Posted by SS661M > 2014-10-15 19:16 | Report Abuse

What should we do now, KC. There is nothing we can do about the counters that loss. Too late to cut loss now. We can protect our profit of the counters that still showing profit before they turn to losses. Shall we sell for gain?

Posted by SS661M > 2014-10-15 19:19 | Report Abuse

Keep the losers sell the winner or the other way round?

Posted by kcchongnz > 2014-10-15 19:27 | Report Abuse

I really don't know how the market will continue from here. Just read these two top articles in i3investors,and another one from a favourite site of mine below. They are good articles.

http://klse.i3investor.com/blogs/kianweiaritcles/61675.jsp

http://klse.i3investor.com/blogs/kianweiaritcles/61678.jsp

http://www.intellecpoint.com/

Posted by apini > 2014-10-15 19:37 | Report Abuse

If do not borrow to trade, just hold if you don't want to lose. Unless the fundamental of the companies you are invested has changed. I have no expertise to play on opportunity cost. I know I can't escape from the bear. So I choose to do nothing and enjoy the dividend, hopefully they do not reduce too much. Right? Mr chong.

Posted by Flintstones > 2014-10-15 21:17 | Report Abuse

Too long, did not read

Posted by digiuser016 > 2014-10-16 22:04 | Report Abuse

Hi, Kcchong, May I know your philosophy? How do you react over the current situation? Using bottom up? Ignore market noise? Or?

Posted by sim2468 > 2014-10-17 02:45 | Report Abuse

Don't panic! Got extra money, choose the good fundamental shares, wait for some times, bull will come!

Posted by kcchongnz > 2014-10-17 06:51 | Report Abuse

Posted by digiuser016 > Oct 16, 2014 10:04 PM | Report Abuse

Hi, Kcchong, May I know your philosophy? How do you react over the current situation? Using bottom up? Ignore market noise? Or?


I am not a qualified person to answer this as there are many much more experience market players here. But since you ask, just share what I think.

The market, especially that of US has gone up a fair bit since the last crisis in 2008. Well, I believe nothing can defy Newton's law of gravity. It is just that nobody knows when that would happen in foresight. The market is unknowable. It is unpredictable. That is why you can see I advocate this principle in investing; invest you do (in good stocks with good price), but never speculate with borrowed money. History has shown that market always recovers, and in the long run, you can reasonable return from the market (provided you invest in good stocks). But if you speculate on margin (even for seemingly good stocks), you can't recover like what a prudent investor will as explained in this article.

I know of people who have made tons of money "investing" with borrowed money or margin. So they become overconfident. I have done that before and I am sure i can do again and I am damn good, that is what they think. However, investing is not a matter of self confidence as you can't control the market, you can't even control the companies you invested in. overconfidence kills. As a matter of fact, all investors should respect the role of luck as this article below.

http://klse.i3investor.com/blogs/kcchongnz/45226.jsp

There are investors who are happy about this market , such as TTB of icap, (it is just that the shareholders were very unhappy for the last 5 years). For them there are cheap stocks now or soon to be picked. But for those who are over-leveraged, they should be prudent and not get themselves fall into the deep hole.

Posted by duitkwspkita > 2014-10-17 07:01 | Report Abuse

Dear Respected kcchongnz,

thanks for your valuable experience sharing. For me, urs are SHARP and STIMULUS for readers. I liked this very much"
I know of people who have made tons of money "investing" with borrowed money or margin. So they become overconfident. I have done that before and I am sure i can do again and I am damn good, that is what they think. However, investing is not a matter of self confidence as you can't control the market, you can't even control the companies you invested in. overconfidence kills. As a matter of fact, all investors should respect the role of luck as this article below. "


Agree
agree super agreed.

your articles and sharing always create value to newbie like me. And off course good friendly reminder to experienced investors too.

hope to learn more from you.
wishing you a healthy and wonderful trading life.

warmest regards,
newbie duit

Posted by kcchongnz > 2014-10-29 14:48 | Report Abuse

Let me try to revive this thread too.

"The thing is the market somehow recovered every time and if you investing some good stocks at good price, you will still get some decent long-term return. But if you are investing with leverage, you may never have a chance to recover."

Is my statement correct? What I can say it is correct all the time.

The recent dip in the market was just a bleep. But what if you were so overconfident that you speculate on say a stock like Insas a month ago when it was about 1.35? So many analysts wrote about this stock and say how good it is. I also wrote about and mentioning how undervalued it was.

