1. I invested in Alibaba and Baidu after the stocks dropped over 30% from their peak. My total investment was more than $250,000 SGD.
2. The stocks dropped more after I invested. At the worst point, I was down by more than $100,000 SGD on these two stocks. I held on to these stocks as they were undervalued.
3. These stocks have recovered significantly over the past two months. I sold all of my holdings as the prices now exceed their fair values (based on my judgment). I was able to make a modest gain of about $50,000 SGD on my investment.
4. I will reinvest in these stocks when they fall below and become undervalued again.
5. I adopt the following principles in my investment strategy:
a) Invest in undervalued stocks.
b) Hold the stocks for the long term, if necessary
c) Take profit when the stocks become overvalued.
d) Invest without taking leverage
Tan Kin Lian