Winners are rare in Bursa Malaysia

Winners are

rare in Bursa

Malaysia

  

If you care to do a simple survey around those people who have invested before and ask them this simple easy to understand question : Is it easy to make money from the stock market?

What would their answers be most probably? If you can get a majority percentage that the answer is Yes, then most of us would not need to be working anymore and spend our daily time dabbling in the stock market.

Truthfully and sadly, most of us actually lose money in the stock market. According to my ex-remiser, there are the occasional winners, but few are the elite ones that consistently make the right calls more than the wrong call. Not only that, of these few elites ones, only a few rare ones are able to sell for a substantial profit of nearly 100% or above RM1 in most trades as well.

I can speak truthfully because I have yet to come across any of them personally. Most of my investing friends don't seem to have such big profits trades experiences or story to share. As I had shared previously, most would jump out even for a profit range of 10% to 30% immediately.

Back to the original issue, despite knowing most people would lose money in investing, yet there are many trying their lucks on Bursa Malaysia.

I think one of the chief reasons is most people think that once you buy a stock, you just need to sell when there is a 10-30% range profit because the Mr Market goes up and down. (Previously I used to think like this too).

Last year when I was invited to join a Koperasi to be in the Investment division, the mandate was even more shocking. Aim for a 10 - 15% profit would do. To me, this is akin to hit and run tactics which means the Koperasi would never have a chance of making super profits, but rather pittance in my personal opinion.

Even making pittance profit from Bursa Malaysia is also not easy too. Agreed? But of course you can heard the cry of pittance profits more often than the cry of bumper profits. Even your very close brothers or sisters or even daddy or mummy, how many times have you heard that they had make a bumper profit trade?

Yet a wrong call on a particular stock would result in heavy loss that even those several pittance profits would not be enough to cover. Yes, this is very true. In investing, every loss big or small counts. Because statistics showed that most make more losses than winning trades and those winnings trades are rather pittances ones, how is one going to cover back those mostly lost trades?

Even for an experienced investor like me, I too made some wrong calls despite having done research, analysed the fundamentals of the company and forecasted the future profits to be good.

My recent basket of defensive stocks is proof of that. NTPM, BP Plastics and Berjaya Sports Toto are registering gains while Chin Well and CCB are experiencing paper losses.

This is how the latest current profit/loss account of my Basket of Defensive Stocks showed.

Just to prove how easy it is to lose money in the stock market rather than the other way round, I am reproducing the table below published in The Star on June 18, 2016. It was done by The Star for the period from Dec 31, 2015 to June 17, 2016.

There were two groups picking up selected stocks of their choices. On the left side are picked by fund managers and the right side is picked by business writers. We can safely assume both these two group of people are knowledgeable and with some expertise in stocks analysis. Yet the results were actually shockingly.

Fund Managers' Picks

There were five acceptable losses (SKP, Brahim, Malayan Banking, My E.G. and WCT), two mild wins (Gamuda and RHB) and one rather bigger win (Thong Guan).

Writer's Picks

There were seven losses (KKB, Karex, CIMB Bank, Petronas Chemical, MBSB, Suria Capital and Apex) and only one small winner (PRG-wa).

If fund managers and business writers suffer losses with their stocks picks (even though it was for a six month period), what about ordinary people like you and me?

In conclusion, I believed that winners are rare in Bursa Malaysia. Big time winners are even rarer. But losers are plenty all year through. If you want to know which category you stand, ask your remiser for an honest comment. Ha, ha.

Buying Opportunities Again

Buying

Opportunities

Again

Global markets went on a sharp tailspin recently when unexpectedly, Britons voted to leave the European Union which created fears throughout the financial world. Famously known as Brexit, it was decided by just a minority slim win of 51.9% vote to leave.

What does Brexit means to you or me or the ordinary man in the street? For one, I know the pound sterling has taken a severe beating in more than 30 years prompting many investors to make a beeline to the money changers to buy it cheaper and hopefully to sell it later when it appreciates back.

My brother-in-law and his spouse who has been in United Kingdom for more then ten years must not be feeling happy with this. It is like suddenly you wake up one morning and realised all those savings (in pound) has been devalued by several percentage just like that!

Nevertheless it has created fears into the stock market worldwide. Stocks on Bursa Malaysia has also declined in tandem with this. Perhaps some suffered more heavy declination especially very unfortunately accompanied by some negative news that will have an even more powerful impact on its share price.

Berjaya Sports Toto Berhad

One such stock must be Berjaya Sports Toto (BTOTO). Its share price has never traded so low below the RM3 levels especially during the last five years. On Dec 31, 2012, its share price touched a high of RM4.49 and fast forwarded to this year and it touched a five year low of RM2.88 on June 13.

Yet all these years, BTOTO has continued to make profits without a single quarterly loss since June 2008. (I did not have records earlier than this).

Long term investors are also happy with its mostly quarterly dividends payout (except this time the new five year low share price).

One of the chief reasons this time must be because the company's major shareholders Berjaya Land Bhd (BLand) and Berjaya Corporation Corp Bhd (Bcorp) has been trimming their stakes recently.

The stakes disposals were done through off market trades and also executed at discounts to market. According to UOB Kay Hian, it is believed that the disposals were carried out due to funding requirements for the major shareholder's overseas projects.

This might possible created a perception that its major shareholders are slowly beginning to cash out of the stock.

But I strongly believed the selling/disposals would ease because the group still want to retain control of the company.

Anyway, I have decided to add BTOTO shares into my basket of defensive stocks (although it is understandable that it is not so defensive anymore especially a few of my stocks are in the negative zone).

I am very sure there are some of you who had decided to follow my recent new purchases and must be asking if they had followed me correctly. At this point, it is equally important that my strategies has been to make a purchase at certain time to eventually average out my investment. And I have just been doing this since this year.

Long term investors should not fear the market as long as one buys reasonable profitable companies and dare to keep them for years. As long as there are good dividends to be credited into your bank account every now and then, one should ignore the up and down of share price.

An good example was the recent announcement by YTL Corp Berhad (YTLCorp) that it is looking for bargain again after the UK vote to leave the European Union had sent assets plummeting.

YTL managing director Tan Sri Francis Yeoh said not since 2008 has there been an opportunity for it to scout for assets at attractive prices till now.  And this time the assets are already more realistically priced by default rather than design.

One must note that the conglomerate YTL group is a master of buying assets at depressed prices during major crisis. In 2002 during the eurozone crisis, it snapped up Wessex Water Services Ltd at a rather bargain price too.

What can we learn from YTL's action is that the best time to invest or able to buy assets at cheaper/depressed prices is always during major crisis. But to be able to do that, one must be ready with cash, the more the better anytime.

To have such cash, one must always plan to build up its cash reserves from time to time. Incidentally, I am one such person who has been prudently building up my cash reserves to wait for buying opportunities during any major crisis.

BTOTO won't be the last investment of the year. There will be more good fundamental stocks that once fall below my target prices to enter due to any reasons, I will be ready to buy.

It doesn't matter if it falls after my buying prices, because I am just practising what YTL is practising, buying at cheaper prices and keeping it for longer terms.

I also like to wish all my Muslim friends Selamat Hari Raya on this happy occasions.