China Goaxian

China Goaxian is a weird one. 

First confession: I have had holdings in it for a long time since its IPO in Singapore. There was this whole hoo-haa about accounting fraud, as a result of which it got de-listed from the SGX. 
My feelings at that time was, "ok fine, shit happens", if i can afford to invest in such a company, i have to be willing to lose 100% of my investment. It was a moment of realisation how things can really go against you.
 
This year as soon as it got listed back, they issued warrants to existing shareholders, of which i was one. Lets see how this plays out in the coming years.

Second confession time: I monitored trading volume and price movements for several weeks so i could buy in equal number of stocks at almost 90% discounted price. 
That was my second bullet. Now i just wait for the opportunity to get out of this dreadful counter as soon as i can hit my target price. 

Recently, ChinaGoaxian has come into the limelight for being a very promising stock, so called multi-bagger. All i have to say to people who are trying to get a piece of action from this counter is be very careful. If investing in ChinaGaoxian has taught me anything, it is to stay away from penny stocks.

Gold in NOT an Investment

2 years ago, I was not persuaded by those analyst who kept saying GOLD is an inflation hedge hence we should invest in Gold. Many people i know did "invest" in Gold and lost quite a bit in the recent pullback. I cannot stress this enough, Gold and other commodities are not investments, you can however take advantage of the situation and trade it. An investment should give you capital gains and/or dividends.

I treat all commodities as a tool for trading and so should you. Do not be under the impression that you can hold onto Gold forever, if you do, be prepared to face huge price swings in the future. This does not mean i believe Gold will collapse, it might keep on rising as some hardcore fanatics predict Gold might even hit $5,000 or $10,000. Please be reminded that along the way, Gold price might go below $1000. 

In earlier posts, i have talked about Market Cycle. We are in the middle of another cycle, the commodities cycle where inflation is higher than usual, commodity prices keep rising. In fact Jim Rogers is correct in saying that there will be a shortage in commodities in the near future. If and unless we stop innovating new methods of food production, mineral mining, ore extraction and purification, commodities will rise non-stop. History has taught us that is not the case, look at the chart below:

We have been riding one of the steepest commodities BOOM in history. From the chart is seems we are nearing the end, i.e if technicals are followed (trades within the widening aplitude channel). Its not far away now, 2014-2015 is going to be recorded in history to be the worst fall in commodities ever.(just watch and see) 

Again my opinion here is that commodities should be traded, it shoud not be treated the same as a business which you can invest in, with the intention of "buy and hold".

Disclaimer: I am not here to discourage you from investing in commodities neither am i encouraging you to do it. Please be cautious about investing your hard earned money.
 

My Past Performance

Being a small-time retail investor and actually quite inexperienced, its vital to keep track of your investments so that we can learn from our mistakes. 

I want to share my past performance, and the kind of lessons it has taught me.

Below is a table of my recent trades. As you can see, some trades were closed at a loss...this is because i really did not see the counter moving higher anytime soon(6-18months), therefore would not justify holding on to a losing stock/unit. 

SMART TIP #1: Its important to cut your losses early and shift the capital elsewhere.

SMART TIP #2: Always stick to your target price and get out of the trade. (No point regretting later, like for example: why did i close Starhub @ $3.14 when now its trading at $4.20! That just was not my target, i never anticipated or valued Starhub at anything more than $3.20) So i don't regret my decision.

SMART TIP #3: Shift your capital around as you see fit during the fiscal year. Financials do well from Oct to Feb. Telecom and Consumer Goods are defensive plays and good to hold from March to Sept. Pharmaceuticals generally do well from May to Sept.

***Following fiscal cycle (business cycle) is one thing, trying to match with general Market cycle and trend is another. Therefore you need to match business cycle with Market cycle and trend. I will talk about Market cycle in another post.