I know I am not supposed to make prediction, but I am interested to find out the accuracy of my technical analysis.
So today, I am betting RM 1 for 1 Penang Chendol!
That July is going to be a very bearish month. World market to fall about 10% in July. KLCI to test support @ 1224 at the end of July. And start to rebound early August 2010, to slowly break resistance @ 1350 for a multi-year bull run and touch a new all time high. Stocks will split again once more before we call the end of this super bull run.
Why? Because trend line, Fibonacci and support says so. Furthermore, total output volume of the Dow does not equal the input volume since March 2009.
That's my RM 1 prediction. If you want somemore prediction, give me another RM 1. :-P You will be in a state of shock if stock rise from RM 1 to RM 20!
Like I said on the top post, we are not supposed to predict. But it is fun! Isn't that what everyone is seeking? Seeking to be right! Especially short term people.
The truth is, most people are wrong most of the time.
India Exchange still not above 18,000. Still bearish. TOday all market up except India. So, this still show weakness in world's most dynamic markets - India & China.
KLCI breakout! Looking at Genting & maybank... definitely have some strength. Just look at the black candle with low volume. That is a testing candle. Testing whether there is more sellers or not. As it is low volume, then there will be less seller, means less resistance for the price to go up.
You don't need more buyer to push up price. What you need is less seller to push price.
Finding low-risk stocks should be priority number one in this market. Benjamin Graham, considered by many to be the architect of fundamental analysis, described a strategy for identifying deep value stocks, which in his view are low-risk candidates, in his book, “The Intelligent Investor,” published in 1949.
Graham’s strategy, dubbed the “net current asset value” approach, apparently works very well. One research study, covering the years 1970 through 1983 showed that portfolios picked at the beginning of each year, and held for one year, returned 29.4 percent, on average, over the 13-year period, compared to 11.5 percent for the S&P 500 Index. Other studies of Graham’s strategy produced similar results.
Despite the impressive results, Graham’s net current asset value (NCAV) approach is relatively unknown to individual investors. That’s probably because finding stocks meeting Graham’s requirements requires some digging. No Web site provides tools to screen for NCAV stocks.
However, it’s not hard, and anyone willing to devote a couple of hours to the task should be able to come up with a few candidates. Here are my ideas for finding NCAV stocks.
Graham's Value Strategy Benjamin Graham's Net Current Asset Strategy
Graham’s NCAV strategy calls for buying stocks trading below their calculated value. Many value stock selection strategies can be described similarly. What’s different is how Graham determines value.
Book value, the usual value measure, is a firm’s assets minus its liabilities. Graham does the same calculation, but only includes current assets (cash, inventories, and accounts receivables) in the computation. He ignores long-term assets such as buildings, equipment, patents, and the like. However, he still counts all liabilities including short- and long-term debt, and everything else that appears in the liabilities column of the balance sheet.
Thus, net current asset value is current assets minus total liabilities. Graham’s NCAV strategy calls for buying stocks trading at two-thirds or less of their net current asset value.
That’s a stringent requirement, since most companies have negative NCAVs. But Graham was looking for firms trading so cheap that there was little danger of falling further. His strategy calls for selling when a firm’s share price trades up to its NCAV.
Finding Graham's Value Stocks
According to Graham, some of the companies meeting his NCAV criteria could end up failing, so he recommended buying a large number of stocks to diversify the risk.
Upcoming monday is those days that I think it is a bit difficult to handle.
They will be a huge discount. And especially with huge discount, when you short and then cut loss, you lose a lot.
It is one of those thing that I intend to improve on. But I don't know how.
Basically if you can reduce any possible loss amount, you can increase the win to loss ratio. And it can improve your performance tremendously in the long run.
Hmm... still thinking about it.... I think these are those days where you need some manual monitoring. It is very possible that you might not be able to sell at your cut loss price.
A huge discount is certain expecially when all TA people can see clearly that this is a market no more uptrend sign.
Hmm...... follow or not follow? Follow 1 day later to wait for discount to readjust???? Hmmm...
