THE INVESTMENT APPROACH OF CALVIN TAN
THE PROBLEM OF 3iii IS HE HAS TUNNEL VISION IN INVESTMENT (HE CANNOT SEE WHAT OTHERS SEE)
calvintaneng
Publish date: Tue, 03 Dec 2019, 01:50 AM
calvintaneng
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Hi Guys,
I have An Investment Approach I which I would like to all.
I have An Investment Approach I which I would like to all.
HI GUYS.
3iii MAIN PROBLEM IN INVESTMENT IS THIS
HE HAS TUNNEL VISION.
OUT OF 6 CATEGORIES OF STOCKS 3iii CAN ONLY SEE SLOW GROWTH STOCKS LIKE PADINI, DUTCHLADY AND A FEW OTHERS
SINCE HE CAN ONLY SEE ONE LIMITED VIEW WE CALL TUNNEL VISION HE GOES ROUND CONDEMNING OTHERS WHO CAN SEE
LOOK AT THE PICTURE BELOW
SEE THE TWO PHOTOS ABOVE
THE ONE ON TOP HAS FULL VISION WHILE THE ONE BELOW HAS TUNNEL VISION
A PERSON WHO HAS TUNNEL VISION CANNOT SEE THE 4 SIDES OF ENCLOSURES WITH RED, GREEN, YELLOW & BLUE
HE SEES ONLY HALF THE IMAGE OF THE BALLS
SO 3iii CAN ONLY SEE SLOW GROWTH STOCKS ALL HIS LIFE
CYCLICALS, TURNAROUNDS & ASSET PLAY STOCKS HE CAN NEVER SEE NOR UNDERSTAND
HE CONDEMNED SIFU RAIDER FOR BUYING ARMADA WHICH IS A TURNAROUND
HE CONDEMNED ALL THE ASSET PLAY STOCKS LIKE PM CORP LAST TIME
NOW HE CONDEMNS THE CYCLICAL STOCK CALLED NETX
WHY LEH?
ANSWER:
3iii HAS TUNNEL VISION
AS SUCH HE IS LIKE A BLIND PERSON TEACHING OTHERS HOW TO SEE
BETTER AVOID 3iii AT ALL COST
IF THE BLIND LEADS THE BLIND BOTH WILL FALL INTO A DITCH
One Up on Wall Street’: Peter Lynch’s 6 Categories of Stocks
As we might expect, finding a great company does not mean you should rush out and buy it. In chapter seven of "One Up on Wall Street," Peter Lynch said buying a stock without research is like playing poker without looking at the cards. Just because Dunkin’ Donuts (NASDAQ:DNKN) is always busy doesn’t flip on an automatic buy signal:
“What you’ve got so far is simply a lead to a story that has to be developed. In fact, you ought to treat the initial information (whatever brought this company to your attention) as if it were an anonymous and intriguing tip, mysteriously shoved into your mailbox.”
A good entry point for getting more details about the story comes from knowing what category of stock you are considering. There are, however, a few things to consider first.
Watch sizes
Pampers diapers, from Proctor & Gamble (NYSE:PG), was a runaway marketing success in the 1970s. But if you spent literally just a couple of minutes studying the company’s profile, said Lynch, you would discover Pampers’ earnings contributed only a small amount of its overall earnings.
Further, he argued, big companies don’t experience big price moves, despite the success of popular products. In his words:
“The size of a company has a great deal to do with what you can expect to get out of the stock.”
If you want 10-baggers, you need to look to smaller companies. Don’t expect big price growth in big companies unless there is a special situation of some sort, such as major corporate turnaround.
Lynch’s categories
With that, Lynch launches into an outline of his well-known stock categories to help investors more quickly identify what they are buying or want to buy.
Slow growers (sluggards)
These are “large and aging” companies that were once fast growers but have since fallen back for any number of reasons. In Lynch’s words, they “pooped out.” Often, they are companies in an industry that has lost momentum, and their charts resemble the topographical map of Delaware: simply flat. Not that these stocks should be overlooked—they often pay generous dividends.
