sonylin.net / investment
O O O O

I've made investment on real sector, deposits and non real sector.  My real sector includes housing and properties, while my non real sector includes stock market, money market and foreign currency. 

I will share my stock and investment analysis on this page.  This is the first time I invest stock, well, so I welcome any suggestions and tips from seniors :)

My investment broker is PT. eTrading Securities, which I join on mid of February 2008, and still on analysing stage.  On this page I'll write the stock that I bought on what price and what is the current price as per writing.  I always hope that I could get some profit from it.

My home grown articles

  1. Value investing
  2. Average down
  3. Retaining decision
  4. Unnecessary expenses on stock trading
  5. Stock market shock
  6. Choosing stock
  7. Taking insurance or Not?
  8. Living cost in Indonesia

Table of contents

  1. Analysis & articles
  2. Exchange rates

Portfolio

This are the stocks/warrant (portfolio) that I got
Stock/WarrantAverage buying priceCurrent Price
ADHI - Adhi Karya (Persero) Tbk660450
ASRI - Alam Sutera Realty Tbk2915
BUMI - Bumi Resources Tbk24312200
ELTY - Bakrieland Development Tbk429315
JSMR - Jasa Marga (Persero) Tbk11071040
KIJA - Kawasan Industri Jababeka Tbk134129
LSIP - PP London Sumatera Tbk74506550

My analysis and articles:

19th June 08: Shocked about the stock price decline, especially ASRI-W that price falls 70% in one trading day.  Although this is off my prediction, I believe this will be only temporary.  When the price drops further more, I might be interested to buy more of those stock.  For the happy news is I got dividend from my BMRI stock, at least this is reducing my shock.

19 May 08: I've write my own article about value investing.  I write it in an easy to understand and interesting way, please read and have fun :)

5 May 08: reading a book about Warren Buffet, only the first few page, his investment methods includes holding a good stock for as long as you can!  It is different then what expert says, but his theory is proven, and he is one of the richest in the world.  Then I studied BUMI stock, in mid 2003, the BUMI stock costs 30 per share and by mid 2008, the stock costs over 6800 per share.  More than 200 folds, or 20000% ROI in just 5 years!  These data is the proof of Mr Buffet's theory!  His title of 'The Greatest Investor of All Time' is real!

And for averaging down, I've found another good reason to do it: to buy the stock at low price!  Not for lowering the break even point.   For example, when the stock price reaches a bottom price, buy it.  Then it might rise again and fall to reach another bottom (double bottom).  Buy again!  Please refer to the picture below (from Yahoo Finance) for the double bottom scenario.  I've put circle on the bottom price.

Chart for Bumi Resources Tbk (BUMI.JK)

However if the stock price rises and could not manage to reach the 2nd bottom, you already have undervalued stock and then enjoy the rise.  Triple bottom might happens in some occasion, when that happens, then you can average down 3 times to get the stock at its lowest price.

Remember: you need to choose good stock, from a solid company that is undervalued to do this trick!  Otherwise you will end up with loosing more!

15 April 08: due to lack of experiences, I've put some stock at pretty high price, therefore since the last 15 days I've decided to average down the stock, so that I'll require only smaller stock price gain to get profit.  This is not a very good idea, since averaging down requires tremendous amount of money, and averaging down will only make fake profit if the stock price only increases to less than the highest buying price.  However I have no choice. 

I'll give you the calculation here:

  • I've bought 10 lots of BUMI stock at 6800, and then 10 lots at 5800 and another 10 at 5300.  Imagine now the price is at 6000 and stays there.  How much do I earn?  I've lost 800 x 500 x 10 = 4000000, and earned 200 x 500 x 10 + 700 x 500 x 10 = 4500000.  So in conclusion I've earned 500000.  Good enough for hedging loss. 
  • Now imagine, if I sell the BUMI stock at 6500, I'll lost 1500000.  Then I buy that again at 5300, when the stock price goes back to 6000, this is that I've earned: 700 x 500 x 10 = 3500000, in total I'll earn 2000000.  4 times the original figures, with about 1/3 amount of investment.  Quite surprising right?
  • Average down is for hedging loss when it is too late (the price is already too low for feasible cut loss, and the stock price is unlikely to go lower), but it is not substitute for good stock choice.
  • Scenario 2, on my position, if the stock price continue to decline down to 5000 and stays there, I'll loss lots and lots amount of money (1800 + 800 + 300) * 10 * 500 = 14500000, compared to cutting loss and buying back 300 x 500 x 10 + 1500000 = 3000000.
  • So, think again about averaging down!

31 March 08: it is very hard to predict what will happen to the stock market.  The stock price has risen on the past few weeks, and moving erratically.  My believe is the stock will again slump, and then rise in a no time.  Buy when it is low, and sell when it is high.

12 March 08: the Fed just inject money to the US's banking industry.  Hopefully this will help.  The Dow is back at 12200 and the market receives positive sentiment.  It influence Asian stock market and the price is getting stronger.  Hopefully this will get stronger and stronger!

7 March 08 Warning: Stock market crash!  America's Dow index fall below 12000.  Investors on other market should take extra care in investing their money.  I can't say whether Indonesian market will go up or down. 

My suggestion is: if you have good stock, then wait.  If you don't have stock yet, bid at around 90% of opening price.

Exchange rate

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