Thursday, January 7, 2010

Buy on dip, Buy and Hold - Investment Strategy for 2010

2009 has been a great year to say the least. All the markets have rebounded sharply and I am pleased that my portfolio has broken even after the devastation caused by the financial crisis.

As we leave the troubled times behind, it has been said many times that the easy money had been made, now the route to wealth creation will rely on a strong stock selection. Many analysts have had their versions on how 2010 will pan out. Some say that this is the beginning of the multi-year bull run, others qouted that the road to recovery will be bumpy. The big question that everyone have in mind will be : When will interest rate be raised to curb inflation and speculation?

As a value investors, one must hold true to its fundamental principles. Ignore short term volatility and focus on the fundamentals of the companies.

Cut things shorts, my stock selection for this year are:

1. Adampak - Manufacturers of die-cut, labels
2. Boustead - Multi industry focusing mainly on energy-related engineering and geospatial and real estate solutions
3. Midas - Infrastructure play dealing with carriage construction
4. A-Power Generation Power - Wind Turbine Manufacturer

Reason for my choice

1. Adampak and Boustead remains my value play stocks. Low P/B, high ROE and consistent dividends. 40% of my capital are invested in them.

2. Midas and APWR are my selections for growth stock. China's growth may not be as high as before but it is still growing and as long as rail way gets constructed, there will be business for Midas. APWR is a green alternative energy play. $450 billion has been committed for the wind energy over the next 5 years. They have recently won contract with GE to build wind farms in Texas and recently concluded a license agreement to have exclusive rights to build a particular model of the wind turbine.

Current game plan right now is to build up hoards of cash in anticipation any possible correction that will present opportunity for entry.

Well, this is it. Let's see how this year will pan out.

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