WB: I started investing when I was 11. I believe in reading everything in sight. I wandered for 8 yrs with technical analysis. I read Intelligent Investor, chapters 8 and 20 I recommend, and if you absorb it you won’t be a lemming. I read it early in 1950, and I think as good a book now as then. You can’t get a bad result if you follow it. There is another book out there, Food You Will Enjoy about the Buffett family grocery store. Neither of us were any good at groceries. You don’t want to pay attention to my Grandfather’s advice on stocks. It has three big lessons, a) stock is a part of a business b) market serves you doesn’t instruct, and c) margin of safety. Berkshire holders are better than most at understanding that they own a part of a business.
Today is a special day indeed. Finally I get to share Rule # 3 today which was implemented today.
Let's review the rules again.
Rule # 1: Do not lose money.
Rule # 2: Never forget rule # 1.
Rule # 3: Always average up.
Elaborate here a bit.
Rule # 1 says when there is a safety of capital and high probability of winning, then trade. Safety of capital comes first. Even if the potential profit is higher by buying now but the direction/conclusion is still uncertain, do not bet. Why you want to try winning something that will not affect you now while putting your current comfortable position at risk?
Rule # 2 says have a cut loss. Must always have a cut loss. Cut loss when you found out your valuation is wrong. Cut loss when the trading plan is wrong. Cut loss when the situation has changed and not following your plan. Cut loss to prevent a big loss so that you can continue trading/investing/business. Never let 1 bad loss wipe you out. Have discipline. Have a trading plan and follow and execute it as planned. Do not let emotion control you. Never ask what if the stock go up again? Ask what if the stock fall again!!! Accept a small pain rather than mega pain where you cannot climb up again. To supplement, if you get a margin call, just close all your trade. It means you are trading on the wrong side and also not trading following your plan.
Rule #3 says always average up. Bet/Buy somemore when you are correct and winning. It shows that you are trading according to plan, and your plan has worked so far. So add up only when you are winning. Never average down your losses unless you are sure of your valuation and it is getting even more undervalued. For trading, if you average down, you will find yourself losing a lot more later. Your are averaging with you own money. While averaging up, you are using your profits. If the trade goes bad, you didn't lose any money. But if you average down.... That is a certain way to get wiped out and also a catastrophic loss. So if you get a supplementary buy signal, you go ahead and add up after considering Rule #1 & 2.
So after Rule #3, the rules repeat itself again, Rule 1,2,3, Rule 1,2,3 until it is time to get out/close position. If you follow the rules, you will prevent yourself from catastrophic loss. If you take care of the downside, the profit will take care of itself. Like my big brother BC always says:"Protecting your capital is the most important. Whatever market give, we just take, never ask for more."
Greed and hope.
As a Technical trader, you need to recognize that it is a boring game. Nothing special. Got buy signal, just buy. Got sell signal just sell. No what if. So you will find it funny that you are feeling greedy and hoping the stock market will not fall, please don't fall. Please go up somemore... etc... it was simply part of your trading plan. You planned for it to happen, or else you won't be buying it. So if it was plan, why get excited? You should hope to win Toto or 4D or get a free BMW. That's understandable. But funny in trading.
Today has a huge Premium. I feel uncomfortable. As I said Rule #1 is the most important. When I cut loss, the losses will be bigger. if 10 points premium, cutting losses will be at least 20 points gone. So will your previous profits. Well, just trade according to plan. Don't expect to get lucky everyday Lok.
As I have said, I am not comfortable with paying a huge premium last Friday. And I plan to lower down the premium.
I thought of an idea that since the spot month contract is ending, why not start rolling now and try to lower the entry price for next month rolling.
The trade is simple:
Sell spot at 1359 Buy next at 1353
Let's examine the risk of buy first, sell later: You hold too many contracts increases your risk. If your call is uptrend, that is safe. If your margin is still wide, no problem. If you are far from your cutloss point, no problem.
Let's examine the dangers of sell first, buy later: If it continues on the uptrend, you miss the the profits because you sold yours and could not buy it any cheaper back.
So by trying to be smart, you become stupid.
Standard procedure is to roll with 1 to 2 points profit. 1 point to cover your brokerage cost. 2 points if you want to make some pocket money.
So, I will go for a buy first sell later approach, especially when that is a down day on the futures market. But it must fit 2 criteria which I did not do today: 1.)Current value must be far away from cut loss point. 2.)Margin call level to be at least 50% away
And to execute it like this: A.)Down day on FKLI buy, sell on up day on FKLI
This is a problem of execution. With small sums of money, premium trades are possible.