What happened? Just a small bleep can caused it to plunge from 1.35 to a low of about 85 sen, or a loss of 37%, in a few days!

What if you were to pawn your underway and take up a margin account of say 50% and bang on this stock? Sure win one mah.

You would have almost lost everything there with the margin calls,the forced selling and the sleepless nights!

But if you are not on margin finance and keep the share, you would have recovered quite a bit. In fact if you have bought some better fundamental stocks, you would have recovered almost all.

We haven't even talked about a real big correction yet.

Posted by sunztzhe > 2014-10-29 15:15 | Report Abuse

kc,
Have u considered all possible scenarios on the subject matter???
- buy with own money(no need to elaborate further)
- buy with margin( this u had already communicated the message)
- buy with own money but use margin only at market correction or market crash
- risk reward scenario of using margin only at market correction/crashes with 20% margin, 30% margin, 40% margin, 50% margin

Posted by kcchongnz > 2014-10-29 15:27 | Report Abuse

sunztzhe,

Read the article below and let me know what you think. with the scenario analysis which I have shown there and you can do it also, why not make an analysis with whatever scenarios you want and let us know your finding?

http://klse.i3investor.com/blogs/kcchongnz/44344.jsp

Posted by teyl333 > 2014-10-29 16:38 | Report Abuse

Hi kcchongnz,

This is a little out of topic..but I know you're one of the respected sifu in I3. Hence, would like to ask your view/opinion on skpetro (5218). Appreciate if you could share your view. Many many thanks in advance.

Posted by sunztzhe > 2014-10-29 21:40 | Report Abuse

Kcchongnz,
You have assumed a scenario of using margin at all times and come to a conclusion which is perilous which is true for that situation. However if one uses margin ONLY after correction and after market crash, the conclusion is it is beneficial but not perilous. Assume also worst case scenario that you just invested with cash capital and the day after, market corrected or market crashed.

Assume market decline by 10% during a normal correction and 50% during a market crash. Market rebound by 10% during correction and market rebound by 80 % after a crash. U buy with margin of 60% of Equity Value invested after correction and margin of 60% of Equity Value after Crash.

Cash equity Inv Market Correct(-10%) Market crash(-50%)
100,000 90,000 50,000
Net Inv Value 90,000 50,000
Paper Loss -10,000 -50,000

Margin Capital Margin Capital(60%) Margin Capital(60%)
zero 54,000 30,000

Market Rebound +10% +80%

Cash Equity Value 99,000 90,000
Margin Capital Value 59,400 54,000
Total Cash + Margin 158,400 144,000

LOSS Cash Equity -1,000 -10,000

PROFIT Cash + Margin +4,400 +14,000

So if you had used margin after correction and after crash, you will be better off compared to not using margin. Yes there is peril to use margin at all times but there is no peril but beneficial to ONLY use margin after market correction and after market crash.

Posted by NOBY > 2014-10-29 23:00 | Report Abuse

sunzthe, you are speaking from the perspective of someone who knows exactly wherevthe bottom is.....how will you know when the crash is over. Wht if market drop further from the point u take the margin...you re dead as well... my view is tht margin acc may be more suitable to use in bull market for short term trades.... i wouldnt dare to use margin to hold long term....just too risky....

Posted by sunztzhe > 2014-10-29 23:18 | Report Abuse

NOBY, I do understand your view of using margin account to use in bull market for short term trades. How sure are you that your short term margin trades will not suddenly correct or crash? Very few people can actually predict a correction or a crash but quite a number can predict that the market had already corrected or crashed and bombed out. In this scenario when the market had corrected or had crashed and bombed out your upside gain is much more than downside risk and it is beneficial to use margin but not during bull run as you will never know for sure when the correction or crash will happen as correction and crash ALWAYS HAPPEN DURING A BULL RUN!!

Posted by NOBY > 2014-10-29 23:37 | Report Abuse

I think one would need to employbstrict cut loss when using margin to avoid wipe out... It is dangerous to use in both bull and bear market....I m saying in bull market chances of making money is higher but only for short term trades to ride the bull... I just dont think buy and hold strategy will work when using margin unless your timing is perfect especially in bear market....

Posted by sunztzhe > 2014-10-29 23:42 | Report Abuse

Agree with your point of strict cut loss for margin. Take the case of recent correction. Anyone who had bought in is sitting pretty with easily +10% gain and if one had used margin , the absolute gain will be much more. So would you rather take margin on short term trade in bull market and experience a market crash and cut out with losses or you rather wait for market correction then go in with extra margin capital???

