THIS ARTICLE FIRST POSTED IN YEAR 2017

 

Many are holding Cash like TTB of Icapbiz due to the uncertainty of

Donald Trump triggering another Stock Market Crash.

One Remisier is already holding 70% cash. Others are keeping to 50%

to 70% in Cash position waiting for another market crash.

And Foreign Funds have pared down their investments in Malaysian

equities to their lowest levels now. Right when KLSE is in weakness &

ringgit has fallen sharply. So they have cut their losses and left for

good?

Ha! I have told many in i3 forum that I only invested 3% of my Capital

in the Stock Market. Why is it so? The answer is this. I have invested

90 over percent of my capital in my own business. And investing only

3% in other people's businesses so far. Yes, investing in the KLSE

equals to investing in other people's businesses.

 

Never for once did I hold cash. Except for year 1997/98 just before the

onset of the Asian Financial Crisis! How did I escaped the Asian

Financial Crisis?

This is my story.

In those days I was fully invested in Shares. And I just sold Bj Capital at

Rm3.00. The next day to my chagrin Bj Capital jumped to Rm3.80.  Let

me quote from my past post

 Posted by calvintaneng > Apr 1, 2015 11:51 PM | Report Abuse X

Kcchongnz,

Thanks for highlighting these interesting events.

In 1994 I started investing for the First time. The moment I invested the

market had a mini crash and I got burnt. I missed the Strong Bull Run

of Year 1993. I am so glad looking back that I was not caught in the

euphoria of 1993.

I knew of 4 Business Friends who made a lot of easy money in the

1993 Bull Run. In the Crash of 1997 3 gone bankrupt and disappeared

due to harassment from loan sharks. One lost RM5 millions, one lost

 

RM3 millions & one RM500K

.

One more 4th Guy who didn't go bankrupt told me this. He said he

made RM800K in the 1993 Bull Run. Money was made in the comfort

of airconditioned room, why sell cars under hot sun?

He kept playing the market till he lost a cool RM2 millions (Rm800K

profit earlier plus RM1.2 million of his own hard earned money).

 

I am so glad I escaped unscathed.

This was how I escaped. Sometime in 1997 I just sold BJ Capital for

RM3.00. After selling BJ Capital for RM3.00 the next day the price shot

up to RM3.80. Then I sold Aokam Perdana at RM5.00. Again after

selling the next day Aokam rose to RM5.50!

I felt the pain keenly. If still rising, why should I sell?

 

That afternoon after share market closed, I drove out from the Remisier

Firm in KL. It was drizzling and I saw Alfred, my Remisier's colleague

they called "Big Mouth". Among the 20 or more Stock Brokers in the

Trading Hall was Alfred Ong.

I don't know much about Alfred Ong. What I know was Alfred used to

shout "Gin Gin Chow" in Hokkien or "Run Quick Quick". Since every

body thought he was just a joker few pay him any attention.

As it was starting to rain I stopped the car and asked Alfred where he's

going? He said, "To the Train station to catch a train to Shah Alam".

"Hop in", I told him, as I drove towards KL Train Station.

 

Then I said,"I just sold BJ Capital & Aokam Perdana. And after selling

both went up to cause me heart pain. I think we are in a bull run & I will

not sell any more share from now."

"Not selling your shares? We need people like You!!" Alfred mocked.

He said further in very serious tone ,"This is Not a bull run at all. This is

but only a bull fart!! You better sell off all your shares & run!"

The KLSE Index was above 1,250 points. He said it will crash through

the 1,000 barrier and drop to 800! A crash of 450 points to be expected.

And he said his brother who worked as a Fund Manager for Singapore

Temasek told him that shares worth RM10.00 to RM20.00 might even

drop to only 50 cents to RM1.00. Sound crazy?

Wow! I was at my peak in euphoria & this fella was telling me "The

Darkest Picture of Doom & Gloom!!" Like coming out from the hottest

sun of summer to the deepest freeze of the bleakest winter. We were

Poles Apart in directions! I was fully optimistic & he was deeply

pessimistic!

 

I was totally shocked with disbelief as I dropped him off at the train

station.

The next day I went to the share market. And Alfred said, "I just sold all

my last 50% shares finally. I sold off 50% yesterday. And I am now

100% out of the market. He continued, "I also told my wife who is a

Remisier with Omega Securities To completely Sell Off All Her Shares!"

Just then KLSE was a sea of red. Ha! I saw one of my counter still

green. TA Enterprize at RM4.00. So I sold off TA at RM4.00. The next

few days the Share Market rebounded & I sold off more than 70% of

my shares. Still holding 30%. The index has dropped to about 1,100

points by now. I remember selling Kim Him Industry into strength at

RM6.00.

 

I was waiting for rebound before clearing off the rest. Weeks passed

. Then One Day Mr. Yahya the Proton King's helicopter crashed. He

was killed instantly! The next day 6 Yahya's related counters got

suspended momentarily.

I called my Stock Broker, "Please sell off every last share I still have".

The KLSE Index was now near 1,000 points as I came out 100%!

After that it crashed & crashed to the lowest of 262 points.

I was in Grand Season Hotel when my friend Mr Gan said, "Today

Anwar goes to jail. Dr M imposed Capital Control. On Monday When

Stock Market reopen Dr M will throw RM50 Million PNB Money to push

up Bursa. If not enough he can throw another RM50 Million Petronas

Money". Being quite an illiterate car broker I wondered how Mr. Gan

got such foresight.

On the same weekend, Dynaquest's Boss Dr Neoh Soon Kean came

out with a HEADLINE

 page article in Malay Mail, "KLSE At 262 Points Index NOW THE

BARGAIN OF THE CENTURY!"

At 262 points at it lowest I drove with great excitement to the share

market.

What happened then?

And later during the Dot. Com Bubble

I bought 10,000 shares of MPI at RM4.50. MPI later shot up 1,000% to

over RM50.00

Did I make RM500,000?

To be continued...

