Hi Guys,

One of the best advise I got from THE INTELLIGENT INVESTOR by Ben Graham was this:

If Prices in the stock market have run up alot it is a wise thing to lock into gain and preserve profit by shifting outsized profits into bond.

Now, THE INTELLIGENT INVESTOR is not advocating the buying of bond as a rule. Since stock market player and investors are often itchy and restless. THE INTELLIGENT INVESTOR gives you "something to do" after locking into profits by buying into safer bonds or stocks with bond like nature - which did not move up much. Therefore, the chances of going down is less.

Let Calvin relates his experience AFTER reading the excellent advise of Ben Graham's Book.

In Year 2006/2007 I bought lots of PECD shares at 22.5 cts.

After buying PECD at 22.5 cts to my surprise The News Media came out with a glowing report that PECD has secured a project of JV with Middle Eastern Partners.

On that news alone PECD doubled in price  to over 40 cts. I watched PECD with great fascination and surprise!

A week later The News Media (not Star papers)  again came out with another fantastic report that PECD has secured another even more lucrative JV with more Middle Eastern Partners.

AND PECD PRICE JUMPED & DOUBLED AGAIN FROM 40 PLUS CENTS TO OVER 80 CENTS!!

In less than 2 months PECD Price Has Shot Up By Over 250%!!

As I was a newbie then I was really euphoric. Will PECD shoot past Rm1.00 as the momentum is now on fire?

Then I remembered the words of My Sifu 

"NEVER CHASE A STOCK IF IT HAS SUDDENLY GONE UP A LOT;"

So?

So I decided to sell PECD and switch my funds to park in a cold stock that hasn't move yet. That stock was Gopeng.

SO I SOLD ALL MY PECD SHARES AROUND 80 CENTS & PARKED MY FUNDS IN GOPENG At 70 CTS.

And then?

And then PECD encountered with some business losses.  More bad news surfaced! Not long after PECD went limit down. And limit down again. And finally gone bankrupt & delisted from Bursa.

Ha! Calvin was then a newbie. But sorchai also can make money in Bursa mah! See fools can buy sorchai shares like PECD.

Then fools can sell to greater fools. And greater fools can also make money from who?

FROM GREATEST FOOLS OF COURSE!

It is not because you are clever. It is because you being damn lucky due to more stupid sorchai around you who bought your overvalued  shares  and  helped you to escape early. 

But is this the only way to make money in Bursa?

NO! NO! NO!

Luck only play a small part in investment. 90% is sheer hard work. Nothing comes for free. There is really no free lunch.

The Chinese proverb says, "If you go up mountain once too often. You might meet a tiger one day".

So don't go a chasing after hot hot stocks like IFCA at Rm1.87, Sumatech at 80 cts, Transmile at Rm15.00 & Gadang at Rm3.38?

Now coming back to the bond safety story. I bought Gopeng at 70 cts because Gopeng was selling at at least 30% discount to NTA. Gopeng was involved with Oil Palm Cultivation, Water business like KPS.  Gopeng  also own 1/3 of Hanjoong Cement which YTL Boss already offer Rm1.00 a share to take it private togther with YTL Cement who was the other 2/3 owner of Hanjoong Cement in Perak. As time proved while PECD went bankrupt Gopeng gave a nice 30 cts cash distribution plus shares crossed Rm1.00

Now what should you guys do if you have bought Gadang below Rm2.00?

Take Calvin's advise

SELL ALL GADANG SHARES ON ANY REBOUND!

THEN SWITCH ALL GADANG SHARES INTO EITHER OF THESE 3 STOCKS WITH POTENTIAL DUE TO COMING GE14.

1) BINA PURI (Already up 20%). Try to buy on weakness if there is any.

2) MRCB (This one will be traded range bound as BIG TIME BUYER WANTS TO COLLECT 20% BY PP) Best time to buy now

3) DRBHICOM (Top Beneficiary of BUDGET 2017. Something brewing very soon.

Final decision is yours

Warm regards & have a really nice Sunday,

Calvin Tan

Jurong West, Singapore

See below how hot air balloon crashed & killed 16 people

Remember: Safety First. Plant your feet firmly on terra firma. Buy Rock Solid Stocks with Margin of Safety!!