Do read the below conversations between a newbie and 2 “seasoned” investors with a light-hearted touch:

Newbie to Investor A

“Is this stock a good buy?”

“Sure! This stock’s P/E ratio is at all time low of 9 times; the forecasted growth next year is 20%; it’s selling at 30% discount to its book value; the chart is showing it is building a strong base – which means it will break out in price soon! Plus it got lots of dragons and phoenixes…”

“That’s great! I assume you already own this wonderful stock?”

“I not vested in this counter.”

“……….”

Newbie to Investor B

“Is this stock a good buy?”

“This stock is the pits! I spit on it! The management don’t care a damn about shareholders’ interests; take on massive amount of crazy debt to diversify to new businesses that are not complementary to it’s core competences; and the stock is now selling 50% below it’s IPO price; and the management still got the cheek to issue a Rights Offer to beef up it’s shaky balance sheet!?”

“Oh dear… I assume you are shorting it?”

“Short you head! I will be subscribing to the Rights Offer so that I won’t get diluted.”

“……….”

I leave it to you to take out what you may from the above 2 conversations. 

We see what we want to see; hear what we want to hear J

Singapore Man of Leisure (welcome to my blog; just google it!)
This post was written by a guest contributor. Please see their details in the post above. If you’d like to guest post for TheFinance.sg, feel free to contact me for details about how YOU can share your tips and knowledge with our community.