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14-08-2012, 10:57 AM
(This post was last modified: 14-08-2012, 11:23 AM by KopiKat.)
(14-08-2012, 02:00 AM)smallcaps Wrote: (13-08-2012, 07:59 PM)nitro Wrote: Anyone practises selling
when the counter reaches 52 weeks high? If there is sustained volume, just continue let it run, sell when volume is falling? If it is a value stock, buys back again when the price drops again.
Not me but Walter Schloss considered the opposite when buying (Rule 10):
http://www.scribd.com/doc/80466887/Walte...-Investing
Nice! All the 16 rules serves as a useful reminder.
Thanks!
I reproduce below,
1. Price is the most important factor to use in relation to value
2. Try to establish the value of the company. Remember that a share of stock represents a part of a business and is not just a piece of paper.
3. Use book value as a starting point to try and establish the value of the enterprise. Be sure that debt does not equal 100% of the equity. (Capital and surplus for the common stock).
4. Have patience. Stocks don’t go up immediately.
5. Don’t buy on tips or for a quick move. Let the professionals do that, if they can. Don’t sell on bad news.
6. Don’t be afraid to be a loner but be sure that you are correct in your judgment. You can’t be 100% certain but try to look for the weaknesses in your thinking. Buy on a scale down and sell on a scale up.
7. Have the courage of your convictions once you have made a decision.
8. Have a philosophy of investment and try to follow it. The above is a way that I’ve found successful.
9. Don’t be in too much of a hurry to sell. If the stock reaches a price that you think is a fair one, then you can sell but often because a stock goes up say 50%, people say sell it and button up your profit. Before selling try to reevaluate the company again and see where the stock sells in relation to its book value. Be aware of the level of the stock market. Are yields low and P-E ratios high. If the stock market historically high. Are people very optimistic etc?
10. When buying a stock, I find it helpful to buy near the low of the past few years. A stock may go as high as 125 and then decline to 60 and you think it attractive. 3 years before the stock sold at 20 which shows that there is some vulnerability in it.
11. Try to buy assets at a discount than to buy earnings. Earning can change dramatically in a short time. Usually assets change slowly. One has to know much more about a company if one buys earnings.
12. Listen to suggestions from people you respect. This doesn’t mean you have to accept them. Remember it’s your money and generally it is harder to keep money than to make it. Once you lose a lot of money, it is hard to make it back.
13. Try not to let your emotions affect your judgment. Fear and greed are probably the worst emotions to have in connection with the purchase and sale of stocks.
14. Remember the work compounding. For example, if you can make 12% a year and reinvest the money back, you will double your money in 6 yrs, taxes excluded. Remember the rule of 72. Your rate of return into 72 will tell you the number of years to double your money.
15. Prefer stock over bonds. Bonds will limit your gains and inflation will reduce your purchasing power.
16. Be careful of leverage. It can go against you.
News article from Bloomberg, interesting extracts,
The Schloss theory of investing, passed from father to son, involved minimal contact with analysts and company management and maximum scrutiny of financial statements, with particular attention to footnotes.
.
.
They start by looking at the balance sheet. Can they buy the company for less than the value of the assets, net of all debt? If so, the stock is a candidate for purchase.”
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(14-08-2012, 10:57 AM)KopiKat Wrote: (14-08-2012, 02:00 AM)smallcaps Wrote: (13-08-2012, 07:59 PM)nitro Wrote: Anyone practises selling
when the counter reaches 52 weeks high? If there is sustained volume, just continue let it run, sell when volume is falling? If it is a value stock, buys back again when the price drops again.
Not me but Walter Schloss considered the opposite when buying (Rule 10):
http://www.scribd.com/doc/80466887/Walte...-Investing
Nice! All the 16 rules serves as a useful reminder.
Thanks!
I reproduce below,
1. Price is the most important factor to use in relation to value
2. Try to establish the value of the company. Remember that a share of stock represents a part of a business and is not just a piece of paper.
3. Use book value as a starting point to try and establish the value of the enterprise. Be sure that debt does not equal 100% of the equity. (Capital and surplus for the common stock).
4. Have patience. Stocks don’t go up immediately.
5. Don’t buy on tips or for a quick move. Let the professionals do that, if they can. Don’t sell on bad news.
6. Don’t be afraid to be a loner but be sure that you are correct in your judgment. You can’t be 100% certain but try to look for the weaknesses in your thinking. Buy on a scale down and sell on a scale up.
7. Have the courage of your convictions once you have made a decision.
8. Have a philosophy of investment and try to follow it. The above is a way that I’ve found successful.
9. Don’t be in too much of a hurry to sell. If the stock reaches a price that you think is a fair one, then you can sell but often because a stock goes up say 50%, people say sell it and button up your profit. Before selling try to reevaluate the company again and see where the stock sells in relation to its book value. Be aware of the level of the stock market. Are yields low and P-E ratios high. If the stock market historically high. Are people very optimistic etc?
10. When buying a stock, I find it helpful to buy near the low of the past few years. A stock may go as high as 125 and then decline to 60 and you think it attractive. 3 years before the stock sold at 20 which shows that there is some vulnerability in it.
11. Try to buy assets at a discount than to buy earnings. Earning can change dramatically in a short time. Usually assets change slowly. One has to know much more about a company if one buys earnings.
12. Listen to suggestions from people you respect. This doesn’t mean you have to accept them. Remember it’s your money and generally it is harder to keep money than to make it. Once you lose a lot of money, it is hard to make it back.
