Thursday, February 09, 2012

Perennial sold

As part of a portfolio clean up, I have been taking a close look at some of the smaller investments in the portfolio. Each investment takes up a certain amount of time to monitor and, as the portfolio has grown, I have concluded that while there is room for some smaller or more speculative investments in the portfolio, it is not terribly productive to have too many such investments at any one time - my time and effort are better spent on other things.  I've also set myself a (somewhat arbitrary) threshold at which a position is considered "small".

As of this morning, I had a total of 11 investments which fell into the "small" category. This is simply too many. It was also worth noting that the aggregate realised and unrealised losses on the 11 small positions is, in the overall scheme of things, simply not material. Put differently, even if the small investments had produced net positive returns, I would still be going through the same exercise - evaluating and monitoring 11 investments which collectively will not have that big an effect on the portfolio is not very productive.

Accordingly, I am in the process of going through each of the 11 small investments.  This morning, I sold off  Allan International (HK:684) which was smallest of the small. This afternoon I sold my shares in Perennial International (HK: 725) at HK$0.70 each. I took a net loss of around 14% on this one. I should complete my review of the remaining nine small positions over the next week or so.

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