FJ Benjamin was bought based on the analysis that 2010 is going to be a year of economic recovery and the retail sector will benefit from this recovery story. Before the purchase, the earnings reports of FJ Benjamin showed lacklustre results and they were still posting losses. However, the extent of losses was narrowing and this is an encouraging sign that the recovery should be on track.
The stock was bought in Feb 2010 with the belief that its quarterly results will show their first profitable earnings report after the financial crisis. As reported previously, due to my limited funds at that point of time, I could only invested in limited number of FJ Benjamin shares. Nevertheless, with my faith in this counter, I added more positions soon after. I strongly believe that the first quarter results of 2010 will be excellent compared to the slumps during the first quarter result of 2009. Indeed, the earnings report was encouraging and profits were announced.
Soon share price rose and shot up to a high of $0.38 with the additional news that renowned investor Peter Lim is accumulating shares of FJ Benjamin. However due to a lack of knowledge on the signs to sell, I held on to this counter, believing that FJ Benjamin can be a long term play as recovery of the retail sector continues.
Soon share price rose and shot up to a high of $0.38 with the additional news that renowned investor Peter Lim is accumulating shares of FJ Benjamin. However due to a lack of knowledge on the signs to sell, I held on to this counter, believing that FJ Benjamin can be a long term play as recovery of the retail sector continues.
True enough, patience paid off and another wave of rise began for FJ Benjamin with the good expected quarterly earnings report just around the corner. This time round, I decided to grasp the opportunity to realize my gains. I fix my target price at $0.355 with a profit of 26%. From the charts, it can be seen that the technicals show limited upside as both RSI and stochastics are reaching the overbought region. However, the strong increase in share price accompanied with a strong volume indicates that further upside is possible and MACD also reflects no sign of weakness as yet.
I decided not to be greedy this time and firmly stick to my plan. A 26% profit is a great record for me and being able to stick to the plan is of even utmost importance as lessons learnt has keep emphasizing the significance of discipline. In addition, nothing beats having realized profits cashed in.
My thoughts at that time: I must start to be discipline and stick to my target. Cashing out gains at the 20% mark is a successful trade, let alone 26%. Hence, I made no hesitation and realized my profits before any unforeseeable circumstances strike out from nowhere again and wipe off my gains.
Lessons learnt: Discipline pays and it is always best to realize gains based on the planned target. In the event that any share experience a sudden spike in share price within a short period of time, a sell signal is triggered. Sell first, cash in gains, and the counter can always be bought back during corrections, which almost always occur.
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