I first bought eratat in may 2012 at 9.8 cents and kept buying down to 8.6 cents. sold all in jan 2013 at 12.5 cents. no holdings since.
yes, I believe the bad news (high interest cost of bond and insider selling) are priced in, but no one can be sure share price has bottomed. it can over shoot.
direct cost for the bond is quantifiable (around 2 cents a share). has been priced in
i am invested in lilanz so I understand the business model and I have seen lilanz shops but not eratat.
I have no doubt on the business model but it is too early to judge executing capability of the management in expansion plan
rock, we all like to invest in WINNERS but WINNERS can be overvalued and become LOSERS, and undervalued LOSERS can become a WINNER.
To me, eratat has a positive intrinsic value and not zero or negative equity
Who doesn’t want to invest in winners? the trick is how to identify which is the potential winner and which is the potential loser. As I said earlier, overvalued winner can potential be a loser, and undervalued loser can potentially become a winner.
no one can predict the bottom of the share price, can u?
the share price of eratat “mathematically” can drop to 8 cents, 7, 6, 5, 4, 3, 2, 1 and possibly zero. this apply to your portfolio of winners as well
a winner don’t always stay a winner and a loser don’t always stay a loser, some do and some don’t.
Averaging down with doubling is a technique in investing and it is different from gambling.
In the casino, u cannot keep on doubling because there is a cap on maximum bet.
In the casino, a lost bet is gone forever, if I lose my initial bet of $1000 it is gone forever.
In investing, if I bought 10,000 share of eratat at 10 cents a piece, if the share price drops to 5 cents, I incurred a $500 paper loss if I hold on to my shares, if the share price rebound back to 10 cents, I am back to square one, whereas in casino, a lost bet is gone forever.
I am not a punter/gambler, I do follow fundamentals and invest in undervalued stock with comfortable degree of margin safety.
How confidence r u in saying that by investing in eratat at this current price and with or without doubling down is amounting to gambling?
if a stock will to drop from 8, 7, 6, 5, 4, 3, 2, 1 then what do you think of the company business? Why pump in money to a sinking ship? You're compounding your lost. If you invest with your eye open, then all the best to you.
We have to manage our risks. Even a winner will to go down hill as compare to the general market. I will take profit first. Never fall in love will a stock.
You're right a winner don’t always stay a winner and a loser don’t always stay a loser, some do and some don’t. My advise manage your risk. Focus on business not on share price. Good luck to you.
UB40 wrote: I am not a punter/gambler, I do follow fundamentals and invest in undervalued stock with comfortable degree of margin safety.
How confidence r u in saying that by investing in eratat at this current price and with or without doubling down is amounting to gambling?
Nothing against you, but so far I read, your initial posts on whether Eratat is a risk worth taking based on current share price. You may say you follow fundamentals, but your questions on Eratat certainly doesn't reflect so at the beginning.
Newbiestock, I would like to add too that my comments here are not due to movements in the daily share price like you point out. Even if it goes to 20 cents next year, my comments and views remain the same, and the same views have been maintained since 2011, with more red flags added on over the years. You know I have not changed in my views since 2.5 years ago.
Stocks like Starhub may be "boring", but if you bought a number of lots <$2 like I did at the time it lost its BPL bid, what's there to complain about? On hindsight, simply being "not interested" in such "boring" counters have incurred a great opportunity cost.
