This isn’t so much of an analysis I feel. it is very clear cut. 2 transportation counters that wasn’t doing very well.
Fundamentals and Economic Moats
SMRT provides the rail transportation that majority of Singaporeans rides on while SATS focus on servicing the regional airports and food catering.
They are very defensive in that they deal with perishable services that has to be undertaken to maintain subsistence.
Decision to buy and sell
SATS (Click to enlarge)
SMRT (Click to enlarge)
- Should you have been vested in these counters from the lows at the start of this rally, your decision might be to ride out the horse throwing you off this bull market. Whatever profits made might go back to zero but you will be able to collect more.
- On the other hand, nothing beats earning your dividends early. Watching your capital shrink to zero and then go negative after 2 years is not a good idea as well.
The right decision I feel is probably:
- basing on the moving averages, take half or one third of the investment and profits off the table when it moves below the 200 day moving average.
- should the trend turns back up above the 200 day moving average, you get a re-entry point. Not much opportunity loss there and the move could be just as ferocious.
- have a x% drawdown from each current value of your portfolio. if it goes below this x%, offload the losers and those that would not do so well.
- in every investment horizon there are bulls and bears and they move in cycles. long term investing is a bet on sustainability of the companies you invest in as well as a punt on the macro-economic conditions being splendid going forward
- preserving psychological capital is sometimes as important as preserving your cash holdings.
I run a free Singapore Dividend Stock Tracker available for everyone’s perusal. It contains Singapore’s top dividend stocks both blue chip and high yield stock that are great for high yield investing. Do follow my Dividend Stock Tracker which is updated nightly here.
Kyith is the Owner and Sole Writer behind Investment Moats. Readers tune in to Investment Moats to learn and build stronger, firmer wealth foundations, how to have a Passive investment strategy, know more about investing in REITs and the nuts and bolts of Active Investing.
Readers also follow Kyith to learn how to plan well for Financial Security and Financial Independence.
Kyith worked as an IT operations engineer from 2004 to 2019. Currently, he works as a Senior Solutions Specialist in Insurance Start-up Havend. All opinions on Investment Moats are his own and does not represent the views of Providend.
You can view Kyith's current portfolio here, which uses his Free Google Stock Portfolio Tracker.
His investment broker of choice is Interactive Brokers, which allows him to invest in securities from different exchanges all over the world, at very low commission rates, without custodian fees, near spot currency rates.
You can read more about Kyith here.
- Singapore Savings Bonds SSB January 2024 Yield Plunges to 3.07% (SBJAN24 GX24010F) - December 1, 2023
- New 6-Month Singapore T-Bill Yield in Early-December 2023 Should be Slightly Higher at 3.85% (for the Singaporean Savers) - November 30, 2023
- Have the World or Emerging Market Healthcare Stocks Outperform the World and EM Index? - November 26, 2023
Drizzt
Monday 7th of February 2011
I doubt it will be much of a defender against a huge correction Willy.
Willy
Sunday 6th of February 2011
Very informative post.. I am considering SMRT as on of my defender stock.