96 - An update on my Basket of Defensive Stocks

96 - An update on

my Basket of

Defensive Stocks

It has been more than two months since I lasted updated my portfolios of stocks in my Basket of Defensive Stocks. Some of my readers might be curious why I did not update it after several of my recent blogs.

The reason is simple. I have like to believe that the stock market is just another piece of jigsaw in our daily lives and nothing more than that. Its movement in share prices should not effect our everyday daily lives or even set the tone for our mood of the day.

I know of many people who are constantly bothered or affected by the movement of stocks prices everyday. It is like the stock market is a  monster that is controlling the lives of those investors who are too emotionally attached.

If you are one of them, perhaps it is about time to pause for a reflection and see the bigger picture of life has to offer. There is so much in life if one is able to shut off from the frenzy pace movement of stocks prices.

I have done that many times. There are instances that for several days in a row, I didn't check the closing share prices at all. And the feeling is fantastic. I could discover that I could focus more sharply in many things I wanted to do. And with less pressure too.

It is not that I am worried about the movements of share prices. My portion of share investment allocation has been well diversified out. So any movement of ups and down will be just be like that unless of course there is a major prices movement of a particular stock which I also happened to hold significant amount of shares.

But it is easier said than done. There are bounds to be articles written by bloggers or in the newspapers about a particular stock that has attracted their attention from time to time.

It could be due to that stock has just reported a sharply rise in quarterly earnings and looked set to repeat it again in subsequent quarters, or involved in a major cooperate exercise that benefits the company or a sudden pleasant surprise announcement of significant higher dividends payment.

So when these happens, even if you do not check on share prices, someone will interact with you and ask you that your that share is up so much and do you have any ideas? Or you could be reading a write up by bloggers heaping praises for this stock.

The impact of unexpected

higher dividend

announcement

A recent case of a stock attracting investors' and famous bloggers' attention is low profile trading house Harrisons Holdings (M) Bhd. Normally a quiet stock with not much trading volume, it quietly announced a surprise higher dividends of 25 sen (which investors expected 15 sen conservatively) on April 12, 2017.

And the next day onwards, life has never been the same anymore for Harrisons. Investors chased after Harrisons while famous bloggers came out with admirable articles for the company. It is like suddenly many came to the same realisation that Harrisons is such a wonderful and valuable company after all.

At the time of writing, Harrisons is traded at RM4.18 at the close on May 5, near its 52 week high of RM4.24. Note that at this stage, my purpose of this blog is not to ask you to buy Harrisons shares. The decision is always yours as I trust most of us are rather intelligent and able to analyse better than many others.

Back to my Basket of Defensive Stocks, Harrisons is the first stock from the portfolios to achieve the either 100% up or crossed the RM1 margin which ever comes first.

Truth is I didn't expect much from my portfolios of shares to surge to this level as most of them were chosen based on their consistent regular earnings which in turn can pay regular average dividends.

I believe such stocks are not so vulnerable to the occasionally market shocks which can jolt shares prices swinging wildly. But one important factor is that such defensive stocks are best purchased near their 52 week lows or after a retreat following a rally in share prices.

Except for Cycle and Carriage Bintang (CCB) which reported dismal results during the last two quarters, the others more or less maintain their earnings and dividends without much surprise. The only exception is Harrisons which raised its dividends to 25 sen instead of 15 sen which has a big impact on its share prices.

So this is how my latest Basket of Defensive Stocks performed to date.

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