2014年12月5日 星期五

MECHCalvin Fund Report Nov, 2014 - Against the tide!

Latest fund price: $1.6053 (+0.077, 5.04%) new high, previous high $1.5675 on Mar, 2014
Total Market Value: $1,495,977.59 
Total units: 931,900.9058 units

Correction:
due to a minor calculation error in Sept, the fund price for Sept and Oct have been slightly adjusted
Sept, 2014 $1.5312 (previously $1.539)
Oct, 2014 $1.5283 (previously $1.5297)

Dear Investors,

This month my fund have broken few personal records, 

1. it has broke through $1.6 for the first time reaching a new high, due to one of my stock have been skyrocketing, 
2. the stock have been skyrocketing was my largest single investment ($100k) so far
3. it has also captured the single largest profit up to date (+$110k, 110%)

While the market have been up and down, it went down due to occupy central (or umbrella revolution), then the shanghai-hong kong stock connect (滬港通) didn't do well as the market expected.

this is what i call "against the tide", i want to be one of those people just completely ignore the majority (aka the market), most fund managers give excuses saying, "hey i can't do well because the market has been bad." but they do go, they ain't gonna say because the market is doing well, they just give credit to themselves, they are just laughable.

there is a little story behind this small success, this stock (1271.HK) have been doing very well from day 1, in the last 6 months, i have already sitting on a paper profit of $25,000 (25%), if i sell it on any day, i can tell people, look! i have made $25000! to be honest 25% in 3 months is very good for most people, it is so tempting to just sell it, but i kept telling myself to be patient, sometimes i feel it is even harder to remain calm when you are winning, since losing in investment is so common to most people once they got a little bit of profit they want out, fortunately i didn't fall for the "temptation", i waited and waited and waited, finally it broke through the roof top and rise a massive 75% within a month!

this is a really good lesson for myself how important patient is... not only in investment

of course you can't expect every stock i pick is this good, tell you the truth, if i have selected 10 companies, and i have been wrong for 4 of them, 5 of them are doing ok, but i have been very right for one stock like this can give me 100+ % profit, i will be do just fine.

anyway, there is only one month left, my year-to-date fund performance is roughly 5.5% (6.7% include dividend paid in June), the market is doing roughly 2.9%, my fund performance is still just fair, but then again you have half of the mutual funds on the market is giving you 3% return, charge you 2% management fee, then claim they can have 12% average annual return, i am doing ok, and i will be happy if i can do 9% each year.

regards,
Calvin

2014年11月6日 星期四

MECHCalvin Fund Report Oct, 2014 - Patient is a Virtue

Latest Fund Price: $1.5297 (-0.19%)
Market Value: $1,425,515.21
No. of Units: 931,900.9058


Dear Investors,
We dropped a little bit more this month, very minor, however I am still waiting for the Shanghai-Hong Kong Stock Connect (滬港通) to launch, they say China delay it is because a political decision due to Occupy Central (actually they are more like occupy everywhere in Hong Kong except Central), lets just call it the umbrella revolution (but again, they say it is not a revolution).

Anyway, names are not important, i don't see they have direct connection but let's just be patient, what this Shanghai-Hong Kong Stock Connect actually do is it allows Hong Kong people to buy China stock and allow Chinese to buy Hong Kong stock, it connects both "money tanks" together.

I expect some boast on HK, but i also worry the quality of Chinese corporation will downgrade HK stock market, there are still many corruption and fake accounting in China listed companies, but overall i think this can benefit both HK and Shanghai in long term.

Moreover, there is a fundamental difference between China and HK, China stock market is mainly driven (80%) by investors of normal citizen (散戶), while HK stock market is mainly driven by institution investors (機構投資者), i must apologies if you find the following statement offensive: yet most of the mass are stupid and irrational, when the market is driven by the mass, the stocks are easily manipulated. HK stock market is more stable because institution investors usually are long term investors, so they won't sell and buy quickly, i afraid when once we are connected to China, many local Chinese will get involve in HK market and make our system before more unstable and volatile, but let's see

On the other hand, US keep making new high, i expect the low interest rate will continue before the stock market being heat up to an ridiculous level (they all do in the end of the hype).

regards,
Calvin

2014年10月4日 星期六

MECHCalvin Fund Report Sept, 2014 - Occupy Central: My Economic and Political Take

Latest Fund Price: $1.539 (-1.1%)
Market Value: $1,434,211.41
No. of Units: 931,900.9058

*warning: It will be a bit long and you might not like my view, feel free to skip it if you have zero interest.