This is one of the not so great stuffs of futures trading.
I do not recommend a constant selling and buying or active trading just for your benefit as it wealth destruction. IT reduces the amount of money in the futures market and put into the brokerage fees.
In the value investing world, Walter Schloss is a legend. He did not attend college and was initially hired at the age of 18 as a runner on Wall Street in 1934. He took investment courses taught by Graham at the New York Stock Exchange Institute. He eventually went to work for Graham in the Graham-Newman Partnership, at about the same time Warren Buffett worked in the firm.
In 1955, Schloss left Graham's company and started up his own investment firm, eventually managing money for 92 investors. By maintaining a manageable asset size, Schloss averaged a 15.3% compound return over the course of five decades, versus 10% for the S&P 500.
Schloss closed out his fund in 2000 and stopped actively managing others' money in 2003.
Warren Buffett named him as one of The Superinvestors of Graham-and-Doddsville, who disproved the academic position that the market was efficient, and that beating the S&P 500 was "pure chance".
Warren Buffett had this to say about Schloss:
He knows how to identify securities that sell at considerably less than their value to a private owner: And that's all he does. He owns many more stocks than I do and is far less interested in the underlying nature of the business; I don't seem to have very much influence on Walter. That is one of his strengths; no one has much influence on him.
Here are 16 golden rules for investing from Walter Scholoss. This came from a 1994 lecture he gave. Thanks to Todd Sullivan for the finding:
1. Price is the most important factor to use in relation to value
2. Try to establish the value of the company. Remember that a share of stock represents a part of a business and is not just a piece of paper.
3. Use book value as a starting point to try and establish the value of the enterprise. Be sure that debt does not equal 100% of the equity. (Capital and surplus for the common stock).
4. Have patience. Stocks don’t go up immediately.
5. Don’t buy on tips or for a quick move. Let the professionals do that, if they can. Don’t sell on bad news.
6. Don’t be afraid to be a loner but be sure that you are correct in your judgment. You can’t be 100% certain but try to look for the weaknesses in your thinking. Buy on a scale down and sell on a scale up.
7. Have the courage of your convictions once you have made a decision.
8. Have a philosophy of investment and try to follow it. The above is a way that I’ve found successful.
9. Don’t be in too much of a hurry to see. If the stock reaches a price that you think is a fair one, then you can sell but often because a stock goes up say 50%, people say sell it and button up your profit. Before selling try to reevaluate the company again and see where the stock sells in relation to its book value. Be aware of the level of the stock market. Are yields low and P-E rations high. If the stock market historically high. Are people very optimistic etc?
10. When buying a stock, I find it heldful to buy near the low of the past few years. A stock may go as high as 125 and then decline to 60 and you think it attractive. 3 yeas before the stock sold at 20 which shows that there is some vulnerability in it.
11. Try to buy assets at a discount than to buy earnings. Earning can change dramatically in a short time. Usually assets change slowly. One has to know much more about a company if one buys earnings.
12. Listen to suggestions from people you respect. This doesn’t mean you have to accept them. Remember it’s your money and generally it is harder to keep money than to make it. Once you lose a lot of money, it is hard to make it back.
13. Try not to let your emotions affect your judgment. Fear and greed are probably the worst emotions to have inconnection with purchase and sale of stocks.
14. Remember the work compounding. For example, if you can make 12% a year and reinvest the money back, you will double your money in 6 yrs, taxes excluded. Remember the rule of 72. Your rate of return into 72 will tell you the number of years to double your money.
15. Prefer stock over bonds. Bonds will limit your gains and inflation will reduce your purchasing power.
16. Be careful of leverage. It can go against you.
The performance of all BC's stock picks has been great these days. And everyone who follows him can get very excited.
3rd liners stocks could be running up high right now, and this might lead us far away form the big picture of the current markets.
Looking again at all stock indices expecially the KLCI, signs of market tops are very evident. Rail road formation for KLCI. Head and should for the Dow, where the right shoulder is lower than the left shoulder.
This amazing breakout has turned into a big lie. This is the moment of exhaustion.
I will not be betting on 1st liner stocks too. Looking thorugh Genting, Maybank, CIMB, TopGlove, they are all indicating a top.
I suggest everyone to be cautious with 1st liner. I am not sure about 3rd liner stocks, but this may yet be their opportunity to shine.
