MECHCalvin Fund April, 2014 Report - South Korea Ferry Disaster

Latest fund price: HK$1.5651 (-0.0024, 0.153%)

Total Asset Value: HK$1,313,249.63

Total no. of units: 839,095.9750 units

Dear Investors,

I have couple new subscription with around 100k combine within the last few days of April, they are all from my current investors, quite happy about it with the trust and it boast my new record high to 1.3M in asset just a month before the end of my 5 years journey in June.

i am already getting all the data ready for a details report next months, also a more in depth writing about the stories I have been going through in the last 5 years of my "amateur investment career".

anyway, i would like to spend today talk about the South Korean ferry disaster, the ferry MV Sewol 「世越號」(前譯歲月號) , the numbers of casualties have not yet finalized, but we all know most of the students is not going to survive and at the moment result at least 292 death. the heartbreaking video of the final moment between students have been released when they call their parents to tell them they love them is just too much for the world to handle.

so many criticism, to the Korean government, esp. their implement to handle such disaster, it goes to hurt the security and morale of the nation, but what it really did is to expose the fragile of human nature and unawareness of the nation.

More importantly, the main reason for this massive numbers of casualties is due to the extremely selfish behavior of the captain, he ordered the students to stay in the room, yet he himself and others sailors were headed to the safe boats and left everyone on board sunk with the ship. further more, when the captain is picked up by the coaster guard, he want to conceal his identity to pretend as one of the normal passengers.

the reason why the ferry sunk is still under investigation, however it appear to be the ferry was overloaded with goods and do not have enough safe boats, otherwise even the selfish captain might allow the students get on board first knowing he will have a space in the safe boats. and i am pretty sure breaking the load limit regulation was a consistent acts rather than single time event.

this is one of those moments the ugliness of human nature truly show but many people (even those who judge in anger) might behave just the same as the captain when facing the same situation, in fact a research showing in the last 10 ship related disasters, most captain abandon the ships rather than put their passenger safety first.

Ironically the only exception was the Titanic event, claim for her "unsinkable" engineer, when the ship sunk, the captains and their crews actually did let the women and children get on board first, and in the movie famously shown a group of Christian band play violins to clam the passengers down end up sacrificing themselves was also true in history, unfortunately this beautiful yet sorrow pictures only happened for the first class rich passengers, for rest of the unseen second and third class poor passengers, 90% of them sunk with the ship and lost their lives.

the reason why i put this down as the tropic for my fund report this month is going back to the fundamental of investment - Risk, whether the most brilliant and honorable crews or the most selfish captain, whether it was created by the highest engineer standards or it is just a normal ferry, the bottom line is it doesn't matter how well you calculate or prepare, you always need to prepare for the worst, in ship case, enough safety boats, in investment case, enough insurance.

most people use ships as a metaphor to funds is because its risky nature, the captains and fund managers are responsible for the safety of the passengers' lives and investors' money, all these events told me, no captain should be arrogant enough to think his ability will overcome any situation, nor he should be coward enough to abandon rest of the people when disaster strikes, and if he is confident enough, he should be prepared for the worst scenario. 

a key concept of investment is known for "margin of safety", or i call it in a more negative way "room for errors" will be introduced in my next fund report, i just felt these life stories should be told and discussed before the journey in the next 5 years begins.

regards,

Calvin

MECHCalvin Fund Mar, 2014 Report - The future of my fund

Fund Price: HK$1.5675 (+0.0111, 0.71%)

Total Assets: HK$1,275,343.28

Total Units: 813,640.6621 units

YTD: 4.8%

since launch: 56.75%

Dear Investors,

The market have dropped more than 5%, while my fund is up 4.8%, crushing the street like this make me feel good once for awhile.

two more months my fund will be 5 years old, and i have some thoughts about the direction i would like to take for this fund. when i started i plan 5 years as a reasonable "time frame" for me to prove whether i am good enough to be a money managers, i didn't expect an amateur like myself can achieve super amazing results, yet i still have some "bottom line" keep to myself for my first 5 years.

1. i should be able to perform better than the market index, otherwise it is just pointless as we can all invest in market index.

2. i should be able to perform better than most of the so-called "professional fund managers" that i need to pay management fee and performance fee.

although running 1 million size fund is nothing like 1 billion size, i do not feel "proud" of able to beat the professional, because hey, it is very hard for an large size elephant to complete with a small size rabbit. however i think most of my asset allocation strategy will also work in large size fund, i am just practicing and testing whether my strategy works.

the result still have to wait, but i think i did alright unless i make some super big mistakes in the next 2 months.

also a shout out to most of my friends and family members that willing to give me part of their wealth (no matter how little) to make this fund what it is today, many of you told me: "when i gave you the money Calvin, i expect to lose it." i would like to take it as a compliment but it isn't, hahaha, yet frankly it really gives me less pressure to risk, and it turns out alright.

in 2014, i will slowly reduced my loan ratio, not there is almost 50% (540k) of this fund is on loan to different parties in order to collect interest, but in the future i would like more liquidity and flexibility, also as my confident is gained in stock market, i will slowly reduce loan for higher return.

there are also thoughts whether the legitimacy of the fund, that might give you guys (investors) a legit partnership and more protection, but i will need time to see how it actually works here in HK, because i will have concern when the fund size increase, you just can't run a real "private" fund when your fund size is up to several millions without having few people lurking at your back.

and ultimately i would like to combine my insurance, and all my side business with this fund.

I just shared my thoughts, let's see how it goes.

regards,

Calvin

MECHCalvin Fund Feb, 2014 Report - Victory Ahead!

Dear Investors,

Fund Price in Jan: $1.2516

Latest fund price: $1.5564 (+0.3048, 24.15%)

Total Asset Value: HK$1,267,314.55

Total Fund Units: 814,255.2027 Units

the massive jump is due to the fund price formula correction, the fund price have been recalculate, if you don't know what is going on, you can search for my last email (disclose to investors only).

nothing too special this month, just couple new things. I have started to invest in both UK and USA stocks, not a huge amount, respectively 1000 GBP and 500 USD, the UK is doing quite well, already 50% gain in a single month, the USA is alright, nothing too much going on.

the point is i want to diversify my portfolio geographically, but not too diversify, i am very new to UK and USA market, they are very different from HK. 

Although HK market is quite mature, it is very small, and HK people's highly speculative behavior make it hard for long term investors like myself, while in foreign countries e.g. US the market capital is massive, there are so many more companies that are outside analyst's "radar", and it is very fun for me who dislike popular picks recommended by large financial firm.

but let's see how it goes!

regards,

Calvin

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.