Posted by CoronaComment > Jul 14, 2020 12:01 AM | Report Abuse
Is it a good idea to enter now? price is quite high now
Earlier would have been better. But that is hindsight
Before joining this counter, note the volatility.
Today we when from 22.94 to 24.5 then down to 23.5 before ending the day at 24.
There was also a month where we started at 17.2, hit 18 when TG announced a 350+% increase in profit then despite the good news dropped all the way to RM 14, before climbing back to RM15.5. During that month we had people saying that TG bull run had ended, that it was over priced. Sell Sell. Vaccine was coming. And all the while the number of Covid19 cases continued to rise. IB gave out TP of RM25-27.
One month of that before TG started to climb again, reaching 24.
So, if you do buy into TG, please understand the fundamental reason why TG and all other glove counters is going up. It is the covid19 virus. As long as the virus continues to spread, the need for gloves remains. You need to know this to have confidence in the stock. Thus seeing share prices fall from RM17 to RM14 over a week could either be a most terrible nightmare inducing experience or a second chance to buy more shares.
TG has a very high profile now, so expect lots of volatility as institutional investors move in and move out. The waves they make by their movements are huge. And institutional investors make their commission when they trade. So they won't buy and sit quietly until the end of 2021. In and out. Big waves.
You must also be able to hold your shares. This pandemic will last some time so in the long term share prices will rise but in the short term you may see all kinds of behavior. If you don't have holding power, you may be forced to sell at a bad time. But at the same time have a plan to leave. Covdi19 pandemic will not last forever. Even this too will pass.
Price is high now. But when I first entered at around RM4-5, RM6 was high, then RM10 was high, RM16 was high, RM 20 was high. Now RM24 is high. Every day will always be high because TG shares are climbing in price. It becomes low, when share price are falling like a rock (ie Airasia). And you don't want to be joining a rock in free fall. It is really terrible.
As for being a good idea or not to enter, you will need to decide if you are trader or an investor.
An investor is looking for good companies that are selling at or below their fair price. So you need to value Topglove and determine if RM24 a fair price for TG shares. Is there more value in the shares? For an investor, a share with a high cost does not mean it is expensive and neither does low cost share mean it is cheap. Garbage can be both a cheap rotting fish and an expensive broken airplane.
If you are a trader. Cost of the share does not matter. Company fundamentals does not matter. It doesn't even matter if the share prices go up, down or sideways. All that matter is can you predict what the price of the share will be within a time frame and implement the appropriate trading strategy? Can you see if where TG share prices will go? If you can go for it, if you can't don't.
Final rule, we are all here to make money. Super serious. Forum here is to share our opinion on best way to make money. We are all confident that our opinion is the right one. But then you have people who say sell, others say buy. Both can't be right, somebody is wrong. Who we don't know who. You have to decide what your opinion is, whether you are an investor or trader.
Me, I think the glove counters will continue to climb as long as the SARS-Cov2 virus remains uncontrolled. It is my opinion that a vaccine will not be ready in 2020. At best late 2021. TG can run wild until a vaccine is found. I am investing in Topglove because I see this pandemic as transformative for this company. It will fill TG with so much cash, pay for the expansion of its production capacity and improve its brand recognition to the point that TG will do what other companies that become big do, grow by buy out smaller glove companies. I see TG consolidating the glove business. It is already bigger than all other 3 of the Big 4 combined.