Thursday, October 09, 2008

Just to put down some thoughts before I go sleep

Studied quite hard for jap test, given that I studied during the weekend, though I did bring a huge stack home and did most of it too. Studied through the cocked-up medical appointment, studied before I concuss on the bed after tuesday workday. Rushed to Jap class, only to be told it'll be next week. WTF?

I am not confident of passing but at least get it over and done with, so I dun have to do all these studying inbetween what time or energy I managed to gather. And due to hole-in-head theory, it meant I cant retain much, so already forgetting the stuff...

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Signz have to get out of house earlier this coming Sat to stop pigging out at home due to boredom and maybe hole up somewhere to study. Kill 2 birds with 1 stone.

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Anyway Waraku soup pasta is very delicious. Its like pasta with a thick and tasty soup. Mine was Bacon with Veg. Its good to eat on a cold day or when one is feeling particularly cold and wanted something soupy. If there are more chances, will try out other flavours. Keep up with my policy of trying different dishes from the menu.

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Also now the stock market is feeling the ripple-effects from the jitters in Wall Street. In a short span of 2 months, particularly this 2-3 weeks, there's been sharp drops from the moon back to the earth for the stock prices. Making huge losses in the 2 lots I bought much earlier this year. Nevermind, learn lessons and am going to hold longer-term. Anyway one of it is bought using CPF amount allocated for stocks, which is like 30% of the Oridinary acc.

I am not saying that the losses dont matter or what, even if its cpf. It just meant I had made a bad judgement. Also meant I have to be more careful and not use money like punters trying to win the jack pot. It meant I have to re-assess when is 'cheap' enough to enter the market. Obviously with hind-sight, I entered a bit too early despite my 1 year wait at the sidelines.

Now what matters is that stock prices are falling still. I am trying to gauge without really much of financial statements but with some understanding of some of their biz, the 'fair' value to pay for the stocks I am KIVing.

An interesting lesson is that at this juncture, how low could stock prices fall is really anyone's guess. I have to be patient yet careful to buy-in when I feel/judge a cheap buy is at. Its scary to buy then watch the value go down some more. Then you'll not be as confident cos you start to second-guess your decision and valuation (which is a good thing to make a better decision) but nobody can be completely certain. So basically I felt this cos I left an order for 2 lots via cpf the day before, yesterday and today. All below the current day's trading price, anticipating the fall in stock price for that counter. Today the order got filled and fell slightly than what I paid for.

"Aiya, if I had just waited a bit more, maybe I'll pay lesser? But what if, it falls even lower than that? Did I buy in too early? How much is it worth?"

A lot of second-guessing about your decision start arising. Guess its so partly cos of the uncertainty in the market and it is affecting investor sentiments. There was this damn rich guy in Sg who bought in to AIG when its share price tumbled after the cash flow problem. Later it recovered and he sold it off and earned 7million. He was in the news yesterday for donating 1million to Lee Kuan Yew's scholarship thingy. A risk or an opportunity? One has to decide and act upon your decision. Of course there are those who lost lots of money in the Lehman brother's bankruptcy. So take a calculated risk, stay away or do nothing. To each his own.

Now I still have some funds in cpf to use. Am going to monitor some more and if it falls lower, hope to pick up more and stretch the money (cos if each share even lower price, I can buy more lots with the same cpf funds)BUT it all remains to be seen how things play out.

Its anyone's guess cos my Dad did share with us before how he kept on buying a share when it was falling. He went in later when it has fallen quite a bit and bought and bought. It kept falling from $2 to $0.55. He bought until he had quite a significant no of shares. Then it stayed low for a while (meaning more than a year) and then when prices start to rise, he started to sell off to make gains. The issue is whether this will play out again and that if go in too early, get 'locked in' yet if had waited more, could buy-into more value cos each lot is cheaper. Also it meant your investable amount is locked in and you end up with less funds when dirt-cheap deals appear. Howeever, without the benefit of hindsight, one can never know if the decision to buy is going to go right (yield huge profits in very short term) or go wrong (get locked in for medium to long term)

Oh well, after some considerations, I will continue to see where are things heading and if the price hits my next targeted level, I may buy 1-2 lots or even 3 (provided low enough) See how lor. Still havent used much of cash (backup in case of dirt cheap price) Its a strategy I come up with based on my limited forray in the stock marktet and considering the amount of capital budgeted for investment. So far, I have quite big losses on the first 2 lots. Well it remains to be seen. I am so far okay with my decision. Its my first forray and first time trading through a recession-like bear market. See if I come out burnt or more experienced with some gains?

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