I started serious Investing Journey in Jan 2000 to create wealth through long-term investing and short-term trading; but as from April 2013 my Journey in Investing has changed to create Retirement Income for Life till 85 years old in 2041 for two persons over market cycles of Bull and Bear.

Since 2017 after retiring from full-time job as employee; I am moving towards Investing Nirvana - Freehold Investment Income for Life investing strategy where 100% of investment income from portfolio investment is cashed out to support household expenses i.e. not a single cent of re-investing!

It is 57% (2017 to Aug 2022) to the Land of Investing Nirvana - Freehold Income for Life!


Click to email CW8888 or Email ID : jacobng1@gmail.com



Welcome to Ministry of Wealth!

This blog is authored by an old multi-bagger blue chips stock picker uncle from HDB heartland!

"The market is not your mother. It consists of tough men and women who look for ways to take money away from you instead of pouring milk into your mouth." - Dr. Alexander Elder

"For the things we have to learn before we can do them, we learn by doing them." - Aristotle

It is here where I share with you how I did it! FREE Education in stock market wisdom.

Think Investing as Tug of War - Read more? Click and scroll down



Important Notice and Attention: If you are looking for such ideas; here is the wrong blog to visit.

Value Investing
Dividend/Income Investing
Technical Analysis and Charting
Stock Tips

Sunday 26 July 2009

Why a Buy and Hold and don't even bother thinking of Selling Can be Wrong Strategy for You? - Part 3

http://createwealth8888.blogspot.com/2009/07/why-buy-and-hold-and-dont-even-bother_26.html <---- If you may wish to read Part first. Beware the risks of Value and Average Down Traps

While shares with low valuation may be an undiscovered gem and market may have mispriced them or at other times, shares that appear cheap, and getting cheaper could be due to Big Boys getting out as they believe the company fundamentals continue to deteriorate. Low stock valuation may be a Value Trap.

Warren Buffet and the likes of Warren Buffet (the Big Boys: Institutions) have enormous resources at their disposal to do due diligence to uncover undiscovered gem and avoid the Value Trap. But, it can be very challenging for many small boy value investors as it can take a great deal of time and enormous resources to recognize that a stock is a real undiscovered gem and not a fake one.

As stock price falls further, the margin of safety gets wider, the small boy value investors likely to fall into the next trap: Average Down Trap, and start averaging down with more shares with their free capital and likely to average down until they run out of capital.

So beware of Value and Average Down Traps. Take care!
Related Posts with Thumbnails