Human psychology plays an important role in how individuals make investment decisions.
The reason why I am writing this piece is because many people asked for my advice after they have seen the profit announcements of Carimin and Dayang. Carimin reported a reduced profit but Dayang reported a very much improved profit.
After I posted my article “Dayang will fly on Monday”, many people asked me why I did not recommend this stock before the company’s announcement of its 4th quarter EPS of 10.13 sen, but I posted a few articles on Carimin.
You can see on the i3investor forum, many people thank me for giving them “Ang Pow” for the Chinese New Year because Carimin was shooting up like rocket. Its 1st quarter EPS was 5.01 sen. After its 2nd quarter EPS of 2.13 sen announcement, many people are so worried especially those who have bought it at its peak.
Many people asked me what they should do. Since its 2nd quarter announcement its share price has been dropping. I cannot tell them to sell because it may climb up again especially when it announces improved profit in the next quarter. It also depends on the price they paid for their shares.
The reason why I dare not recommend Dayang before its 4th quarter result announcement simply because its previous few quarter earnings were quite poor. In fact, its balance sheet is horrible. An accountant friend told me that Dayang has defaulted on its long term loans already. Its current assets is Rm 500 million versus Rm 1,300 million current liabilities, technically bankrupt.
But I dare to buy Dayang because it is in the same kind of business as Carimin. In fact, it has a much larger maintenance contract from Petronas. Moreover, I sold a large portion of my Carimin to buy Dayang because it has gone up more than 300% within 3 months. You may say that I use cheap money to buy Dayang as I believe Dayang will soon play catch up.
Mental emotion control
To be really successful in equity investment, you must be able to control your mental emotion of greed. When Carimin has done up more than 300% within such a short time, you must be able to decide to sell because no share can go up or come down continuously for whatever reason. After some time, it must correct.
After having said that you must not sell too early. I am sure some shareholders must have sold when it went up 100%, some sold when it went up 200% and some sold when it went up 300%. Those who sold too early, would not dare to admit their mistake to buy back and miss a good chance to make profit.
More useful information for serious investors
By the way, I must tell you some good news. Yesterday DJI went up 181 points and crossed 200 day SMA and likewise for S&P 500 and Nasdaq. This confirmed US stock market is a bull market now. DOW’s 9 week winning streak is the longest in 24 years. I believe our stock market will follow the US and will be bullish after a major correction in 2018.
The oil price rally shows no sign of stopping. Brent crude oil price closed at US$ 66.9 per barrel. This good news is good for all Oil and Gas stocks listed in KLSE.
Investment Bloggers Day 2019
I wish to invite readers to attend my talk during the Investment Bloggers Day 2019 at 12-12.45 pm on 2nd March at the Boulevard Hotel, Midvalley, KL. I requested to talk later in the morning because I have to travel from Ipoh.
Created by Koon Yew Yin | Aug 19, 2024
On 14th Aug 2024, I posted my article “Why people are rioting across UK”. Now I want to tell you why do people riot?
Created by Koon Yew Yin | Aug 19, 2024
If I knew politicians are so well paid, I should have been a politician. A few days ago, one old friend who migrated to Australia about 40 years ago, visited me. He told me that he was a Member of P..
Created by Koon Yew Yin | Aug 14, 2024
Riots have spread across numerous cities and towns in England, and in Belfast in Northern Ireland, over the last week in the worst outbreak of civil disorder in Britain for 13 years. Police have ma...
Created by Koon Yew Yin | Jul 30, 2024
The new poll, conducted between July 22-24 and released Sunday, found that Harris’s approval rating had surpassed Trump’s in Wisconsin, Pennsylvania, Minnesota, and Michigan. In Michigan, Harris was..
Created by Koon Yew Yin | Jul 30, 2024
As you can see below, a few people are using my name to promote sale of Initial Public Offer (IPO) shares before and after listing on Bursa Malaysia. You should not buy IPO shares because statistics..
Created by Koon Yew Yin | Jul 23, 2024
The most important criteria for share selection are technical analysis and financial analysis. The price chart below shows that KSL's share price has been going up from 88 sen to above RM 2.13...
Created by Koon Yew Yin | Jul 22, 2024
Recently one smart accountant pointed out to me that KP Property has millions of Redeemable Convertible Preference Shares (RCPS). This will affect its share price. I sold all my KPP shares to buy KSL.
Created by Koon Yew Yin | Jul 15, 2024
Currently Bahasa Melayu is taught in all Government sponsored schools. Bahasa Melayu is only good within Malaysia. All our overseas customers do not know Bahasa Melayu. I hope all our politicians...
Created by Koon Yew Yin | Jul 09, 2024