Thursday, July 3, 2008

A Bloody Day for Parkson

Yesterday was a bloody day for Parkson -- this is one of a very rare day I've not seen for a long time. The whole world just lost faith. The share price slided right from the opening bell. Big boys or small boys are the same, they literally throw out the baby together with the bathwater when the moment it hit around $ 4.66. Some of these guys must be super discipline to cut loss at 10% if they entered around $ 5.00. Loss of 8.4% in one day -- incredible!

I have been hunting for bad news, surprisingly there was none. One good news though, they acquired 9% interest in Xi'an Lucky King Parkson Plaza Co., Ltd. This must be a good news for earnings right? Never mind, if someone dump share again today, I'm going to spend all my money. I'm damn sure this is definitely due to irrationality and nothing else. Silly people.

If I want to be really safe, wait for Shanghai Index to hit 2000 selling for 15 times earning. The current level 2700 plus is around 20 times earning -- reasonable but not at rock bottom bargain yet. Hang Seng Index around 21,000 plus in my opinion already hit rock bottom. However, if Parkson Holding Berhad share jumping the gun, a cart runs way ahead of the horse, it is a worth while risk to take. It's all depend on one's risk tolerance.

For a new reader, you may want to read the whole background, please click the links
(1) Big picture of the Chinese spending

(2) Write up of Parkson and a case for investment

(3) To survive the market, six sense is important. I can feel butterfly in my stomach, sensing storm of irrationality was coming. The following entries capturing my own doubts and how I conquered my own irrationality before I'm ready to take advantage of others irrationality.

(i) Should I cut loss part I,
(ii) Should I cut loss part II,
(iii) Should I cut loss part III.

(4) Technical analysis

1 comment:

KC said...

even we see value on Parkson continue it's fall, we must prepare for the worse.

We must have prepared for 'what if it fall to 2.50'