Posted by 3iii > Aug 14, 2018 07:49 PM | Report Abuse

>>>Posted by qqq3 > Aug 14, 2018 04:41 PM | Report Abuse

I think speculators will do better than investors......<<<


Over the short term, some of the speculators may show some superb returns. We can see this in this forum too. Riding the uptrend taking a big bet.

However, over the long term, I am confident, almost all the speculators will end up with "speculators' returns". I have yet to meet someone who speculates in the market short term over many years, who is spectacularly rich. I have known many wealthy people who speculate in the market, but they are losers rather than winners.

I know a lot of people who got burned speculating in the stock market who are completely out of the market. They have learned their lessons and rightly stayed out; wisely too. Those lacking the knowledge of investing should not indulge in the stock market.

Investors who are guided by a good philosophy and method, should do well in the long run. Over the many years of investing, they would have owned a portfolio which has a lot of gains.


This is exactly my personal experience too. I have many retirees who are my golf mates. All experienced what you have mentioned, absolutely. No exception.

Just look at the writer of the comment as a good example. Has he been successful after 40 years in the stock market?

Posted by Ayoyo > Aug 14, 2018 08:11 PM | Report Abuse
Having said that, in my current situation where I believe I've developed a profitable edge, I wouldn't hesitate to take on MF since I have a firm grasp on risk management
And MF is not a bad thing, if one knows how to manage it.


Good qualification, "if one knows how to manage it". Thank you.

Just curious, why haven't you started using it as it gives you amplified return?

Most of the time I lost money in buying and selling stocks when I was young. I have gone through the 1996 Second Board saga, the 1998 financial crisis, the Dotcom bubble and the US subprime crisis, and I didn't lose much as I was without MF. Although I have been doing very well for the past decade in my investment outcome, not using margin finance still remains my golden rule after think the logic of it and going through thorough analysis at different outcome scenarios theoretically.

There are a few seemingly very successful victors who claimed their fantastic return from using MF in i3investor. However detail analysis of what they have written, stocks recommended and their trading history as shown in i3investor, I have not a single confirmation of that, except of the reverse.

Common, if one has to wait for the banks to make margin finance, of which the user would have lost easily more than 50%. How could MF be good under this circumstance when more than hundred of millions could have been evaporated? And why this can happen when the user has been so "experienced" and certainly managing it is not a problem at all?

In real life, I don't know anyone else who has consistently used margin debt and not regretted it in hindsight, including the one mentioned above. I'm actually shocked it is allowed to be promoted by the IBs.

Yes, that is just me. No one should follow me if he doesn't agree.

Posted by dompeilee > Aug 14, 2018 07:54 PM | Report Abuse
I prefer to pay everything with ca$h. Many stocks I bought on sound basis & valuation declined between 30% - 90% before rising to a profit eg Hwa Tai in '98( sold in '99), Wong in '04( sold in '17), Uchitec in '06(half sold in '17 & '18), WangZng in '05(sold in '17), Huaan in '14-'17(sold in '18) etc.
But this preference could be because the Asian Financial Crisis of '97 reduced the ignorant younger me to negative net worth and I had to dig myself out of that, and to lesser extents in the dot.com bust in '00-'01 and then in '07 - '08.
If I had used MF, would have died many times over. From what I have observed, MF provider wants gambler to trade as frequently as possible, pay as much interest as possible, then get wiped out so new victims can come in.


Wise words from a responsible senior citizen, a role model in investing for newbies and the young. Been there, and glad that he had not done that. Otherwise won't be here anymore to propagate some good values in life to the youngsters.

Ayoyo,

Thank you for your comments. A fair comment.
Yes, I do not use MF. It is my golden rule in investing and I have elaborated many times with my articles in i3investor. If you have made a lot of money using MF, good on you. Please carry on.I have absolute nothing against anyone using MF.

In a democratic country, there are many different views, and we don't have to agree with each other.

However, please read this article over and over again, and also my other articles in the use of MF. Then ask yourself the following,

1) Do I have anything against people like you using MF, or ever mentioned before that those people who use MF are bad?
2) Am I writing about issues like the perils of MF, or about people like you, raiders, kyy etc, that you guys are terrible?
3) Who are the audience my articles is directed to, people like you, kyy, raiders, or the young and inexperienced in the stock market?
4) Are there the opposite side of your advantages of using MF which can have serious consequences to the young and inexperienced?
5) If there is, isn't that an irresponsible act, especially if you are a well respected person in the society and people tend to follow you.
6) Haven't I provided adequate data and analysis in my articles, or have I been just talking nonsense about the perils of MF?

I reiterate here, go ahead and make your money in MF. That does'nt bother me at all. But be aware that if you propagate to the young and inexperienced, and the market goes the other way round, the pain is two and a half times than the enjoy when they are right, if you don't know about this.

When there is a meltdown of the market, or a particular stock, which happen often, and the public (not talking about you) are heavy in MF, it won't be pretty. Everybody will suffer, including those who do not use MF.



Posted by Ayoyo > Aug 13, 2018 10:16 AM | Report Abuse

While I have the utmost respect for KC's work, I don't agree with his one sided mindset on MF... To me, it's an excellent tool for someone who has developed his trading edge and acumen in risk management, to reap maximized returns with limited capital.. The only caveat being, is one competent enough to handle it?

Trading, just like any for profit venture, should be treated as that, a business... If one goes into business purely on the basis of the current or next sexy trends, takes on leverage with no insights into business management, then he's ultimately screwed

Much like trading, if one takes MF and start shooting anything popular that moves, margin or not, one is bound to get screwed many times over...

Take these 3 quotes from masters
A fool and his money will soon be parted

The objective is to make money, and not to being right all the time..

The key to success in the markets is not what you do when you Rae right but how you respond when you are wrong

Posted by VenFx > Aug 12, 2018 11:28 PM | Report Abuse
Hi ! kcchongnz
I find your articles always mind blogging...
How you see Mmsv ?
Would the biz model and their balance health ok ? Tq


I think MMSV has good prospect. I have invested some too more than 3 years ago.

