After a hiatus of 6 months, CynicalCyan is back.

[Warning: Long, long article below]

The break was deliberate. I wanted to see whether i3investor would be a better place without me & to check whether my views have been proven correct or wrong. 

Yet again, popular bloggers like Koon Yew Yin & Calvin Tan dominated the i3investor scene. Some things never change.  

It was nice seeing kcchongnz coming back to post fundamental articles, while refreshing to see Philip posting in BM. skoh888’s latest article was a good wake up call too. Integrity. Intelligent. Industrious. 3iii seems to be telling us to be well-prepared to benefit from this bear market. 

Now, let’s start with a review of my stockpicks of 2022 on 20/11/2021.

1. CAPITALA / AIRASIA

Share price plunged from RM1.05 to RM0.61. Devastating loss of (-41.9%)

No dividends.

2. PBBANK

Share price rose from RM4.00 to RM4.43. Nice profit of (+10.75%)

Dividend of RM0.077 was a bonus. (+1.9%)

3. HEIM

Share price increased from RM21.92 to RM24.28. Nice profit of (+10.77%)

Dividend of RM0.66 is excluded (dividend not paid yet is usually factored in share price)

4. GENM

Share price fell from RM2.97 to RM2.82. Reasonable Loss of (-5.05%)

Dividend of RM0.09 was a bonus. (+3.03%)

5. INARI

Share price tumbled from RM4.15 to RM2.60. Horrendous loss of (-37.35%)

Dividend of RM0.076 was a consolation. (+1.83%)

6. MATRIX

Share price climbed from RM2.09 to RM2.30. Pleasant profit of (+10.05%)

Dividend of RM0.075 was a bonus. (+3.59%)

7. MBMR

Share price moved up from RM3.03 to RM3.13. Fair profit of (+3.3%)

Dividend of RM0.21 was a bonus. (+6.93%)

8. MFCB

Share price dipped from RM3.52 to RM3.48. Slight loss of (-1.14%)

Dividend of RM0.035 was a bonus. (+0.99%)

9. HARTA

Share price crashed from RM4.95 to RM2.78. Tragic loss of (-43.84%)

Dividend of RM0.183 was a consolation. (+3.7%)

WHAT CAN WE LEARN FROM THIS?

On 19/11/2021, KLCI = 1525.54. Yesterday, KLCI = 1436.70. The benchmark KLCI loss = -5.82%

2. In a bear market, almost all stocks drop in price, regardless of sectors.

Even companies who are among the best in their respective fields can suffer catastrophical losses in share price in a bear market. (HARTA, INARI, AIRASIA)

Even a diversified model portfolio like mine can suffer losses. Diversification does not necessarily lower the risk of losing money.

3. It is HARD TO PREDICT future share price movement.

Many analysts predicted KLCI index to be around 1600 previously, yet it’s looking unlikely now. A recession in the USA is expected, since interest rates have been hiked up aggressively to cool down an overheating economy.

​​WHAT CAN I DO NOW?

​

1. HOLD in a bear market,  believe in the company’s future

A bear market = Mr. Market is pessimistic, & is not willing to pay higher prices for stocks. 

I strongly believe in not buying at market peaks, which the inverse is, not selling at market lows.

Looking back, most stocks had fallen to historic lows in 1998 and 2008, but companies that could survive crises & improve their finances would have share prices follow suit in the longer term. Companies which still show signs of improving finances will see its share price rebound.

If your initial idea of buying that stock is still valid, why sell it according to Mr. Market’s low prices? Why not sell when Mr. Market offers at a higher price in the future bull market? Even TSLA had its fair share of share price drops, but only those who believed in the company’s future were rewarded.

2. BUY more of the same stocks when there’s a huge discount

World’s Greatest Investor Warren Buffett is supposedly to have said “Whether we’re talking about socks or stocks, I like buying quality merchandise when it is marked down.”.

For example, his Berkshire bought AAPL in 2016 and averaged down when AAPL fell 20% after announcing declining revenues. He believed that AAPL’s longer term performance would improve & inspire share price recovery. Which means buying more at lower prices was logical. 

Traders sell when technical sell signals appear.

Investors sell when fundamentals of the company deteriorate/worsen further.

Are you a Trader, Investor, or both? 

Most of the time, we don't have a specific plan.

​

5. REVIEW your investment decisions.

Think back why did you think that was a good decision. Does it appear that way now? What can be done better? Would hiring a professional be more effective? 

CONCLUSION:

2022 thus far has not been kind to investors. How low can stocks go? How long can we still hold? 

Buffett wrote in one annual letter “Despite some severe interruptions, our country's economic progress has been breathtaking. Our unwavering conclusion: Never bet against America…” Well, Warren Buffett can say that bcoz the long term trend of America’s stock market is upwards. A country’s stock market is only as strong as its country’s economic strength. America’s economy always grew from time to time.