Posted by stockmanmy > 2016-03-04 00:34 | Report Abuse

Eight wonders of the world..............


Bornoil, AAX, Tguan, VS, KESM, RHB, Scientex

they work as a team.


construct your own portfolio using these 7 stocks and the eighth wonder is the allocation / weightage you give to each stock.


fits all budgets.

Posted by JT Yeo > 2016-03-04 07:32 | Report Abuse

Looks like im late to the party. The easiest thing to see in the market is return, and the hardest thing to figure out is risk. Investors with alpha are the ones that can generate return above average while taking below average risk or without increasing risk substantially.

During bullish years when most investors achieve market beating return, most began to take on excessive risk without consciously knowing that they are doing so either 1) overconfident in their ability 2) psychology of the market etc. And guess what, it is during the bull year that people are 'cash poor'!. Just like business, business are cash flow poor during expansion, not contraction.

So naturally people takes on margin finance during? Bull market obviously. We get comfortable. We see people die from cancer and thought 'that can only happen to someone else' and comfort ourselves. So you have all these factors working in your way, tailwind. Great return, illusion the market is safe (it's bull), cash poor (too many opportunity not enough money) all these lollapalooza makes one goes into margin.

That's where the shit comes. We forgot black swan. It is a bit like the idiocy of buy when market goes up, sell when market is down. In this case, is margin yourself during bullmarket, and bankrupt by bear. Obviously no one would margin in a down market. But that reasoning that it is okay to margin finance on bull market is precisely the thing that kills investors. Because you keep thinking 'accidents' only happen to other people.

Posted by stockraider > 2016-03-04 10:00 | Report Abuse

Raider beg to be different here loh....!!
U should margin during the extreme bear and reduce your exposure as the mkt slowly turn more and more bullish and complete out when it is very bull loh....!!

This is in line with the teaching of taking advantage of Ben Graham Mr Market loh...!!
U r most optimistic when market is most bearish and most pessimistic when market is most bullish loh....!!

Of course the above is only ur psychology make up....u still need to be collaborated with your margin of safety calculation, in order to be successful loh....!!

Should u margin today ? Raider says can start mildly & tip toe loh...!!

Posted by kcchongnz > 2016-03-04 10:04 | Report Abuse

Posted by JT Yeo > Mar 4, 2016 07:32 AM | Report Abuse
During bullish years when most investors achieve market beating return, most began to take on excessive risk without consciously knowing that they are doing so either 1) overconfident in their ability 2) psychology of the market etc. And guess what, it is during the bull year that people are 'cash poor'!. Just like business, business are cash flow poor during expansion, not contraction.

So naturally people takes on margin finance during? Bull market obviously. We get comfortable. We see people die from cancer and thought 'that can only happen to someone else' and comfort ourselves. So you have all these factors working in your way, tailwind. Great return, illusion the market is safe (it's bull), cash poor (too many opportunity not enough money) all these lollapalooza makes one goes into margin.

That's where the shit comes. We forgot black swan. It is a bit like the idiocy of buy when market goes up, sell when market is down. In this case, is margin yourself during bullmarket, and bankrupt by bear. Obviously no one would margin in a down market. But that reasoning that it is okay to margin finance on bull market is precisely the thing that kills investors. Because you keep thinking 'accidents' only happen to other people.


Well said JT Yeo. That was exactly what happen to Shanghai Stock Exchange when it was at 5023 in June 2015, just nine months ago. The SSX was extremely bullish, wasn’t it?

http://klse.i3investor.com/blogs/kcchongnz/79429.jsp

SSX closed 2850 yesterday. The loss, just for the broad index is so far a whopping 42.3%, in just 9 months. And what do you think were the drop of share prices of individual stocks; many individual stocks were extremely bullish then. What is the result of margin finance which so many of them were using, in a bullish market?

However, I still think it is none of our business whether you use margin finance or not, or how much you have made, or have lost doing it. None of my business.

But publicly encouraging everyone, any Tom Dick and Harry, young and old, in seminars, in public forums? Something is very wrong, isn’t it?

May be not, if you have this type of mentality.

Posted by stockmanmy > Mar 3, 2016 05:00 PM | Report Abuse
stock market is war.
compound interest got no war.
stock market is war zone
come prepared.
margin best.

Posted by powerup > 2016-03-04 10:12 | Report Abuse

its called desire to win.......


no desire to win....its called talk three talk four.

if you have desire to win, you want to beg borrow and steal to win big.



Ricky Sandler, the founder of $6 billion long/short equity hedge fund Eminence Capital, likes to hire folks with the "desire to win above the desire to be right."
Sandler spoke on Thursday at The University of Texas Investment Management Company 20th anniversary event in Austin.

His fund takes a bottom up, fundamental approach to investing in equities. There have been some big changes in the market such as the growth of ETFs, the rise of quants, and the growth of investing that's "a little less micro in nature," he noted.

"For us, it is no longer good enough to have a quality business and a cheap stock and just think that's it's worth more," Sandler said.

"One of the biggest skill sets that I find in people, and this is maybe this is a softer skill set, it's the desire to win above the desire to be right."

Sandler said that there are people in the hedge fund industry who are extraordinary intellecutal, excellent at debating, and can be extremely convincing.

"They are often very dangerous investors," he said. "We love competitive people. They want to win. They are willing to admit when they are wrong, and frankly when it's not a game that is worth playing. I think that's a key thing."

