Thursday, June 18, 2015

A crisis is an opportunity?

Few weeks ago, our local market Bursa started to go down! Someone press this button:

Yes, someone press a "Panic" button cause KLCI index falling from 1850 to currently level of 1718. Then as usual, I received many phone call, and one of the common question investors like to ask, "Should I Sell when a crisis occurs?" I will tell them, why don't you think it's an opportunity to buy?

The reality is, if you are trader and like to speculate the stock, then yes, you should sell and wait for opportunity. However, for long to medium term Investor, my opinion is, you only press the Sell button if the company's profit already down for more than 2 quarters or the reason for you to buy is not valid anymore.

For example, this down trend cycle, I managed to accumulate Axiata stocks at around $6.40 to $6.45. Then the company announced a 15 cents dividend. Today, I get extra 15 cents for free, and the stock price still remain at $6.50. Of course, for this stock, it's one of my long term investment, I will participate in their "Share Reinvestment Plan" which give me opportunity to buy the stock at $6.08.  (Axiata is also good at doing corporate responsibility, just refer to their Yong Talent Programme:

"People will rather be promised a winning lottery ticket next week than an opportunity to get rich slowly", this is one of the quote by Warran Buffett. So, don't follow me to buy the stock if you hope to get rich quickly.

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