TENAGA

A bit of trivia.  Fundamentally, TENAGA needs no introduction.  It's not the best fundamental business out there, but it's definitely above average due to its pricing power, even if not managed by the best quality management.

Started buying TENAGA on 28 Apr 2021, nearly 3 years ago.

• Added 3 more times as indicated by the upward pointing triangles.
• Then near resistance, sold a small amount.  Still retain 85% of purchase.

With this kind of price action and trades, as of 25 April 2024:

1. Total Returns = 15.18% per annum CAGR (Price + Dividends).

2. Total Price Returns (exclude Dividends) = 10.65% per annum CAGR

3. This suggests that the Dividend Returns = 15.18% - 10.65% = 4.53% per annum CAGR.

The Dividend Returns are solid - lower than EPF long term returns of 6% per annum, but still higher than FD long term returns of say 3% per annum.

But ... Price returns are even better - more than doubled the Dividend Returns.
That helps Total Returns a lot - especially the 2 buys near the bottom.  That's like tripling the dividend returns!

Moral of the story:

1. Invest, don't trade. (TENAGA charts are not that suited for trading)

2. Invest in above average quality dividend stocks for wealth accumulation.

3. Invest more when the price of this above average quality business is sold at an attractive price.  At the time, the dividend yield when I entered in my 3rd and 4th purchase was around 5.5% to 6% iirc.  

4. Position size is critical.  If neutral position size is 3% and you feel the price might go lower but not too sure, invest a portion of the 3% first.  The advantage is that when your price sense turns out correct, add more when price is lower.  You can do this without violating your position size rules.   

5. However, I didn't get a full 3% position on my last purchase.   I didn't look harder and didn't ask myself timely enough whether I've seen the bottom in TENAGA when price went above my first entry or prior.  On the uptrend, I should at least get a bit more to get to 3% full position size around July 2023.  (too busy with work).

6. Sold a small portion near the horizontal resistance, but price continues to break above that, so, this looks like good odds of an uptrend.   The best thing to do in an uptrend is to sit tight and do nothing.

7. Quick 1 second visual look - next resistance is probably near RM13 (weaker) and RM14 (stronger).  As these are longer term charts, there's no need to watch prices everyday.   Don't need to be precise, but glance once in a while.

Why sell a little bit?  

Things are not black and white.  Probably lowers total return for a long period (because cash drags), but important to have some cash because one day, markets are guaranteed to crash if one has a 5-10 year horizon.  When this happens, you will be glad to have cash.  And you have no idea on when this will happen.