I bought into a Malaysian company called MMHE (oil & gas fabricator) in early June. I did a thorough analysis into the company. P/BV of 0.48X at the time I bought it, with net cash per share of RM0.42. I bought in at RM0.775. It had a brilliant balance sheet. It's also a part of the Petronas group. Permanent loss of capital was near impossible, value for money was unbeatable. Once Petronas resumes with their exploration and field development work, I was certain MMHE would be an easy multibagger.
Then after I buy in the stock keeps falling. I say no worries, I will top up. The story and fundamentals hadn't changed. Yet as it kept falling to RM0.68, RM0.65, RM0.63...I didn't go in. I set aside a large pile of money to make this my "big bet" (a la Munger/Buffett). This pile of money would've been 1.15X the size of my entire current portfolio.
But I gave way to a major human bias...as I saw MMHE price kept falling, I gave in to the thinking that it will keep falling still into the RM0.50 region.
And then last Friday, it took off. RM0.65 to RM0.72, and today it's up to around RM0.75.
I did everything correctly. I had my prior research. I prepared the capital allocation necessary to make a major bet on a severe case of mispricing. I was comfortable to buy even after the price declined some 20% from my initial investment. BUT...the bias of projecting a downtrend to keep trending downwards got to me.
I should have put half of that capital I set aside to work at RM0.65 and kept the other half as dry power...alas, spilled milk is spilled milk all the same.
I truly have learned an invaluable lesson here. I did most things right, yet failed to do the most important thing of them all - that is putting my money to work.
I hope others can learn from this experience of mine. Just wanted to share. It hurts badly, but sometimes it's the painful ones that teach you best.
Submitted September 17, 2017 at 09:58PM by learner1314 http://ift.tt/2ftrJYk
