Friday, August 17, 2018
Morning ... it is Friday. DOW gained the most last night ... 396 points and we shall see BULLISH sentiments back to KLSE? Unfortunately, I m still in cash-position, not taking the risk.
Recently, we seen many tech-stocks rallying ... some at new high while others rebounded so well from the bottom. Vitrox breakout RM6.80 sharply and we are seeing new high now.
Today is a long day for me ... with A-level exams nearing, I would have three tuition-classes, then will attend a 'workshop' before meeting few trading-kaki for our monthly coffee-meet.
BIMB's formed a very strong hammer back then in early Feb 2016 ... I bought into her. Now, to tackle few issues : Did I buy into large position? did I hold till up 20-30%?
So ... whether we buy Vitrox uptrending and breakout ... or BIMB when it dived for technical rebound ... it doesn't matter much. It is the understanding of RISK that separate most of us. We have different risk-appetite. And our risk-appetite also depends on our knowledge and experiences.
Well ... that is what trading or investing is all about : RISK MANAGEMENT.
No need to argue if TA vs FA ... or what have you.
So ... it is not that we cannot chase Elsoft up ... but the RISK is high at current level. If we are not trading but ...so-called investing, buy-hold ... we can buy some now and buy more during pullback, right?
Whichever way ... it doesn't matter what we know ... it is still what we do that matters. It is what we do ... remember that. Everyone can talk-big ... but when it comes to DOING, it takes courage and experiences to guide us ...
Emotion-control is one of the critical trait in trading. Do not get emotionally involved with our trades, easier said than done ... especially if we bought 'huge'.
Let's say we have RM50k in our trading account ... if we are to use RM10k ... that is 20% of our funds ... but if we are buying RM40k ... that is considered as huge as it is 80% of our funds. So ... position sizing is very important when we talk about PROFITS. If a person told you he just profited 30% in trading XYZ ... asked him : how large is your position size? Most likely, they wont tell you the truth.
Back to the hammer-BIMB ... nice one. I did not buy HUGE. I did not hold for a year, 30% profit.
See the issue ... we know BIMB = Bank Islam ... we know strongest hammer = strong buy, yet we do not have a conviction to buy HUGE. Say ...80% of our funds and hold till it gives us 20-30% profit (in a year , 30% profit is considered excellent).
RISK MANAGEMENT basically means ... how much are you going to allow yourself to lose if the trade goes against us?
Cut-loss small ... let the profit runs ... another easier-said-than-done issue which MOST will not talk about.
----to be continued ---
Thursday, August 16, 2018
China's companies traded in HKSE
China Mobile : Back to HKD70 level low ... a downtrending chart. Will you invest in her?
China Telecom : sideway HKD3.10 to HKD4 level. If you think our TM is a large-company, you have to check those China companies
TenCent : One of the largest internet company in China ... moved from HKD120 to HKD470 before a downtrend now ...
XiaoMi : newly listed in HKSE, this XiaoMi needed not to be introduced to Malaysian consumers. It is back to its IPO (below) now due to bearish-ness in HKSE ... time to invest in Mi-Mi?
ZTE : gap-down ... from HKD30 level to current HKD13 level. It went to hit below HKD10 before a sharp rebound.
China's tech-companies that listed in US-market
Alibaba : Will check if the neckline USD165 broken.
Baidu : Sideway from USD210 to USD270 level ... now back to critical support.
HuYa : broken the neckline too ... will be watching.
IQiYi : The only stocks I have in US ... and caught at USD33 level (average) ... have to cut-loss and lost about RM5k plus this week as the neckline broken. Need time to digest on my losses ... IQiYi is speculated to be Netflix of China in-the-making.
Note : I will still buy into the idea of Nasdaq going into bubbly zone ... in months to come, not crash but new-high with euphoria. So ... need to check which one I should be punting in.
JD.com : claimed to be Amazon of China in-the-making ... just broken the support this week.
Ok ... will invest into one or two of these when global financial or tech crisis is here.
Wednesday, August 15, 2018
Geely : At HKD16. A cool 10-bagger from HKD2.70 to HKD27.00 ... since it listed in the HS-index as a component. Well ... they bought into Proton ... now, u see why they downtrending la. haha. Buy Geely below HKD2 again? ok ok ... buy current HKD16, next is HKD12 ... next HKD8 and so on ... dollar-averaging.
That is also applied to TENAGA : Buy RM16, RM12, RM8 and RM4 ... park till done. Dollar averaging ... use RM10k for RM16 level ... RM20k for RM12 level ... RM30k for RM8 level ... and sailing last portion RM40k at RM4 level. Close your pc ... open it after crash and so on ... you should done well.
Here is TENAGA's chart ... u do not need chart, u need planning and execution.
So ... you sure you are investor, right? Buy Tenaga and average it down if it goes lower. Good luck.
