Good Morning ... LCW lost but made all of us proud of his achievements. Liverpool lost to Burnley is to show how inconsistent their performances are .. for past years. Nevertheless, I will always support Malaysia and ... Liverpool.
Yesterday I have another coffee-date with a new-found friend ... yes, I have many and didn't have the time to write about many of them ... but I will. Since yesterday's date is still fresh ... let me share what we discussed about.
Note : A reader does not necessary believe that I really meet many investors/traders ... it is just my wild imagination-lah .. but at least could bring back some pointers or experiences shared hear. It is meant to share experiences on HOW many of us ... went through market-crashes.
He is Mr DY .,, seen his parents lost their fortune in 1997-1998 crash but they manage to survive. A strong young man who just came out from Uni then ... and he said during that time, it was very bad and harsh. They have to struggle as ... the crash almost tore the family apart.
He worked hard ... an engineer in profession. Then, he opened his own company ... and managed to pull the whole family together. I admired such successful person ... strong in characters while maintained being humble. Mr DY ... I know you are reading this line, I do mean it that I respect your characters ... and thanks for sharing long strong about 1997-1998 what your family went through. Most people would like to forget about those painful moments, their struggles ... but you managed to make me felt so humbled. Yeah ... market-crash will humble all of us.
DY ... went into stock-market around 2004-2005, and initially he was an investor. He buy good stocks (such as Genting and BAT) and hold ... but moving into market for 1-2 years, due to bullish market ... he got little carried away and started to buy into HOT-stocks ... and listened to recommendation of his remisier. As he got busier ... he does not time to monitor closely or read about news related to those hot-stocks. Some of the stocks he bought/punted going lower but he thought they will rebound ...as it was at end of 2007, where market was bullish .. but his stocks not recovering well ... and one of the stock in his portfolio is down by 50%.
We talked about cut-loss ... why didn't sell? I asked.
He knew "BUSY" was just an excuse ... but refusal to lose is more exact. Well, the ghost of 1998 haunted him ... seeing his parents crushed by market. So ... he was kinda lost.
Note : Example ... market is bullish now, some thought Sumatec will recover to 50cents?
He continued to buy a few more stocks, ignoring the few stocks in his portfolio which he failed to dispose. Indeed, it is like collecting more ... hot-lousy stocks. He is trapped into his own mindset ... and asking around doesn't help him much.
Why didn't you cut-loss?
He was lying to himself ... he told me. He was in denial ... and no one guide him to cut-loss ... or someone waking him up, to make him do something different!! FEAR of losing gripping us.
Lessons : ALWAYS know why we buy a stock ... place a CUT LOSS point (say minus 10%, sell).
DY said that he wish I would blog during 2006 period of time and write about the importance of CUT LOSS. Well, somehow ... remisiers asking many to buy, only few good remisiers teaching their clients to CUT LOSS. Why?
In 2008 ... most of his counters tanked badly. By then, he has collected more than 10 counters!! Market started to show weaknesses in Mac 2008 ... then in Nov 2008.
Lessons : Do not keep buying other counters without dealing with the existing ones in our portfolio.
He missed the whole 2008 crash as he is stuck in many ... and most of his funds allocated for stocks are inside. At least he could still laugh it off and shared with me his experiences ... recalling how painful 1997-1998 crash was and ... he himself inside the crash in 2008 ... and yes, I see such a strong personality. Perhaps, that explained why DY done well in his biz ...
I will not talk about other things we shared (haha ... you are funny too!) but focus in stock-markets and what I could share with my readers here our experiences of 2008-crash.
Yes ... there are many of them said that they will join me during market-crash. Seriously, I do not know if I could really capitalise well in coming crash, but at least I know I have tried to prepare ... at least I would not blame myself for being ignorant and didn't CHANGE. I would not want to lie to myself ... living in denial like many out there. DY, you are right ... there is NO ONE out there who will guide others ... to get out of their losing stocks and NO ONE to be blamed.
We have to CUT LOSS ... and he did cleared all his stocks in 2008, painfully lost a lot.
I do believe we all need to make that PAINFUL decision ... and LEARN from our mistakes, learn from others mistakes. It is never easy ... as we all know how difficult it is to CUT LOSS many of our stocks during market crash. Then ... we will be in FEAR ... fear of losing. Many quit and gave up (which is good too ... if they could not take the pain further).
DY ... I could not promise you or anyone that we could MAKE IT well this coming crash. But, yes ... we shall meet again to discuss further what we would be doing DURING crash. No worry, market will not crash yet ... and it wont recover in days. We will have time to do our homework ... just make sure you do not BUY MORE into stocks now. As you will want to join my trading-workshop (no plan for next one, end of year .... perhaps), we will be in touch.
Reduce your position ... keep 50% cash is my advice. Be patient ... let the craziness on and glad we have got over our painful 2008-crash experiences. Looking forward to the coming one ...
Thanks for the coffee ... and yes, my pleasure to meet you too.
Note : Will write another 1 or 2 of my coffee-date later.