Hi guys just want to share with you what i wrote about bargain
hunting. Portfolio of recommended stocks are on
my blogspot. Enjoy
How a mere $7,000 can turn into
$98,000
My
aunt, started stock picking during the end of 1997, what stocks she
fished out, she wasn't willing to share. But she hinted that most
of the stocks she picked up during that terrible Asian financial
crisis were quite well known and she cannot imagine them delisting
as they are too important and too big to fall. (Possibility
DBS,Datacraft, Singtel, ST Engineering)
The
important point here , is that she had the encourage to apply the
principal of "Buying stocks when fear is the greatest". Even though
everyone warned her not too. It takes real courage to apply this
principal and im sad to say even i had my own doubts buying up
stocks now. But value investors take comfort beacuse even
though
my aunt
applied this principal back then, she didn’t exactly buy at market
bottom (STI then was 1090 at end of 1997). As the Asian Financial
Crisis reached it's worse from march 1998 to Oct 1998 (STI bottomed
around 807), my aunt's stocks fell even further and of course the
temptation of selling was great.
But she
also applied this principal to her investments "Hold forever
notion", which she did and of course this principal not only saved
her from realising paper loss but turning that paper loss to a huge
paper gain in the coming years.
She of
course she finally realise that , "Hold forever" simply means hold
for like 10-30 years and not literally forever. And being a very
practical aunt, she sold all her stock holdings 10 years after she
bought at the end of 1997, this of course was just last year 2007.
Just so happens that last year was probably the last peak of the
Bull market in this decade.
She
managed to cash out just in time before the huge Bear market
appeared '08. Suffice to say she reaped gains of
1300% from $7000 to $98,000 this not including tax, inflation and
dividends earned, just by applying two techniques taught by Buffet
and with a bit of luck involved.
Aunty
Peggy now sits right besides me with a big grin on her face , as I
blog down her successful stock investment story. Her story is a
shinning example that proves, if any investor who have the guts and
ability to apply these principals in their investing, one can
really reap huge benefit when the next bull comes
out.
Summary in Singapore's
context
>Invest when everyone around are sitting at
the side lines, too fearful to move.
>Invest when taxi uncles and coffee aunties no
longer talk about equities (because they too busy queuing up to get
back their mini bond $ or liquidate their AIA
polices).
>Invest , when everyone thinks its the end of
the world
What Now?
Now I
know that my aunt's success had to do with a bit of luck, because
all the stocks she bought during the 97 crisis are still around up
till now (so she claims), the fact that she didn’t even study the
fundamentals of the stocks she bought, is already a risk
itself.
To
reduce the reliance of luck and risk, I painstakingly created Four
portfolios, that I’m sure will be able to ride out the current
Turmoil and fasten your hands around the next bull
run.
Each
portfolios have their own theme and reason that I gathered them for
and using Low PBV and High ROE data as additional filter for
value.
In
other words these portfolios are created for people who are just
too lazy to study what they invest just like my aunt. And for
people who are young but have limited capital to invest.
The portfolios' ROE figures are based on all the company's past
performances and I took the average out of that 4- 5 years of data.
Like wise for the PBV figures, they are based on trading price when
the portfolios were established on 20th Oct
2008.
Without
further a do , I present to you the first of four
portfolios:
The rest of the article is avilable at http://secret-gems.blogspot.com/