I am writing this blog for a discussion when look at the recent stock market development.
The topic is that a good stock is it really matter?
Yes, it is really important when you adopt buy and hold strategy which
allow you to ride on the uptrend waves. However, people who learn about
fundamental they tend to ignore the noise as they say noise will not
affect the nature of the business. Is it such thinking can really make
you profit in long run.
Investment world is getting sophisticated day by day and thing is
getting more vulnerable as Malaysia adopt open economy and
globalization.
we have seen many value trap when they adopt fundamental investing.
there is nothing wrong of fundamental investing but there is some thing
wrong when they ignore totally of the technical. When they totally
ignore the important of technical. When thing get sour, they gonna bite
the bullet and swallow the pain.
Its very simple, if this a fundamental good stock, it should not move
against the technical trend. If they move opposite direction, there must
be some thing wrong with it.
One thing i am pretty sure. There will not be every lasting forever
going up stock. If they have not drop for the past 10 years, will they
continue going up for another 10 more years. Those day people adopt buy
and hold and keep it for long term is easy. But these day business
environment is getting more competitive.
Given one example :
20 years ago, Genting is the only CASINO operator in SouthEast Asia.
Today, we already see the evoluation for phsycial gaming into online
gaming. On top of that, we also see more casino is building up in
SouthEast Asia. Let me share with you some statistic on this.
You may refer to this to understand better gaming industry.
https://urbanasian.com/news/2018/11/top-5-best-gambling-destinations-in-south-east-asia/
XL
65 casino in 32 cities.
Can you imagine how many competitor coming out?
One thing for sure is business environment is getting more challenging
when a business is really profitable. Very simple, outside there is
plenty of multi billionaire holding lot of cash is waiting for a good
investment opportunity
Remember those day when we are chatting during 90 era.
Evolution Stage 1
People are using ICQ
Evolution Stage 2
Later people go to Yahoo Messenger, MSN messenger.
Evolution Stage 3
Whatapps/ Line
Evolution Stage 4
Skype/ Slack
HP Evolution Stage
1. NOKIA - FAMOUS MODEL 3310
2. MOTOROLA - FLIP MODEL, VERY COOL AND PURPOSELY FLIP IN FRONT OF FRIENDS
3. SONY ERICSON - SONY CARRY FAMOUS BRAND. THOSE DAY SONY LAPTOP SELLING DOUBLE THAT THEIR PEER SUCH AS COMPAQ, DELL, ACER.
4. BLACKBERRY - CORPORATE HP
5. IPOHONE SERIES
6. SAMSUNG
7. HUAWEI/OPPO, XIAOMI
Can you see the same product but company has change down the road. If a
company can't maintain their market and keep on growing. A day their
competitor will overtake them.
So, as a retail investor, do you really have much time to study in
depth about this? I doubt so. Are you rich enough to get a good
dealer/analyst to monitor for you?
Let be frank, this is the society which people talk about benefit. You
can't expect a good service from dealer when you are talking about
position investment. Therefore, you only can rely on research report or
those boutique house research report. In some cases, people might rely
on forum such as I3Investor to give opinion and outlook. In other word,
you are putting your faith into other people hand. If anything go wrong,
don't put the blame on other as this is your money. Your responsibility
to ensure it is profitable. Not to wait for the person to inform you
when to sell.
So, if you are busy with work and can't do short term trading. Yeah. I
know that. But i am sure you have a minute just look at the price of the
stock you are holding. It is go below a certain price level. Regardless
how good is the future of the stock. you should just sell if off. You
might miss the opportunity of making big money if the stock resume the
momentum going up further because you refuse to chase high since you
sell low. Again, is it a profit 30% is not consider money compare to
50% or 100%. If you know what to do, if you have the knowledge. Then you
will plan how to reinvest. A person who regret is a person who have no
knowledge and let the greed control their emotion. End of the day, your
mind is full of regret and negative thinking. I would rather you invest
zero amount and never step into investment world. At least you still
live happily.
Wealth and Health, I will choose health. health is not about physically healthy, is also mentality healthy as well.
A person who aim to make position investment of 30%- 50% in 1 - 2 years time frame into fundamental stock.
Another person who spend a little bit more of time to do short term
trading with the aim 5-10% within 2 weeks time frame. If you can have a
success rate of 80% for several stock that you are trading. Will you be
making more than a person who aim 30-50% in 1-2 years time.
I guess the answer is pretty clear. Unless you know your stock can
surge more than 100% to 300%. Then i would suggest you stick to your
current approach which can deliver 3 digit return in term of percentage.
So, here come to the end of my discussion about this topic. A good
entry is more important than a good stock. That really depend how you
plan your trade.
FB Link : https://www.facebook.com/Steventheeinvestment/
https://klse.i3investor.com/blogs/SICStockPick/193953.jsp
