*****
Banish the words intrinsic value and holding power from your dictionary.
You must banish the words intrinsic value and holding power from your dictionary.
These two words have caused more misery than any other words in the stock market dictionary during a bear market.
Intrinsic value has no meaning and is not falsifiable. Because it is not falsifiable, this is a very popular word in popular literature and amongst conmen ( sifus) . Learn to forecast , to think about trading range and time frame . At least if you are wrong, you know you have mde a wrong forecast.
Intrinsic value reallly has no meaning in the hands of minority shareholders. Intrinsic value is in the eye of the beholder, has no meaning to you and me trying to make some money. Shares are known to fly far above intrinsic values in a bull market and far below intrinsuc values in a bear market. There is no agreed intrinsic value.
In corporate takeovers, people may talk about intrinsic values but intrinsic value is also dependent on what the buyer can do with the company. In the normal dailly life of the stock market, intrinsic values have no function except to mislead the beholder. And because it is not falsifiable it is very popular with conmen and sifus.
When a share is traded above NTA or NAV you may think at least the NTA or NAV is the intrinsic value ....that is....until you find so many shares are traded at 70% discounts to NTA / NAV then you know.
Intrinsic values may have some relevance in big caps and in companies with 100 years history traded in NYSE.
For small and mid caps traded in Malaysia when the P & L has no stability, the whole idea of intrinsic value is a falsehood, a white elephant to focus and to mislead your mind. ...unless and until you are aware there is a corporate excercise brewing.
Do not trust your calculations of intrinsic values so much...the next results season may destroy your vision. Or a milion things may happen to destroy your vision. Learn instead to make forecast of trading range together with time frames, always have time frames, start dates and end dates in your forecasts.
You will make better decisions.
Holding power is another huge misconception. Stock market return is a function of your habits, not a function of your holding power. Holding Hengyuan from $ 19 to $8 is certainly negative power. And when HY was traded at $ 19, the only reason you would have bought it was you believed its intrinsic value is above $ 30 or more.....lol.
Banish the words intrinic value and holding power from your dictionary. You will be better investors.
Failure or success depends on your ability to make forecast of trading range and time frame , forecast of events and results , forecast of risk factors and your ability to assume certain risks and proven right later.....That is the sweetest of success...It ain't got nothing to do with intrinsic values or with holding power.
Focus on the important things, the rest will take care of itself.
and whatever you do, develop your own personality.......sifus ( like OTB and KC Chong ) like to use things like intrinsic value because these things cannot be falsifiable.....not even when the price went against them...they ( the sifus) will still say, hai....but the intrinsic value is so and so and X, Y and Z..
ps.......
95% of the time, people in i3....led by OTB and KC....is only interested in small and mid caps......these have the volatility to make them heroes in a bull market and it is other people money anyway.....
and you say so yourself..... P&L has no stability ( of these companies )..... there are many possible outcomes. the IV is just numbing medicine an anesthetics, nothing more.
ps......and yes holding power...is not about money in the account only.....primarily it is about the psychological aspect of holding it under stress. ......so much emphasis on holding power only mislead people to think if only they can withstand some pain, they will make it.......wrong way to go about doing things.
ps....people cultivate a lot of bad habits from books, from sifus, from testimonies of people who want to sell books and sell subscriptions........
the only way to improve is experience and use the brains.
ps..........Ricky Yeo > Mar 25, 2018 09:34 AM |
So the advice is time the market, good luck
========================================================
yes and no.
yes timing is very important for 90% of the retailers.....and no, if you are a substantial shareholder or an institution willing to hold for at least 3 - 5 years to see your predictions come true.
It generally takes at least 3 to 5 years to see results from corporate strategies and corporate changes.
Fundamental to success and failure is still this....
Failure or success depends on your ability to make forecast of trading range and time frame , forecast of events and results , forecast of risk factors and your ability to assume certain risks and proven right later.....That is the sweetest of success...It ain't got nothing to do with intrinsic values or with holding power.
ps........I think big funds can and should buy whenever they see the ikan bilis and the foreigners selling. PNB and EPF have been doing it for 30 years ....and doing it successfully....no intrinsic values needed for the exercise.
PNB, EPF and big local funds have institutionalized it so much, it is routine nowadays. Doesn't seem to have harmed them.
