Sunday, November 07, 2010

Sunday morning ... seldom that I allowed myself to sleep till 8am!! Yeah .... I was too tired after going here and there and also spending hours looking into charts. I do have few ver nice charts in my mind but I have not finished my 'homework' on them to share it here.

Someone mentioned that I m so 'generous' to share my knowledge and 'homeworks' with many for free! I joked that it is no longer free ... i do ask for teh-tarik, dinners or my D&C. Haha.

9.00 am : counter 259, 050

Genius or idiot?

This is one question I asked JL when he came to see me, asking me to teach him how to invest in stock market. Do you see my work(he knew many of things I was doing 1.5 years ago!) as a work of a 'genius' or just a plain idiot?

It is important on how a person see you, especially you are going to share your works and also your methods with him. We all view markets/stocks differently after a while(years??) in markets. But for a newbies who is still very raw going into markets, it could be overhelming!!

Hence, such a view is quite significant ... as our approaches towards our trades depending on our personalities!! If you are seeing me as a 'genius' in the making, then you might trust my views in a particular stock. BUT, if you see me as just an idiot who 'wasted' many opportunites, then your views on my 'styles' could be very different!

Am I a genius or an idiot? Your pick, please.

In my opinion, I m neither. I m just a normal person, but with strong Math-based foundation(very analytical too) working very hard to learn ...learn .... and learn about FA for two years. Recently I started to re-defined the TA I learnt by myself, the finer points of TA using CNX's software. There are still many softwares around too. As I came from FA, knowing the fundamentals of a company is important to me. Then, to use TA to trade accordingly, testing out many methods and strategies.

Initially, JL said he see me as a 'genius' as I know nothing about accounting, finance, businesses, economics etc etc ... and started from scratch. Also, I went into markets without any much knowledge and get burnt(that is idiotic, not bravery). He wondered why I will test out some methods using real money!! That is risky, I know. Slowly, he noticed that I m just an idiot, I guess.

It is very frustrating to guide a newbie who know nothing much and GREED seeps inside them when you keep profitting!! That was in Mac 2009, the dip where markets shooting higher. I guided him to buy AnnJoo at Rm1.00 and sold it at RM1.30. That is 30% in two weeks!! He get upset when I did not bother much about the profits and continue to speak about strategies/methods of trading!! Hey you stupid, can we earn money NOW and learn about methods next?? I bought AnnJoo-wb started from 20cents right to 60cents level. he may think I m SELFISH ... asking him to grabbed AnnJoo for 30% profits ONLY but I gained more than doubled with AnnJoo-wb.

What a person(novice) missed out is that warrants are RISKY. It was Mac 2009 till June 2009 ... oh boy, I still dont really care about profitting!! I care about what do I learnt from this trade and that trade!! He get very upset with my stupidity, and yes ... now I m an IDIOT. He cant trust his money to an idiot, right?

GREED is a word see no boundaries. It doesnt matter if you are in HK or just a novice playing with warrants. ASK those burnt BADLY ... without knowledge, we are idiots to the MR Market. As they said, market is always right!! Accept that.

Today, we could started to see GREED in play ... with top-ten actively traded counters are speculative counters. When market starts to correct or even DIVE, these speculative counters which being used by syndicates will be pushed down ... to un-thinkable level. HOPE ... those holding on to these empty-shells stock could only HOPE ... hope one day it will move up again.

What JL did not realised THEN(1.5 years ago) is my 5 years plan(I shared with him the details of my goals) and I m NOT in HURRY to get RICH. I m not. That he sees as IDIOT but my work is a work of GENIUS as he put it.

Let me give you another example : HWGB is having a party and gained so much for many punters. Some may view me as an IDIOT not to buy into something keep moving higher but still looking into those waterfalls!!

Why not HWGB? Because it is just being used by syndicates to speculate and lure us, ikan bilis. Fundamentally it failed many of my 'criteria'. So, when FA failed, I wont touch especially I never track her. If suddenly I jumped in to punt, then I defeat all my purposes of LEARNING. yes, I m hearing you ... to hell with your learning, the bottom line is earning MONEY.

So, when my good friend SC bought in-out of HWGB, KBunai and such ... I dont know if it is right to advise her not to punt into such. You see, you could be seen as an idiot trying to stop a friend of making money, lots of money!! They wont see BStead or TopGlove as good stocks to buy. That is too expensive, they claimed. Err ... they mean the stock price, not valuations, ok? They know nothing about valuations or businesses. After all, gambling is just a flip of coin. Why those idiots will look into FA and now, more idiots showing TA?

Novices, it is just an advice ... stay away from those very speculative counters, those less that 20cents stocks. Stay away from call-warrants which could generate huge losses. I know you might think of the huge profits, BUT in markets ... RISK come first, then only PROFITS.

You could also ask those 'veterans' in markets how many stories of many still holding to paper-loss of counters they bought at the very high and still holding!!

LCL comes into mind. An attractive counter to trade and play with, but once the founder/onwer selling his stake ... why are many still holding to it? If I m not mistaken, he sold his LCL at 70cents. I still keep an e-mail from a reader asking for advices as he bought into LCL at 35 cents, thinking it is 'cheap' then. I just said ... sorry, cut loss(it was 30 cents then, I think) or hold for very looooooooooooong time. I didnt here from him since. Losses could be painful to stomach but that is MARKETS. LCL trading below 10cents now.

Let us analyse ... why will anyone buying LCL at 35 cents? It was NOT in PN17 then. It could be due to ignorance, due to punting mentality as the upside SEEN to be huge etc etc. This is psychological, and without KNOWLEDGE about the company's fundamentals and also trading strategies or methods, one does not know how to stop the BLEEDING. LCL is a pitiful example for many to LOOK into before you PUNT or GAMBLE. LCL was a favourite babe, actively traded, ok?

Another example is KNM. Who could deny her popularity? Trading below 50cents now, many still caught buying above RM1. It is a sorry story ... with news of KNM popularly reported ... from the privitisation news(HOPE HOPE HOPE), to buying of Borsig ... crude oil price etc etc ... teach me. If KNM is not for trading, how could it be the most actively traded stock in KLSE for months??!

I traded KNM before ... I almost lost the trade, I shared it here. That was looong time ago. I never look back and discipline myself not to go for these counters. I learnt my lesson and I even learnt how to see what stocks are speculative, which one is less. Go for the less speculative ones with some fundamentals to trade, ok?

So ... I m just an idiot that I could not see KBunai going to 50cents? As I see stocks in valuations point of view, I dont know base on what KBunai could go to 50cents, ok?? But I could be seen as a genius as I know what valuations are, what KBunai's businesses(I was from Sabah la) are ... and it is obvious KBunai is speculated and played by syndicates.

Due to different risk appetites, we all go for different stocks to trade.

I m a person without doubt perfer IGB than LBS, ok? But but ... IGB is above RM2, LBS moved up from 50cents, sir. IGB is more expensive ath LBS!! That ... my 4-year old boy could tell you too, ok?

Next week will be a good trading week ahead. Happy goreng-ing your HWGB. Fatt-arr ...



Anonymous said...

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CP said...

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