Friday, 13 February 2015

Here's a question to Value Investors


Value Investors are those who like to buy stocks that are selling below net tangible assets, selling at a discount to book value, below the intrinsic value with a wide margin of safety, etc.

OK, you people are great at buying. 

Since I'm not a "Value Investor", I've a question to ask you all:

"When do you sell? When the stock is fully valued? Or when it's overvalued?"

"Or you never sell even when it's overvalued? You just buy and hold till the price drops back down to your original purchase price?"






Posted by Singapore Man of Leisure at 09:51
My interests

105 comments:

  1. coconut13 February 2015 at 10:11

    thats a stupid question!

    is like asking hey, what time you go to toilet ah?

    ReplyDelete
    Replies
    1. coconut13 February 2015 at 10:14

      but we do like to ask this kind of question don't we haha...

      Delete
    2. Singapore Man of Leisure13 February 2015 at 10:29

      coconut,

      You cannot be a facilitator. People ask question you say it's stupid. Like that who dares to ask question in future?

      We are traders, we do know when to go to the toilet.

      But aren't you interested too?

      "Value Investors" only seem to makan; never go toilet one?

      Delete
  2. Jimmy L13 February 2015 at 10:30

    good question
    bro 8888 adopts a hybrid approach, collect dividend + taking profit while maintaining a pillow stock
    sell some when its overvalue and keep some for dividend :)
    keep invested in the market :)

    ReplyDelete
    Replies
    1. Singapore Man of Leisure13 February 2015 at 10:51

      Jimmy L,

      LOL! You younger than me and you call CW what?

      I guess that's what we call a generational gap.

      I can poke and argue with CW until I turn blue, but I still address him as qian bei ;)



      You have an interesting diversification and no cut-loss strategy as written in your blog.

      Let's see if you have a sense of humour. (Some of my readers are giggling silly now as they know what's coming)

      1) Why are you hiding behind CW?

      2) What does Jimmy L think?

      Delete
    2. Jimmy L13 February 2015 at 11:02

      at first i want to mention 'uncle 8888' but nowadays people already call me uncle so like not so polite so i say 'bro 8888' haha
      i younger than u? haha
      i was thinking to hold my dividend stocks for life. why kill the goose that lays the golden egg? but will be very 'ai wan' if i see it shoot up do nothing and become a paper loss. i am still a human haha

      Delete
    3. Singapore Man of Leisure13 February 2015 at 11:23

      Jimmy L,

      Thanks for being a good sport!

      I will be 48 years young this year ;)

      And don't you dare call me "uncle"! LOL!

      OK, technically speaking you are not a "value investor" - more a "income investor".

      Even so, cannot be every income stock you buy is "golden" right?

      Maybe something you can blog about in your blog on when to "sell" income stocks? When you realise that income stock has become a dud, and not the golden goose?

      Delete
  3. Createwealth888813 February 2015 at 10:30

    Grow Money Trees. Sit back. Relax and collect money falling from Money Trees. Do you chop them for firewood?

    Do you kill cows when you are still milking them?

    Do you kill hens when you are still collecting eggs?

    Do you ......



    ReplyDelete
    Replies
    1. Singapore Man of Leisure13 February 2015 at 10:56

      CW,

      You are getting more and more slippery...

      Go LP's tavern you share your fishing metaphor.

      Come here you all of sudden become a gardener!?

      Do you... Do you...

      You good! I ask a question and you return more questions back?

      You know what?

      I'll wait patiently for a TRUE value investor to illuminate us ;)

      Delete
    2. coconut13 February 2015 at 11:19

      lets be educated here, i will be doing what CW do as an investor if i'm no longer trading.

      investing is like doing business, you don't sell your business just becos someone wants to buy your business at a premium!

      Delete
    3. coconut13 February 2015 at 11:24

      if you see yourself jumping from shares to shares, it is either you are a misteral trader like me or you don't know what you are doing.

      Delete
    4. Singapore Man of Leisure13 February 2015 at 11:24

      coconut,

      As an "investor", do you cut loss?

      Delete
    5. coconut13 February 2015 at 11:31

      no!

      Delete
    6. coconut13 February 2015 at 11:33

      but as a trader i cut my losses as fast as you blink your eyes.

      Delete
    7. coconut13 February 2015 at 11:39

      i'm not saying you cannot jump from being a trader to being an investor (or can you? but i say we can't, we are just too human to do it), but you better know the different between the 2, otherwise you will be completely at a loss when entering into the market.