Medium growers (stalwarts)
“These multibillion-dollar hulks are not exactly agile climbers, but they’re faster than slow growers.” Lynch expected stalwarts to deliver gains of 30% to 50%, after which he would sell them and find new, undervalued issues. He also expected annual earnings growth of 10% to 12% and liked to keep some stalwarts in his portfolio because they offer defensive protection during market slumps: “You know they won’t go bankrupt, and soon enough they will be reassessed and their value will be restored.”
Fast growers
These favorites of Lynch are “small, aggressive new enterprises that grow at 20 to 25 percent a year.” This is the category to explore if you want to find 10- to 40-baggers, and perhaps even more. According to Lynch, fast-growing companies may be part of fast-growing industries, but he preferred fast growers in a slow-growth industry. Examples from his time included Marriott International Inc. (NASDAQ:MAR), which had been able to grow 20% annually while the hotel industry grew at just 2%. Among the winning stories were retailers that learned to succeed in one place and then duplicate their formula: Walmart (NYSE:WMT), The Gap (NYSE:GPS) and Yum Brands' (NYSE:YUM) Taco Bell.
Cyclicals (3III CANNOT SEE CYCLICALS) HE CALLS ALL CYCLICALS GRUESOME
“A cyclical is a company whose sales and profits rise and fall in regular if not completely predictable fashion.” In contrast to fast growers, cyclical industries expand and contract, almost continually. Some examples include the auto, airline and steel industries. Cyclical stocks do well as economies come out of recession and begin to expand.You can, however, also lose half your investment if you buy in the wrong part of the cycle. Lynch calls them the “most misunderstood” type of stocks. As large and well-known companies, they are often confused with stalwarts. People who work in cyclical industries have an edge over other investors.
Turnarounds (3III CANNOT UNDERSTAND TURNAROUNDS) HE CALLS ALL TURNAROUNDS GRUESOME
“These aren’t slow growers; these are no growers.” Lynch said turnaround companies are “battered, depressed and often can barely drag themselves into Chapter 11.” If they survive and fix their problems, however, they can rebound very quickly and stock prices are least related to the overall market. One of Lynch’s favorites in this category was Chrysler (now Fiat Chrysler (NYSE:FCAU)); it was also a cyclical stock, although that aspect was not as pronounced. From the time he bought in 1982, it became a five-bagger in two years and 15-bagger in five years. He found many opportunities among these temporary losers.
Asset plays (3III IS TOTALLY BLIND TO ALL ASSET PLAYS) HE CALLS ALL ASSET PLAYS GRUESOME
This could be “any company that’s sitting on something valuable that you know about, but that the Wall Street crowd has overlooked.” Lynch said these are situations in which a local edge provides the greatest advantage. One example was the Pebble Beach golf course, once public but bought out for $72 million. A day after buying it, the new owner sold a gravel pit on the same property for $30 million. There were (and are) many hidden or not-so-hidden assets in many companies and industries; investors should start by looking for cash on the books.
Upward and downward mobility
As well as being able to occupy more than one category at a time, Lynch wanted to remind us that companies move in and out of categories quite readily. For example, high-flying growth stocks often run out of room and become sluggards or stalwarts:
“From Dow Chemical to Tampa Electric, the highfliers of one decade become the groundhogs of the next.”
Also among the category-movers: growth companies that “diworsify” and lose the market’s interest; that makes them potential turnarounds.
Applying this information
Lynch advised against maxims that urge you to sell when you hit certain profit or time markers; these include: “sell when you double your money” and “sell after two years.” Obviously, such maxims make it far harder to score multi-baggers. Yet, in the medium growth category, he said he would sell after gaining 30% to 50%, suggesting different targets for different categories, but not delineated here.
The first step toward using the information in this chapter is to determine which category your stock is in, or in which category you should be looking. As noted, there are slow growth, medium growth, fast growth, cyclicals, turnarounds and asset plays. He ends the chapter with these words:
“Putting stocks in categories is the first step in developing the story. Now at least you know what kind of story it’s supposed to be. The next step is filling in the details that will help you guess how the story is going to turn out.”
Conclusion
Lynch became well known for his categories. For investors, categorization is not an end in itself—it is a way to get started in the right area of the market.
He built his reputation on finding opportunities in several categories, but above all in the fast growth category, where the opportunities for 10-baggers and more are most commonly found. Investors of today can still use these categories to orient themselves and their portfolios.
