Taken from i3-investor

IW : I am new to the market..for less than a year..about 9 months on and off...lost around 150k so far. 500k capital left 350k..A 150k lesson..Just to name a few-Lost on Nicorp..Times..YTL power and its warrant.



NiCorp : I never check the chart ... and was 'wow' ... 600+% shot up then retracing ... trapping many punters. This is how syndicates profitting from the herds-of-punters. I do not follow the news, either. So, I m not aware of why such a surge. I do not bother, anyway. What I do know ... when it was traded actively in KLSE, many syndicates happily attract punters and those newbies. Do not touch, my policy.

TEH : I feel sorry that he lost so much in 9-months. The RM500k capital is very huge but unfortunately, market is harsh to all of us in these few months. While I know many punters will go for NiCorp and Time(in news), YTLPower is also making many of us losing money!! Yes, I do still have YTLPower and intended to collect more. One could feel safer to collect YTLPower but not Nicorp, obviously.

Lesson : Do not buy into rumours or news ... and into a lousy stock such as NiCorp. It is purely speculative and certainly a TRAP to those greedy ones. Do some basic homework, buy those good stocks such as YTLPower, and place a longer time frame. While we could average down YTLPower, we could not do the same for Nicorp.

IW : The main reason being buying too big a hand using contra..100 to 500 lots depending on the counters, the losses accumulated really quick. I slow down a bit now and start to read more and try to learn even more from other experience investors like you(MC).

Lesson : Do not play contra and certainly not for newbies/novices.

IW : Advices really help, at least I am not simply throwing here and there. Made a little on the SKPETRO but retreat too early. Honestly speaking I don't really read the news carefully before but now I do...Better be safe than sorry is my strategy nowadays..I am quite upset about the losses but still ok mentally. Just have to accept the facts that I am not a good trader. I keep telling myself, "I need to go slow and steady". I'll make it back one days with patient and right counters. I switch to cash account fully recently to avoid using contra. Once again..I appreciate your advices.

TEH : Yes, do listen to advises. DO read some news, making a good judgement about the counter. He is doing is GOOD ... by accepting some facts(being real), controlling emotions to be more patient and avoid contra!! Whose responsibilities should it be to educate newbies or novices?
MC: Sorry to hear about the losses. When we enter the stock market, this is always a risk. And especially with contra trades. I'm sure each and every one of us here have suffered losses at one time or another. I've followed the market for some years although I've been inactive; coming back only a few months ago after I've rebuilt my capital. I'm one of those unlucky sods who was playing the market in the early 1990's, made some losses, was discouraged... and totally missed the 1994/4 Great Bull run! It tormented me to see shares that I had sold shooting so high: KLK - had sold it at 3.60 (went to 24.00); Time, sold at 1.90 (went to 9.00) etc. But at the same time, I didn't come back in when the market was at its peak - would have been wiped out. I did enter in the late 1990's but made losses.

But I've learned a few things which I hope will result in better investing this time. For one thing, there are groups like this where you can seek others' opinions - there were none some years ago. This is a very important tool. At the same time, one must try not to be too influenced by the opinions here - use your own judgement at all times. After all, it's your money on the line.

I've also learned that it's all about timing - the price doesn't really matter. Often, neither does the company! If a company is going up, it doesn't matter what the current price is. Conversely, if the price is in decline, it doesn't matter how good or profitable the company is. Here lies the problem: we don't *really* know if the price is going up. Or down. Yes, technical charts can help somewhat but this is just to an extent.

Nowadays, I try to do these: (1) Ensure the company is solid plus with dividends. This way, if I have to settle and wait, at least I can comfort myself with the dividends.

(2) Use technical charts to see when the best (or better) time is to buy it - see whether there is a breakout. Try ChartNexus.com's free program first. But one will have to learn how to read the charts. Over time, you will get better. Yes, all trades start as contra with me - if I can profit within the period, well and fine. If I can't, and if I still feel it's a good price, I will settle and wait.

I've also learned that patience is indeed a virtue. As long as we don't buy near a company's historical high price, and if it's a solid company, we tend to make a profit if we wait long enough. Finally, never put everything in one basket no matter how seemingly good it looks. It's better to be cautious and diversify - different counters PLUS at different times. With SKPETRO for instance: everyone knows it's a good company. So, when it was in the 1.90-something, we should have bought "some" - not all of the allocated capital but maybe one-third or so. This way, if it were to go down to 1.80-something, we can buy another one-third. If it goes up before that, then it's great for we will at least get something.

This is what I'm trying to do with OSK. It's fortunate I didn't put all my allocated capital at 1.40 despite feeling it's "already low".


IW : Hi MC, thank you very much for spending so much times sharing all the valuable experiences. The main reason for me to enter the market is hoping to gain enough to buy a nice house. I booked a house last year prior to construction. It is still under various procedures but likely to make progress towards end of the year. Obviously the motive was fine but the strategies were definitely all wrong. I was too eager or even too greedy hoping to win some quick cash from the market. Bad ideas, the stock market is for the patience investors like what you have mentioned about. I will definitely taking your advices and store in my subliminal mind reviewing it from times to times, In fact, your advices is the very first that I have received with thoughts and understandings in correspondence writings. I truly appreciate it. Being educated under a Chinese school educational system throughout childhood and high school, I have better understandings of Chinese language; therefore, I read mostly Chinese books and periodicals. My old folks are farmers; they worked very hard providing foods and shelters for my eight siblings including myself. You know, there weren't many books to read some 20-30 years ago, simply couldn't effort it; we rather use the money to buy foods instead. I still recall the contentment of reading Hong Kong comics books borrowed from a wealthy classmate in the old days. Boys, those were the good time. I know nothing about share trading back in 1990's, not even 2000's. I started buying two Public bank funds in 2008 due to the advices of two friends working at the public bank and found out later those were the worst mutual funds of all time in term of performance. My 58,000 left with 30,000 in 2012. If I add up the opportunity cost and interests for a period of time over four years, the losses has mounted to 50% or so. I don't believe in any mutual funds staff or manager since then. They only ask you to buy and never advice you to sell simply because it is the bank's policy. That was the second reason why I trade myself rather than letting the fund managers doing the trade. Now that I have learned that 'trading' with profit is indeed a colossal task to compose. I will be humbly paying more respects towards advisor like you as well as the market. It is because you are a good advisor and the share market is indeed a place that takes patience and endurance to build one's wealth with characters.

to be continued ... time for breakfast.

TEH