 Posted by kcchongnz > Apr 2, 2015 02:06 PM | Report Abuse

Calvin,

Please carry on with your valuable comments. Oh yeah, I have

incorporated some of your comments in my posts.

 Posted by calvintaneng > Apr 2, 2015 07:48 PM | Report Abuse

X

Thank you, Kcchongnz,

On the fateful Monday as I arrived in Am Securities of AMBank HQ in

KL I received a call from Mr. Ho. He exclaimed, "Ngor Yiu Tiew Lau" in

cantonese; translated it means, "I want to jump off a tall building (And

commit suicide)"

I froze in my track! This is my mechanic boss who lost RM3 millions.

He had 9 motor repair shops with 70 workers. Everything was gone in

a puff of smoke when KLSE crashed from 1,250 to to 262 points. Mr.

Ho later went into hiding and changed his name twice. My heart sank

as I thought of him.

With index at 262 points I met my Remisier, still shaking with fear that

Mr. Ho might kill himself that morning. My Remisier Mr. Ng looked at

the screen & pointed to Tenanga at RM2.80. "Why don't you just buy a

100,000 shares of TNB for RM280,000?, Mr Ng said. I had no mood to

think about shares then. My worry for my friends distracted me. So I picked only 2,000 shares of AMMB around RM4.20. Looking around I

think AMBank should have survived the crash. And I was correct.

After T + 7 was up I called my remisier. He said, " Your AMMB Already

Gone Up in price. Why don't you contra and take the profit?" I took his

advise and accepted the small contra gain. Only to see AMMB go up all

the way from RM5.00 to RM20.00!

My small fortune just flew away.

I think I did what I did for 3 reasons

1) Mr Ho was the one who brought me first to the share market. If he is

finished I have no other friend talking about shares. And he was a

passionate punter.

2) Mr. Alfred Ong is another gambler. He said, "Forget about PE

because PE stands for Punter's Expectation." In fact Aflred lost

RM600,000 when KLSE Crashed on January 1994 right after the KLSE

Bull Run ended in December 1993. Alfred's father bailed him out then.

So Alfred practiced hit & run tactic all the time although he could read

the market and pick the correct stocks. Buy and hold was not in Alfred's

vocabulary.

3) And I have yet to read "THE INTELLIGENT INVESTOR". That's 9

more years away in Year 2006 when I first read it. And it really opened

my eyes!

So, Kcchongnz, if you were around then with your investment advice I

would have made lots more money.

This same method of hit & run and not holding longer term also caused

me to sell MPI so early in the bull run in year 2,000. I bought 10,000

shares of MPI at RM4.50 but sold it before it crossed RM5.00. After

selling it was my everlasting regret to see MPI rise & rise all the way to

RM50,000 a share. A huge fortune flew away!

Note:

One day I bought a Company car from Guolene Metal Can, a

subsidiary company of MPI. The Accountant told me MPI is making lots

of money. By then MPI has already crossed RM30.00. Too high for me

to chase.

Only after many years later Alfred told me about "buy and hold"

strategy. And before Alfred migrated to Melbourne, Australia, he gave

me "Beating The Street" by Peter Lynch. I owe Alfred a big debt for

what he did at the most crucial moment of my investing life. If not for

him my future course would be quite different.

 

Note:

My 3 Friends who lost

1) Mr. N of Batu Pahat lost RM5 Millions. He owed the banks & loan

sharks. He also caused 6 of his own relatives to go bankrupt during the

1997 KLSE Crash when each name could borrow up RM200,000 each.

All in all these 6 relatives became victims of his greed when Mr. N ran

away & disappeared. Currently Mr. N is a part time car broker. He was

the 2nd Riches Car Dealer in Batu Pahat at one time

2) Mr Ho of SP Motor has 9 car repair shops with 70 employees. One

day he brought me to see his mezzanine floor office in Sri Petaling (SP

Motor means Sri Petaling Motor). It was newly renovated for

RM50,000. He boasted that "All these renovations are free due to his

winnings from KLSE" It sounded so easy to make money in the Gogo

years. Until crisis struck he lost everything & ran away into hiding from

loan sharks.

After he resurfaced he told before the crisis he had net net of RM3

millions. I asked him why not sell away SP Motor & just retire with RM3

millions then. He said he wanted to make SP Motor a Public Listed

Company. All it was all gone in the Crash of KLSE.

3) Mr Lee of Sungai Way/Subang also lost RM500,000 in the Share

Market & went into hiding. Mr. Lee was the first to contact me after 3

months. For Mr. N & Mr Ho they only contacted me after 6 months to a

year when harassment from loan sharks subsided.

(Calvin comments: See I have warned and warned about gambling in

i3 forum about ifca, sumatech, vsolar, xox and other dangerous

overvalued hot air balloon stocks!!  I hope someone will escape losses

like the fate of Mr. Neoh, Mr. Ho & Mr. Lee!!))



 Posted by kcchongnz > Apr 3, 2015 05:14 AM | Report Abuse

Calvin,

Excellent relate of you true experience in the stock market. I hope you

don't mind I will be using some of your examples in my book later.

I would like to summarize some points in your comments.

1)The stock market can offer one excellent opportunity to build up

wealth. Imagine if you have invested after the crash of 1998 when KLCI

dropped to its lowest at 262?

2)The market is also a place where huge destruction of wealth occurs

as shown by Calvin's narration of his friends punting experience in the

stock market. Some of them were contemplating suicide. Well it

happened to the legendary trader Jesse Livermore.

3) Market is unpredictable. So don't be greedy like Calvin's three

friends who already had a few million net worth which was substantial

in 1998, and wanted to make more by borrowing huge amount of

money. Yes, never borrow money to invest. Never use margin

financing. It is extremely difficult for you to get up after these kinds of

fall if you borrow to speculate. Some people made big gain by

leveraging and boast around, but most of them having seen a black

swan before. There would be a few times more people who used

margin finance and lost their underwear. Of course these people

wouldn't tell you that.

