MECHCalvin Fund Jan, 2014 Fund Report - Seeing is Believing

Dear Investors,

Wish you a fruitful year of horse!

latest fund price $1.2516 (-0.0006, -0.048%)

nothing change much in my fund, but the market drop more than 5% in a single month, again it shows my defensive strategy perform better when the market panic.

there is an investor withdraw part of her profit to pay rent in Jan, so there is a HK$20,000 quota being freed, anyone who is interested can take up her space.

the following is the story of the 114% and 80% gain stock within 3 months, good read if you are interested, if not see you next month!

best regards,

Calvin

"Today i want to talk a little bit about how i invest, from time to time people always ask, what is the best investment now? the answer is i don't know, people always ask how can i gain 5%, 10%, 20% every year have no understanding how investment works, and i will have serious doubt to those who make such promise.

There are a lot of "guru", "teachers", "experts", "analyst", always bullshit as they can predict the future, every morning i see them bullshit in my company meeting, on TV, radio, blog, newspaper.... i am amazed there are so many "sheeps" out there really take their opinion seriously and end up being slaughtered everyday throughout the year.

my first rule of investing is that i have no idea of the timing, i buy something good (real good), and it will become good eventually, it could be tomorrow, next month, next year or even 5 years later, my only job is to make sure they are good, then do nothing but wait.

the second rule of investing is that i only invest what i can see, when people shop for actual item, e.g. clothes, cars, food, we all know it is stupid we pay before we have actually look at the items, yet so many investors when they hear there is some opportunites 10000km away from home, gold being found in sounth africa, or some invention that might change the world, they just rush in, they rather invest in alien technology than the supermarket down the corner at their house they see every day

i have a perfect example for these two rules this month, for my last couple years, i see this boring advertising on MTR train almost everyday, it is from China South City 華南城 (HKG:1668), i don't even know who will look at such boring advertment, there is no attraction at all, sometimes I even think why on earth this company so stupid to put this advertment on every freaking train.

one day in 2013 i suddenly pay attention it is actually a listed company! so i went home to do a little bit research and found out this company is a logistic company that is doing extremely well! its stock price have been rise from around $1.5 to $2.8, and her business is so strong and growing fast, suddenly this advertisment doesn't seem so boring anymore.

i brought at around $2.21 at 11/11/2013, when it goes down, and expect it will take 3-12 months for it rise to around $3, then i will be happy.

however one day (16/01/2014) i woke up, the stock opens with $3.5, thats 58% gain over the night, i thought the computer is making mistake, so i check it again, it turns out a large company is investing 15 billions HKD into South China City, once the news hit the market, this stock have gone way up, to $3.5 on the first day, $.4 on second day, and hit $4.99 highest on the third day, i sold my shares at $4.86 and $4.06 for a massive 114% and 80% gain.

it might be a bit lucky because there is no way i know about their deal, yet fundamentally, i follow the rules of buying what i can see, make sure it is good, and expect a good result, and i got it. not bad huh?"


this is the extremely boring and unattractive advertisment on train i talked about, i took a picture to remember after i sold the stock, i bet there are 1 million HK ppl look at this everyday (including most of you who travel to work by train everyday)

the chart of the stock

MECHCalvin Fund Report: 2013 Annual Summary

Dear investors,

 

I am still checking all the transaction of my fund in order to finish my annual report, since 2013 is a year with a lot of changes, and things get more complicated. thus i would like to give you a brief summary how we did this year first.

 

the latest fund price is: HK$1.2522 (-0.0089, 0.705%)

total subscription: HK$1,004,571.05

total asset value: HK$1,257,949.28

 

the whole year the fund price have dropped -1.36%, while the market have gain up +2.87%. This is the first year my fund show negative growth while the market show a positive growth. the major reason is that my investment performance is unable to catch up with the new cash income.

 

In 2013, my subscription have increased from

$697,505.35 to $1,004,571.05 (+$307,065.7 or 44.02%)

 

while my total assets value have only increased from

$882,939.83 to $1,257,949.28 (+378,009.45 or 42.47%)

 

as you can see even though i have made a profit of roughly 70k, its growth rate still lower than the subscription rate, this is the reason why i have to stop taking in new money. looking forward into 2014, i expect the value of each fund unit will be increased, and my rough target is to achieve 1.5 million in term of total asset value with no further subscription. this will increase the fund price to roughly $1.5 a unit.

 

you will see more details what actually i have done when i finish my annual report.