Monday, August 13, 2018
BPPlas : closed 1.04 last week, a huge volume detected and a shooting-star (SELL candle).
Lets zoom out ... there. BPPlas is DOWNTRENDING, peaked at 1.78 level. Depends on where you get 'stuck' ... your entry and position-size, that is the paper-loss if you are still holding to it.
PPHB : Peaked around RM1 ... now around 60cents, way to go ... on the downside.
Here is a good clip to share ... I shared many of those pointers during my e-meeting. Listen and learn.
Saturday, August 11, 2018
CMSB : Will you dare to buy during crash? Buy into huge positions? And HOLD till recover? really?
Buying during crash is easier said than done ... buying HUGELY is also just a cheap-talk by majority ... and to hold till recover takes courage and patience.
It has been looong ten years ... I have been waiting, while going thru the stages : 2008 crashing ... 2009 sharp V-shaped recovery ... 2010 bull-rally till 2014 ... and sideway till now in KLCI.
Tonnes of memories ... experiences ... after thousands of trades.
Long time no see ... dear, market-crash. I have missed you and waiting for 10years. There you are ... we are in 2018 today ... with few more months into 2019.
Preparation for market crash is one of the most difficult long journey. A test of patience.
The #4 pointer ... that take YEARS. Even the cut-loss and move on in #1 pointer take years to learn. Otherwise, as we knows ... many stuck UP there in so many stocks ... I can list few hundreds here, actually.
ChinHin : Anyone stuck up there? Of coz. Many.
If you stuck up there into stocks, lets meet ... lets talk about it and what we should be doing? Or are you going to KEEP QUIET and let it be ... HOPING those stocks you are holding to recover? Really?
Evergreen and the furniture-gang : Do you still holding Hevea and such UP THERE STUCK? Or do you know anyone still holding Mieco ... FLBHD? Sound familiar?
IFCA ... oh, the ever popular IFCA being abandoned. Everyday ... and everyone in forums was talking about her. When the stories ended ... the trend ended ... GET OUT. But, unfortunately, it trapped so many ignorant-retailers.
Don't worry ... Frontkn and gang which being pushed up now, the trend will be over ... then, will be quiet and left to slow-death. That is how stock-market is ... cruel and crude.
Forgotten about the logistic sector ... this is CJCen (previously Century). Check GDex and gang ... see how are those charts ... as I know MANY stuck up there, right? No? All so pandai to trade ... no stuck or lying to yourself?
Sapnrg : still actively traded ... media still promoting her and mentioned O&G rally coming due to crude-oil price above USD60. Do you know Sapnrg was known as Sapura-Kencana (SKPetrol) and was an index-linked counter? You do remember, right?
When crude oil price dived ... where were you? Are you still holding any O&G counters (I only like Dialog and Yinson) ... say, KNM? Or Scomi? Sorry ... you have to learn pointer #1 : PRESERVE your capital ...
If you have stuck up there, lost (paperloss??) so much ... how are you going to capitalize on the coming crisis? Yet ... YOU STILL KEEPING QUIET.
If you do not know what to do with those stocks in the sectors I mentioned above ... and STUCK up there big time, NO ONE could help you. You have to live with you ignorance, stubbornness and ego.
Yes ... long time no see.
You can reach me at : email@example.com
I will look into stocks you stuck up there ... but I could never make decisions for you. You have to decide ... and treat me a cuppa, ya. I m preparing for crash ... are you?
Oh boy, I forgotten 'property sector'. ok.
Titijaya : Kinda newly listed ... for 'them' to cash-out ... and the properties-slump ... and down. Till now, we no see light at end of tunnel ... this would be a very long tunnel ... indeed.
Hmm ... did I miss any sector that crashing ... or crashed? I am sure you are stuck in some of those stocks in those sectors.
Stay safe ... in 2018 ... as the RISK increases.
Good luck ... for those buy-hold. You do need huge luck for stocks to recover.
Friday, August 10, 2018
Wednesday, August 08, 2018
24-11-2008: Strategy during crisis investment by Ang Kok Heng
When market was high, many investors were careful and avoided jumping onto the bandwagon. Now that the market has fallen, and fallen sharply, many investors are still wary about investing. There is nothing wrong about being careful with one’s hard-earned money. Not unless our interest rate falls to 1%, like in the case of US or close to zero in Japan.
The only problem with extremely cautious investors is that they kept their money in banks most of the time. They sighed with relief for not being caught by the market. While they escaped the bear, they also missed the bull. Many Malaysians witnessed the bear and bull during the ups and downs of the economy. Nothing happened to them as they did not suffer any losses and neither did they gain anything from these cycles.
No crystal ball
Many investors were cautious because they do not have a crystal ball to predict where the bottom of the market is. Unfortunately, there is no such thing as a crystal ball in the investment world.
