How to pick stock (part 10)

The first time that I made a very good return on imvestmet was when I started learning investment on year 2005. With the small amount (few thousand), I started not to diversify my portfolio but focus only on less than three stocks at the same time.

I started to use roe, pe, cagr to find out the business that I thought was in high grow trend (actually this is so called momentum investing), and I did some sort of so called statistic analysis, I found out that if we could buy a company in growing stage and with low pe, we could actually earn money in bull market.

Since then, I filtered out with my searching criteria, and I had some lists. I tried to do some asset allocation.

On year 2005, with harimau's introduction, I bought topglove at very high price, which was rm5.00. Anyway, at that point of time, I didn't realized what the risk was. Fortunately, I sold it at higher price, at that point of time, the pe reaches more than pe, which I thought was a little bit crazy.

Why I chooses topglove at that time?
- the management wanted to be the top glove maker
- it started to expand the business to down stream, which means it can control the cost by itself.
- the big player in the market is getting lesser, it gives topglove bargain power to control the selling price
- it has a better efficiency system compared with other players.

Why I sold out?
I change target to mah sing, which was considered low pe, high grow.

I never regret on this investment because it teached me that a good investment not only because of the business itself, but also the price that I bought.

Always remember - price is what you pay, value is what you get.