Posted by NOBY > 2014-10-29 23:54 | Report Abuse

You are talking from recent experience only and assuming you got it right.... there are many other cases where you could hv bought into a bear trap and its same story... of course if i hv a crystal ball to tell me where the bottom is I will use margin...but I dont... so I wont take the risk...

Posted by kcchongnz > 2014-10-30 05:06 | Report Abuse

Posted by sunztzhe > Oct 29, 2014 09:40 PM | Report Abuse
Kcchongnz,
You have assumed a scenario of using margin at all times and come to a conclusion which is perilous which is true for that situation. However if one uses margin ONLY after correction and after market crash, the conclusion is it is beneficial but not perilous. Assume also worst case scenario that you just invested with cash capital and the day after, market corrected or market crashed.
Assume market decline by 10% during a normal correction and 50% during a market crash. Market rebound by 10% during correction and market rebound by 80 % after a crash. U buy with margin of 60% of Equity Value invested after correction and margin of 60% of Equity Value after Crash.


sunztzhe,
You got a great point and you have great future. Your ability to forecast when a correction will come after a crash (by the way I would like to know what you define as a "crash",a "correction" etc)will take your a long way to building enormous wealth in the future.

Yes, take as much as margin financing as possible as you have shown scenarios that you will make profit, and with margin financing, 50%, 70% ets will amplify your gains many times.

Why not?

Posted by kcchongnz > 2014-11-21 17:19 | Report Abuse

I just read an article by a value investing trainer, Safal, posted by Tan KW in the link below:

http://klse.i3investor.com/servlets/forum/600064647.jsp

This is an excellent post and there are so many things similar to my this post. I would encourage you to read it.

Posted by kcchongnz > 2014-12-09 12:47 | Report Abuse

Mr Lee's portfolio would have been under forced selling due to margin calls. I hope he has followed my advice and have done away with his heavy leverage when I gave him my comment. Otherwise the consequence is no good, no good at all.

Mind you this present correction is nothing, like "a small woe seeing a big woe", compared to the 1998, 2001 and 2009 sagas.

There are many pitfalls in investing. Some of the top pitfalls are over-confidence due to past success thinking that one is so smart, which could most probably due to the right time and at the right place, and then greed in thinking that margin and leverage investing can only amplify returns, and not the other way.

Posted by kcchongnz > 2015-01-08 17:56 | Report Abuse

馬雲：今天很殘酷，明天更殘酷，後天很美好，絕大部分人死在明天晚上。

Posted by lcwin > 2015-01-12 10:43 | Report Abuse

Use margin only for very short term momentum play and cut loss target must be enforced. If you ask me I say don't use margin... I have margin facilities but only use for 2 to 5 days turnover and even then 90% time I keep a positive balance. During this latest Dec correction I already 90% in cash. I only use 10% cash to buy during this period and I can't make money as I average down! until now still losing about 10% from begining of Dec to now. If I use margin well sure die twice!
At the moment things are very volatile but Gov will not raise rate by much maybe 0.5% to contain the RM/USD fall. Don't forget the Gov cannot raise rate bcos Gov Debt is at all time high, Household debt also v high. Only option is print more money and fiscal spending which is already running unofficially. Our Index is artificially held up so I don't bother how it goes.
So Keep Stock Market exposure low and punt if there is a really good deal with cash only! Kong hee fatt choy may God of prosperity came knocking on your door!!

Posted by stockraider > 2015-01-12 10:48 | Report Abuse

RAIDER COMMENT
THIS MARGIN......RAIDER HAS BEEN USING FOR A LONG TIME.........IMAGINE....U CAN GET RETURN OF 10% TO 20%.....AND U BORROW FROM THE BANK 5% TO 6% PA.....THIS MEAN U R ENHANCING YOUR BUT IN A BEAR MARKET...WHERE ALMOST ANYTHING SELL OFF....IT QUITE RISKY LOH.....!!

RAIDER ADVISE MARGIN HOLDERS TO REDUCE EXPOSURE TO MAX 20% LEVERAGE LOH....!!
SET CUT OFF POSITION....WHENEVER YOUR SHARE FALL BY 10% SELL IT DOWN BY 30%.....UNTIL U REACH A COMFORTABLE POSITION.