This is an example of a Peter Lynch chart, showing Apple Inc. (NASDAQ:AAPL); Lynch said that when the stock price (green line) dipped well below the earnings line (blue line) it was time to consider buying (and selling when the price line gets well above the earnings line). This chart has a five-year timeline. For information on creating these charts, see this article.
3iii THINKS HE IS SO CLEVER REJECTING ALL OTHERS EXCEPT HIS VERY FEW AND NARROW GROUP OF SLOW GROWTH STOCKS & CALL ALL OTHERS GRUESOME
IN ACTUAL FACT HE HAS A GRUESOME DISTORTED OPPINIONATED WORLD VIEW WITH TUNNEL VISION
3iii IS GRUESOME INDEED!!!
STAY AWAY PLEASE.
More articles on THE INVESTMENT APPROACH OF CALVIN TAN
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Created by calvintaneng | Apr 06, 2024
Discussions
Be the first to like this. Showing 37 of 37 comments
Dutchlady has growth constrain as its market has reached saturation over the years
If you read Robert Kuok memoirs then you will understand how he described his sugar business in Malaysia
He said like a fish growing in a small pond like Malaysia his business will soon outgrow it.
So since the fish cannot swim horizontally it tries to swim downward but again the pond is also too shallow if he wants to swim down and will soon hit the floor
Since Malaysia is a limited market he has to move out to Hong Kong to grow.
Dutchlady is such a company now like a big fish in a small pond
AT least at that time Robert Kuok has Govt support and Govt controlled sugar manufacturing license
BUT for dutchlady there is no moat. Any Tom, dick or Harry can set up milk manufacturing business in Malaysia in a well sarurated market
Lately, Govt has raised tax on sugar to help Malaysia to be a healthier nation and F&n has diverted to milk. This is head on collision with Dutchlady
To be continued.....
2019-12-03 11:12
Dutchlady has another very formidable competitor in Nestle
This big fish is even growing bigger than dlady
Nestle is undercutting dlady prices in a fierce battle for market share.
Nestle has the champion Milo which millions of Malaysians love and grow up on. As an extension of their love for nestle Milo there will be drawn to nestle milk as well
Then there is good day milk
Older generations are dream to healthy milk like Anlene as made famous by Datuk Michelle Yeoh
Fern milk from NZ rich and tasty
Taiwan bubble milk tea has also captured a huge slice of the market
Then there are advocates against animal cruelty by changing from cow milk to soya milk
So Dlady having no moat is now facing a suturated old and slow market where growth is difficult
Another problem is cost
While market share decrease cost of doing business is increasing
Malaysia will gradually raise minimum wage.
High electricity and petrol also impact on dlady bottom lines. See unsold Inventories of milk must be kept in cold refrigeration
Tenaga has just reported fantastic result
Partly contributed by Dutch lady
So better sell dlady and switch to tnb OR BETTER STILL BUY NETX
2019-12-03 11:13
REMEMBER LESS THAN 3 MTHS AGO RAIDER TAKE ON 3iii BET....TODAY U CAN SEE HOW UNDERPERFORMANCE OF DLADY V INSAS LOH...!!
THE LESSON OF THE STORY DO NOT CHASE OVERVALUE STOCKS...DLADY IS A GOOD EXAMPLE OF THIS FOLLY LOH....!!
Posted by stockraider > Sep 20, 2019 10:49 AM | Report Abuse X
Ok your bet is on loh...!!
Dlady Rm 58.10 v Insas Rm 0.815 loh...!!
Posted by 3iii > Sep 20, 2019 10:28 AM | Report Abuse
BMW versus Perodua This is a stupid example.
This is a better example:
DLady versus Insas
Over the next 10 years, which of these companies will grow your investment more?
2019-12-03 11:15
WHAT 3iii BUYS ARE BASICALLY STALWARTD
SEE WHAT PETER LYNCH SAY ABOUT STALWARTS
Medium growers (stalwarts)
“These multibillion-dollar hulks are not exactly agile climbers, but they’re faster than slow growers.” Lynch expected stalwarts to deliver gains of 30% to 50%, after which he would sell them and find new, undervalued issues. He also expected annual earnings growth of 10% to 12% and liked to keep some stalwarts in his portfolio because they offer defensive protection during market slumps: “You know they won’t go bankrupt, and soon enough they will be reassessed and their value will be restored.”