Posted by VenFx > Aug 12, 2018 11:36 PM | Report Abuse
kcchongnz ,
What would be the better matrix to measure MMSV ?
Some say EV/EBITA
Others say Peg ...
Very much to see your opinions... tq


I generally like EV/Ebit. I hardly use PEG as it is flawed, and at best be used as a guide for high growth company, with a cap on the growth rate. For a growth company like MMSV, DCFA with margin of safety may be more appropriate. But many investors do not like DCFA.

Posted by Sslee > Aug 12, 2018 09:09 PM | Report Abuse
Dear alibabacoming,
A true friend will give his different views honestly and hope you will see the both side of story. A faked friend will always praise you and say yes to you and hope to profit from you.
Thank you


Sslee,
Few in i3investor can see what you see, and did what you had done in the right way honestly.

However, that is human nature. If you give a sincere and truthful comment, you could be scorned off, or even scolded, and called names. But if someone keeps on PLP like the qqq above, he will be so happy and praised him, or even throw him some crumbs in return.

That qqq will continue to PLP, even though his master is suffering from huge losses, partly because of the confirmation bias as a result of the PLP.

But I think you have lost nothing.

Posted by Sslee > Aug 12, 2018 09:09 PM | Report Abuse
Dear alibabacoming,
A true friend will give his different views honestly and hope you will see the both side of story. A faked friend will always praise you and say yes to you and hope to profit from you.
Thank you


Sslee,
Few in i3investor can see what you see, and did what you had done in the right way honestly.

However, that is human nature. If ou give a sincere and truthful comment, you could be scorned off, or even scolded, and called names. But if you keep on PLP, he will be so happy and praised you, or even profit you in return.

But I think you have lost nothing.

Bingo, these explain very well. Thanks for the comments.


Posted by Daily8 > Aug 12, 2018 06:01 PM | Report Abuse

Many people didn’t manage their risk well in investing. They only think they will WIN at all time on their 1st gear. That is why, they are willing to invest with borrowed money. Larger sum of investment, with expectation of lucrative ROI. They will brush aside the rest of hidden cost incurred. No matter how u inform them the danger in MF, their brain will never agree with you. WHY?

1. They are used to using MF. NO cash in hands for investing anymore. In other words, no other options.

2. They confident they are able to time the market with their 6th sense.

3. They are alcoholic abused and clinically depressed. They may sound very confident with their calls to you, but in fact, it’s a time bomb stock waiting to cut loss at anytime. Instead of he alone buying, why not get a group of people to die together.

4. MF users are usually of very financial constraint businessmen. Their debtors are high and can be said most of them are bankruptcy.

5. They see the stock market as a place of war zone, and they are the warlords. Either die gain, or die gain with nothing.

6. They willing to commit financial suicide at any given time by picking up any calls they believed will damn sure given them profit.

7. Out of 10 losing stocks in hand, the only 1 stock that profit, they will show it off with their friends. Make huge victory out of the 1 stock that made little profit. Full of grandeur and ego!

8. They will influence newbie to invest with them. At the end , they will inform you to trade at your own risk.

9. They never agreed on managing risk. To them, it’s a gamble. Market is very huge place to fish. Maybe these people are those reincarnated warlords from previous centuries.

Posted by qqq3 > Aug 12, 2018 03:44 PM | Report Abuse
Loss aversion is the main driver of decisions in uncertainty...... That is why there is only one KYY. Everybody else is terrified of losing money.... That is also why KC Chong keep attacking KYY and his margin account .....my research and my interest is how to be like KYY


"KC Chong keep attacking KYY and his margin account"?

I have written 328 articles and made 12903 comments in i3investor so far. Go find one article or one comment I attacked him, or even mentioned about him.

I want to reiterate that whoever uses margin finance I don't give a damn. It has nothing to do with me whatsoever. But I just think I am irresponsible as a senior citizen if I don't give my opposing opinion in the public to counter the constant touting and promotion of MF to the youngsters and public.

I am not like some, in fact, may be just a couple in i3investor who have been Poning lan pa someone promoting MF. And that someone was so elated that got others PLP him and he continued to use MF and continued to buy certain stock, until margin calls and regretted about it.

By the way, this is what he said most recently. I seldom re-post what he said, but since this is a good statement, I will do it here to show some good thing about him.


"From the company announcement, you can see that my wife and I have been selling to meet margin call. Forced selling is a vicious cycle. The more we sell the more the price will drop which causes more forced selling until more investors buy on cheap sale to support the price.

I must admit my wife and I have bought too much Jaks with Margin loan. Jaks has very good profit growth prospect, especially when the power plant in Vietnam is completed in about 2 years. Jake is like XO brandy, I drank too much until I have to vomit it out. I must admit that I was too greedy. I am sorry that many of my followers are also affected by the depressed price. I hope they did not buy with margin loan."

The last sentence "I hope they did not buy with margin loan." is emphasized here.

If he cares to read my articles on the perils of MF, many of them in i3investor, the above won't happen.

I just worry for him if Jaks share price fall to become a penny stock, and if he still hold so much shares with so much MF.

Posted by stockraider > Aug 12, 2018 10:51 AM | Report Abuse
The other thing raider notice kc...look at info without further deep understanding loh...!!
Example...the average poor performance of the mkt index KC HIGHLIGHTED.! THATS WHY NO CONFIDENT EVEN TO BEAT 5% PA MARGIN BENCHMARK.
RAIDER SAYS, HE LOOK AT THE MEDIOCRE AVERAGE PERFORMANCE LOH...!!
TOO SURVIVE OR QUALIFY TO REMAIN TO INVEST U SHOULD ALWAYS BEAT THIS AVERAGE LOH...!!


Raider, you have no slightest sense of law of probability, and no knowledge of performance measurement. I really don't know how an investor who has no sense of probability to be successful in investing. And if he does, I can only think of luck.

