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Old Chang Kee: Have my curry puff and eat it too.

Friday, January 11, 2013

Time really flies! It really does not feel like I have been a shareholder of Old Chang Kee since October 2011 but it is true! 

I have been a shareholder of the company for more than a year now.

Today, I made a decision to sell half of my shares in Old Chang Kee. 

Why not hold? Well, it has more than doubled from my buy price.

The decision is not based on TA since it is such a thinly traded and volatile stock. 

The decision is more based on FA as I feel that although it is a great company with characteristics similar to See's Candies which Warren Buffet likes so much, valuation is now rather rich.

Then, here comes the interesting part. 

Why have I chosen to sell at 57c or higher? 

Why not 55c or 56c? 

For those of you who think that AK is a savvy investor with profound insights or thoughts, this could change your mind (hahaha..).

Well, my entry price was 26c a share. A doubling of the share price would see 52c a share. 

Old Chang Kee recently announced a 5c dividend which is payable sometime next month. So, 52c + 5c = 57c. 

Tadah! Rocket science at its best.

Why not sell all my shares then? 

Well, apart from the 5c bumper dividend declared, I really don't know why Mr. Market is so into Old Chang Kee suddenly. 

Could there be something brewing that is more delicious than the comfort fast food that Old Chang Kee is famous for?

Being minority shareholders, we are usually slower in getting any type of news, if at all. So, I am keeping half of my shares (which are free of cost now) just in case. 

Of course, then, I will still receive the bumper dividend to be paid out to shareholders next month. Yummy!

Related posts:
1. Old Chang Kee: Special interim dividend.
2. Old Chang Kee: Initiated long position at 26c.


Don_Jerome said...

haha. Actually that's smart risk management. Whenever we are in the market we are subjected to risk, up to our entire initial investment. You have just reduced you risk factor to zero, while maintaining upside potential.

FX traders do it quite frequently when they want to ride trends further.

AK71 said...

Hi Jeremy,

I always try to be a pragmatist and I just did what seems like a pragmatic thing to me. Thanks for sharing that FX traders do it quite frequently. :)

AK71 said...

In the news, 老曾记波拿酥饼被指使用非可持续棕榈油 学生发请愿书对公司施压.
U still ock shareholder?

My OCK shares are free. I can hold forever 😉

Millionaire style reply. 😬

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