Monday, 3 November 2014

Global market adjustment, what am I doing? (end)

I think Oct has been a roller coaster for a number of investors. Looking back for just 1 month, how many people has been played by the V-shaped rebound?

Several things to take note of:

1. If looking at the lowest point of adjustment makes me feel fortunate that I've sold my shares earlier, then what should I feel right now (i.e. as of market closed on 31 Oct)? Remember this experience.

2. The lesson of how to sell a share. To learn to let go, not to have any emotional connection with any share. This is not the first time I know this, but I didn't take it seriously. Selling INSAS 1.5 month ago taught me a lot. People say you need to forgive yourself, for all the things we didn't do, for all the things that we should have done. This is even more true in the stock market. It doesn't help if I keep on lamenting things like "I should have bought this share earlier" or "I shouldn't perform this transaction". Make peace, move on.  

3. The importance of capital protection. One of the reason why I sold INARI is that it has come to the point with the minimum acceptable profit. Of course, looking back now seems so stupid of me, but what if? No one knows what's going to happen.
As what people usually say: the stock market is always there, but will you always be ready for the market?

4. Confidence. I have to admit that I lost confidence to INARI after seeing it free fall consecutively. I even thought of something wrong is happening within the company. The is the main reason why I sell INARI (which some people raised concerns about its financial credibility before) and GHLSYS (which I bought in without any good reason except GST). But during the panic sell moment, I kept SHH, because I have confidence in the company. How to have confidence? Do homework and understand the company more.

5. Be patient. Sometimes retail investors are like patients in the stock market, looking for some guidance. So, patient needs to be patient. Even if the market is going up and I am holding cash, that's ok. Return is not determined by 1 month, look for a long term perspective.

6. At the lowest point of adjustment, a lot of shares have dropped to below my target buying price. E.g., MMSV 0.45 (lowest 0.38, current 0.58), IFCA-WA 0.30 (lowest 0.285 current 0.59) etc. At that time, I not even thought of buying any share. Ironic isn't it?

This experience makes me realize that I have no difference from most of the others,to be emotionally controlled by the market. I followed the crowd to panic sell at low point. If this is the case, how can this makes a difference in my investment return?

7.  Where do I stand in the market? I need to know what I am doing, all the rationales in buying and selling, and the plans of what if, i.e. risk management. If I know what I am doing, and know where I am standing in the market, I wouldn't have lost myself if something happens.

It is what it is. Take it as a lesson. Move forward.

Saturday, 25 October 2014

Global market adjustment, what am I doing? (2)

In one week time, things can change dramatically. The things that I hold so tight to previously, all gone in a few days. It was so near to me, yet it is now far away from me.

Ironically, I told myself that my target price is RM 2.70 for INARI before. When it reached that price, I didn't sell.

Ironically, I sold some shares at RM 3.18 before, which at that time it went to a high of ~RM 3.30+, which I thought that I've sold it at a low price. Seriously? What happen to me, that I still crave to sell at the highest point? The tighter you cling to something, the faster it is going away from you.

It has been so ironic to me, that my final selling price is not even my target price previously. Even worse, this is not the first time I experience this (see here).

I also panic sell GHLSYS at the same day. It now seems so stupid of me, that I could have had a return of 30% a few days ago before I sold, and now it became 3%.

What am I doing? The market has not adjusted for sometime, and I indulge myself to this kind of situation, to have 100% shares at ALL TIME, thinking to grab every single cent from the market.

What am I doing? I take things for granted, as if I should always be making profit, although past experiences have taught me not to (never) take things for granted.

What am I doing? I did not let my capital to rest for even a single day. I let them to subject to the daily market fluctuation, watching the portfolio rise and down, until I lost myself.

What am I doing? This experience is similar to May-Aug 2013, of which I've written some reviews in Jan 2014. I was vindictive last year, which has cost me even more, so now I decided to rest for sometime. 

[to be continued]



Monday, 20 October 2014

Global market adjustment, what am I doing? (1)

Global markets drops consecutively in two weeks ago. As usual, Asian markets will follow the trend of western markets.  I believe these two weeks has been a turmoil for a number of investors. Unfortunately, I have to admit that I am one of them.

The first day was 7 Oct 2014.