But the worst part of you is, knowing the the benchmark KLCI makes less than 5% for the last 1, 2, 3, 4 and 5 years, and that the young and newbies would perform well below the benchmark, and most probably losing money, you still keep on shouting to them to use MF.

Your argument that we should use the performance of the top investors as a benchmark, that the 'average", and the young should use MF because the top 1% of the investors makes 50%, or 300% return, and if you use it, you would be able to make amplified return like them, is the most ridiculous and twisted argument I have ever heard.

Posted by stockraider > Aug 11, 2018 01:14 PM | Report Abuse
why raider are disappointed with kc...?/
his understanding of investment is good....but his negative mental attitude...impede his potential loh...!!


Okay. For the first statement, thank you very much.

For the second statement, I am very happy with my achievement in investing so far, and most of all, my propagation and teaching the public some good philosophies and attitude needed to be successful in investing in the long term.

I will stop arguing with you. It is unproductive.

By the way, whatever you think about me doesn't deter me from my missions, which I think it is good for the young and the public.

Best of luck to you.

Posted by stockraider > Aug 11, 2018 01:06 PM | Report Abuse
don get me wrong loh...i m not a fan of kyy...i actually oppose to alot of things he do loh...!!
But one thing...he says kc no business sense...he got it right loh...!!

So this KC no business sense?

I thought you have been saying this KC is a good investor all this while?

Why change of your opinion in so short time?

All because I write against people propagating MF?

Use of MF is the only business sense, as oppose to study and analysis the business if it is a good business and buy when it is selling cheap?

Now I understand what your business sense is.

Raider, your copy-and-paste comments were hell of long winded and messy. Nobody will care to read.

My truncation does not make a difference with the gist of it.

Thats is the problem of this kc loh....!!
No wonder kyy says no business sense loh...!!
In life u must approach things with positive attitude in everything, work very hard, prepare to explore & experiment, not afraid of failure bcos even if u fail u know u can always bounce back up, that is what the importants traits of successful businessman or people mah...!!

Whatever u do, need to find something worthwhile to do with positive mental attitude loh....!!
Margin investment is something positive to learn & do loh, if u master it can amplify ur wealth alot loh....!!

It is a very good 2nd source income loh....!!



Hey, I did not know you are his fan now.

But you still can't fathom the vast differences between life in general and investing in the context of positive or confidence attitude and levels.

By the way, this is he said most recently, someone you said was very successful in MF. I seldom re-post what he said, but since this is a good statement, I will do it here to show some good thing about him.


"From the company announcement, you can see that my wife and I have been selling to meet margin call. Forced selling is a vicious cycle. The more we sell the more the price will drop which causes more forced selling until more investors buy on cheap sale to support the price.

I must admit my wife and I have bought too much Jaks with Margin loan. Jaks has very good profit growth prospect, especially when the power plant in Vietnam is completed in about 2 years. Jake is like XO brandy, I drank too much until I have to vomit it out. I must admit that I was too greedy. I am sorry that many of my followers are also affected by the depressed price. I hope they did not buy with margin loan."

The last sentence "I hope they did not buy with margin loan." is emphasized here.

And the conservative, kiasu and kiasi super investors, Seth Klarmen, Howard Marks, Joel Greenblatt, etc. they are making more and more billions for themselves and their investors.

Posted by stockraider > Aug 11, 2018 12:18 PM | Report Abuse
The problem of u KC....u see the glass half empty loh...!!
Very negative loh...not wrong....but very negative to approach in life in the route of wealth building loh...!!
U WORRY THE GLASS WILL BE EMPTY COMPLETELY LOH...!!
MOST CONSERVATIVE LAYMAN IS LIKE THAT LOH...!!



I don't know how matured you are in investing, and if you can differentiate the big difference confidence, or positive/negative in life and investing.
Well, I am what I am, conservative in investing, try to get-rich-slowly. Yes, as a layman. Dare not claim to be an expert like someone else.

I know many intelligent great multi-million investors and fund managers were very positive in their investment but failed terribly and faded into oblivion.

Bill Ackman investing in Valeant. Bill Gross during the US Subprime housing crisis, Myron Scholes the Nobel price winners and the 5-stars traders in long-term capital, etc etc.

Do what you think you are so good at, but please don't bring the young people to places they are going to die.

Raider comment,
I don know what is your maths teacher teaching u, but i m sure the correct probability or answer is option 1 that is to maximise your expected value...!!

most likely your maths teacher would not teach u option 2...bcos i m sure fear & risk management chicken technique is not in syllabus that time loh..!!


I said my math teacher besides teaching me maths, also teach me many great values in life in general.

So your option 1. own capital 30k and borrow 90k and sailang in the market for a young person sure make big money, or in your own words "maximize" return?

First please clarify are you talking about doing busines, or using MF for stocks? And please understand the huge difference in borrowing to do business and MF before answering.

What are your evidence?

Vast body of research has shown that 70% of business fail, and that is not just hearsay.

Someone in the industry also confirmed the success rate of MF is only one percent in the comments here. Although this figure may be exaggerated, which may not be, one can see the high probability of failure rate.

Why are you so adamant about propagating the use of MF to young? Are you out of your mind? Or are you just so naive?

raider, your comments with copy-and-paste the whole lot were so messy. Nobody will read with comments on such a long winded comment.

Moreover, taking off part of the comments makes no difference at all.

Posted by stockraider > Aug 11, 2018 11:46 AM | Report Abuse
Me: You are talking to the old or the young?
Which businessmen are you referring to?
Are you still confuse with borrowing money to do a business, or MF?
If you are, for heaven sake, try find out the differences before preaching to the young.
AFTER RAIDER PREACHING to u SO LONG TO U THAT SHARE INVESTMENT CAN BE A BUSINESS ON ITS OWN RIGHT...U STILL DON GET I LOH ??
NO WONDER PEOPLE SAY NO BUSINESS SENSE LOH...!!