See, it's OK to admit when you're wrong. That's called humility.

Posted by stockraider > 2016-03-04 10:13 | Report Abuse

The above highlighted by KC is a complete wrong way of use margin loh...!!
Always link your margin investment with the theory of Mr Market...!!

Not Raider recommendation but best practice for most margin adopter
But should u use...your margin during xtreme....please make sure u r actually speculating and trading....and dumped without any question should it hit your stop loss, and normal set at 7% to 10%..lower from the indicative price....!!

Posted by powerup > 2016-03-04 10:23 | Report Abuse

a game worth playing is worth playing well.



go the extra mile.....live on the edge.


there is no compounding as suggested by teacher.....

its a war out there, and a war worth playing well.

Posted by JT Yeo > 2016-03-04 10:27 | Report Abuse

Stockraider, you see stop loss is the last defense for margin investment. And you mention during extreme time, aka during market panic.

A stop loss depends on liquidity, not volume. The liquidity of buyers to take the position you are selling. So during market extreme, fulls of volume in the market, but they are all sellers, zero buyers. Where are you going to initiate your stop loss? There are no buyers during market crash, you dont have anything to stop bro.

Posted by Icon8888 > 2016-03-04 10:31 | Report Abuse

many people talk about stop loss, but it is a very alien concept to me. Throughout my so many years of investing, I have never "stopped loss".

If I ever sold, that is because the fundamentals deviated from my expectation, not because share price has dropped below a pre determined level.

Just narrating my experience, sifus sifus please don't get upset

thank you

Posted by Icon8888 > 2016-03-04 10:35 | Report Abuse

there were numerous cases my stocks shrank by as much as 50% and I didn't sell a single share. For example : I bought pantech-WA at 34 sen, it shrank to 12 sen (lowest), I hold on until it rebounce to 60 sen. If I followed stop loss, I would have sold at 20 sen plus

not to say my technique more superior, I guess it is the FA fellow inside me that told me to hold on. Different people different style

Posted by powerup > 2016-03-04 10:37 | Report Abuse

the desire to win means action, take action, take leverage to win big.

the desire to be right leads to talk three talk four.

the desire to win means take action, changing, evolving, adapting.

no desire to win, talk no use.

Posted by shinado > 2016-03-04 10:46 | Report Abuse

Desire to win? Don't want to think about risk? Only think about how much you might get back in return?

Come. Let me take you to the casino. I know of a perfect spot for you. What are you doing trading in stocks? Your return might not be very high. On the other hand, in the casino, your return is 100%. Also, if you lose, is 100% too. Can be done in matter of minutes or seconds.

Don't waste your time rambling about instincts in stock market. Go to the casino. Winner takes it all.

Posted by Icon8888 > 2016-03-04 10:50 | Report Abuse

Desa, same apply to you

you should focus on how to identify stocks to make money here in i3, instead of trying to argue with everybody non stop and poh lan pah (which is non of our business, except that it create a cult and unhealthy intellectual environment, that is why we opposed)

I said the above not to flame you, just voicing my hope that i3 can become a more peaceful place for sharing ideas

Posted by ckkhen > 2016-03-04 10:56 | Report Abuse

shinado,

Well said.

Posted by kcchongnz > 2016-03-04 11:01 | Report Abuse

Another one of the best comments of the decade.


Posted by shinado > Mar 4, 2016 10:46 AM | Report Abuse

Desire to win? Don't want to think about risk? Only think about how much you might get back in return?

Come. Let me take you to the casino. I know of a perfect spot for you. What are you doing trading in stocks? Your return might not be very high. On the other hand, in the casino, your return is 100%. Also, if you lose, is 100% too. Can be done in matter of minutes or seconds.

Don't waste your time rambling about instincts in stock market. Go to the casino. Winner takes it all.

Posted by stockraider > 2016-03-04 11:17 | Report Abuse

Yeo,

Margin for investment during extreme bear mah....!!
So when u buy with big margin of safety and prepare for the long haul hold...!! U can select good counter during this period...!!
Bcos the market has fallen a lot....it is safer to hold loh....!!
Since u buy under extreme bear....there is not damage loh...!!
In this situation...volume is not important....in fact u prefer a low volume.....bcos this also indicate selling pressure subside loh..!!
The above is using margin for investment...bcos the cheaper the safer loh.....!!

For speculator and trader...u set the stop loss..usually for most player will make their move during xtreme bull. To take advantage of momentum...!!
Thus it is very important to set ur stop mechanically, if mkt pullback...bcos most of the stock is overvalue....the correction may be xtreme loh...!!

Posted by stockraider > 2016-03-04 11:24 |

Post removed.Why?

Posted by kcchongnz > 2016-03-04 11:27 | Report Abuse

Posted by stockraider > Mar 4, 2016 10:00 AM | Report Abuse
Raider beg to be different here loh....!!
U should margin during the extreme bear and reduce your exposure as the mkt slowly turn more and more bullish and complete out when it is very bull loh....!!
This is in line with the teaching of taking advantage of Ben Graham Mr Market loh...!!
U r most optimistic when market is most bearish and most pessimistic when market is most bullish loh....!!
Of course the above is only ur psychology make up....u still need to be collaborated with your margin of safety calculation, in order to be successful loh....!!
Should u margin today ? Raider says can start mildly & tip toe loh...!!


