Sunday, 26 April 2015

What is Your Buy-in Price for XYZ stocks?

A reader dropped me an email to enquire about my "buy in price" for two REITs counter I owned - CRCT and FCOT. My reply to her as follows. 

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

Hi M, 

Thank you for reading my blog and I appreciate your email too. First of all, I apologized that it is perhaps not going to be the straight forward answer you are looking for, as you read on. I am not secretive about my buying price, but worries stem from misleading message transmitted to readers, if only the buy and sell price is the target of interest.

Wisdom and Knowledge

One purpose of my blog is to convey financial literacy to the readers and to continue learn/improve myself too. This includes the art of valuing a company and the development of a philosophical mind, which possibly is even more beneficial for investing. I believe that the better you can think, and the more exposures you have in life, the wiser you become. This wisdom is needed for us to assess the market better. Then together with the technical knowledge you acquired from books in valuing a company, you can then beat the market and compound your returns. There is no short cut from investing. Even if you do gain from a shorter path before, it will be temporary and one day, your money earned will all be returned to the market pool somehow. 

Only You Know Yourself Best

Ultimately it will be wiser to value the companies of interests base on your own knowledge/ judgement, because only you will know best how you will react to every trade you make. Treat every trade as sacred for yourself and research as much as possible YOURSELF. Only you will know how long you will hold before selling, based on your own strategy and the way you structured your portfolio to suit your needs.

Do Not Take Price From Others as Benchmark

The last info you should take into account to benchmark or even reference for your investment, is to know what price OTHERS buy/sell their stocks at! 

For instance you spot a company with very good fundamentals and huge upside prospect at $2.00. But your close friend bought it at $1.50. Due to the general tendency of human nature to compare, most people will forsake the idea of buying into the great company, just because their friend bought it at a lower price. Or at least they will want to buy at $1.60 or $1.70 and not $2.00. Hence a golden opportunity may be lost!

Focus on the Fundamentals

Of course, the most important selection of the criteria is the long term fundamentals of the company. Enough had been said on this criteria, easy to comprehend but not easy to follow when erratic pricing starts affecting your emotions!

Yes, until this point if you are still reading, you may think "enough of crap!" Ok ok ok... what I can say is I bought at prices near to my blog articles released date as below. 


I sincerely believe the above articles on REITs are more beneficial than just the pricing I (a stranger) bought at!

Hope you can continue support my blog.

:-) enjoy your weekend.

Rolf


2 comments: