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.