U CAN ALSO REBALANCE YOUR PORTFOLIO GO FOR;

1) STRONG BALANCE SHEET COMPANIES
2) PROFITABLE,CASH RICH & DIVIDEND PAYING
3) HUGE DISCOUNT OF INTRINSIC VALUE
4) STRONG RECURRING CASHFLOW BUSINESS
5) STRONG CONSUMER STAPLE
6) MARKET LEADER BUSINESS LOH
7) ARBITRAGE WHERE YOUR CASH RETURN IS LOCK IN AT A FIXED RETURN

ALTHOUGH REBALANCING DOES NOT GUARANTEE U COMPLETE LOST OF PAIN FROM THE MARKET....BUT IT DO REDUCES THE IMPACT...& HELP U WITHSTAND THE TSUNAMI.......IF U R HIT...!!

WHAT....IS A REAL MARKET FALL??...........RAIDER THINK.....IT SHOULD FALL.....AT LEAST......30%.!!.....THE CURRENT CORRECTION ABOUT 15%....This HAS NOT FELT THE FULL IMPACT OF THE SELLOFF LOH........!!

BUT U SHOULD..NOT too fear!!....DESPITE BEAR!!....Bcos MARKET MAY.....RECOVER & REBOUND...VERY QUICKLY.WITHOUT U.....KNOWING........LEAVING U BEHIND........!!

SO U MUST NOt BE TOTALLY OUT OF STOCK.........ALWAYS have SOME MARGIN OF SAFETY STOCK..........THAT CAN WITHSTAND........!!

Posted by paperplane > 2015-01-12 10:51 | Report Abuse

Raider, how youdecide

Posted by NOBY > 2015-01-12 10:57 | Report Abuse

Raider, fully agree on your points on limiting the leverage but I like the use of leverage especially for this one

7) ARBITRAGE WHERE YOUR CASH RETURN IS LOCK IN AT A FIXED RETURN

Think about it, SPACs trading below cash level with certainty that cash will be returned to shareholders. If the return p.a expected from this investment exceeds the interest rate the bank, I would use leverage to buy this. Of course there is always a risk that banks can designate or reduce the SPACs collateral value so I would still limit the leverage exposure to avoid having to top up. Diversification and moderation is the key.

Posted by Ooi Teik Bee > 2015-01-12 11:08 |

Post removed.Why?

Posted by kcchongnz > 2015-01-12 12:54 | Report Abuse

“I don’t like stress and prefer to avoid it" Walter Schloss

that is why I like ks55's comments

Posted by ks55 > Jan 12, 2015 12:34 PM | Report Abuse

Remember how people get bankrupt during 1996 when market was still good? All because of margin trading. Everybody taught market was the place to get easy money with margin.
Those still were with margin in 97/98 all went holland. Hardly see any left today. Mostly bankrupt.
Were you one of the lucky one still survive? Then you will do well in 2015/16.

Posted by ks55 > Jan 12, 2015 12:38 PM | Report Abuse

No OPM please no OPM.
Buy with OPM will land you sleepless night each time DJ down by 200 to 300 pts.

Posted by paperplane > 2015-01-12 13:31 | Report Abuse

Isn't using tht during bear safer??

Posted by kcchongnz > 2015-01-12 15:05 | Report Abuse

There are three group of investors; the not-much-money, the average, and the rich.

the not-so-much-money can't get margin financing. No need to talk.

The average one can get margin financing and they are the ones who wish to make more money using OPM. Unfortunately most of them got caught when the market is in euphoria and due to greed wanting to get rich fast, they obtain margin financing from the "good and friendly" investment bankers when stocks seem to be flying. However, that is the time most of them were caught, and when the market turns badly. Note that market always revert to the mean. I have a couple remisier friends still working very hard after retirement age, just to slowly paying back their debts.

The rich has no problem getting margin financing. The investment bankers will crawl to them to beg them to get margin financing from them as they are extremely happy to help the rich make big money and become even richer. But market can turn any time as usual, and can be very fast and furious too like in 1996 (second board) 1998 (Anwar fiasco), 2001 (Internet bubbles), 2008 (US sublime crisis) and many times before those. So like ks55 said, it can be very stressful.

But I really cannot understand is, if you are so rich that you have no worries of survival even for your next generation, why do you want to subject themselves to this type of stress and risk losing all you have now?