Raider, be my guest. Use your margin to your limits as you wish. My blessing to you. But you are doing a disservice to the society encouraging the youngsters and newbies to use margin finance.

Show me where and how the use of margin finance “is in line with the teaching of taking advantage of Ben Graham Mr Market loh”.

Instead of your assertion that my discouragement of using margin as “flaw”, I think your propagation of the use of margin finance is becoming more and more dangerous, and misleading, and flawed too.

In the Asian Financial Crisis in 1997 the KLCI dropped by close to 60% in about just half a year. The markets did recover substantially by about 35% between one to three months. That was the most dangerous part, as those who thought Jaw 1 had ended without knowing the appearance of Jaw 2. The markets plummeted by another 60% in another half a year later when KLCI and SBI closed at 303 points and 77 points respectively on 28 August 1998.

The KLCI suffered its biggest daily drop of 21.5% on Sept 8, 1998 after Anwar Ibrahim was sacked as the Deputy Prime Minister. From peak to trough within one and a half year, the KLCI and SBI had lost by 76% and 88% respectively.

Are you aware that how many speculators, especially those using margin finance, got killed during that time; both during its peak when the market was extremely bullish, and its bear market when many investors thought that Jaw 1 had gone?

http://klse.i3investor.com/blogs/kcchongnz/73675.jsp

1997-8 was just one of the numerous examples in Malaysia. Before that we have the cash of 1973, 1983, 1984, 1987,

http://klse.i3investor.com/blogs/kcchongnz/73543.jsp

After that we had the plunge in 2001, the Dotcom Bubble, and most recently, the US Subprime crisis in 2008.

http://klse.i3investor.com/blogs/kcchongnz/73859.jsp
http://klse.i3investor.com/blogs/kcchongnz/74057.jsp

Yes, the market eventually recovered, way above those times. Investors with long-term view who stayed high in their capital structure had recovered nicely. But did those margin users recover? I doubt so. Many of them still paying their debts now.

Posted by duitKWSPkita > 2016-03-04 11:28 | Report Abuse

Dear Respected KC Chong,

drop by to bid farewell.

We will meet up in summit very soonest.
Thanks for all wonderful guidance.

Posted by kcchongnz > 2016-03-04 11:40 | Report Abuse

Posted by stockraider > Mar 4, 2016 11:24 AM | Report Abuse
ICON BY BUYING INTO THE WARRANT, INSTEAD MOTHER....INDIRECTLY U R A MARGIN INVESTOR TOO LOH...!!

MOST PEOPLE DO NOT KNOW, THEY ARE IN FACT USING MARGIN WHEN THEY ARE BUYING INTO DERIVATIVE LOH...!!

IF USING DERIVATIVE, THE CAUTION SHOULD BE APPLIED LIKE WARRANT AS PER USING BANK MARGIN MAH....!!
IN FACT DERIVATIVE, HAVE A HIGHER RISK COMPARE WITH BANK MARGIN , BCOS
OF THE HIGHER LEVERAGE AND USUALLY HIGH PREMIUM PAID OR COST COMPARE WITH BANK INTEREST RATES LOH...!!

Speculator bets on derivatives in the hope of exaggerated return. They bet say RM1m on an option, hoping to make RM10m with an option with a gearing of 10 times. When the option expires out-of-the-money, he loses everything, i.e. RM1m. Yet his maximum loss is only what he has bet on, i.e. RM1m.

A financial risk management investor places RM10000 on an option, hoping to make RM100,000. If his bet is right, he makes extra-ordinary gain using one tenth of the money to hope to make the same gain. If he is wrong, the maximum he loses is RM10000.

In both cases above, the initial outlay is the maximum they will lose.

In speculating on derivative, you are speculating on a leveraged instrument. You are not using margin finance by borrowing more money than what you have to speculate.

How can you compare a margin finance user and speculating in a leveraged instrument?

That is the difference of a speculator and an investor’s mind set.

Posted by stockraider > 2016-03-04 11:48 | Report Abuse

Posted by kcchongnz > Mar 4, 2016 11:27 AM | Report Abuse

Posted by stockraider > Mar 4, 2016 10:00 AM | Report Abuse
Raider beg to be different here loh....!!
U should margin during the extreme bear and reduce your exposure as the mkt slowly turn more and more bullish and complete out when it is very bull loh....!!
This is in line with the teaching of taking advantage of Ben Graham Mr Market loh...!!
U r most optimistic when market is most bearish and most pessimistic when market is most bullish loh....!!
Of course the above is only ur psychology make up....u still need to be collaborated with your margin of safety calculation, in order to be successful loh....!!
Should u margin today ? Raider says can start mildly & tip toe loh...!!


Raider, be my guest. Use your margin to your limits as you wish. My blessing to you. But you are doing a disservice to the society encouraging the youngsters and newbies to use margin finance.

Show me where and how the use of margin finance “is in line with the teaching of taking advantage of Ben Graham Mr Market loh”.

Instead of your assertion that my discouragement of using margin as “flaw”, I think your propagation of the use of margin finance is becoming more and more dangerous, and misleading, and flawed too.

In the Asian Financial Crisis in 1997 the KLCI dropped by close to 60% in about just half a year. The markets did recover substantially by about 35% between one to three months. That was the most dangerous part, as those who thought Jaw 1 had ended without knowing the appearance of Jaw 2. The markets plummeted by another 60% in another half a year later when KLCI and SBI closed at 303 points and 77 points respectively on 28 August 1998.