      Delete
    8. Singapore Man of Leisure13 February 2015 at 13:17

      coconut,

      I think most retail investors are confused "hybrids" or more aptly called "rojak" until they discover their true Mind - who they really are.

      Not easy.

      First have to discover whether one is more an investor or trader.

      If trader, there are Intraday, Swing, and Position trading time frames. With leverage or no leverage.

      If investor, must also determined one is better suited to Active or Passive investing strategies.

      Passive is look ma! No brains needed!

      Active must crack head again to determine if one is Value, Growth, or Income investor.

      And that's only talking about the main schools - we have not even touched on the breakaway smaller denominations!

      No wonder so many newbies and confused investors/traders are desperately seeking answers from seminars and workshops!!!

      Please can someone tell me what to do!?

      This stocks can buy?

      This price can enter?

      LOL!

      Delete
    9. coconut13 February 2015 at 13:49

      you are right, i had many same question from people who know me. i really had hard time talking to them. really a lot, not just shares but commodities as well.

      my answer is the same, don't do anything. giving the fact that they ask the question means they don't know.

      Delete
    10. Singapore Man of Leisure13 February 2015 at 14:15

      coconut,

      Now that's top of the pops!

      "don't do anything"

      :)

      Delete
  4. Createwealth888813 February 2015 at 11:39

    Why become an "investor" when you are trader at heart?

    ReplyDelete
    Replies
    1. coconut13 February 2015 at 11:40

      right now i'm not an investor. my position are all hedged.

      Delete
    2. coconut13 February 2015 at 12:00

      i explain why its such a problem.

      i have 1/4 as margin for trading, the other 3/4 are siting ideal for reserve for additional margin. but they are sitting there earning nothing cos money market funds are at almost zero, so as bank interest rate. thats where investing these 3/4 clip into my mind.

      Delete
    3. Singapore Man of Leisure13 February 2015 at 13:20

      Ah! Look what central bankers have forced retirees and those living on income from savings do?

      This may not end well.

      Especially if battle-hardened trader is also seeking yield...

      No wonder there's a mushroom of income investors since 2009....

      Delete
    4. coconut13 February 2015 at 13:57

      you are damn right, its not small amount. for the past 2 years or so, i had been in and out trying to invest the extra money or so i thought, thats not extra money! its reserves for margin for christ sack!

      i almost lost my way....

      Delete
    5. Singapore Man of Leisure13 February 2015 at 21:57

      coconut,

      That's why your "don't do anything" is so powderful!

      Delete
  5. Sillyinvestor13 February 2015 at 11:52

    SmOL,

    I would like to answer this although I do not call myself value investor. I am money grabber.

    Within the Value investors, there are different sects.

    The founder of value investor is benjamin graham, and his highest profile (There are many others equally successful but less famous) disciple Warren.

    Benjamin believe in Net Net company, however his concept of MOS is based more of gap of hard maths numbers, such as how much will the company be sold for, and also he is a strong believer of diversification with the logic of Maths behind.

    Warren hoot big big when he see something, he takes "growth" in his calculation of intrinsic value, something Benjamin also sees but more in the mathematical perspective, but Warren is elaborated on the qualitative concept of moats.

    Until now I am a parrot, but here is the 2 difference to answer your when to sell.

    If "growth" is in the calculation, growth needs time. You cannot "get 9 women pregnant hoping to get a baby in 1 month". If the moat is there and growth is consistent except during bear, and you buy during that bear, in the long run, the rebounding and the growth will make the counter cheap in 3-5 years time, very cheap in 5-10 years time and dirt cheap in more than 10 years. Even if the price fall, they buy more, because they believe the "growth" and "moat" is intact, and time is the necessary ingredient to harvest.

    If is other reasons like net net play, or special situations whatever F you now call it, then every other situation (if you still call it value investing), has it own set of reasons for buy and sell.

    Time is not the essence of buy and sell, the buy price is the essence, the sell price is when the reason-> moat gone, or already established but narrowing ... again.

    Hence generally, it is not based on x% gains but the basis of business assessment that determine the buy sell decision.

    Phew... think this is my longest comment at your blog

    ReplyDelete
  6. la papillion13 February 2015 at 11:54

    Hi SMOL,

    I think what they will do is to sell when it's severely overvalued. But the idea of a fixed intrinsic value is not true. The intrinsic value changes accordingly as the business grows. So what I bought at $1 five years ago might be overvalued even when it's $1 now, because of changes in intrinsic value.