4) Do invest in the stock market, note the word "invest". Invest with the

money you have, and can afford to put there for years. As we have

seen, market is a place to build long-term wealth. See how after the

crisis, good stocks all recovered and to much higher prices even before

the plunge; Maybank, Public Bank, Nestle, BAT, Tenaga, Guiness, and

many more.

5) Is it really easy to time the market as posted by Kevin here?

Posted by Kevin Wong > Apr 2, 2015 11:27 AM | Report Abuse

who said its impossible to time mkt, Bogle got it all wrong!

Anyone foresaw that the Second Board Index ran up by 156% to 656

points in just 16 months on March 1997? And who had timed it

correctly by selling their shares off then before SBI plunged to by 43%

in just 5 months, up 32% one month later, and then crashed by 62% to

77 points half a year later at the end of August 1998?

Bogle's data were based on academic research with all the rigorous

computer back testing. He didn't just plug figures from the sky. What is

the basis of that statement that states that "Bogle got it all wrong?"

 

Calvin continues..

So since that time of 1997/98 Crisis I have always invested defensively.

And when I visted USA in 1999 I saw the Subprime Reckless Lending

by Banks

I quote from my past article:

8) THE US HOUSING BUBBLE & SUB PRIME PROBLEMS.

Of all problems created this is perhaps the most dangerous and

 

damnable!

In Year 1999 we paid a visit to the US – San Francisco, California, Los

Angeles, Las Vegas, Hoover Dam, Lake Mead, Universal Studio,

Nevada & Beverly Hills (Hollywood).

What a Great Nation is the US!

 

However, everywhere we went, we saw flyers & handbills in the bins

provided. At every street corners you will see huge piles of free printed

materials for the taking.

Let’s take one and see what is it? It says, “WANT TO BORROW

MONEY?” So Easy. It went on to say, “No Job?” No Problem. “No

 

Income?”. No Problem. “No Asset?” No Problem. “Are You

Blacklisted?” No Problem. “Are You A Bankrupt?” Also No Problem!

Come and See Us!!

You can find these handbills – yes, millions and millions of them in Los

Angeles, Las Vegas & California & San Francisco. At that time we don’t

know what’s going on in USA. We sensed that something must be

wrong.

Now we know. The Housing Bubble had burst. The loans given out

from Year 1999 to 2006 were called Liar Loans or also called “NINJA”

Loans. The word “NINJA” stands for “No Income, No Job & No Asset”

Loans.

And because under normal circumstances these people will never, ever

qualify for a housing loan. Unless they are willing to Pay A Higher

Interest Rate. You see, they don’t qualify as Prime Borrowers Who

Have Jobs & Assets as collateral.

 

Since they don’t have proper jobs they are Classified as Sub prime –

And so Pay Higher Interest for added risks. And they are risky indeed.

Compounded by the following reasons Risk has spread Over the Entire

World!

Since the US is no longer competitive, they fiddled with low interest

rates to promote growth by cheap credit. Here, let us share our US

Hired Car Experience. One Day we rented a US made car for a day trip

to Hoover Dam & Lake Mead.

We found out to our amazement the low quality of the US made car.

You see, the automatic window on the driver side cannot close

properly. Even the Malaysian made Proton Saga is better than the US

made car. And US put the first man on the moon?

As the US cannot compete externally, it turned inward and created the

NASDAQ Bubble. When Internet Technology Shares Crashed in Year

2,000 – Attention Shifted To The Great US Housing Bubble.

Suddenly, everyone is caught up in The Housing Frenzy! Prices stared

to rise and rise till Year 2006. And with Rising Equity In House Prices

The Masses Started To Speculate,

Borrow and Spend, Borrow and Spend. The Great American Dream Is

Here At Last! Your Home Is Your ATM Or Cash Cow.

Let’s Say, “House Prices Started in Year 2,000 at US$50,000. And

jumped US$50,000 every year till 2006. In year 2001 Prices Have

doubled to US$100,000. Year 2002 US$150,000. Year 2003

US$200,000. Year 2004 US$250,000.

You see, the Frenzy of Price Rise Year after Year has caught many by

surprise. Suddenly, they feel very rich.

At every US$50,000 price gain they could refinance the house and take

out another US$50,000 for consumption.

Buy that new car this year!

Next Year – Price gone up another US$50,000. Refinance again. And

get that US$50K. Buy that New boat for fishing.

So they go from BANK A to BANK B,then to Bank C,and then to Bank

D & E. They Change Banks like Changing clothes! Every year go to a

different Bank for Refinancing and get another US$50K for

consumption.

Consumption? Yes. The wastrel American spent as though there is no

tomorrow. Prices will only go up. The sky is the limit.

But how come the Banks are so foolish? Don’t they know that there is

great risk and money lent out will never be paid back? What if the

bubble burst? Of course they do.

They have vested interests- these Bank officers. In cahoots with

Housing Agents, Valuers & Credit Assessors they give out Liar Loans

to borrowers.

Someone who is a road sweeper, is given a title called “President of

Health Department”. Property value is overstated. Liar Loans are given

out for kick backs & commissions. The Go-Go years Of US Housing

Bubbles.

Prices Will Go Up Next Year. So easy. Just Refinance It For A Higher

Price With Another Sucker Bank! Everyone is making money, who

cares?

And So The Banks Gave Out Trillions and Trillions of Liar Loans. And

something new and funny (fishy) happened.

These Banks Lumped & Bundled Together These Loans that were

Given Out At High Interest Rates With Projected High Profits. Then

They Sell Them Like Bonds Called “COLLATERALIZED DEBT

OBLIGATIONS” Or CDO.

Collateralized by What? By These Houses At Bubble Prices, Of

Course. And “Debt Obligations” by Who? By the road sweeper called

“President of Health Department”. In Malaysia, we call them

“Longkang” cleaner. And chances are they will never, ever be repaid –

all these liar loans with so called “sub prime higher interests”.

