Posted by kcchongnz > 2016-03-05 23:17 | Report Abuse

stockraider

Raider comment;
Why u say a successful margin user pure luck ? This statement is sweeping and unfair loh...!!
If raider say the guy pass Engineer....pure luck ? It is unfair leh..No ?
Raider think...every area if u can master well...u eliminate the element of pure luck loh...!!


Me: Most people think they are very good making good profit in the stock market, without realizing the role of luck plays a more important role, especially in the short term. Similarly, for margin users when they strike once, yes, majority due to luck, especially in the short term. So they do that again and again, with the advice of “using margin to the limits”. When the market turns, which it often does, they lose everything.

Over-confidence has no place in investing.


Raider comment: Raider side mah....!! There are many people that are successful that raider don know loh....!!
But the 10 within raider circle of friend....that is successful...lend confidence....that we should not if they rectify their investment skill....they will magnify their gain instead of the losses....if they use margin mah...!!

KC being a trainer...should be confident...that a successful investment skill can imparted...mah...!!


Me: So how about those hundreds or thousands who failed into oblivion, exaggerated by the use of margin finance?

Yes, I do teach people about the fundamental of value investing and I strongly believe those who follow these principles will be successful in investing, in the long run. They may encounter short term share price volatility, which very often do, but in the long run, the probability of success is high.

But I don’t tell them they will sure make a lot of money, even in the short run. That will be from the mouth of snake oil salesman.

As market is unknowable and unpredictable, anyone who says he is cock sure of making 100% or even 10% in the short term, is a snake oil salesman.

Unfortunately, when using margin, you got to be right in the short run too, otherwise if you are terrible wrong, not only because of your stock selection skill, but due to black swan events not under your control, you get killed straightaway.


Raider just use George Soros as an ultimate benchmark...but actually the average Joe still can use margin profitably...but using a reasonable good investment system or skill loh..!!


Me: Really kah, even an average Joe can use margin profitably? Where got suckers in the stock market for you to profit from anymore?


Raider; if u ask for statistic...raider cannot give, bcos it is academic or useless info loh...!! Common sense tell raider that 5% pa is actually a bear minimum....given fixed deposits u may get upto 4% pa return mah...!!
If u cannot hit above 5% pa...u r lousy...u have failed...u better rethink whats wrong with your investment tech...!!


Me: Research statistics are not just academic or useless information as alleged by you. Those who claimed so are either they don’t read, or not able to understand research. They are empirical evidence, not merely empty sweeping statements.

I have just shown you average investor, even without margin, fails miserably in the stock market. Who is this “average Joe” you mention who is better? But can “average” be “better”?


Raider comment; In a way stock market is unpredictable in the short run loh.....!! But in long run is fairly predictable mah....!!
W.Buffet say short run...stock price is a voting machine and long run is a weighing machine mah...!!
Thus if use margin properly ....it can be highly successful...when interest rate is very low especially loh....!!
Thats why raider say...if u master the margin risk....it can be a good tool to make u rich...!!
Thus please be open minded....let young people explore loh....!!

Me: That is exactly the problem. Margin users have to be right in the short term. They can’t be terribly wrong in the short term because they will get thrashed and never able to get up again. And in investing, things can go terribly wrong in the short term. It has been shown again and again in history.

Posted by stockraider > 2016-03-05 23:36 | Report Abuse

Posted by Probability > Mar 5, 2016 11:10 PM | Report Abuse

wait a min...

IF, the 'use of margin finance' (A) is to 'multiple many folds' the 'potential gain/loss insight' (B). And (B) is purely dependent on the advantage a person (C) has over the market at large.

THEN, shouldn't the less experienced (C) is, the lesser it should use (A) and instead if (C) is inexperienced, its better of learning about his/her correctness level on (B) by experimenting on the market without (A)....till (C) becomes very experienced and improved his/her (B) level?

(A) does not really appear like a learning tool.

So then youngsters should not be encouraged on using (A)..Raider.
As they will even miss out big opportunities for improving their (B).

PROBABILITY AND ENCLOSED HEREWITH THE INVESTMENT COURSE A NEWBIES SHOULD GO THRU;

A)SUCCESSFUL IN INVESTMENT = MASTER A GOOD INVESTMENT SYSTEM AND SKILL

B)MASTER MARGIN AS A TOOL THAT MAGNIFY SUCCESSFUL INVESTMENT

C) STRENGTHEN NEWBIES EXISTING MAKE UP COMPROMISES OF INTELLIGENT, SKILL, INTELLIGENCE , ATTITUDE, PSYCHOLOGY AND ETC

BASIC
SO A GOOD INVESTMENT TRAINING SHOULD COVER SELECTION OF GOOD INVESTMENT SYSTEM AND IMPART THE NECESSARY INVESTMENT SKILL

TO MOULD THE INDIVIDUAL NEWBIES AND STRENGTHEN IS INVESTMENT ATTITUDE, EMOTION, PRINCIPLE, SYSTEMATIC APPROACH AND GOOD PRACTISE

TO RUN THE NEWBIES THRU TRIAL AND ERRORS....AND SEE HE GRADUATE AS A SUCCESSFUL INVESTOR

ADVANCE
TO ENHANCE NEWBIES BASIC SUCCESSFUL INVESTMENT SKILL THRU MAGNIFYING POSITIVE RETURN THRU MASTERING THE USE OF MARGIN AT THE SAME TIME, MANAGING THE RISK LOH....!!

