To shrink vertically by a factor of 1/8, multiply by 1/8 OUTSIDE the absolute value symbols:
f(x)=1/8|x|
To shift to the left by 5 units, add 5 INSIDE the absolute value symbols:
f(x)=1/8|x+5|
To shift upward 4 units, add 4 OUTSIDE the absolute value symbols:
f(x)=1/8|x+5|+4