The KLCI suffered its biggest daily drop of 21.5% on Sept 8, 1998 after Anwar Ibrahim was sacked as the Deputy Prime Minister. From peak to trough within one and a half year, the KLCI and SBI had lost by 76% and 88% respectively.

Are you aware that how many speculators, especially those using margin finance, got killed during that time; both during its peak when the market was extremely bullish, and its bear market when many investors thought that Jaw 1 had gone?

http://klse.i3investor.com/blogs/kcchongnz/73675.jsp

1997-8 was just one of the numerous examples in Malaysia. Before that we have the cash of 1973, 1983, 1984, 1987,

http://klse.i3investor.com/blogs/kcchongnz/73543.jsp

After that we had the plunge in 2001, the Dotcom Bubble, and most recently, the US Subprime crisis in 2008.

http://klse.i3investor.com/blogs/kcchongnz/73859.jsp
http://klse.i3investor.com/blogs/kcchongnz/74057.jsp

Yes, the market eventually recovered, way above those times. Investors with long-term view who stayed high in their capital structure had recovered nicely. But did those margin users recover? I doubt so. Many of them still paying their debts now.

KC...HOW CAN RAIDER DOING A DISSERVICE TO THE SOCIETY, WHEN RAIDER IS GIVING A COMPLETE PICTURE & INVESTMENT STORY TO SOCIETY ?

YES...THERE IS A SLIGHTLY HIGHER RISK USING MARGIN COMPARE WITH PURE CASH LOH...!! BUT THIS WE SHOULD NOT DISCOUNT THE BENEFIT OF MARGIN TOO LOH....!!

USE YOUR MARGIN RIGHTLY...U CAN IN FACT....TAKE ADVANTAGE AND BENEFIT FROM IT LOH....!!

I NOTICE OF PARENT IS OVER PROTECTIVE NOWADAYS...THEY DO NOT ALLOW THE CHILDREN, RIDE A BIKE AND USE PUBLIC BUS...ETC....IS IT THE RIGHT WAY TO LEARN LEH ?

RAIDER SEE THAT USING MARGIN IS LIKE RIDING A BIKE LOH...THERE IS INHERENT DANGER, BUT THEY IS GOOD BENEFIT TOO LOH...!!

IF U BAN MARGIN ? IS LIKE U R BANNING MOTORBIKE LOH ??
IS THIS HOW THE SOCIETY SHOULD DEVELOP ?

LEARN HOW TO USE MARGIN IS THE ANSWER LOH....!! JUST LEARN HOW TO RIDE A BIKE SAFELY LOH....!!

Posted by 3iii > 2016-03-04 11:52 | Report Abuse

>>> Are you aware that how many speculators, especially those using margin finance, got killed during that time; both during its peak when the market was extremely bullish, and its bear market when many investors thought that Jaw 1 had gone? <<<


Raider started investing in stocks in 2009.
Raider is a young calf that has not met the tiger. :-)

Posted by Icon8888 > 2016-03-04 11:56 | Report Abuse

storckraider, many people misunderstood with the saying "Warrant is one type of leverage". They confused margin financing leverage with Warrants leverage.

first of all, the word "leverage" or "gearing" refers to effect of using something small to drive something big. Just imagine a stick placed on a fulcrum can lift a heavy load with ease, and a big gear turn one round can make a small gear turns many rounds.

In finance, leverage and gearing is used to describe borrowings because borrowing can magnify return on equity.

when comes to warrants, leverage and gearing is used to describe effect of 10 sen gain in mother share from 1.60 to 1.70 (6% gain) can cause warrants to go up from 30 sen to 40 sen (up 30%)

even though both are leverage (or gearing), they are completely different animal.

as such, the nature of risk associated with them are completely different. I get very unsettled when people put them together to discuss although they are same thing

ha ha sorry for being so blunt. Hope you don't mind. Actually this message is not directed to you as I know u are very seasoned and experience. It is more for newbies, who get confused by the same terms that have different meaning

Posted by stockraider > 2016-03-04 11:58 |

Post removed.Why?

Posted by kcchongnz > 2016-03-04 12:18 | Report Abuse

Posted by stockraider > Mar 4, 2016 11:58 AM | Report Abuse
THIS KIND OF ARGUEMENT....DO NOT HOLD WATER LOH...!!
JUST BCOS U PUT RM 100K...U R LIMITING YOUR LOSSES LOH...!!
WHAT RAIDER SEE...IF U PUT RM 100K INTO DERIVATIVE U ARE AT RISK OF LOSING THE ENTIRE RM 100K LOH COMPARE PUT INTO MOTHER SHARE MAH...!!

THE SAME ARGUEMENT CAN BE SAY...IF I GET A MARGIN OF RM 100K LIMIT...MY MAX LIMIT LOSS OF RM 100K ONLY ??

THE CONTEXT OF LOSING MONIES USING MARGIN AND USING DERIVATIVE SHOULD BE READ TOGETHER LOH...!!
BOTH MAGNIFY EARNINGS AND LOSSES....!!

