Below is his comments and my reply for everyone's easy reference:
Originally posted by WeiHan
If we follow value investing strategy, we don't really bother that much about where economy is going. If the stock you are holding doesn't look that undervalue anymore after a large surge in price, then reduce your holding. That is what warren Buffett will do. Just invest on the basis that your investment has a large margin of safety.
My comments:
Many years ago I used to think the way you think right now. I no longer do.
Do you know that DBS's share price dropped to $10 all the way from $28 at market peak in year 2000? If someone had bought DBS at $25 and held all the way from year 2000 to now, he might still be losing money (DBS is about $22.80 now)
If someone had sold his DBS shares when it was above $20 and bought back when it dropped to say $13, would that make a BIG difference in his returns?
Warren Buffett becos of his BIG position, cannot get in and out of the market the way retail investors like us CAN.
That's one advantage a retail investor like us have OVER Warren Buffett. If we don't make use of the advantage we have, we're actually shortchanging ourselves.
Like I said, in the past few years, I observe and learn from the rich what they do. One of the person I observe and learn is Mr Oei Hong Leong. He does not just hold and hold stocks. He also hold some cash as opportunity fund. That's how he can easily go into the market to bail out Citiraya and get the shares at 0.18 CENTS! I had a 15 mins chat with him at one of the pulic talks he gave, I have to say I learned quite a lot in that 15 mins itself!
If Mr Oei is fully invested, he would have missed all such opportunities.
You can have a different opinion.
We gain/lose the most from our opinion if we put our money where our mouths are.