Posted by calvintaneng > 2015-04-01 23:51 | Report Abuse

Kcchongnz,

Thanks for highlighting these interesting events.

In 1994 I started investing for the First time. The moment I invested the market had a mini crash and I got burnt. I missed the Strong Bull Run of Year 1993. I am so glad looking back that I was not caught in the euphoria of 1993.

I knew of 4 Business Friends who made a lot of easy money in the 1993 Bull Run. In the Crash of 1997 3 gone bankrupt and disappeared due to harassment from loan sharks. One lost RM5 millions, one lost RM3 millions & one RM500K.

One more 4th Guy who didn't go bankrupt told me this. He said he made RM800K in the 1993 Bull Run. Money was made in the comfort of airconditioned room, why sell cars under hot sun?

He kept playing the market till he lost a cool RM2 millions (Rm800K profit earlier plus RM1.2 million of his own hard earned money).

I am so glad I escaped unscathed.

This was how I escaped. Sometime in 1997 I just sold BJ Capital for RM3.00. After selling BJ Capital for RM3.00 the next day the price shot up to RM3.80. Then I sold Aokam Perdana at RM5.00. Again after selling the next day Aokam rose to RM5.50!
I felt the pain keenly. If still rising, why should I sell?

That afternoon after share market closed, I drove out from the Remisier Firm in KL. It was drizzling and I saw Alfred, my Remisier's colleague they called "Big Mouth". Among the 20 or more Stock Brokers in the Trading Hall was Alfred Ong.

I don't know much about Alfred Ong. What I know was Alfred used to shout "Gin Gin Chow" in Hokkien or "Run Quick Quick". Since every body thought he was just a joker few pay him any attention.

As it was starting to rain I stopped the car and asked Alfred where he's going? He said, "To the Train station to catch a train to Shah Alam". "Hop in", I told him, as I drove towards KL Train Station.

Then I said,"I just sold BJ Capital & Aokam Perdana. And after selling both went up to cause me heart pain. I think we are in a bull run & I will not sell any more share from now."

"Not selling your shares? We need people like You!!" Alfred mocked. He said further in very serious tone ,"This is Not a bull run at all. This is but only a bull fart!! You better sell off all your shares & run!"

The KLSE Index was above 1,250 points. He said it will crash through the 1,000 barrier and drop to 800! A crash of 450 points to be expected. And he said his brother who worked as a Fund Manager for Singapore Temasek told him that shares worth RM10.00 to RM20.00 might even drop to only 50 cents to RM1.00. Sound crazy?

Wow! I was at my peak in euphoria & this fella was telling me "The Darkest Picture of Doom & Gloom!!" Like coming out from the hottest sun of summer to the deepest freeze of the bleakest winter. We were Poles Apart in directions! I was fully optimistic & he was deeply pessimistic!

I was totally shocked with disbelief as I dropped him off at the train station.

The next day I went to the share market. And Alfred said, "I just sold all my last 50% shares finally. I sold off 50% yesterday. And I am now 100% out of the market. He continued, "I also told my wife who is a Remisier with Omega Securities To completely Sell Off All Her Shares!"

Just then KLSE was a sea of red. Ha! I saw one of my counter still green. TA Enterprize at RM4.00. So I sold off TA at RM4.00. The next few days the Share Market rebounded & I sold off more than 70% of my shares. Still holding 30%. The index has dropped to about 1,100 points by now. I remember selling Kim Him Industry into strength at RM6.00.

I was waiting for rebound before clearing off the rest. Weeks passed. Then One Day Mr. Yahya the Proton King's helicopter crashed. He was killed instantly! The next day 6 Yahya's related counters got suspended momentarily.

I called my Stock Broker, "Please sell off every last share I still have".

The KLSE Index was now near 1,000 points as I came out 100%!

After that it crashed & crashed to the lowest of 262 points.

I was in Grand Season Hotel when my friend Mr Gan said, "Today Anwar goes to jail. Dr M imposed Capital Control. On Monday When Stock Market reopen Dr M will throw RM50 Million PNB Money to push up Bursa. If not enough he can throw another RM50 Million Petronas Money". Being quite an illiterate car broker I wondered how Mr. Gan got such foresight.

On the same weekend, Dynaquest's Boss Dr Neoh Soon Kean came out with a HEADLINE
page article in Malay Mail, "KLSE At 262 Points Index NOW THE BARGAIN OF THE CENTURY!"

At 262 points at it lowest I drove with great excitement to the share market.

What happened then?

And later during the Dot. Com Bubble

I bought 10,000 shares of MPI at RM4.50. MPI later shot up 1,000% to over RM50.00

Did I make RM500,000?

To be continued...

Posted by wwwcomment > 2015-04-02 07:06 | Report Abuse

Can't wait

Posted by Kevin Wong > 2015-04-02 11:27 | Report Abuse

who said its impossible to time mkt, Bogle got it all wrong!

