With the recent Dow and S&P hitting the high 16,000 and 1,800 respectively, it seems no stopping the market going higher and higher. This is despite all the tapering noise that we are hearing for months now.
On the local market, we don’t seem to have a run-up well above the 3,200 mark on the STI. It seems that markets are lost for directions and there simply no company that can well lead the way for the STI.
One position I’ve made today is liquidating all my shares for Boustead. I’ve divested them away at $1.585 for 6 lots and S$1.65 for 1 lot. Overall, this has been a good profits made well over 50% since I’ve purchased them couple years ago. I think this is a good stock for the long term run by a well managed management but the risk has gone up by a lot with current price sitting at the $1.65 range.
The reason I’ve decided to sell Boustead is because I feel the recent run-up has priced in forward earnings and expectations which the markets expected to be very good. Multiple PE valuations based on forward earnings have also gone up beyond their historical valuations and it is easy to see the risk. Sure, Boustead has a good upstream catalyst in their Iskandar investment, potential industrial pipeline, etc. But should the market suddenly turn southwards or any news that will affect Boustead, we can easily see its price go all the way to the $1.30-$1.40 range, which is the range I will be comfortable to pick them up again.
I’ve also divested small lots of FCOT today at $1.265 to reduce my exposure in Reits and raise further cash holdings.
With all the selling so far, my cash position has increased and it is in the comfortable range to pick up any opportunities should the market turn southwards.