Caveat Emptor

In Latin, it means, "Let the buyers beware!"

In buying goods, you normally have a cooling period in spite of this warning. However, in stock trading, there is no cooling period or tribunal to fight for your cause. You live with your mistake - no matter how costly it is.

When you read the newspapers and those writers start speculating this and that on a counter, you really have to do your homework before second guessing it for positioning on the stock. Similarly when you read Magic Moments, just beware that it is some research and plenty of gut feelings based on my experience of getting my fingers burnt. So, it'is caveat emptor again.

Let us look at some examples.

If you had bought Genting and Resorts at the time I focussed on the two stock, you still have yet to recover. No doubt, if you hold the stocks you will ultimately make it because there two are ''must have'' in any worthwhile portfolio. As the market moves up, they will appear ''cheap by comparison'' and then the rush will be to buy in; just like what is happening for the last three days. It looks like it is abating today. But who knows?

The other classic fumble is timing the purchase of Welli-Multi Corporation (WMC). If you had bought in at the RM1.50 level the day before the SC stopped the issuance of the quarterly and annual report of WMC, you would have lost RM500 easily. If you are playing for the long haul, it is one golden egg ready to hatch good gains for you. A good strategy here would be to average down if if goes below RM1.00. So watch this counter closely especially for news of the halal gelatin and capsule projects.

Heartsong