Posted by Haris Phang > 2014-03-19 11:03 | Report Abuse

Thank you for sharing this information. It's been helpful to read your blogs about your expertise and experience, and how you put "your money where your mouth is".

Posted by haikeyila > 2014-03-19 11:05 | Report Abuse

different title, same boast again..

Posted by Vam Pire > 2014-03-19 11:06 | Report Abuse

Thx uncle koon. I bought more than that and already unlocked profit >RM 100k :)
Again, really appreciate your great tips. hopefully got chance to pay u a visit when i visit to Ipoh

Posted by lohman > 2014-03-19 11:39 | Report Abuse

Investors must appreciate margin financing is a double edged sword which cuts both ways. It can magnify the profits, or the losses, of your stock investments. Use it judiciously as you would any powerful weapon. The greatest line of defence against losses is still a good stock pick; and one that promises ever growing profits in coming years can hardly go wrong.

Posted by BUCKBUNNY > 2014-03-19 11:47 | Report Abuse

I am using margin finance too,i used it untill full.most important is your stocks selection,select those good counters and able to give you good dividend to cover ther finance interest.Thus,actual interest paid is minimised.

Posted by BUCKBUNNY > 2014-03-19 11:48 | Report Abuse

my limit is 400k.i used till 300k+..

Posted by Ve Nom Vee > 2014-03-19 11:51 | Report Abuse

I am surprised a seasoned Investor like you will encourage inexperienced or new investors to leverage by margin financing. Although your case study shows the benefits of leveraging in an up-market, you did not emphasize the real dangers of margin financing in a flat and/or falling down market.

Margin financing is NOT for real investors. Perhaps in an upwards bullish market, we may consider using some margin financing. However, when the market turns bearish, margin financing will wipe out all your profits and capital very much faster. You will face force-selling to maintain your margin ratio. On top of that, you still pay high interest rates plus rollover fees. Eventually, you will be wiped out completely!

I have leant the dangerous lessons of margin financing. It's not worth it but only gives you a sense of false security that your shares are safe. They are NOT safe and the moment the market turns down or worst crash, you will have unimaginable nightmares to top up and avoid force selling.

Mr Koon, your articles are very interesting and enlightening but in this case, I disagree with your encouragement of using margin financing to the unsuspecting new share investors or speculators.

Case Study : Xinquan Shares
Among all your stock picks, the one controversial and potentially fatal error in your portfolio may be the 30mil (10%) Xinquan shares. I noticed that you have already lost quite a lot and that most of your Xinquan shares are in margin financing. IF this share should collapse overnight (for one unexpected reason or another), then you will not only have lost all your investments in this share but will also end up owing the banks and stockbroking companies $$$millions.

This is my personal opinion and I hope that I have not offended anyone.
Best regards and thank you.
V

Posted by haikeyila > 2014-03-19 12:00 | Report Abuse

notice that this article is never about margin financing at all. imagine if everyone starts boasting over and over again about every stock they bought that went up for some reason or another. what a bore.

Posted by Alphabeta > 2014-03-19 12:31 | Report Abuse

If it is a one way bet, we cannot argue with Uncle Koon on leveraging to multiply return. Mathematically it is correct, it depend on your risk appetite. If you can borrow at 4.6% p.a. and the investment target can consistently give an annual dividend yield of 6.6%. You will have a clear advantage of 2% per annum. Couple with potential capital gain due to sustainable earning growth, the return can be even better. Bear in mind that market volatility will come into play irrespective of the business fundamental; leveraging is a double edge sword and it can cut both ways. Just make sure you can react fast or able to sustain the bleeding if thing goes ugly. Look before you leap.

Posted by nsk82 > 2014-03-19 13:02 | Report Abuse

i believe Mr Koon miss out the strategy avoid margin call....use only 25% of your margin finance at best. That said, i concur Jaya Tiasa is growth company :)

Posted by Pak Lah > 2014-03-19 13:12 | Report Abuse

Ve Nom Vee. To successful in life, ones must make full use of tools made available to them. As a "crude" example, you can hit a nail with your bare hand. To achieve the same results, you can use a hammer (a tool) to complete the job in a faster and efficient way. Likewise, you must know how to ride on financial tool so that your investment objective can be attained in the fastest way possible.

Posted by Lai Yin Keat > 2014-03-19 13:47 | Report Abuse

For a normal Joe, driving an F1 car is considered dangerous and potentially fatal. To the professional, it is just another day in the office

Posted by mogul88 > 2014-03-19 15:37 | Report Abuse

Noble might the intention be, imparting financial advise that involves leveraging might do equal harm to readers... newbies need to read with pinch of salt.. just saying

Posted by Iching88 > 2014-03-19 16:22 | Report Abuse

as always,take your own risk mah....

