Showing posts with label MISC. Show all posts
Showing posts with label MISC. Show all posts

Thursday, 23 June 2016

The consequence of stock market speculation

I have transacted more than 30 times last month, the highest in my history.

It all started with MISC, when it dropped 13% per day despite a good quarter report. I saw an opportunity coming the next day of the plunge: a chance of rebound. MISC has fundamentals. The daily chart is out of BB lower band. These two features satisfy my rules to catch a rebound. The feeling of securing a return of 20% intraday is so good.

MISC plunge

For a long time I have not earned like this in a single day. My next unconscious reaction is to continue speculation. I started to buy in stocks without even looking at the fundamentals and technical chart. KANGER and LSTEEL, just to name a few. I did not have solid grounds like I bought MISC call warrants. I just thought that luck will be on my side, and I can continue winning just like that. But once again, how unbelievably, I vomit out all earnings.

Only then I realised that the more I trade, the more I lose. 
Only then I realised that winning is the beginning of losing.
Only then I realised that my thought of playing stocks has ended up getting played by stocks.

After all, my best strategy is to hold for a few months. In the mean time, wait patiently for any opportunity of "fast money". If this kind of opportunity comes every week or fortnight, it is probably good enough to generate a considerable extra income.

Wednesday, 11 May 2016

So a good financial report does not mean a jump in share price

This is subtly related to a previous article the consequence of betting on quarterly reportIn the article, I talked about the lesson learnt from betting on financial reports. Now the market seems to "evolve" to another higher standard.

Malaysia International Shipping Corporation (KL: MISC) announced its quarter report on last Friday, 6/5/2016. The company's profit rises 17% quarter-over-quarter. Despite a good quarter report, out of a sudden, MISC plunged 13% on Monday 9/5/2016, with no apparent reasons.

This reminds me of the opposite example, IOICORP. On 16/11/2015, IOICORP posted a loss of 719M, downed 500%+ quarter-over-quarter. For a blue chip stock to incur a loss, people were expecting a big drop in the share price. However, nothing happened on the next trading day and the stock was performing just like normal.

What does this imply? The financial world is changing at all time. So the stock market changes pattern too. The "correlation" between financial results and short term stock price movement seems to disappear. While fundamentals are still important, my view is that its importance and significance has diminished to a lower "weighting". If this is true, then the old way of "long term investment" may no longer work. The big question is: what is the more important factor now? This is a question worth contemplating.