Question regarding Sunlight

[qwertzy]

Hi all. I am a newcomer to this forum and also a newbie in the stock market. Hence I hope to learn some fundamentals and maybe get good tips on the stock market from the lao-jiaos here.

Anyway back to my question on Sunlight. It has tumbled from 0.26 to 0.18.
So too its warrant, from 0.15( last Friday) to 0.08.

I have a gut feeling that this fall will bottom out, so i got myself 50 lots at 0.08 of the warrants.

Any ideas why is the shares of Sunlight dropping by so much?

thanks!

[bolts]

The first lesson I learnt was "Hot tips will kill you"

The stock price simply dropped because people are selling away their Sunlight shares quickly. There are more sellers than buyers. More people want to get rid of the shares than people buying. So, they are willing to sell them off at a lower price and this forces prices to drop.

There are many reasons for price drops. market sentiment is the favorite reason most people use. could be due to some bad news in the company like profit warnings. could be due to someone manipulating the price. etc.

For warrants, that's just a right to buy the share at a certain price. When the warrants expire, they become worthless. You must exercise your right to buy before that happens. Be careful.

[qwertzy]

Thanks for that "hot" tip. But if we have no "tips", we need a lot of faith and confidence in ourselves, which I sadly lack. In fact, i have only acted upon such "hot" tips.

Do you believe in buying when the share prices have dropped then?
For example, CHT was having a downward pressure on the price. It dropped to 0.72 from the opening price of 0.79.

I am thinking about going in. This way i am buying shares, I am ending up buying all the top losers of the days.

[bolts]

Originally posted by qwertzy
Thanks for that "hot" tip. But if we have no "tips", we need a lot of faith and confidence in ourselves, which I sadly lack. In fact, i have only acted upon such "hot" tips.

Do you believe in buying when the share prices have dropped then?
For example, CHT was having a downward pressure on the price. It dropped to 0.72 from the opening price of 0.79.

I am thinking about going in. This way i am buying shares, I am ending up buying all the top losers of the days.

Buying stocks on hot tips may seems profitable in a bull market, but in a downturn, you will get burned. I have been burned before in 1993. If you believe in hot tips, power to you brother. Cos' you will need it.

I only believe in buying shares in FUNDAMENTALLY-sound companies whose share price have dropped. Also, I buy them provided there is a discount on the share price against it's intrinsic value.

Example, if CHT's instrinsic value is $0.65 per share and the price dropped from 0.79 to 0.72, I would not buy it because it has run ahead of it's fundamentals. Always buy shares in fundamentally-sound companies with a 50% discount against it's intrinsic value. That's your safety margin.

[koxinga]

Originally posted by qwertzy
Thanks for that "hot" tip. But if we have no "tips", we need a lot of faith and confidence in ourselves, which I sadly lack. In fact, i have only acted upon such "hot" tips.



I advise u to stop if u do not know what to buy. As bolts said, the last thing u should do is buy on a hot tip. I am not asking u to ignore any tip, just do the necessary homework and assess on your own. Don't fall into the trap of buying blindly because someone said so. Investing in stocks is not a a case of buying something and hoping it will rise.

Do you believe in buying when the share prices have dropped then?
For example, CHT was having a downward pressure on the price. It dropped to 0.72 from the opening price of 0.79.


That is the last thing u should do. You should not buy because it is dropping and it is like 10% lower relative to the past few days. DO u know the reason it is falling? What do u think is the fair or intrinsic value?

FYI, there are alot of people shorting CHT at the moment as the current price is not justified. So dun be surprise it goes lower still.

So how do u start? My advice is to read. Read the books (we got afew here), and read the news. When I mean read the news, I mean both political and economic news. Then read the financial reports of companies.

[qwertzy]

thanks all for sharing ur investment philosophy.

actually i already had some ideas about sound investments, but somehow I still go and make silly mistakes. buy on impulse. sigh.
its like I see the stock going up in that split-second, then i panic want to buy.

urrrgh.......already incurred a demoralising paper loss on Sunlight.

Hopefully the market, including Sunlight, turns on a bull this coming week!

[bolts]

Originally posted by qwertzy
thanks all for sharing ur investment philosophy.

actually i already had some ideas about sound investments, but somehow I still go and make silly mistakes. buy on impulse. sigh.
its like I see the stock going up in that split-second, then i panic want to buy.

urrrgh.......already incurred a demoralising paper loss on Sunlight.

Hopefully the market, including Sunlight, turns on a bull this coming week!

Never invest based on hope. Always invest based on business fundamentals. As Graham says;

"Investing is most intelligent when it is business-like".

Remember that when you buy shares, you are owning part of that business. What would you do when you buy a business? You would need to find out if you are getting a good deal or not?