Posted by lcwin > 2015-01-12 18:31 | Report Abuse

Hahahaha... Bank only lend to those who have money safe mah. Anyway almost all the people I know got totally burned bcos of margin during the 1998 so I talk from experience. Learn to leverage in different ways eg Warrants, Iculs call warrants BUT ONLY play this if you are damm sure the underling stock is solid and never buy anything with big premiums. Of course you may say its the same. Yes and no, Yes you can lose everything if it goes to zero ( quite remote but I was caught before) but then you don't get in debt. Naked is better than be a slave to banks my friend. Alway can earn back some money and buy clothes HeHeHe... Well If you so interest in Warrants and options read up before doing anything stupid, you can search for my random post here and there for beginner tips. Disclaimer I am no expert just play long enough to know what to play and what not to touch and I usually just play warrants and possible growth stocks

Posted by stockraider > 2015-01-12 21:37 | Report Abuse

SO WHAT R THE SAFEGUARDS ?
SINCE IT IS IMPORTANT.....RAIDER DON MIND REPEATING LOH.....!!


GENERALLY RULE OF THUMB IS TO AVOID USING MARGIN TO INVEST IN STOCK AT ALL COST. THIS MEAN AVOID SHARE MARGIN LIKE A PLAGUE LOH....!!

HOWEVER RAIDER SIFU SENIOR ANALYST....FELT DIFFERENTLY & IT MAKE SENSE TOO.....!!
HIS ANALYSIS IF U TREAT INVESTMENT IN STOCK LIKE A BUSINESS & YOUR BUSINESS MODEL HAD SHOWN U HAD OUTPERFORMED THE STOCKMARKET.....IN MID TERM AND U HAD EXPERIENCE WITH BEAR RAIDS & LIVE THRU IT...U SHOULD STICK TO YOUR MARGIN LOH....!!

STOCKMARKET IS JUST LIKE ANY BUSINESS LIKE PROPERTY DEVELOPMENT BUYING LAND, PLANTATION COMPANY BUYING MORE PLANTATION, MANUFACTURING BUYING MORE MACHINERY & EXPANDING USING BORROWED MONIES MAH....!!

THE MAIN DIFFERENT OF MARGIN IS THAT....IT IS MARKED TO MARKET MORE INTENSIVELY & IT FALL TOO MUCH....THERE WILL BE MARGIN CALL LOH.....!!

THE KEY TO MARGIN FINANCING AS WITH OTHER BUSINESS....U MUST NOT OVER LEVERAGE LOH...!!
U MUST BE READY WITH SAFEGUARD & DEFENSE LIKE WHAT RAIDER HAS HIGHLIGHTED MAH.....!!

BUT IN A BEAR MARKET...WHERE ALMOST ANYTHING SELL OFF....IT QUITE RISKY LOH.....!!
U NEED TO MANAGE THE RISK LOH....!!

"RAIDER ADVISE MARGIN HOLDERS TO REDUCE EXPOSURE TO MAX 20% LEVERAGE LOH....!!
SET CUT OFF POSITION....WHENEVER YOUR SHARE FALL BY 10% SELL IT DOWN BY 30%.....UNTIL U REACH A COMFORTABLE POSITION.
U CAN ALSO REBALANCE YOUR PORTFOLIO GO FOR;

1) STRONG BALANCE SHEET COMPANIES
2) PROFITABLE,CASH RICH & DIVIDEND PAYING
3) HUGE DISCOUNT OF INTRINSIC VALUE
4) STRONG RECURRING CASHFLOW BUSINESS
5) STRONG CONSUMER STAPLE
6) MARKET LEADER BUSINESS LOH
7) ARBITRAGE WHERE YOUR CASH RETURN IS LOCK IN AT A FIXED RETURN

ALTHOUGH REBALANCING DOES NOT GUARANTEE U COMPLETE LOST OF PAIN FROM THE MARKET....BUT IT DO REDUCES THE IMPACT...& HELP U WITHSTAND THE TSUNAMI.......IF U R HIT...!!

WHAT...........IS A REAL MARKET FALL...........RAIDER THINK ...........IT SHOULD FALL.........AT LEAST..........30%........THE CURRENT CORRECTION ABOUT 15%.........HAS NOT FELT THE FULL IMPACT OF THE SELLOFF LOH........!!

BUT U SHOULD.......NOT FEAR....DESPITE....BEAR MARKET...BCOS IT MAY....RECOVER & REBOUN VERY QUICKLY....WITHOUT U.....KNOWING.....LEAVING U BEHIND........!!

