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Decision Journal
galumay:
Another forced, rather quick decision today. I saw right on the close of trading yesterday, that SDI had dropped over 30% and on checking there was an announcement, very poorly written, regarding profit guidance for this half year. It seems the market took a dim view of the news, and with the AGM in 2 days time it certainly spooked Mr Market.
I cannot see anything in the news that would impact the actual intrinisic value by anything like 30% so I decided to sell my QBE (which i have been considering for some time - i bought them for entirely the wrong reason - (because I thought i should be in the insurance sector and they seemed the best value at the time.). I got out of the QBE for a small loss (around $1k) and put another $10K into SDI which more than doubles my holding (put $10K in at around $1 originally)
Picked up the parcel of SDI at 70c which was within a whisker of the low today at 0.685
galumay:
Once again I have been a bit lax about documenting some decisions, hopefully the quality of decision is not directley impacted!
I took a postiion in SRV, and I have documented the rationale in a sperate thread in the Shares forum. Then I saw one of my favourite situations, VOC had a very sharp and big fall in their share price based on an announcement that was poorly worded and did raise issues about underperformance in a couple of areas of the consolidated company. Its not easy to get a read on the total financial situation of the group due to the mergers and acquisitions last year, but it dropped in price to the point where I thought there was an opportunity to buy at well below value. So I sold our ANZ in the personal portfolio and took a position in VOC.
The next decision I took was that I wanted to try to build a position in KTP, a very thinly traded stock. My reason was largely purely based on the fact that Tony Hansen at EGP had outlined the case for investment, i couldnt find fault with his buiness case and agreed that if the business proceeds as planned there is a lot of value to be unlocked. Its probably a 3-5 year timeline to get to that point but could be well worth the patience if it delivers.
To free up capital I had to select something to sell, and I realised that due to averaging down as they crashed over the last 2 years, and then a very strong correction as it came out of its troubles, my holding in NWH had grown to a lot larger than my normal position size so I made the decision to sell down to an average size position to free up capital.
At the same time another apparent over reaction of the market came to my attention - MYX fell by about 50% from their year highs based on an investigation into the USA arm of the business. I will detail better in the Shares forum, but suffice to say I once again judged it to be a significant overreation by the market to bad news and took the opportunity to pick up a parcel of MYX, I also got my order filled for KPT.
galumay:
Some reflections - I am no good at short term trades, I failed with one in UOS, one in AHZ and now one in ICU. From now on I will avoid short term trades unless the reason is a hell of a lot more compelling than the past!
I have made some errors of timing this year, in hindsight I sold ANZ & QBE at small losses when some more patience would have seen them sold at a small profit - and to make it worse the postions i swapped into fell further so there was opportunity cost there too. This is less of a serious error compared to the trading one, its impossible to get timing perfect and really the decision to swap out of one business into another can only be viewed over a much longer time frame before making assessments about its merit.
galumay:
another year has passed! goodbye to 2016 and hello 2017!
I am not much of one for resolutions, but i do have a couple of processes to follow next year, a focus on healthier eating, cutting back sugar & alcohol further and no smoking. I also am implementing a more rigorous process with monitoring my investments, adding some new metrics and revisiting my analysis more regularly.
I shall also attempt to develop mental models that prevent me making stupid decisions!
Finally I will be exploring processes to allow me to be a better husband and father.
galumay:
2017 looks like a year where we will have to make an important decision about our future housing. Rio has announced they are evicting us from the company housing at the end of the year so we have some options to consider,
* Move into our investment property
pros - cost of living would be low.
cons - we would lose the significant income from the positively geared investment.
* Buy another PPOR.
pros - we would keep the IP and have a home of our own
cons - getting finance may be problematic, cost of living would be higher.
* Re- rent this property through Rio's excess housing manager.
pros - we get to keep the IP
cons - we would have to pay much more rent ($450) and wouldnt be paying off a PPOR.
Next step is to sound the bank out about finance
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