I was watching the share price of DBS Bank for a while. On 15 December last year, its share price dropped to around $11.60. It remained at around this level till the end of 2011.
On 11 January (Wednesday), it rose by $0.26 to $12.14. The following day, it continued to rise and this time by another $0.26 to $12.40. By yesterday 13 January (Friday), it climbed further spectacularly by $0.52 to end at $12.92.
In just three days, DBS rose $1.04. If an investor owns one lot of DBS (1,000 shares) and bought it just before Wednesday and sold it off on Friday, he would have realised a gain of $1,040 based on investment of $$11,880. That is 8.75 per cent price return in just three days!
This is based on past event and what a missed opportunity.
As an investor, I was not ready to set aside $11,880 for one lot of DBS. I was of the view that DBS can go lower than $11.60 especially with the possibility of systemic credit crunch faced by global banking sector if the Eurozone sovereign debt crisis gets out of hand.
It is difficult to predict how share prices will move in the short term and it is even more difficult to buy at trough and sell at peak. This is just one story. During period of volatility, there are many such stories and it is always with “if only I have done that” kind of regret of not capitalising on the opportunities. But one must bear in mind that the situation may well reverse and you could be buying into a declining stock with no end to decline in share prices. In other words, you cannot time when to buy and sell a share for maximum gain.
Copyright © 2012, limkimtong for Living Investment
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