Problem is when ikan bilis think they have bottomless pocket like PNB.
Notice I wrote, no intrinsic values needed for the exercise but usually these exercises are strictly restricted to shares they are already familiar with and have substantial stakes.
Big funds can make many many consecutive mistakes and they will be still around...As for ikan bilis, a few mistakes already kaput.
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Discussions
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I think big funds can and should buy whenever they see the ikan bilis and the foreigners selling. PNB and EPF have been doing it for 30 years ....and doing it successfully....no intrinsic values needed for the exercise.
PNB, EPF and big local funds have institutionalized it so much, it is routine nowadays. Doesn't seem to have harmed them.
Problem is when ikan bilis think they have bottomless pocket like PNB.
Notice I wrote, no intrinsic values needed for the exercise but usually these exercises are strictly restricted to shares they are already familiar with and have substantial stakes.
2018-03-25 14:15
Big funds can make many many consecutive mistakes and they will be still around...As for ikan bilis, a few mistakes already kaput.
2018-03-25 14:20
Your reply is precisely why you are confused about WB. WB got to where it is because he use the same method when he is a small investor like you.
2018-03-25 15:09
ricky...the walllen buffalo is the richest man in the world, he is not the smartest man in the world.
study after study tells you, the smartest man in the world is not the richest and vice versa.
2018-03-25 15:23
I never said he is the smartest in the world, but in term of intrinsic value, I've a good accuracy as to what I need to believe. Thanks.
2018-03-25 15:31
@Ricky yeo
Could you elaborate the same method tht WB used when he was a small investor ? thank you
Posted by Ricky Yeo > Mar 25, 2018 03:09 PM | Report Abuse
Your reply is precisely why you are confused about WB. WB got to where it is because he use the same method when he is a small investor like you.
2018-03-25 15:43
Ricky Yeo @noplayball I think you are confused by WB's rule. He is risk averse not risk avoidance.
i find it very interesting that WB rule of investing No.1 n No.2 has anything to do with risk aversion versus risk avoidance.
" Rule No. 1: Never lose money. Rule No. 2: Never forget rule No. 1."
to me it just means even if you need to take a timeout from the market, do it, when the odds are against you and to invest would likely result in losing money in a falling market, like now.
2018-03-25 20:04
until you are comfortable with a big enough margin of safety to offset the perceived risk
2018-03-25 20:47
even a pig can fly if it stands at the center of a whirlwind. just follow the trend until it bends. it works everytime for me.
2018-03-25 21:08
things get much easier if one jumps on the bandwagon of existing trend. be fearful when others are fearful , be greedy when others are greedy
2018-03-25 21:09
Patron > Mar 25, 2018 09:08 PM | Report Abuse
even a pig can fly if it stands at the center of a whirlwind. just follow the trend until it bends. it works everytime for me.
==========================================
works fine in theory but eventually enough mistakes to make it not viable.
2018-03-26 02:48
patron....eventually u still need this
Failure or success depends on your ability to make forecast of trading range and time frame , forecast of events and results , forecast of risk factors and your ability to assume certain risks and proven right later.....That is the sweetest of success...It ain't got nothing to do with intrinsic values or with holding power.
on the question of timing......Purebull posted buy when RSI just cross above 56......I think worth trying out.
me.....in most conditions, I fine I make most money when I buy "cheap"...but a strong bear, nothing works......hahahaha
2018-03-26 02:49
You equate volatility as risky, that's why you got confused in the first place. Volatility is never a risk, unless you are trading.
2018-03-26 04:13
I like volatility, I like speculating and I like trading. I just don't like people who offer their services and that include Fred Tham and kind.
I have an instant dislike for such people.
2018-03-26 05:07
Great traders trade on their own account. Just like me. No one to report to and responsible for no one.
And that is the way I like it and should be.
People who have to have customers, I find that distasteful.
2018-03-26 05:11
people who can make money from the stock market got to sell their services to cari makan and suffer all the consequences is a contradiction that don't make sense.
they tell you them found the key to make money, but deep down they don't believe it and need their customers to cari makan.
2018-03-26 05:36
Customer cari makan is sure money for OTB and KC. You don't see KYY do it why? They focus more their own shares than advising others.
2018-03-26 05:40
people who habitually make money has more to do with his habits than with intrinsic value or to holding power.
or maybe it is Fooled by Randomness....who knows?
