Christine Goh comment on Koon Yew Yin's Why most of us cannot become super investors? 

Dear, Koon Yew Yin 

I will share my view hope it won't offend anybody , hope you can accept my sincere view on what normal investor experience. 

[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.] - Koon Yew Yin

Trait1. 

This particular trait means to buy in when there are intense difficulties, unstable conditions either political, social and abrupt change in economic conditions. In order to do this either they are extremely Rich, Hedge funds, Institution Investors, and Fortune teller (dispose all their holdings because they can predict the timing ) When this happens it is considered a CRISiS reaches the highest point and the average investors will be in deep trouble with interest rates hikes, Loan recalled, OD recalled, Margin call , property value diving down , emotional breakdown and all sort of traumatic changes to all average investors. It may take a while for average investors to wheather the storm and when the opportunities flashes just in front of the average investors eye, do you think the have the gut and capability to buy stocks again ? Even it is rock bottom dirtcheap, they will save their houses, businesses and family as their main priority. 

At this juncture, only those people I mentioned above will have the upperhand and financial capacities to stomach the stock market crash and rob the average investors hard earn money, because the extremely rich are the one directly or indirectly manipulate the stock market. They are the biggest speculators. 
There are not right or wrong when it comes to this situation, but not the average investors wants to fall behind their peers but they have no other alternatives to fight againts the said Extremely Rich people .

[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.] - Koon Yew Yin

Trait2. 

This trait is specifically refer to the Great Investors. To me there are no Great Investor, there are only Wise Investor, the Great investor will be replace to " Super Rich Entrepreneur " and belongs to trait.7. This I will post later or maybe not . Yes ,Trader. We are a Trader. A Trader is to buy and sell stocks, , currency and goods to be traded for a profit. Now this trait we emphasise on stocks. Then again it mentioned that with obsession, passion and knowledge of Technical Tools and FA knowledge traders can neutralise risk? Stock market risk? It Means we can able to avoid risks rather than take calculated risk ? Belief it can? Confident we ca do it? Then it's really confusing according to the above trait no 2. 

To my observations, basic trader (punters and speculative traders) and tecnical traders (wiser investor) and financial analysis traders (longer term holders) majorities (90%) of them not able to accurately predict the stock markets and their portfolio of stocks. " Only 10% make it." Note:I DID NOT MAKE IT! 
For those who make it congratulations. 

I believe there are not more than 10% traders who can accurately read and predict the stocks movements The only thing traders can do is to do their own research and from there they understand the surfaces of each company, their future potential and planning, news that public knows. other than that it's all considered as insider news, too bad. 
But then why so many people failed their trading plan and their hopes to make a living, and some traders keep on changing the target prices from time to time and finally their target prices are mostly out off sight. And some vanish forever and stuck forever. The reason maybe, yes maybe : 

Excessive speculation, punting and overly invested , expert tips, excessive greed etc. 
Sudden reversal of unforeseen external crisis. 
Downgrading of company's sectors instabilities. 
Sudden change in company planing and financial loses incurred. 
Management integrity is breached, internal conflicts and accounting fraud. 
Sudden trend changes in certain industry. 
Abrupt change in local economic climate and polical instability. 
And a million of unforeseen circumstances. 

In this case no matter how wise you are, how knowledgeable we are, how passionate we are, how confident we are ,how positive we are, we will loose, a few will loose lesser and a lot will totally wipe out. 

The only way to escape from this as traders: 

1.Patience and calm. there are plenty of time and stocks to choose, give them a chance, dont underestimate them.nothing is impossible. 
2.Commonsense, we are not using our neighbours money. Family first. 
3.Do not predict and gamble excessively. Most of the time it doesnt work instantly. Speculative stock kills 
4.Do not wake up and first thing you think is stocks, only balace life and healthy mind and body can work out the best results. Because we are not super investor. We have to grow step by step positively. 5.Know the value of your money more rather than stocks value. Use it to exchange for a lesser value thing 
6.Must fall in LOVE with your stock, if you dont , WHY buy it.? 
7.Dont over confidence on ourselves ,be humble but brave, we are not invincible.We maybe wrong many times and yet some still do not even notice it. and worst some didnt want to admit it. 
8.Must know when your stock is lying and not honest to you, but they won't tell you, so intuition is important. By the time the chart knows it its too late to respond already. 
9. Intuition, Gut Analysis and Spot Analysis, that is very important to add as extra tools to trade more efficiently. 
10.Lastly, as a trader we are all the same status, no one is greater than anyone, with the same kind of opportunities to buy and sell, the same goal to make a living, the market is always kind to those who are kind to themself. Everyone have weaknesses, its very normal. If we have more , we help those who have less and so on. 


