Koon Yew Yin's Blog

You need more than just FA and TA to be a Super Investor - Koon Yew Yin

Koon Yew Yin
Publish date: Sat, 16 Apr 2016, 11:11 AM
Koon Yew Yin
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An official blog in i3investor to publish sharing by Mr. Koon Yew Yin.

All materials published here are prepared by Mr. Koon Yew Yin

From my long experience in picking shares, I believe you need more than just FA and TA to be a super investor. You need to understand human nature and be prepared to take some risk like an entrepreneur.

Human Nature: Your brain has 3 basic functions.

One is an automatic function that controls your breathing, blood circulation and automation reflex actions to some surprises like falling from a bicycle or stepping on a banana skin.

The second function is emotional reaction like fear, greed, shame etc

The third function is logical thinking. If everyone can think logically then all the share prices would be fully priced and you cannot find underpriced stocks to buy.     

Most people allow their emotional function to control their logical thinking process. As a result there are always buying and selling opportunities to make money.

Entrepreneur Spirit: You must realise that you are making decision all the time. You have to decide what to do next eg if you are talking what to say next, if you are writing, how to spell the next word or if you are eating, which is the next piece to eat? Making decision is so important.

In the stock market, you have to be decisive to buy or sell. At the same time you must bear in mind to overcome your emotional thinking process and think logically. You must not be fearful to buy or be too greedy not to sell.  

My current strategy is to buy export company shares which have fallen about 25-30% in the last 2-3 months in view of the Ringgit strengthening. You must remember that most investors always overreact to good or bad news. How much the stronger Ringgit really affects export manufacturers profit? Can they increase their selling prices?

Focus Lumber: One of my friends visited Focus Lumber recently in Sabah and was told that they have new market in China and Japan for their products. The Japanese are increasing their orders in preparation for the 2020 Olympics. In the past, most of their products were exported to USA. They are expanding their manufacturing capacity to meet the new demand. As a result, the Ringgit strengthening will have little or no effect on their profit.

 

Lii Hen: They have more than 50 American customers and they mark their selling prices like the old Chinese style of giving a maximum 20% to the better customers who pay promptly and less to other customers. In view of the stronger Ringgit, they are giving less discount to all their customers.       

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