Post by oldman on Oct 19, 2013 8:44:14 GMT 7
Everyone wants to buy during the Great Singapore Sale as this is the time of the year when most things are marked down in price. Many of us look forward to this time of the year as we have been waiting to buy certain things at a discount. If you are like me, I don't like buying things at the recommended retail price.
To me, the recommended retail price is like the fair value price of a stock. When brokers make recommendations to buy stocks at their fair value price, lots of retail investors rush to buy these stocks at that price. But, if they were to step back and think about this in the context of shopping, they may actually be buying these things at the recommended retail price. If they were shopping instead of buying stocks, they will certainly take their time before rushing to buy these items as they know that there really is no need to rush to buy things at the recommended retail price.
With stocks, the fair value price of a stock is usually tied to its profitability ( or its price earnings or PE ratio). When the profits go up, then the fair value price of the stock is more likely to follow suit. When one buys a stock at fair value, he has usually to wait for the company to announce better profits as this should then revalue the fair value price of the stock upwards. Investors who buy stocks at their fair values are usually counting on better company results in the months or years as this is needed for a rerating of the stock price.
Value investors like me would rather buy stocks at a significant discount and then try to sell stocks when they have reached their fair values. This is a lot easier to predict than future company earnings. Of course, if the company continues to produce good profits, there is no need to rush to sell just yet.
I like to buy stocks during a sale.... in much the same way as you will see me very active in the shops during the Great Singapore Sale. With stocks however, the sale happens all the time but it is not publicised. The sale is especially good when the stock market is down. Hence, I am usually busier when the market is down as this creates more buying opportunities.
Regardless of whether the market is up or down, one still has to search to find the gems that are selling at a discount. This is the fun that I like in this game of investing. I am a bargain hunter not only in the Great Singapore Sale but also with my investments.
To me, the recommended retail price is like the fair value price of a stock. When brokers make recommendations to buy stocks at their fair value price, lots of retail investors rush to buy these stocks at that price. But, if they were to step back and think about this in the context of shopping, they may actually be buying these things at the recommended retail price. If they were shopping instead of buying stocks, they will certainly take their time before rushing to buy these items as they know that there really is no need to rush to buy things at the recommended retail price.
With stocks, the fair value price of a stock is usually tied to its profitability ( or its price earnings or PE ratio). When the profits go up, then the fair value price of the stock is more likely to follow suit. When one buys a stock at fair value, he has usually to wait for the company to announce better profits as this should then revalue the fair value price of the stock upwards. Investors who buy stocks at their fair values are usually counting on better company results in the months or years as this is needed for a rerating of the stock price.
Value investors like me would rather buy stocks at a significant discount and then try to sell stocks when they have reached their fair values. This is a lot easier to predict than future company earnings. Of course, if the company continues to produce good profits, there is no need to rush to sell just yet.
I like to buy stocks during a sale.... in much the same way as you will see me very active in the shops during the Great Singapore Sale. With stocks however, the sale happens all the time but it is not publicised. The sale is especially good when the stock market is down. Hence, I am usually busier when the market is down as this creates more buying opportunities.
Regardless of whether the market is up or down, one still has to search to find the gems that are selling at a discount. This is the fun that I like in this game of investing. I am a bargain hunter not only in the Great Singapore Sale but also with my investments.
Investors who buy stocks at their fair values are usually counting on better company results in the months or years as this is needed for a rerating of the stock price. 
This is a lot easier to predict than future company earnings. Of course, if the company continues to produce good profits, there is no need to rush to sell just yet.