And now these packaged millions and millions of CDOs are Sold All

 

Around the World To Banks in USA, UK, Germany & Many Other

Countries. Thank God that Malaysia Is Not One Of Them. According to

the Economist Marc Faber, Malaysian Banking System Is Very Sound.

Some years ago, Singapore Newspapers Advertised “Mini Bonds” at

5% Interest rates. Many who bought got into trouble later. So were

those in Hong Kong. Some have lost their entire life savings.

You see, By Selling these packaged CDOs, the Risk is transferred from

the US Banks To Foreign Banks All Over The World. And if Your Local

Banks Happen To Be The Unfortunate Ones, and If They Sell Them To

You As Mini Bonds – Then You Are At Risk Yourself!

Those Banks That Swallowed These Toxic CDOs Have Gone Bankrupt

Or Taken Over One By One – LEHMAN BROTHERS, BEAR

STEARNS, MERRILL LYNCH, MORGAN STANLEY, GOLDMAN

SACHS & MANY OTHERS…

To Prevent Further Insolvency Or Bankruptcy, The Federal Reserve

Improvised QE & Pumped Trillions And Trillions Of Fiat Money Into The

US Banking System.

Until today Many Banks In Many Countries On This Planet Earth Still

Have Unresolved, Toxic and Poisonous CDOs in their Falsified Balance

Sheets.

No one knows WHICH IS THE NEXT BANK or WHICH IS THE NEXT

COUNTRY TO GO BURST! And many properties in the US Are Still

Under Water. The Day of Reckoning is postponed indefinitely by

Continual QE.

Calvin updates:

In year 2005 George Soros came out to warn about the US Subprime

Bubble. And I sold off all my shares again except OPCOM.

OPCOM was an isolated & insulated stock when I bought as low as 30

cts then. And it gave good dividends throughout the Crisis.

Now I am not into Cash anymore because of these 2 reasons:

1) US HAS INVENTED THE MONEY PRINTING MACHINE  CALLED

QUANTITATIVE EASING. SO IS JAPAN, BRITIAN & ALL OTHER

COUNTRIES JOINING IN THE NEW GAME OF CREATING FIAT

CURRENCIES FROM THIN AIR.

 

So the equation has totally changed! People like TTB of ICapbiz has

 

held on to cash for more than 5 years now. I think he will be holding

 

cash for an indefinite number of years more as Trump will start printing

 

another US$1 Trillion for US Infrarstructure jobs. The US Debt Clock

 

has now crossed US$18 TRILLION. (LATEST USD28 TRILLIONS)

 

When Obama started his

 

Presidency US Debt was $10 Trillion. He ended his term when US

 

Debt crossed US$18 Trillion (Up by over 70%)

See http://www.usdebtclock.org/

http://dailysignal.com/2014/12/03/since-obama-took-office-federal-debt-

increased-almost-70-percent/

2) SO INSTEAD OF HOLDING CASH AS A FORM OF SAFETY. CASH

ITSELF IS NOW NOT SAFE AT ALL DUE TO RAMPAGING MONEY

PRINTING AND ENDLESS INFLATION!

I thought of the time 50 years ago when I was a young boy. A red bean

bun (tau sar pau) cost only 10 cents each. Coffee was also 10 cents a

cup.

Today a red bean pau cost Rm1.70 each.

So it has gone up from 10 cents to Rm1.70 in 50 years or an

 

astounding 32% inflation per year.

Just think. The guy who kept his money in the bank earning a

compound 3% to 6% interest a year is now suffering from the

devastation of his new wealth. He will end up in poverty in his golden years.

Will the market crash again like 1997/8 & 2007/8? I really don't know

for sure. But I think we are now into another time zone of the newly

fangled peril of one QE after another QE.

I hope all i3 forumers will invest carefully through these difficult times.



This is the Top Secret of Investment

The time to buy is when prices are cheap. Price to book value is low. This qualifies Calvin's 3rd Investment Rule

HE THAT IS LOW NEEDS FEAR NO FALL

The time to sell is when everybody else is excited!



Happy investing

Best regards



Calvin Tan

Jurong West, SingaporeMany are holding Cash like TTB of Icapbiz due

to the uncertainty of Dnoald Trump triggering another Stock Market

Crash.

One Remisier is already holding 70% cash. Others are keeping to 50%

to 70% in Cash position waiting for another market crash.

And Foreign Funds have pared down their investments in Malaysian

equities to their lowest levels now. Right when KLSE is in weakness &

ringgit has fallen sharply. So they have cut their losses and left for

good?

Ha! I have told many in i3 forum that I only invested 3% of my Capital

 

(LATEST UPDATE 12 DECEMBER 2021:

CALVIN INVESTED 90% AVAILABLE CASH INTO THESE 6 PALM OIL

SHARES: TAANN, SOP, TSH RESOURCES, THPLANT, JTIASA &

BPLANT)

 

 

 

 

in the Stock Market. Why is it so? The answer is this. I have invested

90 over percent of my capital in my own business. And investing only

3% in other people's businesses so far. Yes, investing in the KLSE

equals to investing in other people's businesses.

Never for once did I hold cash. Except for year 1997/98 just before the

onset of the Asian Financial Crisis! How did I escaped the Asian

Financial Crisis?

This is my story.

In those days I was fully invested in Shares. And I just sold Bj Capital at

Rm3.00. The next day to my chagrin Bj Capital jumped to Rm3.80.  Let

me quote from my past post

 Posted by calvintaneng > Apr 1, 2015 11:51 PM | Report Abuse X

Kcchongnz,

Thanks for highlighting these interesting events.

In 1994 I started investing for the First time. The moment I invested the

market had a mini crash and I got burnt. I missed the Strong Bull Run

of Year 1993. I am so glad looking back that I was not caught in the

euphoria of 1993.

I knew of 4 Business Friends who made a lot of easy money in the

1993 Bull Run. In the Crash of 1997 3 gone bankrupt and disappeared

due to harassment from loan sharks. One lost RM5 millions, one lost

RM3 millions & one RM500K.

