- Half year EPS 24.8 RMB cents. - Strong cash flow. - Good growth projected... But share trades around at 18.5 cents. Look undervalued but why investors not interested? Have I missed something?
Mr Market seems to be in a manic depressive mood. Some companies are even trading around 1-2 Forward PE especially S-Chips. Sinotel is another one and many more if you were to strip out the net cash from the price of the stock. The greatest fear right now is that cheap seems to get cheaper..ie: catching a \'parang!\' Having said so, I\'m still buying and will buy some more and prepared for a 50% fall which I do think is a real possibility(50/50) if the DOW crashes to 7000. All I can say to all value investors out there, buy with caution...as we\'ll never ever know where the bottom is although it seems darn cheap right now. All my calculations in my 20 years of investing tells me that this is really a once in a lifetime opportunity but this has to be really cash that you are able to hold for 5+ years or more to earn huge return. NEVER leverage although you\'re 110% sure that this will be a winning stock. BTW, there are many stocks in the NYSE that are trading at ridiculous valuations so take your pick. My advise out there is to select the best 10-20 stocks and equally divide your portfolio. For example if you had 100,000 to invest here is the action plan 1. Spread it out to 5000 x 20 stocks (choose the best of breed according to your risk profile and valuation methodology. My valuation is based of business moat, FPE, Low debt, FCF, High ROE, minimum 15% CAGR and other qualitative measurement. 2. Buy in 20% lots for every stock. Following the above example, buy maximum $1000 worth shares every 1 month. In 5 months you would have reach your single stock limit. Why do this?? Simple...as I said I do not know where the bottom is and this will allow you to average down of the stock tanks. The flipside of this strategy is that the stock may surge half way through...what can I say...at least you made good money on half the proposed allocation amount...not too bad after all. 3. Once the limit is reach, hang in for the possible 5 year+ long wait. If you cannot wait, then don;t invest a single cent as you would probably lose anyway. I do welcomed any comments both positive and negatives as we all hang in together for this one hell of a stormy ride!
for me, a portfolio of 5-6 stocks is max. 20 stocks is too much trouble to monitor and one can never be sure when the external environment turns business prospects negative.
Hi Eagle, I agree and it really depends on your risk profile to narrow down the list. For 5 stocks it means that you\'re exposed to a 20% maximum loss if the stock tanks: (ie: goes to zero or close to it). and I am assuming that you\'re equally weighted. Although it is riskier, you have a heighten sense of making sure that you\'ve done your homework thoroughly and that the 5 is the best of breed. For me, I feel like a kid in a candy store or...pardon the pun to put it crudely...a convict in a whorehouse. There is so...many stocks that doesn\'t seem to have a floor no matter the fundamentals or a total disconnect with price and valuation. so in such a situation I rather have a lower risk by spreading across at least 10 stocks and yet still achieve outsize returns 5 years out or more. A good pal of mine is going for broke and intends to \'bet\' the farm on GIL if it breaks $0.40. It means a single stock expose to ONE STOCK!!! Of course, I told him to be careful and do not purely judge based on the history of Genting in Malaysia to make the judgement. His contention is of course valid about the \'moat\'..Univeral studios, casino, captive market, etc...but numbers will still be numbers. I did warn him of Disney Hong Kong projections and they were all wrong and till today it is bleeding...badly...yes they did not have a casino but who would have thought to have to bet against the mickey mouse franchise. Again there is no right and wrong here and the important point here is to manage and balance your risk well. If you have a VERY high risk profile and you have 20 years ahead of you... by all means pick the best of the best, bet the farm and you\'ll do alright. Cheers.
then again, not easy to be so disciplined. even when i know must get rid of something, it\'s very difficult to decide when to cut loss. throw today \'tomorrow\' sure rise one... haiz\"
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