Posted by stockraider > 2018-03-19 11:27 | Report Abuse

I always argue with Kc on this margin thing loh...!!

If u r good in investment and find good stock with margin safety to buy, it is okay to use margin loh...!!
Just like if u r a good businessman & u have good project, it is ok to borrow mah...!!

Yes borrowing increase ur risk a little bit, but if u have a good project or stock and u have the right skill...u can offset this minor disadvantage of margin mah....!!

Those people who lose monies using margin in the long run, are basically not good investors loh....!!
Basically these people will lose monies, whether using margin or not using margin at all loh....!!

They lose bcos, their investment skill not good enough mah...not bcos using margin mah....!!

U need to be reasonable good in investment b4 u even consider margin loh....!!

ALWAYS REMEMBER TO USE MARGIN WHEN U R YOUNG AND NOT WHEN U R OLD LIKE, UNLIKE what KC SAYS LOH....!!
IF U USE MARGIN YOUNG...U LEARN THE ROBES OF TRADE EARLIER AND U have time to recover from any failure AND MAKE U A GOOD INVESTOR FASTER LOH....!!

CONCLUSION IF U LOSE MONIES DON BLAME IT ON MARGIN...JUST BLAME YOURSELF WHETHER U R GOOD ENOUGH LOH ??

LOOK AT YOURSELF & ASK WILL U STILL LOSE MONIES, IF U JUST USE CASH to invest LEH ??

Posted by kcchongnz > 2018-03-19 11:42 | Report Abuse

Raider,

Good to discuss with you again in this issue.

I got your point but I don't think you got mine.

Let me ask you this questions,if a youngster follows the persistence peddling of somebody to buy Sendai at its peak at about RM1.40 6 months ago, with say RM100000.

1) How much he would have left now?
2) How much he would have left with 50% margin, say RM100k of your own money, and another RM100k in margin.

You know lah. This stock was heavily promoted as having billions of contracts and sure make multi-million profit one. Sure win, so sailang. Make more money use margin.

Please do a calculation and show us the answer.

Posted by stockraider > 2018-03-19 12:03 |

Post removed.Why?

Posted by kcchongnz > 2018-03-19 12:15 | Report Abuse

Raider, thanks for your response.

Let me ask you another question, a similar one.

If a young man was convinced the use of margin by someone on the "stock on the century" in Hengyuan, and he was convinced to sailang with his saying of RM100000, and with another RM100000 from the bank, at the peak of euphoria a few months ago when HY was trading between RM17 to RM19.

How much is the leftover now,

1) with his own money
2) with the margin?

I am sure you agree this was a sure make-big-one-stock a few months ago.

Posted by Jon Choivo > 2018-03-19 12:18 | Report Abuse

stockraider,

I do use leverage, but not margin.

Mine consist of essentially 3-5 year loans from investors. With maximum personal leverage of 50%. Ensuring that i can pay them back without ever having to sell my stocks.

When you use margin, you allow others to dictate when you sell the stock and at what price. Not a good idea imho.

And if you look at 2008 crisis, even berkshire lose 50%. Anyone with a margin of just 1X (can go up to 3x). Die already, it they cannot meet the margin calls.

Posted by Jon Choivo > 2018-03-19 12:22 | Report Abuse

Just because the expected value is positive. Does not mean you should buy it.

Russian roulette have a EV of 83%! but if you die one time, means gone.

Just avoid points of ruin. And Margin is one of them.

You can diversify all you want. But in crisis, correlation goes to 1. Everything drop for you to see. All the industries etc. At that time, only question is this.

Can you hold or top up? If cannot. Gone case.

Posted by Ricky Yeo > 2018-03-19 13:47 | Report Abuse

There's no point talking to him. He is overconfident, doesn't understand complexity and nonlinearity and have no appreciation for the unknown. Those that normally gets killed in Black Swan.

Posted by stockraider > 2018-03-19 15:34 | Report Abuse

KCHONG....U R BARKING ON THE WRONG TREE LOH....!!

NOTICE UR EXAMPLE IS THAT THE YOUNG MAN IS "CONVINCE BY THAT SOMEBODY" TO USE MARGIN TO BUY SHARE LOH....!! BUT IF I SUBSTITUTE THAT YOUNGMAN IS CONVINCE BY SOMEONE TO BUY SHARE USING " CASH"....THE END OUTCOME THAT YOUNG MAN WILL LOSE MONIES WHETHER HE BUY USING CASH OR MARGIN LOH..!!

