Just For Thinking ....
Read? hyflux preference shares
This crazy "Googling" of Hyflux 6% Perference shares has hit many bloggers to set new record high has confirmed my earlier post on Financially literate investors?
For financially literate investors, it is not difficult to get 6% Compounded returns in the stock market without getting their investing capital stuck in the market for the next 7 years.
It has been 3.5+ years since the last Bull in Oct 2007. We are getting nearer to the next Big Bear and not further from it. If you can wait patiently for it; you may reap much bigger rewards than the total of 42% ROC in Hyflux 6% CPS in 2018
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17 minutes ago
Ya,
ReplyDeleteThat's the gist of it. Why let your capital stuck for 7 years with a "2nd rate blue chip"? Actually i am not even sure it is a blue chip - more like a growth company to me.
I may or may not subscribe to the Hyflux Preference Shares but I would like to comment on tonite's two statements recorded.
ReplyDeleteFirstly, "financially literate investors" will need to adequately diversify. A good portion will always be looking at good returns, definately beyond 6% per annum. However certain portion should be liquid or with near-cash instrumnents, while able to generate better than the fixed deposit rates. Prefrence shares is one such instrument. So there is never an issue to have some investments generating only 6% albeit with commensurating lower risk understanding.
Secondly, the Preference Shares will be listed and subscribers can sell anytime, whether at a loss or profit. So it is not right to say that the "investing capital" will be stuck for the next seven years.
Thirdly, if a big bear market is potentailly looming, then I should not be reading stock guidances on what to pick up. If I buy them, and the BIG Bear actually happened, my stock value will greatly reduced. So this is not prudent. I should then stop reading all these blogs and just keep cash. However, buying Prerence Shares will be a better option than buying stocks. Preference Shares will hold on to their value much better than stocks in a big bear market. We do not envisage that Hyflux will go bust in the next few years, at least. So some interest payouts are expected in the next few years and the value will not drop much in a bear market.
Lastly, when the worst happens to Hyflux, Preference Share Holders are paid before the ordinary shareholders. This is universal for all such Preference Shares.
Better advise readers carefully and more accurately, even if this Hyflux Preference Shares has many doubters (like me).The whole perspective must be acknowledged.
Cheers
WR