Everyone is faced with the same dilemma. Even the professional investment fraternity cannot predict the market accurately. The only difference between a layman and a professional is that the latter is equipped with a bit more information and some knowledge about investing. But their vision is also limited.
They can only see a few feet ahead. Their vision becomes hazier further away from the target. Beyond certain circumference, they probably cannot predict what will happen. Whatever they forecast is purely based on a set of assumptions which may or may not be valid. As such, the predictions of many analysts and fund managers are nothing more than their own assumptions.
Travelling on rainy night
Investment is like travelling in the rain at night. Some may park their cars by the side of the road during thunderstorms while waiting for the rain to stop.
This is especially true for those with astigmatism and poor night vision. They know they can only travel on a rainy night if they have their vision corrected.
Some will drive very carefully in the downpour due to poor condition of their wipers. They know that they are not equipped to speed before changing the wipers.
For those who are well equipped and familiar with the road conditions including the bends and nooks, they can drive on with reasonable speed. Hence, they arrive home early and safe. Getting home safely is important, but getting home early is definitely an achievement. For those who are less equipped, it is better to get someone who knows how to drive to take over the wheel.
In investment, one must be equipped with the basic investment knowledge and familiar with the investment conditions. Otherwise, the road ahead could be treacherous.
Crisis means opportunities
The prevailing financial crisis in US may provide the much-desired opportunities. The Chinese character for crisis means danger and opportunity. These meanings must have been coined many years ago based on the Chinese’ experience. The explanation can be seen as a clue and it has helped many successful people to make huge profit.
“Buy when markets hit the point of maximum pessimism.” — Sir John Templeton
For those who have been keeping their savings in the bank, the opportunity arises during a crisis. Their patience eventually becomes fruition. The day of recognition finally arrives and their prayer is answered. Ironically, many who have patiently kept their savings in the safe cradles become more protective of their savings and they just stood by the sidelines, watching the crisis comes and goes. It happened in the past and it is happening now and it may also happen in the future.
Market chaser — a loser
On the contrary, there are also certain groups of investors who always chase the market. They get excited whenever the market runs. They are overwhelmed whenever the bull is in town and they tail behind the bull. When the bull is gone and the bear returns, they become fearful. They hide at home and cuddle whatever balance they have in their savings.
“The public buys the most at the top and the least at the bottom.” — Bob Farrell’s Rule No 5
As a whole they put in more money during the bull market than in the bear bottom. Some even cut lost after a substantial fall in prices. In a way they “buy high and sell low”, whereas the basic rule of investment is to “buy low, then sell high” — a simple investment tenet understood by most people, but not being widely practised. Although we may not know where the bear bottom is, buying in a down market may still lead to losing money. This is definitely true. As long as the purchase is not at market bottom, it may still result in losses for the time being. This is likely to be a short-term loss but compensated by a probable long-term gain. Even if we cannot time the market perfectly, we are definitely better off to “buy low and sell high” then to “buy high and sell low”.
Prices fell but value intact
Presently stock prices have fallen sharply. Banks are trading at 1x book value, property stocks sold at 50% discount from net asset value, utility stocks trading at single-digit price-earnings ratio providing an earnings yield of more than 10% net of tax and there are many good stocks trading at dividend yield of 2x bank interest rates.
While prices have fallen off the cliff, the values of these companies are still very much intact. The present financial tsunami in the US has its impact on many Malaysian companies. It will cause a slowdown in our economy and affect earnings over the next one to two years. But isn’t this part of business risk? Established and proven companies have weathered this many times as in the past and they will eventually end up bigger and stronger.
Prices may fall but the value of a good company is still very much intact. The value of a company comprises the brand name, business contacts, the team of suppliers, the network of clienteles, the internal management control, the technical skills and etc.
Warren Buffett is busy buying
Warrant Buffett, the second richest man in the world who makes his fortune from stock investment, is busy buying undervalued companies. He sees the value and he also sees prices detaching away from the intrinsic values. He said: “I haven’t the faintest idea as to whether stocks will be higher or lower a month — or a year — from now. What is likely, however, is that the market will move higher, perhaps substantially so, well before either sentiment or the economy turn up.”
Although we may not be able to imitate exactly what he is doing, we can still follow some of his investment strategies. There are a few strategic moves that he has employed in the current financial crisis:-
• He is able to buy those shares which he likes in the past at a huge discount to the net worth, which means his safety margin at this point is very good.
• He aims to hold the investments for several years for huge profit margin as he is unlikely to sell for a small profit.
• He does not rush in to buy, he is very selective on the stocks he bought.
• He buys gradually. Thus far, he only uses about half of the cash balance in Berkshire Hathaway, his flagship company.
While others witness the collapse of banks in the US and wonder which one will be the next to fall, Buffett discovers many cheap buys. When Alan Greespan said this is a once-in-100-years financial crisis, Buffett believes this is a golden opportunity to accumulate undervalued stocks for his collection.
