Saturday, August 29, 2015

Journey To Retirement Part 8.1 -- SembMar

Sold SembMar at $2.60, registering a capital loss of 25.10%, a dividend gain of 34.65% resulting in a net gain of 9.55% for the investment, annualized gain of 1.84%.

The intention to divest out of SembMar started in 1Q 2015 when I was adjusting my investment portfolio for the purpose of Sun Tzu Art of War Chapter 4 — Formation (第四篇,军形篇).  SembMar being in the O&G sector as in Kep Corp make no sense to own more than 1 stock of the same sector in a diversify portfolio.  The reason to let SembMar go over Kep Corp is because SembMar is a pure O&G play in which its revenue and profit are plainly rely on the O&G business.  On the other than, Kep Corp is a conglomerate having business in O&G, Property, Infrastructure and Investments sector, making it less risky to cyclical downside as compared to SembMar.  However, a mistake was made then when I hesitated to divest at that time.  At that time, while the price was still trading above the $3 level, I have the believed that the crude oil plunge saga could be resolved and price will head higher up next so that I could divest with a gain.  Call it a failed analysis and that result in suffer a higher capital loss.  A mistake was made and have to learn from it so that next time will not happen again.  On the other hand, the amount of dividend was able to offset the capital loss and hence once again stressed the importance of dividend in an investment.

Looking forward, I have couple of options for the capital from the divestment of SembMar.  I could strategically (using Sun Tzu Art of War Chapter 5 — Momentum (第五篇,兵势篇) recover the amount of capital loss or use that capital to add more of Kep Corp given the current weakness in crude oil price and O&G stocks.

In short, the investment of SembMar didn't turn out successful, a mistake was made, a lesson learned but was lucky enough not to suffer overall net loss (due to the dividend collected so far).

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