    But if the stock is overvalued/at fair price now, if there's no better buy, I will hold it. No point switching to cash if there's no better use for the money. What's impt is NOT to buy when it's overvalued or even fair.

    For Graham, he will hold for buy below intrinsic value, sell upon reaching fair value, with holding period of a fixed no. of years. If it doesn't go up, he'll sell it. And he will diversify the risk of holding duds by buying a lot of companies, so he just needs to hit 2 mulltibagger, break even for 2 and have a multibegger for 1, net net he'll still make a good return. He did that because he doesn't not take into account the growth and the qualitative aspect of the business.

    With Buffett, he'll incorporate growth aspect and all the lingo about buying a great company at fair price than buying a fair company at great price. So it really depends on which value guru one is following.

    ReplyDelete
  7. TheFinance.sg13 February 2015 at 12:30

    It's over-valued when all the Uncles and Aunties start buying - time to sell. It's under-valued when it is the reverse. Does that count me as a value investor? LoL

    ReplyDelete
    Replies
    1. Singapore Man of Leisure13 February 2015 at 13:04

      Derek,

      LOL!

      That's not value investing; that's contrarian investing - using retail aunties and uncles as an indicator.

      You die! Now others know your face.

      Better kneel and beg for forgiveness before all the aunties and uncles come knock your head next time they meet you!

      Delete
    2. Singapore Man of Leisure13 February 2015 at 13:25

      Sillyinvestor,

      There is only 3 simple answers to my questions:

      Yes; no; it depends.

      Thanks for giving us your "it depends" answer :)

      Delete
    3. coconut13 February 2015 at 13:43

      haha, same answer to the toilet question,

      morning, evening or at night,,,,

      Delete
    4. Sillyinvestor13 February 2015 at 13:47

      Ya lor,

      Still say you cannot be facilitator, SMOL cannot be teacher, pupils answer so hard, then say just answer it in multiple choice question when the question is structured like an open ended question.

      Delete
    5. Singapore Man of Leisure13 February 2015 at 13:58

      Sillyinvestor,

      You do know I am messing with you right? LOL!

      You are always so fun to poke ;)

      Psst. You cannot play poker. Your reactions can be too predictable.

      May want to learn from wife.

      Women are so capricious. Do one thing today got praise. Do the same thing next week kenna scolded!? Aren't they lovable?

      Delete
    6. Sillyinvestor13 February 2015 at 14:30

      I am learning from my wife LOL. Is sometime ok to be drama mama.

      I not water lei. In fact, I am going easy on myself now ...

      Delete
    7. TheFinance.sg13 February 2015 at 15:26

      I need to start wearing mask like a certain someone. LOL . Anyway, uncles and aunties is just general term. I just go against the majority.

      Delete
    8. Singapore Man of Leisure13 February 2015 at 17:21

      Derek,

      As blog aggregator, I think you have a good bird eye's view ;)

      Delete
  8. Singapore Man of Leisure13 February 2015 at 13:35

    LP,

    Thanks for weighing in to this kopitiam shoot the breeze debate!

    "I think what they will do is to sell when it's severely overvalued"

    You used the word "they" - so I take it you don't consider yourself a "value investor" then ;)


    Finally!

    Both Graham and Warren have SELLING strategies!!! Just by looking at what they DO ;)

    Strange. No one wants to admit they are a Value Investor?

    Cannot be. There's a big following at Valuebuddies... I'll wait patiently.

    Maybe true blue Value Investors don't want to reveal their secrets? Keep their cards close to their chests?

    Still waiting for someone who is not eager to reply on behalf of "value investors" ;)

    ReplyDelete
    Replies
    1. la papillion13 February 2015 at 13:50

      Ha ha, I'm not a a value investor for sure :) perhaps this is a wrong place to ask lol

      Delete
    2. Jimmy L13 February 2015 at 14:07

      i think its very hard to find a pure value investors. ghchua is a dividend + value investor. i think the closer u can find :)

      Delete
    3. Singapore Man of Leisure13 February 2015 at 14:12

      LP,

      Of course the "wrong" place is the "safest" place to ask mah!


      By the way, confirm you not scholar?

      Big daddy's loss is the gain for worried parents out there.

      It's true then. Some just want to wallow in the mud than seek 功名；）

      Delete
    4. Singapore Man of Leisure13 February 2015 at 14:26

      Jimmy L,

      You know what?

      1) ghchua made me feel better - he got into Jurong Tech too! LOL!

      2) Wow! 22 "unlisted" counters!? I guess that's a nice way to put it.

      ghchua wins my respect! How many bloggers will show their
      duds" so openly? 22!!!

