Portfolio Update May 2008

Cumulative Return since 2007 : -8%

Dividend/Coupon/Interest received for 2009 : $33,222

P/S : For taking advantage of possible inflation and USD Downtrend, I have started taking positions in physical Gold. Gold should be well supported as China have also been increasing their gold reserves in their National Reserve. It will not be a long-term position and I intend to dispose of Gold if the bubble pops.

For the possible economic recovery, commodities will be on the rise and I have maintain position in my commodity funds and increase allocation to AUD, the commodity currency. I have converted more AUD dollars to be placed in 3mths FD at 3.24%. I have also increase allocation to Energy-related equities. Again, China have been actively increasing their activities on purchasing commodities/energy related companies & products and prices should be well-supported.

Finally, the recent equity rally have continued unabated and I will be looking to buy on dips as before. Though I will be maintaining my Cash Position and instead will be shifting out of equity funds and replacing them with direct equities that will be paying me dividends.

Warren Buffett's Investing Checklist

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Warren Buffett's Investing Questions

Before Warren Buffett invests a dime, he asks:

• Is the company in an industry with good economics? That is, is it not in an industry competing on price?
  
  
• Does the company have a consumer monopoly or brand name that commands loyalty?
  
  
• Can anyone with an abundance of resources compete successfully with the company?
  
  
• Are the earnings on an upward trend with good and consistent profit margins?
  
  
• Is the debt-to-equity ratio low, or is the earnings-to-debt ratio high? Can the company repay debt even in years when earnings are lower than average?
  
  
• Does the company have high and consistent returns on invested capital?
  
  
• Does the company retain earnings for growth?
  
  
• Does the business have high maintenance cost of operations, high capital expenditure or investment cash outflow? (If so, that's not good.)
  
  
• Does the company reinvest earnings in good business opportunities? Does management have a good track record of profiting from these investments?
  
  
• Is the company free to adjust prices for inflation?

In short, he makes companies jump through a lot of hoops before he considers putting them in his portfolio.

Source : InvestmentU