SO U MUST NOT BE TOTALLY OUT OF STOCK.........ALWAYS HAVE SOME MARGIN OF SAFETY STOCK..........THAT CAN WITHSTAND TSUNAMI........!!

ALTHOUGH MARKET SELLOFF MAY OVERSHOOT....BUT IF YOUR BUSINESS MODEL U RELY MUST BE SOUND & HAVE SAFEGUARDS MAH . U MAY ACT LIKE A PON...DAN.....BUT U SHOULD NOT FEAR THE STOCKMARKET MAH...!! IF OPPORTUNITY COMES...U MAY USE LEVERAGE TO BUY IF THE RISK REWARDS FAVOURS !!"

Posted by SapuMalaysia > 2015-01-12 22:01 | Report Abuse

i bookmark this in my browser to remind myself

马股过去 30 年 11 次的熊市
http://klse.i3investor.com/blogs/ss2020_vaInv/61899.jsp

When you think low, market can go lower.. Japan suffered the lost decade after the bubble burst. 1MDB is a time bomb

Posted by matakuda > 2015-01-12 22:08 | Report Abuse

If u asked me what is the best sentence to sum up my 2014, I would say this above title

Posted by kcchongnz > 2015-01-13 05:56 | Report Abuse

I am very happy that my this old post attracted a number, all of them, very high quality comments and criticisms. There are indeed a lot of very knowledgeable investors in i3investor.

First I thank SapuMalaysia’s appended chart, http://klse.i3investor.com/blogs/ss2020_vaInv/61899.jsp.

This chart is extremely useful and I will “leverage” it later for some of my future articles to share. That is one of the great advantage of leverage, but not leverage with margin financing.

Eleven occasions of serious drops in Bursa in 30 years of an average of 42.3%, or at least once in three years does sound very frequent and scary to me. For those who embark on margin financing, don’t you think so? Can you imagine the consequence if this happens when you are with margin financing at the peak of one of these cycles? I believe most probably margin financing was used at the market euphoria when people got greedy, and not at the low end of the market when it was full of fear. In any of these cases, most likely the equity of the one engaging in margin financing would have gone to zero or even negative. Few recovered.

[Posted by ks55 > Jan 12, 2015 12:34 PM | Report Abuse
Remember how people get bankrupt during 1996 when market was still good? All because of margin trading. Everybody taught market was the place to get easy money with margin.
Those still were with margin in 97/98 all went holland. Hardly see any left today. Mostly bankrupt.]

[Posted by lcwin > Jan 12, 2015 06:31 PM | Report Abuse
Anyway almost all the people I know got totally burned bcos of margin during the 1998 so I talk from experience.]

[Posted by matakuda > Jan 12, 2015 10:08 PM | Report Abuse
If u asked me what is the best sentence to sum up my 2014, I would say this above title]

The problem is research has shown that nobody can predict correctly in a statistical significance when the market turned.

On the other hand, if you were investing for the long term, you can see from the chart that market always recovered and you would have a satisfactory positive return in the long term. The positive return could be amplified with some good fundamental investing strategies.

[Posted by stockraider > Jan 12, 2015 10:48 AM | Report Abuse
RAIDER COMMENT
BUT U SHOULD..NOT too fear!!....DESPITE BEAR!!....Bcos MARKET MAY.....RECOVER & REBOUND...VERY QUICKLY.WITHOUT U.....KNOWING........LEAVING U BEHIND........!!
SO U MUST NOt BE TOTALLY OUT OF STOCK.........ALWAYS have SOME MARGIN OF SAFETY STOCK..........THAT CAN WITHSTAND........!!]

[馬雲：今天很殘酷，明天更殘酷，後天很美好，絕大部分人死在明天晚上]

So what course of action do you think you would take in investing?

Posted by lcwin > 2015-01-13 09:56 | Report Abuse

Hi KC yes if you follow the KLCi chart it is on long term rise with correction every few years. Lets not forget KLCi component stock is change to reflect " present time" or can I say massage to "look good". I would say again KLSE is more like a zero sum game for 75% of the market yoyoing up and down now and then following sentiments. I admit I haven't been playing the market for many years before this last 2 years but I still follow the treads of KLSE. I stay out mainly bcos of my financial condition which I should add never play the market if you are cash strapped or don't have positive cashflow to support you daily needs.This bcos you will never be able to make rational decision amids the personal chaos. This is also the reason I negative on Margin usage except on short spurt of bull run. Having said that I think Margin is very useful to have and by all mean obtain one but use it sparingly. You know like Malaysia we buy submarine though of no use but then again you will never know one day we catch Sulu pirate with that!

