Posted by PlsGiveBonus > 2016-02-28 18:24 | Report Abuse

Margin call is one of the best approach to catch the falling knife.

Posted by JN88 > 2016-02-28 18:53 | Report Abuse

Cash is the best approach to catch the falling knife.

Posted by Probability > 2016-02-28 19:07 | Report Abuse

Those words of wisdom from the gurus is indeed inspiring. The message really cuts through....

Ohh...whenever KC boldly expresses his opinions like these..
i feel he is such a gem in i3!

Posted by odie88 > 2016-02-28 19:19 | Report Abuse

kc is right, margin call in stock investing was never for newbies and even experienced investors. The risks are too high for people who did not even earn big profits by using cash investing. But having said that margin investing is one useful leverage only when individual's own financial match his margin call, and when he knows what is he doing.

Posted by tonytonychopper > 2016-02-28 19:49 | Report Abuse

I like KC posting article on Sunday. It's good to pass the weird-sunday-evening-sad feeling by doing some reading.

KC is right, margin is not for everyone.

Posted by Chin Foming > 2016-02-28 20:22 | Report Abuse

I have just apply a small amount of margin finance and is due to be activated next week.should I carry on with the offer?

Posted by soros228 > 2016-02-28 20:45 | Report Abuse

Very well written. Thanks.

Posted by youlee > 2016-02-28 21:00 | Report Abuse

Don't play with fire if u don't have plenty of water on standby!

Posted by youlee > 2016-02-28 21:04 | Report Abuse

Sometimes the water also dried up when u need it!

Posted by fayeTan > 2016-02-28 22:53 | Report Abuse

Margin game is for high risk taker, win big and lose big. Consider the risk not just return...

Posted by hissyu2 > 2016-02-29 00:33 | Report Abuse

Certainly, CHina stock market bubble was caused by OVER margin/leverage as well. And many china people are now fear of it... My colleague from China had turned all his investment into bond and told everyone STOCK MARKET was cruel and dangerous... I can feel that he had totally lost all his confidence in stock market... Beware of leverage, avoid it as much as you can... Want quick money, just go Genting for quick bid! We invest, for long-term wealth.

Sincerely appreciated all the kind advice...

Posted by bracoli > 2016-02-29 00:49 | Report Abuse

Newbie like me use margin die lor... Need to sell house later.. Gg

Posted by TAH > 2016-02-29 04:33 | Report Abuse

History, got people jump from high rise building during market plunge because of Margin oh! Don't Play 2 Oh!

Posted by nokenzo > 2016-02-29 08:33 | Report Abuse

A very good piece of advice.

Posted by kekure24 > 2016-02-29 09:33 | Report Abuse

Thanks a lot mr kcchong. I learnt a lot from your article. Cheers

Posted by oohlala > 2016-02-29 09:50 | Report Abuse

You have voice out my thinking! i have the same feeling too when i read the article " use margin to its limit "! keep it up.

Posted by noobnnew > 2016-02-29 09:52 | Report Abuse

Waiting for Desa to fight back. The show is on

Posted by TAH > 2016-02-29 10:19 | Report Abuse

Conclusion : margin for experienced traders.
For newbies better don't touch.

Posted by PlsGiveBonus > 2016-02-29 10:25 | Report Abuse

Margin call is good to enrich bottom fish like us

Posted by Desa20201956 > 2016-02-29 12:33 | Report Abuse

Margin is some thing all tycoons use to become a tycoon....and all tycoons say don't use it.

If that is not a secret of the tycoons, I don't know what is.....

A conspiracy?

Posted by PlsGiveBonus > 2016-02-29 13:24 | Report Abuse

Any good tips to catch falling knife?
My body is hestitate now.
But I will still waiting patiently at bottom

Posted by powerup > 2016-02-29 13:32 | Report Abuse

Buy the margin calls

Like people buy auction properties

Fast money.

