A Perfect Storm

Looking at the STI over the past few trading days, it certainly seems to be a perfect storm with YTD losses of around 8%.

As Buffett has said that "you paid dearly for a cheery concensus", the present gloomy outlook makes me feel intrigued or even slightly excited. It is always wonderful to be able to bargain hunt, waiting for prices to drop lower (at a higher probability than usual). Beats watching the paint dry.

Well, at the end of day, every adversity or losses one endures, one comes out stronger and hopefully wiser.

Comments

musicwhiz said…
Hi thinknotleft,

Yes, Mr. Market's mood swings are creating the perfect opportunity for buying into sound companies at bargain basement prices !

But I also sense that one must be highly selective and do one's research thoroughly, as selecting the wrong company during this time will also prove detrimental to wealth in the long run. Also, one should have a reasonably long-term horizon of at least 5-10 years so as to smooth out market volatility.

Regards, Musicwhiz
ThinkNotLeft said…
Hi Musicwhiz

Yes, I do agree that one has to be highly selective in stock-picking.

And I take my hats off to you for having not selling any of your stocks given the market downturn.

As for me, my itchy hands have sold some of the stocks that I bought earlier so as to raise the cash to buy other stocks. Not that I do not have excess cash, but rather that I do not want to commit new funds in a falling market.

As for investing horizon (portfolio
), I do maintain a long-term view.
But for stocks, I do not adapt a 5-10 years or longer horizon.

A 5-10 yrs or even 20 years horizon is more buffett-style (buying high quality stocks at low prices and hold them) and this is what you are currently practising.

My horizon is closer to Graham or Neff, where every stock I purchase is for sale if the price is right or if there are better alternatives.

Regards,
Thinknotleft

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