Transcorp, Dead or Alive?

[emeka]

Originally Posted by Gengen

However, as micro-investors trying to maximise our returns, we should ask ourselves what investment opportunities have we missed?
[/b]

The answer to these question lies in one word: Diversification.

I dont believe is a bad investment strategy to put money in a penny stock with 'potential'.

Secondly, the so called 'investiment oppurtunities we missed' cannot be concretised. The current bear run is the market makes it all the more difficult to predict the movement of (m)any stocks. Please share with us if you are certain of any stock in this market.

While waiting for such informations, picking up a few more units of Transcorp at 4 naira is not a bad idea. Imagine if it appreciated to 6 naira in the next three month. Did I hear someone say thats 50% capital appreciation? Well, thats not such a bad start for the micro-investors

[c kenneths]

I like that word diversification, if Transcorp can apply it in their business and venture into money yielding ventures in this lucretive economy, thing will change for the better, I will not sell any of my Transcorp for any reasons.

As for opportunity cost, nothing is certain as Emeka said, you may have lost more if you invested in any other stock.

[pumping]

Originally Posted by emeka

The answer to these question lies in one word: Diversification.

I dont believe is a bad investment strategy to put money in a penny stock with 'potential'.

Secondly, the so called 'investiment oppurtunities we missed' cannot be concretised. The current bear run is the market makes it all the more difficult to predict the movement of (m)any stocks. Please share with us if you are certain of any stock in this market.

While waiting for such informations, picking up a few more units of Transcorp at 4 naira is not a bad idea. Imagine if it appreciated to 6 naira in the next three month. Did I hear someone say thats 50% capital appreciation? Well, thats not such a bad start for the micro-investors

It may not be a bad idea to buy more Transcorp at 4 Naira but let me tell you why I do not agree with the timing. I understand the principle of long term investing but this is not the issue here. The price at which you buy a stock is as important as how long you decide to keep it.

Let us assume that transcorp will not go lower than 4 Naira for now. However, do we feel very comfortable that it will rise above 4 Naira in the very near future? I don't. Not this year anyway.

Nothing is certain but from what everyone is saying, it appears the expectation is that this stock will not really change in price for a while. It will probably just be fluctuating. In this current bear market this is almost certain.

If this is the case, why buy now and not say in March next year or when the bulls return if the stock might still be 4 Naira at that time? Why tie the money down down?

Moreso since you are not getting dividends and we don't expect the company to post profits in the first couple of years we don't expect anything to drive the price drastically.

If you have the stocks now it is okay to keep it. You waited too long. It is however interesting that even though the prediction was that Transcorp will fall to around 4 Naira, 3 Naira some investors still held on to them when they bought at almost 10 Naira. This concensus was awash on this forum the the price will be dipping below at least 5 Naira. Why wait??? Okay, this appears to be analysis after the fact.

Just remember that it was a bad decision not to sell it off even at 7 Naira. Most agreed the price was dropping much further. If one had sold off at 7 Naira and buys at 4 Naira now you are better off than trying to average out. It's okay to sell at a loss and re-enter at an even lower price. If you ever make profit by averaging out, you will make more by re-entering at a lower price.

Well, no one should feel bad about this analysis. I learnt this lesson the very hard way too but I learnt from it big time.

Advice I got from a mentor:
Don't buy a stock now because it will do well in 2 years time. Instead buy in a years time if the price difference won't be all that much.

We understand of course that you won't always get it right. So we keep monitoring the stock so we don't miss a sudden one way movement of the stock northwards.

Comments are very welcome.

[dj4wealth]

I saw all these coming right from the starting point. I knew that the kick off of Transcorp at NSE was garnished with Media Hype.
Lets keep our fingers crossed and eyes open to see what will happen in several months to come.

Then i guess there will be a new song.

[X-2-X]

Dear Mr or Mrs Pumping,

U too much!

[Gengen]

Originally Posted by pumping

Advice I got from a mentor:
Don't buy a stock now because it will do well in 2 years time. Instead buy in a years time if the price difference won't be all that much.

We understand of course that you won't always get it right. So we keep monitoring the stock so we don't miss a sudden one way movement of the stock northwards.

Comments are very welcome.