Let us not just talk, but show something solid of what we mean by margin finance which I have written numerous time, and one of the articles is here:

http://klse.i3investor.com/blogs/kcchongnz/44344.jsp
http://klse.i3investor.com/blogs/kcchongnz/61822.jsp
http://klse.i3investor.com/blogs/kcchongnz/79429.jsp

And how to do financial risk management in speculating in a leveraged instrument.

http://klse.i3investor.com/blogs/kcchongnz/58905.jsp

Yes, both magnify profit and losses. But which one will lose more, and which can subject to margin calls which the price can fall like waterfall due to the indiscriminate selling of investment bankers to limit their own loss, and can even lose more, much more, than their initial outlays?

Let us see how your argument “hold water”.

Posted by stockraider > 2016-03-04 14:21 |

Post removed.Why?

Posted by kcchongnz > 2016-03-04 15:16 | Report Abuse

Posted by stockraider > Mar 4, 2016 02:21 PM | Report Abuse

Just bcos KC have bought warrant b4 and did not use margin b4...does not mean....Margin is of higher risk than the derivative loh...!!


Me: Let us say you intend to make RM100000, either from the underlying share, U, selling at RM1.00, or from its call warrant selling at 10 sen which has a conversion price of RM1.00 and expires in say 2 years’ time.

You expect the underlying share will double to RM2.00 in two years’ time, note expect, not necessary it will be.

So you will buy 100000 shares at RM1.00, or an initial outlay of RM100000. You are very good. You want to use margin finance to double your return. So you will use RM50000 of your own money, and RM50000 from margin financing.

When the outcome is positive and you are right as expected, you make the RM100000, or 200% using margin finance. So far so good.

But if you are wrong, and the share price drops 50% instead, you lose your RM50000, plus the margin finance of RM50000 you borrow. That is also 200% loss, not including your set up fees and interest for the money you borrow yet.

For speculating in warrants, W, and having the same expectation that the underlying share will go up to RM2.00 two years later, I buy 111000 shares of W at 10 sen, or an initial outlay of RM11100, only one fifth of your initial outlay in U.

When the share price of U goes up to RM2.00, the value of W is RM1.00, and my profit is 90 sen in W. My total profit will be the same of RM100000 (111000*0.9), the same as U.

But if U becomes 50 sen two years later, my W will expire worthless, and my total loss is RM11100, or 100% of my initial outlay.

Risk of losing RM100000, or 200% using 50% margin finance to aim for a gain of RM100000, compared to risk of losing RM11100, or 100% in speculating in a leveraged instrument to aim for the same gain, so your margin finance safer than speculating in a leveraged instrument?

Please elaborate.

Posted by Probability > 2016-03-04 15:24 | Report Abuse

wah...very interesting discussion...but my brain cells cant cope already :(

isn't there a difference between losing 100k that u earned and losing 100K that u borrowed. Coz...u not only no longer can behave like a capitalist...but now u have become another's slave...

Posted by stockraider > 2016-03-04 16:06 |

Post removed.Why?

Posted by stockraider > 2016-03-04 16:15 |

Post removed.Why?

Posted by stockraider > 2016-03-04 16:21 | Report Abuse

Furthermore derivative holder need to take note of expiry date, whereas margin holder do not have expiry dates loh...!!

The expiry dates...result in amortization of the warrant thru time with high risk of zero value upon expiry...as usual warrant is using out of monies loh...!!
Even it is in monies...u need to pay premium....this again resulting out of monies loh....!!

I m not surprise...some people lose 100% of their investment bcos of this loh....!!

Posted by powerup > 2016-03-04 16:24 | Report Abuse

Eight wonders of the world..............


Bornoil, AAX, Tguan, VS, KESM, RHB, Scientex

they work as a team.


construct your own portfolio using these 7 stocks and the eighth wonder is the allocation / weightage you give to each stock.


fits all budgets.

Design your own margin account using these stocks.

Posted by stockraider > 2016-03-04 16:28 | Report Abuse

Of course raider is talking on losses of derivative v margin the risk aspect...where derivative will lose more loh....!!

But on the other hand, the positive side the derivative will make more than the margin...if the speculation turn out right loh...!!

Those people complaining of margin investment....when they are actually buying into derivative is actually taking more risk loh..!!

But people don understand, the fact that derivative is a bigger risk leverage loh...!!

That's why warren buffet says derivative is a weapon of mass destruction loh...!!

Posted by tonytonychopper > 2016-03-04 16:47 | Report Abuse

People don't understand also margin can kill yourself and your family..>100% lose bro..

Don't say buy at extreme bearish ...you think price is low enough...but it always goes lower la ...margin tak tahan lama la bro..Not everyone is skillful as u please..

Gentle reminder: Don't recommend everyone to use margin. If can, don't use at all. I have seen many shits margin cases happened that totally destroyed their lives..especially the experienced ones..

You all can continue to discuss ><

Posted by kcchongnz > 2016-03-04 16:57 | Report Abuse

Posted by stockraider > Mar 4, 2016 04:06 PM | Report Abuse
KC is not comparing apple to apple loh....!!
I guy having Rm 100k cash & want to invest everything in one derivative and a guy having Rm 100k and want to invest everything into the mother share mah....!!

Normally warrant will have the usual 5 to 1 leverage power and margin only have 1.67 to leverage power loh....!!

Given a guy...having Rm 100k...he will dump everything to warrant...he is expose upto Rm 100k cash loh...!!


Please don't use the term investing in your above statement. It is pure gambling, 100% pure gambling.

We are talking about risk all the time. I don't know about you, but I won't be so stupid to dump all RM100000 into warrant.

