Monday, May 5, 2008

Selling Genting for extra $$$

I purchased Genting for RM 6.40 and sold it at the loss of RM 6.35, all because i am in hurry to use the cash. Genting is an interesting counter offering good growth in the revenue and profits. Anyway... i did a mistake purchasing Genting at wrong timing. Should have purchased counters like PBBANK , DIGI, LPI and DLADY which offers higher dividend yield. During economy uncertainty the growth stocks are heavily bash and most of the counters in the market takes time to regain its momentum. It is wiser to keep value counter because at worst condition, even without capital appreciation, investors still get the dividend.

Some of the Fundamental Analyst believe that keeping a good counter and hoping for capital appreciation is one of the way to make big bucks. Personally i DOUBT IT!!!!. Imagine you purchase one counter with good growth, good income statement and beautiful cash flow hoping it to appreciate within a few years but the price is not moving... are you going to keep the share base on your FA valuation ? The answer to this question is "Yes" and "No"

When do we keep and when do we not keep? It all depending on the you ... If you are a Growth investor it is probably the time to throw because your valuation of the company is base on capital appreciation. During market uncertainty, don't expect miracle to happen and everything just get corrected immediately. Normally Growth investors make big bucks during the bull period. But if you are a value investor... YES it is time to keep for further cash flow as long as the company pays its dividend. It is all about valuation and to determine whether you are looking into growth or cash flow.

Growth Investor
You will be looking at capital appreciation. Most of the time they go for high beta share with good fundamental intact. When the market rises, this counter will be galloping like mad. Dividend is not so important since the earning is repatriated to the capital expenses to further grow the company.

Value Investor
I would have to say, this would be the safest but the slowest to achieve good returns. The investor is looking at the dividend paid which is normally more than the value given by bonds.