Me: What kind of BS you are talking about all this time?
for heaven sake, try find out the differences before preaching to the young.

THE NOT SO BUSINESS MINDED TEACHER WILL SAY Option 2 with RM 30K OR BETTER DON INVEST AT ALL.. PUT All INTO FD LOH...!!
This could be what most layman would advice loh, put all into fd loh...!!

Me: Yes, my advice to the young people, knowing them they don't know enough about investment is better to put their money in bank deposit earning 3% to 4% interest a year, rather than simply buying stocks without knowing anything.

Not only advice for the young, but also the old, if they do not have any investment knowledge.

This advice is thousand times better than with 30k, borrow another 90k and punt in the stock market.

Still haven't read my analysis on the return of the broad market for the last 5 years, or you just can't comprehend?

Posted by stockraider > Aug 11, 2018 09:50 AM | Report Abuse

U HAVE RM 30K AND HAVE THE CHANCE TO BORROW ANOTHER RM 90K....DO U START WITH RM 30K CAPITAL OR DO U START RM 120K(CAPITAL PLUS BORROWING}

THE CORRECT OR PROGRESSIVE MATHS TEACHER WILL TELL U RM 120K LOH..!
THATS WHY MOST BUSINESSMEN with Business Sense CHOSE OPTION 1.

THE NOT SO BUSINESS MINDED TEACHER WILL SAY Option 2 with RM 30K OR BETTER DON INVEST AT ALL.. PUT All INTO FD LOH...!!

Actually the correct maths answer is Rm 120k ( capital & borrowing loh)

Why young newbies leh ??
This young newbies start with clean sheet mah, so it is easier & better to acquire good investment knowledge b4 they got corrupted loh....!!

Don ask a 55 yrs to do margin mah, it is difficult to train an old dog new tricks mah....!!


Me: I have some great teachers in my high schools, including many maths teachers. I give them great respect as besides teaching me on specific subjects, such as maths, they also teach me many great values in life.

What is the investment knowledge are you referring to in your statement, "it is easier & better to acquire good investment knowledge b4 they got corrupted loh....!!"

Is it some good investment skill like value investing, or using MF to punt the stock market to "hope" to get-rich quick, but risk bankrupt fast too?

If it is the earlier, good. But if you are referring to the later, they are already "corrupted" by a rouge trader.

Posted by stockraider > Aug 11, 2018 10:14 AM | Report Abuse

WHY U NEED TO BORROW ??
PUT IT THIS WAY LOH....IF U R. YOUR GOOD UR PROBABILITY OF SUCCESS IS 70% AND FAILURE 30% !!

Me: So sure? You are good right? So what was you success rate the past one year?

U HAVE RM 30K AND HAVE THE CHANCE TO BORROW ANOTHER RM 90K....DO U START WITH RM 30K CAPITAL OR DO U START RM 120K(CAPITAL PLUS BORROWING}

THE CORRECT OR PROGRESSIVE MATHS TEACHER WILL TELL U RM 120K LOH..!
THATS WHY MOST BUSINESSMEN with Business Sense CHOSE OPTION 1.

Me: You are talking to the old or the young?
Which businessmen are you referring to?
Are you still confuse with borrowing money to do a business, or MF?
If you are, for heaven sake, try find out the differences before preaching to the young.

THE NOT SO BUSINESS MINDED TEACHER WILL SAY Option 2 with RM 30K OR BETTER DON INVEST AT ALL.. PUT All INTO FD LOH...!!

Posted by qqq3 > Aug 10, 2018 08:31 PM | Report Abuse
jon
margins a tool for business man.
for non businessman, dares not even sailang, let alone margin.


Hey, have you been a businessman before or not?

Never mind, you can ask any businessman if they use MF or not? What is the percentage of them doing so, if you have any businessman friend.

Or were you and are you a "non businessman"? You sailang or not? Sailang in what? Margin? How much is your margin?

And how much you made sailanging Jaks the last 6 months?

Never mind. Keep talking. We really need more jokes here.

Posted by qqq3 > Aug 10, 2018 08:42 PM | Report Abuse
jon kc
entrepreneurship, risk taking , is what every university wants to teach.....


Hey, have you gone to university before or not?

Never mind, keep on talking. We really need more jokes here.

Posted by qqq3 > Aug 10, 2018 06:27 PM | Report Abuse
kc...
Jaks....Jaks is good to me.....I made not less than 5 times already.....
Its business sense first.
I introduce you girl, no guarantee got baby....That is also business sense.

Good also lah with you around. It adds some silly jokes and laughter .

Please carry on.

Posted by stockraider > Aug 10, 2018 05:34 PM | Report Abuse
Raider says if u start to use margin on today price 10-8-2018 on Hengyuan at Rm 7.55 or evergreen at rm 0.545, raider still see u, will out perform positively over the one yr period, even after paying the 5% financing cost loh....!!
Perhaps u may want to take raider comment as an experiment, maybe measure the result after 1 yr say on 31-8-2019 loh....!!


What is the point talking about the future which nobody knows how it will turn out?

Talk about the past, qhar have happened, when you buy and sell, and write an article to share with us how you have made so much money using MF.

By the way, i thought you have informed that you have exited from Hengyuan and Evergreen after "awakened" by MF?

Not participating in your prediction on the upside of HY and EG ah? Why ah, since you say so good and you have a crystal in front of you?

Posted by qqq3 > Aug 10, 2018 02:40 PM | Report Abuse
kc
forget about margin accounts, it is just a tool.
It is business sense you got to develop.
no business sense cannot sailang, let alone margin account.


You have been talking about how good your BS, I mean bullshit, is in Jaks, and how many times shouting sailang sailang on it.

You have also been telling everyone here sailang in Jaks.

So how good has been your business sense in Jaks? What has been your outcome sailanging Jaks?

Please share.

Posted by stockraider > Aug 9, 2018 11:10 PM | Report Abuse

Twisted MF argument 4 & 5

WHEN YOUR PARTNER THE BANKER DEVICE A MARGIN SCHEME FOR U THEY THINK OF HELPING U TO MAKE MORE MONIES AT THE SAME TIME SAFEGUARDING U TO PROTECT THEM LOH....!!

