EOD Update (8 June 2006)

Took a hard look at some of the losers in my portfolio. Decided to cut out some of them. Times like these are the best to realign one's portfolio. With so many good counters declining to good values recently, now is the time to take cash out of the "dogs" and prepare for some bargain-hunting. Some might say I'm selling out near the bottom. Sure, these losers may rebound if the general market picks up, but I doubt the rebound would be faster and stronger than for other "better" stocks which have been dragged down as well. If you look at it objectively, there is no reason to stay with the losers at a time like this when bargains galore. Most investors would wait and hope to get out even first, which to me, is a psychological handicap. Everyone makes mistakes. You make your money back riding the stocks which will move the fastest when the bad times are over. You don't have to make your money back the same way you lost it (can't remember who said this).

Getting rid of the losers also forced me to realise something. In some instances, I had lost up to 40% of the purchase price on some of them. There is simply no excuse for such stupidity, especially when I wasn't even that hot on their fundamentals in the first place. Thank goodness, I only had small positions in them. I've now realised that I tend to lose a lot in smaller positions. Most likely this arises from a sense of apathy when faced with small initial losses, since the positions are small. The result is each loss then starts getting bigger and bigger, until it becomes a big dollar (ringgit) amount, translating to something like a 40% loss. So, the lesson for myself is to treat all positions the same. Big or small, when things go wrong ... zap!

Latest purchase:

TAMCORP: +8,000 (0.25) ... Total 40,000

Latest disposals:

FOCUS: -5,000 (0.27) ... Balance 15,000

FONICS: -10,000 (0.19) ... Balance 0

DCIB: -10,000 (0.28) ... Balance 5,000

MIDF: -3,000 (1.07) ... Balance 3,000 (this is not a loser, more of a laggard)

SUNRISE: -4,000 (1.60) ... Balance 0 (this is not a loser, am just protecting profit)


/ichithekiller