I currently am holding on to Colex, Hong Leong Finance, Delfi and F&N. The latter two are held at a loss. I am pretty much a buy-and-hold kind of investor because trading stocks is too much for me. Given that I am expecting a not so good second half of the year, I am looking to unload my stocks. However, the trading volumes on the above four stocks are so thin. For example, for Delfi, for pretty much the entire trading day, there are only bids for 2,000 shares. This is probably placed by the market maker.
This always bring us to the problem of buying stocks that have "deep value". Often these stocks trade at low PE and PB or any other conventional valuation metrics. They trade at "deep value" in part because no one really is picking them up. Imagine, every quarter, you collect say 5,000 shares. Over time, you build up a sizeable holdings. If for some reason, you need to liquidate your position because you need the money, who can and who do you sell to?
The best case scenario for buying "deep value" stocks has always been their value will be discovered by the market. When this discovery occurs, the interest generated will always bring up the price. Another fantasy outcome of this discovery is, should the stock continue to post growth in earnings, that a stock split or bonus issue occurs. Some examples are Etika International and Breadtalk. They have rewarded their long suffering shareholders handsomely when a small base of shares gets multiplied. There will be more people to sell to.
In my case, except for Colex, the other three companies relatively big and mature companies trading on the stock exchange for sometime. Their shares are illiquid at the moment, because I think that no one really wants to sell, even if the stock's fundamentals are not so positive. Likewise, no one really wants to buy because they know there are difficulties flipping the shares for a quick buck. Well, I just have to be patient and look for that window of opportunity in the coming weeks.
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