READ AGAIN
Lynch expected stalwarts to deliver gains of 30% to 50%, after which he would sell them and find new, undervalued issues
LYNCH SAID AFTER STALWARTS HAVE GAINED 30% TO 50% HE SHOULD SELL THEM AND FIND NEW ONES
SO CANNOT FALL IN LOVE LIKE HOLDING DUTCHLADY UNTIL IT GREW INTO HOLLAND GRANDMA
BUT THE DAMNABLE THING IS TO TELL PEOPLE TO BUY DLADY AT RM76.00
THAT WILL DESTROY A LOT OF WEALTH FROM PEOPLE WHO DON‘T STUDY PETER LYNCH
2019-12-03 11:17
Very good
Sifu Stockraider is current
3iii is not.
3iii is just a relic
2019-12-03 12:31
Today like every other day 3iii neglects his dlady but go Netx to be a busy body
So sell Dlady and buy Netx is best
2019-12-06 14:05
What is a turnaround?
A turnaround is a stock that has seen good times before but got hit badly along the way.
It has fallen out of the radar of investors "because earnings have fallen into pitiful state
BUT Management is doing its very best to turnaround the company by selling assets to pare down debts
To see what can be done to unlock value
Example is Talam Transform
It's debts have been pared down and soon it will turn around into debt free status when Seroja Apts are sold to further clear off remaining debts
Then Talam might be able to resume dividend
Once Market sees it clearly Talam share price will rebound
2019-12-07 11:39
Posted by Integrity. Intelligent. Industrious. 3iii (iiinvestsmart) > Dec 8, 2019 10:27 PM | Report Abuse
Those who bought NetX during the bull phase due to calvin of calvin tan research of singapore fame's promotion are now facing very interesting choices:
Some bought at 3 sens per share, that is a huge drop to 1.5 sen per share or even lower at 1 sen or 0.5 sen per share.
Some bought at 2 sens per share, that is also a significant drop to 1.5 sen per share (25% drop).
Some bought at 1.5 sens per share, they will still lose a little due to commissions and trading expenses.
Those who bought at 1 sen per share, well at 1.5 sen per share, they may feel the "loss of potential gain" should they have sold higher.
Behavioural finance is an important subject to master. How many have read the book by Kahneman Think fast and slow.? It is a very good book giving a lot of insight into the many ways your decisions are made in varied circumstances in our life.
INSTEAD OF POSTING TO DEFEND CRUMBLING DLADY
3iii NOW WANDERS HERE AND THERE
2019-12-08 22:33
Both Philip and 3iii have changed ID
Why people changed names?
They are ashamed of their original names and ID
Last time during Asian Financial crisis Mr Neoh changed name to Peter and Mr HO changed name to Andy
Why so?
Both hiding from loan sharks
3iii hiding from dlady people while Philip hiding from petchem people
NO wonder both changed their names and disturb other forums like Netx?
Why they both dare not go post in dlady or petchem?
See reason:
Convicted criminals change names to cover up past
https://globalnews.ca/news/2558782/convicted-criminals-change-names-to...
2019-12-08 23:12
Why calvin want u to make investors pledge leh ??
The answer is that calvin wants to protect & guide u to the art of making monies loh....!!
Without this pledge investment guide, alot of investors will be running around like mindless chicken, thus resulting in lost of big profit making opportunity loh....!!
Yes stay with sifu calvin & make the investment pledge on NETX loh..!!
