Eratat Lifestyle – My First Stock, My First Mistake

By A Young Investor's Diary • February 25, 2012

This was the first stock that I bought, after I was enticed by its growth story of positioning itself in the premium market where there is higher profit margin. Profit margin is growing and profit and revenue have been jumping higher and higher each year. Coupled with its high cash position and low P/E of less than 2, this seemed to be the ideal stock.

So what was my first mistake?

Lousy and basic accounting skill. Looking at the current financial statements, there's in fact quite a number of doubts in its statement that I should have spotted earlier on.

First of all, lets look at their growth story as written in 2010 annual report:

Since 2008, we have made strategic changes to reposition ourselves as a mass appeal and casual lifestyle company and away from the sportswear segment.

Is it really so? In 2008, they added 3 more production ...

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