Posted by powerup > 2016-02-29 13:34 | Report Abuse

X
powerup Secrets of the tycoons...part 2..... Thick face black heart.

Posted by kcchongnz > 2016-02-29 13:35 | Report Abuse

Posted by bracoli > Feb 29, 2016 12:49 AM | Report Abuse
Newbie like me use margin die lor... Need to sell house later.. Gg

Great comment bracoli, forced to sell house is nothing compared to this:

Posted by TAH > Feb 29, 2016 04:33 AM | Report Abuse
History, got people jump from high rise building during market plunge because of Margin oh! Don't Play 2 Oh!


Jesse Livermore, perhaps the greatest stock market tycoon of all time, died on November 28, 1940, by his own hand, via a revolver bullet through the brain.

Posted by powerup > 2016-02-29 13:39 | Report Abuse

Teachers teach

Born to be tycoons become tycoons or die trying.

They call it capitalism.

Posted by PlsGiveBonus > 2016-02-29 16:33 | Report Abuse

More bad news is coming
Expect a Great Depression to come within near term

Posted by Karenng > 2016-02-29 18:34 | Report Abuse

I love your conclusion on this article, Mr Kcchongnz. It so very witty at the same time very smart.... I like your honesty.

Posted by Ayat > 2016-02-29 18:41 | Report Abuse

This is an article to fool Ayam Tua into losses.

Ayam Tua, I love you and that's why I warn you to be prudent in your decisions.

"Pasti tuju langit?" not always.

Posted by Frank Soweto > 2016-03-01 06:20 | Report Abuse

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

I'm not very successful currently - infact only 2 months into the year already lost 10% n if the fella below really got crystal ball then i will be half dead - The other half Hopefully live to see a recovery of my paper losses so my trick to survival is to sell when my shares recovers n not when I'm forced to coz I dun have margin,OD nor ah long and ah leng coming after me when n if the mart falls further

PlsGiveBonus More bad news is coming
Expect a Great Depression to come within near term
29/02/2016 16:33

Posted by 3iii > 2016-03-01 08:14 | Report Abuse

When the market is with them, those who leveraged enjoy the highs. In fact, it can be so intoxicating, they may even leverage more without realising the true risks. However, the 1% of the time when the market is against them, they lose everything.

Posted by 3iii > 2016-03-01 08:17 | Report Abuse

The only time I will leverage is when I have certainty of the outcome. However, these situations are rare and far in between. Arbitrage situations that are within your circle of competence and where you are certain of their outcomes, are those when you can leverage up safely, knowing there is safety of your capital with promise of big returns.

Posted by stockraider > 2016-03-01 10:51 | Report Abuse

Actually using margin and not using margin the investment risk is the same.....don be mislead for avoiding margin all together.
Especially in very low interest rate environment.

Fyi....a margin investor actually enjoy lower cost compare to cash equity investor loh.!
For example margin cost is 5% pa, whereas epf cost is 6.4% pa loh...!!

U just need to manage the margin better loh....!!
They are 3 points raider mentioned earlier, that u need to take note for using margin.

Posted by PlsGiveBonus > 2016-03-01 11:47 | Report Abuse

How many will declare bankrupt in this thread after today?

Posted by PlsGiveBonus > 2016-03-01 11:49 | Report Abuse

In this country
You will be bankrupt if you cannot service as little as 20k loan
When you are bankrupt you are not eligible for any financial loan for the rest of your life, include personal loan house loan car loan and any financial aids. All your daily purchase will need to report to your banker.

Posted by powerup > 2016-03-01 11:53 | Report Abuse

those who can't teach
Teachers teach

those who can do

tycoons are made from people who Do.
yes we can.

Posted by PlsGiveBonus > 2016-03-01 11:57 | Report Abuse

Can you afford to loss your opportunity to secure any more reward able financial loan for a high risky margin loan?