First Quote about AVERAGING DOWN from "How to make money in Stocks" by William J. O'Neil. One of his "Nineteen Common Mistakes Most Investors make" is:
"Averaging down in Price rather than Averaging up when buying:
If you buy a stock at $40 and then buy more at $30 and average out your cost at $35, you are following up your losers and putting good money after bad. This amateur strategy can produce serious losses and weigh your portfolio down with a few big losers"


Second Quote about AVERAGING DOWN from F.A. Akindipe's book, "Techniques of making money in Shares". I quote:
"Averaging down:
It is unfortunate that what we see most investors doing is 'averaging down'. This is what I call fantasy. It is the most grievious mistake any investor can make. It is also common with institutions and brokers. I see it as a self-justification exercise aimed at covering up mistakes, ill-advices and inefficiencies.
A great investor once said; "There are only two emotions in the market: hope and fear. But the problem is that most investors hope when they should fear and fear when they should hope". Those who prefer to average down are hoping that such stock would bounce back again. Supposing it does not?"

[emeka]

Thanks Pumping and gengen,

I understand and appreciate what you all said. However, no one can predict with certainty what transcorp might do in the next three months. And there is nothing sto suggest that we can not lose our money in others stocks.

Again there are some of us who are not 'averaging down' yet. Many who did not buy from the IPO may see these as an oppurtunity to take position. How many of us strongly believe that transcorp will drop further to 2 naira or even 3.

The strategy is: dont stick out your neck too much, and dont invest what you cannot afford to lose. Buying transcorp shares at 4 naira or less, is a calculated risk. One risk a few are willing to take.

I like this:

There are only two emotions in the market: hope and fear. But the problem is that most investors hope when they should fear and fear when they should hope". Those who prefer to average down are hoping that such stock would bounce back again. Supposing it does not?"


How about: Supposing it DOES?


I do not expect Transcorp management to sit and watch Transcorp go down the drain.

[hispy99]

Originally Posted by Gengen

First Quote about AVERAGING DOWN from "How to make money in Stocks" by William J. O'Neil. One of his "Nineteen Common Mistakes Most Investors make" is:
"Averaging down in Price rather than Averaging up when buying:
If you buy a stock at $40 and then buy more at $30 and average out your cost at $35, you are following up your losers and putting good money after bad. This amateur strategy can produce serious losses and weigh your portfolio down with a few big losers"


Second Quote about AVERAGING DOWN from F.A. Akindipe's book, "Techniques of making money in Shares". I quote:
"Averaging down:
It is unfortunate that what we see most investors doing is 'averaging down'. This is what I call fantasy. It is the most grievious mistake any investor can make. It is also common with institutions and brokers. I see it as a self-justification exercise aimed at covering up mistakes, ill-advices and inefficiencies.
A great investor once said; "There are only two emotions in the market: hope and fear. But the problem is that most investors hope when they should fear and fear when they should hope". Those who prefer to average down are hoping that such stock would bounce back again. Supposing it does not?"

I do not have a problem with averaging down; sometimes teh market can be irrational and drive down the price of stocks to a point that it does not make sense. For instance teh credit crunch in the U.S several weeks back drove down the price of some stocks to ridiculous levels; some of those stocks have since risen by 30-40% in the last couple of weeks.

What I have a problem with is that people just average down ALL the time once the price of a stock falls. That is a very very bad idea. Apart from the normal swings in the price of stocks, if a stock you own falls by more than say 15%, you need to step back and re-evaluate the stock. Have things changed fundamentally since you bought the stock? Did you miss out anything when you first analyzed the stock?

What happens a lot on this forum is that people are just advised to "average your cost down". I have seen such comments even for stocks that may not be going anywhere.

My two cents.

[yodiyokun]

I agree with Pumping and Hispy. When a stock nosedives it is better to step back and reanalyze to ascertain if any thing has changed fundamentally or an error in judgement was made.

If nothing has changed fundamentally, then averaging is ok , but if it otherwise it will be stupid to average.

Pumping, I am also of the opinion that if a stock will pay off in 2 years, why should I buy it now and sit tight unnecessarily for 2 years.
any which way we win some and loose some.

[Soweto]

Originally Posted by hispy99

I do not have a problem with averaging down; sometimes teh market can be irrational and drive down the price of stocks to a point that it does not make sense. For instance teh credit crunch in the U.S several weeks back drove down the price of some stocks to ridiculous levels; some of those stocks have since risen by 30-40% in the last couple of weeks.

