Shanghai market just 8 months ago, the SSX Index has dropped by 45% in just 8 months. http://klse.i3investor.com/blogs/kcchongnz/79429.jsp How many speculators and punters in China have lost their fortune, and their life? Don’t let OPM ruin you.
Strongly agree with the observations and also it tell you why you should keep more cash, so far there isn't anyone else in klse loss their pant their loved one or their life yet. Klse is very strong it is hard to believe
Why it has to be Asian? The history show China has been generous for too many times. Asian could be the most generous creature in this universe It didn't come by occasion.
#1 OPM - I agree with the general precaution here, about investors/speculators often not taking into full consideration the impact towards their account and capital when things move the other way. At the moment, I'm not using margin. But I feel it should also be considered as an option to be utilised on certain occasions. Despite the risks.
It's a bit like a credit card too - it's not the CC or margin that's the main problem, but the person using it. To me, it's always better when we have more choices. Having a CC or margin shouldn't mean we are using it all the time. When used properly, it can be a very useful tool. The more important thing to consider is in having a proper plan, including prudent capital management and the discipline to execute cut loss at a predetermined point. And also to take profit when the indicators say that the better thing to do.
The part about not treating OPINIONS by analysts and so-called experts is worth remembering. Some people confidently declare ringgit, crude oil etc. will be such-and-such "for 2016", and therefore investing decisions must be based on these. These may actually come about. But we must remember they are all only GUESSING. No matter what models they use, with colourful charts lines and all that look convincing, it's a fact that NO ONE knows the future. One or two changes in the variables may lead to a totally different outcome.
Read and think about all of these opinions. But make your own conclusions and decisions, because it's your money at stake here. My general stance and strategy: since we don't know what will happen (in detail), the next best thing to do is to respond...to just follow the trend. And to always hedge when things are so volatile and unclear, as right now. Buy dividend-paying counters when they suffer a fall (and thereby getting higher dividend yield)...AND ALSO put warrant of FBMKLCI-H as insurance just in case. As always, timing is important. But it is indeed possible to get better prices for anything when we aren't hurried while being decisive. No guarantee we will succeed. But at least we have a plan.
Many good articles to share from Mr KC Chong on 10 golden rules to Mr Koon on 'don't be greedy and fall in love too much with your stocks after they move up fast and a lot'. TQ
Posted by Mat Cendana > Feb 10, 2016 11:26 AM | Report Abuse
#1 OPM - I agree with the general precaution here, about investors/speculators often not taking into full consideration the impact towards their account and capital when things move the other way. At the moment, I'm not using margin. But I feel it should also be considered as an option to be utilised on certain occasions. Despite the risks.
It's a bit like a credit card too - it's not the CC or margin that's the main problem, but the person using it. To me, it's always better when we have more choices. Having a CC or margin shouldn't mean we are using it all the time. When used properly, it can be a very useful tool. The more important thing to consider is in having a proper plan, including prudent capital management and the discipline to execute cut loss at a predetermined point. And also to take profit when the indicators say that the better thing to do.
Mat Cendana,thanks for your comments. I always appreciate it. But I don't agree with you in this case that margin financing is like a credit card.
Credit card is a very useful thing for me for many reasons. Without it, it will be very inconvenient for me. It is a very useful tool for me. The most it costs me is its annual fee, RM50?
To set up a margin finance account for you to use if you need it involves substantial cost, 1%? You will be out of pocket of RM10000 upfront to set up a RM1m margin finance facility. Not sure if there is any maintenance fee.
Won't you use it after paying the upfront RM10000? If not, why would you set it up in the first place? Just for fun and pay the upfront fee?
That is what exactly this Mr Lee did in the link here:
Mind you this is not a made-up story, but a true story. And Mr Lee is not a novice speculator, but a very experience investor who had used margin financing for all his investing life and would have used this facility "properly". Look how he controlled his margin finance in this account, and how has his this account fared?
Would you still be able to stand up with the performance of his this account?
First advice to the newbies: Do not enter this dangerous place called the stock market without your accumulative reserves of 12 months'salary for emergency fund. Most of the newbies intentionally neglected and hesitantly adhere to this golden rule due to unevitable poise of being ahead of other people and quick rich mentality. I've to repeat again and again: 3 - 6 months' of emergency fund is not enough. You must have emergency fund of at least 12 months!
You are clearly not belong here without your savings of 12 months' reserves as you are indeed not ready for stock investment. Work harder, save as much of your money in any of good capital protected savings schemes and come back here later after accumulating your 12 months' reserves fund plus your excess investment capital. You are rest assured that you will be surprised when knowing that you are actually ahead of 90% of people in the stock market including the veterans who are having no reserves fund plus also suffering from negative returns.