RAIDER SEE U R NOT A COMPLETE INVESTOR....IF U DO NOT COVER THE SYLLABUS ON THE USE OF MARGIN MAGNIFICATION LOH.....!!

PRACTICAL
THE ABOVE IS JUST THE THEORETICAL ASPECT....U STILL NEED TO PUT THE NEWBIES THRU TRIAL AND TEST....THRU THE PRACTICAL ASPECT AND SPEND TIME TO GAIN THE NECESSARY EXPERIENCE LOH....!!

IF LATER THE GRADUATED NEWBIES INVESTOR CHOSE TO USE MARGIN OR NOT....IT IS THEIR CHOICE AND PREFERENCE LOH....!!

IF U R YOUNG....IT IS OK....TO START EARLY...TO LEARN THE ROBES...OF MARGIN MANAGEMENT LOH....!!

Posted by Probability > 2016-03-05 23:41 | Report Abuse

GAIN / LOSS = (A) x (B) x (C)

A = MARGIN FINANCE
B = INSIGHT over the market at large
C = CORRECTNESS of the INSIGHT (probability level : - 100 % to + 100%).
the lower the age...the more the probability towards incorrectness, i.e C is toward negative 100%.

As such do not use leverage when your certainty of correctness is very low. Leverage does not add value. What we need is to push C towards +positive 100%.

Posted by stockraider > 2016-03-05 23:59 | Report Abuse

Raider totally do agree luck do play a role loh....!! But to be successful consistently u cannot depend on pure luck mah...!!
Black swan even can hit both cash newbies as well as margin newbies loh..!!
But given hit both..cash and margin newbies will suffer loh...!!

Margin newbies will suffer abit more than cash....but it is ok loh...bcos they still have plenty of time & still got time mah...!!
They can recover & learn loh....!!

The issue is nothing due to margin....it is pure bad luck loh...!!
Margin is still a good tool...to magnify success...!!

Since it is newbies....their actual quantum loss will be not be high..bcos they just start loh...!! If they use cash...they still suffer too ...if the bad luck hit loh...!!

If like that....WHY U DON SAY don invest at all ?? Bcos it is profitable to invest in longrun loh....!!
The same arguement can be say USE MARGIN is also profitable....thats why raider say...WE MUST avoid KC SWEEPING ARGUEMENT USE MARGIN NO GOOD LOH...!!

Raider comment: Raider side mah....!! There are many people that are successful that raider don know loh....!!
But the 10 within raider circle of friend....that is successful...lend confidence....that we should not if they rectify their investment skill....they will magnify their gain instead of the losses....if they use margin mah...!!
KC being a trainer...should be confident...that a successful investment skill can imparted...mah...!!

Me: So how about those hundreds or thousands who failed into oblivion, exaggerated by the use of margin finance?

Yes, I do teach people about the fundamental of value investing and I strongly believe those who follow these principles will be successful in investing, in the long run. They may encounter short term share price volatility, which very often do, but in the long run, the probability of success is high.SAME ARGUEMENT HERE IN LONG RUN THOSE WHO USE MARGIN WILL BE SUCCESSFUL IF THEY MASTER THE ART OF INVESTMENT, INFACT MORE SUCCESS THAN THOSE THAT DO NOT USE MARGIN LOH.!

But I don’t tell them they will sure make a lot of money, even in the short run. That will be from the mouth of snake oil salesman.
As market is unknowable and unpredictable, anyone who says he is cock sure of making 100% or even 10% in the short term, is a snake oil salesman. THIS RAIDER ALSO AGREE LOH....BUT SOMEHOW....IF U R SUCCESSFUL IN YOUR INVESTMENT....U WILL BE MORE SUCCESSFUL USING MARGIN LOH...!! BCOS THE HURDLE RATE ON MARGIN IS DAMN LOW AT 5% PA LOH!!