THIS THE NETX INVESTORS PLEDGE
1) I BELIEVE IN RM50.3 NFCP FIBERISATION AS A REAL COMING EVENT
2) THEREFORE I BUY INTO NETX BECAUSE IT IS A SPECIALIST IN DIGITAL NETWORK INFRAR AS IT WILL GET JOB AWARDS
3) I WILL NOT BE SWAYED BY NAYSAYERS TO SELL IN FEAR OR BE MOVED BY THEIR FEAR-MONGERING
4) I PLEDGE TO HOLD FIRM ALL MY SHARES TILL I SEE JOB AWARDS ROLL OUT FROM TELEKOM
5) I WILL KEEP NETX AS RM50.3 BILLIONS NFCP JOB AWARD IS A VERY RARE OPPORTUNITY AND I WILL HOLD FIRMLY ALL MY NETX SHARES TILL I ACHIEVE SUCCESS IN MY INVESTMENTS
6) I WILL JOIN IF WITHIN MY ABILITY TO DEFEND NETX AGAINST NAYSAYERS
7) I BELIEVE THEREFORE I INVEST. I INVEST THEREFORE I EXPECT NETX TO DO WELL IN COMING NFCP BULL RUN
2019-12-09 00:06
both this retards valvintard and stockretard Dare to criticise other when their call all holland?
2019-12-09 19:13
Posted by Integrity. Intelligent. Industrious. 3iii (iiinvestsmart) > Dec 9, 2019 8:01 PM | Report Abuse
Very few bought at 1 sen
Many bought at 1.5 sen
Many more bought at 2 sen, 2.5 sen and 3.0 sen
Given the low volume of transactions the last 7 days, the trading ranged from 1.5 sen to 2.0 sen.
Sadly, many are unable to cash out with any gains.
WHY 3iii SO BLIND LEH?
WE INVEST IN NETX BECAUSE OF RM50.3 BILLIONS WILL BE DISPENSED FOR FIBERISATION EXPANSION IN MALAYSIA
5 YEARS TO SEE NETX BULL RUN TIME
WHY 3iii NOT ONLY GOT TUNENEL VISION. HE ALSO MYOPIC?
2019-12-09 22:41
Poor 3iii and sour grapes totally missed the Ogse bull run of carimin Dayang penergy and uzma
They failed once now still so stubborn and want to fail twice
Missed ogse bull run and now not only didn't join Nfcp bull run but try to discourage others from joining by poisoning their minds with all negative postings
3iii is true to his id as
Idiot
Insane
Incorrigible
3x idiot, insane incorrigible
2019-12-10 11:16
Integrity. Intelligent. Industrious. 3iii (iiinvestsmart)$€£¥
>>>>
stockraider Why calvin want u to make investors pledge leh ??
The answer is that calvin wants to protect & guide u to the art of making monies loh....!!
Without this pledge investment guide, alot of investors will be running around like mindless chicken, thus resulting in lost of big profit making opportunity loh....!!
Yes stay with sifu calvin & make the investment pledge on NETX loh..!!
THIS THE NETX INVESTORS PLEDGE
1) I BELIEVE IN RM50.3 NFCP FIBERISATION AS A REAL COMING EVENT
2) THEREFORE I BUY INTO NETX BECAUSE IT IS A SPECIALIST IN DIGITAL NETWORK INFRAR AS IT WILL GET JOB AWARDS
3) I WILL NOT BE SWAYED BY NAYSAYERS TO SELL IN FEAR OR BE MOVED BY THEIR FEAR-MONGERING
4) I PLEDGE TO HOLD FIRM ALL MY SHARES TILL I SEE JOB AWARDS ROLL OUT FROM TELEKOM
5) I WILL KEEP NETX AS RM50.3 BILLIONS NFCP JOB AWARD IS A VERY RARE OPPORTUNITY AND I WILL HOLD FIRMLY ALL MY NETX SHARES TILL I ACHIEVE SUCCESS IN MY INVESTMENTS
6) I WILL JOIN IF WITHIN MY ABILITY TO DEFEND NETX AGAINST NAYSAYERS
7) I BELIEVE THEREFORE I INVEST. I INVEST THEREFORE I EXPECT NETX TO DO WELL IN COMING NFCP BULL RUN
09/12/2019 12:06 AM
>>>>>>
2021-11-04 06:51
Why this iddiot go every way to promote palm oil stocks?