One thing you can be certain is: Be careful. And keep your cash to stock ratio higher.
Let's find out whether by being patient, we can still be a winner. Target sell price is 26 million for the whole company. I bought the company at 12 million
Looking at the previous volume, price is steady at 6 cents. Is that the floor?
If it goes even lower, I am interested to buy some more. Selling at 3 cents per share will be perfect.
Aiya, remisier didn't executed my contract right and didn't become short. And today shorted too low a price because panic.
I am looking at losing all winning for the year in futures system, plus a bit more losses.
Human is so failable. If so much precision is required for my futures trading. I think I am going to see more losses because of this human errors. It is bound to happen again and again and again.
I am thinking of stop my futures trading plan and just place money in stocks. Furthermore, my futures trading plan does not match the personality of my stocks investment method. It totally clashes between speculation and investment.
Aiya........ such a terrible day. Failure by human. I followed the plan, but it did not get executed. What a waste of time.
I will continue with this futures trading. Let's give it a 3rd try. Here is the action plan:
1.) A normal remisier who works daily on the screen. (so don't trouble you.) 2.) Even simpler instructions. 3.) Use market orders at 10 second interval, right after market close at 5 pm. 4.) Multiple scenario is necessary. Put in all scenarios. 5.) Phone call if there is late hour change, or if afraid of missed orders.
3 July 2010:
ReplyDeleteI know I am not supposed to make prediction, but I am interested to find out the accuracy of my technical analysis.
So today, I am betting RM 1 for 1 Penang Chendol!
That July is going to be a very bearish month.
World market to fall about 10% in July.
KLCI to test support @ 1224 at the end of July.
And start to rebound early August 2010, to slowly break resistance @ 1350 for a multi-year bull run and touch a new all time high.
Stocks will split again once more before we call the end of this super bull run.
Why?
Because trend line, Fibonacci and support says so.
Furthermore, total output volume of the Dow does not equal the input volume since March 2009.
That's my RM 1 prediction. If you want somemore prediction, give me another RM 1. :-P
You will be in a state of shock if stock rise from RM 1 to RM 20!
*This is not a recommendation to buy or sell.
Wishing everyone all the best!
- LokGP
11 July 2010
ReplyDeleteSeems like my predictions is not right.
I am holding long positions now.
Uncle Sam has a rule. According to statistics, bull run last for 18 months only.
First bull started on 1st April 2009, should end 1st Oct 2010.
It was quite accurate for the bull run in 2006 until the crash in 2008. A good reference.
Anyway... looks like I lost my RM 1 chendol.
随缘就好，^.^
ReplyDelete何必去猜测市场走到哪里？
何必去猜测人生还有几何？
一切随缘、一切随缘...
Today, it is officially a bear market for the whole world stock market.
ReplyDeleteSensex made a double top - unable to breach 18000
All over the world, a classic head and shoulders in S&P, Dow, Nikkei, KLSE, STI, HSI.... everywhere.
And the most important is.... Shanghai - SSE is already in a long term bear market. This is very clear.
Expect to go side way and down.
If anyone still have stocks, they should get rid of it and wait.
The bull run is over!
Like I said on the top post, we are not supposed to predict.
ReplyDeleteBut it is fun! Isn't that what everyone is seeking? Seeking to be right!
Especially short term people.
The truth is, most people are wrong most of the time.
India Exchange still not above 18,000. Still bearish. TOday all market up except India.
So, this still show weakness in world's most dynamic markets - India & China.
KLCI breakout! Looking at Genting & maybank... definitely have some strength. Just look at the black candle with low volume. That is a testing candle. Testing whether there is more sellers or not.
As it is low volume, then there will be less seller, means less resistance for the price to go up.
You don't need more buyer to push up price.
What you need is less seller to push price.
Finding low-risk stocks should be priority number one in this market. Benjamin Graham, considered by many to be the architect of fundamental analysis, described a strategy for identifying deep value stocks, which in his view are low-risk candidates, in his book, “The Intelligent Investor,” published in 1949.
ReplyDeleteGraham’s strategy, dubbed the “net current asset value” approach, apparently works very well. One research study, covering the years 1970 through 1983 showed that portfolios picked at the beginning of each year, and held for one year, returned 29.4 percent, on average, over the 13-year period, compared to 11.5 percent for the S&P 500 Index. Other studies of Graham’s strategy produced similar results.
