Wednesday, August 20, 2014

Random thoughts: Mental Journey 2 (Greed and Fear)

I remembered selling Parkson Retail in fear when it fell 4 cents in a single day. I blogged about it here.

Random thoughts: My mental journey with Parkson Asia

I believed a deeper correction of more than 5% is now inevitable given markets just skid through a 3-4% correction and has not seen any meaningful correction in the whole year.

October perhaps, when easing ends...

I knew if Parkson go lower than my purchase price, this time round, I will not panic but start to accumulate.

I know the dividends will provide the painkillers as I wait.

Now, Parkson share price shot up more than 10% in 3 days, giving me 3 years worth of dividends including growth, or 4 years worth of dividends if growth does not set in from 2016 onward.

Now I super feel like taking profits, but worried about missing a potential winner.

The theory are easy and I heard it before,

1) cut your losers and keep your winners.

2) Know the valuation of your business, and you know when to sell.

But it is not so easy applying it.

I even contemplating taking some profits off APTT, but the yield is really too irresistible. 

Blogging usually allowed me to crystallized my thoughts.

APTT is still a good cash cow, I will wait through it, especially the waiting period is now cut short to quarterly.

Parkson might be a dividend grower from 2016 onwards But if it shoots up again today and I get 5 years dividends including growth, then maybe its time to say goodbye. "Never fall in love with a stock"

See, you can always twist and turn convention wisdom and quotes to suit your choice and preference.

My plan of compounding returns of dividends but ignore valuation of portfolio allowed me to be calm if my portfolio value fall below cost, but it didn't answer the question of "opportunity costs" if my value exceed expectations...

Hmm...

I remembered "freedom" from valuebuddies with this advice, you can never be wrong taking profits, don't try to get everything, (Buy at bottom, sell at peak)

COnfused?

I am, hope you are not...

Cheers,

Sillyinvestor 

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