My Adventure of Investment

On December 11, 2011, in English, General, General | Discussion, by Kok mING

For many years, I am an amateur investor in stock market. Still I am now… I couldn’t do Fundamental Analysia (FA) or Technical Analyst (TA) without tools or investment analysis/reports… So in such a way, it makes me an real amateur. Although, I do not know how to do FA / TA like most analyst do, I still read some book written by successful people namely Warren Buffet and Peter Lynch. Always, they are saying some golden rules like never lose money, always buy the stock which you understand their business and how well it performing, be assured that whatever went down will go up again and etc…

For years, I manage to make around 10% to 20% return on investment per annum. So I am quite confident on my picks!

With much confidence, I’ve put my savings into share market. Well, with at least 10% return, I couldn’t resist to do that. Life is unpredictable, same goes with the stock market. At the moment that you think that you have control or prepare for the worst to happen, the most dramatic thing could happen to knock you down harshly…

A few months ago, my total investment for my portfolio shrunk 77.5%! Yes, no joke at all! 77.5% of my capital had gone and that is the most real painful experience… Nothing can express the feeling…

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As you can see… It is all negative, and there is no financial crisis at that time (3 months ago)… How lucky I am, how many people can own stocks that can lose more than 90%? I do anything wrong? Yes… there is one thing I done wrong, that is too confident with my selections… For earlier time, I could have cut losses when it is minus 10%… But I didn’t because I trust it will go up to my target price so I wait and wasted the chances to sell… I can only blame myself!

I need to figure out what I can do to get myself out from this mess… So I took a risk, be a gambler… a real one I mean. I sold all the stocks which losses greater than 60%. The pain of losses, still fresh in my mind…

After this cash out, I quickly look into one stock which has the greater chances to go up in short time, of course it must have a lot of room to go up and limited down side! I show hand invested all my cash into this one counter! Honestly, I know by doing this, Peter Lynch, Warren Buffet and you are laughing out loud on my foolish act which is to put all eggs into one basket. This is a kamikaze act… deadliest! Do not try it yourself… unless you are a strong hearted risk taker like I am.

I invested and waited for a month, and voila! The_one stocks goes up and ring the bell. It hits 300% profit for me! With this gain, I recover 70% – 80% of my previous losses. Overall, I am still losing but at least I have much capital to grow now…  and this is very important. In stock market, it always welcome you but you gotta be cash rich!

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In this 3 to 4 months, I learn many lessons which greatly change my investment style…

1. Cut lost, is not shameful, it is to protect your capital so you can buy the ticket for second or third chance.

2. No matter how, once your stocks reaches your target price, sell it and never go back in again…

3. Do not influence by the market sentiment, in good or bad market, there will be people making money from it. You have to be one of them!

4. Market is heavily manipulated, so be the one who manipulate it or join the group who create the manipulation!

5. Buy low sell high, this means, buy when market is down for a period of time, and sell when it goes up! This is very important! Never chase high sell low… this is fatal!

and many many more…

 

If you have any good pick, do share with me. Smile

Until then, good luck!

 
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