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Can you cari makan from speculating? Lesson 1 on Serba Dinamik kcchongnz

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Publish date: Tue, 24 May 2022, 08:44 AM
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qqq3333

want some pocket money, buy some serba at current price. at less than 15

qqq3333

Want some pocket money? Buy some Serba. Yesterday just 1 day too early

qqq3333

Buy Serba 6 Sen make money faster than all other methods.

gohkimhock

@qqq3333 you are an experienced trader (ET). You know very well that nobody can time the market. Will you still buy Serbadk at 12 sen now? I won't.

qqq3333

I am thinking whether I should sell at 15 or wait for 19............................

 

Have you ever heard of people claiming to have made money speculating on the share price of stocks? I am sure you have if you have been long in i3investor.

The above were comments appeared in my last post, also on someone speculating on a particular stock listed in Bursa in the link below, which the outcome has not been good too.

https://klse.i3investor.com/web/blog/detail/kcchongnz/2022-05-07-story-h1622471454-Subur_Tiasa_Is_debt_good_When_is_it_good_kcchongnz

The comments were posted by an “experienced trader” (ET), thanks for his comments.

The ET was speculating on the shares of Serba Dinamik when it was lifted from suspensions a couple of weeks ago. The last traded price before the lifting of suspension was 35 sen since 22 October 2021.

The figure below shows the share price movement of Serba dinamik shares (The share).

Reading the above comments, let us make some guesses what this ET would have done. Of course, guesses, are also speculation, and what he had done can be totally different. He could have made huge amount of money, or he also could have lost his pants. But why go about speculating what people have done? Just for learning purpose.

The ET could have bought the share at about 15 sen on 9 May 2022 when it started trading from the long suspension based on his first comment above. The share closed at 11 sen for the day. The following 2 days, the share continued to drop to a low of 6 sen. ET realised that he bought the share a little too early, based on his second comment.

A few days later, the share sprang to close at 17 sen on 17 May 2022. The intraday high was actually much higher at 22 sen. Notice that the volume of shares done on the day? It was 1.06 billion shares done, close to a third of its shares outstanding!

There must be buyers and sellers of equal number of shares, i.e. 1.06 billion shares. But who were the buyers and who were the sellers?

The share closed at 11.5 sen yesterday on 23 May 2022. It is now down by 23.3% from 15 sen, and 47.7% from its peak price 22 sena few days ago, during which a huge volume of shares were traded.

Bursa filings showed huge number of shares were sold by insiders, under “forced selling”. Those institutional investors still caught holding these hot potatoes would also, likely to act fast and furious after the long suspension. So, who are the buyers, institutional investors, or retail investors? No prize for the right answer, too simple question.

Has the ET sold his shares and made a killing? I think the answer lies on the last two comments.

Unfortunately, I believe, ET represents most of the retail speculators.

So, is speculating in the share market a rewarding experience? You make your judgment.

 

Speculation in the stock market is the anticipation of future price movement based on a belief the market has inaccurately priced the stock, based on the historical price movement, but not the fundamentals of the business nor the valuation of the business. The speculations are trades that involve companies that have a high risk/high reward profile.

The allure of stock speculation is undeniable. It is exciting activity for those people with gambling instinct, many do and that includes me. Earning some extra pocket money, or even a living executing trades from the comfort of home seems far more exciting than most 9-to-5 gigs. It also earns great “respects” and “admirations” when bragging the success of day trading in the public forum and various WhatsApp groups. Of course, when losing money, just keep quiet and nobody knows.

 

Speculation Success Rate

Most people would have heard success stories in gatherings how people brag about making so much money speculating in the stock market. Who would tell you he has lost money?

But what is the fact?

Brad M. Barber and Terrance Odean in their paper “The behaviour of individual investors” confirms that collectively individual investors trading on their own under-performed the market. Many of them lost their savings completely. The underperformance was due to information asymmetry, overconfidence, failure to diversify, easily influenced by rumours, tips, media and internet forums etc., and last but not least, sensation and action seeking day traders, going in, make few cents, and out, and in again. Eventually, these speculators lost a bundle when some of the stocks tanked abruptly and forced to cut loss or have to hold on to the shares which continue to drop in price. They do the same thing repeatedly.

In an efficient market, the expected return of speculating in the stock market is zero as the chance of winning equals losing. With transaction cost, the expected return turns to negative. Speculating is not an appealing proposition if one hopes to make money in the stock market.

Individual speculators are up against the syndicates, manipulators, and other big-time traders who have the financial, technical and computer power in the market, all trying to profit from each other. The odd against an individual speculator is huge. It is a no-brainer that it is a loser’s game for individual speculators. My own personal experience in speculation told the same story. Been there, done that, and suffered before.

Speculating in the stock market is exciting. However, the outcome of speculating by retail investors have been dismay. In fact, it has been disasters. So, for your financial wellbeing, don’t speculate, but invest wisely following the proven successful and fundamental approach.

It is just my opinion.

 

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1 person likes this. Showing 6 of 6 comments

qqq3333

well, I made good money on serba bought and sold after relisting

4 weeks ago

qqq3333

can u make money from speculations? Some can, some cannot. As always in stock market......it depends.

4 weeks ago

sensonic

Post removed.Why?

4 weeks ago

qqq3333

for the first half, Bursa has done well when compared to HK/ NY................for the second half, looks like HK will do better than bursa.

4 weeks ago

ahbah

I kena teruk from speculating lah !!!

3 weeks ago

qqq3333

ahbah ............speculating does not mean every day trade..............................

3 weeks ago

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