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Sunday, October 11, 2015


AK is an accredited kay poh and is always looking around. 

If we train ourselves to be more observant and to be more aware of our environment, we might learn something or find something which might benefit us now or in the future (either by participating or avoiding). As investors, it could be a good idea to be a kay poh.

Today, I visited a mall that I have a stake in through my investment in a listed company. I saw a good crowd in the late morning and that made me happy. Did I hear SPH?

I bought myself a curry puff at an Old Chang Kee kiosk and I had to queue. A lady in front of me bought all the fried chicken wings available despite a recent price increase of 10c per wing. I had to wait quite a while for my turn but I was happy.

I went to a bank to place a fixed deposit and I saw that they had an air purifier. So, I chose the seat that was the closest to the machine while waiting to be served. A bit noisier but the air was probably better. 





Alamak, AK is so kiasu and kiasi. Yah lor. Regular readers know that I have two air purifiers at home and that they are on almost 24 hours a day. It is always good to be prepared. Prevention is better than cure, isn't it?

This leads me to another idea about how we should always be prepared, whether we are investors or not. I have a friend who was looking high and low for an air purifier when the haze was at its worst recently. 

Despite my advice a few years ago that he should get an air purifier for his home, my friend didn't get one. He said the haze wasn't that bad. This time round, his parents developed respiratory issues due to the haze.

As investors, we probably get the best deals when the market is not interested. When everyone is interested in buying a stock, it is hard to get a good deal. Well, when everyone was interested in getting an air purifier, it became harder to get our hands on one. Same, same but different.

So, since the haze is an annual event, why not be prepared for it? If only price movement in the stock market is just as predictable.

As investors, we want to be prepared too. We want to make sure we have a war chest ready and that we have a shopping list ready. We don't know if a crash is going to happen but if it should happen, we should know what to do and make fast decisions. 

We must be prepared to seize opportunities or be prepared to lose out on opportunities.

While waiting for my turn at the bank, I read an article by Goh Eng Yeow in the papers and I would like to highlight these few paragraphs:




As investors for income, if we have invested in good companies, even badly timed entries should eventually turn out well. 

The fluctuations in prices should not affect us much if we have been eating bread with ink slowly (see related post no. 3).

So, how's your Sunday? 

Told you AK is kaypoh. ;p

Related posts:
1. Protect ourselves from the haze.
2. Tea with Solace: Common sense investing.
3. How to have peace of mind as investors?
4. Feeling depressed about paper losses?

8 comments:

Ann ST said...

DearAK,

How long do u normally park your war chest in FD? And which bank offers the best rate now?

AK71 said...

Hi Ann,

For me it is more about planning so that I have a fixed deposit or two maturing every month or every other month. At least this is how I do it for funds in my war chest. Best rate or length of the FD are less important considerations.

It is about ensuring that I have more funds to buy into opportunities without having to prematurely terminating a FD. Of course, if I needed more money, if I must terminate another FD or two, then, I must.

Howard said...

Haha AK, time to change user name to KP71?

AK71 said...

Hi Howard,

That is so very droll. LOL. ;)

Jing Quan said...

Dear AK,


May i ask if averaging down or up for accumulating is good? there are many school of thoughts some says never average down and you must be crazy to average up

say today i can afford 1000 shares of company X at $2. I am reaping the dividends and when i get my bonus i decided to buy 1000 more at $2.2 (averaging up) because i want to achieve more dividends. does that make sense?

or it should always be averaging down as you accumulate? As i just started working and 1 lot can cost as much as 1.2k is basically what i can afford for every 2-3months is it wise to save all up and buy when market is down in company X or constantly try to time the market to enter?

Sorry if much doesn't make sense :D

I have dip in the stock market before aug and i have lost quite a few Ks which i calmly sat down and had a long hard thought. I think the way forward for now is to buy a couple good reits. collect the dividends and reinvest them. I don't wish to pay more school fees to the market :D

cheers

AK71 said...

Hi Jing Quan,

Firstly, if we do not wish to pay school fees to Mr. Market ever again, the only way is to exit the stock market. I am paying school fees to Mr. Market all the time. Really, I am. -.-"

Averaging down:
If we have determined that a business is a good investment and if the stock price were to decline, all else remaining equal, the stock would be providing better value then.

Averaging up:
A stock could be rising in price but it could still be undervalued even at a higher price. A stock could be rising in price but because the business has become more valuable, it could actually be cheaper at a higher price. I blogged about QAF Limited before in this respect. You could search for it in my blog.

Remember the difference between price and value and you will know what to do. :)

Jing Quan said...

Dear AK,

Wow a reply simple and concise.

Seems like reits be considered as "safer heaven" if I want to reduce my exposure and also get some passive income? I started with cache log and aims amp Reit. Think i got them at P/B or slightly higher. I think these are good starting point instead of diving deep aimlessly.

Great blog i have learnt quite abit and will hope to build up the war chest to buy more when they are on discount. My current target is to have a yearly dividends of my 0.5 month's pay for now :D and long term hopefully 2x my current pay hehe

cheers

AK71 said...

Hi Jing Quan,

I try my best. ;)

You are on the right track. Think big (2x your current pay eventually) but take baby steps (0.5x your current pay for a start). Gambatte! :)

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