Never have ill feeling toward ourselves, those who have this attitude will self destruct themself eventually. 

Conclusion.: Do not overly expose or promote the stocks we like . We can hint and share for the benefits of everyone. Up to individual to decide. 
Too overly promote a stock will eventually create a lot of other unwanted issues and arguments. 

For those are new like me I am lucky I have a chace to know some friends here,, I always like to share and listen to advises because its free. 
THE ABOVE POSTING IS THE LESSON I LEARN FROM MY KAKIS THAT WILLING TO SHARE WITH ME

[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. ] - Koon Yew Yin

Trait3. 

I have already read this trait numerous time but it still doesn't make sense to me.All trader and small investor, trade base on their own meris. It can be Tecnicals analysis, Financial analysis,general information and etc. Those traders buy shares and sell to another investor/trader for a profits when the shares reached their target price. The following trader buy base on their own reason to buys and resell to another. By this way it created liquidity and the chain continues. Every investor/trader have their own reason and intention. There are no DUMB here, all base on each individual trader's knowledge and experience. It is healthy and nothing wrong here. Some win and someone lose. Bottom line is the figures, timing, knowledge will dictate the difference. Then again I see the word MISTAKES too. Is there any mistakes you can see there? Of course no. Because nobody has the Ball. No matter how good you are, there will be never a perfect trade ,the best price and the best timing. So who are the DUMB and where are the MISTAKES? 

Indeed this trait is interconnected with trait4.and 5 

[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.  ] - Koon Yew Yin

Trait4. 

Yes Commonsense, but then, who has more and who has none? Any body dare to admit they have no brain and commonsense? Nobody because each of us have it, but being corrupted by a lots of factors and influences. 
1. Trader are influence by EXPERTS. Some have interest in certain stocks and some with no interest in stock markets, but hired by those who have very large positions, " The Financial Institutions. " 
Because of their involvement the Stock +Market become active and begining to flourish and here comes the exiting part. Volatility and. Manipulation. They have the upperhand manipulation.

1.Crowds manipulation. Market and data manipulation, media and psychology manipulation. 
2. Volatility manipulations created a greater chance of shortfall and wider swing of stock prices. 
Hence there are opportunities and also downfall created from these Big Money here. Trader become vulnerable to such circumstances and the wise will survive and majority will fall. There are no way to avoid this. Even the most wonderful trader cannot avoid these squeezing, , not to mention those who are still new to the abovementioned manipulation. 
Majorities will be casualties if not being wipe out. 

How to avoid this ? I afraid we have to find the answers ourselves. Because all of us have different objective, risk tolerance level and cash flow. 
If we can take control of ourselves, unshaken minded, understand the importance of cash flow, follow the rules, forget our ego, knows the value of money and know what we are doing, who we are facing, know the company we are investing, then we might have a slightly higher chances or survival. 
Conclusion is there are no DUMB trader here, if we willing to face them outright and passionate about our money and willing to face the challenges , We may be able to make it 
To those who invest base on pure speculation, luck, lack of knowledge, and act of carelessness and reckless trading, wish them good luck. 
Finally, there will free lunch available for those who knows what is " STOCK+MARKET " 

And there are also expensive lunch available if we trust the wrong person and wrong company.

Ability to think clearly, yes of course, I believe here you don't understand we as a investor and a Trader mindset. Each Investor and Trader has their critera beforehand to go for their Stock pick through stringent quality check such as company profile, management trustworthiness, accounting integrity, risk assessment.sector coverage, future profit, future plans, company transparencies, and most importantly WHO are running the Company. Their choice will determine whether they are well rewarded or otherwise. The Companies that lack of any of the above will be shunned by a the investor no matter how many peoples shouting how good it is. Even a good Company may not generate a good return if the Management do not have the passion and good future objectives to maximise their potential. Some Companies even betray their Investor by irresponsible Management that have false intention. 

