Monday, August 02, 2010

JCY : Inverted white hammer seen. At 1.25 now, extremely oversold with IT-stocks taking a beating now. Notion, GTronic, Unisem ... watch the sector closely as IT-index at oversold region too.

Value Investing vs Momentum Investing

Looking for under-valued stocks and looking for a longer time-frame may not be in everyone's mind. With KLCI reaching for new 52-week high, there are not many under-valued counters around. Intrinsic value is considered as 'actual' value of a stock. How do we actually calculate the 'intrinsic value' of a stock? I re-read Adam's book yesterday to remind me of being an investor, rather than random-trading(base on TA). Are TopGlove or JCY undervalued? If the EMH is true, then the price of the under-valued or over-valued stocks will approach to its intrinsic value, a matter of time.

According to Adam, for example : Apple priced at USD257 is overvalued as its intrinsic value is USD200, and it is becoming a momentum stock. If US market is to dive, then Apple will dive much lower than USD200, and that is the time investors should BUY Apple(not orange, ok?) By the way, I told LL to buy Apple as investor when Apple was at USD88. We were having lunch together then. Today, Apple is overvalued.

So, as investors ... there are more underground works need to be done, looking for undervalued or over-looked stocks. Stocks or sectors that being ignored/neglected should be investors focus, instead of chasing a stock that rushing high. The risk is definitely higher in the latter.

Perhaps we should balance our portfolio into value-investing and momentum-investing.

Example : KPJ is a growth stock, with optimism is high at the moment. While it may be a good value stock, it is categorise under momentum stock as it is reaching for new highs. Same goes to many rubber-stocks.

So, in Feb-Mac during rubber-rally, many will only talk about rubber-stocks and IRCB shooting few folds higher. Do look at IRCB now. Its P/E was insanely above 50. During my dinner with SL during that month, I talked about property-stocks or auto stocks which were still NOT moving. Since then auto-stocks have moved lead by TanChong.

This week, property stocks will continue to attract interests by many punters/speculators or momentum players, once the property-stocks fully gorenged, they will move to other sectors!!

9.15 am : Grabbed more of JCY at 1.26-1.28

9.30 am : KLCI up 6 points, thanks to AK.

Hai-O : Broke the 3.60 strong support level today. So, it will form another nice waterfall for me to watch closely. Hai-O is one of KLSE's darling.

Malton : The last time I mentioned about her when she was at 0.38 level. That was merely one/two months ago. Well, it is property-rally in play with E&O news plus Ivory's listing. Speculators will use whatever excuses to punt, while syndicates happily obliged, pushing a stock higher and higher. When will the music stops? I bought it at 0.525, and hope I wont be the last donkey there being taken alive by the buaya. Haha

KNM : Welcome back, babe.

11.50 am : JCY back to 1.27, feel so 'stupid' to grab Malton, so released at 0.535, hope enough to pay the transaction fees!! Hmm ... focus in my JCY and TopGlove. Bought 4k units of JCY today, so totally 7k units now.

Notion : Down 7% today, at 2.43 now. Noted.

4.00 pm : JCY down to 1.26. Malton sold at 0.535.

6.45 pm : KLCI up 2+ points. JCY closed at 1.25, 1 cent below. My queues at 1.22-1.24 not done, so I shall wait for below 1.20 and see if it rebounds?

Many counters are bullish - MKLand, Kinstel ... yes, property and steel are moving up now.

LionInd : bought 2k units at 1.60, riding on the bullishness of steel-counters.

Sunway : Moved up finally after one week I yelled at it and lost some in it!!
9.55 pm : DOW opens higher by 100+ points, but A123 retraced to 10.78(flat) after opened at 11.00.


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