2018-03-26 05:54
OMG.... this is why traders 95% of them will blow themselves up eventually. U buy something without caring for the value. Everyone think about riding the trend.
Exactly like buying up bitcoin to usd20k hoping that there is another few great fools buying more than them.
My advise is buy only if u like the business. And once bought, keep them in the fridge. The basis of INVESTMENT is ownership of a company. And OWNERSHIP requires u to know not only INTRINSIC VALUE but POTENTIAL GROWTH.
Stop talking about investing when u aim to ride the wind and trade. Be honest. U r not investing. U r trading. So be it... trade and do your trade. But do not insult the intellect of those people who INVEST.
2018-03-26 06:37
@happy88 Happily invested in Hengyuan ah ??
btw, where you puck the 95% figure ah ? you are very pro ..
good luck to you , happily invested in HY business, because you very trusting China-owned company is world class mgmt,even though only se tahun jagung, while the record shows most China-owned company listed in BURSA, P&L only in ruins over time.
Posted by happy888 > Mar 26, 2018 06:37 AM | Report Abuse
OMG.... this is why traders 95% of them will blow themselves up eventually
2018-03-26 06:49
NoPlayBall > Mar 26, 2018 06:36 AM | Report Abuse
are you a lecturer ? because you are very lost in semantics
=============
fierce lecture. This ricky is also an intellectual...but noplay seems more realistic....
even universities ...when they teach risk, they also use volatility as a proxy for risks......
2018-03-26 06:53
happy...don't insult my fellow traders/ speculators.....
https://klse.i3investor.com/blogs/qqq3/151380.jsp
2018-03-26 06:55
noplay
ricky is quoting from the popular investment books found in book shops and from value investing sifus.....they don't mind being frozen soldiers.
me.....I find the whole idea of mixing value investing with small and mid caps rather incompatible.
2018-03-26 07:12
NoplayBall... i pluck from sky?
Nah... take this and read lah
3Barber, & Odean (2000): Trading is hazardous to your wealth: The common stock investment performance of individual investors
– 4 Kumar: Who Gambles In The Stock Market?
– 5 Barber, Odean (2001): Boys will be boys: Gender, overconfidence, and common stock investment
– 6Calvet, L. E., Campbell, J., & Sodini P. (2009). Fight or flight? Portfolio rebalancing by individual investors.
–7Barber, B. M., Lee, Y., Liu, Y., & Odean, T. (2009). Just how much do individual investors lose by trading?
– 8Gao, X., & Lin, T. (2011). Do individual investors trade stocks as gambling? Evidence from repeated natural experiments
– 9Strahilevitz, M., Odean, T., & Barber, B. (2011). Once burned, twice shy: How naïve learning, counterfactuals, and regret affect the repurchase of stocks previously sol.
– 10Da, Z., Engelberg, J., & Gao, P. (2011). In search of attention
– 11De, S., Gondhi, N. R. & Pochiraju, B. (2010). Does sign matter more than size? An investigation into the source of investor overconfidence
2018-03-26 08:32
Yes.. i am holding HY. At Rm19 i dont sell HY. Why do i need to sell it now. Money i put inside is money i expect to be inside there for the next 2 to 5 years. Too bad i seriously have holding power.
Banish the word intrinsic value and holding power? Only fools do that. Might as well u go contra and margin all the C warrants.
2018-03-26 08:35
NoPlayBall... u say Bursa confirm downtrend. I am not a technical analysis person. Tell me what is the definition of downtrend?
Bursa in downtrend? U must be a joke. Any analyst will tell u surprising bursa is in an intact uptrend.
qqq3... i dun think i am insulting your fellow traders. I think u r insulting fellow investors. Perhaps your article is gunned towards traders audience. If yes i rest my case then.
2018-03-26 08:41
happy
people also talk east, go west
what people say vs what people do
academic work vs real work
what is the difference between investing and speculating/ trading?
both activities are most profitable when companies do well.
2018-03-26 08:44
happy888 Yes.. i am holding HY. At Rm19 i dont sell HY. Why do i need to sell it now.
=======================================
aiyoyo...got chance to sell HY at $ 19 and didn't ...then you should change the way you look at the whole issue of investing........
2018-03-26 08:54
@happy888
Important is your stks make money or not,
KLCI maybe uptrend confirm, are you invested in klci stks ah ?