SO MARGIN CALL IS TO PROTECT U LOH....!!
AND A GOOD MARGIN FINANCE WILL AMPLIFY UR RETURN LOH...!!

BUT KC...USE A VERY BAD ILLUSTRATION ON JAKS....WHICH RAIDER THINK IT IS NOT A GOOD REFLECTIVE EXAMPLE LOH....!!

BASICALLY RAIDER WOULD USE MARGIN INVESTMENT LIKE USING CASH INVEST MORE CONSERVATIVELY FOR LONG TERN THEN KYY LOH....!!


I have used a hot stock to demonstrate what I mean with all the numbers. Why don't you use your example to demonstrate how you double, triple or ten times return using MF?

What about using your favorite stocks? HengYuan, which I have used it too and shared in i3investor?

Or another of your favorite stock, Evergreen?

Posted by stockraider > Aug 10, 2018 04:19 PM | Report Abuse
Your Info are based on mediocre average performance loh....!!
If u r mediocre...do u think u should remain in the mkt leh ??
U should be the top 20% of the overall investor to outperformed, if that is ur overall result...using mf will amplify ur result or return mah...!!
If u r one of the soochai...mediocre naturally u will be eliminated, then ....u suffer no damages in future, bcos...u do not make it as a good investor mah....!!


So those 80% after one year, two years, three years, four years and five years investing, and with MF, say lost RM100k will know they are not cut out as investors and should leave the stock market to you and your buddies? Mind you, 60-70% of them are fund managers and institutional investors. You know or not?

And those 20% make profit above 5% with MF, including you and your buddies, should be the only ones remain in the market?

So the market will be left with the 20% winners? And all of them will be winners for the future?

Who are the losers ah?

Another hell-of-twisted argument.

RAIDER REPLY,
SO IF U TAKE MARGIN 5% PA...AND INVEST R U.. NOT NEED TO ACHIEVE THE REQUISITE ABOVE 5% PA RETURN....IF U FAILED U WILL BE PUNISH...THRU CAPITAL LOSS LOH....!!

IF U FAIL TO ACHIEVE 5% PA...IS IT NOT U NEED CONSIDER WHETHER U R SUITABLE IN INVESTING , SINCE U R NOT GOOD ENOUGH LEH ??

THERE IS NO FREE LUNCH....THEY IS COST ON MONIES OR OPPORTUNITY COST MAH...!!


Read my article again where I gave the annual return for the last 5-year, 4-year, 3 year, 2-year and one-year return of the broad index. That can be approximated as the return of "an ordinary investor" in Bursa, which includes fund managers and institutional investors.

Could they get the return of the cost of capital of 5%?

If not, how a young and new investor to get the return of the cost of 5% in MF?

Why are you still telling them to borrow and lose more?

So they are not suppose to invest in stock market? Only 20% of them can invest?

Another twisted argument.

Posted by stockraider > Aug 9, 2018 10:44 PM | Report Abuse

Twisted MF argument 2

RAIDER ADVICE,
WHY BELITTLE MARGIN INVESTORS LEH ??

JUST BCOS UR RICH FRIEND DOES NOT USE MARGIN, DOES MEAN PEOPLE CANNOT MAKE USING MARGIN LOH....!!

ALOT OF BUSINESS R SPECIALIST....THEY ARE VERY NARROW FOCUS...THUS IT IS POSSIBLE, THEY DON MAKE MONIES FROM SHARE SHARE INVESTMENT, WHAT MORE FROM SHARE MARGIN INVESTMENT LOH...!!

THERE ARE PEOPLE MAKE ALOT OF MONIES USING MARGIN LOH....!!

KYY COULD ONE OF THEM LOH....!!

RAIDER BUDDIES ALL MAKE MONIES USING MARGIN TOO MAH...!!


Good on you. You and your buddies are in the same league as KYY.

Who "BELITTLE MARGIN INVESTORS LEH"?

We dare to belittle you leh?

Carry on using MF, and tell everybody to do so. Good on you.

Posted by stockraider > Aug 9, 2018 10:35 PM | Report Abuse

RAIDER REPLY,

WARREN BUFFET ADVICE PEOPLE TO INVEST IN SHARE ON A BUSINESS LIKE MANNER MAH, THUS SHARE INVESTING IF DONE PROPERLY IS BUSINESS LIKE AS ANY BUSINESS MAH...!!
IF GOOD BUSINESSMAN ARE ALLOWED TO BORROW, THEN WHY NOT GOOD INVESTOR SHOULD BORROW TOO LOH....!!

KC ARGUE SHARE INVESTMENT NO NEED TO USE MARGIN, CAN USE OWN SWEET TIME TO GROW, THEN THE SAME ARGUEMENT SHOULD APPLY TO BUSINES, WHY DON THEY USE CASH AND TAKE A LONGER TIME TO GROW, INSTEAD OF TAKE RISK TO BORROW FOR GROWTH LEH ??

THE ABOVE SHOWS THAT, IF U THINK BUSINESS LIKE FOR SHARE INVESTMENT, THE PARTICIPANTS SHOULD BE GIVEN THE OPTION TO BORROW USING MARGIN MAH...!!


What another twisted argument. A businessman borrows money to do a business he fully own and controls is the same as using MF for buying shares of the company, or a minute portion of ownership of the business?

Posted by stockraider > Aug 9, 2018 10:24 PM | Report Abuse

WHEN RAIDER HAVE TIME...EASILY RAIDER can refute ALL THE NEGATIVE POINTs THAT KC RAISED ON MARGIN INVESTMENT LOH.....!!

Me: Please do! Please show some examples, facts and figures too. Otherwise it is of no use.

