Wednesday, February 19, 2014

Plantation in play?

Good morning ... it is Wednesday, yet another very busy day. I have sold so many yesterday ... let me try to re-call ... Scomi, Ecoworld, ECS, TDM, JTiasa, HapSeng, Zhulian, GAB ... not sure if I missed out a few more?! Too many counters in hand, bought during the CNY-mega sales ... and trying to consolidate ... re-group and stay out for a while.

Plantation in play 

FCPO broken 2700 yesterday ... and we are in bullish sentiment again, especially for plantation counters. Those wanting the big-cap, IOICorp is my choice. Since listed the IOIPg, IOICorp will be a 'pure' plantation play. When is Bstead going to list their plantation-arm? CBIP in new high, TSH back to RM3 ... Kretam(crab) is still moving sideway as that is their nature ... but Ketam ... I mean, Kretam dived sharply after split. Kulim is recovering well, broken RM3.25 yesterday and hitting 50MA at current level. Yes, I sold JTiasa as I read some bad-news about Wilmar exiting Swak ... and this kinda of bad-news need time to be digested by market. SOP is expected to retrace further due to the news too(dropped from RM6.90 to current RM6). So, take your pick ... CPO has been depressed for past 1-2 years ... and the recovery is in the making. I have told my stock-watch group that I am collecting plantation counters. Moving into the trend ... is it sustainable as many 'bad' news relating to CPO? We shall see ...

 Got to go ... off

TEH

Friday, February 14, 2014

Trait #2 : Be Passionate

By Koon Yew Yin

Trait 2.

A great investor is one who is obsessive about playing the game and wanting to win. 

These people do not just enjoy investing; they live it. They wake up in the morning and the first thing they think about, while they are still half asleep, is a stock they have been researching, or one of the stocks they are thinking about selling, or what the greatest risk to their portfolio is and how they are going to neutralize that risk.

It is 12.45 am now ... Happy V-day, if you are celebrating.

I slept early today as I am very tired, after a whole week of classes and paper-work. Then, I am awake ... to do some readings, checking on the markets and my trades.




GAB : Bought her after sold off my AEON for profits. Heavy as it is, but the movements are strong too. 10% profits? KLCI came down sharply today.

Yes, being passionate about whatever we are doing ... including trading/investing. If we are going to trade well, it is definitely need many of our hours to research ... and learn more about strategies, trading set-up, news related ... etc etc. It takes me hours in daily basis. Yes, daily ... for past 6 years. Without passion ... and motivation, it is difficult to last long. Simply put, nothing great being achieved without great efforts done.

Certainly we need to ENJOY whatever we are doing ... otherwise, the hours we spent with 'markets' will be a drag. In daily basis, they will always some interesting stories related to stock markets ... from the bird-flu, USD ... QE tapering drama ... to the step down of Swak CM. From some cooperate exercises, M&A of companies ... quarter reports, dividend declaration, announcement of change of CEOs ... to any insiders buying/selling ... we have to be alert and aware of them.

These certainly takes a lot of our TIME and EFFORT. For that, I do believe we need to have the passion to continue to probe, learn, listen ... share ... etc etc. Without passion, many things will become a drag ... and it won't last.

IF money is the only motivation to be in market, one tends to give-up when he/she starts to lose money. The 'instant gratification' ... instant profits, instant easy money kinda mentality stays in MANY of those in stock markets.

Did we knew the statistics of 80% losers in stock-markets?

Because most of them want to profit ... and seeing it instantly. That explains why many punt into those penny-speculative counters. Little knowledge needed in punting ... but we do need 'LUCK'.

So, we should be motivated to learn more about trading markets. We should attend many of those talks(many are free ... organised by IBs) and do our own researches.

We need to be consistent in our trades and learning ... so that we could see to be a better trader. We cant do that ... without passion.

I am going to drive up to IPOH on Sunday morning for KYY's talk. I heard that he has changed venue due to overwhelming responses. Great ... I will try to record his talk and post it here.

 For those going to his talk, great. Do take the opportunity to know great-man's views. Learn from those done well, rather than from forums or your friends.

See you all there.

TEH

Sunday, February 09, 2014

Trait #1 : Be a contrarian


By : Koon Yew Yin

Trait 1. 

The ability to buy stocks while others are panicking and sell stocks while others are euphoric.

