I put in a small sum of money for Turtle portfolio to demonstrate one point. Not all stocks are created equal. I find that people tend to abuse or quote Warren Buffett out of context.
Be fearful when others are greedy, be greedy when others are fearful.
It does not mean we can step in and buy any stocks indiscriminately. If we do, I think we are stupid. Very stupid. Again if we do, there is a good chance that we will lose money immediately the moment our buy transaction is completed because those penny or ACE stocks can fall further on the downside. Those are the stocks we must avoid during panic selling.
We also must not forget that Warren Buffett keeps saying he sticks with his circle of competence. Meaning he is watching a group of stocks(normally are so-called safe, with moat, etc) and high predictability that enable him to calculate the business value accurately using discounted-cash-flow. Please also not that not all stocks can use this method especially those belongs to unpredictable business model and etc....
With this in mind, if there is a group of stocks that are very defensive in nature like BAT, REITs, BJ Toto, Nestle, Star, etc fall big time, these are the stocks that we can step in and buy during panic selling. These are the stocks that I think will exercise my calculated risk.
From technical point of view, KLCI is testing on a very strong support around 1,474. Unless we see further nuclear-like bomb to shock the market, I think there is a good chance that it should bounce off from here(at least for the short-term). Failing to hold at this level, I think it will invite more selling. Watch this line very dilligently.
No comments:
Post a Comment