Friday, August 19, 2016

Planning for crash : Diversification

it is 2.30am ... I slept 10pm ... too early. Now, I could not doze off.

Listening to my old-fav Eric Moo's songs ...

Will be listening to the whole list of about 50 of his songs ... I have full collection of his songs (CDs), and one day ... I will have my own room (with good hifi system) ... sit there for an hour or two, just listening to songs!! My dream ... after retiring.

Back to market ... thinking about PATIENCE, a topic I discussed with the group.

Why there will be no crash in 2016?

Because it is NOT hot enough ... not many retailers in market and many talking about crash!! When everyone talking about the potential of crash, it will NOT. Crash happens when no one believe it will ... and majority earning easy money and happily telling others about their profits and ... I TOLD YOU SO being played many of times.

We do not hear that now, do we? I will check forums once awhile .. to see such 'mini' euphoria forming .. then, correction will be around the corner.


別再問我愛你有多深 我已無力面對你一問再問
是否我的感情如此不堪讓你等 我卻為你苦苦的生存

別再問我愛你有多真 我已無力證明心有多誠懇
是否我的感情如此不堪讓你等 我卻為你苦苦的生存

明天的問題讓我來承擔 多少人的決定比我們更難
只要你的心堅定不移不怕不逃避 就讓不安的心隨風去

別再問我愛你有多深 我的深情和你一樣的認真
是否我的回憶如此不堪讓你等 我願為你苦苦的生存

During crash ... how should we diversify?

Let me put one hypothesis : Lets say we have RM100k fund readied and we are going to buy FIVE penny stocks (which could be around 50cents ... example if AirAsia trading @ 50cents or UEMS @50cents ... or FLBhd@ 50cents ... or SKPetrol @ 50cents ... or HuaYang @ 50cents .. or Prestariang @50cents or ... you get the picture stocks I m aiming at 50cents, right?).

Assuming we have stock A, B, C, D and E ... each from different sectors.

With RM20k for each ... we could divide our buying into 3 stages. RM4k, RM6 and RM10k.

At 50cents : plunge in RM4k for first stage buying

At 40cents : plunge in RM6k for second stage buying

At 30cents : sailang ... show hand RM10k.

Then ... wait for recovery. ONE DAY ... sell in staged once stock-price shoot ... say 3x, 4x and 5 times.

At RM1.50, sell 1st and 3rd portion ... and at RM1.60, sell all. haha.

RM4k x 3 + RM6k x 4 + RM10k x 5 = 12 + 24 + 50 = RM86k.

So ... in theory, if according to play profit would be RM66k ... rounding to RM65k la(fees plus GST).

That is about 325% profits.

Is that good enough? To some ... if that is true, it is very good. But ... that is an over simplified hypothesis I put out ... no brainer kinda plan (what do you expect at 3.45am now?)

In case the stock we bought did not rebound ... instead goes into below 20cents or de-listed, too bad. Cry is an option ... don't think men do not cry, ok? (title of the song. haha)

Learning fundamentals becoming more important now ... plan plan plan.

ok ... it is almost 4am. Last song ... and I m going to take a nap and go for my morning job.

nightzzz ... should be morning.


1 comment:

Unknown said...

Its easy to say this and that. When the time comes will u buy? Air Asia went below RM1 last year. Did u buy?

If u did, I am sure u are a man of your words and will prosper when the crash comes.