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Sunday, 14 September 2014

A Beautiful Mind on Chip Eng Seng

Q1. I have a few readers asking me do i feel heartache when I sold Chip Eng Seng at 0.89 and the closing price of 0.95 on 12 Sept 2014 is a 6% missed profit.

To be honest, I never expect it to flew higher after I sold off.

Yes, I am expecting a correction and that is also why i choose to take a profit of $10, 793.40/- which have a additional $4000/- dividend. Total Profit: $14, 793.40/-

The entry was made when the price action stays above 61.8% fib and the market is bullish with a good dividend of 5.11%. Do refer to the above chart to match the entry.

There is really no heartache because the money is back in my bank account safely.

Q2. Now then why did I sell?

The reasons are quite simple.

1. I do not have a good margin of safety if there is a major correction. There was a resistance at 0.90 for 3 trading days so it is wiser to take profit in my point of view then to risk taking lesser profit.

Do note that 2 days later after i sold the price drop to 0.885.

 In a mind where a person feels there is a correction, is only norm they will sell lower eventually.

2. My Entry is above 61.8%. So IF there is a retracement with a bullish signal, i might be able to enter at around 61.8% fib which is a cheaper entry price.

3. The market does not have volume and we have wars and diseases around the corner. Ignoring it doesn't mean it will go away and when the bear really comes, no business price action is spared.

4. I already planned to reduce my positions in the market in case the free cash flow can be put to better use at a better price and timing.

Q3. Why did you not buy on break out?

1. I have reserve from  Q2pt3 and stick to my Q2pt4 strategy now.

Now what have this to do this a Beautiful Mind?

Let's assume the price does correct (touch wood) after 12 Sept 2014, and the price action drop back to 0.890.

Would a vested person sell at 0.890?

You see, if the price action does drop back to 0.890 or lower, more or less you are getting back the same amount of profit less disappointment and stress of why one did not take profit at the current high of 0.980?

What if the price action goes higher?

It will be great if the price action goes higher, it will benefit all the investors who are still vested.

All I have to do is put my profit to good use by finding another good company.

Having a Beautiful Mind means we do not let greed or anger get into us and believe in the correct decision we made to keep our investment safe and profitable.

Remember this, a profit is not a profit until you cash it out into your bank.

Invest and Trade Safely Everyone!

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