My Trading Adventure
Traits for being a great investor
CP TEH
Publish date: Thu, 06 Feb 2014, 05:33 PM
CP TEH
0 2,918
All the writings in this weblog are mainly for PLEASURE reading purposes. I am in NO position to recommend a call(BUY/SELL). Please check with those know-hows before you make a decision. Yes, I am just a learner, with only five years experiences in KLSE. So, please BEAR with me.
Trait 1. The ability to buy stocks while others are panicking and sell stocks while others are euphoric. In 1983 when China wanted to take back Hong Kong, the stock market crashed. Did you dare to buy Hong Kong shares knowing the risk when the communists took over the control Hong Kong? Everyone thinks they can do this, but then when the market crashed on October 19, 1987, almost no one had the stomach to buy. When the year 1999 came around and the market was going up almost every day, you could not bring yourself to sell because if you did, you might fall behind your peers.
Trait 2. A great investor is one who is obsessive about playing the game and wanting to win. These people do not just enjoy investing; they live it. They wake up in the morning and the first thing they think about, while they are still half asleep, is a stock they have been researching, or one of the stocks they are thinking about selling, or what the greatest risk to their portfolio is and how they are going to neutralize that risk.
Trait 3. A good investor is the willingness to learn from past mistakes or to admit that he or she has bought the wrong share. It is so hard for people to recognize their own mistakes and sell the bad share which they bought at a higher price. Most people would much rather just move on and ignore the dumb things they have done in the past. But if you ignore mistakes without fully analyzing them, you will undoubtedly make a similar mistake later in your career. In fact, even if you do analyze them it is not easy to avoid repeating the same mistakes.
Trait 4. A fourth trait is an inherent sense of risk based on common sense. You must have the common sense to realize the risk of buying any share which has gone up a lot and when all the analysts are recommending buy. No share can go up indefinitely for whatever reason. Quite often you might be tempted to fall in love with your purchase because it has been going up and up. You are so proud of your pick and refuse to sell it. Remember your ego can skew your judgment.
Trait 5: Great investors have confidence in their own convictions and stick with them, even when facing criticism. Buffett never get into the dot-com mania and he was being criticized publicly for ignoring technology stocks. Eventually he was proven right. Unlike Buffet, we small investors can get in and out quickly and make some profit. Besides confidence, you must have patience to wait to buy when it is has established a base and not buy when it has shot up due to some exciting hot news.
Trait 6. It is the ability to think clearly. There are a lot of people who have genius IQs who cannot think clearly, though they can figure out bond or option pricing in their heads. I have met a lot of smart people in my life time but very few of them can come up with an inventive way of looking at a problem. As you know, there are so many criteria to consider in share selection and invariably all the professionals will consider the current profit is most important. They do not look at the future profit growth prospect of the share. They do not look at the company and the industry like a business man or an entrepreneur. Again I have to use Jaya Tiasa as an example to explain this important point of making super return. You only have to have the elementary knowledge of arithmetic to calculate that JT will almost double its fresh fruits bunches (FFB) production in 3 years. Even if the CPO price remains unchanged, its profit from its oil palm plantation will surely double. Moreover, JT has about 2,500 sq km of forest to supply all the raw material for its plywood and timber business. Surely any one with eyes should be able to see the huge forest ( 50 km X 50 km approximately) which is the competitive advantage it has over all the manufacturers in China, Taiwan, Japan, India and in any other countries. Yet all the professional fund managers cannot see the forest as the competitive advantage JT has over other competitors. As Warren Buffet often say that in the competitive world of doing business, all your competitors are constantly trying to attack you and you must build a moat around you to protect yourself. Unfortunately, in the Malaysian stock market, we do not have stocks like Coco Cola, Gillett Razors or Mac Donald which have the market competitive advantage.
