Sound Investment

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22 Jan 2013 03:38 #12985 by Rock
Sound Investment was created by Rock
 
Sound Investment
Learn how to be a great investor, not a hopeless gambler. Impact of losses – make 100% and then loss 50% & you only break even & then loss 50% & you must make 100% just to recover.
Thus the key to success lies protecting your principal, knowing when to cut losses is life in the real world. Knowing when to take cash in profits, or abandon falsely strategy, is of equal importance. Cautious investments will serve you well enough.

Timing the market is next to impossible- Adopting the correct time horizon for specific investment objectives is however essential. Staying invested in the market for the long term is the only way to achieve long term goals.

Rather than try to time the market, it is advisible to look exactly at what a company is worth & how much it would be worth if worst should come to the worst. If the company is so cheap that its value stays almost the same even it will to go out of business, then you have a “margin of safety” in your investment.

Invest in Growth Stocks - Investors must expose to Growth Stocks growing at double digit if they want to capture that Growth. Look up for potential growth story.

Value investing - buying at good value & holding it for the long term for appreciation & dividend yield. Invest in only sectors that you are familiar in. Learnt about market cycles, Staying in focused & disciplined.
Loss aversion – not willing to cut loss. Many so call investors always want to win but refuse to lose. They will sell the winners & keep the losers. They feel very painful to cut lose. Eventually they will end up holding onto the losers. Many of the losers will eventually end as penny stocks. Many have to sit thought the market circle to recovery their lost. The winners are those companies which have potential growth story or those undervalue stocks that will recovery fast in market correction or market recovery.
 

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22 Jan 2013 17:50 #12988 by Rock
Replied by Rock on topic Sound Investment
How to Build a Personal Stock Portfolio
by Alexander Green ,
Investment U
Chief Investment Strategist

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25 Jan 2013 02:45 #13012 by Rock
Replied by Rock on topic Sound Investment
 
Many people have the wrong believe thinking stock markets are for speculation & gambling, for making quick bucks. They will buy low & sell high for quick profit. Next they will buy high and sell higher & then buy higher and sell higher higher. No profit they will hold on. They feel painful to cut lost. These people will only sell the winners & keep the losers. (Kia Su mentality) Eventually they will end up holding all the losers which are mostly penny stocks. Just ask yourself why are these companies end as penny???

It is very true one can double or maybe treble their profit within days by speculating/gambling in penny stocks with all their saving or on leverage on margin trading. But remember they can also lost every cents. (Win all or lost all) Why should we expose our life saving to such high risk? Maybe for some excitement it is advisable not more than 5% of our saving expose to penny stocks.

Investment is about value investing. Buy good value stocks & holding for long term for appreciation & dividend yield. Let your money work for you & not work for your money. In this way you are able to sleep well. Review your portfolio from time to time. Here are some guardlines which have helps me in my investment:

1) Invest in Growth Stocks. Investment is about growth of companies.
2) Invest in undervalue stocks which give you a safe margin of risk.
3) Learn about market cycles.
4) Invest in sectors which you are familiar with.
5) Stay in focus & be disciplined.
6) Sell only stocks over-run it value or fundamental. Be thankful & never regard your decision.
7) Cut lost if the company future is in questions. (smell or see cockroach)

History of past crisis: Black Monday 1987, CLOB, Asia Financial Crisis 1997, .com bubble 2000 Credit Crisis 2008 & PIIGS Financial Crisis 2011.
When crisis hits I will review my portfolio. Build up cash position & buy up the gems during the crisis. Remember, crisis resulted in great opportunity.
 
During the 2008 crisis I’m able to recover fast by turning lost to profit. In 2009 & 2010, my performance for 2 years is about 200%. In 2011 my performance is about 15%. In 2011 last year my performance is about 50%.
 
My advice is to invest wisely, sleep well & see your money trees bear fruits. Let your investment generate passive income yearly. The best part is able to outperform the markets.
 
 

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26 Jan 2013 04:00 #13025 by Rock
Replied by Rock on topic Sound Investment
 
Having stop loss in place is good for any surprises. On the other hand the BB is always around to trip your stop loss from time to time, that will cause you to reset back to square one. So it is best to focus on fundamental sound stocks which are able to withstands surprises.
As for Blue chip stocks which usually track by ST Index. As we all know ST Index also will go up and down. Blue chip stocks usually are able to recover faster than penny stocks.
Sucessful investors are those who able to spot Growth stocks which are potential muti-baggers. Some of the muti-baggers stocks are Vicom, Fragrance Groups, Super,SBS many others.
Sumer have highlighted a number of 2nd liners undervalue properties stocks. All these stocks have performed and will still perform. I have beem handsomely rewarded & thanks Sumer for it.
During 2009 I have park all my fund in Biosensors, Bonvest, First Reit & Thomson Medical. 3 of these are medical stocks which are recession proof. All the 4 stocks are muti-baggers. Traders, speculators or gamblers will never able to score muti-baggers, because they will not have the patient and are alway ready to take profit.
I strongly believe CORDLIFE have the potential of a muti-bagger. Cordlife is debt free, generate free cashflow recurring profit. It's also can be consider medical company which is recession proof & will not be affected by business cycle.
All the other medical companies are trading above 30 PE & Cordlife is trading about 15 PE. Cordlife business can be comparable to Insurance business but there is no worry of payout claim to members
 

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26 Jan 2013 18:04 #13034 by pine
Replied by pine on topic Sound Investment
Hello Rock : You wrote   ... During 2009 I have park all my fund in Biosensors, Bonvest, First Reit & Thomson Medical. 3 of these are medical stocks which are recession proof. All the 4 stocks are muti-baggers. Traders, speculators or gamblers will never able to score muti-baggers, because they will not have the patient and are alway ready to take profit.

 

Congrats Rock on the 4 multi-baggers! I agree with you about traders. Their mindset is take profit, take profit. This is not a wrong strategy as it works sometimes in an uncertain market. In a bull market, it will not allow them to realise multi-baggers. Fundamental investors, on the other hand, can find it frustrating to see paper profits vanish, and then return, and then vanish. 

In the end, to each his own. The world is made up of all sorts and investing is complex, has so many variables, it gives rise to many stripes of investors.
 
The following user(s) said Thank You: Rock

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26 Jan 2013 21:54 #13042 by Rock
Replied by Rock on topic Sound Investment

Abb you have said "Fundamental investors, on the other hand, can find it frustrating to see paper profits vanish, and then return, and then vanish." Well it happen to me in the past but I have learn from it. We have to review the company business from time to time, knowing when to sell. Are we still holding on to a stocks when it"s already trading at too high PE?
The other area is we should be able to differential recurring profit or one time profit from whatever sourse. I have read someone in the forum said "Company A profit will power next day because profit have increase by more than 100%" The next day company A share price did not rise.
During the PIIGS crisis in 2011, I only keep growth & profitable stocks which are paying good div. some still as high as 10% and those still undervalue stocks. At the same time accumulate high cash. Buying stock is easy but knowing when to sell is difficult. My performance in 2011 is 15%.
As I have mention earlier" When crisis hits, review your portfolio, build up cash position & buy up the gems during the crisis. Remember, crisis resulted in great opportunity."



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