So Smurfs , how long did you do paper trading before you did your first real trade?

Excellent. You sure you know trader?

Over your time as a market player, you would encounter countless theories on how to play the market. But so many theories. Macam mana? Some make sense, some just purely sin kar, some totally ludicrous. How to know which one? Which method? I have always advocate that in order to achieve the best possible result, you need to play your A game, your BEST of BEST GAME. If you are a trader, trade. If you are an investor, invest. It gets more complicated than that because as you know, there are just so many ways to trade/invest/etc etc. (which is why paper trade is so important. This is your discovery period, where you discover who you are, which METHOD you are good at, what you suck at.. etc etc etc).

As a trader, knowing the funnies is just an EXTRA but yet VALUABLE option. You understand the potential catalyst that investors seeks in a sock. And yes, as badly as I despise bottom fishing/deep value investing ie.. buying a stock just because of its value DESPITE its clear decaying economics of its business structure. It just means as a trader, you understand why and when there might be buying catalysts that could drive up a stock. 

As we know, the very basic and common sense why people want to invest/buy a business is because the business is going to make more money. The future potential is bright. All the shareholders of this business will earn more. So naturally people would just want IN.  And in the stock market, such action causes buying frenzy, which naturally drives up the stock higher.

Hence, knowing the funnies will give you an advantage.

If one trades based purely on the charts... one is trading based on what the markets wants you to trade. I find that this method for a trader, one is always a step behind.  There is no EDGE at all....

So you realise and understand that dividend counters will have its risk because the lower profits puts a burden on the company's cash flow and hence forces the company to reduce dividends.

Case study: Amyway.

Hope you understand when you said PROOT would be a dividend counter is risky.

I dun have
How are you?

Early, early morning got brain twister
For me, if that was me, I bought the stock (which I thought had value) but yet the stock went down, the first and best thing to do is ALWAYS try to look at it with an unbiased mindset. Forget the value thing. Forget the discount. First thing is that the bloody stock went down. Which means is that I have to ask myself if I had bloody well farked up on my assumption of value there. DID I MAKE THE BLOODY MISTAKE IN THE FIRST PLACE? That's what I would ask instead of using quotes like 'BE GREEDY WHEN OTHERS ARE FEARFUL. When we do not analyse ourselves first, that would utterly render that quote useless.

Take that Parkson example again. Take Feb 2012. Profits 100 million plus. NTA 2.39. Parkson price then was 4.40++

So Parkson was tumbling down....

Assuming one spotted it but decided that they would take the good old value+patience approach.

They wait ONE year later before pulling the mighty trigger. May 2013. Profits 70 million plus. Still bloody good ma. NTA increased to 2.59. Price was 3.0+. And they note, got dividend and got share buyback. What can go wrong?

Well profits continued to fall. From 70+ million, profits plunged to 30+ million.'

Now assume this fella did not average down YET.

He/She played the patient game... but come AUg 2015.... profits turned into MASSIVE losses. ...... and Parksom traded only around 1.10++

Hey its NTA still 2.43 wo...

Then came the aggressive AVERAGE DOWN..... how can go wrong? ICAP fella still invested in the stock. Big massive discount now....

Ahhh..... this is where it can get really interesting.

Say initial investment was 3.00. Bought 10,000 shares.

Now price 1.10. Buy how many? Buy 30,000 shares?

Then price dropped 90 sen? Buy 10,000 shares?

Then price dropped 80 sen? Buy 50,000 shares?

Then price dropped 70 sen. Buy how much?

Ooops.... price dropped a lot this year too. Now 55+ sen. Buy how how much?
Now add them up. 

What's the average price?
You know... if I throw away all my market knowledge and just analyse these actions.... isn't one BUYING MORE, MORE, MORE of one's initial mistake?

But then the stock market is a beast, an unpredictable beast.

So badly and deadly the Parkson example is, there are always exceptions. As we all KNOW, any stocks can be fried up. Good stocks or bad stocks. Doesn't matter. It's just a stock and it all can be fried.

