Market Sense

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CK Choy.

Market Sense 市场意识: Value investing is BOOORRINNGGG!!!
Be decisive, Be patient, Don’t be greedy, Don't be stubborn

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The information contained in is provided to you for general information/circulation only and is not intended to nor will it create/induce the creation of any binding legal relations. The information or opinions provided do not constitute investment advice, a recommendation, an offer or solicitation to subscribe for, purchase or sell the investment product(s) mentioned herein. It does not have any regard to your specific investment objectives, financial situation and any of your particular needs. Accordingly, no warranty whatsoever is given and no liability whatsoever is accepted for any loss arising whether directly or indirectly as a result of any person or group of persons acting on this information. Investments are subject to investment risks including possible loss of the principal amount invested. The value of the product and the income from them may fall as well as rise.

You should seek advice from a financial adviser regarding the suitability of the investment products mentioned, taking into account your specific investment objectives, financial situation or particular needs, before making a commitment to purchase the investment product. In the event that you choose not to obtain advice from a financial adviser, you should assess and consider whether the investment product is suitable for you before proceeding to invest.

Any views, opinions, references or other statements or facts provided in this are personal views. No liability is accepted for any direct/indirect or any other damages of any kind arising from or in connection with your reliance on the information provided herein.

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Note:
All TA (Technical Analysis) view using charts are for illustration purpose only.
Unless otherwise specified, all charts' sources are from POEMS(Phillip Online Electronic Mart System)

Saturday, 2 July 2011

Value investing is BOOORRINNGGG!!!

Value investing is boring! I can hear some of you shouting “HELL YEAH!”. It’s boring because sometimes we need to wait for eons before our investment reaches the intrinsic value. It’s boring because we don’t get instant gratification and prices take a long time to move (I know you are thinking about Kingsmen!). It’s boring because we need to sit still and have to control those itchy hands of ours.
Value investors need to have lots of patience and discipline (and I really means LOTS). When we buy into a stock, we should not expect to make money immediately. In fact, we must be mentally prepared to lose paper money in the short-term. It most probably will take a long time for the stock to rise up to the intrinsic value. In the meantime, we need to sit still like good boys and girls and not meddle with our portfolio. The trader in us always wants to do something like sell off when there’s a small profit and cut loss unnecessarily, thinking we can buy back later. We have to control the urge to do that and remember that we are in this for the long-term. If the business fundamentals are intact, we should just sit on the sidelines and not do anything. When the price dips and goes down tremendously, we must have the discipline to not hit the sell button out of panic (provided the business is still flourishing).
Currently, some stocks in my portfolio are down and my China ETF is down 10% as of today due to the negative market. I’m willing to hold on to them as I believe they are undervalued and have lots of room for capital appreciation. I do feel emotional at times when my stocks are down but I need to keep on reminding myself that I’m in this value investing business for the long-term and am not here for short-term gains. Having more patience and discipline is what I need to work on and am working on it constantly. For the short-term, the prices fluctuate up and down but value is what I get for the long-term. Value investing is not easy due to the strict discipline and patience we need to have. This might explain why not many are into value investing. Having said that, those who have control over their emotions will see tremendous benefit for the long-term and I believe in this. Many have been there, done that. People like Benjamin Graham, Warren Buffett and Peter Lynch are/were great value investors due to their emotional control and they have shown us that it can be done with the right skills and attitude.
Actually, contrary to the title, value investing is not boring and I need to confess my love for value investing. I feel value investing is one of the best ways to accumulate wealth. All that is needed is just a bit more of mental fortitude so that we don’t succumb to unwarranted actions that will affect our portfolio.

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