As from April 2013 my Journey in Investing is to create Retirement Income for Life till 80 years old for two over market cycles of Bull and Bear.

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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.

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Friday, 7 April 2017

On why sound investing principles will always work???


Uncle8888 came across this in the Cyber world


So instead of “high risk / high return,” a better description of how investing works – in my view – would be “low risk / high return.” The following’s a real-life example of how this works.

Back in 10 October 2007, when the Singapore stock market reached a peak prior to the Great Financial Crisis, Singapore’s largest bank, DBS Group Holdings Ltd (SGX: D05), was priced at 1.72 times its book value. That’s a high valuation – and hence it was a risky time to invest. Today, DBS Group’s stock price is still down by 14% from where it was back then.

On the other hand, in early March 2009, when Singapore’s stock market had reached its bottom during the Great Financial Crisis, DBS Group had a price-to-book (PB) ratio of just 0.49. That’s a really low valuation – which meant it was a low-risk time to invest. From then to today, DBS Group’s stock has increased by nearly 200%.

On why sound investing principles will always work


CW8888

The above quote is just talk talk on paper.

The real thing happening to retail investors on the ground is ...



Real People. Real Story on DBS!


This ex-colleague who was some time also Uncle8888's lunch kaki.

During GFC 2008/2009; he was very keen to invest bigger on DBS; but in Mar 2009 he was still waiting for DBS to reach $6 before accumulating slowly!

When the market recovered he regretted big time; but; he did learn important lesson on investing!

This time in Jan 2016; when DBS went below $15; he started to accumulate slowly using his CPF fund as he has already reached 55 (Feeling rich with his bigger War Chest? How often can we beat CPF OA 2.5% with blue chip yield?)

In Investing; Your Account Size Really Matters! - CW8888

When DBS has crossed $19; he began to divest slowly. Uncle8888 last heard that he has fully divested all his DBS.


7 comments:

  1. What is the moral of the investing story? What has changed?

    ReplyDelete
  2. Sound investing principle always work (method & timing) provided one has the guts to pull the trigger (Mind - greed/fear) with substantial capital (money).





    ReplyDelete
  3. Ha! Ha!

    2008/2009 many of the BIG BANKS in US kaput.

    i had 2 lots of HDB.

    HDB had a rights issue at that time.

    i was chickened out by what had happened in US, i only exercised 1 lot.

    i understand to this day, some managed Funds don't invest in financial institutions at all.

    True or not?

    ReplyDelete
  4. Hi bro8888,

    If your pocket money is small, you can only play arcade game with maybe only 2 tokens. If your pocket money is big, you can play arcade games with a bagful of tokens. If die already, just insert token and continue playing!

    ReplyDelete
    Replies
    1. ha ha. Scarcity mindset also applied to investors' mind.

      Delete
  5. Hi uncle CW8888,

    I encountered the same situation in early 2016 too. I was waiting for few counters such as STI, DBS etc to drop further before I start to enter. They have drop quite a lot and I was so afraid that the financial crisis will start and price will keep dropping after I buy, so I continue to wait. I have the experience of buying SPH when it start to drop and it drops further after I buy. It didn't recover till now so I suffer from paper lost with a bit of dividend as Panadol.

    I regretted so much when Singapore market seems to bull again.
    I always wanted to start my investing journey when I was in my 20s but I always don't know how. I wish I have a mentor to guide me so that I can speed up the success.

    ReplyDelete
    Replies
    1. Quote : "I wish I have a mentor to guide me so that I can speed up the success."

      That is not an issue. There are quite number of monthly mentoring session after attending training courses. Of course, they are not free. :-)

      Delete

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