July 27, 2021

13 thoughts on “My “VALUE?” stocks keep plunging. What should I do?

  1. Hi Rolf,

    If my value stocks plunge, I will revisit my earlier analysis on the company and see if my due diligence still holds true. If it is just 'market noise', I will average down in tranches. If fundamentals have worsen drastically, then I will have to cut loss.

    1. Hi Dividend Knight,

      Thanks for commenting. Yes yes yes. Agree with you.
      Hmmm but the arduous task is to define what is noise and what is fundamental?
      Take Keppel for instance? There are many dividing views.
      And more questions like, when to average down, how much to average down, and really to cut loss even if your loss is >50% for a holding 30% ur portfolio?

  2. I average down after doing my own analysis but sometimes I can be wrong too! The stocks still keep plunging although fundamentals are intact.

    1. Hi Sweet Retirement,

      Most mentioned word "fundamentals".

      My question now is "are Kep, SCI, DBS, or M1 fundamentals intact?

      How about fundamentals intact such as balance sheet but fwd outlook is changing.

      not refering to above stocks, let's say Nokia or Kodak, before iphone n digital cameras were invented, fundamentals intact! Even when they were invented during the initial phase, some may still argue Nokia and Kodak are financially strong!

      Hmm.. so how to decipher?

  3. Hi Rolf,

    Great lessons. But I think despite reading all these, we will still commit them haha! Knowing is different from understanding afterall. Only when the real battle starts, will be know whether we really master how to use a sword and shield 🙂

    1. Hi Rolf,

      Hm… finally the "fundamental" word is not mentioned. 🙂

      As u mentioned n I agree, It is perhaps not just knowing or understanding, but certainly what count most is "doing" and the "results"!

      To have success in real battles, u need to read and equip with knowledge, then coin plans way before, n finally take the step down to the battlefield and "show ur guts!" With that, and carrying wit and experiences, (n sword n shield) u will then be able to tame the obstreperous market.

      Just do it Lah… dun be chicken…

  4. Hi Rolf,

    I agree with you that fundamentals can only paint a picture of what has already transpired and is not forward-looking. Indeed, the outlook for some of the industries are beginning to change and just like Nokia or Kodak, it may become obsolete as they fail to revamp themselves. Maybe we can draw some confidence from the Management and see how are they adapting to the crisis or innovate themselves to remain relevant.

    'Buy into a business that's doing so well an idiot could run it, because sooner or later, one will.'
    While having a simple business model is great, it takes an astute Management to make a complex business look simple.

    1. Hi Little Snowball,

      Aside from the "idiot can run" company, the team driving the company is by and large one of the most important factors for the success of the company.

      The problem here is by not being a major shareholder, you seriously have little access on the management. Even if you are analyst who has interviewed the management, it means very little, unless the management is utterly transparent which is often not the case!

      Another factor that most retail investor tend to miss is the competition/threat. It takes more than just to read the annual report, but also to understand the business in the industry.

      Just my two cents thoughts.

  5. average down your cost. do a bit of trading with your existing share. trading lower your cost and will help in the long term health of your portfolio.

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