 

so please bear with me and enjoy your nice weekend

 

best regards,

Calvin

親愛的投資者，

 

我仍然檢查本基金今年的所有交易，以便完成我的年度報告， 2013年有很多的變化，基金也變得更加複雜。因此，我想先給你一個簡要的總結。

最新的基金價格是：港幣1.2522美元（ -0.0089 ， 0.705 ％ ）

總認購：HK $ 1,004,571.05
資產總值：HK $ 1,257,949.28

全年基金價格一共下跌了-1.36％ ，但市場獲得了2.87 ％的增長 。這是第一年市場表現出成長, 而我的基金卻呈現負增長。主要的原因是，我的投資業績是無法趕上新的認購率。

 

在2013年，我的新資金已經從
$ 697,505.35 增加至 $ 1,004,571.05 （+ $ 307,065.7或44.02 ％ ）

而我的資產總值僅從
$ 882,939.83 增加至 $ 1,257,949.28 （ +378,009.45或42.47 ％ ）

 

你可以看到，即使我已經賺了大約7萬，其增長速度仍比認購率較低，這就是為什麼我要停止接受新資金的原因。期待2014年，我預料每個基金單位的淨值將增加，並且我粗略的目標, 是在沒有新認購下, 實現150萬元的資產總值。這樣就可以將每個基金單位提先到 $1.5

 

在我的年度報告完成後, 你會看到更多的細節。

 

所以請大家多多包涵，並享受您週末愉快

 

最好的問候，

Calvin

MECHCalvin Fund Nov, 2013 Fund Report - Risk, I mean Christmas is all around us!

Dear Investors,

latest fund price: HK$1.2611 (+0.0069, 0.55%)
Market Value: ~HK$1,267,009.45

Christmas is upon us, we have reached the 1 million subscription milestone this month, remember i said i wouldn't do anything more until the end of year? with the new 120k capital rush in, i think the story have been changed, the next milestone will be 100% return, haha

there are a lot of causal investors throw in $100, $10, even $1 into this fund, from time to time i have been asked in various random occasion:

"hey Calvin, how's my $100 buck doing?"
"Cal, don't lose my precious $1 yet?"
"hey Calvin, how much dividend i will have with my $10 investment?",

as hilarious as they sounds, i always picture how cool it will be when i can finally hand two 1 dollar coins back to those who only gave me 1, it's like magic!

i have been spoken numerous time how easy it sounds to turn $1 become $2, but how difficult it is in real life, the beauty of my fund is a demonstration of my philosophy, no matter how insignificant something is, when they accumulate, the inflence just cannot be ignored.

if i invest alone, surely i will be rich much faster, i am taking an online trading course from a Jewish guy named Tim Sykes, In 1999, while still in high school, he took $12,415 he had received in bar mitzvah gift money and began day trading. He would turn this initial investment into over $1.65 million before the age of 21.

See how insanely fast you can you work your way up alone after understanding the stock market, however ultimately that's not what i want, i prefer the saying from one of my favorite footballers, Kaka:

"If you want to go fast, go alone; If you want to go far, go together"

Anyway, I bought 8 more stocks and increase my holding to 18 companies in total. some are doing exceptional well, one particular stock have reached 92% growth in 2 weeks!

next month will be the end of Dec, 2013, and i will release the annual report, which will show all the mistakes i have made due to my stupidity and inexperience, if i haven't made them, the return would be so much higher, but let's do my confession next month.

you will see significant change in this fund in the next 6-12 months.

Regards,
Calvin

the following is for few (including my mom) who have trouble reading English report.

尊敬的投資者，

最新的基金價格： HK$1.2611（+0.0069 ， 0.55 ％ ）
市值：約HK $ 1,267,009.45

快到聖誕節，我們已經在本月達到了100萬港元認購額的里程碑，還記得我說過今年不會再做任何事情多？但因為有了120K的新資金，我覺得故事已經改變，下一個里程碑將是100 ％的回報，哈哈

有很多投資者在這個基金扔下了100元， 10元，甚至1元，所以不時有人在不同場合問我：

“哎Calvin，我的100元投資現在怎樣？”
“哎 Calvin，不要輸掉我的寶貝1元啊？ ”
“哎Calvin，我的10元投資會有多少分紅？ ”

因為它們聽起來是那麼好笑，我總是想像, 有天當我終於可以將兩個1元硬幣, 送回到那些只給了我一個1元的人手上 ，將會是如何的酷，就像魔法一樣！

我已經說過很多次, 把1元變成2元聽起來是多麼容易，但它是在現實生活中卻又是多麼困難，本基金漂亮的地方, 其實是我的哲學示範: 「不管一樣東西多麼微不足道，當他們累積起來的時候, 其影響力是絕對不容忽視的。」

