nik271 commented that he believes that Favco's fair value is 0.72. Well that is his opinion or some analyst opinion (if he gets his idea from somewhere) and his style of trading. He may be a value investor who can wait 1 whole year for the stock to reach it's fair value. For me, I have a limited capital. I cannot affort to wait for something that may or may not happen. I need to ride a stock when it is starting to move.
In addition to that, I will not predict where the stock will go but to let the stock tell me where it wants to go. A stock will move when it wants to move. Nobody can force it alone. It needs all the market participants to move it. If you predict where it will reach, then you will have an opinion ingrained inside you. This is a dangerous thinking as you will refuse to read the market neutrally which will result in big financial damage. This mind set is hard to train. That's why most of us are giving our money to someone better than us.
3 comments:
Agreed! Fundamentally sound stocks do drop also. No stock or fund is invinsible.
Of course fundamental stock also drop but what's important is that you buy stock similar to buying a portion of company's growth. Everybody has his or her own valuation. In fact I missed few counters' growth potential when I lost my patience. KNM (bought at MYR5.05), Pos (MYR2.86), Dlady (MYR6.00++), KPJ (MYR1.50++). Currently I quite bullish for Bkawan (bought at MYR7.70) and Muhibah (bought at MYR1.44). Just buy fundamental companies and be patience, if fundamental not change and price not rise substantially, sit on it.
Oh...everyone has his own style. As long as it works, keep using it.
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