The performance of some second & third-liner stocks are so spectacular that retail investors are clamoring to get into the action. How do you handle a client's request to buy a second or third-liner stock that is now trading at a price that has doubled or even tripled from what it was trading at just a few weeks ago? Do you discourage him only to discover that the stock that he had planned to buy has now gone higher? Do you endure in his adventures and yet encourage him to diversify his purchases somewhat, only to discover that the other stocks that he has picked are birds of the same feather? This is the remisier's dilemma. While we may have formed the view that the present market rally can sustain, we must be careful that we do not buy into stocks that are about to go into PN17 or whose operation had ceased or who may default on its borrowings (or bonds) that will mature shortly.
Chart 1: FBMSCAP's weekly chart as at 12/5/2009 (Source: Quickcharts)
Chart 2: FBM2BRD's weekly chart as at 12/5/2009 (Source: Quickcharts)
Chart 3: FBM-MDQ's weekly chart as at 12/5/2009 (Source: Quickcharts)
Sometimes I also think that very hard to recommend a stock to buy since all the 2nd and 3rd liners up like nobody business.
ReplyDeleteEven myself want to get in some stock also worry.
if buy good fundamental stock right now, short term may end up profit.
I think not only remisier have this kind of dilemma. To small investor like me also feel the same.
Yes. Myself also facing this kind of problem - cannot hold ourself from entering the order when see market is still hot even know that most of the share prices have double or triple....lucky I hold my hand brake already recently and withdrawn all the money from my trading account. :)
ReplyDeleteMarket is crashing today. Luckily I have sold off all my counters. :)
ReplyDelete