$CNOOC (00883.HK)$When buying a property, you need a down payment; similarly, for CNOOC, you make a down payment. The rest is borrowed from Futu. Borrow at 6.8%? Of course. Buying below HKD10 offers a 7% return, with an interest rate of only 6.8%, and there's no need to repay the principal. Though with property, an H mortgage costs around 1.4%, with rental yields at 3.XX%, you still have to pay out of pocket to cover the principal. From a cash flow perspective, borrowing to buy CNOOC generates positive cash flow, whereas borrowing to buy property results in negative cash flow. Therefore, borrowing fully to buy CNOOC seems feasible.
Of course, every investment carries risks. However, buying below HKD10 with a 7% dividend yield appears to mitigate risks significantly. Moreover, oil prices are rising daily, there are special dividends, plans to list in A-shares, share repurchases, and the management team wants value to return. Considering all these factors, using simple math: 0.7 / 7% + HKD0.5 special dividend = HKD10.5. Thus, as long as the price is below HKD10.5, it’s worth buying. For this reason, applying the method of refinancing after property appreciation—doubling one into two, two into four—using unrealized gains to continuously increase positions, and adding more when necessary. That's why you see me adding positions at recent highs.
What will be the final outcome?
1. If the stock rises, profits are unlimited, and as long as the trend remains, I'll continue holding. However, after breaking through HKD10.5, I'll be cautious about adding more positions. I'll gradually reduce my position because having 280% of my capital in one basket requires extra caution.
2. If the stock doesn't rise, I’ll treat it as prepayment, depositing a fixed amount monthly. A 7% return (for purchases below HKD10) already satisfies me.
3. If the stock falls...