如果我獨自一人投資，我致富肯定會快得多，我正在網上跟隨一個叫Tim Sykes的猶太人學習交易，在1999年，雖然還在讀高中，他帶著他收到的成年禮金 (猶太的成人儀式) 共12415美元 ，並開始在股市交易。在21歲之前, 他已經把這個初始投資變成1百65萬美元。

你就可以看到當你了解股市的運作後, 一人致富是可以如此瘋狂的快，但最終，這不是我想要，以我其中一個最喜歡的足球運動員卡卡的說法：

“如果你想走得快，一個人去，但如果你想要走得遠，要一起去”

無論如何, 我又買了8隻新股票，我的控股增加到18家公司。一些做得特別地出色, 其中一只股票, 在2個星期內, 已經達到了92 ％的增長！

下個月將是十二月， 2013年年底，我將發布年度報告，該報告將顯示所有我由於愚蠢和缺乏經驗的錯誤，如果我沒有犯下這些錯誤, 那本基金的表現將會更好，但讓我下個月才懺悔。

你將會看到本基金在未來6-12個月有顯著變化。

最好的問候，

Calvin

MECHCalvin Fund Oct, 2013 Fund Report - Not-So-Pro!

 Dear investors,

latest fund price: $1.2542 (+0.0292, 2.83%)

Well yeah, things have been back, my investments usually have some sort of delay and insensitive to the market, just like myself.

In fact, detach from the market is my ultimate goal, if market is represent the mass media, then sensitive to it will make you mainstream, but also make you mediocre, Benjamin Graham once said: having opposite opinion with the masses do not make you right or wrong, you are only right when your data and logics are correct.

i would add: most of the time, the masses are usually wrong, otherwise 90% of the people would have been rich already, wouldn't it?

my dad almost got annoy when i present carelessly on facebook page or anywhere openly, he said my "image" is very important to make how people feel trust in me (funny my boss also say that a lot), i always respond: hey, this is not like i have to "prove" myself to the general public, try my best to impress anyone so they "trust" me, and i don't like to sell my fund actively, this kind of mentality is pretty much in my blood, i have no fashion sense, little social skill or don't usually bother with my hair, i am only serious in what i do - work,

i have seen too many "professional" look analyist and fund managrers, fail big still get paid large amount of sum, while those investment masters like Warran Buffett and Peter Lynch go eat burgers and dress up cheap, i don't like "professional image", so i decide my style will be called "Not-So-Pro", hahaha.

maybe i should change, but definitely not now.

anyway, this report not really about my fund, just few grumbling since basically i don't think i will move anything in the next 2 months but wait for the investments to grow. most people feel they need to do a lot of thing to get a great return, but i am telling you, activities have nothing to do in investment, in fact inactive will give you better advantage, people just want to do too much.

Warran Buffett only make 1 deal in a year, and there were 4 years he did nothing because he said he can't find anything interesting on the market, and he become 2nd richest man in the world, can you believe that? i guess after hearing that, 99% of the Hong Kong people who believe in working hard will want to beat him to death . my average trade is about 25-50 trades in one year, and my target is to reduce it to less than 10 in the next couple years.

So there you go, I am learning to "Do Nothing" and "Not-So-Pro"! :)

wanted to write some stories to make this report less boring, but i think it is already long enough.

So have a nice weekend and don't forgot you can subscribe more by the end of this year, there is 120k quota left :)

regards,

Calvin

*little note: in case you didn't get the jokes and really believe i don't need to do anything, investors needs to work hard, but the work is mainly thinking and finding data, not spend time on the market.

MECHCalvin Fund Sept, 2013 Fund Report - Patient is a Virtue

Dear Investors,

the latest fund price: $1.2250 (-0.0007, -0.057%).

the market have gone totally upward in a single month by more than 5%, because of the war on Syria didn't happen, also the Fed surprise the market they will continue QE for longer time. but my fund still dropped slightly, mainly because the stocks i pick are very defensive, and have very slow respond, but they will catch up slowly, also because the subscription increase.

in Aug, the total subscription is $833,685.05, market value $1,021,835.45, which give me 22.57% growth thus fund price is $1.2257 a unit.

in Sept, the total subscription have increased to $883,685.05, which market value have also increased to $1,082,514.98, yet only give me 22.5%, thus fund price become $1.225 a unit.

Although my fund is extremely small, actually tiny, a small size fund should be around at least $5-10 million USD, still you can see i am facing the problem every fund manager is facing, the growth rate must overrun the subscription speed in order to achieve captial gain, otherwise value per unit will be diluted even the fund is actually making more money.

