Thursday, November 20, 2014
Newbies : Be aware of media
Good morning ... I have a good talk about newbies should not buy 7 types of stocks. I added an extra one : SPAC. Yes, newbies ... people like me who think we know trading but actually very little about it.
Fundamental analysis is the most crucial part ALL newbies/novices should learn. There is one good and kind person in i3 who is teaching and sharing about FA --- kcchong. Yes, I wish to find some time to read about his articles and comments. I did read some ... and kcc, if you are reading this .. thanks a lot.
We all have our opinions on FA or TA. So, it is ridiculous to argue which is which ... but I do still believe in trading good fundamental stocks. So, what newbies should be doing is ... LEARN about which companies are good and sound, ignore those speculative get-rich-quick stocks. I have said many of times that newbies will be lost punting in-out into those ... and strongly advise those who wish to learn to get a good mentor. Not me ... I do not know anything much about FA ... or TA. I am still learning ... from many.
When the years to come ... unfold, many punters will realize that ... trading is too difficult. No one get rich by trading short-term as the emotion control is too difficult for most of us to handle. Remember, when market dives ... nothing could stand still ... many over-valued stocks will dive too.
EGO ... this is something we all could learn to eliminate. I wish I do not have that in me ... I wish to be more humble ... as market will humble us. It is those days and those time when ... when we thought we are good enough, we fall. We are too complacent ... and exposing ourselves to too high of risk. We might be leading others to that situation ... and we could think that it has nothing to do with us.
We lead each other ... like it or not. We are influencing each other and create the crowd. Whether we are saying or doing certain things ''differently'', we still being influenced by people who get to know us ... and influencing people we know. I am very aware of my words here being followed closely by many now ... and as I blog without preparation ... or editing ... I do not delete my posts. I do have my UP and DOWN mood ... in a year, of coz. The high ... and the low tide. So, I will want to write it in my own close blog ... away from preying eyes. Well, because I like to write ... and being seen in public(many followers?), I am supposed to be professional? Nah ... I dislike the rigid restricted ways of things being done in the whole society. We should have our way of doing things. But most important thing, we should not offend anyone, cheat ... or perhaps, mis-lead?
So ... yesterday, when I mentioned about those lousy stocks ... I do put it nicely. Newbies. Yes, people of my level, who still humbled by Mr Market ... should not touch those stocks. I have learnt many lessons(painful ones too) ... and I just hope to reach out to many more newbies who just came into stock market, and un-aware of the risk they are exposed to. Being a teacher, I do hope I could impart some of my experiences that I have gathered for past 5-6 years ... of struggling in trading.
Everything I wrote here are meant for my personal reading, my personal opinions and not to oppose anyone in anyway. But, people like to judge ... without knowing what it meant. If one thinks he is not a newbie, and earning well from those speculative counters, WHY NOT? So, I m not pointing to anyone. I have no personal attack on anyone ... just my opinions(novice level) on things going around in the noisy market place ...
When I said aunty-uncle, I am referring to retirees who are just too free and came into stock-market. That is a category I m most concern about as they are exposed to high risk. Yes, if for youngsters(below 30) to be in market ... it is OK for them to learn thru trial-error, as those experiences will bring them good in future and they could still have the time to re-coup their losses. But ... what about those above 60 years old? If we have lots and lots of money, burning some for the excitement ... err .. I think it is ok(why not donate it away to needy ones?) ... but if we are using our retirement funds(EPF, pension etc) ... that is the risk I am talking about.
I do hope I do not offend anyone by stating such ... it is just my opinion that those can't-afford-to-lose group should not buy into those penny-speculative counters. And do not follow blindly into buying those hot-stocks. It is hot for a reason ... if we do not know how to exit, we will be cultivating greed in ourselves, without knowing it.
Simple summary : Never touch these "things"
1. PN17 stocks(potential to be de-listed)
2. Losing money companies(every quarters bleeding)
3. Over-valued stocks(up few hundreds percent)
4. Buying cyclical stocks(at peak)
5. China-stocks(polished balance sheets)
6. Call-warrants(short expiry, not liquid)
7. Pump and Dump(speculative ones)
Here is the reminder and summary again ... if one is newbie(less than 3yrs in KLSE) and above 60yrs old ... as a age guideline, these are too risky for you to touch. Just promise that you will not buy into them. If you do not know which is which, ask around in the forums ... I do believe many good souls will guide you. Remember ... ask those 20% winners. Ask your good friend who are in market long enough to advise you.
This was taken yesterday ... the most actively traded counters. All the penny, like what RI said ... cap ayam. Haha ... this are for experienced good punters who know the movements and their experiences could give them good profits trading these kinda stocks. I have to admit that I do not know how to buying into these ... so, I just given them a skip. My trading system just failed ...on these stocks. Do remember ... the stocks are active for a reason(THINK) and they are cheap for a reason too(THINK).
I do hope remisiers/dealers will be more responsible too. If your clients are newbies, advise them not to buy into these cap-ayam stocks. Give them good stocks to trade. If they are ignorant and stubborn(many of them) ... then the risk is their. We all should never blame our remisiers/dealers if we lose money due to their recommendation. We should take responsibility of our own trades, asking them opinions and guidance.
Analysts too .. should be more responsible ... we newbies do read broker reports to buy/sell. When we see the high target price, we will be tempted to ADD. I do know analysts are just doing their jobs ... but we, newbie retailers do follow those reports, ok? Again ... we should not blame the analysts for our losses, right?
Bloggers should be more responsible in their sharing? Especially they know they have followers? Ok, for my blah-blah blog, how about not following my writing, please? Unlike many bloggers, I prefer to be on my own ... writing whatever I have in mind. I like the freedom of writing, and I have nothing to show ... I like putting in those nice songs, those valuable clips to share ... or perhaps, washing my laundry in public, ok? I cant speak about other bloggers ... but if you are buying stocks due to their writings, just understand that they are very much a human. Perhaps, they do have personal agenda or interest in the stocks?
Anything written in media should be taken on the surface. WE ... yes, readers ... should be aware of internet(scams, lies and such) is a place where many un-true things being thrown in. We have to filter. For sure, I will protect my mind ... and that is the most important asset. Media certainly influence the movement of stocks ... good report, bad report ... and more.
Politics is another area I will not want to write or get involve too ... too many people spreading rumours, lies, hatred. So, leaving politic aside ...
Time to go for my morning jog. And to reflect on my words.
Nothing written here should be taken seriously ... relax-la .. afterall, I m not even a stock analyst, ok? I am .. just a blogger.
Have a nice punting day