      3) Too bad I don't know him. If he says he never cut loss, I totally
      believe him!

      Delete
    5. la papillion13 February 2015 at 15:42

      Hi SMOL,

      If by scholar it means I took up any scholarship, then no, I'm not one :) don't say until like I'm very noble, haha! I want to be a scholar but they don't want me, and when they finally want me, I don't want them anymore lol! So, I make the best of my situation.

      One doesn't have to be a scholar to be scholarly ;)

      Delete
    6. Singapore Man of Leisure13 February 2015 at 17:32

      LP,

      I knew you told me you not scholar.

      But by the way you put forth your ideas and arguments, I was thinking cannot be...

      Ah! I was right. Respect. Not many have the spine to turn down a scholarship ;)

      You are 士大夫.

      Flutter on butterfly. Be free!

      Delete
    7. la papillion13 February 2015 at 22:49

      Hi SMOL,

      Haha, don't have such high expectations of me, your hat is too big for me to wear :) When we finally meet each other, you will be solely disappointed, LOL!

      Delete
    8. Singapore Man of Leisure14 February 2015 at 00:03

      LP,

      There's zero expectations between a grasshopper and butterfly.

      We both are not built to survive the winter....

      Unlike the ants, we live for ourselves, not the Queen Mother ;)

      Delete
  9. Createwealth888813 February 2015 at 13:44

    Did you post this question at Valuebuddies?

    ReplyDelete
  10. Sillyinvestor13 February 2015 at 13:48

    Those who answer this at valuebuddies will not be those true blue value investors. ESP if they know it is asked by SMOL not by an newbie really trying to learn the difference and the essence of value investing

    ReplyDelete
    Replies
    1. Singapore Man of Leisure13 February 2015 at 14:02

      Sillyinvestor,

      Must sayang you for looking out for me!

      Our qian bei CW very bad. Trying to get others to hit me....

      I dumb; but I not stupid OK!?


      P.S. Have a safe trip to Nanjing! I can't imagine handling so many brats running around... You be good Papa smurf OK?

      Delete
    2. Sillyinvestor13 February 2015 at 14:31

      They should be ok... These new pupils are SO adorable and innocent to the extend of being "silly". But I love them. 50% of my power they are like mouse liao LoL

      Delete
  11. Createwealth888813 February 2015 at 13:56

    It is common to see or hear retail investors either they don't sell or they sell too soon

    ReplyDelete
    Replies
    1. Singapore Man of Leisure13 February 2015 at 14:05

      CW,

      Must give you props!

      You're "lao jiang hu" ;)

      Shhh...

      Delete
    2. coconut13 February 2015 at 14:31

      next week CNY liao, this is one my favourate CNY song

      https://www.youtube.com/watch?v=4l1GGIPtdrA

      this song telling you to look positively and flower will open for you, bird will sing for you and spring belongs to you.

      Delete
    3. Singapore Man of Leisure13 February 2015 at 18:00

      coconut,

      I have phobia of CNY songs... Especially the "ching dong qiang" ones!

      Argh!!!

      Delete
  12. SMK13 February 2015 at 15:07

    Great question smol!

    Tough tough. There's a local program in the guise of value investing and holding up buffett banners. Great advertising, but they never tell you when to sell.

    I don't get it right all the time. Sometimes I am lucky.

    so I am gonna dodge this.

    But great question. Tougher than when to buy.

    ReplyDelete
    Replies
    1. Createwealth888813 February 2015 at 16:33

      Value investing lessons are easy to teach but too difficult to show their results as it will take decades to show their performance.

      :-)

      Delete
    2. Singapore Man of Leisure13 February 2015 at 17:50

      SMK,

      Wow! I had to go through your blog to check whether you have a Zen or Liberal Arts background.

      Then I found this:

      赐子千金，不如教子一艺；教子一艺，不如赐子好名

      This explains a lot!

      You got "ink in your belly" ;)


      Thanks for answering the way you do without affecting the other readers.

      Always nice to banter with 同道中人 ;)

      Delete
    3. Singapore Man of Leisure13 February 2015 at 17:52

      CW,

      I'm not going to call you fisherman now. You are getting more and more slippery. I'll call you snake king or eel king!

      You 老油条!

      Delete
  13. B13 February 2015 at 15:53

    Hi SMOL

    To be more specific, I usually look at the company's ability to generate strong free cash flow ability rather than the price, or the price to earnings as many people like to look at. As long as the fundamentals of generating the FCF is still there, it's still a hold for me.

