Do Retailers Make Money From Investing?

Do Retailers Make Money

From Investing?

This is a question I have always asked around among many people (retailers, remisers and those working in the finance and stock broking firms and a few fund managers from some units trust companies).

It seemed that the answers I received are not very encouraging at all and it must be true. Most retailers tend to lose money in investing in Bursa Malaysia.

Although no official statistics or surveys are done, it is believed that only a very small handful of retailers are able to make some profits, even then the profits are perhaps at a paltry amount only. Only a few “elites” are able to make monsters’ gains in a more consistent manners.

From my personal experience, most of my friends (retailers) don’t have much good memories with Bursa Malaysia. They have lost money when they sold their stocks at lower prices which they bought at higher prices knowing that they should be buying lower and selling higher.

Many of them have become long term investors because they are still holding on to some stocks bought at high prices and now have become penny stocks. Many of my friends have not even trade at all during the last several years. They jokingly asked if their accounts are still activated or not.

Let me share with you one true story of a company going for listing in 1995. At that time, most of the employees were not even having an account to trade. The listing exercise provided the “novice” employees a opportunity to profit some money from the share market. At the time, the market was on a rally, especially the then Second Board which saw many counters trading at more than RM10.

The rally went on and on with more ups than downs. Making some money from the contra period was easy. Overnight, those “novice” employees became “master” players in the stock market. They became bolder and bolder. They bought more and more stocks hoping for a contra gain. I still remembered one of them bought a so-called stock Instantgreen at more than RM10. She said her “master” friend recommended strongly.

Well, we all know that the rally party came to a nightmarish ending with the onslaught of the 1997 Asian Financial Crisis which saw most of the region’s currencies depreciating to unprecedented levels.

Most of the stocks felt down to unprecedented levels, too. My friend’s Instantgreen became penny stock instantly. Until today, many of my friends do not even bother to find out what happens to their stocks. Some of them have become long-term investors by choice.

There was even this young chap in his early twenties (from that company) making small gains from contra trading in his initial trades. He went on to make more and more contra gains. He became braver in buying in more stocks on contra. As I knew him personally, I advised him of the danger should the market turns the other way round. Well, he said to me :  “You DON’T KNOW about trading contra. I have been making money all this while playing contra.”

When the market turned south, he went in for more contra trades to cover his earlier positions (bought at higher prices). But when the market went down even further giving no opportunity for him to average out his investments, he had to cut his losses for he had no capital to take up the shares.

Worse, he had no money to pay for his massive contra losses.

Today, I really DON’T KNOW where this young man is because he went missing from work a few days later and is never seen until today.

Another strong reason among many retailers is if making money (consistent or from time to time) is easier than losing money investing in Bursa Malaysia, why do so many of us are still working for someone? Why are many of us still fighting through the morning jam to be in the office by 9am and toiling ourselves until the end of the day?

We all should be full-time retailers spending our time in front of the trading screen in the stock broking firm. In this internet era, many of us would not need even to go out from their homes. I know of many of my friends whose computers are connected to Bursa Malaysia, thus providing them instant trading prices.

There would not be much needed for fund managers, too. In fact, there would not be even enough seats in the trading gallery if making money from investing in Bursa Malaysia is really easy.

So in conclusion, I must readily admit that one should always accept the fact that investing in Bursa Malaysia is a two way traffic. You either see your investment price maintains at a slight plus or minus level, appreciates to a higher or even higher levels or depreciates to become a loss.

Minimizing our potential loss should be one of the top priorities. That is why one should always does a lot of homework doing research and understanding the business you are going to invest and eventually develop your own style of choosing a particular company to invest.

For some, they are not bother if the company is in debt or not. Some don’t even bother if the company does not pay out dividends at all. Some rather look for growth even knowing the company is carrying big amount of debts. Some look for companies which are cash-rich that pays regular dividends like the writer.

Finally identified one worthy stock

after three months of soul searching.

I have not bought a single stock since the start of 2014. Not because I did not want to, but because I was searching high and low for a worthy counter worthed investing. Such counter required me to spend some considerable amount of time for analysis and research.

Indeed  there  was one such stock  worth investing for  the mid  to  long  term. (again, this is only from my personal view, so please treat this with caution should you feel you would like to join in the party later). I had purchased a handful lots of that stock at the time of posting on April 4, 2014.

I would be more than pleased to share it in my next blog. That is a promise from me.

A simple idea to use less plastic

Each time we go to do some shopping in the hypermarket, we would be using that thin white plastic sheet to wrap the foods. For example, a sheet is required when you buy some apples. Another sheet is required again when you buy some carrots. Imagine how many thin white plastic sheets we carry home each time we come back from shopping. Here is an idea which I have recently started to apply. The sheet used for the apples can be reused again the next time. All we need to do is only to REVERSE the plastic sheet from the inside so that the side with the price tag is now inside whereas the outside sheet is now a clear side (for the cashier to stick a new price tag on it for your next shopping trip).

This way, the plastic sheet could be used twice (hence, cutting down the amount of plastic usage by 50% or more) and you will also have less plastics to keep (or throw, which is you know I know that plastic is something that could not be easily recycled and is harmful for environment.

If you really care for environment, please support this idea and share it with your friends.