Making prudent decisions

It is very important to make prudent decisions in the equities market because as what Warren Buffett said, "If you buy things you don't need, soon you will have to sell things you need."

This is what happen when 3 stocks, namely Blumont, Liongold and Asiaons plunged up to 80% after SGX suspended trading on them. They are highly speculative stocks and anyone who bought it at a high price will soon realised that they are holding on to huge paper losses.

Even when the prices have dropped tremendously, people still think that the stocks are undervalued. and there are no indicators or rather unknown indicators of its future growth prospects.

Although the temptations of a 'buy low sell high' mentality is strong, i would like to remind myself to be prudent in investing and of what Warren Buffett said.