What I have a problem with is that people just average down ALL the time once the price of a stock falls. That is a very very bad idea. Apart from the normal swings in the price of stocks, if a stock you own falls by more than say 15%, you need to step back and re-evaluate the stock. Have things changed fundamentally since you bought the stock? Did you miss out anything when you first analyzed the stock?

What happens a lot on this forum is that people are just advised to "average your cost down". I have seen such comments even for stocks that may not be going anywhere.

My two cents.

I partially agreed with your thoughts but most atimes it depends on the investors analysis of the particular stock and time horizon(short term or long term). leveraging down is good if u think the stock will bounce back but if ur averaging down base on what they say, then it could be a fatal mistake if it is falling stock. For transcorp, I have got no problem averaging down. I boought from the sec market at N8.5 (incl. cost) but now I have averaged down to <N5 per share.

[Betiku Franklin Olugbenga]

Originally Posted by emeka

The answer to these question lies in one word: Diversification.

I dont believe is a bad investment strategy to put money in a penny stock with 'potential'.

Secondly, the so called 'investiment oppurtunities we missed' cannot be concretised. The current bear run is the market makes it all the more difficult to predict the movement of (m)any stocks. Please share with us if you are certain of any stock in this market.

While waiting for such informations, picking up a few more units of Transcorp at 4 naira is not a bad idea. Imagine if it appreciated to 6 naira in the next three month. Did I hear someone say thats 50% capital appreciation? Well, thats not such a bad start for the micro-investors

I have been waiting for tcorp to drop below N4 for sometime now to say N3 - N3.5 but i guess it is not going to happen
I think i am going to have to call my broker to buy some unit for me at the current price of N4 and hope for a speedy turnaround in fortune and appreciation of the share price.

[Betiku Franklin Olugbenga]

Originally Posted by pumping

It may not be a bad idea to buy more Transcorp at 4 Naira but let me tell you why I do not agree with the timing. I understand the principle of long term investing but this is not the issue here. The price at which you buy a stock is as important as how long you decide to keep it.

Let us assume that transcorp will not go lower than 4 Naira for now. However, do we feel very comfortable that it will rise above 4 Naira in the very near future? I don't. Not this year anyway.

Nothing is certain but from what everyone is saying, it appears the expectation is that this stock will not really change in price for a while. It will probably just be fluctuating. In this current bear market this is almost certain.

If this is the case, why buy now and not say in March next year or when the bulls return if the stock might still be 4 Naira at that time? Why tie the money down down?

Moreso since you are not getting dividends and we don't expect the company to post profits in the first couple of years we don't expect anything to drive the price drastically.

If you have the stocks now it is okay to keep it. You waited too long. It is however interesting that even though the prediction was that Transcorp will fall to around 4 Naira, 3 Naira some investors still held on to them when they bought at almost 10 Naira. This concensus was awash on this forum the the price will be dipping below at least 5 Naira. Why wait??? Okay, this appears to be analysis after the fact.

Just remember that it was a bad decision not to sell it off even at 7 Naira. Most agreed the price was dropping much further. If one had sold off at 7 Naira and buys at 4 Naira now you are better off than trying to average out. It's okay to sell at a loss and re-enter at an even lower price. If you ever make profit by averaging out, you will make more by re-entering at a lower price.

Well, no one should feel bad about this analysis. I learnt this lesson the very hard way too but I learnt from it big time.

Advice I got from a mentor:
Don't buy a stock now because it will do well in 2 years time. Instead buy in a years time if the price difference won't be all that much.

We understand of course that you won't always get it right. So we keep monitoring the stock so we don't miss a sudden one way movement of the stock northwards.

Comments are very welcome.

Pumping, yeah i think you may be right, following your analysis i think i am just going to have a rethink about making an entry now.
Thanks man

[Soweto]

Transcorpers may soon put a smile on their faces

Checkout

Business World Intelligence | Economic Intelligence Delivered

[wanaj0]

Originally Posted by Soweto

Transcorpers may soon put a smile on their faces

Checkout

Business World Intelligence | Economic Intelligence Delivered

That is INSIGNIFICANT. N1Bn when MTN just got $256m.

Transcopr need to get their acts together. Action is what is needed not all the noise.