The goal is the same, to have an expected return of RM100,000; one using RM50000 own money plus RM50000 borrowings from bank, and the other using just RM11000 of his own money.

How can you say the latter is riskier than the former?

You got to have the mind set of doing financial risk management instead of gambling.

If you gamble,of course you will lose more,even with derivatives, no doubt.

Try learn something about using derivatives as financial risk management if you still don't have any knowledge. Trust me, it is good for you.

Posted by stockraider > 2016-03-04 16:59 | Report Abuse

Actually using margin is less harm than buying derivative like warrant loh....!!

A lot people...lose margin...bcos they use the margin to buy into warrant loh....!!

That mean...a high risk with a very high risk instrument...so u can imagine how much u will impacted u if the price reverse downwards loh....!!

Learn to use margin well...!!
learn to ride a motorbike well...!!
It will have its benefit once u master it loh...the fear is not margin...itself...it is unskillful and reckless players loh...!!

Just like u ...ride the bike....reckless....it is high risk of accident loh..!!

IT PLAIN COMMON SENSE MAH...!!

PEOPLE SEE USING MARGIN...LIKE COMMITTING MAJOR INVESTMENT SIN...IN FACT IT IS NOT LOH....!!

MARGIN, DERIVATIVE ARE SO OF THE TOOLS THAT CAN HELP U LOH...!!

Posted by kcchongnz > 2016-03-04 17:29 | Report Abuse

stockraider Actually using margin is less harm than buying derivative like warrant loh....!!
A lot people...lose margin...bcos they use the margin to buy into warrant loh....!!
That mean...a high risk with a very high risk instrument...so u can imagine how much u will impacted u if the price reverse downwards loh....!!
Learn to use margin well...!!
learn to ride a motorbike well...!!
It will have its benefit once u master it loh...the fear is not margin...itself...it is unskillful and reckless players loh...!!
Just like u ...ride the bike....reckless....it is high risk of accident loh..!!
IT PLAIN COMMON SENSE MAH...!!
PEOPLE SEE USING MARGIN...LIKE COMMITTING MAJOR INVESTMENT SIN...IN FACT IT IS NOT LOH....!!
MARGIN, DERIVATIVE ARE SO OF THE TOOLS THAT CAN HELP U LOH...!!


So you now finally admit using margin finance is also a high risk thing, just like playing derivatives. Good on you.

But why do you advocate a high risk investing to youngsters?

I strongly criticize it, not because you use margin is like you are committing major investment sin. Be my guest. Use margin “to the limits” as you like. It is none of my business.

But when you advocate, tell the youngsters to do this you already acknowledge as risky thing, you are doing a disservice to the society, because despite of what you have said, you haven’t given the complete picture, a true picture, of the pros and cons of margin finance yet, as what I have done.

The skill of using margin finance to make a lot of money from the stock market, if there is any proven skill, is like the skill of riding a bike well?

One must learn the skill of using margin finance, just like learning to become an Olympic gold medallist, because everyone can be taught and trained to be a gold medallist?

You must be kidding.

Posted by stockmanmy > 2016-03-04 23:12 | Report Abuse

Everybody selling their losers to buy AA and AAX


If got margin so nice, can have both.

Posted by stockraider > 2016-03-05 19:29 | Report Abuse

So you now finally admit using margin finance is also a high risk thing, just like playing derivatives. Good on you. YES THERE IS RISK USING MARGIN....THAT SHOULD NOT PREVENT US FROM MASTERING THIS IMPORTANT FINANCIAL TOOL..!!
IN REAL LIFE....THERE ARE RISK IN EVERYTHING...LIKE RIDING A BIKE, SCUBA DIVING, HIKING....ALL GOT ITS INHERENT RISK LOH....!!

But why do you advocate a high risk investing to youngsters? IT IS GOOD FOR YOUNGSTER TO START EARLY...!! IT IS EXPECTED NOT ALL IS EXPECTED TO MAKE THE GRADE...!! SOME WILL FAIL...AND MOVE ON...!!
THERE ARE SOME WILL BE SOME WHO MASTER THE SKILL AND BECOME HIGHLY SUCCESSFUL LOH....!! RAIDER SEE MANY FRIENDS AND SIFU DID VERY WELL LOH...!!

I strongly criticize it, not because you use margin is like you are committing major investment sin. Be my guest. Use margin “to the limits” as you like. It is none of my business. IT IS PHILOSOPHY FOR RAIDER SEE....THAT WE SHOULD BE POSITIVE IN LIVE N NOT TO BE NEGATIVE LOH....!!
THERE ARE FAILURE BUT THERE ARE SUCCESS TOO....!!
SO WE SHOULD DISCOUNT ALL THE FINANCIAL TOOLS...!!
THE ISSUE IS NOT MARGIN....BUT THE NECESSARY SKILL OF THE USER THAT NEED TO BE DEVELOPED LOH...!!

But when you advocate, tell the youngsters to do this you already acknowledge as risky thing, you are doing a disservice to the society, because despite of what you have said, you haven’t given the complete picture, a true picture, of the pros and cons of margin finance yet, as what I have done. AS I SAY...NOT EVERY YOUNGSTER CAN BE A DOCTOR, LAWYER, ENGINEER, PILOT BUT WE SHOULD NOT PREVENT THEM FROM TRYING LOH...!! BCOS ONE OF THEM....MAY HAVE MASTER THE SKILL OF MARGIN AND HE MAY BECOME THE NEW SUPER INVESTOR OF MSIA GEORGE SOROS LOH..!!