THE WAY KC TALK LIKE, HE COMPLETELY DO NOT UNDERSTAND....WHY PEOPLE FAILED IN INVESTMENT LOH....!!
THERE IS A BIG MISCONCEPTION THAT MARGIN IS EVIL BUT IT IS NOT TRUE LOH....!!


Me: ok, ok. Ever with facts and figures, examples etc, you still say I don't understand. Show us that you so understand, please.

By the way, you have not responded to my questions above. Do the following super investor also don't understand MF and need to learn MF from you?

“I've seen more people fail because of liquor and leverage (in stock investment)—leverage being borrowed money. You really don't need leverage in this world much. If you're smart, you're going to make a lot of money without borrowing.” Warren Buffett

“If you are going to be a very concentrated investor, you should not use leverage. You can’t leverage because you need to live through the downturns and that is incredibly important.” Joel Greenblatt

“The trick of successful investors is to sell when they want to, not when they have to.” Seth Klarmen

Posted by stockraider > Aug 9, 2018 10:14 PM | Report Abuse

RAIDER NEED TO PUT IT BLUNTLY LOH....!!

INVESTMENT IS NOT TOTALLY AVOIDING RISK LOH....!!

Me: Who says one must totally avoid risk in investing? Please show!

IF U MAKE SUCH A STUPID STATEMENT 83% OF SHARE INVESTORS LOSE MONIES, THEN WHY DON U ADVISE ALL OF THEM TO PUT IN FIXED DEPOSITS & AVOID STOCK MKT TOTALLY LOH....!!

Me: Stupid statement? Where did I say such a precise number that 83% of share investor lost money? Please show.

Why should I tell them to put their money in FD and avoid stock market?

In fact, it won't be a bad advice to tell them to put their money in FD for the last 5 years. I have shown the fact and numbers in my article. Wouldn't them better to put their money in FD the last 5 years?

INVESTMENT IS TO TO DEVELOP UR TALENT TO ACHIEVE GOOD RETURN MAH....!!

Me: Wow, incredible statement. Talent in the use of MF when so many people lost their underwear? You know they are not good in investing, don't you?

MAKING SWEEPING STATEMENT THAT MARGIN INVESTORS WILL DEFINITELY LOSE, IS NAIVE AND MISLEADING LOH...!!

AT LEAST 20% CAN MAKE IT AS MARGIN AS INVESTOR SUCCESSFULLY LOH...!!

Me: Is it a good advice to use MF when 20% only make money and 80% lose their pants? What logic is that?

BUT SPREADING FALSE MISLEADING COMMENT, U R HINDERING POTENTIAL YOUNG INVESTMENT TALENT FROM PROGRESSING LOH

Me: My statement with facts and numbers false and misleading? Not yours without nothing to show?

Me hindering potential young investment talents from progressing; or your telling them to go to Holland?

I have poor understanding in MF? I am irresponsible? I need to learn about MF?

These people are some of the richest in the world from investing, making billions for their clients and themselves. Do they also have poor understanding in MF? Are they irresponsible? Do they also need to learn MF from you?

“I've seen more people fail because of liquor and leverage (in stock investment)—leverage being borrowed money. You really don't need leverage in this world much. If you're smart, you're going to make a lot of money without borrowing.” Warren Buffett

“If you are going to be a very concentrated investor, you should not use leverage. You can’t leverage because you need to live through the downturns and that is incredibly important.” Joel Greenblatt

“The trick of successful investors is to sell when they want to, not when they have to.” Seth Klarmen

Posted by stockraider > Aug 9, 2018 09:46 PM | Report Abuse

What type of poor understanding this kc calling himself consultant loh....??

In a way he is irresponsible saying as a financial consultant with a blanket...negative on margin products loh...!!
If u don understand, try to understand & learn and see what r the benefit mah...!


Raider, I really do not wish to quarrel with you as you can see, all my comments are without any name calling, unlike yours.

I have poor understanding about margin finance? I have shown you with numbers, and facts about MF. Have you shown any besides general statement? Yes, write a proper article to articulate your point of view, with facts and numbers, rather than wild shouting.

I am irresponsible to say people shouldn't tout MF to the general public? Or is it you who are irresponsible telling youngsters to use MF?

For your information, I am not a financial consultant, and never claim to be one. But I know a lot about finance and investment, whether theoretically or practically.

Learn the benefit of MF from you? Look at my articles with all the numbers, and different scenarios I have presented. Have you?

Tell you bluntly, you need to open your mind, learn from others, from internet etc about the negative side of MF.

Investing is not about getting rich quick but risk losing everything. It is about building long-term wealth slowly but surely.

However, if you want to get rich quick, you are entitled to d it yourself, but please don't teach the wrong thing to the youngsters.

I have poor understanding and irresponsible? Read through all the comments. There is one thing one must be aware, it is seldom that everybody is wrong and you are right.

Posted by cherry88 > Aug 9, 2018 09:44 AM | Report Abuse
I agreed with KC. I worked in Margin Department in stockbroking firm before. I can confirmed and testify again here that "less than 1% actually make money from MF over a 5 years period or longer" !!! Why risk yourself and let broking house (or investment bank) make the money ? I term of risk-reward ratio, I believer it is better to risk the money in casino than via MF.


Cherry,

Good on you as one in the industry and also involved in this thing to do some social service to the public together with us.

You are the right person.

Posted by Ray168 > Aug 9, 2018 02:53 PM | Report Abuse
Using MF is just like driving a F1 car... it can brings to your designation fast but may also bring to to holland.
If you don't have the skill set and guts, don't do it.


Ray, good analogy. Is it better to drive safely within the speed limit to arrive the destination timely, of drive a F1 car at 200km/hr to reach the destination faster?

Actually, this article is about the irresponsible advice of elderly telling the youngsters and the new drivers, or even those without the driving license, to drive like a F1 racer to reach the destination fast.

The proponent above justified that it is good to advise the new drivers, or inexperienced drivers, to meet some accidents first, while they are young, so that they can be better drivers in the future.

Great analogy too!