Posted by Icon8888 > 2016-03-01 11:58 | Report Abuse

Sifu Desa why u hide here and talking to yourself ? Come chit chat with me lah

Posted by PlsGiveBonus > 2016-03-01 11:58 | Report Abuse

When you are bankrupt you cannot travel oversea also. Spend the rest of your life here

Posted by powerup > 2016-03-01 11:59 | Report Abuse

what is your measure of wealth?

wealth I argue can be measured by how much you can borrow.

Posted by powerup > 2016-03-01 12:01 | Report Abuse

what is your measure of wealth?

wealth I argue can be measured by how much you can borrow.

if you learn how to borrow 1 million
your disposal wealth is suddenly increased by 1 million.

Posted by powerup > 2016-03-01 12:02 | Report Abuse

our PM got 3.2 billion donations...thats immediate wealth.

Posted by PlsGiveBonus > 2016-03-01 12:05 | Report Abuse

More bankruptcy is basically benefited banker
As they can redeem bankruptcy loss from the central bank
Less one headcount to feed

Posted by Icon8888 > 2016-03-01 12:05 | Report Abuse

Sifu Desa I followed u buy airasiax, now make enough money to buy KFC

Posted by PlsGiveBonus > 2016-03-01 12:07 | Report Abuse

Do not compare royal family with peasant life
Many peasant think they are having royal life in fact they are peasant on the physical looks

Posted by PlsGiveBonus > 2016-03-01 12:10 | Report Abuse

Many youngster has bornt prince or princess in disguise?

Posted by ckkhen > 2016-03-01 12:17 | Report Abuse

Some (a minority) who borrow can become rich. But for the majority, better stick to cash. Better be a tortoise than be a rabbit. Always play safe.

Posted by powerup > 2016-03-01 12:40 | Report Abuse

ck......the majority are doomed to spend the whole life working.

Posted by kcchongnz > 2016-03-01 14:20 | Report Abuse

Posted by stockraider > Mar 1, 2016 10:51 AM | Report Abuse

Actually using margin and not using margin the investment risk is the same.....don be mislead for avoiding margin all together.
Especially in very low interest rate environment.

USING MARGIN AND NOT USING MARGIN IN INVESTMENT IS THE SAME? YOU MUST BE KIDDING!

HAVE YOU CONSIDERED MARGIN CALL RISK, BANKRUPTCY RISK, EXAGGERATED LOSS RISK, SLEEPLESS NIGHTS RISK, STRESS RISK ETC?

Fyi....a margin investor actually enjoy lower cost compare to cash equity investor loh.!
For example margin cost is 5% pa, whereas epf cost is 6.4% pa loh...!!

THE COST THE SAME? HAVE YOU CONSIDERED THE SETUP COST, COST OF MARGIN CALL, ETC?

U just need to manage the margin better loh....!!
They are 3 points raider mentioned earlier, that u need to take note for using margin.

PLEASE RAISE YOUR "3 POINTS" HERE AND WE CAN DELIBERATE HERE.

Posted by stockraider > 2016-03-01 14:53 | Report Abuse

What would be the result of lack of capital, lack of skill, and combine with the use of margin finance? RAIDER AGREE LACKED OF SKILL CAN BE TRAINED...BUT USING MARGIN FINANCING IS ALSO PART OF THE OVERALL INVESTMENT SKILL....SHOULD RAIDER SAY TRAINING INVESTOR TO MANAGE THEIR MARGIN IS ALSO PART OF THE INVESTMENT SKILL,,,PERHAPS RAIDER SAY IT IN A DIFFERENT WAY...IT CAN BE CONSIDER ADVANCE PART OF INVESTMENT LOH....!!