OVER IN RAIDER SIDE HERE....RAIDER HAD AT LEAST MORE THAN 10 CLOSE FRIENDS, THAT RAIDER KNOW PERSONALLY...THAT ARE SUCCESSFUL USING MARGIN FOR MORE THAN 20 YRS LOH....!!
THERE WOULD NOT BE AS SUCCESSFUL....IF THEY HAVE NOT MASTER THE ART OF MARGIN INVESTMENT AND THE MARGIN OF SAFETY LOH...!!

The skill of using margin finance to make a lot of money from the stock market, if there is any proven skill, is like the skill of riding a bike well? NOT ANY TRADE...MARGIN U NEED TO LEARN AND MASTER...THERE ARE VARIOUS SKILLS....THERE IS THE PSYCHOLOGICAL MAKE UP AND THE EMOTIONAL CONTROL TOO.!!
IT IS NOT EASY TO MASTER, BUT IT IS WORTHWHILE TO MASTER LOH...!!

One must learn the skill of using margin finance, just like learning to become an Olympic gold medallist, because everyone can be taught and trained to be a gold medallist? YES THIS ULTIMATE....THE BEST OF THE BEST....A GOOD EXAMPLE IS GEORGE SOROS LOH....!!

BUT U NEED NOT BE AS GOOD AS OLYMPIC GOLD MEDALIST OR GEORGE SOROS...WHAT U NEED TO DO....IS JUST BE REASONABLE OK...TO ACHIEVE POSITIVE RESULTS.

You must be kidding. BENEFITS OF MARGIN TOOLS IS NOT A JOKE LOH...!!
IT IS A SERIOUS SUCCESSFUL INSTRUMENT FOR THOSE WHO REALLY LEARN AND MASTER THE USE LOH...!!

Posted by Probability > 2016-03-05 19:39 | Report Abuse

any stocks in Bursa having the potential to reward us from margin financing..? Please give your inputs if you don mind Raider...

I don't want to take margin finance...but im just waiting to get a personal loan at 5% interest rate. Who knows I may win big later ;)

Posted by stockraider > 2016-03-05 19:44 |

Post removed.Why?

Posted by stockraider > 2016-03-05 19:48 | Report Abuse

INVEST IN SPAC...USING MARGIN....IS SAFEST POSITIVE RETURN LOH...!!
BCOS IT LOCKED IN YIELD TO MATURITY.

U CAN BUY STOCKS TOO....BUT PRINCIPLE INVESTING IN STOCKS USING CASH OR MARGIN IS MORE A LESS THE SAME LOH....!!
AS LONG AS IT CAN BEAT THE FIXED RETURN OF 5% PA WHY NOT ?

Posted by stockmanmy > 2016-03-05 19:58 | Report Abuse

I like this raider.

Most people are mortals
They seek safety in conventions, in numbers, in political correctness, in generally accepted cliches

They no need for brains and no need for risk. No Need to challenge the status quo.

But the doers and the future tycoons are no talkers....they make their own rules.

Posted by stockraider > 2016-03-05 20:00 | Report Abuse

MARGIN HURDLE RATE IS 5% PA LOH.....!!
WE SHOULD BE POSITIVE THAT WE CAN BEAT THIS VERY LOW RATE USING MARGIN LOH.....!!
TO RAIDER SURPRISE....THERE ARE SO MANY PESSIMISM, DOUBTFUL THOMAS, UNJUSTIFY FEAR THAT RENDER MANY MANY LOSS OPPORTUNITY LOH...!!

THE AVERAGE BEARLY SUCCESSFUL INVESTOR MAKE 8% TO 10% PA....EVEN IF U HIT THIS TYPE OF RETURN....U SHOULD NOT FEAR THE LOW MARGIN COST OF 5% PA....!!
BCOS IT IS STILL POSITIVE WEALTH GENERATION LOH...!!

THOSE NOT SUCCESSFUL...GETTING MORE THAN 8% PA....NEED TO GO BACK AND RETHINK AND IMPROVE THEIR INVESTMENT SYSTEM LOH..!!
DON'T BE NAIVE...!! THEIR FAILURE IS NOT DUE TO MARGIN MAH...!!

Posted by stockmanmy > 2016-03-05 20:45 | Report Abuse

compounding and exponential growth is the eighth wonder ....quotes Einstein.

But Einstein is not talking about stock-market. Einstein is talking about natural phenomenons......but the marketing agents have hijacked Einstein to serve their own needs to market their services.

Those who wish to enjoy compound growth should stick to fixed income and EPF.

Those who wish to join the world of tycoons are welcomed to the world of the tycoons full of risks and opportunities and gearing and margin accounts...even Tony Fernandes has margin accounts.

Posted by stockraider > 2016-03-05 21:03 | Report Abuse

Stockmammy

What they meant by compounding is the average rate of return pa, monies held and reinvested for many many yrs loh...!!