YES I WILL AGREE THAT YOUNGMAN WILL LOSE MORE, IF HE USE MARGIN TO BUY LOH...!!
BUT THE KEY IS THAT YOUNG LOSE MONIES BCOS LACK OF FINANCIAL SAVVY & NOT BCOS OF USING CASH OR MARGIN TO BUY MAH...!!

AS I SAY U NEED TO TARGET FINANCIAL SAVVY & NOT BAD MOUTH MARGIN MAH..!!
MARGIN IS JUST A FINANCIAL TOOL LOH....!!

THE KEY IS THAT YOUNG GOT CON TOWARDS BUYING A STOCK LACK FUNDAMENTAL LOH....!!

SO DO NOT PAINT MARGIN SUCH A BAD LIGHT LOH....!!

Posted by stockraider > 2018-03-19 15:54 |

Post removed.Why?

Posted by qqq3 > 2018-03-19 16:14 | Report Abuse

Everybody pretending they are Jesus or what?

Furthermore anyone who comes here are assumed to be of legal age and to trade according to their own ambitions.

if you don't want so much risk, then don't sailang / margin the high beta stocks......

if you sailang and margin a portfolio of blue chips....it would take more than a black swan to cause margin calls.....and even when margin calls occur...it is not the end of the world.....truly not the end of the world.

Posted by qqq3 > 2018-03-19 16:16 | Report Abuse

Lets look at the Hengyuan kakis.....these people mistaken low PE for safety, low PE mistaken as blue chips.....low PE as low beta

......well....they are mistaken.

Posted by qqq3 > 2018-03-19 16:21 | Report Abuse

on a theoretical basis as long as borrowing costs is lower than stock returns...you are supposed to go borrow.

Posted by qqq3 > 2018-03-19 16:31 | Report Abuse

there are many ways to to create beta...and also endorsed by the authorities ....and that includes sailang and margin...also includes call warrants and futures......

you see.....only your lack of ambition and the negative people stops you from becoming what you are capable of.

Posted by stockraider > 2018-03-19 17:10 | Report Abuse

u TALK LIKE A PRO WHY DON U SAILANG ON BLUECHIP NESTLE LEH ??

Posted by Highfive Bread > 2018-03-19 17:11 | Report Abuse

KC is being very cautious in his advice to newbies as they do not have the experience to jump into the deep end. The percentage of them succeeding in making money from borrowed money is slim. Didn't want anyone to be in debts, that is all. A lot of people can do it but of course there are those who cannot. At the end of the day be aware of your capabilities and your chances of succeeding. No one can stop you but be warned of the consequences of your failure. Think twice before you act.

Posted by qqq3 > 2018-03-19 17:15 | Report Abuse

blue chips have blue chip rules. When they don't follow the rules, shareholders can discard the shares.

Posted by qqq3 > 2018-03-19 17:17 | Report Abuse

what is this newbies oldbies?

everyone has a brain....use it.

Posted by Why_ > 2018-03-19 17:23 | Report Abuse

no loan from bank? If avoid margin but want to borrow like borrow money to buy house why cannot?

Posted by Jon Choivo > Mar 19, 2018 12:18 PM | Report Abuse
stockraider,

I do use leverage, but not margin.

Mine consist of essentially 3-5 year loans from investors. With maximum personal leverage of 50%. Ensuring that i can pay them back without ever having to sell my stocks.

When you use margin, you allow others to dictate when you sell the stock and at what price. Not a good idea imho.

And if you look at 2008 crisis, even berkshire lose 50%. Anyone with a margin of just 1X (can go up to 3x). Die already, it they cannot meet the margin calls.

Posted by qqq3 > 2018-03-19 17:54 | Report Abuse

force selling has saved as many people as it has forced people out before a rebound.

Posted by qqq3 > 2018-03-19 17:56 | Report Abuse

Forced selling protects the banks....it has also protected their customers from dropping further.........

Posted by qqq3 > 2018-03-19 17:57 | Report Abuse

forced selling can also be a welcomed intervention .....its lucky to have been forced to sell.

Posted by arv18 > 2018-03-21 05:57 | Report Abuse

you're right kc, should have posted my comment in here instead, for a more positive discussion...

basically, you could use any of your calls, Prolexus, Latitude Tree, ECS, Kfima or even BIMB-wa over the last 2-3 years and LOST money, either by buying such counter with cash OR using margin finance (including interest costs)...

imagine spending long nights doing all that Warren buffet analysis and STILL being stuck for 2 years+!

kcchongnz Posted by arv18 > Mar 20, 2018 12:10 AM | Report Abuse
Um KC, do you really want to go down this road?
Lets take a look at some of your calls
1) Prolexus - Down from ~2.60 to 73 sen today (nice steady downtrend for 2 years)
2) Latitude tree - 8.00 to 3.69 (2 Year downtrend)
3) ECS ICT - 1.78 to 1.14 (2 year downtrend)
4) BIMB-wa - 65 sen to 29 sen
Kfima, Plenitude
On and on it goes...