If you so confidence what you bought, why need to go every way non-stop talking unless you start realise not the better choice so need all waterfish members here to support you and to catch your nonsense mistake
We know you had put your bet on palm oil stocks more than 6 months but end up unable to reach your desire target, so now start nervous that's why non-stop putting blog to promote
We know you had past record on what you did last time, don't con members here until loss their hard earn money
I don't know why 3iii administrator didn't take any action to suspend this iddiot account to avoid keep on spamming every way
I pegging administer need to take proper action against this spammer
2021-11-04 08:42
Haha
I3 represent: Independent, Intelligent, Informed and 3iii represent:
Integrity. Intelligent. Industrious
So i3 readers must welcome independent writers and use their intelligent to make their informed decision.
2021-11-04 09:04
Lesson learn here is never never chase overvalue stock even if it is a bluechip like dlady mah!
If u have invested in Dlady at sept 2019 at a cost of Rm 58.10 today it is worth rm 33.00 u would have lost 43% of your investment mah!
On the otherhand if u invested in contraian unloved insas with margin of safety at rm 0.815 and together with the participating in the corporate exercise with free warrant...u would have gain 43% loh!
Do not listen to kon 3iii proposing his overvalue stocks for investment loh!
2021-11-04 11:25
Integrity. Intelligent. Industrious. 3iii (iiinvestsmart)$â¬Â£Â¥
1. Great minds talk about ideas
2. Good minds talk about things
3. Weak minds talk about people
2023-04-13 19:00
Remember this loh!
Today dutch lady is Rm 26.20, even worse loh!
Posted by stockraider > 2021-11-04 11:25 | Report Abuse
Lesson learn here is never never chase overvalue stock even if it is a bluechip like dlady mah!
If u have invested in Dlady at sept 2019 at a cost of Rm 58.10 today it is worth rm 33.00 u would have lost 43% of your investment mah!
On the otherhand if u invested in contraian unloved insas with margin of safety at rm 0.815 and together with the participating in the corporate exercise with free warrant...u would have gain 43% loh!
Do not listen to kon 3iii proposing his overvalue stocks for investment loh!
2023-04-15 13:15
Integrity. Intelligent. Industrious. 3iii (iiinvestsmart)$â¬Â£Â¥
>>>
Blog: 7 Classes of Wealth (Calvin Tan)
1 day ago | Report Abuse
This 3iii tells lie is true.
If Calvin got say sell 8 houses to buy Netx then cut and paste here
What Calvin said is, "Dinosaur 3iii kept Dlady dumb dumb holding from Rm72 to Rm21.50
>>>
2023-08-16 08:26
Memang betul loh!
3iii veli veli dumb mah!
Posted by Integrity. Intelligent. Industrious. 3iii (iiinvestsmart)$â¬Â£Â¥ > 1 hour ago | Report Abuse
>>>
Blog: 7 Classes of Wealth (Calvin Tan)
1 day ago | Report Abuse
This 3iii tells lie is true.
If Calvin got say sell 8 houses to buy Netx then cut and paste here
What Calvin said is, "Dinosaur 3iii kept Dlady dumb dumb holding from Rm72 to Rm21.50
2023-08-16 10:11
Integrity. Intelligent. Industrious. 3iii (iiinvestsmart)$â¬Â£Â¥
https://klse.i3investor.com/web/forum/forum-thread/909210236
THE PROBLEM OF 3iii IS HE HAS TUNNEL VISION IN INVESTMENT (HE CANNOT SEE WHAT OTHERS SEE)
2 months ago
Do u all notice that 3iii like raider has been criticizing Icap TTB for lack of good performance return for the last 7 yrs ? Surprisingly the excuse given by TTB is exactly the same like what 3iii had given loh!
Quote by 3iii
"It was very interesting to see calvintaneng and his side-kick raider posting on my Petdag, Nestle and now DLady.Perhaps they should know that these long term stocks remain and are still multi-baggers in my portfolio."
3iii should focus on what have went wrong on Nestle & Dlady for the past 7 yrs, instead of making bad excuse & trying to divert attention from his failure by attacking sifu calvin loh!
In other words, 3iii should study & learn what have gone wrong in Nesle & Dlady and explain to us what action had been done to improve his investment return going fwd loh!
Posted by Integrity. Intelligent. Industrious. 3iii (iiinvestsmart)$â¬Â£Â¥ > 22 hours ago | Report Abuse
>>>
Posted by stockraider > 2 hours ago | Report Abuse
This useless 3iii has been targeting sifu calvin tan with his bias comment for a long time loh!
