When did I start to buy?
KYY Golden rule for share selection:
The company must report profit growth for 2 consecutive quarters before I decide to buy it. Moreover, it must be selling below PE 10.
Among all the criteria such as NTA, Cash flow, dividend yield, debts, liabilities, cash in fix deposit, profit etc profit growth prospect is the most powerful catalyst to move share price.
Dayang is a good example. When I saw its profit growth for its 2 consecutive quarters 2nd and 3rd quarter which complied with my golden rule, I started to buy it.
When it reported 10.13 sen for its 4th quarter, its share price shot through the roof.
When will I sell?
I will start to sell as soon as I see the company report less or reduce profit for 2 consecutive quarters. You must bear in mind that many company’s product or services are seasonal. I will not simply sell, when I see the company reported reduced profit for 1 quarter because its product or services may be seasonal.
I will also sell if I can find a share which has a better profit growth prospect than Dayang. Up till now, I have not found one.
Note: No share can go up or come down continuously for whatever reason. After some time, it will correct itself as some investors will start to sell to take profit. After it has dropped for some time, some cash rich investors will start to buy to push the price up again.
To be really successful, investors must also have some knowledge of financial and technical analysis, understanding of human nature and business sense.
In any case, I believe Dayang has a long way more to go.