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NTA rbm 0.32 but share trade at sgd 0.005 ?? something very wrong down there!
Hulumas ( Date: 17-Feb-2009 16:30) Posted:
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Short term trading does have it's merits too. Just that one cannot totally depend on it since this is riskier returns with higher potential in the short term than long term investing. I will bet heavily on long term investing because based on statistics it gives stable consistent returns in the long term (at least 10 years). However, one may still apart from having a core long term investment portfolio, have a little amount of capital solely for the short term trading to try and boost one's returns. Bearing in mind short term trading can yield potentially high returns but at a higher risk one must absorb, one should then have a short term view and even cautious approach in not overcommiting too much capital into it.
I totally agree too. That is the logic I use, why I invest equity in the long run but not trade it in the short term holding.
Farmer ( Date: 17-Feb-2009 12:40) Posted:
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I totally agree with you. Share PRICE plays the most important role in equity investment strategy. That is the logic I use, why I keep queue buying KXD at Sgd. 0.005 (the least prices ever since) for substantial lots. Ha... ha... ha...
jeremyow ( Date: 17-Feb-2009 12:02) Posted:
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Haha! Holding power, approach and time frame also crucial.
Consider two different investors A and B:- Investor A has a larger invested capital of $100k compared to investor B having an invested capital of $50k. Assuming investor A and B bought the same stocks in their portfolio. Investor A's average price for every stock is twice that of investor B because A bought the stocks at a higher price than B. Overall, though investor A has a larger invested capital, but both investors each have the same number of shares in the same stocks they bought.
Investor A's portfolio:- Company A (ave price $2) (20000 shares), Company B (ave price $6) (10000 shares) (Total invested capital = $100K) (Total number of shares= 30000)
Investor B's portfolio:- Company A (ave price $1) (20000 shares), Company B (ave price $3) (10000 shares) (Total invested capital = $50k) (Total number of shares = 30000)
Consider also that if the current stock price is $1 for company A and $3 for company B, obviously investor B will be able to have immediate returns on his portfolio once the stock price goes up.
Obvious conclusion that cannot be underestimated:- Returns is dependent on the price one pays for one's investment and the potential of growth in one's investments.
Human emotions always work against sound rational investing principles. What one may know one may not do.......