Koon Yew Yin, 2 Jan 2024

Someone has been using my name to promote initial public offer (IPO) shares. I just received this last night.

I have complained to Securities Commission about a year ago. If you have received a similar scam, you can write to ​aduan@seccom.com.my to make a complaint.

I do not want to ask anyone to buy IPO shares because statistics show that almost all the IPO projected profit are not achievable.

Guidelines for investing in the stock market 

If you Google” percentage of investors lose money in the stock market”, you will be shocked to know that 90% of investors lose money. If you have no experience in investing in the stock before, you should not start. If your track record shows that you have been losing money, you should stop investing.

Losers are very egoistic and they will not stop investing. The reason is that fools and fanatics are always so sure of themselves and the wiser investors are always in doubt.

Since my retirement as director from IJM Corporation Bhd. about 40 years ago, I have been investing in the stock market. There are always some unforeseen risk in buying stocks. I have made many expensive mistakes. I must remember not to repeat the same mistake and I did not give up.

When I made mistakes, my ego is hurt but I have the courage to take calculated risk to find good growth stocks to invest to make back some money.

Stock selection criteria:

Among all the criteria of any listed company such as NTA, dividend yield, debt, cash rich, profit and loss etc, profit growth is the most powerful criterion to push up share price.

Only buy when the company reported increase profit.

Never buy any stock if it has reported reduced profit.

Do not buy stocks just based on dividend yield because almost all the listed companies give out less than 6% per year.

There are about 1,100 listed companies and as normal investor, you have only money to buy a few stocks. Just carefully select a few good growth stocks to buy. Never take unnecessary risk.

I only buy when the share can pass the financial and technical analysis.

Price chart cannot lie

The share price chart is a record of the daily closing price of a stock. If there are more sellers than buyers, the share price will drop and if there are more buyers than sellers the price will go up. All these daily transactions are recorded to form the price charts. Never buy any shock with a down trending price chart because after you have bought it, the price will continue to drop. Only buy stock when its price chart is showing up-trend.

Initial Public Offer (IPO)

Never buy Initial Public Offer (IPO) shares because record shows almost all IPO projections are not achievable.

Companies for initial public offer (IPO) usually don't have a long history of disclosing their financial information and they don't have an established trading history for investors to analyze. Moreover, IPO companies usually engage professionals to promote and sell their shares. What they say in the campaign can be misleading.

Free tips

This is a big mistake that most people commit when they start investing in the stock market. They easily trust the tips they hear from a friend, neighbor, colleague, brokerage firm, news from a financial channel. Most investors blindly trust these recommendations and lose money.

Patient

People are always in a hurry to make money. They always want to become rich quickly. Investors can lose money if they do not have patience. Investors must be patient.

Blind leads the blind

Investors should not follow the crowd blindly to buy stocks. After researching the company properly, if you are satisfied, then only invest in that stock.

Never sell good winning stocks to buy bad losing stocks

After careful research, you bought a few stocks. The good stocks continue to go up higher and higher and the bad stock went up a bit but keep dropping. Don’t sell the good stocks to buy the bad stock.

Safety

After careful research, you might have bought 1 or 2 stocks. It is safer to buy a couple of other stocks to diversify to reduce risk.

I only buy when the share can pass the financial and technical analysis.