Ultimate Stock Tips
Review of Stockpicks 2022: What should I Do Now?!
CynicalCyan
Publish date: Sat, 02 Jul 2022, 11:59 PM
CynicalCyan
0 69
Unique content created once in a blue moon to increase the quality of articles of klse.i3investor.com. (used to be weekly)
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%
On 19/11/2021, FBM EMAS = 11245.64. Yesterday, FBM EMAS = 10257.35. The benchmark FBM EMAS loss = -8.79%
Needless to calculate, my stockpicks had greatly underperformed the 2 local benchmark indexes thus far.
If you had done better than both indexes, well done!
1. STOP-LOSS is important.
If an investor had not applied a 10% or 20% stop loss, and held CAPITALA, INARI & HARTA until now, the losses would be terrible in 7 months. One is either forced to be a long term investor to hold on, or take more losses now.
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.
If I knew a bear market would be coming, I’d have told everyone to sell everything back then and wait until now to buy everything.
Would the share price go up in the next 6 months, or drop further? How long are you willing to hold your stocks? Can you stay calm when your stocks plummet 30% or more?
4. Stocks DROP FASTER than MOVING UP.
For example, INARI took almost 10 months to move up to RM4.00 from RM2.60, but only 7 months to drop back to RM2.60.
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.
Even one of our local ex-fund manager, Peter Lim Tze Cheng has said that the current bear market could be a good time to buy stocks for the longer term.
3. SELL current stocks to shift to higher return assets
Investment is putting money to an asset that can generate a higher return later.
If you have found an asset that provides higher returns, be it another stock, real estate, business partnership, crypto, etc., you may want to swap.
4. Create a STRATEGY for trading/investing.
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.
I am nowhere near Buffett’s level. Neither is Malaysia near America’s level.
But Malaysia has always made economic progress throughout the years too. (whether low or high growth, low inflation or high inflation)
Despite the current persistent bearish sentiment of the Malaysian stockmarket, I believe that in time, stocks will recover. I don’t know which day, which year, how long it takes, our economy as a whole would make progress over time. (and that means stocks, e.g. gloves, plantation, tech, etc. shall one day rise again.) It is wishful thinking. But without confidence in Malaysia, I’d given up on local stocks & invested in other countries’ stocks instead.
My unwavering conclusion? I still look forward to the day Malaysian stocks recover.
Disclaimer: This article is not tailored financial advice, but mere general stock sharing / observations. Please do further due diligence. The author disclaims all liabilities from readers. The author has interest in some stocks mentioned above, i.e. CAPITALA, PBBANK, HEIM, GENM, MFCB, HARTA.
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Discussions
3 people like this. Showing 13 of 13 comments
Some arguments made by a certain prominent blogger is so skewed that it is almost laughable….for eg palmoil is used in everthing we use so you should therefore buy palmoil stocks
2022-07-03 10:44
Its almost like saying by the same logic we should all buy bank stocks because everybody will need to use a bank at some point
2022-07-03 10:45
The true fact about investing is everything has a fair price at any one time….so knowing when to buy and also SELL is just as important…not dum dum buy only
2022-07-03 10:47
Good writeup. Before trying to understand the market, understand yourself first. Are you a trader or investor? What is your long term and short term? What is your risk level? That should give you some idea what sort of stocks that you want to buy or sell. Good.
2022-07-03 11:05
More than 50% of packaged supermarket products contain palm oil and palm kernal oil, and it's in nearly everything including shampoo, lipstick, bread, chocolate, ice cream, detergent, soap and more. The reason for this is because it's a stable oil which is good for deep frying and with fatty acid chain of C8, C10, C12, C14, C16, C18, C18' and C18" it can be fraction into functional fat or further chemically react into ingredient for cosmetics, hygienic, personal care, biodiesel, lubricant, moisturiser, explosive (nitroglycerin) and etc.
Beside Palm tree is an incredibly efficient oil bearing crop.
2022-07-03 16:35
I do something like what EPF do but only on a minute scale comparatively speaking
The biggest difference is that it’s my own money while it’s a lotta folks’ money where EPF is concerned
2022-07-03 17:37
My advice is never time the market. Each new year we we can see a lot of sin ka lan analysts giving predictions of index. Every amateur stock trader will be able to do that too. Just take the index of the last trading day of the year /- 15%. Unfortunately all these so-called analysts are looking at one side of the coin. So, never ever take their opinions seriously.
Stay invested. My Pick are banking and construction sectors. Dark horse is technology.
2022-07-03 17:46
I no know what to do now ! Stay invested or get out ?
I think getting out of the mkt is the better option ? Korrect ma ?
2022-07-03 20:26
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This book is the result of the author's many years of experience and observation throughout his 26 years in the stockbroking industry. It was written for general public to learn to invest based on facts and not on fantasies or hearsay....
skoh888
Great article cyan! Welcome back!
2022-07-03 10:41