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Hock Lian Seng should be 69c a share.

Wednesday, May 31, 2017


Reader:
A senior of mine at work told me about your blog when we chatted about stocks. I mentioned Hock Lian Seng and he said AK blogged about it. I bought this because my broker told me it was worth at least 69c and that there was a special dividend. I paid 62c but the price has plunged. I wonder if I should hold or sell or buy more. If you are wondering, I just started investing this year and I don't know who to trust now.

AK:

Trust yourself. Trust no one else, not even AK. I have nothing against your broker and I think I know which brokerage he is from but don't trust him either.

Don't rely on others for investment tips. Buying something because it was a hot tip could end up burning you. 

You have to have an idea of what you are looking at and how much it is worth. Only then would you have an idea if the price makes sense. 

If the price doesn't make sense, is it because it is too cheap or too expensive? Then, you know what to do.

Having said this, as investors, we cannot expect a 100% hit rate. If we can be right more often than we are wrong, we should be happy. 

Sometimes, we can do all the research we could possibly do, be reasonably confident and still be wrong. The only one who is always right is Mr. Market.

You might be interested in this blog post and pay attention to the broker's recommendation:
http://singaporeanstocksinvestor.blogspot.sg/2017/01/history-with-sabana-reit-and-current.html

Those who bought then and bought more as the price declined would be bleeding badly.


If you are not prepared to do some work as an investor, it is better for you to stay away from the stock market.
Related post:
Hock Lian Seng returns more than 100%.

4 comments:

Laurence said...

I recently read AK's post where he wrote: " ... don't ever ask a barber if we need a haircut."
I have since borrowed his sentence to remind my friends to be more prudent when seeking advise.
When I first started using my CPF money to invest in SGX stocks in the late 1990s, I often asked my broker for advise. Very quickly, I lost tens of thousands of dollars and just a couple of years later, decided to stop investing my CPF money in stocks and shares altogether.

AK71 said...

Hi Laurence,

Credit goes to Warren Buffett. ;)

I treat money in my CPF-OA as the bond component of my investment portfolio. At the same time, it is also my ultimate war chest to be deployed when Mr. Market goes into extreme depression.

cheryl2010 said...

AK, the funny thing is after you post this article, HLS went up to 54cents!

AK71 said...

Hi Cheryl,

I wonder why? Hmmm... ;p

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