Peter Lynch and the blue chips
Stalwart - simi lai?
"In addition to a strong balance sheet, one of Lynch’s key measures for a stalwart company is the P/E growth ratio (PEG), which is calculated by dividing the company’s price-to-earnings (PE) ratio by its earnings growth rate. Lynch determined that PEGs below 1.0 were an indication of an underpriced stock relative to its growth rate. He considered stocks with PEGs below 0.5 to be a real bargain. For dividend-paying companies, he factored in the dividend yield to arrive at a yield-adjusted PEG ratio. Wal-Mart is often cited as an example of Lynch’s stalwart methodology."
[Source: Stalwart http://www.investopedia.com/terms/s/stalwart.asp#ixzz4uQvSnJIq]
哦,P/E还可以这样子用的喔。
I interpret it as -
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Just a fun simulation here based on an old blog post of mine last year - http://rainbowcoin.blogspot.sg/2016/03/4d-market-rules.html
STI was at 2837. Now STI is at 3246. (Difference +409)
If I were to buy all the resilient blue chips (highlighted in yellow below) then in 2016, assuming almost equal amount invested per stock, how would my portfolio fare now?
Time travel to Oct 2017 and
the results are...
Shares | Price then | $ vested | Price now | $ vested | Gain/loss | |
Ascendas REIT | 4100 | 2.44 | 10004 | 2.66 | 10906 | 902 |
Capitamall Trust | 4600 | 2.17 | 9982 | 2 | 9200 | -782 |
Jardine Cycle | 300 | 39.55 | 11865 | 39.82 | 11946 | 81 |
SATS | 2600 | 3.91 | 10166 | 4.66 | 12116 | 1950 |
SPH | 2600 | 3.92 | 10192 | 2.71 | 7046 | -3146 |
Thai Bev | 13000 | 0.77 | 10010 | 0.9 | 11700 | 1690 |
Wilmar | 3100 | 3.21 | 9951 | 3.2 | 9920 | -31 |
TOTAL | 72170 | 72834 | 664 |
Negligible capital gain. Becos one rock sunk the ship.
Could have done better by buying the STI ETF!
(Those who bought the banks really hit home run. LOL)
Moral of the story
Do not buy simply based on the company's resilience in a down market. Do look at the company's earning prospect, forward price trend and overall sentiments.
How many of the blue chips are still stalwarts? It's for you to decipher.
*** Disclaimer: I have no vested interest in the above stocks.
Could have done better by buying the STI ETF!
(Those who bought the banks really hit home run. LOL)
Moral of the story
Do not buy simply based on the company's resilience in a down market. Do look at the company's earning prospect, forward price trend and overall sentiments.
How many of the blue chips are still stalwarts? It's for you to decipher.
*** Disclaimer: I have no vested interest in the above stocks.
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