I believe that most important is running some back data testing ourselves to check out theories....

One of the theory, which I am very sure of, is the DIVIDEND MAGIC theory.

I am always not impressed with those promoting theories that on dividends. Hold it many, many years and one should be able to see the wonders of dividends performing its bomoh tricks on your money....

The very simple point is the share price is never constant.
It is traded.
And with share price getting adjusted after it gives out dividend, how good could it get?
Furthermore, once if dividend trend is on a decline, the share price tends to fall too....
So how safe is this dividend theory?

I always feel that dividend should never be the main reason one purchase a stock....
would I buy a cow just for the milk?
or should I buy a cow for its milk and its meat?

Back to Maybank....

now what if I roll back and do two more years?



EXERCISE NO. 1

Buy Maybank in 2014 at the lowest possible price and hold until now!

Purchase Dec 2014. Price RM8.24

Dividend received since = 0.33 + 0.54 + 0.52 + 0.55 + 0.57 + 0.64 = 3.15

Current price = 7.62.
Purchase price = 8.24

*Current holding loss = 0.62

Total dividend received = 3.15
Total gain since buying = 3.15 - 0.62 = 2.60

CAGR gain for 6 years = 3.65%



=========================================================================

EXERCISE NO. 2

Buy Maybank in 2013 at the lowest possible price and hold until now!

Purchase Jan 2013. Price RM8.90

Dividend received since = 0.33 + 0.535 + 0.57 + 0.54 + 0.52 + 0.55 + 0.57 + 0.64 = 4.255

Current price = 7.62.
Purchase price = 8.90

*Current holding loss = 1.28

Total dividend received = 4.255
Total gain since buying = 4.255 - 1.28 = 2.975

CAGR gain for 7 years = 4.21%
And what can we deduce from this exercise?
I cheated and used the year lows as my buying price. I cherry picked my purchase price.
Consider this. In July 2013, Maybank had a high of 10.80!.
If 10.80 was the buying price, the current loss would have been 3.18.
Which would have reduced the total gains to a mere 1.075...
which would mean the CAGR gain for 7 years is only 1.65% !!!

How good and how safe dividend investing is?

That's my main point.....

Jaga lo ....

Here are some selected stock charts.... the blue vertical line indicated 4th June... the day you asked me...








here are my 3sen opinions...

1. most of the tech stocks have done pretty well since early March...

2. now this for me was the matter of preference. If I had not chosen the glove stocks, for sure the tech sector 'might' have been a choice for me... but then it's June and frankly, these stocks in June was not in my buy setup. Not that cannot buy ( and if you would recall my earnest reply to you was that it was worth a shot) but most of the tech stocks simply had been trending nicely and imo the trend could still have legs to go very much further....

yeah, it's complicated. lol. I see them going up much higher but I would not trade it.... LOL. Make sense?

3. If I had chosen the tech sector instead of glove stock, clearly I would have just sit on my fat SSSS and not do twiddly...  there is no sell indicator, so why la sell?

Finally got tipsy  

Thanks for the lengthy reply! appreciate it. yeah, you've mentioned about this last few years too. i was diving and reading the posts over here. haha. never felt that i'm good enough to share. you've been promoting paper trading for a long time and i've followed your advice since. backtested the indicators and buying/selling for years too. trading in and out on papers did yield me better than my current holdings. old habit hard to die eh  

first few books and father were influencing me much i guess. hence during this mco time, picked things back up and wanna reevaluate all my strategy. due to my diversification, i wouldnt say i earn big, but i'm satisfied. wasn't fluctuating much during down turn, but when the market is good, they're good. but again, with the paper trading i've been practicing, the return is better. but still, i'm not confident to trade.

however, the charts and FA do help me to get better entry. when you mean the best trade, it looks like to me you only trade like one or two stocks at a time. so, that means you are indeed very sure on the entry and the trend (swinging, mostly?). let say there's only one stock and you are sure that it's gonna bring you much meat, what if it goes wrong? or you never went wrong? cutting loss is not something shameful like you said, when you trade only one stock, after calculating the risk/reward ratio, when you lose, that means you're losing with a cut loss. did it ever happen? i assume you did much better than almost everybody out there due to meticulously increase you win rate to more than 52%?

I do what's best for me, so should you. I tend to keep things as simple as possible. Trade only when I think a big win as possible, else do nothing.

To each his own. But I'm open to any kind of interpretation and always want to learn from everyone. Not that I'll take everything blindly but it's interesting to look at what works best for others and be ready to change my own strategy. Lots of people have a huge pay wall put there. Claiming that they are sifus but you always share unselfishly. Really appreciate it.

Perhaps Maybank was the best example....   

Really............................

It's one example where you could put a lot of theory into test....

1. Buy the big blue chip. Does it hold true for Maybank? Reflect the test results from 2013 onward. And mind you, I used the assumption that one could buy at the lowest price each calendar year. Results are pretty dismal, yes?

2. Buy what you know best. ( so if one uses Maybank for banking and everywhere they go they see it is Maybank... so would investing in Maybank yield a good result?)

3. Invest in a big name stock for dividends..... again results for Maybank was dismal !!

4. Dollar average cost. LOL! Don't get con by this. You can dollar average for Maybank all you one and the end result is there .......

5. Same with averaging down. If the initial purchase yielded poor result, you are merely magnifying the poor result....don't you dig the hole deeper!

etc etc etc ....

run the back test. you hear an idea, test it out yourself....

If the past shows poor results, why should you adopt those theories?

