Tuesday, August 23, 2016

Short Selling : AirAsia

Morning song ... to share ...

KLCI down 2-3points ... nothing interesting as I m not into market, except shorted FKLI.

So ... I m doing my 'reading' work ... selected the book titled "Crash Profit" and selected #11 : Winning Minority.

Yeah .. then ... I went to pool-side, lying there ... reading. Mind clearer ... watching the cloud. haha.

There ... my reading area, fyi. Then, I will workout in gym for few minutes ... take bath and back to my desk.

Let me share a little about that chapter-11. First of all, it is about an investor ... a biz-person, who never knew about investing much and placed his money with mutual funds. During crash, the funds were crushed ... and was devastated. So ... he decided to learn about investing by himself.

SHORT SELLING is the idea ... to hedge against our long in stocks (including blue-chips). Another point shared is to check on reverse index-funds. Yes ... these two are in my mind.

Can we short KLSE's stocks ... and HOLD ... then, short in stages? Can anyone answer me? I would be glad to create a fund --- to short some individual-stocks (such as AirAsia).

No ... I m not talking about buying into put-warrants (short expiring period and liquidity risk).

Let me take our darling under-valued AirAsia as example. Remembered when I used AEON as an example for dollar-averaging. Now, we are going to do the OPPOSITE. That is what short-selling about.

Assuming I am allocating RM10k for each level.

AirAsia : SHORTED at RM3 done last week. Taking profit level would be RM2.50 and will update once done.

Queue to short next at RM3.50. Today, AirAsia at RM3.20 level.

Next level to short is RM4 ... and every 50cents up.

Assume : We have RM100k allocated for her.

Level 1 : 3 x 3330units = RM9,990 used.

So ... the chapter basically stating that we should hedge our portfolios with shorting the index.

Will need to go for lunch ... classes and continue to rest at nights (preparing for exams).

Note : Check on reverse index-fund trading in US.


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