Posted by CharlesT > Aug 9, 2018 03:17 PM | Report Abuse
Margin is neutral lah..just dont let some cunning old shares operator brainwashed n misleaded u to buy his shares at high prices using margin when he wanted to dispose...

Margin is neutral. This is a fair statement. Same as what Howard Marks said that,

"Leverage doesn’t add value or make an investment better."

He also said recently,

Leverage + Volatility = Dynamite

http://www.oaktreecapital.com/memo.aspx


More significant effect,

Noble prize winners Kahneman and Tversky (1979) studied
how people respond to the prospect of loss. They find that a loss has about two and a half times the impact of a gain of the same magnitude and they call this phenomenon loss aversion (Prospect Theory)


Combining maths and behavioral finance, a new "theory" by KCChong

Expected gain in using MF = 0.5*1-0.5*2.5 = -0.75

Posted by cheoky > Aug 8, 2018 11:38 PM | Report Abuse
buy cold eye revised edition 2018 read. more comprehensive.


Coldeye may have used MF investing in stocks and have made amplified gains. But there aren't many "coldeye" in Malaysia.

The big difference is that he never boast about making so much money using MF (implication of encouragement of using MF). He understands the detrimental effects of MF when market goes against us.

In his books, he persistently discourages the general public from using MF because he knows, and most people know, the general public can't handle it.

That is humility, a great teacher, and a great social contributor, propagating the right things in investing in particular, and life in general.

Posted by stockraider > Jul 30, 2018 07:57 PM | Report Abuse

ALWAYS REMEMBER INVESTMENT CAN BE YOUR 2ND SOURCE OF PERMANENT INCOME ON TOP OF YOUR PERMANENT EMPLOYMENT....U NEED TO LEARN THE ROBES QUICK & U NEED TO KNOW WHETHER U R SUITABLE AS A POTENTIAL GOOD INVESTOR LOH...!!
BETTER PUT UR COMMITMENT ON THIS LIFE LONG LUCRATIVE INVESTMENT BUSINESS
WHEN U R STILL YOUNG LOH...!!

THE EARLIER U START THE BETTER UR CHANCES OF SUCCESS LOH....!!

Me: Of course and fully agree with you. That is also my advice as a professional financial planner. But the difference of your advice and mine is, you propagate the use of margin finance, for the young people which you know very well they are not good in investing, and that 90% of them lose money in the stock market, and that they will likely lose money, and exaggerated losses with margin finance.

WHY GO TO TRADITIONAL WAY LIKE BUY CAR & BUY HOUSE 1ST....WITH LOADS OF FINANCIAL COMMITMENT WHEN U R YOUNG.

Me: If you have a job, and your office is way out of public transport system, isn't that a priority, over getting a margin finance to use in stock purchase, which is no way certain of making money?

RECESSION HAPPEN MAY MEAN HILANG KERJA...SUPPOSE U GOT RM 600K HOUSING LOAN AND RM 100K CAR LOAN....WITH MONTHLY SERVICING COMMITMENT HOW ??

Me: Your house is still worth a lot of money, unlike in a stock market crisis, one loses all his money! Which is worse?

What is the chance one loses his job and can't even find another, compared to the stock market tanking?

Note I am not talking about not investing, but not using margin finance.

IF U HAVE A MARGIN...MAY COME HANDY TOO DURING RECESSION & LOST OF JOBS...CAN DRAW SOME CASH OUT...TO TIE OVER YOUR MONTHLY SERVICE COMMITMENT...WHILE STILL HUNTING FOR NEW JOBS LOH...!!

Me: Your "margin" appears to be used as "in the event of recession, losing job". Not for buying stock meh? Isn't that defeating its purpose?

No need to pay commitment fee, roll-over fee, interest etc ah?

Posted by stockraider > Jul 30, 2018 06:59 PM | Report Abuse
WOW...HOW COULD U SAY THAT....I ASK THEM NOT TO BUY NEW CAR....THAT IS ALREADY ALOT OF SAVINGS LOH....!!

Me: This is a good advice. But they need to buy a car to go to work. Working is the most reliable way of earning money. Not use margin to punt on stock market.

YES I ASK THEM TO OPEN MARGIN....SO THAT THEY HAVE A MEANINGFUL INVESTMENT CAPITAL MAH.....!!

Me: You need a car to go to work, a second hand small car. You need a permanent shelter over your head if you have a family. Borrow money to buy a house also is a forced saving, a sure forced saving. House price often go up in value over the long-term. At least it won't like stock which could tank by 50% often, whether good or bad stocks.

IMAGINE THEY HAVE ABOUT 30K....THIS IS TINY....FOR INVESTMENT LOH...!!
YES MARGIN....DOES NOT MEAN THEY NEED TO SAILANG ON 1 STOCK LIKE KYY ADVICE LOH...!!

Me: Which is a priority: buying a second hand which you need to go to work, a permanent shelter over your head when you start a family which you can call it your own and at the same time forced saving, or use margin to buy stocks to hope to get rich quick in the short term, which nobody can be sure about that?

Raider, you may be good as a investment "advisor" for investment banks which have been promoting margin finance, such that they will make a lot of money from punters in the stock market.

Certainly you are not qualified as a professional financial planner/advisor who could take care of the interest of those young people.

Posted by stockraider > Jul 30, 2018 06:19 PM | Report Abuse
RAIDER FIND ALL THOSE CONVENTIONAL TRADITIONAL THINKING OUT OF LINE....IF THEY ARE WILLING TO BORROW ALOT OF MONIES TO BUY HOUSES UPTO 90% AND CARS 90%, IS IT NOT USING SHARE MARGIN GEARING 65% VERY MUCH SAFER LEH ???
IMAGINE U BUY A HOUSE U MAY BORROW UPTO RM 600K AND A CAR A DEPRECIATING ASSETS MAYBE RM 100K, WHY NOT FOR A START WITH RM 100K SHARE MARGIN FACILITY LEH ???

Raider, are you comparing apple with apple?

