In early of 2005, I received a very fat bonus from my employer.
I was thinking to buy one oil and gas companies, but I have no idea about upstream and downstream O&G companies. Only 3 companies came into my mind: Shell, Mobil and Petronas because I see them everyday.
I did not perform any fundamental analysis on these companies. Worst, I thought PETGAS is Petronas… Actually this is wrong. Anyway, at the end, I decided to buy PETGAS because Petronas is “protected” by government and it has very strong economic moats. How about PETDAG? OK, I had no bloody idea about the existence of this company.
When to buy?
I spent almost all of my bonus to buy PETGAS at 7.0 in Mar 2005 because PETGAS was ranging for almost 1 year.
For similar reason where PETGAS ranging again from Oct 2005 onwards, I bought PETGAS at 8.8 in Sep 2006 and the quantity was double of the first batch (May 2005). OK, this is wrong way of averaging up.
When to sell?
No idea at that time.
So, you can see that I made couple of mistakes, and yes, there are many luck elements in this investment. However, this investment still turned out to be a successful one. I think the main reason was I successfully applied economic moats in selecting stocks.
By the way, the last time I accumulated PETGAS was in Dec 2009.