Posted by kcchongnz > 2015-01-13 09:57 | Report Abuse

Posted by stockraider > Jan 12, 2015 10:48 AM | Report Abuse
RAIDER COMMENT
THIS MARGIN......RAIDER HAS BEEN USING FOR A LONG TIME.........IMAGINE....U CAN GET RETURN OF 10% TO 20%.....AND U BORROW FROM THE BANK 5% TO 6% PA.....THIS MEAN U R ENHANCING YOUR BUT IN A BEAR MARKET...WHERE ALMOST ANYTHING SELL OFF....IT QUITE RISKY LOH.....!!

Borrow at 6% and get a return of 20% a year for a net gain of 14% a year. Yes very logical. So where do I sign? Investment bankers somehow are very kind and willing to lend you that money for you to make that extra-ordinary profit instead of them doing it themselves.

For the last 5 years, KLCI has gone up from 1300 to 1730 points now. The compounded annual gain is 5.9% a year, just short of the 6% of interest charges for margin financing, not forgetting the upfront set up cost of 1% and other administrative charges. And what do you think of the market the last 5 years? I would think it has been a good market, and not an average market.

This means that what an ordinary investor get is just enough to pay bank charges. The only extra in a good market is the annual dividend estimated to be around 2%-3% a year. Is 2%-3% return commensurate with the risk a margin financing investor gets? You tell me.

Of course many investor will tell you that they are above average investor, and not an ordinary investors. Every investor seems to think that he is much better than an average investor. Does this sentence make sense?

Don’t get me wrong, I sincerely believe those saying they made more money in this thread here by borrowing money to do it, did make it. But they aren’t average investors.

Posted by leno > 2015-01-13 10:14 |

Post removed.Why?

Posted by calvintaneng > 2015-01-13 10:27 | Report Abuse

Yes Leno is correct!

I remember vividly before Anwar was arrested.

Dr M said there will be shocking measures. Indeed there were 3 shocking measures

1) The sacking of Anwar

2) The implementation of capital control.

3) The demise of clob in Singapore.

At the same time KLSE fell to its lowest point of 262.

Dr. Neoh Soon Kean wrote in the headlines of Malay Mail

KLSE NOW THE BARGAIN OF THE CENTURY.

And at that time I had Zero shares.

On my way to the stock market - just as I arrived - I received a call from Mr. Ho - He said, "I want to commit suicide by jumping of a building!"

I was momentarily frozen. So I didn't participate in the subsequent revival of KLSE.

Mr. Ho, together with 2 other business friends of mine lost RM3 Millions, RM5 millions & RM500,000. The two that lost millions played margin.

All ran away from loan sharks and went into hiding.

Later one by one emerged with new names, still hiding from loan sharks.

Posted by leno > 2015-01-13 10:39 |

Post removed.Why?

Posted by Jonathan Keung > 2015-01-13 10:55 | Report Abuse

opportunity ? timing is very important whether you buy or sell.but unfortunately in Malaysia ( short selling in Bursa is on the rope- meaning only for the selected few )

borrowing to invest (is not encouraged) but during a bull run everything is feasible. when the market is down invest within your own means. no matter how the market turns. you have the holding power unlike those who trade on margin.

Posted by leno > 2015-01-13 11:01 |

Post removed.Why?

Posted by bracoli > 2015-01-13 11:11 | Report Abuse

http://anilnetto.com/malaysian-politics/the-curse-of-bakun-the-fall-of-ting-pek-khiing/

Posted by leno > 2015-01-13 11:18 | Report Abuse

dun forget to add the fall of apek koon of mudajya also because of margin ... kkekekekekekek ....

Posted by stockraider > 2015-01-13 11:57 | Report Abuse

RAIDER ADVICE !!

ALWAYS STICK TO MARGIN OF SAFETY LOH.....!!
AT LEAST BY DOING THIS U DON GO OVER COMMITTED WHEN CRISIS STRIKE MAH....!!

