Buying on hope

Every investor has different expectation of the share he/she bought. Ultimately, everyone wants to make money. For big company, to attract investor willing to buy company's share is not difficult. The earning is stable and growing slowly. Some are of course grow faster and has high PE.

For smaller company, attracting investor money is more difficult. The business is still going through transition or picking up. You need to have good story for people to buy into the share. Therefore, there exists the PR agency, to communicate the merit of the company. Investor buy the company on hope that the new venture or business will pick up and will make a windfall out of it. However, many time, you find that, story is one thing, performance is another thing.

Take an example, Anwell Tech, the recent financial result is disappointing. When the share was hot, chasing by punter, it went up quite a fair bit. I didn't take profit, wishing the solar business could take off and earn more money. However, looking at recent result, there is a gap between expectation and reality. I decided to cut loss, selling at some loss to protect my capital.

Perhaps I should keep in mind Buffet's teaching - Don't lose money. Slowly my investment style has changed towards big cap. Those that has more stable business and chance to keep increasing earning. I need to think twice in investing promising company in future.