One more 4th Guy who didn't go bankrupt told me this. He said he

made RM800K in the 1993 Bull Run. Money was made in the comfort

of airconditioned room, why sell cars under hot sun?

He kept playing the market till he lost a cool RM2 millions (Rm800K

profit earlier plus RM1.2 million of his own hard earned money).

I am so glad I escaped unscathed.

This was how I escaped. Sometime in 1997 I just sold BJ Capital for

RM3.00. After selling BJ Capital for RM3.00 the next day the price shot

up to RM3.80. Then I sold Aokam Perdana at RM5.00. Again after

selling the next day Aokam rose to RM5.50!

I felt the pain keenly. If still rising, why should I sell?

That afternoon after share market closed, I drove out from the Remisier

Firm in KL. It was drizzling and I saw Alfred, my Remisier's colleague

they called "Big Mouth". Among the 20 or more Stock Brokers in the

Trading Hall was Alfred Ong.

I don't know much about Alfred Ong. What I know was Alfred used to

shout "Gin Gin Chow" in Hokkien or "Run Quick Quick". Since every

body thought he was just a joker few pay him any attention.

As it was starting to rain I stopped the car and asked Alfred where he's

going? He said, "To the Train station to catch a train to Shah Alam".

"Hop in", I told him, as I drove towards KL Train Station.

 

Then I said,"I just sold BJ Capital & Aokam Perdana. And after selling

both went up to cause me heart pain. I think we are in a bull run & I will

not sell any more share from now."

"Not selling your shares? We need people like You!!" Alfred mocked.

He said further in very serious tone ,"This is Not a bull run at all. This is

but only a bull fart!! You better sell off all your shares & run!"

The KLSE Index was above 1,250 points. He said it will crash through

the 1,000 barrier and drop to 800! A crash of 450 points to be expected.

And he said his brother who worked as a Fund Manager for Singapore

Temasek told him that shares worth RM10.00 to RM20.00 might even

drop to only 50 cents to RM1.00. Sound crazy?

Wow! I was at my peak in euphoria & this fella was telling me "The

Darkest Picture of Doom & Gloom!!" Like coming out from the hottest

sun of summer to the deepest freeze of the bleakest winter. We were

Poles Apart in directions! I was fully optimistic & he was deeply

pessimistic!

I was totally shocked with disbelief as I dropped him off at the train

station.

The next day I went to the share market. And Alfred said, "I just sold al

l my last 50% shares finally. I sold off 50% yesterday. And I am now

100% out of the market. He continued, "I also told my wife who is a

Remisier with Omega Securities To completely Sell Off All Her Shares!"

Just then KLSE was a sea of red. Ha! I saw one of my counter still

green. TA Enterprize at RM4.00. So I sold off TA at RM4.00. The next

few days the Share Market rebounded & I sold off more than 70% of

my shares. Still holding 30%. The index has dropped to about 1,100

points by now. I remember selling Kim Him Industry into strength at

RM6.00.

 

I was waiting for rebound before clearing off the rest. Weeks passed.

Then One Day Mr. Yahya the Proton King's helicopter crashed. He was

killed instantly! The next day 6 Yahya's related counters got suspended

momentarily.

I called my Stock Broker, "Please sell off every last share I still have"

.

The KLSE Index was now near 1,000 points as I came out 100%!

After that it crashed & crashed to the lowest of 262 points.

I was in Grand Season Hotel when my friend Mr Gan said, "Today

Anwar goes to jail. Dr M imposed Capital Control. On Monday When

Stock Market reopen Dr M will throw RM50 Million PNB Money to push

up Bursa. If not enough he can throw another RM50 Million Petronas

Money". Being quite an illiterate car broker I wondered how Mr. Gan

got such foresight.

On the same weekend, Dynaquest's Boss Dr Neoh Soon Kean came

out with a HEADLINE

 page article in Malay Mail, "KLSE At 262 Points Index NOW THE

BARGAIN OF THE CENTURY!"

At 262 points at it lowest I drove with great excitement to the share market.

What happened then?

And later during the Dot. Com Bubble

I bought 10,000 shares of MPI at RM4.50. MPI later shot up 1,000% to

over RM50.00

Did I make RM500,000?

To be continued...

 Posted by kcchongnz > Apr 2, 2015 02:06 PM | Report Abuse

Calvin,

Please carry on with your valuable comments. Oh yeah, I have

incorporated some of your comments in my posts.

 Posted by calvintaneng > Apr 2, 2015 07:48 PM | Report Abuse

X

Thank you, Kcchongnz,

On the fateful Monday as I arrived in Am Securities of AMBank HQ in

KL I received a call from Mr. Ho. He exclaimed, "Ngor Yiu Tiew Lau" in

cantonese; translated it means, "I want to jump off a tall building (And

commit suicide)"

I froze in my track! This is my mechanic boss who lost RM3 millions.

He had 9 motor repair shops with 70 workers. Everything was gone in

a puff of smoke when KLSE crashed from 1,250 to to 262 points. Mr.

Ho later went into hiding and changed his name twice. My heart sank

as I thought of him.

With index at 262 points I met my Remisier, still shaking with fear that

Mr. Ho might kill himself that morning. My Remisier Mr. Ng looked at

the screen & pointed to Tenanga at RM2.80. "Why don't you just buy a

100,000 shares of TNB for RM280,000?, Mr Ng said. I had no mood to

think about shares then. My worry for my friends distracted me. So I

picked only 2,000 shares of AMMB around RM4.20. Looking around I

think AMBank should have survived the crash. And I was correct.

After T + 7 was up I called my remisier. He said, " Your AMMB Already

Gone Up in price. Why don't you contra and take the profit?" I took his

advise and accepted the small contra gain. Only to see AMMB go up all

the way from RM5.00 to RM20.00!

My small fortune just flew away.