1.FIRST SIGN OF CRASH LARI KUAT KUAT SELL AT LEAST 30% OF YOUR HOLDING.
2. SELL THE STOCK U HAVE HAND THAT IS NOT PAYING GOOD DIVIDEND YIELD OR HAS LOWER MARGIN OF SAFETY MAH.....!!
3. HANG ON TO YOUR STOCK WHICH HAVE GOOD DIVIDEND YIELD, HIGH MARGIN OF SAFETY, STRONG BALANCE SHEET AND LOW PRICE TO BOOK VALUE.
4. WHEN MKT CRASH DOWN 20% OCCUR....DON JUMP IN IMMEDIATELY LOH....WAIT FOR IT....TO STABILISE AND VOLUME IS XTREMELY LOW B4 U JUMP IN WITH YOUR 1ST 15% LOH.....!!
5. LOOK FOR SIGN OF UPTREND B4 U BUY YOUR BALANCE 15% MAH.....!!
6. TYPE OF STOCK U SUPPOSE TO BUY ? MARGIN OF SAFETY STOCK......ESPECIALLY THE STOCK....U HAD SOLD...AND NOW U GOT CHANCE TO PICK UP AT A FRACTION OF ITS COST LOH......!!


AFTER MARKET CRASH NORMALLY IT TAKES ABOUT 3 YRS FOR IT RECUPERATE AND FINALLY RECOVER LOH...!!
YOUR WINDOW OF OPPORTUNITY TO MAKE EXCEPTIONAL GOOD MONIES IS IN THIS PERIOD LOH....!!
BE PREPARE TO HOLD LONG LOH......!!

BUY WITH MARGIN OF SAFETY .......BUT U MAY INCLUDE SOME GROWTH & BLUECHIPS STOCK INTO YOUR PORTFOLIO TOO LOH......!!!

WHEN THE PE IS XTREMELY LOW AND DIVIDEND YIELD IS XTREMELY HIGH AND THE BALANCE SHEET COMPANY ARE STRONG.....U MAY CONSIDER LEVERAGE LOH.....!!
THIS IS THE BEST TIME TO BORROW LOH.......!!!
BUT MAX LEVERAGE SHOULD NOT BE MORE THAN 30%

Posted by leno > 2015-01-13 12:10 |

Post removed.Why?

Posted by calvintaneng > 2015-01-13 12:31 | Report Abuse

Leno really tickles me to laughter.

Keep Cash until October?

Is This A Crash or A Deep Correction?

Will Oil be going down the drain in prices?

Is Malaysia finished?

I think there are counter balances in the Market. Only Oil has crashed. And it only impacted Oil & Gas Counters, Commodities, Banks & Some Real Estate Cos.

But that concerns only Malaysia. And in particular Oil Price Crash.

There are factors supporting Oil Prices

1) Shale Oil exploration has stopped.

2) Many are now going out of business.

3) Shale Oil could be a flash in the pan. And could be over within months if Oil keeps at US$60 a barrel

4) Saudi needs oil revenue more than any other nations on earth. The immense tightening they have to endure. Think they want low oil prices?

5) The US is selling more SUV & 4 x 4 due to cheap oil. Oil usage will pick up again.

6) And If Shale Oil failed, many US Banks will be in trouble of insolvency. So Uncle Sam will start QE 4 instead of raising interest rates.

7) Then cheap printed money will return back to emerging markets like Malaysia.

8) And last year China up 45%, India, Thailand, Indonesia & Philippines up 20% over while KLSE crashed 8%

9) Money will flow to value - And Malaysia might well be the darling of Foreign Fund Once again.

10) The cycle repeats.

"That which has been is that which shall be; and there is nothing new under the sun" King Solomon

Posted by stockraider > 2015-01-13 12:38 | Report Abuse

I think USA, europe, japan, china are doing fine....!!
It is just the unfortunate oil producing countries ....including msia will be suffering loh....!!

Shale has not much impact....bcos producer can simply shut production until oil go back to usd 70.

For traditional oilfield it is very difficult to stop production.
But they could produce less loh.....!!

Posted by leno > 2015-01-13 12:42 | Report Abuse

if u got stuck with stocks .. of course u must keep saying everi thing is fine. If u are stuck with stock plus margin .. than u must keep saying playing margin is fine.
EVERI THING IS NOT FINE LAR !! How do i know ? Because i no hold stock tats why i can see veri clearly ... BOOOOO CA$$$$$HHH CCCCCCCC AAAAAAAAAAAAAAAA !!!! HAHAHAHAHAHAHAH ! HAHAHAHAHAHAHAH !!