Posted by Koon Yew Yin > 2014-03-19 16:27 | Report Abuse

Pah Lah uses the right analogy of hitting a nail with the right tool. If you do not know how to use the hammer, you must learn how to use it. You cannot continue to use your bare hand to hit the nail. To be save use only half of the allowable margin and buy shares that have profit growth more than 4.6% per year which should be easy to find.

haikeyila, obviously you did not buy JT at Rm 2.10 otherwise you would laughing all the way to your bank. Perhaps you should change your attitude so that you can start to make money from the stock market. Being a skeptic, a person habitually doubts generally accepted beliefs, will only make you poor. Open your eyes and be willing to learn.

Posted by haikeyila > 2014-03-19 16:38 | Report Abuse

No i did not pick up JT, but I did grab FResources and Wilmar which have also gone up substantially (missed out on Olam). Now imagine if i were to write about how much a 'superinvestor' I am over and over again, calling those who disagree 'poor', 'fools', etc.

Posted by axeaxe > 2014-03-19 17:26 | Report Abuse

Mr koon when will you have talk in kl area? Hope to attend your talk one day.

Posted by lucifer > 2014-03-19 17:39 | Report Abuse

haikeyila show Mr Koon your total earning from the market and prove him wrong, your attitude didn't make you poor or any annual reports that have your name in the substantial shareholders.

Posted by lucifer > 2014-03-19 17:45 | Report Abuse

Margin Financing needs a lot of self-discipline and never max out your margin of finance (mof), else kena margin call and the bank will be calling you up asking you to top-up or force sell your shares. This is not something for beginners that lack of self control.

Posted by haikeyila > 2014-03-19 17:47 | Report Abuse

get rid of this bolehland mentality of accepting what people shove down your throat without questioning, this 'idol worship' and threatening people to shut up when they disagree. is it any wonder that the whole world is laughing at us?

Posted by optimus8 > 2014-03-19 17:49 | Report Abuse

omg, haikeyila. u r damn right. bolehpeople just cut n paste peoples opinion and take it as theirs! so glad I found someone agreed with me!!


this is fantastic >>>get rid of this bolehland mentality of accepting what people shove down your throat without questioning, this 'idol worship' and threatening people to shut up when they disagree. is it any wonder that the whole world is laughing at us?

10x like

Posted by nsk82 > 2014-03-19 18:22 | Report Abuse

let time be the evidence, 3 years from now. i have faith in JTiasa

then again, there are plenty of choices around to earn money. :p

Posted by Haris Phang > 2014-03-19 18:51 | Report Abuse

Ve Nom Vee, thank you for cautioning. Agree that need to know how to use margin financing wisely. And need to know how much risk that we can take financially and psychologically. Would not want to have sleepless night and check the stock price every morning frantically.

Posted by optimus8 > 2014-03-19 18:57 | Report Abuse

I agreed with mr koon. leveraging is very powerful. lets compare walking with both legs (safer but slow) or riding on Harley (faster but more risk)

Posted by Andy Ng > 2014-03-19 20:12 | Report Abuse

I am a very particle person and a firm believer of current earning. Until recently where I attend a course on trading in US Market, I realized that majority of US Market valuation is based on Growth rather than current earning. At first it is hard to accept, after I do a self review on my past investment and reading Mr Koon Blog. I am slowly changing my approach. Hope it will improve my Investment Return.

I do used share margin to buy stocks. I believe it have different impact on different type of character. I can only share my experience. Beginning of 2013, when I know the election factor is causing uncertainty. I systematically reduce my share margin to zero before Election. Even after election over, the stocks shoot up. I did not regret as I know what am I doing. After small crisis at end of 2013, I try to buy stocks using share margin slowly. Share Margin is like water, it can float the boat, at the same time can sink the boat. Its all up to you.

Finally, I Thanks Mr Koon for selfless sharing on his Investment.

Posted by Ooi Teik Bee > 2014-03-19 20:34 |

Post removed.Why?

Posted by Rambotan > 2014-03-19 20:35 |

Post removed.Why?

Posted by Anwar120 > 2014-03-19 21:32 | Report Abuse

What is wrong with you Rambotan? OTB gave his honest views, what did you ever give beside insulting him.

Posted by Ricky Kiat > 2014-03-19 22:01 | Report Abuse

many 30 top shareholder of listed company are using margin financing .Included cold eye (Mr Fong Si ling).

Posted by davidkkw79 > 2014-03-19 22:04 | Report Abuse

coldeye said don't borrow money to invest in stock market !

Posted by Ricky Kiat > 2014-03-19 22:05 | Report Abuse

it is up to u how to learn & master margin finance as use loan from bank to expand your business.

Posted by Ricky Kiat > 2014-03-19 22:22 | Report Abuse

cold eye are not recommend newbie to borrow money buy share, but he is using margin finance,u can check Gtronic,Huayang,ECS,Prtasco,Plenitu,tambun Annual report.