Dear Investors,
I ain't a person like politics particularly, however unless you are residency in China where all information are sealed or living in a cave with no internet in the last month, the occupy central is the hottest topics in Hong Kong. So I would like to express my takes on this singular event from both economic and political views. 



Economic View:

I knew it is coming, sometimes between Sept and Oct, and my prediction of this event was: it will only have minor effect to HK's economy, and i am pretty much correct (for now), historically politics impact on the market is only temporary, after the incident ends, the market will continues her previous trend (up or down)

Even as huge as the war between Russia and Ukraine, it only make Russian stock drop 20%, and when the new president of India stepped up, the India stock market surge 30%. It is due to the market is driven by news in short term, but driven by economic performance in long term. If that political event have no fundamental change to economy, then the society will quickly forget about it.

When occupy central started, the HK stock market dropped roughly 5% in 3 days, it added up to the previous drop so this month HS index have dropped roughly 8% in total, while my fund have only dropped 1.1%, as you can see i was prepared for it. Regardless of the market downside, my fund performance was still up 0.6% before the occupy central started, but in 2 days before the end of Sept, it was gone negative.

Although i said political events doesn't affect the economy that much in long term, and i believe after it is settled everything will be back to normal, however we can use the market's short term respond as an indicator to observe whether the world see these political events will have a positive effect on the society, the mechanism behind is simple, if the political event have given the investors confident, surely more capital will enter and cause the market to rise, if the political event show a negative effect on the society, then the investors will sell base on fear and cause the market to drop. 

At this point, we can say the world doesn't think occupy central will have a positive impact to HK. The supporters of this event argue, they know in short term they are affecting the economy, however comparing the political improvement they are going to bring, the sacrifice will worth it, so lets discuss this claim in my political view session. 


Political View:

For every political events, the society have to pay a price, the organizers knows it (maybe the students don't), so in order to convince people to join, they will say the long term benefits will make the short term sacrifice worthy.

If you have no idea what they are fighting for, let me simplify for you. HK is going to have a "democratic" Chief Executive election in 2017, the election of the previous CEs were chosen by a small group of people, but now Beijing agreed all of the registered voters in HK can vote for our own CE, sounds great right? wait until you realize the CEs we can vote for are pre-selected by a small group of committee. So democratic movements see this as a fake democratic election, rather than a real democratic election, a universal suffrage where citizen can nominate anyone to be the CE of HK, 

In order to express their anger of the Beijing decision, few organizers included 2 students organization suggest we should occupy central (the economic hub of HK), by paralyzing the society and economy of HK, it will force the HK government and Beijing to rethink the decision and ultimately give us a true democratic election in 2017. That was the plan!

But after couple months of back and forth, it turned out not much citizen are interested to get involved, occupying central become unsuccessful, instead they have ended up occupied 3 other locations: Admiralty, Causeway Bay and Mongkok, However how the government action handling the situation next is what make the "shit hit the fan", the police hope to use tear gas to clear the streets, instead of succeeding taking back control, it raged up more citizen came out to protest on the street.

So we can say the misused of tear gas is one of the reason why there are so many people to join the movement, and later it developed into a "no man drive" events, because most of the citizen came out to street, blocking the roads NOT because the organizer asked them to, they are spontaneous movements, and due to the fact that many people use umbrella to fight against the police's pepper spray, the world now called it the "umbrella revolution".

If you want to follow the latest update, you will find it everywhere on the internet, the movement is shown on CNN, BBC even the cover of Times magazine, so if the movement is about rising voice how the people of HK do not like the government, they have already succeed more than they can imagine. Yet at the same time, they have affected many people's livelihood, e.g. public transport, retail stores have to shut down, and many business depending on the national holiday on the 1st of Oct, Now it is my take (some might not like it)

From the beginning, i personally do not feel by paralyzing the society can bring any positive effects onto the society, and historically i have not seen one case this kind of protest will lead to a successful result as getting what they want, it doesn't matter whether it is an absolute monarchy country, or the most democratic country, it just won't work! 

Instead it will lead to a chaos, the authority will end up clearing the street, because as a movement develop, more people will make things complicated, and without a clear leader controlling the followers, different opinions will split the movements apart and lead to a bloodshed internally, this is the nature of men, everyone want to be the one who take control.

However i also believe HK can afford it (if it doesn't last too long), because our economy is still strong, but personally by occupying the streets and hope it will change the mind of Beijing is a native thinking, if you really understand communist, they ain't even afraid of USA, how would she can be affected by HK? let alone using a method that is hurting ourselves.

