Kimly Limited IPO: One of the few things that confound me as an investor is why do retail investors demand participation in a hot IPO that seems overvalued? And the answer is simple. Everyone wants the opportunity of making a quick buck. And the problem is this : IPO's are usually fairly or overvalued. Didn't you know already? IPO stands for It Is Probably Overvalued. It probably isn't the first time you have heard this and it won't be the last. But the truth of the matter is retail investors will not pay heed to prudence in investing. Rather, they pay heed to greed. Enticing Story (more…)
Beat The Herd Mentality To Improve Investment Results Beating the markets is beating the herd mentality.T he intelligent investor is a great book to start reading for amateur investors. The book is rich in quantitative data but readers may find it hard to swallow as the language is written with a terse archaic style. But what the book does not touch on is how to be an emotionally intelligent investor and beat the herd mentality. While numbers are easy to handle, one's emotions can prove to be an inconquerable mountain like Everest. And for most of us, this may very well be the final obstacle to being an investor great. Descendants Of The Herd (more…)
At some point recently, I looked on interestingly at Qian Hu. At a price of 9 cents, many investors felt uncomfortable with it. Well for one, its profitability had decreased drastically over the last 3 years from 0.39 million to 0.07 million. On a price to earnings basis, investors would have been turned off by Qian Hu, looking instead to blue chips such as SIA,Singtel, Starhub and maybe SPH. SPH by the way is having the time of their life right now. Maybe, I will detail this in another article. Do look out for it.
In another article, I spoke about glamour stocks versus beaten down stocks. This is an apt example of what I was trying to convey. Buying beaten down stocks, if you have the mettle and the stomach for it, may prove more profitable than buying the blue chips, the well known and the well loved by all.
So what happened?
AEI Corporation is not new to me. In fact, since my days in university, this did pop up on the screen then. And that was more than a decade back. Incorporated since 1983, the company's operations include the import and export of aluminium products used within the electronics industry and also in the buildings and infrastructure segment. As you can guess, it should be considered a cyclical, moving and ebbing with the flow of economic activity. However an operational history of more than 30 years tells an inferential story of management doing an at least okay job at keeping the business alive through 1997 crisis, the dotcom bubble and the subprime crisis of 2008.
The price to book value currently stands at a paltry 0.35 at the time of this writing. Since then, it has moved lower to 0.27. This is not going to be an in depth analysis. Neither is it going to be a recommendation to buy or sell. I suppose what I am trying to drive at is that bargains are beginning to appear and this could be a possible bargain since the advent of the decline in oil prices. The market is always forward looking and of course, not to mention a manic depressive, which should work to the smart investor's advantage. That being said of course, it is up to investor to recognize opportunities around them. The recognition of potential opportunities, putting them on watchlist, studying them and waiting for the right entry price which represents a margin of safety is what all investors ought to do. But many don't.