(02-07-2012, 08:27 PM)Stockerman Wrote: [ -> ]should we come in and short this counter? today, a lot of counters went up with things look a bit better on the Euro front..
with a grim prospect of zero yield, price is set to drop further? below 10 cents ??
“The market can stay irrational longer than you can stay solvent.” ~ John Maynard Keynes
I have heard buffett quoting this too.
Personally, i dont think i will ever short any counter cos the downside risk seems unlimited. Who knows if i short today at 17 cents, then some joker with deep pockets thinks otherwise, comes in and bids up the share price to 25 cents, i would be forced to cover my shorts and it may wipe out my savings of like 10 years. (He may be wrong eventually but i would still lose money)
i would prefer to seek out undervalued stocks and patiently hold them than risk losing money that i worked so hard to save. Call me a coward but i can live with it
(02-07-2012, 05:09 PM)wsreader Wrote: [ -> ] (30-06-2012, 10:34 PM)KopiKat Wrote: [ -> ]The Yield just dropped to 0% as they'll have to suspend distribution till Jun-13,
I just checked the AR that there were 7045 unitholders as at 28 feb 2012. How many unitholders will hold on to a zero yield shipping trust?
Some of the unitholders seems like financial institutions. Surely they have investment professionals on their payroll who can advise their employers to get out as the situation deteriorate beginning in 2008?
Hmmm, i guess never rely too much on these financial institutions. There are some big companies like eastman kodak, nokia, lehman, etc that are mainly held by institutional investors but arent they bleeding cash, some have even filed for bankruptcy.
If we want to call ourselves investors, then at the every least, we can do some due diligence. Check that the company is conservatively financed, have a reasonable earning power relative to price, reasonable ROE, decent management who think like owners. In the case of FSLT, for the past 2-3 years, management has been paying more money in the form of loan interest to the bankers than to shareholders as dividends, i wonder why people still believe in this management.
Of course, i have to admit, once upon a time, i didnt believe that management will do silly things, if they have the confidence to do 100% payout of earnings, then obviously they have to be right. Well, i have changed my opinion, sometimes you do have fools running a business.