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!


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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

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Monday, 22 February 2010

Low Net Profit Margin - Avoid Them? - Part 2

Low Net Profit Margin - Avoid Them?

Bummy's comment


hum chim peng


Many years ago at the former Maxwell market, there was a hawker stall selling "hum chim peng" at 10 cents per piece (small version) while other stalls elsewhere were selling at 20 or 30 cents per piece (larger version).

It was quite obvious that the profit margin from selling "hum chim peng" at 10 cents per piece was much thinner.

Guess what happened to the customers' buying pattern of "hum chim peng" at this stall?

When the price of "hum chim peng" was only 10 cents per piece, customers didn't buy a few pieces; but they bought in units of 10, 15 and 20 pieces.

I usually bought 10 pieces and ate a few pieces myself and the rest passed around to colleagues as treat. May be psychologically I didn't want to be seen as cheapskate so I bought more.

If the "hum chim peng" was 30 cents per piece, I would just buy enough for myself.

This hawker was able to move massive volume of his product to make up for the razor thin margin. The only difference was that he got to work harder.

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