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Look at the business rather than share price (先注重生意,再看股价)

When new investors just started their investment journey, one of the first things they will first look at is the share price. They tend to be more interested in stocks that are cheaper as it seems to be more affordable. However, an intelligent investor should disregard the share price, and only focus on their business first.

It is relatively hard to do because you will need to do more research on their business models. For example, DUFU is a company that manufacture HDD components, and you will need to find out the demand of HDD, whether will it be sustainable for the coming years. On the other hand, we can also take glove as an example, they are currently being sold a lot due to the emergence of vaccine, but still glove is in no doubt that they will still be a necessity in the coming few years.

Benjamin Graham once said that it is better for stocks to have no quotation at all, so that emotions will not be accounted when buying a stock. Once again, we take one of the leader in glove sector, TOPGLOV as an example. Currently, their share price fell from RM10 to the current RM6.64, a 33% drop from their peak. After seeing the share price movement going downtrend, most investors will tend to avoid glove sector as vaccine is releasing to the world, and their share price has surged too much since April 2020.

However, if we are purely looking TOPGLOV as a business without any market quotation, will we invest in this company? The writer believes the answer will be yes. A company that have 50% of profit margin and 73% of ROE is not easily achievable by others. Imagine a company earn RM50 for every RM100 of sales they made, and return RM73 for every RM100 that shareholders invested. What a bargain!

Unfortunately, most of the investors nowadays are focusing more on share prices and trends, and eliminate companies that have a strong fundamental just because their trend has yet to emerge. Hence, they are some companies that are good but not paid attention to, such as palm oil companies and previously, banking companies. Investors and traders will only invest in these companies once they are trading at higher volume, and their price has started to move up.

In short, investors should focus more on company and business itself first, then only look at their share price, but not the other way round. No matter how high will the share price goes, once investors realize that the company has a weaker fundamental, the share price will eventually drop.

当新手刚踏入投资的旅程,他们会做的其中一样东西就是先看股价。他们会对便宜的股比较感兴趣因为它们看起来比较“买得起”。但是,一个聪明的投资者会先无视价钱,反而先看他们的生意模式。

这相对的会比较麻烦因为你需要在他们的生意上做很多的功课和研究。举例,DUFU是家制造硬盘零件的公司,那么我们就要找出硬盘在接下来几年的需求,而公司是否会得益。另一方面,我们也可以拿手套来当例子。他们现在因为疫苗的面世而面对着很高的卖压,但手套确实还会在这几年成为必需品之一。

本杰明.格拉汉姆曾经说过股票最好没有任何的价钱,那么在买股时就不会被市场的情绪所影响。我们再次拿手套的大哥,TOPGLOV来当例子。TOPGLOV的股价已经从最高的RM10下跌到最近的RM6.64,大概33%的跌幅。在看到股价的下跌趋势后,大多数的投资者都会避免买入手套公司,其中一个原因就是疫苗的面世,而另一个则是手套板块已经从2020年4月为止上涨了太多。

但是,如果我们去掉任何的价钱,单纯看TOPGLOV的生意模式的话,我们又是否会投资这家公司呢?笔者相信答案会是“是的”。一家拥有着50%的净利润率以及73%的股东回酬率的公司并不容易被找到。想象下这家公司可以从RM100的营业额中有RM50是纯赚益,而投资者所投资的每RM100,公司可以提供给投资者们RM73的回酬。这是多好的公司啊。

不幸的是现在的投资者都比较看重股价和趋势,所以会忽略掉拥有很强基本面但却没有趋势的公司。因此,我们才会有很好可是不被注重的公司,如现在的像种植板块以及之前的金融板块。投资者和交易者只会选择比较高交易量,并且价钱开始上涨的公司。

总结,投资者其实更应该先注重在公司的生意模式上,再看它们的股价,而不是反过来进行。不管公司的股价去到多高,只要有人意识到公司的基本面没那么强,股价自然的就会回调。

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https://klse.i3investor.com/blogs/InvestingKnowEverything/2020-12-22-story-h1538284908.jsp

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