Sunday, March 11, 2018
Downtrending sectors and stocks
Morning ... trying to accept losses may not be as simple when we have higher expectation. Lost 2 - 1.
Sapura Energy : This is a KNM in a making as EPF disposing further their holdings. KNM was a hot-popular stock back then ...lost it's glamour ... and abandoned.
KNM : at lowest level ... and the slow death is a PAIN if we are stuck up there ... RM2 or RM1 ... even at 50cents.
So ... I will still follow Sapnrg which at below 50cents now, and might follow KNM's foot-steps.
The importance of CUT LOSS out losers has the under-estimated, under-discussed and many DO NOT like to talk about their losses ... and stuck up there. Interesting to hear that most will only 'boast' on their winning trades. Why is that so?
Simple explanation ... it is against our main purpose of going into stock-markets : to PROFIT.
While crude oil-prices still staying at USD60 - USD 70 level, recovered from USD 40 level, we DO NOT see the same for most O&G counters ... they do not recover well.
It is a loooong story if I m to explain the WHY here (lazier to write these years, but had e-meeting to explain few pointers instead). You may want to read some broker reports on O&G ... and it is interesting. But ... it will not be what we want to read/hear ... if we are STUCK up there.
Coastal : This darling O&G came from RM5 plus ... and currently trading around RM1.20 level. It was one of the five great mid-cap counters picked by Forbes. Unfortunately, the plunge of the O&G prices (and p/l) seeing this 'good' counter trashed to the core.
Info : Coastal Contracts Bhd. is a marine company. The Company's segments include Shipbuilding and Shiprepair, and Vessel Chartering. It provides marine products and services to the shipping, oil and gas and commodities industries. Its business units include Shipbuilding Division, and Oil & Gas Division. The Shipbuilding Division specializes in fabrication and sale of offshore support vessels, and marine transportation vessels. Its Oil & Gas Division focuses on the development, ownership and chartering of strategic offshore assets for oil and gas upstream sector. Its services include build, charter, repair, maintain and trade of marine vessels ranging from tug boats, oil barges, dumb barges and landing crafts to offshore supporting vessels and others. Its combined yard space of over 100 acres is equipped with engineering facilities offering vessel and offshore structure fabrication, and repair and maintenance services. It has operations in Malaysia, Indonesia and Singapore, among others.
As contrarians, we might THINK that the price of these stocks are 'cheap' ... but without visible earning and recovery of the sector ... there is NO WAY I will want to be involved or stuck up there ... as market is at highest RISK level. Let the dust to be cleared ... and see how the whole sector then.
Liking : The only two O&G counters that I liked are Dialog and Yinson. Simple : uptrend and profiting companies. Someone asked me 1-2 years ago ... that was what I answered. Since then I traded Dialog (more liquid) and Yinson (buy-hold as not liquid). Currently I m not holding any.
Properties-index : Can sell the recent selldown ... affected properties-stocks much more. Not many properties stocks are trading uptrend ... and to pick the cherry from the whole rotten basket is not easy. Will you be a contrarian and buy into those properties counters? believing that "property" are at bottom now? Some property-gurus are pointing to BUY during current 'depressing' market ... but some see the bottom is NOT there ... just yet. I m going with the latter.
Ecoworld : Last week's selldown ... seeing the new low in Ecoworld. Well, Liew's company should be great as he is a great biz-man and leader. But ... currently, property-sector is in DOWN-trending ... unless we are going to claim that we are investors, and buying into it ... to hold for recovery. Then, we are contrarians. Oh yes, I would prefer Liew's ex ... SPSetia.
MahSing : A weekly chart ... showing the support broken and the selldown is intense.
This is a general rule for newbies and novices : DO NOT BOTHER about the stocks if the SECTOR is in downtrending. We are novice ... we learn to see the BASIC charts ... down-trend sector, AVOID.
It sounds SIMPLE but it needs LOGIC (and brain).
It is not due to LOW PER (HuaYang PER at 3-4 level, is HuaYang cheap?). HuaYang is illiquid now ... as the downtrend continues ... and to EXPECT HuaYang to be back to RM1 or what-ever recovery ... it NEEDS EARNING. To show earnings, it needs to show profits from sales etc etc. So, it is not as easy as ABC ... PER = 3.5 .... low, cheap = buy??
Think again ... where do you get that idea? Low PER = BUY. Very misleading, right?
What else is downtrending sector? Furniture/wood.
Will you be buying into FLBhd or Latitude or WTK ... whichever in the downtrending sector, expecting the recovery?
THINK AGAIN ... use little of our brain. Put assertion in our decision making. OUR DECISIONS should be base on LOGICAL expectations and understanding sectoral movements ... and of coz, businesses-related to the companies. It is not due to only LOW PER or good MANAGEMENT ... it is the external market forces, in general.
USD up or down ... many not see the recovery of whole furniture/wood sector .... nor up-down of crude-oil prices will help any of those bleeding-depressing O&G companies.
If we are to buy into any of these downtrending (unless you are like me, trading short-term), you have to make SURE to put a cut-loss level, rather than buying more into it ... and know its FUNDAMENTALS well-enough. It should not be based on any few parameters and to analyse further ... we DO NOT have the 'sufficient' data (and abilities too) to make that quatitative analysis ... and buying into them.
I have simplified my trading idea ... and trading plan after ALL THESE 10 YEARS in market.
Putting RULES will save our asses ... and listening to noises out there is too ridiculous. I have shut myself away from the whole crowd (forums etc etc) and believing that MAJORITY of them losing in markets.
We can filter and learn from forums and messages ... but if we are a NEWBIE, we won't know how-to. We will be DROWN into noises ... and believe me, we will take some YEARS to understand what I mean (provided you survive ... and not quitting yet). WE need BRAIN ... and REFLECTION on things we have done WRONGLY.
It is not really possible to teach NEWBIES. They have TOO MUCH un-filtered noises inside them. If only we know how to PULL OURSELVES ... and see in the eagle's eye-views ... things would be clearer. But ... alas, it takes lot of efforts with courage.
This might be one of a better post ... read the above and many pointers I have shared in my e-meeting which many WILL NOT listen. So ... allow me to move away, yet again.
There are still few sectors downtrending ... or segmentation of biz. So, I will continue later ...
Go to : https://cpteh.blogspot.my/ for updates as i3-forum will NOT refresh my update.
Have a nice weekend and DO NOT read my posts from i3-forum, but to keep my link instead. Don't know how ... ask your YOUNGER kids to help u in keeping link as you watch list.
Have a nice weekend.