Unfortunately, when using margin, you got to be right in the short run too, otherwise if you are terrible wrong, not only because of your stock selection skill, but due to black swan events not under your control, you get killed straightaway. IF U R A NEWBIES U GET KILLED WITH CASH OR MARGIN...IT IS A SETBACK LOH....IT IS PURE LUCK LOH...!!
BCOS LONG TERM INVESTMENT HAS A POSITIVE OUTCOME....EVENTUALLY U STILL CAN BE SUCCESSFUL LOH...!!
BTW....MARGIN IS NOT USE FOR SHORT RUN....IT IS A LONG RUN INVESTMENT LOH....!!
IF SHARE IS OVERVALUE IN THE SHORT RUN....U R NOT INVESTING...ANYWAY...!! U R SPECULATING LOH..

Posted by stockraider > 2016-03-06 00:16 | Report Abuse

Raider just use George Soros as an ultimate benchmark...but actually the average Joe still can use margin profitably...but using a reasonable good investment system or skill loh..!!

Me: Really kah, even an average Joe can use margin profitably? Where got suckers in the stock market for you to profit from anymore?
RAIDER SUCCESSFUL BENCHMARK MARGIN FRIENDS ARE A VERY GOOD EXAMPLE LOH..!1
THEY ARE ACTUALLY JUST AVERAGE JOE WHO ARE SUCCESSFUL IN INVESTMENT AND THEIR RETURN IS MAGNIFY USING MARGIN MAH...!!


Raider; if u ask for statistic...raider cannot give, bcos it is academic or useless info loh...!! Common sense tell raider that 5% pa is actually a bear minimum....given fixed deposits u may get upto 4% pa return mah...!!
If u cannot hit above 5% pa...u r lousy...u have failed...u better rethink whats wrong with your investment tech...!!

Me: Research statistics are not just academic or useless information as alleged by you. Those who claimed so are either they don’t read, or not able to understand research. They are empirical evidence, not merely empty sweeping statements.
I have just shown you average investor, even without margin, fails miserably in the stock market. Who is this “average Joe” you mention who is better? But can “average” be “better”?
YOUR ARGUEMENT ARE HEARSAY TOO....IF U KNOW THE BANK MARGIN INVESTMENT DEPT....U CHECK WITH THEM ....WHAT ARE THE PROPORTION ARE THE SUCCESSFUL MARGIN INVESTOR THEY WILL LIKELY GIVE U RATIO OF 2 OUT OF 10 LOH....!!
THIS RATIO OF SUCCESS IS NOT TOO FAR FROM YOUR AVERAGE CASH INVESTORS LOH....!!
RAIDER KNOW A FEW MARGIN INVESTMENT DEPT....COFFEE TALK RAIDER DO GET THE ABOVE FEEDBACK LOH....!!

Raider comment; In a way stock market is unpredictable in the short run loh.....!! But in long run is fairly predictable mah....!!
W.Buffet say short run...stock price is a voting machine and long run is a weighing machine mah...!!
Thus if use margin properly ....it can be highly successful...when interest rate is very low especially loh....!!
Thats why raider say...if u master the margin risk....it can be a good tool to make u rich...!!
Thus please be open minded....let young people explore loh....!!

Me: That is exactly the problem. Margin users have to be right in the short term. They can’t be terribly wrong in the short term because they will get thrashed and never able to get up again. And in investing, things can go terribly wrong in the short term. It has been shown again and again in.
NOT NECESSARY MARGIN INVESTOR, NEED TO BE RIGHT SHORT RUN....THERE IS NOT MUCH DIFFERENT FROM THE SUCCESSFUL CASH INVESTOR....THEY BOTH NEED TO BE RIGHT IN LONG RUN....IN ORDER TO BE VIABLE AND SUSTAINABLE LOH..!

THEY IS BIG CORRELATION SIMILIARITY OF SUCCESSFUL CASH INVESTOR AND SUCCESSFUL MARGIN INVESTOR LOH....!!

Posted by stockraider > 2016-03-06 00:28 | Report Abuse

Posted by Probability > Mar 5, 2016 11:41 PM | Report Abuse

GAIN / LOSS = (A) x (B) x (C)

A = MARGIN FINANCE
B = INSIGHT over the market at large
C = CORRECTNESS of the INSIGHT (probability level : - 100 % to + 100%).
the lower the age...the more the probability towards incorrectness, i.e C is toward negative 100%.

As such do not use leverage when your certainty of correctness is very low. Leverage does not add value. What we need is to push C towards +positive 100%. RAIDER AGREE LOH....IF U R DUNGU....BETTER DON INVEST LOH....WHETHER U R CASH OR MARGIN INVESTOR LOH....!!

SO IF U HAVE NOT MASTER ITEM C....U BETTER DON INVEST LOH...!!

THE ARGUEMENT IS NOTHING TO DO WITH WHETHER U R A CASH INVESTOR OR MARGIN INVESTOR LOH....!!

THE ARGUEMENT IS WHETHER U R A GOOD INVESTOR OR DUNGU INVESTOR MAH..!!

