2016 Review & 2017 Outlook: The Story of Pencil
3rd QUALITY
“the pencil always allows us to use an eraser to rub out any mistakes. This means that correcting something we did is not necessarily a bad thing; it helps to keep us on the road to justice.’
In 1Q 2016, we had high conviction that Semen Indonesia (SMGR) was already undervalued when we compared it to its replacement cost, the share price also already fell 40% in 2015, so we think why don’t we buy SMGR ?
Yet, Mr. Market decided that oversupply issue is still in charge in SMGR, we finally dumped the stocks and accept small loss here.
Another mistake we made was on Champion Pacific Indonesia (IGAR).
At first, we thought IGAR share price around IDR 700 is a bargain considering we expect MITSUI will tender offer IGAR share around IDR 1.100, but we are wrong, MITSUI tender offer price was only IDR 274, IGAR share tumbled and we take a moderate loss here, luckily we only bought IGAR around 1% of our portfolio so we can said there is no material impact to fund performance.
One funny thing was when we bought Indofarma (INAF.IJ) around IDR 150 per share, we thought the stock already very cheap and with President Jokowi pushing healthcare idea as one of his priority project, we decided to collect it. It took only 1 month for INAF to doubled from our average buy price, we are so happy and sold the stocks around IDR 300, only to found out the share price hit IDR 5.500 by the end of 2016 (Now IDR 2.400). But we have no regret at all, we have our own valuation calculation, and sometimes stocks not only move by fundamental factors, but also money flow.
Like I said before, we are still human, after all. Even one of the best investor like George Soros lost USD 1 Billion when he was wrong during Trump unexpected victory in 2016 US election.
Making mistakes is maybe one of the best opportunity for us to improve our investment decision process in the future.
We always learn from our mistakes, so we will not trapped in the same hole.