3iii should look into the mirror and reflect how are the performance of his top holding Dlady & Nestle since 2017, b4 making unfair & unjustify comment at sifu calvin loh!
>>>
2 months ago
Integrity. Intelligent. Industrious. 3iii (iiinvestsmart)$â¬Â£Â¥
Selling is often a harder decision than buying
"If you have bought a good quality stock at bargain or reasonable price, you can often hold forever."
Investing is fun. For every rule, there is always an exception.
The main reasons for selling a stock are:
1. When the fundamental has deteriorated permanently, (Sell urgently)
2. When it is overpriced, whereby the upside gain will be unlikely or very small and the downside loss will be big or certain.
We shall examine reason No. 2 through the property market. The property market is also cyclical. There were periods of booms and dooms.
If you have a good piece of property that is always 100% tenanted and which gives you good consistent return (let's say 2x or 3x risk free FD rates), would you not hold this property forever? The answer is probably yes.
Then, when would you sell this property?
Note that the valuation of property, as with stocks, is both objective and subjective.
Would you sell when someone offered to buy at 500% above your perceived market price?
Probably yes, as this is obviously overpriced. You could cash out and probably easily re-employ the money to earn better returns in another property (or properties) or other assets.
Would you sell when someone offered to buy at 50% above your perceived market price?
Maybe yes or maybe no. You can offer your many reasons.
However, all these will be based on the perceived future returns you can hope to get from this property in the future. This is both objective based on past returns obtained and subjective and speculative on future returns.
However, unlike reason No.1 when you would need to sell urgently to another buyer to prevent sustaining a permanent loss, you need not sell just because someone offered to buy the property at high price. (However, there are also those who "flip properties" for their earnings; they will sell quickly for a quick profit.) You will not suffer a loss but only a diminished return at worse. You can take your time to work out the mathematics.
You maybe surprised that you may still achieve a return higher at a time in the near future by rejecting the present immediate gain based on the present high price offered.
Also, you would need to price in the lost opportunity cost when the property is sold at this price, even though it is 50% above the perceived normal market price. Could you buy a similar quality property with the same sustainable increasing income or return by offering the same price?
Similarly, the same line of thinking can be applied to your selling of shares.
When should you sell your shares?
Yes, definitely when the fundamentals have deteriorated permanently. The business has suffered for various reasons and going forward, the earnings will be permanently impaired and deteriorating.
Yes, when the price is very very overpriced. However, you need not sell your shares in good quality companies that you bought at fair or bargain price. As long as the fundamentals are strong and the business is adding value, selling now at a higher price may mean losing the return that you could have obtained in the future years from owning this stock and the opportunity cost of reinvesting the cash into another stock of similar quality and returns.
Once again, the importance of sound reasoning and doing the mathematics in making a decision whether to sell or not.
Is it not true, that the really big fortunes from common stocks have been garnered by those
who made a substantial commitment in theearly years of a company in whose future they had great confidence and
who held their original shares unwaveringly while they increased 10-fold or 100-fold or more in value?
The answer is "Yes."
ht tp://myinvestingnotes.blogspot.com/2012/07/my-18-points-guide-to-successfully.html
Additional notes:
Other reasons for selling a stock (or property) are:
To raise cash to reinvest into another asset with better return.
A certain stock (or property sector) may be over-represented in your portfolio due to recent rapid price rises and you need to reduce its weightage to reduce your risk of over-exposure in this single stock (or property sector).
Footnote:
This is a true story. A rich man was approached by a buyer to sell his property. A few neighbouring lots were sold for $1.6 m the last 2 years. What offer will ensure that you sell your property to me? Please let me know. The unwilling owner replied, "$5 million". There is a lesson here too. :-)
1 month ago
Integrity. Intelligent. Industrious. 3iii (iiinvestsmart)$â¬Â£Â¥
Selling is often a harder decision than buying
"If you have bought a good quality stock at bargain or reasonable price, you can often hold forever."
Investing is fun. For every rule, there is always an exception.
