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On PE, the growth story must convince me to justify the high PE. I'm not comfortable with high PE, but I'm learning to adjust the mindset that PE valuation is everything. This has caused me lose opportunity to buy Frontken, Vitrox, QL & the likes previously. Looking at PE made me buy gloves last year, thinking they were atttractively priced according to research reports, since they were at few years' low. So, I dont' think purely looking at PE is value investing, but it's a good comparison with other stocks.
On value investing, there are so many types of value investing. Basically, I like to buy during price dips. I thought I practised value investing when I bought TG last year at reasonable PE, higher than FD dividend yield, reasonable room to grow further as many sources say that gloves shortage is global. Mr Market proved that I wasn't value investing by buying gloves at peak earnings & near all time high prices. Strictly speaking, when I bought Genting last year, it wasn't value investing either, bcoz future earnings wasn't clear & stock valuation wasn't "cheap". Hence, I dont' think I use value investing as I don't calculate intrinsic value. I invest on what I feel comfortable with.
I beg to differ on your point that the reason to buy is reason to sell. Based on that reasoning, I should sell glove companies bcause I no longer believe that they'll generate sustained heightened earnings for 1 or 2 years. But my limited experience tells me, if a company is strong, like Maybank, holding long term will eventually allow the stock to recover its price & avoid real losses. I believe my gloves will be the same. I'm ready to hold long. Maybe it differs from person to person, (I hate cutting losses) Furthermore, my observation is that, for any stock, price rocketing in too short a time compared to previous years is a ticking time bomb. Gloves in 2020-2021, KESM in 2017, GME, Datacrap recently. Ofc, traders would love to fast in fast out, but that isn't for me.
My reason to buy & hold KGB are as follows. The horrible 2020 due to lockdown means 2021 should be better earnings improvement, with gradual openings. Semicon chip shortage implies KGB might benefit. I feel these reasons are what the market saw when it chased KGB from 1.60 to 2.30. I think the market is looking at companies that can improve its profits substantially in the next year, judging by share prices of others like, Aeon, Genting, Airasia, etc. Also, as mentioned earlier, if share price goes berserk suddenly, I will sell. My buying price of around2.13 going to RM4 is around 100%. That would be irrational price swing as the market expectation is too high in too short time.
PS - Not a buy or sell call on any stock. But discussions are welcomed.
D&O PE skyhigh..