To me, i value economic freedom higher than political freedom, because when the society asking for more political freedom, the reason behind is when the majority of the citizen cannot share the benefits of the economy achievements, i would be pretty confident to guess 90% on the street now is not because of democracy, but because they cannot afford a house, the inflation is too high, the government is not function properly, only 10% is there for the real deal, a true election.

Their logic is that: if we have more political power, we will able to choose someone, a true leader we desire to save us from the mess, this is the logic i personally think it is flawed and it will never ever a government can achieve such thing. This is similar to a young lady always dream of her prince charming, and when the real husband material came along, she doesn't like it very much, that's why in the countries where democracy have become mature, the citizen have experienced many chosen (imperfect) president, their request will become more realistic. 

However I must admit if the common citizen have certain power over the government, they might feel better, but the belief that a "great government" will be able to save us all from the problem we have now is a delusion.

For sure there are also many actually angered with the fact that Beijing do not keep their promise by giving us a universal suffrage, i never trusted the communist right from the start, as the bible said: "Can an Ethiopian change his skin or a leopard its spots? Neither can you do good who are accustomed to doing evil." - Jeremiah 13:23 

Let alone recently the President of China Xi Jinping openly speak: "China is a lion, but we are a civilized lion." i was like, seriously? i like lion, i think it is cool and tough and all that, but i also bet the most civilized lion still want to eat some sheep, in a civilized way of course.

Hereby I called upon you who have patient to read this far, do not put hopes or waste your time onto these movements nor the government, i treasure the opportunity i am still having now, and did the best i can in my position so ultimately, my financial freedom will allow me to get away from these political bullshits.

regards,
Calvin

2014年9月8日 星期一

MECHCalvin Fund Report Aug, 2014 - Dark Horse

Latest fund price: $1.5561 (-0.48%)
Total Market Value: $1,450,101.35 (-2500.66)
Total no. of Units: 931,900.3089 units (+2829.5494)

Dear Investors,

Sorry for the late coming report, the global market is heating up and the HK index have been up for 6.16% since 2014, at the same time it has broke the 6.5 years long term resistance at 25000, so i have high expectation it will go up to a new height in the next 1-3 years.

But few might question why my fund is only up for 2.41% since 2014, although it is also because of roughly 2% of dividend has been paid (or reinvested).

The key reason is that when a market is going up (bullish), all the major companies (blue chips) will lead the rise, most of these companies are actually part of the index, so rise of these companies results in the rise of the index, 

However i do not like to invest into large companies, mainly because they represent the index already, if i invest in them, my fund performance will only as good as the index, how is it possible to beat the index by investing in companies which are already part of the index?

Most of my investments goes to small to medium large companies, these "second & third rank" companies usually follow the rise of the large companies, but once they pickup the steam, they surge so much more than their big brothers, and at the end of a bull market, even those rubbish, companies that have no value will start skyrocketing because the market will become so irrational, that's the time when i will take the profit and leave, and of course, wait for it to collapse, this is the forever cycles of our modern economy :)

So be patient and i am expecting something big from Oct to Dec

regards,
Calvin

2014年8月1日 星期五

MECHCalvin Fund Report July, 2014 - Next 5 Years Plan

Latest Fund Price: HK$1.5635 (+0.69%)
Market Value: HK$1,452,602.01
Numbers of Units: 929071.4175 units

Dear Investors,

I still haven't delivered all my dividend, esp. few friends I have not seen for quite awhile, i will keep the dividend into reserve and will contact you individually, if no preference i will reinvest the dividend.

I saw some funny faces when i pay dividend to few colleagues at office, $2, $4, $6, so many coins and it's just too much fun! some said although little, still better than bank, damn right it is!

anyway 5 years have passed and i am looking forward to the next 5 years, i have stopped fund raising for 6 months when i have reached the 1 million mark, however people (who know the existence of this fund) have started to give me money into the fund, so i feel i have enough money to work so i have stopped asking people to join or fund raising.

In my next 5 years i set simple goals.

1. I have repeatedly said 90% so-called active fund managers cannot beat the market in long run, i have proven i belong to the 10% that can beat the market in the last 5 years, and i expect i will continue to do so in the next 5 years.

2. I want to expand my fund to 5 millions, my capability of wealth management have increased.

3. I will find way to lower the trading cost even more (so far is 1%), 1% seems little, 1% of 1 million is only 10k, 1% of 1 billion is 1 million, although 1 billion in the eye of modern financial world is like $1 in an average person's eye, nobody cares, however i want to be push the running cost even lower, better donate that 1% to people who needs it, do you know $100 a month can feed 5 children in Africa?