1 . Again a listed Company is mentioned here, so I choose to ignore first and go to Warren Buffet. Nobody can emulate Him and please dont copy his sayings and post. We know him well and his experiences and writing can be used as research and motivation to become wiser. And it is not suitable for everyone. Because His Status, mindset, financial strength, strategy is unmatched to all .He is a Legend don't compare anyone with Him. 

2. Malaysia will never have a Company mentioned above. Never. Every one knowsthat most of our WISES and RICHES has left. Because of our Political influences and Business environment hereyou will be dreaming if you hope there will be one soon for another 30 years. It's not because we don't have Wise and Smart people, but it is very rare . A passionate and far sighted business man indeed very rare now. To find the right Company that can reward their shareholders are harder than before. 

3. A good Company will focus on their business and well rewarded their Investor. It is more important to look for a good Company that do not betray their Investor,. It's nothing that the Investor can do if their chosen Company did not perform. Those Smart Investor you are mentioning is based on your own judgement. There are a lot more Smarterthan you that you have overlooked. A Smart investor who does not invest in your picking, doesn't mean they are stupid. They just didn't share the same wavelength with you, that's it. 

[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. ] - Koon Yew Yin

Trait7. 
The most important and rarest as you mentioned. This is the most difficult trait to answer. Because only those who has gone into a critical situation will understand the pain and suffering that you never understand. It is like a Trader with one bullet left have to find a reason either to find a shelter when Crisis struck or to keep fighting. I think you may forgotten one Financial institutions collapsed because of a single Trade bursted the Organisation? Hundreds of Big and small businesses shut down? Hundreds of Banks need their Government bailout. Who are we to compare to them. Hope the single bullet win win the battle.? Do you think we should take the risk to show thst we are a Smart investor? I have to leave this for the brave and have gone through the hardship to answer. 

Only the Manipulator will win this Battle. They are the cause of a crisis. They have the upper hand. We have no chance at all. Money is not every thing. They have a lot more to concern. Those people who dare to put their money above anything is selfish. For those who cares more about their families is doing nothing wrong. Their brain and attitude is just a basic instinct, there are no right or wrong here in this situation.I think you will be able to differentiate between Smart and Stupid here. Hope in the next articles you May not include the stocks you mentioned above. Let them decide themselves. Those who make their right choice will enjoy the sweetness, and for those who did not we hope they learned their lessons. Let them have a chance to decide and their rights to pick their own stocks without any influences. I think a good Company will have their Investors Relations Manager to promote the Company. Definitely not by their shareholders. 

Wish the next article you post will be "THE MOST UNSUCCESSFUL VENTURES I HAD MADE ". That may help more people to learn from you, snd from your mistakes, isn't it is better? Or you never made any. 


Dear Mr.koon yew yin, sorry if my writing is offending you.But because we all majority,want to learn more.But to act like what you mentioned,I believe we will have to be a least a multimillionaire ,to be successful like you.But unfortunately majorities of us, Are still learning to be more wiser trader. 

Thats my personal view,as a investor. 


Thanks and kind regards. :)

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Original Articles from Mr. Koon 

(http://klse.i3investor.com/blogs/koonyewyinblog/45867.jsp)

The last time I published ‘How to become a super investor?’ I received more than 200 commentaries. Of course, most of the commentaries are good, but a few are really bad and insulting. In fact, one doubted my sincerity and accused me of trying to promote Jaya Tiasa. Fortunately or unfortunately, Jaya Tiasa did go up by about 20%, soon after the publication of my article. It went up too fast and not sustainable. As expected, it is making a healthy correction.

In view of this situation, I am obliged to write this article and also I genuinely wish to share my knowledge with people who are interested in share investment.   

For a long time, I have been trying to teach my wife, close relatives and friends to follow what I did but all of them could not emulate my performance or achievement. I think the reason is that to be a super investor your brain has to be wired differently when you are young. It is a nature built into your brain which cannot be nurtured. By the time you are an adult, either you have it or you don’t have it.

