It is also interesting when people asked : is your cash increase by year end as compare to year ago citing as investment 'correctly' done what-if the person 'simply' buy in to in this case Courage marina at 6 cents and now double its cash is this ALSO considered as good investment ? There are rules to follow for sound investment h/e not all investment will bear fruits by 12 months hence such comparison simply too simplistic. Of course speculative play at the right time/stock also give you positive cash at end of the day but that is 'speculative' play just like people now still playing the BAL.
I think you would be better off holding Lee Metal and Kingsmen and collect dividends, than averaging down into Eratat with massive losses!
newbiestock wrote: botak, courage marina is just an example. If courage marina can achieve 40% up in a day, it shows that Eratat also have that potential upside as well. of course, before that happens, Eratat management must address all major shareholders' concern first.
For stocks tat i plan to invest and hold, I follow these three FA rules.
1) First, the quarterly result must be profitable.
If it makes any quarterly loss, I will not hesitate to sell it. I will not touch any company that is still making a loss.
If it is a turnaround company, it must demonstrate at least two consecutive quarters of profits before I will consider making any entry.
2)I prefer it has a core business with earnings that is easy to predict. Not those one off or extraordinary earnings. That's why I don't hold property or shipping or any cyclical stocks for long. If I ever buy cyclical stocks, it's probably for short term trading.
3) I prefer stocks that I can see the cash balances grow yearly in a predictable manner and have a track record in giving consistent dividends every year. Preferably, the business requires minimum investment / setup costs needed to scale up. FCF is one FA indicator that I look at too. Some stocks I buy and hold before include Lee Metal group and kingsmen creative etc, which I hold for years before selling off.
so, one yr ago, even if courage marina is at 6 cents, i probably won't buy and hold. For trading, maybe, but that will depend on TA at that point of time.
so far, these three FA rules did work well for me... provided I have the patience.
lee metal and kingsmen have appreciated enough so it makes sense to cash out and no point to accumulate any further at the present price.
For Lee Metal and kingsmen, I hv also averaged down bit by bit before.
as long as the company is making good profits and giving dividends, I just use the dividends or any spare cash to accumulate whenever it dips. And I cash out all at one shot only when it has made significant capital gains or when valuation has appreciated enough or I feel that its growth potential has peaked.
Has been applying these strategies successfully to a few low P/E stocks alr since I started investing in 2009 and so far works well for me, esp now I don't trade that often as before. of coz, patience is the key. Must give time for company to grow. Holding period definitely more than 1 yr for these stocks.
newbiestock wrote: 3) I prefer stocks that I can see the cash balances grow yearly in a predictable manner and have a track record in giving consistent dividends every year. Preferably, the business requires minimum investment / setup costs needed to scale up. FCF is one FA indicator that I look at too. Some stocks I buy and hold before include Lee Metal group and kingsmen creative etc, which I hold for years before selling off.
The FCF of Eratat is hardly strong.
Furthermore, it requires a HUGE investment to scale up, as seen from the bonds issue.
These two factors doesn't seem to fit your criteria. Perhaps you should define what you meant by minimum investment costs needed and amount of FCF you look at. The words you used are highly subjective.
newbiestock wrote: Has been applying these strategies successfully to a few low P/E stocks alr since I started investing in 2009 and so far works well for me, esp now I don't trade that often as before
So you started investing right in the midst of a bear market! Your timing of entry is impeccable!
Perhaps another question for you would be, if you are managing a 7 figure portfolio, what is the percentage you would put in Eratat given your knowledge and excellent track record of spotting low P/E stocks with 100% success.
If anything, the announcement of new distributors will give Eratat the perfect excuse of increasing the size of trade receivables greatly! Smart people.
Fundamentalist – Beginning of 2009 was not bear market, but the beginning of bull run until now. I loaded on Eratat early 2009 from 6.5 cts to 10 cts ( my 1st S- Chip, ave 8.5 cts ), and it rebounded to close to its 30 cts IPO price twice, at end of 2009 and early 2011. I sold off progressively until early 2012 , so have done quite well . I bought/sold Eratat for various reasons as I could have bought C Hongxing or C Sports etc then. ( guess I was lucky ? ). S-Chips were hot then as there were only few scandals. I won’t dare bet heavily on S-Chips today, in fact not held any since late 2011 unless for trading.
Anyone who bought in early 2009 would be sitting on multi-baggers today ( eg Osim was then trading at abt 5 cts, a 40 bagger today plus lots of dividends - 6 cts/yr recently ). Unfortunately, I picked Eratat then ( abt PE 4 ? ) as Osim was losing heavily in US investment, though I bought Osim much later at abt 85 cts . Newbiestock was blessed to have only started buying shares in 2009 and should be rich by now if he did not sell. Such opportunities only come once every 10 yrs or so. I started investing more than 2 decades ago and hit badly in 2008 US subprime even though was holding good counters, but have now more than recovered. So, those who only started buying shares early 2009 and held until now, don’t think you are a financial genius LOL.
my bad, I meant to say it is the bottom of the bear market. Relaxing, you put out in direct words what I wanted to say.
Which means to say that successfully applying strategies since 2009 means nothing. Most counters bought without the application of any strategies would have yielded a fair bit.
Personally, I bought/sold a few of the S-chips that are now suspended. Perhaps I was real lucky, I managed to escape with a profit or at worst a small loss in those cases. In those cases, the debts of the companies started to increase, along with an increase in profits as well as trade receivables.
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