    ReplyDelete
    Replies
    1. Singapore Man of Leisure13 February 2015 at 17:42

      B,

      Yes, you have shared the reasons to buy or continue to hold.

      But you wouldn't sell even if the price has overshoot the fundamentals?

      Delete
    2. B13 February 2015 at 20:56

      I tried not to unless the market price is shooting ridiculously high.

      I ask this to myself, is this the price I would be willing to buy? If the answer is a strict no and I gave a tight slap to myself, then I will be a willing seller :)

      Delete
  14. WolfT13 February 2015 at 19:20

    Heng I am not a value investor....
    I don't have a problem of selling my shares anytime.
    Before I buy I already have a sell target price.If reach,sell! no emotion attach.
    I am happy for those who took over the stock from me and still make money. ;)

    ReplyDelete
    Replies
    1. Money Honey13 February 2015 at 19:28

      Agree.

      Delete
    2. Singapore Man of Leisure13 February 2015 at 19:34

      WolfT and Money Honey,

      That's why asking the above questions to a Trader is a waste of breath.

      It's a given.

      But ask the same to "Value Investors", that's where the fun starts!

      Delete
  15. Createwealth888813 February 2015 at 21:15

    Where are the graduates of Value Investing school?

    Should be thousands of them by now?

    Time to show SMOL some true color!

    ReplyDelete
    Replies
    1. coconut14 February 2015 at 11:20

      sorry hor, they all have switch side and becomes traders.

      long lives trading!

      Delete
  16. Joyce Leong13 February 2015 at 21:19

    I sell when I hit my target price because value is subjective and the numbers don't always speak for themselves because the market decides what the value will be. My opinion of value can be drowned by the masses who don't think like me.

    ReplyDelete
    Replies
    1. Singapore Man of Leisure13 February 2015 at 21:51

      Joyce,

      Question: Is ACCICB working in the industry?

      ;)

      Delete
    2. Joyce Leong13 February 2015 at 23:06

      He like me decided to wave our goodbyes to the industry ;p

      Delete
    3. Singapore Man of Leisure13 February 2015 at 23:58

      Joyce,

      Thanks! Now I have the context and perspective ;)

      Delete
    4. Joyce Leong14 February 2015 at 22:09

      Don't know how the answer helps to provide you with context and perspective though....?

      Delete
    5. Singapore Man of Leisure14 February 2015 at 22:36

      Joyce,

      In your blog's masthead, you jest that ACCICB is making moolah from your stock tips.

      You come across as a confident woman who is not afraid to speak your mind. And that's sexy in my book!

      A weak man would take offend if I am ACCICB....

      That's why I asked.

      Just making sure who is leeching on whom?

      Ah! If ACCICB were working in the same industry as you, then he is even more confident and self-assured than I expected.

      You lucky girl!

      Please, go on poking him ;)

      Delete
  17. Createwealth888813 February 2015 at 21:28

    It seems that more Traders at heart are coming here to answer question for Value Investors.

    :-(

    ReplyDelete
    Replies
    1. Money Honey13 February 2015 at 22:01

      Letting go an investment once it hit your target a certain price is the most misunderstood stand by most people - it's really Not trading!

      Also, price will not going up forever; letting it go is securing the profits before its price going back down. That's when one can keep counting the number of rounds of profits in a certain stock (Keppel Corpn, DBS, etc etc) secured each time the stock is sold off and re-investing into it when its price got mispriced during a market correction, etc etc

      Delete
    2. Singapore Man of Leisure13 February 2015 at 22:10

      1) Thank you so much Money Honey!


      2) CW,

      Amazing right? Indeed. Where are the "value investors"?

      Some of those who follow your "pillow stock" strategy have not got your true essence....

      Delete
    3. Sillyinvestor14 February 2015 at 07:46

      The value investors that I know are keeping in forum are keeping quiet. You are asking for response from a hermit at watering hole and poking at hermit when u should be going to the mountains.

      Some replies from me and others are those who being to mountains and the poking of where are the hermits are ...... They are not at the watering hole. But they are around

      Delete
    4. Sillyinvestor14 February 2015 at 08:00

      Also,
      I am not a Buddhist, I cannot even say I am a follower of Buddhism because I know perhaps only 10% of the teaching and even then, I have problems following the 10%, yet I have almost respect for it, as with other faiths.

