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Majesty Fund. Presentation Flow Trading Philosophy and Strategy 1 Behavior Bias 2 Analysis of...

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Majesty Fund Funds Managers Hung Pun Ki, Majesty 2008078285 Mak Yin Yan, Wendy 2008299994 Wong Lam Wai, David 2008085991 Yau Tat Kwan, Jacob 2008046921 Stock Track Portfolio Project 09-10
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Majesty Fund

Funds ManagersHung Pun Ki, Majesty 2008078285Mak Yin Yan, Wendy 2008299994Wong Lam Wai, David 2008085991Yau Tat Kwan, Jacob 2008046921

Stock Track Portfolio Project 09-10

Majesty Fund

Presentation Flow

Trading Philosophy and Strategy1

Behavior Bias2

Analysis of selected trade3

Future Prospective5

Relative and Absolute Performance4

Majesty Fund

Trading Philosophy

11 Market is NOT efficient!

22 Believe in Value Investing

33 Believe in Momentum Investing

Majesty FundTrading strategy

• Primarily in Hong Kong Stock Market– Easily to obtain information via Internet– With a deeper understanding– Can catch the market sentiment easier

• Asset allocation– At the beginning as outlined,

10% spots and future, 20% cash, remaining contributed to HK stocks

Majesty Fund

Behavior Bias

• Ignorance of short-term game• emphasize on long term investment• Only 3 months• Neglect short-term volatility

• Selection of unfamiliar market• Buying of derivatives• Asymmetric information

Majesty FundAdjustments

Focus on stock-specific news events,

with reference to macroecono

mic news and financial markets

Paying more attention to Hong Kong and China

Stocks

Majesty Fund

Short-term day trading

Majesty Fund

0363 – SHANGHAI INDUSTRIAL HOLDINGS LIMITED

• 1st reason: On 31/3, Announcement of 2009 Annual Results show 00363 is bullish.

• 2nd reason: On 31/3– Shanghai Industrial holdings Ltd released its 2009

Annual Financial performance• Overall gross profit rises by 5.8%• Profit in real estate sector rises by 66.2%• Final dividend 60 cents per share

– Catch the advantage of Shanghai Expo

Majesty Fund

0363 – SHANGHAI INDUSTRIAL HOLDINGS LIMITED

On 31/3, we bought at HK$35.6

On 7/4, we sold at HK$39.9

Margin of safety is not beyond On 8/4, re-invest at HK$40.5

Majesty Fund

0363 – SHANGHAI INDUSTRIAL HOLDINGS LIMITED

• However, there is a series of bad news.

09 April 2010Shanghai is planning to impose value-added tax on real estateBeijing is planning to restrict application of mortgage loan

from non-locals

12 April 2010Strictly investigate the risks of loans provided to real estate

producers of China

13 April 2010Large selling of Mainland real

estate stocks due to suppression in real estate

market

Majesty Fund

0363 – SHANGHAI INDUSTRIAL HOLDINGS LIMITED

While f

oc

usi

ng

on t

he i

ndivi

dual

perf

or

ma

nce

of

00363,

we als

o

pay atte

nti

on t

o c

urre

nt

ne

ws.

We s

ol

d t

he st

ock after t

he i

nvestigati

ng

peri

od t

o st

op l

oss

on

14/

4.

Majesty Fund

0005 HSBC

• 4/2 monthly statement, new stocks released• 17/2 announcement of fourth quarter results

On 23/2, we bought at the price of HK$84.95

On 1/3, people were unsatisfied with the performance of HSBC in 2009

On 1/3, we sold at the resistant price of HK$86.65

Majesty Fund

Total Profit: $936.62 + $5158.05 =

$6094.67

On 16/4, we sold at

the price of HK$84.55

On 8/4, we reinvested at the support

price HK$79.55

Majesty Fund

Select Trade 3- Speculation(8173.HK)

Use at most 30% of money on speculative trading

Ride on moment with the help of technical analysis

Cut loss strictly at 15%

Bet on stocks with highest beta

Majesty Fund

Selected Trade- Technical Analysis

K line cross from below over the S line

Sudden Increase in Turnover

=> We wait for rising trend

Majesty Fund

Select Trade 3- Speculation

Buy at 0.061

Increase stakes at 0.073

Start profit taking at 0.091

Lessons learnt

When making profit, withdraw part of the money out and let the remaining run for itself.

Return =37.8%

Majesty Fund

Relative performance

1 2 3 4 5 6 7 8 9 10 11

-0.06

-0.04

-0.02

0

0.02

0.04

0.06

0.08

0.1

0.12

Comparison of weekly return of Majesty Fund and HSI

Majesty Fund

HSI

Majesty Fund

Relative performance

• Benchmark: Hang Seng Index• Outperform the benchmark!

Measure Portfolio BenchmarkSharpe Ratio 2.28 2.654Treynor Ratio 2.957 0.5437Return 10.92% 10.37%Volatility 12.64 20.64

Majesty Fund

Market Efficiency

2

2

1

2 ~M

kM M

k

Q n nn k

1

1

2 3 1

0,12 2 1 1

q

k nk

kqn

qZ N

q q

Majesty Fund

Market Efficiency

• Null hypothesis– The market is in a random walk process hence it is

efficient

• Result from tests– Test statistics > critical values for both tests

• The market is efficient– Reject the null hypothesis

Majesty Fund

Our perspective in 2010

Majesty Fund

Late Performance

• Huge returnRate of return in the last month= 15%

• Constant return• Highest among all funds• Rate of return of HSI

= 7.4%

Majesty Fund

Majesty Fund

• We learned from mistakes• We invest in our strongest• We have good market sentiment

Fact!!These make Majesty Fund the best performed

PROVEN

Majesty Fund

• The End• Thank you very much for your attention!


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