Gushan, This was the mistake of Mr N of Batu Pahat He made some good monies during the boom years of 1993. Then his profits evaporised in year 1994.
And still playing the market he lost rm1 million of his capital. By year 1995 Mr. N was restless because of losing Rm1 millions.
I asked him how much he still got left? He said he had rm5 millions and after losing rm1 million he still got rm4 millions.
He could not take it. So he wanted to recover his losses. I told him to forget it as he still got Rm4 millions and could have retired comfotably in Batu Pahat then.
But he wouldn't listen.
It was too much for him to bear. He could only take it up but cannot put it down. That is, accept victory and cannot bear defeat.
In the very end he lost his other Rm4 millions.
As if Satan caught hold of him and he could not escape until his passion totally consumed him in total loss!
johnyeoyeo, 1 of my rich old fren who is now worth around 100 mil in assets also kena 30,000 of tranmil at 10.00.the stock code I still remember 7000,hahaha
calvintaneng wrote "Only 5% of my capital is in the stock market for now."
Over the long term: the stock market delivers the highest return, then bonds and then FDs.
Do you think properties returns beat the stock market returns over the long term?
I think you can increase your asset allocation to stocks a lot more than your 5%, without incurring more risk and with a potential for higher returns.
Do you know that out EPF's asset allocation is 25% to shares or equity and the rest are mainly in fixed income securities. A small amount in properties.
Calvin Boss.. My humble opinion on IFCA crash la.. Actually IFCA fell from 1.80 in May '15 was because all companies already installed GST system with IFCA by April '15. So naturally IFCA's sales will start to fall and people knew it so they sold the shares. And IFCA continued to crash from 1.00 to 0.500 in August was because the stock market crash due to crash in oil price. With the above two factors, IFCA crashed severely between May to Aug' 15.
Ok Sultan Apollo, From your doomed friend who bought many counters and hard for him to sell is a good lesson. On its own is ok if he has holding power.
What he did wrong was leverage. Margin calle killed him.
That's why margin is a dangerous thing if used too much and at the wrong time. Even at right time it should be used moderately.
it's a painful sharing for many....but pls keep sharing. I'm too new to know about these financial disaster, and i'm really thankful to be able to hear some of these stories.
always buy what you can afford ( to lose ). never speculate like a gambler baccarat banker or player sailang everything at one go. never never borrow from ah long
Raider think ur allocation of 5% to equity is too small & it does not commensurate with your stature, skill, knowledge and experience mah.
Yes there are risk but if u practice margin of safety, long term it is no risk loh....!!
In 2011 to 2013 raider exposure to equity was very high 150%, which is risky loh...but this is how u make big monies in a big way & short time loh, if u have done a through homework and u are confident with ur findings, u bet big when there is huge margin of safety loh...!!
At that time raider agreement, is that if u r willing to gear up a few properties borrowing 90%, what wrong with borrowing 50% on equity when there are alots of opportunity leh ?
Today the above arguement, no longer hold water bcos things had changed loh...!! But the concept of putting more when u have confidence & done good homework is the right approach loh....!!
Of course today raider exposure is much less, and raider will never increase the exposure to that high level anymore, even if raider is greedy, but certainly not 5% which is on the extremely low side loh...!!
Alot of great conservative learned investors recommend the following formula for equity exposure;
Yes, under ordinary circumstances 5% capital in equities is far too little.
In 1997 I actually invested more than 40% into the stock market. But after being warned by Alfred Ong my Remisier Friend I got out of the market.
And I got back into the market in year 2005 after reading Ben Graham's book on THE INTELLIGENT INVESTOR. I also subscribed to the Monthly Digest of Grand Master Sifu Dr Neoh Soon Kean.
Next year I met my Johor Sifu who was the avid disciple of Dr. Neoh. From then I get to know Value Investing.
But in year 1999 I visited Usa for a holiday. There i saw the seeds of the subprime bubble being sown. Everywhere i saw flyers and handbills asking people to borrow money. No income no job also can borrow. Blacklisted and bankrupt also can borrow if you buy any house.
So at the back of my mind this puzzling and reckless lending behaviour haunts me and i really don't know how it will all end.
Then in year 2004/5 George Soros came out to warn that in 3 years time the sunprime loans will turn bad and might turn into a financial crisis.
As it turned out Lehman Brothers, an investment bank, over 100 years gone bankrupt and triggered the Great Recession of 2007/8.
By the timely warning of George Soros i escaped another Stock Market Crash.
So what happened. In year 2007 i bought a house from Jb highcourt auction, then 2 more in year 2008. The next 2 years of 2009/10 i didn't buy any as bidding at high court got fierce.
But in year 2011 i saw property boom in Iskandar took off in a big way. So i bought and bought until i got no more cash. I leveraged it by borrowing from many banks until they told me to stop. So i think just as you invest 150% in the stock market, i too, invested in landed houses as much as 150%.
Together with my other investors we bought almost 30 properties. Some new ones but mostly from jb high court auctions.
What is the yield so far.
I bought one property for Rm79k in year 2011. I sold it this year at Rm250k.
So i got 36% capital gain at 36% yearly for 6 years. And rent was Rm700 per month. That's another 10.6%
So in total the yield is a decent 46.6% yearly for those passive years.
I still got over 20 properties to sell slowly. As landed property still going up I will dispose more later.
So although I know stock market can give very good reward in upcycle I think I have done the same in property cycle.
No income no job also can borrow later turned into the NiNJA Loan later. Lehman Brothers, Bear Stern, Merrill Lynch, Fanny Mae, Freddie Mac, Countrywide & Washington Mutual & others gone bankrupt one by one later
Yes if u know where ur expertise lies & can be utilised well, thats is the best loh..!! Warren Buffet says stick to ur core competence when making investment, this is a very good risk managemest advice loh..!!
Posted by calvintaneng > Oct 2, 2019 3:32 AM | Report Abuse
Opcom was the only stock I kept in year 2007/8 all throughout the crisis years and escaped Then prospered
So now is the repeat again
A whopping Rm21.6 Billions fiberisation project
>>>>
Was he all in cash in 2008 and the missed the biggest rally subsequently?
But he claimed to have recommended stocks 10 or 20 years ago which recently rallied giving him multibaggers gain and yet by his admission he had only 1 stock in 2007/2008!
As was suspected, most "value investors" did not benefit from their selections because they chose to invest in gruesome companies that were appropriately beaten down in their prices. Sooner or later, the prices dropped lower and thes "value investors" sold locking in their losses. They were already out of these stocks many years later when the companies showed temporary business improvements and a short period of rising and falling prices.
Calvin is not credible in many of his posts, lack transparency.
You should check in on some of those fields below.
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Posted by calvintaneng > 2017-08-08 21:57 | Report Abuse
Gushan,
Without limit up or limit down will be suicidal for some.
Last time during the great depression when stocks were in great confusion someone keyed in a buy for i think, only ten cents.
Then margin calls force selling. At it was sell at market at any price. So a stock last traded at Us$10.00 could be dumped at only 10 sen
It was total madness.
Someone actually keyed in 10 sen and got it matched at the end of the day.
So limit down is a healthy safe guard.
Malaysian Govt created Danaharta to prevent fire sale of assets during Asian Financial Crisis. It saved some banks