Success is built on failures, most of these famous investors become a legend because they overcome their failure. There is a lot for us to learn from their simple quotes. You will understand their quotes in more detail when you have more investment experience.

“Rule No. 1 is never lose money. Rule No. 2 is never forget Rule No. 1.”

Above is 1 of the famous quotes by the billionaire investor, Warren Buffet. Every investor would like to become like him & adopt his investing method & thoughts. However, we find very few investors understand his quote truly, but rather just the cover of the book. 

We all know that making losses in the stock market is inevitable. But many investors apply these rules in their investment & misinterpret the above quotes for not cutting losses. Or most investors thought they need to study the company well & not having all eggs in 1 basket will achieve Rule #1.

Warren Buffet quoted this when he was talking about how we should value our money. We should allocate our money to investments that give us compounding returns, but not spend on assets that will devalue. Don’t apply this methodology in your investment anymore.

“Never invest in a business you cannot understand.”

We truly agree with this & we always tell people around us who are new to the stock market or never tasted the “Cruelty” of the stock market before. Don’t get us wrong, we are not asking them to study the business of the listed companies they want to invest in. 

The first business you need to understand is not the listed companies you want to invest in. It is a business that is called “The Stock market”. If you don’t understand the stock market, don’t ever hope that you can make consistent profit in the long run.

“Risk comes from not knowing what you are doing.”

- Warren Buffet

Many retail investors are practically very knowledgeable on how to read the financial statement or the chart pattern. But why can't we achieve consistent profit in the stock market? Obviously we know the companies that we invested in very well but not knowing the stock market “game play”, such as the true “forces” that move the stock prices.

If you have invested in the stock market before, you will realise the stock price doesn’t have direct correlation with the company's business performance. We always find certain stocks with bad fundamentals but the stock price performs better than the good fundamental stock. Tech stocks are a very good example, with no profit generated but the stock valuation can skyrocket. It is because the stock price performance depends on the investors’ expectation. The hope of the business can bring in huge revenue in the future. 

“In the short run, the market is a voting machine but in the long run, it is a weighing machine.”

― Benjamin Graham

If you prefer to trade short term, then you have to understand the stock market move based on expectation not the fundamentals. To lower your trading risk & achieve higher profits in the stock market, you need to know how the stock market mechanism works & know the “rules”.

Don’t worry, it is not that difficult to understand & master the profit making in the stock market. Thanks to the market having these “rules”, it makes it easier to achieve consistent short term trading profit in the stock market by following these big boys who are behind the price movement. It is much easier than betting in the casino where you have someone to follow. 

“There is nothing new in Wall Street. There can’t be because speculation is as old as the hills. Whatever happens in the stock market today has happened before and will happen again.”

- Jesse Lauriston Livermore.

Most technical analysts would interpret the above quotes as the price pattern always repeats, which is exactly opposite of what Jesse Livermore means. When you truly understand how the stock market works, the only thing that repeats is “Greed & Fear”. If you want to perfectly time the stock price reversal or price continuation, understanding the Greed & Fear is the way. Price & chart pattern is formed because of the big boys greed to sell their shares for profit at resistance breakout.

Many investors were shaken off from the stock market by the market crash in the past 2 years. The main reason these investors are flush out from the market is because they didn’t understand the stock market “gameplay” & not knowing the market is going to crash by following the traditional way to trade in the stock market instead of following the big boys. 

But don’t give up yet, success is built on failures. We will know what is right when we have experienced the techniques that don't work in the stock market. Just like all these famous investors we share in this post, they have gone through many failures before you know him for his success. 

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“I'm only rich because I know when I'm wrong.”

― George Soros

Visit our blog on our website or our upcoming webinar to understand how the big boys operate in the stock market & you will realise trading in the stock market can be easy with simple analysis. 

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About Us

Malaysia's stock market is a unique market; hence it requires a customized trading approach to tackle & swerve. Many existing traders in Malaysia apply a plug-and-play strategy from the overseas stock market, but it is not necessarily the best strategy to trade in KLSE. This is due to the difference in local and overseas stock market regulation and the size of market participants of institutional funds & retail investors.

“True traders react to the market.” is the backbone of our trading method. Our findings and strategies are developed through years of trading experience and observance of the operating style in Malaysia’s stock market.

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Disclaimer :

This blog is for sharing our point of view about the market movement and stocks only. The opinions and information herein are based on available data believed to be reliable and shall not be construed as an offer, invitation or solicitation to buy or sell any securities. Round & Surge and/or its associated persons do not warrant, represent, and/or guarantee the accuracy of any opinions and information herein in any manner whatsoever. No reliance upon any parts thereof by anyone shall give rise to any claim whatsoever against Round & Surge. It is not advice or recommendation to buy or sell any financial instrument. Viewers and readers are responsible for their own trading decision. The author of this blog is not liable for any losses incurred from any investment or trading.