Borrow to buy a house or a car because young people starting work or a family need to, and using share margin to punt in the stock market which is full of uncertainties?


As a financial advisor, I used to advice young people to buy a house and a car they need as soon as they can afford. Of course they need to borrow.

Posted by stockraider > Jul 30, 2018 06:03 PM | Report Abuse
SAMETHING WARREN BUFFET ADVICE DON USE DERIVATIVE AND MARGIN FOR INVESTOR BUT ACTUALLY WARREN USES ALOT OF DERIVATIVE EVEN HE CALL IT DANGEROUS AS WEAPON OF MASS DESTRUCTION LOH....!!
BUT CAKAP & BIKIN TAK SERUPA LOH....!!
MAYBE HE PLAN TO ADVICE GENERALLY...USE THE SAFEST & LEAST CONTROVERSIAL PATH LOH.....!!
IN REAL LIFE...COLD EYE USES MARGIN ALOT TOO....!!


That is why they should be the role models. They may use margin in investing (Warren Buffett doesn't). They may have made a lot of money doing it because they are good(How many people in the public are as good, or even close to them in investing?). But in their public speeches and writing, they express very strongly against the public using it. Because they know very few people can handle it, and most of them bankrupt doing it.

That is humility, social responsibility and behavior of true super investor.

Posted by stockraider > Jul 30, 2018 05:49 PM | Report Abuse
BTW COLD EYE ALSO USES ALOT OF MARGIN LINE TOO LOH....!!
THAT MEANS HE ALSO SUPPORT THE USE OF MARGIN LIKE RAIDER LOH....!!


This appears in my article here.

"The Peril of Margin Finance

Just not long ago, I read three books in Chinese written by a real super investor in Malaysia who has built substantial wealth in the stock market. As I remember in his books, he keeps on discouraging the use of margin finance for the public, but following the “right path” in investing, in particular value investing, to build long-term wealth in investing in part of a business, i.e. investing in good stocks of public listed companies. He had sent the right and proper message to the public, despite he had also sometimes made exaggerated return of investment by using leverage. This is a great advice from him."


Don't take my words only. Go and read his books, if you understand Chinese. Do not simply put words into his mouth.

Posted by gohkimhock > Jul 28, 2018 09:44 PM | Report Abuse
I believe the book you read was written by Cold Eye. Am I right?


That is right. I recommend any investor, experienced or newbies read them, especially the first two books before embarking in stock investment.

He should be a role model in investing. You won't go wrong following him, in the long-term.

Posted by KINGV > Jul 29, 2018 11:33 PM | Report Abuse
KCChong, I strongly support your advice against using margin account. There are arguments for and against using margin account and below is a short account of my personal experience in using margin account.
During the time when Iraq invaded Kuwait, markets were down. I approached a foreign bank for a margin account to buy shares . When U.S invaded Iraq,markets rebounded and returns were good. Then came the sheer madness in the early 1990s for KLSE when cheap counters like SHChan, Hwa Tai and AHP reached prices of over RM60, RM200, and RM8 respectively. Practically everybody was making money and celebrating. Those having margin made more. I was conservative in using my margin account in my borrowings and in selecting my counters. Even then returns were very good.
Then came the financial crisis of 1997/1998. The market crashed and it is hard to believe how low the market went. Some of the dubious counters went limit down 3 times in a row. Those with margin accounts have no time to run and by the time the broker firms forced sell, they have not only lost their principals but owed the firms/banks substantial sum of monies. Those who invested in blue chips were not spared.The composite index fell from around 1300 to the unbelievable number of around 240. If I am not mistaken Maybank fell below RM3 and Berjaya Toto below 50 sen. Those who invested in a diversified portfolio of blue chips were not spared since the composite index fell so sharply. Those who had margin accounts suffered more since there were a lot of forced selling at each lower level of the composite index unless one was so skillful in liquidating all his/her blue chips in the initial stage of the market fall. I was not spared but it is a good lesson that margin account can wipe you out.


I would have to say this is one of the best comments on margin finance, with facts and some histories. It is also unbiased showing two sides of a coin. he is also new in i3investor.

Thank you.

Posted by jjj88 > Jul 28, 2018 05:40 PM | Report Abuse
nice nice sharing

Posted by crownford_bl > Jul 28, 2018 10:08 PM | Report Abuse
KcChong: I like your blogs. Well done!

Posted by stockraider > Jul 29, 2018 04:21 PM | Report Abuse
KC ADA SUBSTANCES LOH....!!
RAIDER CAN ATTEST MAH.....!!
HIS IDEA A CORE SUCCESSFUL INVESTMENT STRATEGY LOH...!!

Posted by coldinvestor > Jul 29, 2018 08:01 PM | Report Abuse
好文章， 谢谢您 ！




Thank you very much. Terima kasih, 谢谢您, நன்றி

Posted by Jon Choivo > Jul 29, 2018 01:43 AM | Report Abuse
But to put yourself in a position where the bank can force you to sell at the worst time possible and make your losses permanent, is one of the stupidest thing i've ever heard.
I personally don't dare to put all into one stock as i suppose i don't truly understand the business.
And the only time i considered margin was when i was a newbie, after really understanding the utter insanity of people in groups, i will never touch it.
Its inevitable that i will be rich anyway, why risk what i need for what i want.


Posted by qqq3 > Jul 29, 2018 02:14 PM | Report Abuse
cheoky
all businessmen have a margin account. All CEOs have a margin account.
if no margin account experience, its fine, just don't be a business man or CEO.
be an educator ...or a plant engineer...still a fine life.
I think University of hard knocks better than university of book worms or university of maths teachers.



Just look at the two comments above, the earlier one from a young man, and the later a 60+ retiree, you can see the vast difference in knowledge, intelligence, wisdom as well as experience.

But the big surprise is the young one is the one who excels. He said, "Its inevitable that i will be rich anyway, why risk what i need for what i want."

The old one, who just know one person he worships who has share margin account, simply shoots that "all businessmen" got share margin account. Where does he get that?