      The taunting of value investors is really uncalled for, and is getting on my nerve. Not that I dun believe in other religion, just like I have utmost respect for traders alike, but it is better for Christiana to keep a distance commenting on Buddhism just like traders keep a distance commenting on value investing, especially in a poke fun measure

      Delete
    5. EY14 February 2015 at 09:36

      The act of buy and sell is called _____?

      天下武功出少林，少林武功出___ ___?

      :)

      Delete
    6. Sillyinvestor14 February 2015 at 09:59

      天下武功出少林，少林武功出达摩
      达摩武功出____？
      自己？

      Delete
    7. la papillion14 February 2015 at 10:25

      I think it comes from observing nature and mimicking them, hence u see mantis, monkey, snake, crane, Tiger, Eagle, cat etc etc patterns in kungfu. Then where do all these animals learn their kungfu from? They don't. They are behaving as themselves and expressing their true self in the form of their actions.

      To have the real essence of kungfu is therefore to express oneself honestly, so that you don't have to think about what moves and what punches to throw. You just react because that is the true reflection of yourself expressed through your actions.

      Kungfu cat ;)

      Delete
    8. EY14 February 2015 at 11:03

      Hi SI,

      Thanks for being a sport.

      怎么填都无所谓，武功不就是内在修炼所呈现的形与式? 看穿了，名词不过是商业操作的某种成品。

      百家争鸣，百花齐放。

      万物何须归宗?

      笑看风云，云淡风轻。

      :)

      Delete
    9. Sillyinvestor14 February 2015 at 11:50

      EY,

      👍受教。多学

      Delete
    10. Singapore Man of Leisure14 February 2015 at 21:16

      Sillyinvestor,

      LOL!

      I see LP and Endrene have already come calmed your nerves ;)

      They have "coached" you to the right direction.

      Here's 3 verification questions in case if you want confirmation you understood what Endrene and LP have said:

      1) You may want to reflect why you suffer from cognitive dissonance from this exercise. When most others are having fun with me?

      2) When you got it, you may understand why those who "call" themselves value investors struggle with such elementary questions?

      3) And spot those who are "conversant" with value investing have already replied here ;)

      Some of the answers are brilliant!


      Delete
    11. Singapore Man of Leisure14 February 2015 at 23:01

      Money Honey.

      That's why those who "practice" Value Investing are the ones who are making the interesting comments ;)

      They understand I am only poking those who "call" themselves Value Investors - the poor posers.

      The imposters ;)

      Delete
  18. calving77713 February 2015 at 23:29

    hi smol,
    imho start selling when price reached one's determined "fair value", taking into account the latest co. business outlook, earnings, cashflow, debt etc. Sell periodically over say 3 mths unless the price is much higher than "fair value".
    Adv: lock-in some profits
    Disadv: Sellers' remorse should price rise much higher after you sold all.

    ReplyDelete
    Replies
    1. Singapore Man of Leisure13 February 2015 at 23:56

      Welcome calving777!

      It's always good to have a new face to this watering hole :)

      Interesting!

      You already started selling when it reaches "fair value".

      First one who dares to say it! Excellent!

      Delete
  19. Small Time Investor14 February 2015 at 10:00

    Hi Smol

    I guess there's a similarity afterall between investor and trader , and that is time ?

    ReplyDelete
    Replies
    1. Singapore Man of Leisure14 February 2015 at 21:33

      Small Time Investor,

      Need to add price to time - but they are commonalities about the markets.

      All charts and technical indicators are built upon the basic building blocks of price and time ;)

      A 3rd element is volume, but with black pools and algos, volume analysis is not as straight forward as it used to be...


      Whether we are a trader or investor, to acquire an asset, we must....

      And to monetise this asset, we must....

      ;)

      Delete
  20. coconut14 February 2015 at 11:34

    smol, if this market is full of investor like CW, you and i are going to eat grass fortunately, 99% of market action are not investing driven.

    the right thing to do is always the wrong thing to others, and the wrong thing we do is always the right thing for some...

    ReplyDelete
    Replies
    1. Singapore Man of Leisure14 February 2015 at 21:53

      coconut,

      Don't play play with CW. He got contribute to our market volumes :)

      1) He got his trading rounds 1,2,3,4....

      2) Make a wild guess where the money that goes into his pillow comes from?

      3) Most people can readily admit they are not cut out to be entrepreneurs.

      But not everyone can accept the truth that investing and trading may not suitable for everyone. Strange huh?

      And our performance don't get better by sticking a label on our forehead ;)


      Delete
  21. Rolf Suey14 February 2015 at 11:36

    Hi SMOL,

    Very tiring commenting this post. Keep scrolling down until I find the comments box.

