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.

Thursday, 10 July 2014

KL: CSL chart says it all

Few months ago I wrote something about is low PE shares attractive?

Interestingly, I mentioned CSL in that post. At that time (Jan 2014), it was traded at about RM 0.80.

Today, this share is traded at about RM 0.10. A picture says a thousand words: CSL weekly chart.



You know what happen by looking at the announcement. I am not going to say much about this.

Tuesday, 1 July 2014

US: What is after hours trading?

When you browse for quotes for stocks in US markets, you will see something like this:

after hours trading
(Picture print-screened from the The Wall Street Journal)

The price above is the usual closed price. The price below is the so-called after hours trading price. So what is after hours trading? While this may seems common in US, it is not the case, at least in KLSE.

US market trading hours are below:
(All times are in Eastern Time (ET). Eastern time refers to the time zone in the eastern part of US, not the time zone for eastern countries in the globe, e.g. Japan.)

1. Pre-Market Trading Hours: 4:00 a.m. to 9:30 a.m.

2. Trading time: 9:30 - 4:00 p.m. (Unlike KLSE which has a break time of 2 hours in the afternoon, no break in US markets. Break time even in market trading, what a Malaysian pattern? )

3. After hours trading: 4:00 - 8:00 p.m.

We see that apart from the normal trading hours, there is also a pre-market and after hours tradings, which are also known as extended hours trading.

The reason for this is for investors to trade outside normal trading hours (nonsense?).  This is because a lot of companies make announcement, e.g. quarterly report, corporate news before market open or after market closed.

For example, Chicago Board Options Exchange ( CBOE ) plans to  list options for  GoPro, Inc. (GPRO). (NB: This GPRO has nothing to do with the GPRO in KLSE, although they have exactly the same listing name.) This was announced at 17:05, 30 June 2014 (i.e. after market closed). Seeing this as a positive sentiment for the share, the share of GPRO rose during after hours trading:

(Picture taken from Nasdaq.com)


30 June 2014, 4:00 p.m. price: 40.55 (normal trading hours)
30 June 2014, 8:00 p.m. price: 42.15 (after hours trading)
Change: 3.95%


30 June 2014, 4:00 p.m. price: 40.55 (normal trading hours)
1 Junly 2014, 7:30 a.m. price: 43.37 (pre-market trading)
Change: 6.95%


The price movement will continue until the market opens. Therefore, after hours trading and pre-market trading provides a very good indicator on how the market reacts to the news, and a good insight of the price once the market opens as normal. 

Extended hours tradings give investors to trade at a flexible time. It can also serve as the time to "digest" the news just announced by companies. In addition, for pre-market trading, it can reflect the conditions in other markets, especially EU markets since EU markets start earlier than US markets.


Last but not least, some facts about extended hours trading:
  • they are REAL trading, requires both buyer and seller for a transaction to match (in US, filled is used instead of matched).
  • All stocks listed in NYSE, NASDAQ and AMEX companies can be traded in extended hours trading. 
  • Only for stock trading, does not include options.
  • A lower extended hours trading activity (lower volume) will result in a wider spread (i.e. a larger difference between bid and ask price. Again, in US they use bid and ask instead of buy and sell.) 
  • Share price change, i.e. % change is still calculated based on closed price during normal trading hours. Chart only shows the price movement during normal trading hours.
  • You can view the most active, most advanced and most decline for after hours trading on Nasdaq.com
I hope you have an idea what is extended hours trading now after reading this.

Saturday, 28 June 2014

KL: the so-called one-lot-transaction (一阳指)

In share trading it is not uncommon to see a 1-lot transaction being made. It creates interests because in some cases, a 1-lot match would result in a 10% brokerage fee of the total amount traded, or even much higher.

Yesterday, I have this experience:


SHH transaction

Match amount = RM 94. Brokerage about RM 10+. Brokerage fee = 10%+. This mean that I must have a 10% gain in this share just to make it break even. 

Looking at the queue, the best sell price is 0.985.


SHH queue


The seller intention is apparently obvious: hoping the buyer to increase the buy price to buy at seller's price. As a retail investor, some people would do that because even if they buy more, the brokerage charge remains relatively the same for a trade amount of up to RM 1k. So why not buy more? But then you have to pay a higher price, which is the pitfall set by the seller.

But I am not going to do so. The first reason is because I already have some shares on hand, so that I can sell them all together. Secondly, I am not comfortable to buy at this seller's price, so not falling into the trap. Kind of self-comfort, isn't it?

Saturday, 14 June 2014

US: AMD analysis

AMD shares closed with 2 white candles with relatively high volume on 10 and 11 June. On these two days, there is no apparent reasons why the shares moved with volume. One day later, the news revealed.