Remember the keyword: 12 MONTHS. Otherwise, get lost from here and go to work.
ok lah newbies should know. if market so easy earn money, nobody work loh. anything u must practice, u must fall down, then u will become strong. just take as a lesson. nothing need to scare, just dont over confidence and big head.
An article with true wisdom & honest words, I salute you from my heart, Mr Chong.
I made more than 70% return with monies invested in stocks within 6 months period, but those only counted for 30% cash I totally have. I feel happy but always stay alert with all the market developments.
Why I did not invest it all? Because I do not know when will be the market head south.
Sometimes we need newbies to take our stocks, or else who should we sell our stocks?
Everyone knows:
1. best unit trust fund in Malaysia can only earn 10%++ every year during good times (before real market crash) 2. Warren can only earn 20%++ over 40 years
Why many newbies still think they can win the crowd when they are indeed the chasing crowd?
@Probability - That is why I follow posts by people like KC Chong. It's not just the individual posts but also the comments from others. The constructive ones, of course. When people share their knowledge and experience, and thoughtful opinions, everyone benefits. I had been involved on-off in Bursa Malaysia since the 80s. When it comes to information, opinions, constructive arguments and criticisms, we've never had it this good. No guarantees the individual would make a profit over any given time period, but his chances are way better than in previous years. It's thanks to sites like this and bloggers like KC Chong etc.
""Anytime is a good time to invest, but anytime isn't a good time to trade"", remember this wise adage all you investors and traders out there. Good luck everybody!
ya and most old hand in investing like me, are fully invested at all times since years even decades ago...we too have not much spare cash to invest, can only reshuffle our portfolio
"It was the alert of a course participant which prevented me from average down when the share price continued to drop, and instead I cut loss at an early stage, though I still own a little now."
What was the trouble you found with coastal that made you sell most of your position?
Posted by TeckChuan Lee > Feb 11, 2016 11:39 PM | Report Abuse
"It was the alert of a course participant which prevented me from average down when the share price continued to drop, and instead I cut loss at an early stage, though I still own a little now."
What was the trouble you found with coastal that made you sell most of your position?
The heavy exposure on 2 jack-up rigs with heavy borrowings and the crash of oil price.
another new year another great article from Kc :) Maybe missing no 11 - donfollowblindly especially if you're extremely suwey ( bad luck )LOL but can also do with No 5 as a close replacement LOL Anyway thanks KC n gong Xi Fa Cai to u :) n also to my good buddy invest88 :)
"The heavy exposure on 2 jack-up rigs with heavy borrowings and the crash of oil price."
KC can you point me to the exact report of this borrowing matter? I checked the latest balance sheet the debt/equity are ok? what am i missing here? Also can you tell us what made you so bearish on O&G? are the capex of oil producers not going to go back to the level before? in the future?
Coastal used to be in huge net cash position with minimal borrowings and hence low risk, and they were doing very well in their operating business in ship building. The latest report has shown it went into a net borrowing position. But I agree it is still not that bad in terms of total debt in relation to its total equity.
When it get into more exposure in the oil and gas sector, the plunge of oil price has affected all companies in this industry.
That caused the huge drop in the share price of those companies, including Coastal. That is just a reflection of the state of the O&G companies now.
Now,I don't predict the price of oil in the future, and the prospect of O&G companies. One thing I can say is in business, almost everything is cyclic. That implies oil price will definitely rise again, but I don't know when.
For your info TeckChuan, i am also looking at Coastal closely. I have make one round in early 2014. It rolling 4Q FCF has turn negative in 09/14. With the sale of one of its JUG, its should be in a better position to weather the O&G storm. Its current price looks quite attractive.
It has sold one of its Jack Up rig and waiting for delivery for the 2nd one in 4Q.
mr.kc i would like to ask whether u have a book? cause i really like ur valuabale methodology and skills in investing... if u do have one can let me know where i can get? i love to attend ur training but not very good using linkedln
the 2 book u recommended me, i have finish reading and still hunger for more... so if possible i really hope 2 have a step by step guide book and coaching directly from you...so i can follow through as i go through this unending learning process
Posted by Elwin Kai Kai > Feb 25, 2016 10:20 AM | Report Abuse
mr.kc i would like to ask whether u have a book? cause i really like ur valuabale methodology and skills in investing... if u do have one can let me know where i can get? i love to attend ur training but not very good using linkedln
I am still compiling my book. It is not an easy task. it takes a lot of time. I will let you guys know once it is done.
However, what is in the book will be more general. If you wish to learn in a structured manner, attending my course is definitely a better way.
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Posted by PlsGiveBonus > 2016-02-09 22:55 | Report Abuse
11. Should be don't ever invest your money when the bad time is near