Finally, the moments that we’ve been waiting for a while to happen finally takes place.
The China effect taking a headline in the past month has battered the portfolio pretty badly, which at glance you can see that I am heavy on some of the beaten Chinese stocks myself.
I am not worried though.
This is the kind of stuff which puts a dent on your portfolio temporarily but over time it puts an engine to your portfolio. If I look back at what happened to my own portfolio back then during COVID, this is the kind of stuff which helps to propel the growth going forward once things subside and move on from here.
In fact, most Chinese stocks were beaten so badly back in 2018 (worse than today) due to the very same reason and still managed to recover strongly when things subsided. And then the shares continue to hit an all-time high a year or two later.
Taking Tencent for example, it fell 47% from the peak to the trough back in 2018 due to the government restricting the number of games license to be granted to them and limit users of certain age limit to use their gaming platform at certain hours. Sentiments were so bad back then that no one dared to touch it. Subsequently, the company managed to rise back 59% thereafter in the next few months once it is blown over.
I started to utilize my leverage once again, averaging down and doubling my positions quite aggressively into some of the beaten down companies like Baba, JD, Ping An, HUYA and Tencent.
Four of those were existing positions which I already have previously so it will be more like additions.
The only new entrant was a position on Tencent which I have just added yesterday.
If you’d like to follow the a more frequent updates on my position, do follow my Facebook page which I have updated more frequently than the blog. I also post news and company updates as well as technical analysis on my page.
Portfolio net-worth went down for the month of July, but I am confident that it can bounce much higher when things subside in a few months or so.
In fact, I am happy to let this news headline over a few more months ahead so I can build up more of my positions over time on this.
Like everything, do take caution if you’re planning to go in and use leverage and make sure you account for the very unlikely event it can happen. The last thing we want to do is to increase our risk and blow up our positions unnecessarily. That would just be silly.
So that’s all the updates I have for now.
Will see you guys back next month with more updates!
10 thoughts on “Jul 2021 – Portfolio & Transaction Updates”
Yeah, 2018 wasn’t a great year for Tencent Holdings. I added about 50 shares at HKD400+ and starting DCA, and it went all the way down to HKD200+, but still continued holding on to it. Sitting on losses for about 2 years. Fast forward today, it recovered and sitting at around price of HKD500+. I still believe that the future of Chinese tech is bright and trading at a pretty attractive valuation currently. Eventually after anti-trust investigation, it will lead to fine and then concession, and then back to normal again. The glory days are yet to come! Same for Alibaba, Bilibili, Meituan, and JD. And Ant Group will likely be listed sometime in the future which will unlock more value to shareholders.
That’s a nice DCA right there back in 2018.
Yeah, the waiting might last for a while more but as long as the company is not a value trap, I think we’ll do fine over time when the right time commences and people starts flocking in to push up valuations. Right now, it’s about accumulation phase slowly at a time each month.
Also, for the Tencent shares, did you get your calculation correct? 1,000 shares should be 535k HKD.
Thanks for spotting. It should be 100 shares.
It has been some time since, and it is very interesting to see that we have some similar thoughts towards Chinese tech stock. Ha.
More to learn from you
Long time no see friend.
Hopefully we made the right decision, we’ll know over time.
Great update. As you say, I think your net worth will bounce back up over the next couple of months. Everything takes time to work itself out, and you are certainly on the right track. Looking forward to next month’s data. 🙂
Yeah, I think once the shares are beaten down by over 30%, not so worried too much anymore, as long as we don’t buy it at the top. I think this is not a permanent damage although the longer run of closing in on its actual valuation still remain a big question mark due to the structural nature.
Great article, and share your view on china growth and the eventual china tech rebound. Just curious what kind of funding did u obtain for that 75k leverage?
I used margins via Tigers and/or CFD for the leverage.
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