The main reasons for selling a stock are:
1. When the fundamental has deteriorated permanently, (Sell urgently)
2. When it is overpriced, whereby the upside gain will be unlikely or very small and the downside loss will be big or certain.
We shall examine reason No. 2 through the property market. The property market is also cyclical. There were periods of booms and dooms.
If you have a good piece of property that is always 100% tenanted and which gives you good consistent return (let's say 2x or 3x risk free FD rates), would you not hold this property forever? The answer is probably yes.
Then, when would you sell this property?
Note that the valuation of property, as with stocks, is both objective and subjective.
Would you sell when someone offered to buy at 500% above your perceived market price?
Probably yes, as this is obviously overpriced. You could cash out and probably easily re-employ the money to earn better returns in another property (or properties) or other assets.
Would you sell when someone offered to buy at 50% above your perceived market price?
Maybe yes or maybe no. You can offer your many reasons.
However, all these will be based on the perceived future returns you can hope to get from this property in the future. This is both objective based on past returns obtained and subjective and speculative on future returns.
However, unlike reason No.1 when you would need to sell urgently to another buyer to prevent sustaining a permanent loss, you need not sell just because someone offered to buy the property at high price. (However, there are also those who "flip properties" for their earnings; they will sell quickly for a quick profit.) You will not suffer a loss but only a diminished return at worse. You can take your time to work out the mathematics.
You maybe surprised that you may still achieve a return higher at a time in the near future by rejecting the present immediate gain based on the present high price offered.
Also, you would need to price in the lost opportunity cost when the property is sold at this price, even though it is 50% above the perceived normal market price. Could you buy a similar quality property with the same sustainable increasing income or return by offering the same price?
Similarly, the same line of thinking can be applied to your selling of shares.
When should you sell your shares?
Yes, definitely when the fundamentals have deteriorated permanently. The business has suffered for various reasons and going forward, the earnings will be permanently impaired and deteriorating.
Yes, when the price is very very overpriced. However, you need not sell your shares in good quality companies that you bought at fair or bargain price. As long as the fundamentals are strong and the business is adding value, selling now at a higher price may mean losing the return that you could have obtained in the future years from owning this stock and the opportunity cost of reinvesting the cash into another stock of similar quality and returns.
Once again, the importance of sound reasoning and doing the mathematics in making a decision whether to sell or not.
Is it not true, that the really big fortunes from common stocks have been garnered by those
who made a substantial commitment in theearly years of a company in whose future they had great confidence and
who held their original shares unwaveringly while they increased 10-fold or 100-fold or more in value?
The answer is "Yes."
http://myinvestingnotes.blogspot.com/2012/07/my-18-points-guide-to-successfully.html
Additional notes:
Other reasons for selling a stock (or property) are:
To raise cash to reinvest into another asset with better return.
A certain stock (or property sector) may be over-represented in your portfolio due to recent rapid price rises and you need to reduce its weightage to reduce your risk of over-exposure in this single stock (or property sector).
Footnote:
This is a true story. A rich man was approached by a buyer to sell his property. A few neighbouring lots were sold for $1.6 m the last 2 years. What offer will ensure that you sell your property to me? Please let me know. The unwilling owner replied, "$5 million". There is a lesson here too. :-)
1 month ago
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CS Tan
4.9 / 5.0
This book is the result of the author's many years of experience and observation throughout his 26 years in the stockbroking industry. It was written for general public to learn to invest based on facts and not on fantasies or hearsay....
calvintaneng
3III THINKS HE IS SO CLEVER BECAUSE HE SEES IN HIS OWN WORLD VIEW WITHOUT RESPECT TO OTHERS
HE THINKS PEOPLE SHOULD BE HUMBLE AND LISTEN TO HIM
WHY HE HIMSELF BE A LITTLE HUMBLE TO LEARN FROM OTHERS?
HE ACTS LIKE HE KNOWS ALL IN HIS FROG WORLD VIEW
SEE
https://www.google.com/search?q=FROG+IN+THE+WELL+PICTURE&tbm=isch&source=univ&sa=X&ved=2ahUKEwjtidzgxpfmAhVWbysKHevOA9gQsAR6BAgHEAE&biw=1920&bih=937#imgrc=EkY0pYS5S-PouM
2019-12-03 02:09