The markets have now been drifting downwards for several weeks. While it is never enjoyable watching the prices of the shares I hold (and my net worth) decline, it has to be remembered that I am still a net buyer of investments and lower prices represent both lower risk and higher expected returns. Accordingly, I have been looking at adding either new positions or incremental purchases of existing positions to the private portfolio.
This morning I made a small incremental addition to my existing investment in China Blue Chemical (HK:3983) paying HK$5.60 per share. This compares my my original purchase price of HK$4.71. Average cost is now HK$4.93 per share (including transaction costs but not allowing for dividends received).
Whether this proves to be an astute piece of bargain hunting or a case of catching the falling knife remains to be seen. On the subject of falling knives, both of my last two purchases (Sino Oil & Gas (HK:702) and China VTM Mining (HK: 893) have fallen sharply since I purchased them (12% and 25% respectively) which is far more than the market decline over the relevant holding periods. A search has shown no announcements or other market developments which would explain the decline. Nor have I been able to identify any broker downgrades. Accordingly, I will continue to hold the positions.