Despite the impressive results, Graham’s net current asset value (NCAV) approach is relatively unknown to individual investors. That’s probably because finding stocks meeting Graham’s requirements requires some digging. No Web site provides tools to screen for NCAV stocks.
However, it’s not hard, and anyone willing to devote a couple of hours to the task should be able to come up with a few candidates. Here are my ideas for finding NCAV stocks.
Graham's Value Strategy
Benjamin Graham's Net Current Asset Strategy
Graham’s NCAV strategy calls for buying stocks trading below their calculated value. Many value stock selection strategies can be described similarly. What’s different is how Graham determines value.
Book value, the usual value measure, is a firm’s assets minus its liabilities. Graham does the same calculation, but only includes current assets (cash, inventories, and accounts receivables) in the computation. He ignores long-term assets such as buildings, equipment, patents, and the like. However, he still counts all liabilities including short- and long-term debt, and everything else that appears in the liabilities column of the balance sheet.
Thus, net current asset value is current assets minus total liabilities. Graham’s NCAV strategy calls for buying stocks trading at two-thirds or less of their net current asset value.
That’s a stringent requirement, since most companies have negative NCAVs. But Graham was looking for firms trading so cheap that there was little danger of falling further. His strategy calls for selling when a firm’s share price trades up to its NCAV.
Finding Graham's Value Stocks
According to Graham, some of the companies meeting his NCAV criteria could end up failing, so he recommended buying a large number of stocks to diversify the risk.
Upcoming monday is those days that I think it is a bit difficult to handle.
ReplyDeleteThey will be a huge discount. And especially with huge discount, when you short and then cut loss, you lose a lot.
It is one of those thing that I intend to improve on. But I don't know how.
Basically if you can reduce any possible loss amount, you can increase the win to loss ratio.
And it can improve your performance tremendously in the long run.
Hmm... still thinking about it.... I think these are those days where you need some manual monitoring. It is very possible that you might not be able to sell at your cut loss price.
A huge discount is certain expecially when all TA people can see clearly that this is a market no more uptrend sign.
Hmm...... follow or not follow? Follow 1 day later to wait for discount to readjust???? Hmmm...
WB: I started investing when I was 11. I believe in reading everything in sight. I wandered for 8 yrs with technical analysis. I read Intelligent Investor, chapters 8 and 20 I recommend, and if you absorb it you won’t be a lemming. I read it early in 1950, and I think as good a book now as then. You can’t get a bad result if you follow it. There is another book out there, Food You Will Enjoy about the Buffett family grocery store. Neither of us were any good at groceries. You don’t want to pay attention to my Grandfather’s advice on stocks. It has three big lessons, a) stock is a part of a business b) market serves you doesn’t instruct, and c) margin of safety. Berkshire holders are better than most at understanding that they own a part of a business.
ReplyDeleteToday is a special day indeed. Finally I get to share Rule # 3 today which was implemented today.
ReplyDeleteLet's review the rules again.
Rule # 1: Do not lose money.
Rule # 2: Never forget rule # 1.
Rule # 3: Always average up.
Elaborate here a bit.
Rule # 1 says when there is a safety of capital and high probability of winning, then trade. Safety of capital comes first. Even if the potential profit is higher by buying now but the direction/conclusion is still uncertain, do not bet. Why you want to try winning something that will not affect you now while putting your current comfortable position at risk?
Rule # 2 says have a cut loss. Must always have a cut loss. Cut loss when you found out your valuation is wrong. Cut loss when the trading plan is wrong. Cut loss when the situation has changed and not following your plan.
Cut loss to prevent a big loss so that you can continue trading/investing/business. Never let 1 bad loss wipe you out. Have discipline. Have a trading plan and follow and execute it as planned. Do not let emotion control you. Never ask what if the stock go up again?
Ask what if the stock fall again!!! Accept a small pain rather than mega pain where you cannot climb up again. To supplement, if you get a margin call, just close all your trade. It means you are trading on the wrong side and also not trading following your plan.
