Monday, May 09, 2011

KLCI opens 2 points up now. Hmm ...

Sharing Corner

Date : 16th Nov 2009

Warrants stalked

1. AnnJoo-wb at 0.65.
2. SPSetia-wb at 0.545
3. Sunway-wc at 0.44.
4. WCT-wb at 0.60
5. WahSeong-wa at 0.385

As at today

1. AnnJoo-wb at 0.67
2. SPSetia-wb at 1.16
3. Sunway-wc at 1.36
4. WCT-wb at 0.66
5. WahSeong-wa at 0.26

Strategy : Place 20% of capitals on each of the warrants above.


1. It doubled, take profit.
2. It downs 20%, cut loss.

Results :

1. AnnJoo-wb : It initially went down to 0.60 level before shooting to 0.93 level in weeks. That is 50% profits. It dived down to 0.53 level then. That is still less that 20% cut loss rule. Currently, it is back to same level. So, no profit, no gain from this one.

2. SPSetia-wb : Adjusted price is 0.350, so easily doubled. Profits taken.

3. Sunway-wc : From 0.44, doubled too.

4. WCT-wb : This one went down 20% to reach the cut-loss level. So, loss of 20%. By the way, it flew off to RM1 after that.

5. WahSeong-wa : If bought at 0.385, this one reached the cut-loss of 20% too.

Conclusion : Assuming we have RM10,000 as initial capital, on 16th Nov we bought into ALL of them in a day. RM2,000 each. A profit of 100% = RM2, 000 and a loss of 20% = (RM400). From the above, the profit could be RM4000 - RM 800 = RM3, 200. If that is translated into ROI, it is around 30%. All the trades done in less than a year.

Illustration purposes

The above is just for illustration, taken from my trading journal. I have these idea 2 years ago. It works IF we are in bull-run.

So, how do we apply such a 'stupid' way of trading?

BUY 5 good fundamental-stocks warrants. Place 20% of capital each(more than RM10k suggested - you may reduced it to 4 warrants, 25% each and such). When to buy? When the news everywhere talking about recession, suffering, squeeze, unemployments, bleak future, negative outlook, sell-sell-sell from broker reports, dooms-day revealed(LOL), double-dip phenomenon, no one reading financial blogs(LOL) ... add in those 'negative' views from the crowd.

When to sell? Follow the rules - sell if doubled(or 50% profits) and sell if below 20% cost price(or 10%). Time frame ... one to three years.

The above is just for sharing purposes. The financial market is too huge for me to comprehend. We just want to 'profit' from market, so we need some strategy(proven?). I am just indicating what I am testing out. Sometimes I got 'lucky', it works. At times it is not.

How about now?

If we see the economic situation around, many are bullish. More buy-buy-buy calls by broker houses. More people wanting to enter share-market, many NEWly registered 'investors' with BURSA, more people talking about charts, more investment talks being organised, more IPOs, more projects announced, more new launching, more ... and every short-correction viewed as 'opportunities' to buy.

In short, we are of bullish outlook and sentiment. This is NOT what investors want. So, applying the strategy above will NOT work well. Chances are we need to cut-loss on 3 of 5 of our holdings!!

So ... next time around, I will be prepared to apply such 'stupid' way of buying!!!

Warrants I stalk at the moment : AnnJoo, BRDB, Century, EAH, Fajar, Gamuda, Glomac, Handal, IJM, IJMLand, IJMPlant, KFC, KMLoong, KPJ, Kulim, KYM, Latexx, Masteel, Media, Notion, QL, QSR, Segi, SPSetia, Unisem, WCT, WahSeong, YTLPower.

Doing comprehensive homework on them, then WAIT. Wait for the 'DOOM'. Wait for some bubbles to burst? Or wait for recovery ... such as glove-stocks or IT-stocks? Wait for another rally in the abandoned plantation-stocks?

Yes, I will want to create a sharing corner, rather than learning corner tho I am still in learning process. We need to keep our journal so that we could check if we were right or wrong. For that reason, we could learn from it(hopefully). Most of us do not wish to be so hard-working to do homework(many do not even know what should be done) and keep a dairy/journal could be a huge task. I want to recollect my journals and write it here - for keeping purposes - and to share with many(my readers?) what I have been doing for the past 3 years!! As I came from ground-zero, it is huge for me. I have to learn almost everything from scrap. That was past ... I need to continue to learn while start applying what I have learnt.

One of the purpose of this blog is to collect my trading thoughts, some may sound too naive, stupid or even absurd. But ... arent we all learn to improve? Knowledge is power ... only when applied appropriately.

What do you think of my strategy above? Will it really work? I wonder too ...

4.10 pm : KLCI up 4 points.

BJToto : At 4.14 now.

E&O : At 1.45.

Evergreen : Need to watch her.

HapSeng : At 5.80 level.

Naim : At 2.60 level. Stalk.

Perisai : At 0.73. Watch.

SPSetia-wb : At 1.12 now. Wait.

YTLLand : At 1.76 now. Stalk.


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