13. Try not to let your emotions affect your judgment. Fear and greed are probably the worst emotions to have in connection with the purchase and sale of stocks.
14. Remember the work compounding. For example, if you can make 12% a year and reinvest the money back, you will double your money in 6 yrs, taxes excluded. Remember the rule of 72. Your rate of return into 72 will tell you the number of years to double your money.
15. Prefer stock over bonds. Bonds will limit your gains and inflation will reduce your purchasing power.
16. Be careful of leverage. It can go against you.
News article from Bloomberg, interesting extracts,
The Schloss theory of investing, passed from father to son, involved minimal contact with analysts and company management and maximum scrutiny of financial statements, with particular attention to footnotes.
.
.
They start by looking at the balance sheet. Can they buy the company for less than the value of the assets, net of all debt? If so, the stock is a candidate for purchase.”
[i]1. Price is the most important factor to use in relation to value
Unquote:-
i think this is the most important of all considerations. All other things is relative. No?
WB:-
1) Rule # 1, do not lose money.
2) Rule # 2, refer to # 1.
3) Not until you can manage your emotions, you can manage your money.
Truism of Investments.
A) Buying a security is buying RISK not Return
B) You can control RISK (to a certain level, hopefully only.) But definitely not the outcome of the Return.
NB:-
My signature is meant for psychoing myself. No offence to anyone. i am trying not to lose money unnecessary anymore.
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Extracted from this book 'The Triumph of Value Investing' by Janet Lowe, available at the Library : 332.6 LOW-[BIZ], Chapter 10 (Pg 157-8),
Knowing When to Sell
■ The stock has done so well that your portfolio is now out of balance. If you become too heavily weighted in an industry that has become overly popular with investors, it may be smart to rebalance.
■ The company is tanking. You bought the shares because the company had excellent fundamentals, but management, sales, cash flow, or something fundamental has happened to change the picture.
■ The stock isn't keeping up. You've found another stock that you expect will bring better returns.
■ The dividend is cut or eliminated. Not only do you lose a desired return, this is a red flag that the company expects to generate less income.
Most, if not all the points, had likely been covered in this thread. The last point does remind me of my own reasons to sell MIIF (DPU not yet cut but very likely for FY13) recently, with the 3rd point being regularly used as the reason for my frequent switching of stocks.... 
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My reason for most of my sells come under point 2. How i wish it were more often because of point 1 instead. 
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i have been selling based on all 4 points and then some. And happily once in a while caught by surprise sell because of point one. i think for point one the stock is usually a long-term buy.  
WB:-
1) Rule # 1, do not lose money.
2) Rule # 2, refer to # 1.
3) Not until you can manage your emotions, you can manage your money.
Truism of Investments.
A) Buying a security is buying RISK not Return
B) You can control RISK (to a certain level, hopefully only.) But definitely not the outcome of the Return.
NB:-
My signature is meant for psychoing myself. No offence to anyone. i am trying not to lose money unnecessary anymore.
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(13-08-2012, 07:59 PM)nitro Wrote: Anyone practises selling
when the counter reaches 52 weeks high? If there is sustained volume, just continue let it run, sell when volume is falling? If it is a value stock, buys back again when the price drops again.
But it might be many years later. You will lost the opportunity cost
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Usually, I find that the right time to sell is when everyone gets so exuberant about a business that they price in a lot of future growth prospects which either have yet to materialize, or which may be completely unrealistic.
Essentially, when the value of the business is severely decoupled from the price which is being offered, to the extent that the price offered over-inflates the value of the company significantly, then it may be prudent to sell and look for a better opportunity in terms of value-price mis-match.
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The recent APB and F&N saga is an interesting case study
If you were the majority shareholder in Great Eastern and OCBC, would you sell your F&N stake?
If you were the majority shareholder in F&N, would you sell your APB stake?
(OMG, just look at how long Great Eastern and OCBC had held the F&N stake!)
Price is indeed the most important factor to use in relation to value.
The reality I find is that most "pseudo" value investors advocate buying when price has fallen below intrinsic value, but do nothing when price has run ahead of value 
Its a bit like those HDB owners who got $1 million offers for their HDB flats - some will sell; and some will decline.
Never underestimate sentimental value or inertia. Nor mix up stamp collecting with value investing.
LOL!
Just google singapore man of leisure
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usually to sell or not depends on the fair value of the company base on my analysis
Example if I think the stock I am holding is worth $1.00 but mr market is pricing it at $2.00, I would definitely let it go.
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(31-08-2012, 12:42 AM)Musicwhiz Wrote: Usually, I find that the right time to sell is when everyone gets so exuberant about a business that they price in a lot of future growth prospects which either have yet to materialize, or which may be completely unrealistic.
Essentially, when the value of the business is severely decoupled from the price which is being offered, to the extent that the price offered over-inflates the value of the company significantly, then it may be prudent to sell and look for a better opportunity in terms of value-price mis-match.
Ha! Ha!
When will this usually happens? Bull market? Bear market? Side-way? This time is different? If you can spot it--"FATT TAT LOL". i like it.
WB:-
1) Rule # 1, do not lose money.
2) Rule # 2, refer to # 1.
3) Not until you can manage your emotions, you can manage your money.
Truism of Investments.
A) Buying a security is buying RISK not Return
B) You can control RISK (to a certain level, hopefully only.) But definitely not the outcome of the Return.
NB:-
My signature is meant for psychoing myself. No offence to anyone. i am trying not to lose money unnecessary anymore.
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