So yes, to each their own... but do make sure your own has the capability to yield you good result. That's what important yes?
I can just bet big on a singular stock. It works for me but it might not work for you.
I bet big on that one glove stock earlier this year.
Now I am done... most likely for the year unless I see something that fits my setup.
If nothing then I do nothing...
Sit and sit...
Betting on say four or more stocks just doesn't work for me. That's me.
I don't spread out my bet but that's me.

If you go into a fight... if your kicks is your most lethal ... then you better make sure you go in hard with your kicks....
Fight your best fight....
Don't fight with something you are not good at.
It applies very much in the share market...

If trading short doesn't work...
hey, adjust the time frame...
Use the weeklies.... or the monthlies....
paper trade to find your best fight...

nononon, i wasn't trying to disapprove your train of thought
in fact i totally agree with you

i started of using divi as my own yardstick as well and all the stocks were selected based on divi as one of the qualities
but soon, throughout years, the stocks were losing steams but the ones which didn't give out much divi grow better

in fact, this mco had given me lots of time to reflect and reread everything possible and i've grown towards your methods as well
was trying to diversify a lot to reduce risk ended up shaving away the chance to get bigger profit as well and therefore i'm trying
to reshuffle my stocks now. still finding chance though.

even after years in it i'm still learning to be better, used to think that average down was a good tactic (no, learnt the hard way) and changed
to averaging up, riding the winning stocks and yielded much better results. cutting lost too and picking another ones, etc

and now the one i'm learning is to kick hard like what you said, focus on the stocks I picked because i should have been confident on the stocks i pick,
go big or dont go at all. be prepared.



hopefully when i come back a few years later, my track record will be prettier than where i have today 

the market is very choppy now with a limited upside so I assume that's the reason you said you're done with the year, is it?

when you said kick hard, I assume it's more than 100%? What if there's no COVID and what would be your alternative?  I was struggling with evaluation before this and totally missed glove. chase high isn't something I do usually, and now chasing high with a trend is something I must learn.

There's nothing that really fits into my trading setups.  That's all. Several iffys but nothing really seduces me.

LOL! You cannot follow what I do exactly la.... siao ah??

Before COVID hit hard? Look for companies that's most likely gonna make more money in the future. They need to sell the sexy story....

Chasing trends? Not easy game to play ho. Even I no good at it.

of course I wont. LOL

nobody's the same because of style and personality. 

and this is what I look for ----> "Look for companies that's most likely gonna make more money in the future. They need to sell the sexy story...."

after covid hits, snatched a few techs but patience is needed especially after the supply and demand chain were disrupted.

but it happened just right after MCO started. did my last buy in the early april and nothing afterwards. and that's the time I got more time to read whatever I found and did some catching up.

paper trading during that period was great but i'm not sure it suits with my personality. but you've given a super important point, buy only when there's a certainty and confidence on a stock with BIGGER lots since the risk is the same. april and especially in may gave me so much time to catch up with things and when i looked back now, earnings were ok-ish but I wish I should have been more confident and not to diversify too much.

the change is there.  one good thing is I have immense patience. gonna utilize that and now revamping my overall strategy slowly.   

Did you read my initial glove posting and the back test data I did?

See that back test data was crucial. It showed that ...

1. During the SARS pandemic ... the glove stocks really flew.... we are talking multi baggers here. And obviously the best strategy is whack it as much as possible and then sit and do nothing.......

the in and out strategy makes no sense. why go for a few bucks profit when there's big money to be made?

2. The profits soared.

Okay but this time it was slightly tricky. Cos during the SARS period, players like Supermax and TOP were still babies... now they are big. So I did have some doubts on how big of a profit growth is possible....

This was what was needed. Back test the strategy you want. If it made sense and there's a possibility of big money... swing hard at it.... 

That's all....
See how important back testing is?

At times like this, one of the common things you here is go for dividend stocks..... but as proven numerous times before via back testing... this strategy is iffy. It's not a sure win!

Without back testing, you won't know what's good or what's iffy....

backtesting is extremely important. googled every kind of indicators and backtested them within a few years' timeframe. ended up giving mixed signals.
scrapped everything and focus on the good old price action/volume and trend.

so currently i just look through the companies' fa, compared with the companies in same sector, korek their figures + news, and wait till I get good entry.

diversified too much I guess. although like I said, it did balance out the risk but it also shaves off the profit much. it's only within the satisfactory region for my taste. 

about SARS and COVID, read something about chances amidst crisis and how one should get hold of it. totally forgot about this till I cleaned everything, saw that book and realized that
I totally missed the ride of gloves.

but, you've let go of your TG right? assuming the pandemic will still go on and ASP will still keep rising, why did you let it go? the few small ones like comfort etc are posting good results
and expecting ASP to raise still for the next few months to fy21. 

I did not say I played TG.

I posted my exit. One really needs to know when to sell. When to admit you farked up and sell your mistake and know when to collect your winnings.... Know your setups.

understood. looking at the chart now, it's breaking previous high, so I assume that if one has it, looking at the near-term prospect especially when the market almost guarantees a record-breaking profit in the coming quarter, wouldn't one to hold for another few weeks or months for better profit? but of course, one can't have everything. 

What is the good platform to start looking and tracking at share?

Do Kenanga provide their user with protal for the portfolio monitoring?

TIA

LOL! You bought much earlier than June 4th .....

I don't follow this stock. Hahaha.... Dunno what UWC stands for.. dunno what it does.. lol...

Considering your purchase price... LOL..... why sell? Seriously la..... I don't see the weakness la... in fact it does looks interesting...cos we could even have a pennant play here....


Anyway, do a paper trade yourself here...
assume you DID not sell...
assume you will hold the stock till the day the stock actually corrects (more than 5%) ....
mark that price vs your sell price today...

why?

it seems you are selling AHEAD.....