Posted by kcchongnz > 2015-04-02 14:06 | Report Abuse

Calvin,

Please carry on with your valuable comments. Oh yeah, I have incorporated some of your comments in my posts.

Posted by calvintaneng > 2015-04-02 19:48 | Report Abuse

Thank you, Kcchongnz,

On the fateful Monday as I arrived in Am Securities of AMBank HQ in KL I received a call from Mr. Ho. He exclaimed, "Ngor Yiu Tiew Lau" in cantonese; translated it means, "I want to jump off a tall building (And commit suicide)"

I froze in my track! This is my mechanic boss who lost RM3 millions. He had 9 motor repair shops with 70 workers. Everything was gone in a puff of smoke when KLSE crashed from 1,250 to to 262 points. Mr. Ho later went into hiding and changed his name twice. My heart sank as I thought of him.

With index at 262 points I met my Remisier, still shaking with fear that Mr. Ho might kill himself that morning. My Remisier Mr. Ng looked at the screen & pointed to Tenanga at RM2.80. "Why don't you just buy a 100,000 shares of TNB for RM280,000?, Mr Ng said. I had no mood to think about shares then. My worry for my friends distracted me. So I picked only 2,000 shares of AMMB around RM4.20. Looking around I think AMBank should have survived the crash. And I was correct.

After T + 7 was up I called my remisier. He said, " Your AMMB Already Gone Up in price. Why don't you contra and take the profit?" I took his advise and accepted the small contra gain. Only to see AMMB go up all the way from RM5.00 to RM20.00!
My small fortune just flew away.

I think I did what I did for 3 reasons

1) Mr Ho was the one who brought me first to the share market. If he is finished I have no other friend talking about shares. And he was a passionate punter.

2) Mr. Alfred Ong is another gambler. He said, "Forget about PE because PE stands for Punter's Expectation." In fact Aflred lost RM600,000 when KLSE Crashed on January 1994 right after the KLSE Bull Run ended in December 1993. Alfred's father bailed him out then. So Alfred practiced hit & run tactic all the time although he could read the market and pick the correct stocks. Buy and hold was not in Alfred's vocabulary.

3) And I have yet to read "THE INTELLIGENT INVESTOR". That's 9 more years away in Year 2006 when I first read it. And it really opened my eyes!

So, Kcchongnz, if you were around then with your investment advice I would have made lots more money.

This same method of hit & run and not holding longer term also caused me to sell MPI so early in the bull run in year 2,000. I bought 10,000 shares of MPI at RM4.50 but sold it before it crossed RM5.00. After selling it was my everlasting regret to see MPI rise & rise all the way to RM50,000 a share. A huge fortune flew away!
Note:
One day I bought a Company car from Guolene Metal Can, a subsidiary company of MPI. The Accountant told me MPI is making lots of money. By then MPI has already crossed RM30.00. Too high for me to chase.

Only after many years later Alfred told me about "buy and hold" strategy. And before Alfred migrated to Melbourne, Australia, he gave me "Beating The Street" by Peter Lynch. I owe Alfred a big debt for what he did at the most crucial moment of my investing life. If not for him my future course would be quite different.

Note:

My 3 Friends who lost

1) Mr. N of Batu Pahat lost RM5 Millions. He owed the banks & loan sharks. He also caused 6 of his own relatives to go bankrupt during the 1997 KLSE Crash when each name could borrow up RM200,000 each. All in all these 6 relatives became victims of his greed when Mr. N ran away & disappeared. Currently Mr. N is a part time car broker. He was the 2nd Riches Car Dealer in Batu Pahat at one time

2) Mr Ho of SP Motor has 9 car repair shops with 70 employees. One day he brought me to see his mezzanine floor office in Sri Petaling (SP Motor means Sri Petaling Motor). It was newly renovated for RM50,000. He boasted that "All these renovations are free due to his winnings from KLSE" It sounded so easy to make money in the Gogo years. Until crisis struck he lost everything & ran away into hiding from loan sharks.

After he resurfaced he told before the crisis he had net net of RM3 millions. I asked him why not sell away SP Motor & just retire with RM3 millions then. He said he wanted to make SP Motor a Public Listed Company. All it was all gone in the Crash of KLSE.

3) Mr Lee of Sungai Way/Subang also lost RM500,000 in the Share Market & went into hiding. Mr. Lee was the first to contact me after 3 months. For Mr. N & Mr Ho they only contacted me after 6 months to a year when harassment from loan sharks subsided.

Posted by kcchongnz > 2015-04-03 05:14 | Report Abuse

Calvin,

Excellent relate of you true experience in the stock market. I hope you don't mind I will be using some of your examples in my book later.

I would like to summarize some points in your comments.

1)The stock market can offer one excellent opportunity to build up wealth. Imagine if you have invested after the crash of 1998 when KLCI dropped to its lowest at 262?

