https://dividendguy67.blogspot.com

CEB - Quick Update

DividendGuy67
Publish date: Tue, 30 Jul 2024, 02:09 PM
DividendGuy67
0 77
Following Message

CEB made new low again today.  A friend asked - should buy more?

Here's my quick reading:

1. Clear Downtrend channel since IPO.  Clear euphoria on IPO day when open at RM1.42.

2. Be skeptical of IPO reported fundamentals - they tend to be "beautified" after 1-2 years have passed.  Not 100% sure about CEB, but with this price action, looks like investors didn't believe in the reported fundamentals.

3. If you draw a channel connecting the bottoms, and pull up the top, you'll see 3 potential bull traps.  3 times.

4. The hard line on the sand was 86 sen support.  This was conclusively broken 2 days ago by the long candle.

5. Second key support at 69 sen based on 2 days was broken again this morning.  

6. When you see intraday price action like this, the hard thing to do, which is the correct thing to do, is to do nothing.   Wait

7. Wait till close of business to see if bull have power to bring it back up above 69 sen.   

  • If it closes above 69 sen, then, maybe 50:50 chance the downtrend is over.
  • If not, expect more downtrend i.e. "falling knife".

Odds of falling knife?  60/40 IMHO.  Higher than closing above 69 sen.

 So, what should my friend do?

  1. Are you an investor or trader?  Why did you enter in the first place?
  2. If invest, why do you invest?   What's your time frame and what is your target price?
    1. E.g. if invest to see reward in 5 years time and target price is 90 sen growing by 15% p.a., then, the most important thing is Position Sizing.  If you have enough, don't add yet even when cheaper.  Wait till falling knife clears.  If already fully sized, do nothing.
  3. If trade, what is your trading strategy?
    1. Traders have their stop losses.
    2. They should have backtested their trading system to find a winning "expectancy".
    3. If so, they should follow their rules - I can't generalize nor advice.

Should I average down?

Beginners new to value investing typically thinks like this.  "Many in the internet like the stock.  Many says good things.  It must be a good company.  The cheaper the price, the more I should buy cheap right?  Be greedy when others are fearful?"

  1. The key to win in investing in the long run is to not lose money permanently.
    1. Do you know 100% if CEB loss is permanent or temporary?  I don't think anyone knows.
  2. If so, when unsure, control the Accumulation of Risk.
    1. You want to not lose the biggest when you are wrong.
    2. Take current size, assume 50% loss, can you stomach it?  If too big, then don't add.  (50% is Buffett's criteria, not mine).
  3. My observation on CEB limitations are that when compare to normal blue chip companies (like PBBANK, TENAGA, etc.), it's history is short and unproven.
  4. Never exceed your position size limits.      
  5. If you don't have a fixed limit, consider small like 5% or 3% or 2% capital.   
    1. Need more convincing?
    2. Compare against your other sound stocks like MAYBANK, PBBANK, RHBBANK, TENAGA, etc. if you have them.
    3. Make sure this remains small relative to other stocks.
    4. If you don't have other stocks to compare, keep it below 5% capital.

Summary and Conclusion

As I quickly pen this at lunch at work, price haven't closed yet, so we don't know how market will close today.

If you don't have a position, wait and watch.  

If you have a position, still same advice - wait and watch to make sure it's not a falling knife.​

If you are an investor, take heart - Buffett says that in the short term, Market is a voting machine, but in the long term it is a weighing machine.  If the longer term business performance is truly above average, then, let market calms down first and then re-evaluate to see whether to add (if have space) or do nothing.  

Best wishes.


Disclaimer:  As usual, you are solely responsible for your own trading and investment decision.

Note:  Posted at 2PM


CEB (5311)
Related Stocks
More articles on https://dividendguy67.blogspot.com
FXI

Created by DividendGuy67 | Dec 01, 2024

KLCI Update and Portfolio Nov Month End Update

Created by DividendGuy67 | Nov 30, 2024

KLCI Update - at Critical Juncture - Actions Needed

Created by DividendGuy67 | Nov 17, 2024

S&P500 vs FBM KLCI

Created by DividendGuy67 | Nov 17, 2024

Trump Won!

Created by DividendGuy67 | Nov 07, 2024

MAXIS - will it hit 4.18-4.23 this month to take me out?