If your aveagerate return is

20% pa...double in 3.6 yrs
15% pa....double in 5 yrs
10% pa... double your monies 7.2 yrs
8% pa....double in 9 yrs
6 pa.....double in 12 yrs

The above action is call compounding

Posted by kcchongnz > 2016-03-05 21:22 | Report Abuse

Posted by stockraider > Mar 5, 2016 07:29 PM | Report Abuse
IT IS GOOD FOR YOUNGSTER TO START EARLY...!! IT IS EXPECTED NOT ALL IS EXPECTED TO MAKE THE GRADE...!! SOME WILL FAIL...AND MOVE ON...!!
THERE ARE SOME WILL BE SOME WHO MASTER THE SKILL AND BECOME HIGHLY SUCCESSFUL LOH....!! RAIDER SEE MANY FRIENDS AND SIFU DID VERY WELL LOH...!!

Me: What will be the percentage of success and failure of youngsters or just normal retail investors? Please shows some research statistics.

How bad will it be if they fail with margin finance in speculating, or investing if you prefer to call it?

THERE ARE FAILURE BUT THERE ARE SUCCESS TOO....!!
SO WE SHOULD DISCOUNT ALL THE FINANCIAL TOOLS...!!
THE ISSUE IS NOT MARGIN....BUT THE NECESSARY SKILL OF THE USER THAT NEED TO BE DEVELOPED LOH...!!

Me: Yes, the issue is margin because if one fails with his own money, he can stand up again easily. If fail badly using margin, one not only lose everything, he can even lose more.

AS I SAY...NOT EVERY YOUNGSTER CAN BE A DOCTOR, LAWYER, ENGINEER, PILOT BUT WE SHOULD NOT PREVENT THEM FROM TRYING LOH...!! BCOS ONE OF THEM....MAY HAVE MASTER THE SKILL OF MARGIN AND HE MAY BECOME THE NEW SUPER INVESTOR OF MSIA GEORGE SOROS LOH..!!

Me: No, I will never discourage someone aspiring to be an engineer if he wants to try to. But I will definitely not encourage him to be an engineer if at high school, he can’t even do multiplication and division, because the chance is he will never succeed and will waste his time; and even if he eventually succeed to become one, like someone succeed becoming rich using margin finance, most likely purely due to luck, it won’t be good for the society too because building designed by him will collapse.

OVER IN RAIDER SIDE HERE....RAIDER HAD AT LEAST MORE THAN 10 CLOSE FRIENDS, THAT RAIDER KNOW PERSONALLY...THAT ARE SUCCESSFUL USING MARGIN FOR MORE THAN 20 YRS LOH....!!
THERE WOULD NOT BE AS SUCCESSFUL....IF THEY HAVE NOT MASTER THE ART OF MARGIN INVESTMENT AND THE MARGIN OF SAFETY LOH...!!

Me: Ten succeeded, out of how many?
Yes, I also always hear of success stories in the stock market and hardly hear of failure personally from those people concerned. It is human nature. It is glorifying to tell people that one makes a lot of money from the stock market, but it is shameful to tell others of losing money, isn’t it?
But quoting numbers like that is highly spurious, you should do much better than that basing on numbers from research which are statistically significant.

YES THIS ULTIMATE....THE BEST OF THE BEST....A GOOD EXAMPLE IS GEORGE SOROS LOH....!!

Me: How many George Soros are there in this world? And how many Michael Sochai have actually lost their pants following the advice of using margin buying expensive stocks which had run up many folds in the stock market?

BUT U NEED NOT BE AS GOOD AS OLYMPIC GOLD MEDALIST OR GEORGE SOROS...WHAT U NEED TO DO....IS JUST BE REASONABLE OK...TO ACHIEVE POSITIVE RESULTS.

Me: Please shows statistics from research of how many percent of retail investors who have made above 5% return in the stock market.

BENEFITS OF MARGIN TOOLS IS NOT A JOKE LOH...!!
IT IS A SERIOUS SUCCESSFUL INSTRUMENT FOR THOSE WHO REALLY LEARN AND MASTER THE USE LOH...!!

Me: Most people like you only think of positive outcome. Unfortunately, the stock market is highly unknowable and unpredictable. Are you also fully aware of the perils of margin finance and its disastrous outcome if things don't go your way?

Posted by kcchongnz > 2016-03-05 21:33 | Report Abuse

Hey,

The more you mumble, the more I doubt your claim that you are a 60-year old retired accountant. OMG!



Posted by stockmanmy > Mar 5, 2016 08:45 PM | Report Abuse

compounding and exponential growth is the eighth wonder ....quotes Einstein.

But Einstein is not talking about stock-market. Einstein is talking about natural phenomenons......but the marketing agents have hijacked Einstein to serve their own needs to market their services.

Those who wish to enjoy compound growth should stick to fixed income and EPF.

Those who wish to join the world of tycoons are welcomed to the world of the tycoons full of risks and opportunities and gearing and margin accounts...even Tony Fernandes has margin accounts.

Posted by stockraider > 2016-03-05 21:54 |

Post removed.Why?

Posted by Probability > 2016-03-05 23:10 | Report Abuse

wait a min...

IF, the 'use of margin finance' (A) is to 'multiple many folds' the 'potential gain/loss insight' (B). And (B) is purely dependent on the advantage a person (C) has over the market at large.

THEN, shouldn't the less experienced (C) is, the lesser it should use (A) and instead if (C) is inexperienced, its better of learning about his/her correctness level on (B) by experimenting on the market without (A)....till (C) becomes very experienced and improved his/her (B) level?

(A) does not really appear like a learning tool.

So then youngsters should not be encouraged on using (A)..Raider.
As they will even miss out big opportunities for improving their (B).