Rule #3 says always average up. Bet/Buy somemore when you are correct and winning. It shows that you are trading according to plan, and your plan has worked so far. So add up only when you are winning. Never average down your losses unless you are sure of your valuation and it is getting even more undervalued. For trading, if you average down, you will find yourself losing a lot more later. Your are averaging with you own money. While averaging up, you are using your profits. If the trade goes bad, you didn't lose any money. But if you average down.... That is a certain way to get wiped out and also a catastrophic loss.
So if you get a supplementary buy signal, you go ahead and add up after considering Rule #1 & 2.
So after Rule #3, the rules repeat itself again, Rule 1,2,3, Rule 1,2,3 until it is time to get out/close position. If you follow the rules, you will prevent yourself from catastrophic loss.
If you take care of the downside, the profit will take care of itself.
Like my big brother BC always says:"Protecting your capital is the most important. Whatever market give, we just take, never ask for more."
Greed and hope.
As a Technical trader, you need to recognize that it is a boring game. Nothing special. Got buy signal, just buy. Got sell signal just sell. No what if. So you will find it funny that you are feeling greedy and hoping the stock market will not fall, please don't fall. Please go up somemore... etc... it was simply part of your trading plan. You planned for it to happen, or else you won't be buying it. So if it was plan, why get excited? You should hope to win Toto or 4D or get a free BMW. That's understandable. But funny in trading.
Today has a huge Premium. I feel uncomfortable. As I said Rule #1 is the most important. When I cut loss, the losses will be bigger. if 10 points premium, cutting losses will be at least 20 points gone. So will your previous profits.
Well, just trade according to plan. Don't expect to get lucky everyday Lok.
There is a new question I face today.
ReplyDeleteAs I have said, I am not comfortable with paying a huge premium last Friday. And I plan to lower down the premium.
I thought of an idea that since the spot month contract is ending, why not start rolling now and try to lower the entry price for next month rolling.
The trade is simple:
Sell spot at 1359
Buy next at 1353
Let's examine the risk of buy first, sell later:
You hold too many contracts increases your risk.
If your call is uptrend, that is safe.
If your margin is still wide, no problem.
If you are far from your cutloss point, no problem.
Let's examine the dangers of sell first, buy later:
If it continues on the uptrend, you miss the the profits because you sold yours and could not buy it any cheaper back.
So by trying to be smart, you become stupid.
Standard procedure is to roll with 1 to 2 points profit. 1 point to cover your brokerage cost. 2 points if you want to make some pocket money.
So, I will go for a buy first sell later approach, especially when that is a down day on the futures market. But it must fit 2 criteria which I did not do today:
1.)Current value must be far away from cut loss point.
2.)Margin call level to be at least 50% away
And to execute it like this:
A.)Down day on FKLI buy, sell on up day on FKLI
This is a problem of execution. With small sums of money, premium trades are possible.
This is one of the not so great stuffs of futures trading.
I do not recommend a constant selling and buying or active trading just for your benefit as it wealth destruction. IT reduces the amount of money in the futures market and put into the brokerage fees.
In the value investing world, Walter Schloss is a legend. He did not attend college and was initially hired at the age of 18 as a runner on Wall Street in 1934. He took investment courses taught by Graham at the New York Stock Exchange Institute. He eventually went to work for Graham in the Graham-Newman Partnership, at about the same time Warren Buffett worked in the firm.
ReplyDeleteIn 1955, Schloss left Graham's company and started up his own investment firm, eventually managing money for 92 investors. By maintaining a manageable asset size, Schloss averaged a 15.3% compound return over the course of five decades, versus 10% for the S&P 500.
Schloss closed out his fund in 2000 and stopped actively managing others' money in 2003.
Warren Buffett named him as one of The Superinvestors of Graham-and-Doddsville, who disproved the academic position that the market was efficient, and that beating the S&P 500 was "pure chance".
Warren Buffett had this to say about Schloss:
He knows how to identify securities that sell at considerably less than their value to a private owner: And that's all he does. He owns many more stocks than I do and is far less interested in the underlying nature of the business; I don't seem to have very much influence on Walter. That is one of his strengths; no one has much influence on him.
Here are 16 golden rules for investing from Walter Scholoss. This came from a 1994 lecture he gave. Thanks to Todd Sullivan for the finding:
ReplyDelete1. Price is the most important factor to use in relation to value
2. Try to establish the value of the company. Remember that a share of stock represents a part of a business and is not just a piece of paper.