IF THE ANSWER IS THAT U R A GOOD INVESTOR....THAN U SHOULD INVEST.
IF U R GOOD INVESTOR U SHOULD USE MARGIN...BCOS IT WOULD MAGNIFY UR RETURN LOH...!!

IF ANSWER...IS DUNGU...DO NOT INVEST MAH!!...EVEN USE OWN CASH...AND TO USE MARGIN WHEN U ARE A DUNGU....MY ADVISE IS U BETTER JUMP INTO RIVER 1ST B4 U INVEST LOH....!!

Posted by Probability > 2016-03-06 01:03 | Report Abuse

aiyo...if your papa has 50 Million in asset and he gave 10 million as inheritance after you graduate from law school (no business knowledge), and you want to make money from stock market....you straightaway invest the 10M on the stocks you think has potential meh?

Or u would invest small small till you think you know the stock market and business world very well?

Your 'stakes' should be directly proportional to your confidence level.
its not right to have high stakes...when you are inexperienced.

and there is nothing 'to learn' or 'get experience' about taking stakes...margin finance.

Posted by stockraider > 2016-03-06 10:36 | Report Abuse

Posted by Probability > Mar 6, 2016 01:03 AM | Report Abuse

aiyo...if your papa has 50 Million in asset and he gave 10 million as inheritance after you graduate from law school (no business knowledge), and you want to make money from stock market....you straightaway invest the 10M on the stocks you think has potential meh?
PAPA WILLING TO GIVE RM 10M....THAT MEANS THE DAD GOT CONFIDENT WITH THE SON LOH...!! IF THE SON CHOSE...TO INVEST...BE IT LOH..!!


Or u would invest small small till you think you know the stock market and business world very well? ALTERNATIVE INVEST SMALL SMALL TO LEARN...THIS IS RIGHTWAY LOH...!! SAY PUT RM 200K....AND RM 200K MARGIN = THIS RIGHT AND SAFE WAY OF LEARNING LOH...!!
WHY MUST START WITH MARGIN ? NOT NECESSARY LOH....U CAN START WITH SMALL CASH TOO...!!
BUT WHY RAIDER SAY MARGIN FOR THIS NEWBIES ? USING MARGIN IS AN IMPORTANT TOOL TO MAGNIFY YOUR WEALTH...IT IS AN IMPORTANT INVESTMENT TOOL...U SHOULD NOT IGNORE LOH...!!

Your 'stakes' should be directly proportional to your confidence level.
its not right to have high stakes...when you are inexperienced.THIS RAIDER AGREE LOH....BUT DOES NOT MEAN U AVOID MARGIN ALL TOGETHER MAH...LIKE WHAT ADVOCATED BY KC....WHICH RAIDER DISAGREE LOH..!!
IN THIS EXAMPLE U START WITH CASH SAY RM 200K...THEN SMALL SMALL WITH MARGIN SAY RM 200K, AND GAIN THE NECESSARY EXPERIENCE LOH....!!

MARGIN IS NOT THAT BAD AFTERALL....IN FACT IT IS POSITIVE MAGNIFY YOUR WEALTH....IF U LEARN HOW TO USE IT WELL MAH...!!

and there is nothing 'to learn' or 'get experience' about taking stake..margin...Who say nothing to learn ?? There is plenty to learn loh....bcos margin accelerate your return when u r good loh....!!
Raider say this is an essential tool loh...!!
OF COURSE LEARNING MARGIN OF SAFETY IS THE MOST IMPORTANT ASPECT OF INVESTMENT LOH....!!
LEARN IT FIRST....AFTER U HAVE THE INVESTMENT SKILL....THEN MORE ADVANCE LEARN ABOUT MARGIN LOH...!!

DO NOT BE BRAINWASH WITH THE FALSE NOTION....THAT MARGIN IS THAT BAD LIKE GAMBLING LOH....!!

MARGIN IS MUCH BETTER THAN GAMBLING WHY ?

BCOS GAMBLING GIVE U A NEGATIVE EXPECTED VALUE OR OUTCOME LOH...!!
WHEREAS MARGIN IS NEUTRAL LOH....!! IT IS A MAGNIFY TOOL...!!

IF U A GOOD INVESTOR...IT MAGNIFY YOUR RETURN...THEN BENEFICIAL TO USE MARGIN LOH....!!

IF UR LOUSY INVESTOR....THEN...DON INVEST LOH...!! BETTER JUMP INTO RIVER 1ST IF U CONSIDER TO USE MARGIN LOH...!!

RAIDER PROVIDE U WITH A BALANCE VIEW LOH...!!
THE WAY IT WAS CONVEYED BY PEOPLE....IS MARGIN IS THE SINNER...BUT IT IS NOT TRUE LOH...!! THE SUFFERING IS CAUSE THE POOR INVESTMENT SELECTION AND POOR INVESTMENT SKILL LOH...!!