I think I did what I did for 3 reasons

1) Mr Ho was the one who brought me first to the share market. If he is

finished I have no other friend talking about shares. And he was a

passionate punter.

2) Mr. Alfred Ong is another gambler. He said, "Forget about PE

because PE stands for Punter's Expectation." In fact Aflred lost

RM600,000 when KLSE Crashed on January 1994 right after the KLSE

Bull Run ended in December 1993. Alfred's father bailed him out then.

So Alfred practiced hit & run tactic all the time although he could read

the market and pick the correct stocks. Buy and hold was not in Alfred's

vocabulary.

3) And I have yet to read "THE INTELLIGENT INVESTOR". That's 9

more years away in Year 2006 when I first read it. And it really opened

my eyes!

So, Kcchongnz, if you were around then with your investment advice I

would have made lots more money.

This same method of hit & run and not holding longer term also caused

me to sell MPI so early in the bull run in year 2,000. I bought 10,000

shares of MPI at RM4.50 but sold it before it crossed RM5.00. After

selling it was my everlasting regret to see MPI rise & rise all the way to

RM50,000 a share. A huge fortune flew away!

Note:

One day I bought a Company car from Guolene Metal Can, a

subsidiary company of MPI. The Accountant told me MPI is making lots

of money. By then MPI has already crossed RM30.00. Too high for me

to chase.

Only after many years later Alfred told me about "buy and hold"

strategy. And before Alfred migrated to Melbourne, Australia, he gave

me "Beating The Street" by Peter Lynch. I owe Alfred a big debt for

what he did at the most crucial moment of my investing life. If not for

him my future course would be quite different.

Note:

My 3 Friends who lost

1) Mr. N of Batu Pahat lost RM5 Millions. He owed the banks & loan

sharks. He also caused 6 of his own relatives to go bankrupt during the

1997 KLSE Crash when each name could borrow up RM200,000 each.

All in all these 6 relatives became victims of his greed when Mr. N ran

away & disappeared. Currently Mr. N is a part time car broker. He was

the 2nd Riches Car Dealer in Batu Pahat at one time

2) Mr Ho of SP Motor has 9 car repair shops with 70 employees. One

day he brought me to see his mezzanine floor office in Sri Petaling (SP

Motor means Sri Petaling Motor). It was newly renovated for

RM50,000. He boasted that "All these renovations are free due to his

winnings from KLSE" It sounded so easy to make money in the Gogo

years. Until crisis struck he lost everything & ran away into hiding from

loan sharks.

After he resurfaced he told before the crisis he had net net of RM3

millions. I asked him why not sell away SP Motor & just retire with RM3

millions then. He said he wanted to make SP Motor a Public Listed

Company. All it was all gone in the Crash of KLSE.

3) Mr Lee of Sungai Way/Subang also lost RM500,000 in the Share

Market & went into hiding. Mr. Lee was the first to contact me after 3

months. For Mr. N & Mr Ho they only contacted me after 6 months to a

year when harassment from loan sharks subsided.

(Calvin comments: See I have warned and warned about gambling in

i3 forum about ifca, sumatech, vsolar, xox and other dangerous

overvalued hot air balloon stocks!!  I hope someone will escape losses

like the fate of Mr. Neoh, Mr. Ho & Mr. Lee!!))

 Posted by kcchongnz > Apr 3, 2015 05:14 AM | Report Abuse

Calvin,

Excellent relate of you true experience in the stock market. I hope you

don't mind I will be using some of your examples in my book later.

I would like to summarize some points in your comments.

1)The stock market can offer one excellent opportunity to build up

wealth. Imagine if you have invested after the crash of 1998 when KLCI

dropped to its lowest at 262?

2)The market is also a place where huge destruction of wealth occurs

as shown by Calvin's narration of his friends punting experience in the

stock market. Some of them were contemplating suicide. Well it

happened to the legendary trader Jesse Livermore.

3) Market is unpredictable. So don't be greedy like Calvin's three

friends who already had a few million net worth which was substantial

in 1998, and wanted to make more by borrowing huge amount of

money. Yes, never borrow money to invest. Never use margin

financing. It is extremely difficult for you to get up after these kinds of

fall if you borrow to speculate. Some people made big gain by

leveraging and boast around, but most of them having seen a black

swan before. There would be a few times more people who used

margin finance and lost their underwear. Of course these people

wouldn't tell you that.

4) Do invest in the stock market, note the word "invest". Invest with the

money you have, and can afford to put there for years. As we have

seen, market is a place to build long-term wealth. See how after the

crisis, good stocks all recovered and to much higher prices even before

the plunge; Maybank, Public Bank, Nestle, BAT, Tenaga, Guiness, and

many more.

5) Is it really easy to time the market as posted by Kevin here?

Posted by Kevin Wong > Apr 2, 2015 11:27 AM | Report Abuse

who said its impossible to time mkt, Bogle got it all wrong!

Anyone foresaw that the Second Board Index ran up by 156% to 656

points in just 16 months on March 1997? And who had timed it

correctly by selling their shares off then before SBI plunged to by 43%

in just 5 months, up 32% one month later, and then crashed by 62% to

77 points half a year later at the end of August 1998?

Bogle's data were based on academic research with all the rigorous

computer back testing. He didn't just plug figures from the sky. What is

the basis of that statement that states that "Bogle got it all wrong?"

Calvin continues..

So since that time of 1997/98 Crisis I have always invested defensively.

And when I visted USA in 1999 I saw the Subprime Reckless Lending

by Banks

I quote from my past article:

8) THE US HOUSING BUBBLE & SUB PRIME PROBLEMS.

Of all problems created this is perhaps the most dangerous and

damnable!

In Year 1999 we paid a visit to the US – San Francisco, California, Los

Angeles, Las Vegas, Hoover Dam, Lake Mead, Universal Studio,

Nevada & Beverly Hills (Hollywood).

What a Great Nation is the US!

However, everywhere we went, we saw flyers & handbills in the bins

provided. At every street corners you will see huge piles of free printed

materials for the taking.

