Hi guys just want to share with you what i wrote about bargain hunting. Portfolio of recommended stocks are on my blogspot. Enjoy
How a mere $7,000 can turn into $98,000
My aunt, started stock picking during the end of 1997, what stocks she fished out, she wasn't willing to share. But she hinted that most of the stocks she picked up during that terrible Asian financial crisis were quite well known and she cannot imagine them delisting as they are too important and too big to fall. (Possibility DBS,Datacraft, Singtel, ST Engineering)
The important point here , is that she had the encourage to apply the principal of "Buying stocks when fear is the greatest". Even though everyone warned her not too. It takes real courage to apply this principal and im sad to say even i had my own doubts buying up stocks now. But value investors take comfort beacuse even though
my aunt applied this principal back then, she didn’t exactly buy at market bottom (STI then was 1090 at end of 1997). As the Asian Financial Crisis reached it's worse from march 1998 to Oct 1998 (STI bottomed around 807), my aunt's stocks fell even further and of course the temptation of selling was great.
But she also applied this principal to her investments "Hold forever notion", which she did and of course this principal not only saved her from realising paper loss but turning that paper loss to a huge paper gain in the coming years.
She of course she finally realise that , "Hold forever" simply means hold for like 10-30 years and not literally forever. And being a very practical aunt, she sold all her stock holdings 10 years after she bought at the end of 1997, this of course was just last year 2007. Just so happens that last year was probably the last peak of the Bull market in this decade.
She managed to cash out just in time before the huge Bear market appeared '08. Suffice to say she reaped gains of 1300% from $7000 to $98,000 this not including tax, inflation and dividends earned, just by applying two techniques taught by Buffet and with a bit of luck involved.
Aunty Peggy now sits right besides me with a big grin on her face , as I blog down her successful stock investment story. Her story is a shinning example that proves, if any investor who have the guts and ability to apply these principals in their investing, one can really reap huge benefit when the next bull comes out.
Summary in Singapore's context
>Invest when everyone around are sitting at the side lines, too fearful to move.
>Invest when taxi uncles and coffee aunties no longer talk about equities (because they too busy queuing up to get back their mini bond $ or liquidate their AIA polices).
>Invest , when everyone thinks its the end of the world
Now I know that my aunt's success had to do with a bit of luck, because all the stocks she bought during the 97 crisis are still around up till now (so she claims), the fact that she didn’t even study the fundamentals of the stocks she bought, is already a risk itself.
To reduce the reliance of luck and risk, I painstakingly created Four portfolios, that I’m sure will be able to ride out the current Turmoil and fasten your hands around the next bull run.
Each portfolios have their own theme and reason that I gathered them for and using Low PBV and High ROE data as additional filter for value.
In other words these portfolios are created for people who are just too lazy to study what they invest just like my aunt. And for people who are young but have limited capital to invest.
The portfolios' ROE figures are based on all the company's past performances and I took the average out of that 4- 5 years of data. Like wise for the PBV figures, they are based on trading price when the portfolios were established on 20th Oct 2008.
Without further a do , I present to you the first of four portfolios:
The rest of the article is avilable at http://secret-gems.blogspot.com/