For a start, let me define what is a super investor? To qualify as a super investor, you must have a long term track record of making more than 20% per year. Warren Buffet has been able to achieve about 22% per year over the last 20 or more years. Using the empirical formula of 72; when 72 is divided by the rate of return the answer is the number of years for you to double your capital. In Warren’s case, he can double his capital in 72 divided by 22 = 3.3 years. That means $1 will become $2 in 3.3 years and $2 will become $4 in 6.6 years and $4 will become $8 in 9.9 years. At 22% return pa, Warren can turn $1 to $8 in about 10 years.

How many of us can achieve more than 20% return per year in the last 10 or more years?      

To test the putting is in the eating. In retrospective, did you make a huge amount during the Y2K computer crisis when MPI and Unisem went above Rm 40 per share? Globtronics went up from about Rm 2.00 to above Rm 20.00 in about 18 months.

Did you make much money when CPO went above Rm 4,000 per ton a few years ago?

Did you make a killing when all the rubber glove shares shot through the roof due to the HINI fear about 3 or 4 years ago? Supermax went up from Rm 1.00 to Rm 6.50 in 18 months.

Did you buy SOP when it was selling about Rm 2.50 about 3 years ago? SOP went above Rm 6.50 per share recently.

If you did not make much money when the above mentioned opportunities came, you can only be a mediocre investor and you have no hope to be a super investor.

Looking forward, do you dare to buy Jaya Tiasa when it is not showing much profit currently and the share price has been depressed for quite a long time? Most fund managers are not interested to own Jaya Tiasa. Can you see that it is really undervalued and it has tremendous profit growth prospect?

About 3 years ago, Sarawak Oil Palm (SOP) was selling about Rm 2.50 per share because most of their oil palms were young. As a result, the company was not showing much profit. For the same reason, Jaya Tiasa is now showing poor profit. Most of the Fund Managers do not want to own it. But, do you have the patience to own it and wait for a few years to maximize your profit? I am obliged to tell you that Jaya Tiasa is my major investment holdings.    

I can tell you that very few of you can achieve above 20% return per year over a long period of time and if you spend enough time studying investors like Charlie Munger, Warren Buffett and other famous investors, you will understand what I mean.  

I know that everyone reading this article is exceedingly intelligent and you have all worked hard to get where you are. You are smart and experienced. And yet, there is little likelihood of anyone here becoming a great investor. You all have a lot of advantages over normal ordinary investors, and yet you have almost no chance of standing out from the crowd over a long period of time. 

The reason is that it does not much matter what your IQ is, or how many books or magazines or newspapers you have read, or how much experience you have, or will have later in your career. These are things that many people have and yet very few can end up compounding at 20% or more  over their careers. 

I know this is a controversial thing to say and I do not want to offend anyone. On the bright side, although most of you will not be able to compound money at 20% for your entire career, a lot of you will turn out to be good, above average investors because you can learn to be an above-average investor. You can learn to do well enough, if you are smart and hard working. You can make millions without being a great investor. You can learn to outperform the averages by a couple points a year through hard work and an above- average IQ and a lot of study. So there is no reason to be discouraged by what I am saying today. You can have a really successful, lucrative career even if you are not the next Warren Buffett.

Going to the best business schools and reading every book or article ever written on investing would not make you a super investor. Neither will years of experience. If book knowledge and long experience will make you a multi- millionaire, then all the Professors in finance, all the old fund managers and old people who have been investing for decades, would be multi-millionaires.

So what are the sources of competitive advantage for an investor?  They have to do with psychology, and psychology is hard wired into your brain. It is a part of you. You cannot do much to change it even if you read a lot of books on the subject.  

After having said all these discouraging words, I think some of you who can master the following traits or qualities will have a better chance to become a successful investor. 

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.

Conclusion: I must realize the risk I am taking in writing this article. People will judge me and they will laugh at me if I am wrong in betting Jaya Tiasa so heavily. I still have some SOP which I have bought when it was cheaper and I sold a large portion to buy JT.  I also have Mudajaya,  Kulim,  and smaller amount of Symphony Life, Success Transformer.

Only time will tell whether I am right or wrong. Nevertheless, my intention is honorable and altruistic. I also believe I have some special knowledge which will help you make more money from the stock market.