Asian Pay Television Trust (APTT) share price on red alert

Call it sheer madness or whatsoever. Within the span of two days, Asian Pay Television Trust (APTT) share price plunged by nearly 50%. Investors with weaker hearts might have suffered serious heart attacks watching in horror at the meltdown of Asian Pay Television (APTT) share price. After all, you don’t often get to see value of business trusts being eroded by so much in a matter of days. Well, that’s investing in SGX stocks for you.

In my previous article, Asian Pay Television Trust dances with the wolves, I wrote that investors should “hope for the best but expect the worst”. I was also bearish on this counter as I was not convinced that the management had the ability to turn around the trust. My view was that the unit price would come under further pressure. Recent Asian Pay Television Trust (APTT) share price vindicated my thesis.

As the saying goes, cheap things don’t come good and good things don’t come cheap. When a business trust is trading at such abysmal level, the price level may not represent value. There are investors who insisted on accumulating more units of Asian Pay Television Trust instead of cutting losses. Well, they had better be sure of what they are buying into.

Why should you invest in companies that produced declining profits in the first place? For all you know, you could be throwing good money after bad. This is not value investing. It is called speculative investing – buying on the hope of business turn around.

Nightmare for APTT investors

The devastating spell of run for Asian Pay Television Trust (APTT) underlies another dark chapter for this pay TV operator. Should investors run for their lives or buy on the dip? This is not an easy question to answer but I guess investors have to play their part as well.

In life, there is no good stock or bad stock, only right or wrong investment strategies. To illustrate, I have made good money from investing in penny stocks with weak business fundamentals. Conversely, I have also lost bad money investing in blue chip as well.

Many of us tend to use DPU or yield as the sole yardstick when selecting the stocks to invest in. Not many investors bother to review the business fundamentals or attempt to analyze the future growth of the company. Also, there are too many investors who don’t set entry price or have the courage to cut losses. This often results in investors holding on to toxic stocks for too long while selling champion stocks too early.

For a long time, Asian Pay Television Trust (APTT) has been deemed as a yield darling among the investor community because [This is a premium article. The rest of the content is blocked and can be accessible by SG Wealth Builder Members only. To read the full content, please sign up as member.]

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