Naturally this complicates and confuses the hell out most beginners.

They will say... ah... Parkson just one bad example.

They would then use maybe Vivocon and throw that share at my face. They will say... see that share use to be 25 sen. So I bought at hald price. 12.5 sen. I was confident. When it drop to 11.5 sen, I sell all my underwear and buy, and buy and buy. When it hit 14.5 sen, I sell all. Now I buy many new underwear.

Yup.

It does complicates things. So damn confusing.

Which one to use?

One thing I do know is..... WHEN you average down and WHEN the stock keeps falling, one is gonna need A LOT, LOT MORE capital just in order to help recover the losses. So do ask yourself, got enough money ah?

Cheh!! Show off!!!



it's not just about trading the correct stock...
it's about managing the risk in the stock u are trading...

those 5% win stocks...
those win kfc trades...
those mucky mouse trades...
these are drugs....
They kill and they destroy whatever potential one has as a trader.

every year u hear folks come in forums and boast...
every year they disappear...
cos they tend to lose more than they win...

Very evident isn't it?

the phrase 'so so' ...  is too generous
I might favour a weaker ringgit in the near future....
still weighing the risk though...

Naughty you.

ya..ya... Karex.. said long b4.
I think this is another fine example of not to use Uncle Buffett saying of 'buy what you know'...
and also 'big' or 'well known companies do not necessary make a good stock bet.

... and ya ya.. stock buybacks or insider buying... is never a safe indicator.

staying on sidelines is never a bad idea ....
buying for the sake of buying IS.


couple of interesting stuff...

Muda vs Orna.

FPI looks interesting, no?

Air asia... Roflmao.. fire sale? lol.. nah nah... leasing co sale die where? ok.. fire sale could clean it's bs nicely... and the stock market is liking it?

That AirAsia really something... pathetic

** though those fansi who made money from the stock would never ADMIT **

last time... borrowed like hell... and yet bought more planes...

now? They sell a bunch of them planes?
why?
to reduce debts....



** ever occurred to anyone that perhaps if TF would be more prudent and less arrogant .. they would not have to do such a fire sale? **

and yet they got so much more new planes to masuk.

lol... so in the future... just sell some more planes loh...
lol... the wonders of the corporate market.
ps... got dividend from the fire sale ah?

.... remember these projections are really flimsy back of the envelope or back of the tissue paper numbers.
there must be evidence (eg.. say higher favorable forex numbers) that support your projected numbers....
you cannot simply tembak a number based on say cagr growth of 25% over the next four years where there is nothing in its business economics that suggests it is remotely possible.....

I had always proclaim that one should use chart and not let the godamm blardeeee chart use you...

Don't be slaved to the charts la...
thousands of charts .... hundreds maybe could be traded... but could you trade it profitably each and every single time? (me? I lousy... i ken not. )

charts is like a map for me...
if you are not too comfortable with the proposed journey... don't get on it...
don't trade for the sake of trading...
be selective... be very selective.

and also.....
every single time.......
whenever I make any analysis....
my very first rule....
I am always wrong.

Analysis could always be wrong...
same with chart readings...
and there will be many times when our analysis would beg to defer from our chart readings...
it happens....
how we deal with it?
well.... it depends on each individual case, no?
for me, there is no one rule that fits all....

how we adapt to each situation but most important... how well we manage our risk... that's the key, no?

Trading turnaround stocks....

It's never really safe to be early in such theme based trading. ie the morning cooko bird might not catch the worm.

You assume that the said company earnings would turnaround....
if does, you could win big....
but if it doesn't ..... remember the other side of the coin do exist!!
..... which means you could also lose big too!

.... well ... we have seen it happen a lot, yes?

How many have you seen jump so quickly back into Superlon after last Sep earnings?
One of the reasons is that the assumption that Superlon earnings will recover.....

Or how about the Oil  and Gas collapse?
How many rush way in way too early?
People will always make mistakes.
Losing the least money in each of the mistakes is important, yes?
p/s..... waaa so early meh?
Got what good stuff?