When You Think a Stock Is Expensive

Starting the journey in Singapore and in income stocks and venturing out to Hong Kong then US. I am still adapting to buying growing business in the PE range above 20x. My only ones is Ulta Beauty. 

I just made a quick look at Shanghai Airport. Remember my post on Beijing Airport 2018. Shangai International Airport then in 30th OCT 2018, was 28.3x PE, now is at 29.5x PE but the stock price has grew about 61%. 

In comparison, Perfect Shape Medical, I bought it at 15x PE and now it is below 12x PE but share price has grew 36%.

Of Course I didn't buy Shanghai International Airport then not only because of the 'high' PE and I was aiming for Beijing airport. And also historically Shangai International Airport is traded below 20x PE but other airports wer still traded insanely high and still are. Just by the table below, both Beijing Airport and Shangai International Airport is a buy. 

In 2018

In 2019 current

Now I have learnt that a high PE can remain high but price do catch up. Learning it one thing but to adapt and conditioned to act on it is another matter. Pulling the trigger at a high PE has to tolerate any drastic drop as higher price mean higher risk and also the confident to buy more as it get cheaper. There is definitely no reason not to when you buy at 29x PE and froze as it drop to 20x for example.

For me in this situation, is awfully similar to people waiting at the sideline for the pass 10 years, for a crash. In this case, waiting in a correction in price while the market is pricing in it's future growth prospects. 

There is no one way of investing, investing is complex. Over the course of investing, one learn from mistake, experience, books and change their investing method. Looking at Shangai International Airport today, my prospective is different from that of last year.