I use the term adjustment, because at this point it is sure that this is an adjustment since KLCI index drop far below its 200MA, i.e. year line. I don't know if it is a bear or not at this point.


Small and medium capital shares adjust really a lot. In just a few days time, my buddy INARI has drop more than 30%. 



My profit has evaporated significantly. This is what happen to INARI price, and how my feeling is manipulated by the market all these days.







7-10-2014: First day drop, no feeling at all. Not even thought of selling.



8-10-2014: First day GAP DOWN, continue holding, hoping it to get back. I told myself
that if the coming rebound has no volume, I will sell it.


9-10-2014: Small rebound. It happened that this rebound did not have the volume I expected. 
Yet I convinced myself to hold. Why? I am longing it to get back to its 
"normal" position that it used to be, i.e. above RM 3.20. (mistake 1)

10-10-2014:  Second day GAP DOWN. It is painful, terribly painful. One day of plunge
can get back to the price which is 4 months ago, i.e. if I sell now, I lost 4 months of

opportunity cost. I am still too proud to lose at this point.

13-10-2014: Third day GAP DOWN. Horrible sell off. Price went back to 7 months ago.
I can assure you that seeing your profit evaporate day by day is an extreme 
agony. 



14-10-2014: Fourth day GAP DOWN, cannot tahan (stand) anymore, SELL ALL. (mistake 2)


15-10-2014: Continue going down, totally out of my expectation. Of course I felt
fortunate that I've sold it yesterday.


16-10-2014: Fifth day GAP DOWN. A total drop of 35%+ from 3.18 to today's low.
All happen in 1 week time. The opening price is RM 2.04.

Even though I know that this is a bargain price;
Even though I know that technically, the price is completely out of BB lower band 
(i.e. a rebound is very soon);
Even though I know that it will not continue to gap down everyday; 
Yet the emotional fear has stopped me from buying. I am too scared to buy in.

I guess this gives me a taste of bearish market,
that no matter how low the price is;
that previously you've thought that you would have bought in (probably all in?) at this bargain price, 
that who is so stupid to sell INARI at RM 2.04;
But the market will scare you from doing so. I admit that I am completely scared by the market at that time.
After all, seeing what happened on 15-10-2014 is that it open greenly in the morning, 
and at the end of the market it went down from RM 2.50 to RM 2.22 to close at the lowest
price. How dare for me to buy in if I see this kind of transaction?

Logic says: hey, INARI 35% discount price, when will you see this bargain again? 
Emotion argues: OMG, it has been free fall for so many days, how dare you 
catch the falling knife? never die before? 

At the decision moment, this time, my emotion won. I lost my logical
thinking seeing the market can be red like that.


17-10-2014: Strong rebound, I couldn't believe what has happened. A big slap to 

people that have sold it in the past few days.



After selling, I felt fortunate that the price continue going down.
After the rebound on 17-10-2014, what is my feeling then?

The market is controlled by big fish;
My emotion is manipulated by the market;
My decision is controlled by my emotion;

So my decision is controlled by the market, which should not be the case.


[to be continued]

Thursday, 9 October 2014

2014 Q3 Review

Return: +4.5% vs KLCI -1.9% (3 months)

Transactions: 3

 1. Sell PNE
I've been holding this share for 1.5 years. Not a bad return. Fortunately I have enough patience to wait for it. Thanks PNE. But one thing I must remember is that luck is an important factor. Who knows if it wouldn't move until 3 or 5 years? So I am really happy with this transaction.

2. Sell INSAS
This share has been grueling to me, finally cannot tahan (cannoot stand) and Sell INSAS. I don't have the patience that I have for PNE. Maybe one day in the future I will return, who knows?

3. Buy GHL
I love this transaction. This brings back me the "feeling" of short-term trading. I used to have this feeling, but the experience seems to disappear when I indulge myself too much in the stock market. Luckily I've regained this "feeling". Needless to say more, look at the chart:


9-9-2014: gap up with volume. I refrained from chasing high.

10-9-2014 to 18-9-2014: consolidation with low volume. I observed the movement. Telling myself that my target entry price will be around RM 1.05. Why? Because the closing price before gap up is RM 1.04. A "sincere" consolidation process shouldn't go below RM 1.04.