Created by DividendGuy67 | Oct 02, 2024

TAANN - Thank-you for +26% per annum returns!

Created by DividendGuy67 | Oct 02, 2024

HLBANK near all time highs - should you sell?

Created by DividendGuy67 | Sep 26, 2024

CAPITALA - will it just touch or breakout?

Created by DividendGuy67 | Sep 22, 2024

YTLPOWR - Should you buy the dip?

Created by DividendGuy67 | Sep 22, 2024

Discussions
2 people like this. Showing 6 of 6 comments

babyuser111

great update and info. Best things to is nothing while we wait proper pattern to form. But to me seems like will continue falling for tmr

2024-07-30 21:09

DividendGuy67

9.46PM Update. Just finished work, dinner, home chores. Saw the closing Price 66 sen and intraday low 64.5 sen. So, now we have:
1. New Resistance #2 = 69 sen, as today's price did not close above 69 sen.
2. New key low of 64.5 sen to watch out for tomorrow.

Downtrend is still intact. Knife is still falling as of today's close. Do Nothing. Wait until tomorrow's candle is printed. After work, reassess.

There are a few possibilities:
1. Price breaks below 64.5 sen and closed below 64.5 sen = Falling knife still intact. Do nothing.
2. Price breaks below 64.5 sen and closed above 64.5 sen = Indecisive. Do nothing.
3. Price does not break below 64.5 sen, but does not break/close above 69 sen = Consolidating. Do nothing.
4. Price does not break below 64.5 sen, but breaks above 69 sen and closed above 69 sen = Rebound attempt. Do nothing.

Especially if you already have a position much earlier at say 95 sen and is already having a full size like 5% capital, do nothing in all 4 scenarios above.

Wait until a high probability pattern appears, and then, make your next trade.

Be precise.

2024-07-30 21:52

ivanlau

Good analysis article..........

2024-07-31 08:21

dawchok

Big thks for the great comments and advise especially to those new players. Looking forward for more good articles from you.

2024-07-31 10:00

Rose88

Great updates and comments. Would be happy to follow your blog and the articles.

2024-08-01 21:45

DividendGuy67

Thanks. Today, I shared that I "tikam" CEB at 36 sen and 40 sen. I bought a dozen stocks quietly on Monday, Tuesday and Wednesday as I felt VIX was at an extreme a couple of days ago over 60 and felt that markets are going to recover. I queued more at lower prices but was not hit on many stocks. But roughly half are hit and that's good enough for me. Very lucky enough was hit. Now, nothing to do but just sit tight and let markets make new highs again.

36 sen is ridiculous price, given 16 months ago, the stock was IPOed at 90 sen and just 8 months ago, they raised more capital at RM1.07.

The dividend yield was not attractive when it was say RM1 since DPS is only 2.21 sen. But at 36 sen, the dividend yield is extremely attractive.

The stock NAPS is 47 sen. For a newly IPOed stock, trading below NAPS is crazy!

However, I really don't know if this is a superior or above average quality business as I don't follow this stock.

I tried to buy quality businesses but the blue chips prices hardly moved. I eyed CIMB and didn't get it - all the big banks seem to have only dip a little and recovered. Even TENAGA went back up to nearly RM14 after testing RM13. The recovery is a lot faster than I had expected, so, that's kinda nice bonus.

The stock is still downtrending, so, hopefully in the next few months or years, it will go up to retest its downtrend like channel. That's usually like a magnet if the business fundamentals don't deteriorate too much. Hopefully in a bull market, more stocks prices will rise and CEB included over short to mid term.

I bought 11 other stocks quietly too. Some you can guess because I blogged about it. This includes GENTING at 4.20 (hesitated and missed 4.1x) and a few others. The point is the past 3 days are good days if you believe this recovery is shortlived, as I have blogged about how VIX spiked up above 60 and came back down fast which led me to think odds are good that this might be short lived. Nearly all the stocks I bought during this time - I have confidence that in 3, 6, 12, 24, 60 months time, the gains will be nice ... The great thing about stocks with recovery power is that you can utilize your cash to buy them as they get cheaper. This past 3 days was only a small dip. In the future, there will be bigger corrections with better opportunities. Until then, nothing to do and "do nothing".

Cheers and best of luck!

2024-08-08 00:18

Post a Comment