Trait 7. Finally the most important, and rarest, trait of all is the ability to live through volatility without changing your investment thought process. This is almost impossible for most people to do; when the chips are down they have a terrible time not getting themselves to average down or to put any money into stocks at all when the market is going down. People do not like short- term pain even if it would result in better long-term results. Very few investors can handle the volatility required for high portfolio returns. They equate short-term volatility with risk. This is irrational; risk means that if you are wrong about a bet you make, you lose money. A swing up or down over a relatively short time period is not a loss and therefore not risk, unless you are prone to panicking at the bottom and locking in the loss. But most people just cannot see it that way; their brains would not let them. Their panic instinct steps in and shuts down the normal brain function.
By Mr Koon Yew Yin
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Discussions
1 person likes this. Showing 36 of 36 comments
Posted by Pak Lah > Feb 7, 2014 09:58 AM | Report Abuse
Clearly, the above traits mention no Technical Analysis. Charting is on whim and fancy.
wahahhaa - Pak Lah pun ada kat i3.. wakakakakaka
2014-02-07 23:26
mc121534, have you experienced loan recall, OD recall or margin with RM100mil at stake? How is it like?
2014-02-08 02:13
Good Morning, Choop, all need to be said, already mentioned above.
Regarding the money figures, I dont want to comment nor disclose any in this public forum. To disclose the figures like - how much MONEY I have in my margin ac, how much MONEY I have make, how many SHARES I have , how GREAT we are, how RICH I am and etc doesn't make sense to me and sounds more towards to boastful and overly confidently rather than sharing and not beneficial to average investors.
Thank you and Happy CNY to you.
2014-02-08 10:11
Appreciate it, Mc another share ur's view wth us.... I m supprising again.... :)
https://www.youtube.com/watch?v=Xui7x_KF7bY&feature=youtube_gdata_player
2014-02-08 11:35
Dear kakis, CT , Mike ,Connie , Tessa, Bro Hiddengem, I just saw it you all is here, MC Wish all Happy Chinese New Year.
My 2. Trait not posted yet please be patience all my friends I may drag all of you in as my Actor lol
# autumn amd skyhawk, wish both of you A Very Happy Chonese New Yeat.
2014-02-08 19:43
hmmm ... mc, let me go thru' this checklist !!
1.Patience and calm
HAVE BOTH..MAYBE AT TIMES STUBBORN
2.Commonsense
MY SENSE IS PRETTY COMMON
3.Do not predict and gamble excessively
I BUY AND SELL SOLELY BASED ON CHARTS (IS THIS PREDICTION ?) AND I DO NOT TRADE BASED ON HEARSAY ... I DON'T GAMBLE EXCESSIVELY
4.Do not wake up and first thing you think is stocks
OOPSI ... MON TO FRI THINK A LOT ... SAT GET DRUNK .. SUN STOCKS AGAIN DO HOMEWORK FOR NEXT WEEK
5.Know the value of your money more rather than stocks value
I VALUED MY MONEY MORE THAN ANYTHING ELSE
6.Must fall in LOVE with your stock, if you dont , WHY buy it.?
FALL IN LOVE FOR 7 DAYS. THIS IS MY GOAL ..
7.Don't over confidence on ourselves ,be humble but brave
BEING HUMBLE AND MODEST IS MY MOTTO
8.Must know when your stock is lying and not honest to you
YES SOMETIMES CHARTS LIE TOO AND TA STOPS ROCKING
9. Intuition, Gut Analysis and Spot Analysis
HAVE INTUITION BUT DO NOT HAVE SA
10.Lastly, as a trader we are all the same status
DEFINITELY, NEVER THINK I AM SUPERIOR TO OTHERS
mc ... will i do ok ???
2014-02-09 14:53
oh mc ... i take this as a compliment yeah ?? here i remember u said u like this song !!! beautiful in white :D
http://www.youtube.com/watch?v=-JJqSQMXjhU
2014-02-09 15:05
yea....inwest88...thank you give me smile face....i try myself write long long dy...as my english is not well....but i will try my BEST :)
2014-02-09 15:26
Yes. Connie, you are real and have a good sense of humour, you are qualified to be a wise trader base on ONE important aspect. Tecnical, charting and behavioural analysis doesn't work, The Extremely Rich investors already many steps ahead, we can never beat them, THEY are not going to put you in NOTICE to you until you fall to their TRAP. Congratulations.Happy Trading.