Let’s take one and see what is it? It says, “WANT TO BORROW

MONEY?” So Easy. It went on to say, “No Job?” No Problem. “No

Income?”. No Problem. “No Asset?” No Problem. “Are You

Blacklisted?” No Problem. “Are You A Bankrupt?” Also No Problem!

Come and See Us!!

You can find these handbills – yes, millions and millions of them in Los

Angeles, Las Vegas & California & San Francisco. At that time we don’t

know what’s going on in USA. We sensed that something must be

wrong.

Now we know. The Housing Bubble had burst. The loans given out

from Year 1999 to 2006 were called Liar Loans or also called “NINJA”

Loans. The word “NINJA” stands for “No Income, No Job & No Asset”

Loans.

And because under normal circumstances these people will never, ever

qualify for a housing loan. Unless they are willing to Pay A Higher

Interest Rate. You see, they don’t qualify as Prime Borrowers Who

Have Jobs & Assets as collateral.

Since they don’t have proper jobs they are Classified as Sub prime –

And so Pay Higher Interest for added risks. And they are risky indeed.

Compounded by the following reasons Risk has spread Over the Entire

World!

Since the US is no longer competitive, they fiddled with low interest

rates to promote growth by cheap credit. Here, let us share our US

Hired Car Experience. One Day we rented a US made car for a day trip

to Hoover Dam & Lake Mead.

We found out to our amazement the low quality of the US made car.

You see, the automatic window on the driver side cannot close

properly. Even the Malaysian made Proton Saga is better than the US

made car. And US put the first man on the moon?

As the US cannot compete externally, it turned inward and created the

NASDAQ Bubble. When Internet Technology Shares Crashed in Year

2,000 – Attention Shifted To The Great US Housing Bubble.

Suddenly, everyone is caught up in The Housing Frenzy! Prices stared

to rise and rise till Year 2006. And with Rising Equity In House Prices

The Masses Started To Speculate,

Borrow and Spend, Borrow and Spend. The Great American Dream Is

Here At Last! Your Home Is Your ATM Or Cash Cow.

Let’s Say, “House Prices Started in Year 2,000 at US$50,000. And

jumped US$50,000 every year till 2006. In year 2001 Prices Have

doubled to US$100,000. Year 2002 US$150,000. Year 2003

US$200,000. Year 2004 US$250,000.

You see, the Frenzy of Price Rise Year after Year has caught many by

surprise. Suddenly, they feel very rich.

At every US$50,000 price gain they could refinance the house and take

out another US$50,000 for consumption.

Buy that new car this year!

Next Year – Price gone up another US$50,000. Refinance again. And

get that US$50K. Buy that New boat for fishing.

So they go from BANK A to BANK B,then to Bank C,and then to Bank

D & E. They Change Banks like Changing clothes! Every year go to a

different Bank for Refinancing and get another US$50K for

consumption.

Consumption? Yes. The wastrel American spent as though there is no

tomorrow. Prices will only go up. The sky is the limit.

But how come the Banks are so foolish? Don’t they know that there is

great risk and money lent out will never be paid back? What if the

bubble burst? Of course they do.

They have vested interests- these Bank officers. In cahoots with

Housing Agents, Valuers & Credit Assessors they give out Liar Loans

to borrowers.

Someone who is a road sweeper, is given a title called “President of

Health Department”. Property value is overstated. Liar Loans are given

out for kick backs & commissions. The Go-Go years Of US Housing

Bubbles.

Prices Will Go Up Next Year. So easy. Just Refinance It For A Higher

Price With Another Sucker Bank! Everyone is making money, who

cares?

And So The Banks Gave Out Trillions and Trillions of Liar Loans. And

something new and funny (fishy) happened.

These Banks Lumped & Bundled Together These Loans that were

Given Out At High Interest Rates With Projected High Profits. Then

They Sell Them Like Bonds Called “COLLATERALIZED DEBT

OBLIGATIONS” Or CDO.

Collateralized by What? By These Houses At Bubble Prices, Of

Course. And “Debt Obligations” by Who? By the road sweeper called

“President of Health Department”. In Malaysia, we call them

“Longkang” cleaner. And chances are they will never, ever be repaid –

all these liar loans with so called “sub prime higher interests”

.

And now these packaged millions and millions of CDOs are Sold All

Around the World To Banks in USA, UK, Germany & Many Other

Countries. Thank God that Malaysia Is Not One Of Them. According to

the Economist Marc Faber, Malaysian Banking System Is Very Sound.

Some years ago, Singapore Newspapers Advertised “Mini Bonds” at

5% Interest rates. Many who bought got into trouble later. So were

those in Hong Kong. Some have lost their entire life savings.

You see, By Selling these packaged CDOs, the Risk is transferred from

the US Banks To Foreign Banks All Over The World. And if Your Local

Banks Happen To Be The Unfortunate Ones, and If They Sell Them To

You As Mini Bonds – Then You Are At Risk Yourself!

Those Banks That Swallowed These Toxic CDOs Have Gone Bankrupt

Or Taken Over One By One – LEHMAN BROTHERS, BEAR

STEARNS, MERRILL LYNCH, MORGAN STANLEY, GOLDMAN

SACHS & MANY OTHERS…

To Prevent Further Insolvency Or Bankruptcy, The Federal Reserve

Improvised QE & Pumped Trillions And Trillions Of Fiat Money Into The

US Banking System.

Until today Many Banks In Many Countries On This Planet Earth Still

Have Unresolved, Toxic and Poisonous CDOs in their Falsified Balance

Sheets.

No one knows WHICH IS THE NEXT BANK or WHICH IS THE NEXT

COUNTRY TO GO BURST! And many properties in the US Are Still

Under Water. The Day of Reckoning is postponed indefinitely by

Continual QE.

Calvin updates:

In year 2005 George Soros came out to warn about the US Subprime

Bubble. And I sold off all my shares again except OPCOM.