Still want to encourage youngsters to invest with margin finance?
Yes, skill can be taught, but that guarantee the success in investing, especially in the short run? AS RAIDER SAY EARLIER...INVESTMENT IS NOT SHORT TERM....IT IS A LONG TERM PLAY....!! REMEMBER THIS ....SHARE PRICE IS A VOTING MACHINE IN THE SHORT TERM....THAT MEANS U UNABLE TO PREDICT ITS MOVEMENT IN SHORT TERM, BUT IN THE LONG TERM IT IS A WEIGHING MACHINE, THAT MEAN ITS VALUE CAN BE DETERMINE LOH...!!

If one uses margin finance, he has to be right, not only in the long run, but also in the short term. Otherwise any sharp fall in the market incurs short selling and capital can be wiped out easily.
So a skilful investor guaranteed of short-term success in investing with margin finance? WHETHER PEOPLE USE MARGIN OR OWN MONIES TO INVEST...THEY NEED TO BE RIGHT IN THE LONG RUN...IF THEY ARE WRONG WEALTH WILL BE DESTROYED LOH....!!

DON'T FORGET, EVEN IF U INVEST USING YOUR OWN MONIES....U R EXPOSE TOO...SAME AS MARGIN LOH....!! U NEED TO MAKE HIGHER THAN UR OPPORTUNITY COST....!!

IN FACT SOMETIME IT IS BETTER TO USE MARGIN THAN UR OWN MONIES LOH...!!
FOR EXAMPLE IF U LEAVE MONIES IN THE EPF...UR RATE RETURN IS 6.4% PA BUT IF U CAN BORROW USING MARGIN AT 5.4% PA, THEN IT IS BETTER FOR U TO BORROW LOH....!!

HAVING SAY THE ABOVE, AN INVESTOR NEED TO ON GUARD MORE ON MARGIN COMPARE WITH OWN MONIES.

1. WHEN SHORT TERM MOVEMENT MAY TRIGGER MARGIN CALL

2. THE BANK MAY CHANGE THE CAPPING VALUE OF YOUR SHARE, AGAIN THIS MAY REDUCE UR SECURITY..RESULTING THE RISK OF MARGIN CALL AND FORCE SELL.

3. THE BANK MAY COMPLETE DISALLOW THE VALUE OF YOUR SHARE PLEDGE, AGAIN THIS MAY TRIGGER A MARGIN CALL,

IN THE CASE OF A MARGIN INVESTOR...HE NEED TO BEAR IN MIND OF RISK ITEM 1 TO 3 COMPARE TO SHARE INVESTOR.
OTHER THAN ITEM 1 TO 3....THE RISK OF CASH INVESTOR AND MARGIN INVESTOR ARE EXACTLY THE SAME.

SO IN ORDER TO USE MARGIN FINANCING U NEED TO MANAGE YOUR MARGIN RISK LOH....RAIDER WILL ELABORATE THIS LATER...!!

Posted by kcchongnz > 2016-03-01 15:16 | Report Abuse

Posted by stockraider > Mar 1, 2016 02:53 PM | Report Abuse
What would be the result of lack of capital, lack of skill, and combine with the use of margin finance? RAIDER AGREE LACKED OF SKILL CAN BE TRAINED...BUT USING MARGIN FINANCING IS ALSO PART OF THE OVERALL INVESTMENT SKILL....SHOULD RAIDER SAY TRAINING INVESTOR TO MANAGE THEIR MARGIN IS ALSO PART OF THE INVESTMENT SKILL,,,PERHAPS RAIDER SAY IT IN A DIFFERENT WAY...IT CAN BE CONSIDER ADVANCE PART OF INVESTMENT LOH....!!
Me: Most young people can’t even handle the elementary part of the investment skill, so you want to training them the “advance” part, using margin financing? Would you want to train an aspiring pilot to fly now when he can’t even understand the instrumentations in the plane?

