On 3 January 2010, I have listed 10 companies that I have confidence in. They are
1. Goldman Sachs (GS) @ $170.05 [$168]
2. Walt Disney (DIS) @ $32.50 [$36.70]
3. Nutrisystem (NTRI) @ $31.40 [$20.58]
4. Garnett Inc (GCI) @ $14.97 [$15.60]
5. General Electric (GE) @ $15.22 [$17.24]
6. OCBC Bank (Singapore) @ $9.08 [$9.85]
7. Breadtalk (Singapore) @ $0.675 [$0.605]
8. UOL (Singapore) @ $4.07 [$4.68]
9. UIC (Singapore) @ $2.09 [$2.43]
10. Popular (Singapore) @$0.18 [$0.18]
The price in [ ] is the price as at 10 Dec 2010.
Imagine if you have invested $10,000 in each, how much will you have now?
1. Goldman Sachs $9,929.83 [ lost 0.7%]
2. Walt Disney $11,375.42 [ gain 13.75%]
3. Nutrisystem $ 6,753.35 [ lost 32.47%]
4. Garnett $10,490.88 [ gain 4.9%]
5. General Electric $11,601.83 [ gain 16.02%]
6. OCBC Bank $11,194.42 [ gain 11.19%]
7. Breadtalk $10,717.91 [ gain 7.18%]
8. UOL $11,703.37 [ gain 17.03%]
9. UIC $11,729.14 [ gain 17.29%]
10. Popular $13.618.83 [ gain 12.01%] (Invested Capital $12,159.08 due to rights issue)
When calculating the value now, I have taken into account the amount of dividend, bonus shares, rights issue, scrip dividends.
All the 5 Singapore Companies that I have chosen has gain between 11.9% and 17.29%)
For Foreign Investment, only Walt Disney and General Electric has gain about 14% to 16%.
Garnett has gained only 4.9%, which is good enough to beat inflation?
Goldman Sachs and Nutrisystem are my wrong choices.
However, I have lost my interest in Nutrisystem when the price hit $32.
In the year 2010, I have only invested in these stocks: Walt Disney, Goldman Sachs, OCBC Bank, UOL and Popular. Therefore, my gains for the year 2010 is ranged between 10% to 12%, as more capital is invested in Popular.
Lessons to be learnt here.
- DO NOT invest in businesses that you DO NOT understand. Goldman Sachs, Garnett and Nutrisystem are good examples.
- Invest in businesses with a strong MOAT. Walt Disney, General Electric, OCBC, Breadtalk and Popular are good examples with strong MOAT.
- Invest in companies that has a strong management. UOL and UIC are good examples as both companies are lead by Chairman of UOB Bank.
- Invest in companies that buys back their own shares. OCBC is a good example. They have bought back more than 1 million shares this year.
- Once you know the value of companies, stockpile when noises cause the stock price to go down. Invest in business, not in stocks. Buy when the price is still right. Popular is a good example, still trading under their value. I have stockpiled this company’s shares to 18% of my target number of shares.
- Knowing the P/E ratio and other numbers are not enough, we must really look into the companies main activities and the management.
So what are you waiting for? Start doing some homework and grow your savings.