P_Tan asked 6 years ago
Hi Victor/Rusmin,
The objective of the investment quadrant is to identify companies which are good in all 4 quadrants yet price is below intrinsic value. This usually happens when not many people are aware of such companies and that’s where we should start buying the stock. And I believe such counters usually have low transaction volume and hence lower liquidity.
What’s your view on this pls?
Victor Chng answered 6 years ago
Hi PF,
Most of our best gainer are from companies that are low trading volume. Market works in a supply and demand way. If there is lots of supply (Volume), then you need a lot of demand for the share price to move up but if the supply is limited hence a little demand will push up the share price.
PF_Tan
replied 6 years ago Thanks victor. I noticed one possible reason for the low transaction volume is because very low proportion of the shares (eg < 20%) is owned by retail investors. I see that the rest are largely owned by the parent company, the management and some brokerage firms. Is this the norm and we should be of no concern?
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