2014-02-09 15:32
Hi Autumn, thanks for your kind wishes, hope you are blessed with all the goodies in 2014.
2014-02-09 15:40
Hi, inw and Chrissy. Thanks for refining my posting, it is a very healthy advises from all of you, Happy Trading
2014-02-09 15:43
MC... good sharing... would like to share mine too with my cheemuis...here goes:-
1.Patience and calm
Yes… but easier said than done. Need lots of practice!
2.Commonsense
Yeah… have to concur with Conniee.. Mine pretty COMMON too.
3.Do not predict and gamble excessively
I once did and got burnt … so I now I control.
4.Do not wake up and first thing you think is stocks
For me… open eyes.. think of family (concur with Chrissy) : )
5.Know the value of your money more rather than stocks value
Oh YES! I love my money too!
6.Must fall in LOVE with your stock, if you dont , WHY buy it.?
Well, you must have seen something good in it or else why fall for it, right? BUT do it with ur eyes wide wide open….. Coz you are the one who is gona reap the harvest for better or for worst!
7.Don't over confidence on ourselves ,be humble but brave
Definitely need to be brave to enter STOCK arena.
8.Must know when your stock is lying and not honest to you
Make or break…know when to RUN ….. most important.
9. Intuition, Gut Analysis and Spot Analysis
Just came to realise through lesson from our esteem sifu, chart & other indicators also play a very important part.
10.Lastly, as a trader we are all the same status
Trade according to your own appetite…. at your own risk!
MC.... bolih ke?
2014-02-09 16:02
Dear, Miss Ooi, one aspect, You have to fall in love with it, then let it grow and teap the harvest from the one you love! Since you are a wise trader, I got to learn more from you from the future. Happy investing.
Dear Auturn, you too, good that you know how to love something valuable. I wish to know you better in the future Happy trading.
2014-02-09 16:32
yea..correcto what u said autumm....trust ourself..our own eye..our own analysis...
if do it wrong way...try remind ...accept ours analysis is wrong way....so
happy trading to mr market :)
2014-02-09 17:13
"The greatest achievement in life is not money, but people remember who you are"
2014-02-09 17:15
aih here pula asawa ko ... um ... interesting ... many familiar id here ... take time to digest ........................... kikikii .. makan dulu , bye
2014-02-09 17:29
Dear Autumn, that is a good attitude, keep it up, when time comes , we will share pur experiences. Time will come and you take care yea market is very deceptive at time.. I normally do not post in other threads. But I feel this one is quite interesting, and will finish all traits if I am free. There are something interesting to share and refine here. Have a nice day.
I won'tocome in again until I ready to raise the 3rd and 4th traits together. Happy investing.
2014-02-09 18:08
autumn, would be a great to see u more in 932 so we can share share our ta knowledge :D :D
2014-02-09 18:13
Interesting blog,mc...hmmmmm,like.
Chrissy leng lui...super like your 3.22 pm post.
connie and ooi leng lui's ...yours too,like.
2014-02-09 18:38
Hi ALL familiar e-faces here!kikiki.....mine is GA/SA then FA then TA...like every dog has its day, every stock kaki has his way...right?!?Chrissy...dont u dare worry abt your england!practice makes perfect (or close to perfect!!)..kikiki...
BTW..i had the unpleasant opportunity to be on "the other side" in executing forceselling...trust me when i say its not a beautiful sight! and your judgment in executing forceselling is crucial or else might lead to catastrophic after events!!!!
2014-02-09 19:23
chrissy .... but i know u have the most important ingredient and that is THE BRAIN !!!! command of "england" is secondary :D
2014-02-09 20:39
A stock with great potential & a rising star GHLSYS earnings is expected to be double after the merger & acquisition of EPAY.
2014-02-12 10:18
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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....
Pak Lah
Clearly, the above traits mention no Technical Analysis. Charting is on whim and fancy.
2014-02-07 09:58