Sold 2 lots of STI ETF @ $3.18

The innate human tendency to be greedy makes selling stocks difficult. For example, an investor purchases shares of a stock at $10 a share and tells himself that when the stock price hits $20, he will sell it all. When the share price finally reaches $20, the investor becomes greedy and decides to hold out for more gains. When the stock price continues rising to $22, greed overcomes rationality again and the investor holds out for more. The stock price suddenly takes a downward turn and is back at $18. The investor then tells himself that once the stock price hits $20 again, he will sell it all.

This is exactly how I felt when I tried to sell my STI ETF for the past few days. My initial selling price was $3.15. When it reaches $3.15, I became greedy and decided to hold out for more gains. When it continued rising to $3.17, I placed my sell order at $3.18 and the stock price dropped back to $3.16. Fortunately, the share price rose back to $3.18 today and I finally managed to sell all my 2000 shares of STI ETF.

My decision to sell the STI ETF was part of the strategy to liquidate my stock holdings and sit on more cash while waiting for the next market correction/downturn. I initiated a position in STI ETF last year September at $2.72 and total return for the past 15 months is approximately 20% including dividends. In addition, the share price is at its 52 week high and I feel that the recent rally might not be sustainable as uncertainties are still looming over the US fiscal cliff, Europe crisis, China slowdown and Middle East tensions.

3 lots of Biosensors @ $1.19

Bought 3 lots of Biosensors at $1.19 today.

Here's a brief summary of the reasons for purchasing Biosensors:

1. High growth potential  
2. Licensing agreement with Terumo Corporation extended till Dec 2014
3. Potential M&A target
4. Impending SFDA approval on Biosenors' flagship product, BioMatrix (end of 2012?)
5. Shandong Weigao taking on a more active role in its capacity as Biosensors' majority shareholder
6. First mover advantage and strong positive clinical data as its key competitive advantage
7. Strong technical support at $1.20
8. Potential price cuts of drug-eluting stents in China and Japan might have been priced in already.      Furthermore, volume growth could mitigate price decline
9. Acquisition of JWMS, one of the top three Drug Eluting Stent(DES) players in China with a strong distribution network nationwide with around 25% share in the domestic medical equipment market
10. Analysts' top pick in the healthcare sector
11. Relatively low gearing, high ROIC and earnings growth(>20%) and attractive multiples such as P/E, P/B, P/CF, etc

Here are my concerns about the purchase:

1. Biosensors is a non-dividend paying stock
2. Uncertainty in global economy - Middle East Tensions, Europe crisis and China's slowdown
3. Magnitude of price reduction in China still unknown
4. Long-overdue SFDA approval on Biosensors' flagship product, BioMatrix
5. High competitive rivalry from bigger players in the DES market (Boston Scientific, Medtronic, etc)

Based on past experience, I became aware of the fact that I will never be able to catch the bottom when purchasing stocks and prices almost certainly go below my purchase price after I bought it. Since Biosensors' stock price has retraced back to its strong support line of $1.20, I decided to test it out by purchasing 3 lots. 

Although this stock does not meet my selection criteria of being a stable or dividend paying blue chip, I feel that its potential growth is worth a bet. The good track record of the company, coupled with an experienced management team that is capable of achieving targets for Biosensors and its investors, prove that Biosensors has the ability to carry out future growth plans. Personally, I feel that this stock is worth a look for long term investors who are interested in a growing industry. 

It is indeed difficult to keep emotions out of the picture. I am keeping my fingers crossed.

5 lots of Singpost @ $0.99

Purchased 5 lots of Singpost at $0.99 today.

Reasons for purchasing Singpost are:

1) Trading at 52 week low (major support at $0.99)
2) Strong support at $1 which has been tested 3 times since August
3) Dividend yield of 6.3% at this price
4) Limited upside potential offset by limited downside risk($0.70 during 2008 crisis)
5) Singpost-DBS tie-up from 3 Jan 2012?
6) Stable operating cash flows (well in excess of its dividend commitment)
7) Consistent dividend payout

Dividend distribution over the past 10 years

Source: http://singpost.com/singpost_03investor_dividend.htm

2 lots of STI ETF @ $2.72

Bought 2 lots of STI ETF at $2.72 today.

Rationale behind purchase:
1) Just got awarded bursary valued at $3000
2) Dropped 20% from its $3.39 high(in line with strategy*)
3) VIX is at 42.96 today (>40)
4) Dividend yield(ttm) is near to 3%.
5) STI is in a downtrend and stocks are generally undervalued
6) A bet on Europe's recovery
7) Time horizon of at least 5 years
8) Still have more than $10,000 in cash after purchase.  Able to buy more when prices plunge further.

*My strategy for STI ETF is to start buying when price drops 20%. Subsequently, I will buy one lot of STI ETF for every 15% it drops. Next target price will thus be $2.31(0.85 x $2.72)