Hmmm..... my answer? Simple. If the investment is still bearing fruits, surely it's a no-brainer to HOLD on to our investment. Tiok boh?
If your dah-ling continues to gives u ever-everlasting luv... surely u wanna hold onto all dat loving. Tiok boh?
Same with footsie... if a team continues winning... doesn't it makes sense NOT to bet AGAINST it? Tiok boh?
Same with stocks, isn't it? If and IF the company earnings remain as strong as ever dun u want to hold on to ur investment for as long as possible? I would. Wouldn't you?
Unless... of course the company has been losing money for a number of quarters and as them sifu say, their earnings outlook is rather cloudy or has low future earnings visibility. Or as me Ah Poh says the next meal dunno when and where it would come from. Eat rice or eat porridge olso dunno!
Sooooo for us, ze kuci-kuci-mai investor.... u think it's wise to HOLD and HOPE that the earnings will recover in the future?
Buy and hold long term?
Forever and ever?
What if the earnings take longer to recover?
Then how?
Will that stock's share price depreciate while one HOLD and HOPE?
Can we discount that share price depreciating from happening?
What if share drop teruk-teruk?
Where is the complaint department? Is there one?
Tiok boh?
Soooo... take ACPi
For Fy 2003 it made 23 million. For Fy 2004 it lost 26 million. Last fy 2005 it lost 33.8 million.
Soooo... back to the main issue.. if one bought ACPi based on fy 2003 earnings performance, why is one still HOLDING on to a stock has been losing money for its last two fiscal year?
Does it make sense?
Do we know precisely when it's earnings will turnaround?
Do you? I don't!
Take this write-up from Dynaquest (15th April 2005) ACPi was priced then at 0.96. Dynaquest gave it a HOLD recommendation.
With the negative factors outnumbering the positive for a long time, most of the institutional investors and retailers alike have made their exit. This largely explained the plunge in the share price from RM3.16 during the market rally in March 2004 to slightly below par in early 2005. As most of the weak holders would have disposed of their holdings, the downside risk at the current hammered down level is foreseen to be reasonably low. Nevertheless, a BUY call still does not appear timely until we see some lights in the construction industry. The investors are also now spoilt with plentiful of buying opportunities in other growing sectors of the economy. The still dark operating scenario, hence, remains a good excuse for potential investors to shy away and wait for more convincing leads. We would rank ACPI as a HOLD for the moment.
LOL!! "As most weaker share holders have disposed their earnings.."? I tell u what... those shareholders who sold once they realised that ACPi's earnings fundamentals were decaying, these were the smarter investors for ACPi share price dropped from rm3.16.
anyway.... have a look here at Dynaquest's write-up (31st May 2005) . ACPi price has now dropped to rm 0.79 from rm 0.96. See how it wasn't that wise to hold on to a stock which is losing money?
ACPi last traded today at rm 0.655.
See how buy and hold doesn't work?
We cannot simply hold onto to a rotten investment and hope it recover, can we?
Dun we want to hold on to only to 'winning' investments?
Btw.. ACPi recorded a small turnaround in it's earnings (a profit of 4 million) for its last reporting quarter. How? Is this the turnaround?
Anywayyyyyyyy... S&P initiates covereage on ACPi with a HOLD
interesting comments:
"Our main concern, however, is that the domestic outlook for demand for ACP's products remains lackluster, given indications of continued austerity in infrastructure spending, coupled with the potential for softening building construction,"
"Valuing ACP is challenging, given the low visibility for future projects, "
Another HOLD?
Anywayyyyy.... what still baffles me.... those so-called-investors.... why are they still HOLDING on to this stock?
Isn't it simply way past its sell date?
Way back then there was some justifications to invest in this stock based on fy 2002 or fy 2003 earnings. However, all bets were off once this share started losing money. There was simply no earnings visibility. And if one had sold the stock then, one might have had managed to sold the stock when it was trading around rm3.16.
To HOLD and wait for the earnings to recover.... just loook at the end result. ACPi is now trading at rm 0.655.
When will its earnings recover? And it simply amazes me that annother HOLD recommendation has been recommended given the fact the analyst itself concurred that ACPi has a low earnings visibility.
Now if ACPi earnings does recover... holding on might have some justifications.... but.... if the earnings take a much longer time to recover... what if ACPi continues to lose money for this fiscal year... what would happen to ACPi's stock price? Won't it get hammered? Why take such risk? And worse still, what's the reward for holding on?
See why HOLDING might not be a wise suggestion?
What say you?
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