Headline: AMD reorganizes (MarketWatch) which states the plan of the company to consolidate some of its business segments and appointed a new chief operating officer. Another news concerns about its rival, Intel (INTC) which loses appeal against record $1.43 billion EU fine (MarketWatch). I think AMD didn't earn any money from this, but morally, is a good news that push AMD share.

On 12 June, the share opened higher @ 4.33, trading high @ 4.44, but closed @ 4.29. A newbie technical chart:


The share has just broken its upper Bollinger Band (BB), with volume. This is a good sign for the share price. A black candle on 12 Jun, could it be a "washing" process? Not sure, still fumbling in US markets. Let's see what happens in the next few weeks.

Back in 2006, AMD bought over ATI (Engadget), a big move by the company at that time. Since then, the company has shaped its future direction, to combine a CPU with graphics technology into one single chip, known as APU (Accelerated Processing Unit). I like this idea. By now, more and more APUs are being installed on laptops, easily observed when you walk into a computer shop. In gaming console areas, XBox One is using AMD APUs too. You can find chips made by AMD in personal computers, tablets, game consoles and cloud servers as well.


If the direction of APU is right, it could be very rewarding in years to come. 

Monday, 9 June 2014

A brief review: when to sell a share?

Selling a share is a tough decision for me. When I intended to sell a share:
- for which that have an unrealized gain, it is as if I am cutting my limbs.
- for which that have an unrealized loss, it is as if prohibiting the loss to turn into victory.

Perhaps I hang on to these things too long, with too much emotions.

SBCCORP is a typical example:

Bought in Dec 2012 @ 1.04 (before right issue)
Went up to 1.18 at 17 Jan 2013 (before right issue)
An unrealized gain of 4 figures within 1 month. Yet I hang on there, wanting more gain. (I mentioned this before 2013 Q1 Review)
Finally sold @ 1.01 at Feb 2013.

Looking back, I realize two things, that:
I sold it too late, that only took action after it fell from peak price.
I sold it too soon, that I didn't continue holding or the share would have doubled its price in a few months time.

Why would I mention something 1.5 years ago? Because I found that I didn't learn from that experience at all. That I went through the same thing again: 

CHHB:

Bought in Mar 2014 @ 1.48
Went up to 1.61 at 21 Apr 2014
A 9% gain within 1 month. Yet I continue to hold, not even think of taking profit.
Worse comes to worst: top up @ 1.55 Top up CHHB
Current price @ 1.45

Yet I am still holding the share, get nothing for almost 3 months.

Yes I bought both of these shares at a pretty "decent" price. But buying at a low price alone does not guarantee profit. It must be paired with a good timing of selling to maximize profit. 

I keep repeating the same pattern: holding, telling myself that the share is going to move very soon. But as one day turned to two and two days turned to weeks or even months, at the end of the day the opportunity cost that I may have lost may cost me a lot in the waiting. Until the share did move, months would have passed, and by then I would long for an even higher return, which in turn results in not selling AGAIN, which traps myself in this circle eventually.

So how to sell a share? JUST SELL IT when volume comes! If not willing to sell or, then at least take partial profit. Look at these two example, if I sell them when it shot up, the waiting period is within 1 month, and yet I secured profits. Remember: Profit in the account is still the best, not the unrealized profit in the portfolio.

Sunday, 1 June 2014

US markets hit record high (consistently?)

I wonder how 1 month can fly in a blink of eye -- I didn't notice this at all until I checked my last post. I was just too obsessed with my stuffs, and I realized I shouldn't.

Now, US markets closed at new high is not new anymore. Let's have some statistics.

Dow Jones Industrial Average(DJIA):
 31 Dec 2013: Record high close of 16576, see related news 
 4   Apr 2014: Hit an intraday historical high of 16631, see here
 30 Apr 2014: Closed at record high, at 16580
 9  May 2014: Close of 16,583.34 narrowly topped the previous record, less than 2 weeks ago
12 May 2014: Continues from last Friday, closed at historical high again, at 16695
13 May 2014: Continued the rally, closed above 16700 for the first time, at 16715
30 May 2014: Another record high, 16717, see related news

S&P 500 is another key index in US markets, have a similar trend too. closed at 1923 last Friday, a fresh record in the history, see Wall Street Journal.

How about NASDAQ? Nasdaq closed at 14-year high of 4357 at 5 Mar 2014. Media cannot use a record high for NASDAQ, because its record high was set in 2000 during the dot.com bubble, where NASDAQ soared above 5000 before collapsing. Is NASDAQ actually heading to another rally?

Now, how about Bursa Malaysia? It remains as boring as it can be, as usual. Bursa also closed at a record high of 1887 on 19 May 2014. A 1900 seems to be so close, and so far. Will Bursa breaks the history as well? If it really does, I hope it comes with volume.