OPCOM was an isolated & insulated stock when I bought as low as 30

cts then. And it gave good dividends throughout the Crisis. (NOTE:

OPCOM NOW UP TOO HIGH: SELL OPCOM BUY PALM OIL

SHARES: 12 DECEMBER, 2021)

Now I am not into Cash anymore because of these 2 reasons:

 

1) US HAS INVENTED THE MONEY PRINTING MACHINE  CALLED

QUANTITATIVE EASING. SO IS JAPAN, BRITIAN & ALL OTHER

COUNTRIES JOINING IN THE NEW GAME OF CREATING FIAT

CURRENCIES FROM THIN AIR.

So the equation has totally changed! People like TTB of ICapbiz has

held on to cash for more than 5 years now. I think he will be holding

cash for an indefinite number of years more as Trump will start printing

another US$1 Trillion for US Infrarstructure jobs. The US Debt Clock

has now crossed US$18 TRILLION. When Obama started his

Presidency US Debt was $10 Trillion. He ended his term when US

Debt crossed US$18 Trillion (Up by over 70%)

See http://www.usdebtclock.org/

http://dailysignal.com/2014/12/03/since-obama-took-office-federal-debt

-increased-almost-70-percent/

2) SO INSTEAD OF HOLDING CASH AS A FORM OF SAFETY. CASH

ITSELF IS NOW NOT SAFE AT ALL DUE TO RAMPAGING MONEY

PRINTING AND ENDLESS INFLATION!

I thought of the time 50 years ago when I was a young boy. A red bean

bun (tau sar pau) cost only 10 cents each. Coffee was also 10 cents a

cup.

Today a red bean pau cost Rm1.70 each.

So it has gone up from 10 cents to Rm1.70 in 50 years or an

 

astounding 32% inflation per year.

Just think. The guy who kept his money in the bank earning a

compound 3% to 6% interest a year is now suffering from the

devastation of his new wealth. He will end up in poverty in his golden

years.

Will the market crash again like 1997/8 & 2007/8? I really don't know

for sure. But I think we are now into another time zone of the newly

fangled peril of one QE after another QE.

I hope all i3 forumers will invest carefully through these difficult times.

Now I am happy to see Prestar crossed Rm1.00 finally. This is another milestone of a 100% gain.

This makes it no. 11th to touch 100%

http://klse.i3investor.com/blogs/www.eaglevisioninvest.com/92509.jsp

http://klse.i3investor.com/blogs/www.eaglevisioninvest.com/92608.jsp

As Prestar is already up more than 100% Calvin calls for caution &

please don't chase it now.

About 10 years ago Calvin together with Johor Sifu bought Prestar

around 65 cts. I also bought lots of Prestar warrant then. Suddenly

Prestar declared a 22% gross dividend & Prestar price shot to a high of

Rm1.05 then

We both sold off all Prestar then at peak prices. Prestar is now at 10

year high already. Will it go higher or not I cannot tell. But I bought

Prestar when it was back down again at 46 cts when no body wanted.

 

(NOTE: PRESTAR ALREADY UP 100% AND SPLIT: SELL PRESTAR

AND BUY PALM OIL NOW: DEC 12TH 2021)

 

This is the Top Secret of Investment

The time to buy is when prices are cheap. Price to book value is low.

This qualifies Calvin's 3rd Investment Rule

 

HE THAT IS LOW NEEDS FEAR NO FALL

The time to sell is when everybody else is excited!



Happy investing

Best regards



Calvin Tan

Jurong West, Singapore

 

 

 

 

Calvin additional comments: (December 11th 2021)

 

Gloves Collapsed! Many were hurt

 

The Next to Collapse will be Malaysia Banks sitting on Billions &

Billions of Subprime & Prime Loans given out at 90% to 110% in the

GoGo Years of Property Boom years of Iskandar 2011 to 2014 when 30

Huge Blocks of CONDOS MUSHROOMED

 

 

Now Rm30 BILLIONS OF THESE LOANS WILL TURN SOUR AS

THESE CONDOS TURN INTO GHOST TOWERS

 

 

COUNTRY GARDEN ALONE GOT 9,000 UNITS WITH PRICES

CRASHED BY 60% TO 70% AT JB HIGHCOURT LELONG

(DEVELOPER OFFERS 50% FOR THE REMAINING 1,000 UNITS

UNSOLD)

 

8,000 UNITS WERE SOLD AROUND RM1 MILLIONS WITH BANK

LOANS AS HIGH AS 70%, 80% ot 100%

 

 

THE BANKS THAT FINANCED THESE & OTHERS IN MEDINI WILL

SUFFER HORRENDOUS LOSSES LATER

 

 

THIS IS THE REASON TO SELL BANK SHARES EARLY BEFORE

NPL GOES UP, PROFIT COMES DOWN & DIVIDENDS SLASHED &

SHARE PRICE CRASH

 

NOTE: CANNOT BUY ISKANDAR CONDOS DUE TO HUGE GLUT

 

BUT CAN BUY SINGLE STOREY LANDED HOUSES BELOW RM300,000 IN JOHOR OR DOUBLE STOREY LANDED HOUSES BELOW RM400,000 

 

FOR SHARES WE HIGHLY RECOMMEND THESE 6

 

1) TAANN (OVERALL CHAMPION IN DIVIDENDS & VALUE)

2) SOP (GREAT GROWING COMPANY)

3) TSH RESOURCES (INSIDER BOSS BUYING)

4) THPLANT (MIGHT RESUME DIVIDEND NEXT YEAR)

5) JTIASA (STRONG TURNAROUND)

6) BPLANT (HIGH DIVIDEND)

 

 

 

GLOVE BULL RUN CUT SHORT BY CHINA: CHINA COULD PRODUCE GLOVES IN 4 SHORT MONTHS

PALM OIL BULL RUN WILL LAST MUCH LONGER AS IT TAKES 5 TO 6 YEARS TO PLANT & HARVEST 1ST FRUITS