Still want to encourage youngsters to invest with margin finance?
Yes, skill can be taught, but that guarantee the success in investing, especially in the short run? AS RAIDER SAY EARLIER...INVESTMENT IS NOT SHORT TERM....IT IS A LONG TERM PLAY....!! REMEMBER THIS ....SHARE PRICE IS A VOTING MACHINE IN THE SHORT TERM....THAT MEANS U UNABLE TO PREDICT ITS MOVEMENT IN SHORT TERM, BUT IN THE LONG TERM IT IS A WEIGHING MACHINE, THAT MEAN ITS VALUE CAN BE DETERMINE LOH...!!

Me: How can investing with margin finance to belong term when the change in share price can be more than 30% in less than two months as some of the stocks described in this thread, or even up to 50% in a year? Isn’t there high risk of margin call? Even there is no margin call, won’t youngsters subject to the high risk of losing 60% in a year like what have been described in this article?

If one uses margin finance, he has to be right, not only in the long run, but also in the short term. Otherwise any sharp fall in the market incurs short selling and capital can be wiped out easily.
So a skilful investor guaranteed of short-term success in investing with margin finance? WHETHER PEOPLE USE MARGIN OR OWN MONIES TO INVEST...THEY NEED TO BE RIGHT IN THE LONG RUN...IF THEY ARE WRONG WEALTH WILL BE DESTROYED LOH....!!

Me: No, margin users not only have to be right in the short-term but have to right in the short-term too as described in this article. Genetic lost 48% of its share price within 3 months. 50% margin users would have lost everything.

DON'T FORGET, EVEN IF U INVEST USING YOUR OWN MONIES....U R EXPOSE TOO...SAME AS MARGIN LOH....!! U NEED TO MAKE HIGHER THAN UR OPPORTUNITY COST....!!

Me: I can withstand even short term losses, and I often do, but not necessary must be higher than opportunity cost. You are exposed to short-term margin call risks, besides higher return from your opportunity cost.
Anyway, opportunity cost should not be the prime concern of a margin user. The high risk of margin calls and forced selling due to market volatility, which is very common, is the concern.

IN FACT SOMETIME IT IS BETTER TO USE MARGIN THAN UR OWN MONIES LOH...!!
FOR EXAMPLE IF U LEAVE MONIES IN THE EPF...UR RATE RETURN IS 6.4% PA BUT IF U CAN BORROW USING MARGIN AT 5.4% PA, THEN IT IS BETTER FOR U TO BORROW LOH....!!

Me: Why do you compare with the return of EPF and use it as an opportunity cost? Why not from your FD, or Along? Do you also encourage youngsters to take up their safe EPF and reasonable return fixed income to invest in risky assets, not guaranteed of higher return?

HAVING SAY THE ABOVE, AN INVESTOR NEED TO ON GUARD MORE ON MARGIN COMPARE WITH OWN MONIES.

1. WHEN SHORT TERM MOVEMENT MAY TRIGGER MARGIN CALL

2. THE BANK MAY CHANGE THE CAPPING VALUE OF YOUR SHARE, AGAIN THIS MAY REDUCE UR SECURITY..RESULTING THE RISK OF MARGIN CALL AND FORCE SELL.

3. THE BANK MAY COMPLETE DISALLOW THE VALUE OF YOUR SHARE PLEDGE, AGAIN THIS MAY TRIGGER A MARGIN CALL,

IN THE CASE OF A MARGIN INVESTOR...HE NEED TO BEAR IN MIND OF RISK ITEM 1 TO 3 COMPARE TO SHARE INVESTOR.
OTHER THAN ITEM 1 TO 3....THE RISK OF CASH INVESTOR AND MARGIN INVESTOR ARE EXACTLY THE SAME.

SO IN ORDER TO USE MARGIN FINANCING U NEED TO MANAGE YOUR MARGIN RISK LOH....RAIDER WILL ELABORATE THIS LATER...!!

Me: So you do see the high risk of margin finance from your above statement. Aren’t they any concern to youngsters? Why still encourage and want to train youngsters to use it in the first place?
Let us hear how you manage them.