Late for Gold then buy Lithium

Almost everyone wants to get into Gold these days. Prices have been on the uptrend. Here I too share my oversight and it happened in 2000/01 when I was at a crossroad of investing a lump sum of my money into two investments - Gold Trust or Other Unit Trust.

Why these two? At that point of time, I had limited stock trading experience and time. What I knew from years of reading was when stocks go down, Gold will quite certainly go up because of factors like safety haven, scarcity and so on and so forth. I was at the the persuasion of the banks to "come and invest in unit trusts" - easy, and steady growth. Yes the key words were that. Growth with very nice upward trend "charts". Past 3 year charts! My mind was lingering on the Gold Trust which was at about $0.60.

So no regrets now.

Instead investment is always about looking forward. And forward looking value for some new research we would believe in. Thereby summarised in my Stock Trading Rules. (see http://denzukefinance.blogspot.com/p/my-trading-system-and-rules.html)

Therefore for the past 2-3 years I have been keeping a watch on this resource - Lithium. It started when the oil prices went out of "control" to over $150 USD a barrel. And when car companies were going crazy about been bigger and larger especially in USA. Inefficient and fuel-hungry machines. Manufacturers were thinking of alternative fuels, and fuel-cell. The downturn changed this too. Being efficient is in. Being green is in. Start to think now to change this. Some vehicle owners started with retro-fitting gas cylinders for CNG or NGV. For the longer term, hybrid cars and fuel cell cars will be more and more mainstream. And for these cars to function, the main product is lithium to store electricity inside the car.

My stock highlight for this sector is Orocobre Limited (ASX based stock).
Here is the chart. From 14 December 2007 till now, there has been a whopping 900% gain. (from about 0.30 to over $2.45) Look at the green "percentage change since" indicator.

Orocobre Limited is an Australia-based mineral exploration company. The Company focuses on lithium, potash and boron resources in Argentina. The Company’s projects include Salar de Olaroz Project, Santo Domingo Project and South American Salars Project. The Salar de Olaroz Project is located in the Puna region of Jujuy, approximately 230 kilometers northwest of the capital city of Jujuy. The Salar de Olaroz Project consists of 118 square kilometers of tenements over a salar (salt lake). The Santo Domingo Project is located in the San Juan Province. The South American Salars Project has approximately 60,000 hectares of tenements on 10 salars in the provinces of Salta, Jujuy and Catamarca. During the fiscal year ended June 30, 2009 (fiscal 2009), the Company drilled 16 vertical cored holes (1136 meters) and six monitoring holes (360 meters).

Unit Trusts Shenton Asia Pacific, Global Opportunities, Eight Portfolio ALL SOLD

There have been times we were approach in the banks, in magazines, TV ads about buying Unit Trusts and Dollar Cost Average. And the other acronym RSP. Regular Savings Plan meaning putting aside monthly a fixed amount say $100 into the Unit Trusts. This is the methodology of unit trust investment. Some professional will manage a basket of stock portfolio(s) on your behalf for a fee.

Today, I finally sold my remaining holdings in Shenton Asia Pacific Trust, Shenton Global Opportunities Fund and Ei8ht Portfolio by DBS Asset Management. Previously I had sold all units of my Citibank UOB United Telecom Trust.

The conventional question would be why you divested all your unit trust funds? Is it against basic diversification principles? Yes perhaps it does. Diversification is a form of average risk(s) into different sectors, segment, and types of investments. Cash, stocks, bonds, unit trusts, property. And within each segment a few other diversification e.g. Singapore Stocks, Malaysian Stocks. Residential property, commercial lot. So on and so forth.

Going back, let us think about the significance of having an investment in unit trusts. The goal is there are some professionals helping to manage and diversify your portfolio. You sum of $10 000, will be diversify to include Singtel (telco), Ezra (shipping), SIA (transport) and a dozen other stocks. Which you are unable to perform with just $10 000 by yourself. Perhaps you could buy 3 lots of Singtel shares.

Now, we are supposed to be self discipline investors. Seeking out to look for risks that will give a delightful return. Some of you had attended seminars. Many bought books, or read up from the internet. Blogs, magazines, Forbes Magazine, Bloomberg. We look at reports. Brokerage house recommendations. The Edge Magazines. We try to be more knowledgeable about Technical Analysis. Fundamental Analysis. Price Earning Ratio. We can think of dividend yields and compare that with Fixed Deposit Dividends. And we feel wiser when we can set aside that $10 000 into say Suntec REIT, and get a 7% return, rather than letting it stay in Fixed Deposits. We feel an accomplishment. We studied!

Therefore, the question is then isn't it obvious we are actually taking back that people power into our own hands. We are managing, diversifying, investing from our own analysis and own effort? We have a fuller control and we feel satisfied. That is how I feel. Ever felt very upset when the Unit Trust we bought did not perform?

Finally, I am saying all my good-byes to unit trusts. Perhaps a milestone of graduating from seeking experts to manage the investment options (and paying them a fee), now I am doing it from my own effort, my own knowledge and experience. The monetary rewards are more fulfilling simply because I did it my way. Comments, suggestions, welcome.