4. Fully transform it as a long term retirement fund, which represent long term steady growth.

5. Find options to legalize this fund, option can be private fund with legal rights, or public (mutual fund) for normal citizen to join.

Let's see how it goes after another 5 years, it will be year 2019 baby!!!

regards,
Calvin

2014年7月4日 星期五

MECHCalvin Fund Report June, 2014 - The 8th Wonder!

Latest fund price: $1.5527 (-2.09%)
Market Value: $1,434,594.17
No. of Units: 923,919.1289

*the drop is due to dividend pay result in lower cash

Dear Investors,

you should received my individual emails about your dividend to be paid, you will receive notice from me about how to transfer money to your bank account, or if you are my friends or colleagues, i will give you in cash when i see you at office or next gathering within this month.

some of you already reply you want to give your dividend back to me, some suggest i can buy ice-cream, go get some dim sum or sandwich, thanks for that! 

Some of you decide to reinvest back in this fund, not a bad choice! Albert Einstein once said “Compound interest is the eighth wonder of the world. He who understands it, earns it ... he who doesn't ... pays it.”

even your interest is as low as $1, we will see how much difference it will become after couple decades, say after 20-25 year :)

nothing much more to add, 

i have made one video last month, check it out when you have time, it is about some feel stock trading is nothing more than gambling, actually it isn't :)



Enjoy the summer around the world! *unless you are in Australia right now :D*

regards,
Calvin

2014年6月10日 星期二

MECHCalvin Fund Report May, 2014 - 5th Anniversary! My Performance, Comments and Vision!

Dear Investors,
Latest Fund Price: $1.5854 (+1.3%)

all the details about what i have been doing, profit & losses, current assets, what i am holding, value, breakdowns are all in the attached PDF, unless you have high interest in money management (highly double it, haha), have a look when you have trouble sleeping, the numbers surely can help! just a quick summary for you what i have achieved in the last 5 years in case you don't have the time

Fund performance: +58.54%
Annualized return: +9.65%
* hang seng index: +24.75%

investors joined: +108
investors left: -5

money subscribed: +$1.31 million
money withdrawn: -$53,451

market value: $1.453 million
units created: 917,047.4222 units
fund price: $1.5854

realized profit and loses:
HKD: +113,281.35
GBP: -165
USD: +14,949.63
CNY: N/A


Comments:

not super great result, there are funds (although very little) can achieved +100% in the last 5 years, however there are about 90% of the mutual funds were unable to outperform the market in the last 5 years, so i think i did alright as an amateur.


My Vision (the value of one dollar):


no doubt i start to run this fund as a retirement fund, first of all i find financial needs for my retired parents, as well as the needs of some of my family members and friends that are the major investors of this fund, also i am not hoping for super quick ultra rich, my desire for money is so little, in the beginning investment was more like a game to me (like play chess or computer games), i want to get high score not because i love the money, but i love the game. But now when i have become maturer, i start to understand the value of money and how it affects people's life.

over the years working in financial industry let me understand how fragile our financial system is, bigger the institution, less trustworthy, low interest rate, high inflation, normal citizen got scared and become extreme sensitive to the current highly volatile world, money is not secure, corruption in company, government money-printing involvement doesn't help but push the greed in wall street even further, in the end we can all foreseen the inevitable conclusion: each dollar worth less and less

Many people do not want to get ultra rich or have the most luxury life, they just want "sufficient amount of money" for the rest of their life, so i have set these goals for my fund, 
1. investment amount can be low enough for normal people ($1)
2. outrun the inflation (assume to be 5% annually)
3. low cost (friction-less finance)

i want to put an extra note on the 3rd point, low cost, in the last 5 years, my total trading cost is about $10,000 (1.08%), although it is quite low but i feel it is not low enough, usually a professional fund charge 5% initial fee, 1-3% commission for the salesman, 1.5%- 2.5% management fee depend on each fund, and extra 15% so called performance fee if the fund manager do well, it ate up at least 7-10% of the investors' profit (IF there is profit), how many fund can have 7% return in the first year just to break even? my approach to my fund will always find way to lower the cost, zero management fee, and more over, i hope some day i can buy a small broker firm, so i can offer completely free trading fee, all the cost except tax must be eliminated!

in these way hopefully i can keep the value of each dollar being invested here unchanged!

regards,
Calvin

p,s. PDF only disclose to investors only through email