    Wrote a post before on when to sell ref to contrarian approach...

    http://www.rolfsuey.com/2014/06/when-to-buy-hold-and-sell-stock.html?m=0

    Before you buy a stock, always have a plan for it - different for different stocks. Sell the stock as long as pre-set objectives are met. Similarly, when market over-value the stock and the fundamental of the business deteriorate, let go of the stocks with no emotions attach.

    Do not ask me how to determine "over-value"?

    I am not Warren Buffett or Ben G. Just an ordinary stock investor.

    Like you easily predicted, I buy more than sell...

    ReplyDelete
    Replies
    1. coconut14 February 2015 at 11:43

      someone is even more tiring answering all these comments.

      Delete
    2. coconut14 February 2015 at 11:45

      lets see, 83!

      you going to have a century break!

      Delete
    3. Singapore Man of Leisure14 February 2015 at 22:08

      Rolf,

      1) You complain? You only have to scroll down. I have to bloody find who said what and where in the comments!!!

      2) Boo! You wrote? You dare say that? That's only a book review or summary ;)

      3) If you have internalised it, what's so difficult in you replying that you start selling a bit at fair value; and sell a lot more when the price exceeds fair value?

      4) Thanks for reminding "value investors" that there's another label for them - contrarians.

      Value investors buy when others are selling.

      So when others are buying, what do value investors do.....?

      Definitely not buy when others are buying, and sell when others are selling!

      LOL!

      Delete
    4. Singapore Man of Leisure14 February 2015 at 22:13

      coconut,

      You think we are playing snooker?

      Ha ha!

      Delete
  22. Rolf Suey14 February 2015 at 23:06

    Perhaps most value investor never sell.

    When they see their portfolio rise... They feel shiok, drool at itand invincible that indeed they are right! Ego satisfaction! Never sell...

    When price drop, value investor will say they invest for long term... And fundamentals stil sound.. And still good to collect their dividends... They still feel shiok n confident in some degree of self denials... Haha...

    Sounds like me....

    ReplyDelete
    Replies
    1. Singapore Man of Leisure15 February 2015 at 08:39

      Rolf,

      I think it's better to dispense with the "most value investor".

      Without an adjective in front, "value investor" can mean anything....

      Competent is different from work-in-progress; and newbie is different from clueless ;)

      Notice you spoke from 3rd person perspective and only in the last sentence you spoke from 1st person perspective?

      (It's Sunday so it's just a mild sugar coated poke)

      Delete
  23. EY15 February 2015 at 08:36

    If the value investor truly holds the ideology that they are owning a part of a great business, then this 'business' shall be a part of his/her legacy for passing down the generations. Hopefully, 3 generations at least? ;)

    ReplyDelete
    Replies
    1. Singapore Man of Leisure15 February 2015 at 08:53

      Endrene,

      "great business" - is that objective or subjective... Hmm...

      What's great to you may not be so great to those who come after us...

      It's fun watching the public feuds between the 1st and 2nd generational owners at some of the public companies as a non-vested party.

      If vested, I'll be sweating bullets...

      That landed property the owners tried so hard to preserve as "legacy"; but once they passed on, the children can't wait to sell it off as part of their "entitlement"....

      Hands up who likes parents making decisions for us?

      Delete
    2. EY15 February 2015 at 09:01

      The conviction of not wanting to sell is based on certain ideology. It's the 'Mind'. Who can be sure that the next generation has a similarly 'great' Mind?

      Objective? Is there such a thing? :P

      Delete
    3. Singapore Man of Leisure15 February 2015 at 09:12

      Endrene,

      Got looks and brains; life is so unfair!

      Buy and hold versus Market Timing (can swap with Trading)

      Value investing versus Growth Investing

      Which is strategy? Which is tactic?

      I suspect that's where the most confusion lie ;)

      Delete
    4. EY15 February 2015 at 09:45

      Haha. Such flattery. Must buy you coffee!

      If we remove all the labels and just question the motivation, it will all lead to that one and only sacred outcome - make money.

      Make money quickly, slowly, excitedly, boringly, handsomely, marginally.... Choose any one or any combination. Then come up with a recipe to cook our own dish.

      Errrrr...can use recipe book? Come up with own recipe difficult leh.

      But hor, recipe book never tell me difference between my cooking strategy and technique? Dunno then how?

      LOL!