RHB CAPITAL NOMINEES (TEMPATAN) SDN BHD
PLEDGED SECURITIES ACCOUNT FOR
FONG SILING (CEB)

Posted by Ricky Kiat > 2014-03-19 22:35 | Report Abuse

uncle Koon are not asking u to use margin finance but use it when u are really need as u want to expand your business.Keep in mind, buy share is buy business(dont use big hat if u head are small)

Posted by optimus8 > 2014-03-19 22:36 | Report Abuse

no wonder coldeye not as rich as uncle koon.

Posted by sunztzhe > 2014-03-19 22:53 | Report Abuse

Agree with the business thinking mindset of Mr Koon on professional evaluation of COST versus FUTURE BENEFITS. There will be RISKS no doubt in every stock investment but the risks can be minimized and managed very well by following Mr Koons Investment principles of seeking out companies that yield increasing PROFITS in the future years and making the decision now to Invest in these companies.

Posted by Victor Tai Yong Sheng > 2014-03-20 09:21 | Report Abuse

I hold on to my priciple, when investing never ever play with margin and contra. I prefer to be safe than sorry, just my 2 cents.

Posted by davidkkw79 > 2014-03-20 09:23 | Report Abuse

Don't forget market crash could be just coming in anytime, don't get burn by borrowing money !

Posted by KinSoon Kok > 2014-03-20 09:26 | Report Abuse

Does it works like OD. If it is not utilised no interest being charged? Any commitment fees?

Posted by KinSoon Kok > 2014-03-20 09:28 | Report Abuse

What is the difference of nominee a/c & conventional trading a/c?

Posted by susuan > 2014-03-20 09:31 | Report Abuse

I agree with Victor Tai Yong Sheng!

Posted by Koon Yew Yin > 2014-03-20 10:31 | Report Abuse

Fear is the biggest obstacle to success. In fact most professional fund managers and highly educated professional cannot out perform the market index because they are trained to look out for possible or imaginary danger. When Businessmen look at a proposal, first they consider how much profit can they make. That is why Tan Sri Yeoh Tiong Lay of YTL and Tan Sri Lim Goh Tong of Genting who do not have tertiary education, are so successful. Their companies employs hundreds of professionals to work for them.

Posted by Vam Pire > 2014-03-20 11:30 | Report Abuse

Hi uncle Koon, do u have any other good stocks to recommend? i will have huge fund available end of this month/early april.....would you mind to share here (so everybody can earn :) or i should write you personal email ?

Posted by Koon Yew Yin > 2014-03-20 12:00 | Report Abuse

As I said many a time that to be able to make more money than ordinary investors, you must buy plantation shares as soon as read my recent posting on "Palm Oil Price Trend". The average cpo price for last year was about Rm 2,500 and all the experts say that it will be Rm 3,000 by year end. It is currently at Rm 2,850 per ton. Assuming that the average price for this year is Rm 2.850, the additional profit will be Rm 600 per ton and this additional profit requires no additional effort, just pure profit for doing nothing.

You don't have to be a genius to know what shares to buy to be sure of making profit. Moreover, due to the long depressed cpo price, most plantation shares are also being depressed.

80% of my investment are on planation shares and I am very sure plantation companies will make more profit this year than last year and most of them will continue to make increasing more profit next year.

Posted by nsk82 > 2014-03-20 12:14 | Report Abuse

i think it is fair to say JTiasa base on its young tree profile. Thus, regardless of the CPO price (unless it fall to RM1500), JTiasa future earnings is somewhat guarantee.

I concur with the necessity to think like businessman when comes to investing in business (stock market), and not handicapped by fear

Posted by Koon Yew Yin > 2014-03-20 12:30 | Report Abuse

Sorry I made a small mistake in my above comment . The average CPO price for last year was Rm 2,250 per ton and not Rm 2,500 per ton.

Posted by Fung Chee Fui > 2014-03-20 16:46 | Report Abuse

Investing is an art, not science. There's no right or wrong for using margin financing in stocks investing. The biggest risk is not on the margin financing itself, but it is on not knowing what yourself is doing.

Mr Koon offers his generosity by sharing his experience. We -- the readers -- should not only read, but also think about how his experience would help us.

Posted by Ricky Kiat > 2014-03-20 22:06 | Report Abuse

nominee a/c = margin account

Posted by talkking > 2014-03-20 22:34 | Report Abuse

how many here really understand margin finance and have this account....let me guess..at least 80% dunno but pretend to know

Posted by kingleecha > 2014-03-20 23:09 | Report Abuse

High Risk, High Return? Perhaps high debt. Margin account is for the people who have confidence in earning money in stock. Let say MY economy down, you think either your profit or lost maximized?

Rethink.

Posted by kingleecha > 2014-03-20 23:12 | Report Abuse

I don't think you should introduced the margin to them, as they just began to invest, you will harm their incomes.