Upside vs downside

Buy and hold strategy or buy and sell at  your target price.

I don't think a buy and hold (forever) strategy is a quite relevant in Singapore. Although this method has made Warren Buffett to be the most successful investor but in Singapore context it may be a little difficult. Because I cannot find a company in Singapore is of eqivalent scale or equal growth like Coca Cola, US Post,... Singtel is the biggest company in Singapore based on market capital and has the most influence to STI but in my view I don't think it can be a multi bagger over the course of 20 to 30 years.

I believe a buy low and sell high method will be relevant. The question most will start asking will be "how low is low and how high is high". We will never be able to catch the lowest and sell at highest, just buy reasonably low and sell at reasonably high.

First of all you have to select a stock with good fundamental to start with.  This will be the strategy I will use to evaluate a price I am ready to enter. 

• After selecting a stock with good fundamental, a very general method is "upside must be 2 times more than the downside". 
• Determine current, lowest and highest price in the last 5 to 10 years. 
• Example OCBC, the lowest was around $4 in 2009 and around $11 in 2015. Current price in March 2016 is $8.8. 
• Downside is $8.8-$4 =$4.8
• Upside is $11-$8.8=$2.2
• From this case the upside is not more than downside. So wait.
• It will be attractive when price drops to $6, where upside is $5 and downside is $2. So upside is 2.5x the downside.  
• If you are looking at long term investment then the lowest and highest price should be 5 to 10 years where it is usually a duration of a bull and bear. But if you are looking mid term, the lowest and highest should be taken during the last 1 to 2 years. If no upside, then pass. There is always opportunity else where.

This method of "upside must be 2 times more than the downside" applies to buying property or even in life.  For every decision you make, the benefit must be always 2 times the risk involved.  This will put you in a better position as the chance to fail is minimized.  Even if you fail, your lost is at minimal. For example OCBC, there is always a possibility that OCBC may drop to $2.