Anyway, less complain and more on the update, i have brought couple more new local stocks, that many mainstream fund managers might be too afraid to choose, mainly because they are small size, mainstream fund managers like to pick those mega huge internationl incoperation, because they are safe, if HSBC fail, people will say: what's wrong with HSBC? but if a small company fail, people will say: what's wrong with the fund managers?

but i rather take the chance, the new stocks i picked are well known to local HK-ese, e.g. 759 stores 阿信屋, japan home 日本城, tsuiwah 翠華, they are all expending, 759 store is planning to open up to 180 stores by the end of this year, japan home plan to open 100 more new stores in Asia within the next 3 years, and the boss of tsuiwah got caught taking business trip on economic class by a reporter, good sign because you know the luxery of a company management usually is inversely proportional to the return of the shareholders, so one day if you see me driving a Ferrari, it might be time you consider to leave this fund, haha.

Anyway, don't want to write too much, as you can see this fund is becoming more mature, and i have set a great course of the direction in long run, so i can spend less time on this fund and more time on other business, e.g. insurance, baby shop, chinese tea, etcetc.

This fund will grow, but it will also take time, since over night wealth is nothing but a scam, i hope the steady growth of this fund can help some of you to achieve your dream, e.g. get marry, buy house, business startup, pay tax, even retired.

Patient is a virtue :)

regards,
Calvin

MECHCalvin Fund Report Aug, 2013 - Buy When There's Blood In The Streets

Dear Investors,

The latest fund price is: HK$1.2257 (-0.0124, -1%).
Market value: HK$1,022,915.45

the global market is quite fluctuated, USA said she is ready to quit QE, then said it might be delayed, all these affect short term, also the heating situation that US will go to war with Syrian cause both gold and oil rise, i didn't invest in oil but it surely help the gold i have brought.

there is an old wall street saying: "invest when there is blood in the streets." many people who have bias towards finance always quote this and accuse investors love wars so they can make money, which is wrong, speculators loves global events that cause major panic so they can benefit from the timing, while investors only wish his investment can grow steadily, and war surely isn't something that cause stability on the market. When i have chance, i will write something about the difference between "speculating" and "investing".

although said that, any kind of events that cause panic or fear usually is a good chance to invest, since everyone fears tomorrow might be the end of the day and throw everything they have on hand, which will cause a major downside to stocks price, this gives a true investor a good chance to recieved all the undervalued stocks from those who are too chicken and have no confident in the future. yet in normal circumstances, investors have more interest in finding companies that can grow steadily and morally right in a political stable region, and we don't need those extra "good timing".

don't want to go into details into my action this month, i have done some minor stupid things again, such as selling too fast, the stock i sold this month have gone up 6% the day after i sold it, and further 3% in the next two days, and this isn't the first time, i can talk about bad timing forever.

regards,
Calvin

MECHCalvin Fund Report July, 2013 - Buy Right and Sit Tight

Dear Investors,

this will be a very short report. the market rebounce quickly, as well as the fund, but my stocks will takes time to catch up, the latest fund price is $1.2381 (+0.0071, +0.58%)
the wall street legend Jesse Livermore once said, "who can both be right and sit tight are uncommon. I found it one of the hardest things to learn."

the "game of investment" is that, being right already isn't easy, the stock market is never obvious. It is designed to fool most of the people, most of the time, but what's harder to learn than being right is to sit tight.

from my less than 5 years experience, i have learnt how to be right very quickly, i know what will happen, sometimes when it will happen, but i didn't get more than i could have because i couldn't sit tight easily, 10% gain, then i get nervous and think, maybe i should sell and take the 10% now and leave! if i can resist my temptation, then it rise to 20%, 30%, 40%, then more it goes up, the more tempting i want to get what i can see and leave, and regert it later.

I started buying my own company Manulife (HKG:945) since Sept, 2011 with an average $83 a share, i know its reasonable price should be $120-130, but i sold it at $97.5 after last Sept, 2012, 15% gain, seems pretty good! however this month it has reached $140 already.

another lighting company NVC (HKG:2222), i brought it last Aug at $1.24, and sold it at $1.53 after a month, 25% gain, not bad! this month it has reached $2.4 at highest already.

these are few mistakes i have made by being right but not sitting tight.

but as i said, the first 5 years is pretty much like training, so don't get too serious on that, in the coming year, i will slowly reduce the % of loan, now this fund have 37% is loan to different people/ business, that's why her performance cannot compare with those fund who invest in stocks 100%.

anyway, i have attached an historical fact sheet for some of you want to keep track of the development of this fund since day one.

that's it for now, have a great weekend :)

regards,
Calvin