Catching a falling knife
Some may argue that buying now is like catching a falling knife. If you are not careful, you may be hurt and suffer more losses from falling stock prices. There is no doubt that we may incur short-term losses as long as we do not buy at the bottom. On the other hand, who can determine where and when is the bottom. As long as there are still unknown events or hidden problems, an apparent bottom now may not be the eventual bottom. Since we do not have all the information in the market, it is almost impossible to guess where the bottom will be.
In most cases, we only realise the bottom after it is over and by that time stock prices are running high with much improved market confidence. Market bottom could be there only for a short period. In most cases, market did not stay at the bottom waiting for investors. It will just move on.
Since market moves ahead of the economy by about six months, the market bottoms out when the economy is still gloomy, news are still negative, analysts are still calling underweights and most investors are staying at the sidelines.
In the absence of a crystal ball and in order not to miss the market bottom, it will be more profitable if we learn how to catch a falling knife. The good thing about a falling knife is that, we know it is a falling knife. So, we only need to use some precautionary measures to avoid being slashed by it. Handling something we know is definitely much easier than dealing with the unknown risks, something which hits from behind without warning. When we invest during a crisis we actually go in with our eyes open. We know it is definitely risky but we also know it could also be very profitable. If we can handle the risk, the risk-reward trade-off will be very rewarding.
What we need is to buy near the bottom, not right at the bottom. Investors’ frequent question now is when to buy, that is where is the bottom? Perhaps it is more intelligent to ask how much to buy now since nobody will be able to guess where is the market bottom. Even if someone provides advice for market timing on when to buy, how can we trust he knows the answer. He is probably doing it as a favour in order not to disappoint the enquirer with a negative answer — “I don’t know” (which is a fact, unfortunately), or he is probably guessing based on some assumptions.
Staggered buying is preferred over bullet purchase which is taking the risk of timing the market bottom. In staggered buying, a pre-determined amount will be set aside for investment over time, say in 10 equal portions.
One common method of staggered investment is dollar cost averaging, an investment scheme made in equal portions periodically, either by a small amount monthly or larger amount quarterly. There are also several variations of staggered investment.
The investment portion can be modified to x percentage of cash balance, say 10% of available cash balance. An investment of RM100,000 will start off with RM10,000 in first purchase, then RM9,000 in second purchase (ie 10% of the RM90,000 cash balance) etc. This method will stretch the money over a longer period.
Other than equal interval investment outlay irrespective of how the market performs, timing of the next staggered investment will only be made if the market dips by say 5% or by 50 points.
For more aggressive investors, a 10-equal portion of investment could be finished before market hits the bottom. This could happen if the market takes longer-than-expected time to recover. On the other hand, a more conservative investor may be investing too slowly and the market may have rebounded before he or she has invested half of the money set aside for investment. This could happen if the market rebounds faster than expected.
Anyway, staggered purchase is a preferred method to avoid the anxiety of market timing and the mixed feeling of fear of further downside and worry of missing the market rebound. As long as the market is undervalued, the strategy of staggered investment ensures that investors are in and are benefiting from the undervalued market.
ok ... will comment on that ... perhaps tonight : e-meeting time 9.30pm?
It has been exact 10 years ...when I started this blog.
As I was a blogger back then, my blog was 'filled' with stock-trading, my activities ... so, I decided to start THIS ONE ... to focus on my journey into stock-market trading, after fully cut-loss ALL my holdings
I bought my first stock (Astro at RM4) in Dec 2007 ... then trading few stocks with the guidance of my young dealer (of OSK, KK)
My holding before the Mac GE12 result : LionDiv, Ranhill and Jaks. Market gapped down after the results as BN did not win 'the majority' seats for 1st time in history.
In July 2008, after those 3 drifted much lower ... I decided to cut-loss all and RE-START.
That was 2008 ... my most painful year, being less than 1 year in markets, and facing huge personal financial-crisis.
In July, my baby girl was born ... with no-so-normal legs and only to discover that she is categorized as 'slow-learner' ... well, in-out of hospitals ... cried so much behind the closed doors ... and staying strong to face reality ...my wife with my young 2 yr old boy, financial-crisis (un-able to pay for my credit-cards ... even the minimum 5%), pain of cut-losses in stock-markets...
Well ... 2008 has been the greatest year for me as I learnt most of painful lessons back then. I could choose to QUIT ... but I chose to re-start and learn about stock-markets.
So ... today, I will spend some time re-reading my writings in 2008. I was naïve but very determined. My learning accelerated as I focus in my learning ... and the rest is history, as they said.
8th Aug 2008 ... China Olympic ... I started this blog.
Happy anniversary to my blog : My Trading Adventure
Tonight in mood to have e-meeting : celebrating my 10th year in this blog.