KYY : In 1983 when China wanted to take back Hong Kong, the stock market crashed. Did you dare to buy Hong Kong shares knowing the risk when the communists took over the control Hong Kong? Everyone thinks they can do this, but then when the market crashed on October 19, 1987, almost no one had the stomach to buy. When the year 1999 came around and the market was going up almost every day, you could not bring yourself to sell because if you did, you might fall behind your peers.


Take the latest bad-news related to HSBC. Google it and search if u r un-aware of the bad news. Couple with sharp correction in HSI, HSBC broken HKD80, dropped from HKD86 to HKD79 in two weeks time. Will we dare to BUY such a strong good bank when it was oversold recently?

This is a trait of CONTRARIAN.

It is easier said than done as most of us like to chase over-valued companies or over-bought stocks. Majority retailers will buy when hot-stocks moving higher, and higher. They will use any speculative news to buy into such counters, or even trying to justify why it will or should move higher.

So, to profit well ... we do need to WAIT for market to crash ... wait for good companies to relate to some BAD news(temporary setback) ... and dare to BUY when all panic-selling.

Anyone remember BP oil-spill bad news? Do a search on that piece of bad news, check the price when it dived so so low due to fear .... and silly me, I bought into it.

Again, it is easier said than done.


90% of people want to be in their own 'comfort zone'. In investment world, I have learnt that it is being contrarian that we could do well. We should be doing the opposite of what others doing.

What is Fear-Greed?

Be greedy when others in fear?! 

How many of us REALLY understand such simple quote? It is too simplified, so we tend not to believe it. We prefer to see all those technical-analysis indicators shown in the charts, making it so complicated ... we prefer large financial jargons, in order to believe that could be good.

It is all WIRED wrongly, as KYY said.

That explained the first TRAIT. WHY majority in the forums(i3, investlah, FB,  chat-pages etc etc) will NOT do well in their trading or investments. They are looking for a quick KILL. They are looking for some thrill in tradings. They could be intelligent in the fields or expertise ... but being in market require that LOGICAL brain to analyse, to think ... and learn from those done it well.

I do have high respect for most successful biz-people ... and my high respect to Mr KYY, for being so humble and kind to share with 'public'. It was an honour to meet him in person.

What KYY trying to explain in trait #1 is that we should do our own homework and dare to BUY into a good under-valued counters during market crashing rather than to chase or jump into hot-stocks such as IRIS now ... or many more.

While there is no such thing as right or wrong ... the statistic shown clearly that 80% of retailers LOST or LOSING money, while 10% of them manage to breakeven. Only a small 10% retailers profiting consistently from markets.

Will we follow the top 10% in markets or will we just adding to the numbers of those losing in markets?

Be a contrarian ... as they are the minority. The chances are HIGH that doing what others NOT doing will bring us good profits ... and it we are to be in stock-market for long.

Choice is ours ... are we choosing to be the minority, with good investor's traits?

I have chosen my clearly. I will learn from those winners. I appreciate those sharing with me, enrich me with knowledge ... and placing importance of moving into the top 10% winners. I have intention to maintain my good records, may it be bull or bear market.

Lets take an example .. the current situation : Ecoworld vs SPSetia



Ecoworld now trading around RM4.40 ... came up from 60cents, then everyone in the KLSE talking about 'Focal' ... Liew-n-gang moving into her, changed the name into Ecoworld ... and yes, it gets the publicity needed. So, it has been moving higher and higher. It is a known fact that Liew is leaving SPSetia(by end of April?)


On the other hand, funds selling SPSetia ... many abandoning SPSetia as the 'whole' management jumped ship ... so, SPSetia is only having PNB to handle ... and knowing these GLCs could not find high quality persons to manage well, many are expecting SPSetia to slide ... in their profits and such.

So, now ... should we jump wagon into Ecoworld to, anticipating Ecoworld to be the next SPSetia and over-taking SPSetia as best developer? Perhaps not in the near future, but the prospect is good.

If we are a contrarian, we should be thinking of SPSetia, right? 

But ... is buying SPSetia wise, knowing that such good management by Liew-n-gang leaving? What will happen to SPSetia now and in future?

------------------------------------------------------------------------

Time to re-think on why we do what we did?

contact me at : cpteh@yahoo.com to join my trading group. 


TEH

Saturday, February 08, 2014

Financial Mindset

Good morning ... it is Saturday and I will be 'free' from classes today. I do still have back-log paperwork bothering and stressing me. Anyway, I m going to put that aside for today, doing something what I do like to do ... blogging here, visit by few students to my small hut for CNY, spending time with family ... have 'luo-sang' with my colleagues ... and watch football.