3. Use book value as a starting point to try and establish the value of the enterprise. Be sure that debt does not equal 100% of the equity. (Capital and surplus for the common stock).
4. Have patience. Stocks don’t go up immediately.
5. Don’t buy on tips or for a quick move. Let the professionals do that, if they can. Don’t sell on bad news.
6. Don’t be afraid to be a loner but be sure that you are correct in your judgment. You can’t be 100% certain but try to look for the weaknesses in your thinking. Buy on a scale down and sell on a scale up.
7. Have the courage of your convictions once you have made a decision.
8. Have a philosophy of investment and try to follow it. The above is a way that I’ve found successful.
9. Don’t be in too much of a hurry to see. If the stock reaches a price that you think is a fair one, then you can sell but often because a stock goes up say 50%, people say sell it and button up your profit. Before selling try to reevaluate the company again and see where the stock sells in relation to its book value. Be aware of the level of the stock market. Are yields low and P-E rations high. If the stock market historically high. Are people very optimistic etc?
10. When buying a stock, I find it heldful to buy near the low of the past few years. A stock may go as high as 125 and then decline to 60 and you think it attractive. 3 yeas before the stock sold at 20 which shows that there is some vulnerability in it.
11. Try to buy assets at a discount than to buy earnings. Earning can change dramatically in a short time. Usually assets change slowly. One has to know much more about a company if one buys earnings.
12. Listen to suggestions from people you respect. This doesn’t mean you have to accept them. Remember it’s your money and generally it is harder to keep money than to make it. Once you lose a lot of money, it is hard to make it back.
13. Try not to let your emotions affect your judgment. Fear and greed are probably the worst emotions to have inconnection with purchase and sale of stocks.
14. Remember the work compounding. For example, if you can make 12% a year and reinvest the money back, you will double your money in 6 yrs, taxes excluded. Remember the rule of 72. Your rate of return into 72 will tell you the number of years to double your money.
15. Prefer stock over bonds. Bonds will limit your gains and inflation will reduce your purchasing power.
16. Be careful of leverage. It can go against you.
The performance of all BC's stock picks has been great these days. And everyone who follows him can get very excited.
ReplyDelete3rd liners stocks could be running up high right now, and this might lead us far away form the big picture of the current markets.
Looking again at all stock indices expecially the KLCI, signs of market tops are very evident.
Rail road formation for KLCI. Head and should for the Dow, where the right shoulder is lower than the left shoulder.
This amazing breakout has turned into a big lie.
This is the moment of exhaustion.
I will not be betting on 1st liner stocks too.
Looking thorugh Genting, Maybank, CIMB, TopGlove, they are all indicating a top.
I suggest everyone to be cautious with 1st liner. I am not sure about 3rd liner stocks, but this may yet be their opportunity to shine.
One thing you can be certain is: Be careful.
And keep your cash to stock ratio higher.
- LokGP
Today Kenmark officially suspended from trading.
ReplyDeleteLet's find out whether by being patient, we can still be a winner. Target sell price is 26 million for the whole company.
I bought the company at 12 million
Looking at the previous volume, price is steady at 6 cents. Is that the floor?
If it goes even lower, I am interested to buy some more. Selling at 3 cents per share will be perfect.
Aiya, remisier didn't executed my contract right and didn't become short. And today shorted too low a price because panic.
ReplyDeleteI am looking at losing all winning for the year in futures system, plus a bit more losses.
Human is so failable. If so much precision is required for my futures trading. I think I am going to see more losses because of this human errors. It is bound to happen again and again and again.
I am thinking of stop my futures trading plan and just place money in stocks. Furthermore, my futures trading plan does not match the personality of my stocks investment method. It totally clashes between speculation and investment.
Aiya........ such a terrible day. Failure by human. I followed the plan, but it did not get executed. What a waste of time.
I will continue with this futures trading. Let's give it a 3rd try. Here is the action plan:
ReplyDelete1.) A normal remisier who works daily on the screen. (so don't trouble you.)
2.) Even simpler instructions.
3.) Use market orders at 10 second interval, right after market close at 5 pm.
4.) Multiple scenario is necessary. Put in all scenarios.
5.) Phone call if there is late hour change, or if afraid of missed orders.
Let the stock flow.
ReplyDeleteCheck EFFICEN out.Its show bullishness !