She’s dancing with another man

I sold Haier and Belle last month (see this post and this post). Today, both coincidentally rose 5.3%.

Belle finally rose back to my estimated fair value of 5.30. Today’s price is 11% higher than my selling price.

Seeing both rising by 5% today reminds me of lyrics from Bruno Mars’s song “When I was Your Man”:

Now my baby is dancing

But she’s dancing with another man

If you have been investing in stock market for some time, you will certainly experience this, seeing the stocks that you sold rising even higher. I’ve experienced it many many times, some of which more than double and triple my selling price. If you call it a mistake to sell too early, you will continue making such mistake for the rest of your life. So, get used to it. You can’t time the peak correctly every time.

If you sold the stocks and deployed the money to other more profitable investment, then it’s not a mistake at all to sell too early. It’s an even smarter decision. You always make decision based on all the information you have at that time, and only in retrospect that you can evaluate your decision.

To me, the above decisions were not mistakes. I deployed the money to other investments that are doing decently, though far below the 11% return in one month that Belle achieved. Basically, from the start of the year until now is a good run for many HK stocks. Hang Seng index is up 7% year to date. I did not make the right stock picks to get good return for January. I was just in the right time (so far).

The mistakes I made last month was I did not buy few stocks that I have been following for some time and waiting for more data and attractive entry point. They ended up following the HK rally, up 10-20%. This is mistake of omission. I hope their share prices come down soon so that I can get in at more attractive prices.

Auto players stocks listed in HK have been trading at very low valuation multiples (P/E of 5-10x). I’ve been interested in them, but unfortunately, haven’t taken any action. Since the start of 2017, they have been seeing great run. Have you got any of them?

China Harmony New Energy - Share Price - 2017-02-09.PNG

Dongfeng Motor - Share Price - 2017-02-09.PNG

Source: Google Finance

 

 

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