Overall more stks new low than high maa
2018-03-26 09:01
@noplayball - like I said, it comes down to your strategy. What I said doesn't suits anyone.
Let's break this down. What is a 'confirm' market downtrend? Can you see one coming? 2014 there was a brief so-called Bursa downtrend, if you sell in 2014 and wait for so-called uptrend, can you catch the market timing perfectly? Not many can. So I rather not play that game.
You are right, blind faith and hope is dangerous. But all stocks have risks. The risk is already there before you even enter the market. The risk is there even when you exit the market. Changing your action changes the risk itself. Do you really think 100% cash is risk free? There is risk too. Risk is not what happened to the market; it is how you respond to it that create risk.
So it is best you do your own research if you are looking for 7% yield. I can recommend you Lafarge, but you would think I'm insane.
2018-03-26 09:06
If you can see a 'confirmed' downtrend, you should be able to see it end of last year before everything happens, rewind your memory, did you see one? If you didn't, how do you confirm now is a downtrend or more precisely, how big is it going to be? In Ubiquity, Mark Buchanan wrote the stock market follows the power law. Like a sand pile effect, there's no way to telling which grain can create a collapse and no one can know how big the effect can be. Same as stock market. It is always under a critical state. IF you think you can call a up or downtrend so easily, then that is no different from 'confidently with blind faith' either.
2018-03-26 09:10
Noplayball... that is the difference between u and me. I look long. Really really long. Have a longer vision and see the business model. Why care about the stock price. Anyone can say RM19 is the highest HY will achieve. Nanti at RM21 you will say chase and hentam HY.
2018-03-26 09:15
Wish you success in your stks, am here to learn, share n hopefully win, no joy to hentam any stks, thnks
2018-03-26 09:19
happy
what is the validity of ikan bilis behaving like PNB and Wallen Buffalo is the other main point of the write up......
PNB and Wallen Buffalo can make many mistakes and still stand up
ikan bilis, a few mistakes kaput already
me...if this year my return is only 10%, I consider a great failure...for PNB if their return is 10% they consider it a great success.
2018-03-26 12:41
qqq3... the key word is consistency. Consistency is the only way to survive over next 20 to 30 years.
What for you want to become like jesse livermore win a few million (1900's) and lose them back.
If every year my return average 10 to 15% i am damn happy. Investment is a different game from trading. Rarely i heard people go bust from investment. Trading + margin call becoming bust, I have seen quite a number.
So it is ultimately your choice. Your choice for a high risk appetite game or conservative ones all lies on you. NEVER banish the word HOLDING POWER & VALUE from investor.
2018-03-26 12:53
consistency....so what is consistency?
actually maximum consistency is 100% cash.....
maximum inconsistencies is stay fully invested at all times.
or you believe in KC and soft cover investing books about compounding from stock market? that is both a dream and an unrealistic assumption.
where got compounding one? shares go up and down.
in fact, because I am a trader / speculator ....my portfolio is very consistency one. How? by targeting almost immediate return each time I transfer from cash to shares...if not, it stays in cash.....total portfolio (cash and shares), very consistent one.
2018-03-26 13:43
guys, Robert Shiller just warned of potential crisis from trade war.
I dont really pay attention to economists much, but with Shiller i ought to pay attention.
Plus Howard Marks also warned last year and early of the year in his memo write up.
no harm being cautious. protect your capital is most important.
2018-03-26 15:00
qqq3... if u think u r the top 5% trader then good. Continue what u r doing. Dun stop it.
But again i repeat. Never banish the word holding power and value from investor. Dun believe in compounding... go and look at boeing stock in nyse. With the dividend and everything, it is more than consistent income
2018-03-26 17:54
another way of writing the same ideas
https://klse.i3investor.com/blogs/purebull/152159.jsp
2018-03-31 06:38
happy...the finer points...read the whole article.
every thing in life is about balance...and dangers of extremism.
for 90% of the people here, the words intrinsic value and holding is your death .....
2018-03-31 06:42
happy
Intrinsic values may have some relevance in big caps and in companies with 100 years history traded in NYSE....but 90% of you here are not into big caps...you guys are into small and mid caps.
wrong kungfu apps
2018-03-31 06:47
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2018-03-25 14:11