2)The market is also a place where huge destruction of wealth occurs as shown by Calvin's narration of his friends punting experience in the stock market. Some of them were contemplating suicide. Well it happened to the legendary trader Jesse Livermore.

3) Market is unpredictable. So don't be greedy like Calvin's three friends who already had a few million net worth which was substantial in 1998, and wanted to make more by borrowing huge amount of money. Yes, never borrow money to invest. Never use margin financing. It is extremely difficult for you to get up after these kinds of fall if you borrow to speculate. Some people made big gain by leveraging and boast around, but most of them having seen a black swan before. There would be a few times more people who used margin finance and lost their underwear. Of course these people wouldn't tell you that.

4) Do invest in the stock market, note the word "invest". Invest with the money you have, and can afford to put there for years. As we have seen, market is a place to build long-term wealth. See how after the crisis, good stocks all recovered and to much higher prices even before the plunge; Maybank, Public Bank, Nestle, BAT, Tenaga, Guiness, and many more.

5) Is it really easy to time the market as posted by Kevin here?

Posted by Kevin Wong > Apr 2, 2015 11:27 AM | Report Abuse
who said its impossible to time mkt, Bogle got it all wrong!

Anyone foresaw that the Second Board Index ran up by 156% to 656 points in just 16 months on March 1997? And who had timed it correctly by selling their shares off then before SBI plunged to by 43% in just 5 months, up 32% one month later, and then crashed by 62% to 77 points half a year later at the end of August 1998?

Bogle's data were based on academic research with all the rigorous computer back testing. He didn't just plug figures from the sky. What is the basis of that statement that states that "Bogle got it all wrong?"

Posted by wwwcomment > 2015-04-03 07:48 | Report Abuse

Share market seems a scary place, if you aim for sure win and win BIG!

Posted by Kevin Wong > 2015-04-03 08:42 | Report Abuse

sarcasm KC, in fact since 2010, i have been practicing Bogle's strategy of "fully invested at all times". No more mart timing for me, ever!

Posted by NOBY > 2015-04-03 09:05 | Report Abuse

Wow, KC you writing a book ? haha...

Posted by Kukuman > 2015-04-04 11:28 | Report Abuse

What is the message underlining this article? All the gloom and doom about stock market as usual. get real !! That is the reality of stock market since donkey years. It is not just recently discovered phenomenal. Live with it. No need to hit the drum telling story after story about the gloom and doom of stock market. Every doomsayer will have their field day once a while so is great story. Why not spread good things and good story instead of harping gloom and doom story. please have a positive mindset

Posted by kcchongnz > 2015-04-04 12:40 | Report Abuse

A fool sees not the same tree that a wise man sees.
William Blake

Posted by Kukuman > 2015-04-04 13:56 | Report Abuse

Who decides who is the wiser than the other. Only the self-serving will say other is a fool

Posted by kcchongnz > 2015-04-04 16:14 | Report Abuse

Post 1
Posted by Kukuman > Apr 4, 2015 11:28 AM | Report Abuse

What is the message underlining this article? All the gloom and doom about stock market as usual. get real !! That is the reality of stock market since donkey years. It is not just recently discovered phenomenal. Live with it. No need to hit the drum telling story after story about the gloom and doom of stock market. Every doomsayer will have their field day once a while so is great story. Why not spread good things and good story instead of harping gloom and doom story. please have a positive mindset

Posted by Kukuman > Apr 4, 2015 01:56 PM | Report Abuse
Who decides who is the wiser than the other. Only the self-serving will say other is a fool


Me: Let's look at these two posts here, one by Kukuman above, post 1 and one email sent to me by a reader here, post 2 below.

First of all who said who is a fool? I didn't say who.

Who had decided and had made a judgment of others? "hit the drum". "story after story", "Doomsayer", and most of all "positive mindset"

Talk about "positive mindset". And now compare who has a "positive mindset", post 1 or post 2?



Post 2

Dear Mr Chong,

Has been follow up some of your articles sometime and myself also
holding some stocks in my hand now. I was attracted by your article
posted recently:-

"Is the stock market heaven or hell? Part 4, Lesson from US Subprime
Mortgage Crisis"

I totally agree that year 2008-2009 was a good time for me to invest
in stock market that time as many good quality stocks were traded in
discount. I lucky enough to pick some good companies but some stocks I
was selling too early. I think I am very weak on how to judge or
smelling a company with very good potential to grow in future which
made me regret till now. However, I am willing to learn and knowing
that the world is changing every moment so we should not stop learning
regardless of age.

I looking to hear from you.

Have a nice day.

(Name withheld)

Posted by coolio > 2015-04-04 16:44 | Report Abuse

Lol, Moron Kukuman. What a great article written by KC. We always learn from past and prepare for future. I have benefited alot from KC articles, I even made 38% last year after joining his class. I think you are the only reader here trying to make noise out of nothing.

Posted by alpha investor > 2015-04-04 16:57 | Report Abuse

Cant wait for KC's Book!!