17-9-2014 already went down to RM 1.03, is in my entry price. But I did not look at the stock market on that day.

18-9-2014 I have something to do in the morning. Wait until I look at the price was already trading at RM 1.07. I didn't budge on the entry price this time. I queued for RM 1.05 and I just do my own thing. And it did match after that. I enjoyed an immediate return in a short time. What more could I ask for?

This is the trading style that I am looking at: wait for consolidation, find an entry price, do not chase high. Just let it happens its own way. If the transaction is not matched, just look for other opportunity. 

Sunday, 21 September 2014

KL: Sell INSAS

Finally, I admit my "mistake" for keeping INSAS. I hold this share for too long, longing for a higher return. The fact is that, I could have had the same return 6 months ago, when it soared from 0.90+ to 1.20+. But I chose to stay on. My capital just can't stay the same all the time. I decided to sell eventually.  



Usually a stock with "big fish" in play will move within 3 months after the first round, but INSAS is way too "exceptional". In 6 months, people can already buy other share and gain satisfactory return from the trading. So I have to "change horse" (i.e. switch stock), to look for other opportunities.

Regardless, I still think this is an undervalued stock. I understand that releasing its values and potentials is just a matter of time. But it is just too long for me to wait. And no dividend some more! Earn so much then no give dividend, how can?!

I've had enough with you. Bye.

Saturday, 26 July 2014

KL: Thanks PNE, Bye PNE

My first entry price is 0.295. At that time, the relevance for me to hold a share which is not making profit is the cash/share > share price:

Total share: 65.7 M
Total cash (@ 30/9/2013): 24.2 M
Cash/share = RM 0.37

RM 0.295/share to buy a share that has a cash/share of RM 0.37, too good to be true, isn't it?

When the share went up to RM 0.60, I am still holding it. I convinced myself that the relevance now is the NTA price of RM 0.94. That the share is traded at a price well lower than its NTA/share. So I still holding that.

When it went up to RM 1.10, I keep holding. This is where all relevance turns into irrelevance, all rationality becomes irrationality. There is no fundamentals to support this share at this price. Yet I even think of waiting the share to flip twice (i.e. 300% return). But when volume comes, I know that it is time to sell, regardless of what's going to happen next.

Looking back, the price movements come in 4 rounds. I am surprise that I can wait until the 4th round. I might have still kept holding it,  had it not been the candle on 2nd July 2014, where the volume is just too scary for me:

PNEPCB


I felt a sense of freedom after selling. And I know that is a correct decision to have some cash on hand.

P/S:
This company has some direct business transactions recently, and it involved a large amount of shares:

26 June 2014: 5M shares dispose through direct business transaction.
1 July 2014:  14M of shares  dispose through direct business transaction. (gee, this is substantial considering that the total share is only 65.7M) 

And recently many patterns come out, change in boardroom, change in director's interest etc: PNEPCB announcement 

The price for direct deal is RM 1.10, which is higher than the current market price. I do not know what is the intention. And there is no point dwelling into the reason, cause you will never know what is going on.

The important thing is: I am free from it. That's it.

Thursday, 17 July 2014

2014 Q2 Review

Return: +9.9% vs KLCI +0.8% (3 months)

Transactions: 4

1. Top up CHHB. details here
This was a mistake.

2. Sell CHHB
I need to use money. I am grateful that I picked the right share to sell. Easy: just sell the one which is losing money. Don't hope for a break even, it may come after you lost your patience. 

Lesson learnt: a 3% loss in 2 months. Not a big deal. But it serves to remind me in the future, that I should have sold it at the right timing.

3. Buy SHH
This should be the one like INGRESS last year, the same reason that I bought INGRESS last year. I am going to hold this share until it brings me huge return. I believe it wouldn't be long.

4. Involuntary trade due to a one-lot transaction.

Dividend: 1

INARI 2.0 cent


Review: The power of compound interest

I am still very focus on KLSE, although I start to keep an eye on US markets.

My strategy is still the same for this quarter, very simple: buy and hold. Nothing more.

I start to feel the power of compound interest, that even a 9.9% gain comes in as a considerable amount. This is the power of compound interest. Interest on top on interest. This is how rich people gets richer. This is how money brings more money.