Turtle, why are you so slow, not buying and selling anything?

One of the hardest things in investing is sitting still, especially if you have cash in hand. At least I bought one stock in two months, there are people not buying anything in the last four to six months. If Soros thinks he needs to be careful, who am I? It is so much better off to stay low profile, don't you agree?

Even professionals can get it wrong. Let me share with you what I found in the Business Times.

"SO, THEY guessed wrong. Friday's large push in Singapore, Hong Kong and in early European trading - which was undoubtedly aided by generous amounts of short-covering - came because traders in this part of the world guessed that Wall Street would end higher after its own Friday session and tried to position themselves accordingly. This was clearly an ill-conceived plan - US stocks on Friday plunged after the release of worse-than-expected earnings by General Electric and terribly poor consumer sentiment data.

Traders who bought on Friday might argue that at the time, it looked a decent bet - after all, prices were rising fast and the market had, over the previous fortnight, managed to shrug off bad news.

By the same token, you could also argue that bad news can always become worse news for which the market may be unprepared, and that the previous week's awful employment report already sounded a warning that the economic numbers for the next few months would point to a possible prolonged recession. If so, the smart money would have recognised this and should have sold into strength."

I have been publishing many stocks that I like but still not buying. One needs to understand that fundamentals and sentiments sometimes don't mix well. Good fundamentals do not mean one has to buy outright. Pessimistic sentiments will create even a better bargain, you get more discounts on top of the good fundamental value. Value or Technical camp can fall into problem of anchor and adjustment bias.

Let's take Shanghai A share as an example. At current index, its valuation has reverted-to-mean. However, it does not mean it will not overshoot on the downside, it can go as low as 15 times PE.

Some bought way too early anchored its valuation at 70 times, bought at 50 times PE hoping to go back to 70. Going for a quick flip-lah. There is no first mover advantage in investing, those move way too early will have a hole in their pocket.

Some are smarter, anchor at 40 times PE thinking valuation has gone back to mean already, they too will lose money if valuation goes down to 15 times PE.

However, those have great patience to wait for 15 times PE to arrive will have the last laugh. But then, one may need to wait for almost three years, do you have that kind of patience?



Coincidentally, yesterday, a research house call for a buy for Public Bank. Additionally, Public Bank released a fantastic set of results, 51% jump in Q1 08 earnings, year-on-year. The results came in about 29% of full year consensus' estimates, mildly surprise. Based on price to book value is still expensive, still 4 times but annualized return on equity is truly worldclass, 34%. Those looking at market valuatioan model, i.e. PE will find it cheap, 10 - 11 times earnings (annualized Q1 '08). I will surely buy but would not rush into panic buying yet.