Posted by bsngpg > 2014-01-13 20:25 | Report Abuse

I have one: "Holding a Loser Until it Breaks Even".

In spite of agreeing with the author, I still can’t help myself holding on losers. It's easier said than done. If you are good, you go ahead to sell the losers. I am sorry that I enjoy being stupid. 无药可救了. 唉!
你呢 ?

Posted by Fat Cat Tim Buddy > 2014-01-13 20:50 | Report Abuse

now.. i sell losers asap after i realized it is a mistake.

Posted by Kamaru BahariBakar > 2014-01-13 21:20 | Report Abuse

The most important point : Hold the loser stock until break even. (Do or die philosophy).

Posted by watchful2 > 2014-01-13 22:43 | Report Abuse

Yeah, decision should based on what is your target price & selling at loss is painful but you have to do so.

Never chase for the falling knife but if you have money & the fundamental is good, it is time for you to leveraging down your share investment. e.g. UMSNGB. The current price is very2 attracting. It falls from recent price of RM0.90 to RM0.705 (today - 13 Jan 14 closing). Holding power determined if you should continue to leveraging down or cut lost.

Posted by kcchongnz > 2014-01-14 06:07 | Report Abuse

"Holding a Loser Until it Breaks Even"

The “Endowment Effect” is one of the emotional biases of human being. It is due to the fact that once you own an item, forgoing it feels like a loss, and humans are loss-averse.

Loss aversion is due to the fact that people dislike incurring losses much more than they enjoy making gains. Avoiding regret and seeking pride affects people’s behaviour and in turn causes the disposition effect resulting investors predisposed to holding losers too long (& selling winners too quickly).

This disposition effect can affect the investment return of an investor such as opportunity cost if he continues to hold on to a stock with deteriorating prospect. It can also deprives investors good return from the stock based on the initial thesis, if just because it is a loser and you must sell it.

Hence it is very important to have a good feel of the intrinsic value of the stock and know the relationship between value and price. It can take a lot longer than for value to be realized than we expected, but that it’s taking longer doesn’t mean we’ve made a mistake. If the market hasn’t recognized the value we see and the company is continuing to increase its intrinsic value, why should be a hurry to sell?

A few things need to be checked if one should continue to hold the losers.
1. Have we made some significant mistakes in the analysis of the stock?
2. Have the fundamentals changed drastically?
3. Were we wrong about the management or the deterioration of management decisions?
4. “If we didn’t own it, would we be buying it today?”

Posted by bsngpg > 2014-01-14 07:11 | Report Abuse

Related point from 夜月:
决定的方法很简单，
公司价格高于公司价值，卖出
公司价值高于公司价格，买进或继续持有。

斤经济较：买股票是买公司的现在不是未来 - 夜月
http://klse.i3investor.com/blogs/kianweiaritcles/44847.jsp

Posted by bsngpg > 2014-01-14 07:19 | Report Abuse

There are many wrong matches in marriage especially in Chinese community. Both or at least one know that he/she had made wrong decision marrying her/him. But both just cannot decide to divorce and looking for another spring outside. The consequence is that “a complete family seeing from outside, the actual is suffering inside”.

Posted by sunztzhe > 2014-01-14 09:31 | Report Abuse

It boils down to ones investment strategy and emotional makeup. A true Fundamentalist will buy/sell based on the discount/premium of stock price relative the intrinsic worth. A true Trader will buy/sell based on Technical indicators on whether the stocks are oversold/overbought. These are good systems to follow be it FA or TA. The problem is the emotions gets in the way to cloud decision making.

Posted by ProfitMan > 2014-01-14 09:41 | Report Abuse

It is not easy to cut losing stks but it needs to be done. It is part and parcel of stk investment. Most investors hang on to such stks with the HOPE that it will turn good. Hope can be costly. The intrinsic value of the stk is important and useful as a guide under such circumstances. Just as useful too is the TA of the stk. Never try to go against the reality of the market.

Posted by bsngpg > 2014-01-14 10:25 | Report Abuse

I like this one from sunztzhe very much: “emotions get in the way to CLOUD decision making”. I opine this is one of the most reflective realities of the majority of investing community.
Thks.

Posted by andychucky28 > 2014-01-14 10:28 | Report Abuse

When you talk about emotion, i will think about the kangkung man and also all the right wing brainless shit fighting just because of that one word which is also not originate from this piece of shit land.

Posted by andychucky28 > 2014-01-14 10:30 | Report Abuse

The kangkung man should think how to get more investors to come in to this shit land rather than squeezing the juice out of us.

Posted by bsngpg > 2014-01-14 10:45 | Report Abuse

Yes, holding on a “loser” is costly. But at least emotion is satisfied. Lesson learned is to be more careful in stock selection so that risk of getting “loser” again can be minimized. If I have more “loser” than winner in portfolio, I am a “loser” too.

Posted by andychucky28 > 2014-01-14 11:03 | Report Abuse

At KLSE, it is like beating the raining dog. Do not buy any counter that is already up too high.

Posted by talkking > 2014-01-14 17:19 | Report Abuse

mati. all 5 mistake i also has

Posted by bsngpg > 2014-01-14 17:52 | Report Abuse

Talkking: welcome to the forum. Please scroll up , look for kcchongnz. Follow his posts and teaching. You can ask questions. He is very generous to teach fundamental of investing. Read the many good articles posted by Tan KW too. Happy learning.

Posted by ikan bilis > 2014-01-14 23:23 | Report Abuse

i really learn a lot from u guys sharing. thank you !!!!