Mr. Market doesn't get it right and it happens often. SP slumped to 9c on 21st June despite positive gold drilling results. Today over last hour SP was pushed to 11.5c despite cum free options (@ 12c expiring July 2020). What is wrong?. Simply that not all investors are logical, forward thinking and patient. Some are easily swayed by short term profit taking and others are influenced by global stock volatility.
What does this means for fundamental investors?. Because of market imperfections, we have the opportunity to pick up solid stocks on the cheap. As an example, I added my position on a deep value stock (Bund Center) listed in SGX. Price done at $0.645, net asset value is $2.65 (based on valuation done 6 months back). Bund is debt free, cash rich - with dividend yield > 6% and FCF yield over 10%. What a steal!.
If you believe in KRC's story, then add your position on monday and scoop up the free options (SP goes EX on Tuesday).
Mr. Market doesn't get it right and it happens often. SP slumped...
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