I have not been at ease for past month due to the stress of paper-work. More and more paperwork given to us ... and I could not understand 'WHY'. It is about time to time of quitting the full-time employment, the E-quadrant ... moving into B-quadrant. I am currently in S-quadrant and I-quadrant. Yes, I am refering to Robert's four-quadrants.




I am on DIET ... to reduce my tummy.

Going for breakfast ... will write later.

Off

TEH



Thursday, February 06, 2014

Traits for being a great investor



Trait 1. The ability to buy stocks while others are panicking and sell stocks while others are euphoric. In 1983 when China wanted to take back Hong Kong, the stock market crashed. Did you dare to buy Hong Kong shares knowing the risk when the communists took over the control Hong Kong? Everyone thinks they can do this, but then when the market crashed on October 19, 1987, almost no one had the stomach to buy. When the year 1999 came around and the market was going up almost every day, you could not bring yourself to sell because if you did, you might fall behind your peers.

Trait 2. A great investor is one who is obsessive about playing the game and wanting to win. These people do not just enjoy investing; they live it. They wake up in the morning and the first thing they think about, while they are still half asleep, is a stock they have been researching, or one of the stocks they are thinking about selling, or what the greatest risk to their portfolio is and how they are going to neutralize that risk.

Trait 3. A good investor is the willingness to learn from past mistakes or to admit that he or she has bought the wrong share. It is so hard for people to recognize their own mistakes and sell the bad share which they bought at a higher price. Most people would much rather just move on and ignore the dumb things they have done in the past. But if you ignore mistakes without fully analyzing them, you will undoubtedly make a similar mistake later in your career. In fact, even if you do analyze them it is not easy to avoid repeating the same mistakes.

Trait 4. A fourth trait is an inherent sense of risk based on common sense. You must have the common sense to realize the risk of buying any share which has gone up a lot and when all the analysts are recommending buy. No share can go up indefinitely for whatever reason. Quite often you might be tempted to fall in love with your purchase because it has been going up and up. You are so proud of your pick and refuse to sell it. Remember your ego can skew your judgment.

Trait 5: Great investors have confidence in their own convictions and stick with them, even when facing criticism. Buffett never get into the dot-com mania and he was being criticized publicly for ignoring technology stocks. Eventually he was proven right. Unlike Buffet, we small investors can get in and out quickly and make some profit. Besides confidence, you must have patience to wait to buy when it is has established a base and not buy when it has shot up due to some exciting hot news.

Trait 6. It is the ability to think clearly. There are a lot of people who have genius IQs who cannot think clearly, though they can figure out bond or option pricing in their heads. I have met a lot of smart people in my life time but very few of them can come up with an inventive way of looking at a problem. As you know, there are so many criteria to consider in share selection and invariably all the professionals will consider the current profit is most important. They do not look at the future profit growth prospect of the share. They do not look at the company and the industry like a business man or an entrepreneur. Again I have to use Jaya Tiasa as an example to explain this important point of making super return. You only have to have the elementary knowledge of arithmetic to calculate that JT will almost double its fresh fruits bunches (FFB) production in 3 years. Even if the CPO price remains unchanged, its profit from its oil palm plantation will surely double. Moreover, JT has about 2,500 sq km of forest to supply all the raw material for its plywood and timber business. Surely any one with eyes should be able to see the huge forest ( 50 km X 50 km approximately) which is the competitive advantage it has over all the manufacturers in China, Taiwan, Japan, India and in any other countries. Yet all the professional fund managers cannot see the forest as the competitive advantage JT has over other competitors. As Warren Buffet often say that in the competitive world of doing business, all your competitors are constantly trying to attack you and you must build a moat around you to protect yourself. Unfortunately, in the Malaysian stock market, we do not have stocks like Coco Cola, Gillett Razors or Mac Donald which have the market competitive advantage.

Trait 7. Finally the most important, and rarest, trait of all is the ability to live through volatility without changing your investment thought process. This is almost impossible for most people to do; when the chips are down they have a terrible time not getting themselves to average down or to put any money into stocks at all when the market is going down. People do not like short- term pain even if it would result in better long-term results. Very few investors can handle the volatility required for high portfolio returns. They equate short-term volatility with risk. This is irrational; risk means that if you are wrong about a bet you make, you lose money. A swing up or down over a relatively short time period is not a loss and therefore not risk, unless you are prone to panicking at the bottom and locking in the loss. But most people just cannot see it that way; their brains would not let them. Their panic instinct steps in and shuts down the normal brain function.

By Mr Koon Yew Yin