      Delete
    5. Singapore Man of Leisure15 February 2015 at 09:58

      Endrene,

      With your comment, we have broken century ;)

      coconut would be happy!


      You said it girl!

      We are all money-grabbers!!! We're all in it for the money! As if having a certain "label" will make us "holier than thou" ;)

      The time our tyres meet the road is when we hit 55. If we desperately need our CPF money to be returned to us... Something has not gone right somewhere.... As in the decisions we have made (or not made) for the past 54 years....

      I'll be nice. I won't say anything about our past goal settings and plannings :)

      Delete
  24. H21 February 2015 at 22:09

    interesting responses here, though lots of brainpower appear to be wasted on the "debate" on the genres of investors available for classification, totally unnecessary imho. although i don't think there's a lot of rhetoric being exchanged, which is good.

    "genres" of investors should only be used by salespeople (note, salespeople and NOT investors/traders) to market their investing/trading programs to gullible people. as how EY implies, there's no fixed recipe nor cooking style to come up with a great dish.

    History: when i started working 3 years ago (making my own money) i decided that i won't make a good trader so i started to look at undervalued stocks, have only started putting in more money/effort in 2014 however. in retrospect i didn't make a lot of money still due to my "strategy" (which i'm constantly working on), though my only regret is that i didn't buy more of stocks that i liked, or had favoured, as i'm overly-cautious. still not doing quite well in the psychological aspect of investing i'm afraid.

    Buying: i look for stocks with conservative financials, good/conservative management and happen to be lowly-priced relative to their assets. and i start building a position. there are many "undervalued" stocks listed on SGX but really just a few meets my criterions, so every one i buy is golden to me.
    these stocks will be to me, "quasi-perps", which pays dividends too and possess potentially large upsides if it receives attention from the market - maintaining a cash-sink by holding onto a peculiar call-options portfolio that has no expiry and yet pays me interest greater than deposit rates.

    TP/overvalued-ness: obviously there won't be a targeted TP for me. but an obvious way to tell when to exit is when the stock explodes upward as it starts getting attention (see Valuetronics 2013 to 2014, here i guess some market reading/guessing will be required). thanks to speculators, one might be able to tell when a stock can be "overvalued". i don't try to guess an "intrinsic" value of what a stock is worth.

    Trading: bona fide trading can be done, to try to take advantage of dislocations in bid/offer levels, as what Money Honey pointed out.

    Philosophy:
    (i) putting money where your mouth is > talking. business owners with the most to lose, will have be the best they can be.
    (ii) there are always always going to be suckers, both on retail and institutional levels. that's what brokers and financial journalism does, dumbing people down.
    (iii) history will always repeat itself and mean-reversion is a fact of life. not really referring to price charts, but in human nature.

    ReplyDelete
  25. Singapore Man of Leisure22 February 2015 at 10:52

    H,

    A happy CNY cheer to you! Gong Xi Fa Cai!

    I've a previous post having fun with those who like to split hairs on classifying traders and investors - Ebony and Ivory


    As for this post, it's a poke to "pseudo" value investors out there.

    The answer is really easy and simple. And the true value investors have already answered through their "silence" ;)

    Value investing is buying unwanted and unloved stocks and selling them when they are FULLY valued - mean reversion play.

    Growth investing is buying fully valued stocks and hoping to unload them when they are OVERVALUED as when the stock price has priced in all the good news - momentum play.

    The funny bit is what most "pseudo" value investors are actually buying at fully valued prices... Hence they have difficulty saying they will sell at overvalued prices because they have no clue what is "value"!?

    If they knew, they would not have bought in the first place; hence the cognitive dissonance ;)

    LOL!

    ReplyDelete
  26. H22 February 2015 at 15:24

    Happy CNY to you too SMOL

    what one perceives to be under/overvalued is certainly arbitrary as a lot of assumptions have to go in to determine the elusive numbers that might represent a threshold of market valuation.

    it's as good as one having differing preferences to different cuisines. maybe buyer's remorse or any dissonance associated with one's purchase could be partially attributed to one not properly identifying his/her investment & risk preferences, and identifying that stock investment that might meet such preferences.

    ReplyDelete
    Replies
    1. Singapore Man of Leisure22 February 2015 at 22:10

      H,

      Boy, am I glad I was respectful and serious in my reply to your comment.

      The principles of value investing is easy to comprehend, hence even I - a trader - is conversant with it.

      But to execute value investing well, it's best to let our track record do the talking.

      Once again, its a pleasure and privilege listening to your views and investing style.

      Cheers!

      Delete

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