A reader with a little bit of intelligence would understand this article is about how to read and interpret financial statements, in particular he awareness of cash flow, and not to be fooled by accounting earnings.

I do share a lot of analysis in i3investors, scores if not hundreds of stocks, but purely sharing my analysis, and valuations. I have never made any "calls" to buy any stock.

Please lah, if you wish to comment, you are welcomed, but have some sense and contribute positively.

Posted by kcchongnz > 2018-03-21 10:28 | Report Abuse

What is this article about? Is your comprehension so bad?

This article is about advising the youngsters and newbies on the perils of listening to the touting of the use of margin finance in the stock market, to buy whatever shares, be in HY, Sendai or whatever.

It has nothing to do with any sharing of just a few stocks out of hundreds of stocks by anybody made 5 to 6 years ago.

Read more and think more,and hopefully your comprehension can improve.




Posted by arv18 > Mar 21, 2018 05:57 AM | Report Abuse

you're right kc, should have posted my comment in here instead, for a more positive discussion...

basically, you could use any of your calls, Prolexus, Latitude Tree, ECS, Kfima or even BIMB-wa over the last 2-3 years and LOST money, either by buying such counter with cash OR using margin finance (including interest costs)...

imagine spending long nights doing all that Warren buffet analysis and STILL being stuck for 2 years+!

Posted by qqq3 > 2018-03-21 10:35 | Report Abuse

kcchongnz Posted by arv18 > Mar 20, 2018 12:10 AM | Report Abuse
Um KC, do you really want to go down this road?
Lets take a look at some of your calls
1) Prolexus - Down from ~2.60 to 73 sen today (nice steady downtrend for 2 years)
2) Latitude tree - 8.00 to 3.69 (2 Year downtrend)
3) ECS ICT - 1.78 to 1.14 (2 year downtrend)
4) BIMB-wa - 65 sen to 29 sen
Kfima, Plenitude
On and on it goes...
===================


problem with kc approach to stock market....

not responsive to changes, no big picture, treats stock market as if it is a math problem.


...and bad timing.....every time, he come out with article talk bad about Sendai...Sendai jumps up.


each time KC comes out with bad article on Sendai, I make some money.

Posted by kcchongnz > 2018-03-21 10:48 | Report Abuse

Posted by qqq3 > Mar 21, 2018 10:35 AM | Report Abuse
problem with kc approach to stock market....
not responsive to changes, no big picture, treats stock market as if it is a math problem.
...and bad timing.....every time, he come out with article talk bad about Sendai...Sendai jumps up.
each time KC comes out with bad article on Sendai, I make some money.


Sure, I was very sure you made big money when I wrote about it a few months ago when it was RM1.37, and then when it was about RM1.10, when each time you sailang. Good on you.

Posted by qqq3 > 2018-03-21 13:16 |

Post removed.Why?

Posted by kcchongnz > 2018-03-21 13:21 | Report Abuse

Posted by qqq3 > Mar 21, 2018 01:16 PM | Report Abuse
kc.....every small cap stock.....those below $ 1 billion market cap....their P & L no stability. Today, Superlon, yesterday Poh Huat.
yet.....these are the stocks you and OTB specialize in and call your selves value investors based on PE and your maths .....you and OTB no shame?


Me no shame?

From my various discussions with you, and whatever you write in i3investor, I can easily conclude that you know noting about accounting. But you claimed that you are a retired accountant.

From what I read from your comments, and a few posts you write, I can see you know nothing about investing. But you are damn good in PLP.

Hey, so old already still PLP like that, no shame ah?

Posted by qqq3 > 2018-03-21 13:35 |

Post removed.Why?

Posted by stockraider > 2018-03-21 13:40 | Report Abuse

Yes u r an accountant but a rubbish accountant loh....!!

Kc is an engineer but a financial savvy engineer mah...!!

Posted by qqq3 > 2018-03-21 13:42 | Report Abuse

raider...you are even more naive than KC, at least you didn't ask money from people to learn from you.

Posted by stockraider > 2018-03-21 13:49 | Report Abuse

Raider already very rich mah, no need to ask monies loh...!!
Raider talk cock...for enjoyment loh...!!

Posted by qqq3 > Mar 21, 2018 01:42 PM | Report Abuse

raider...you are even more naive than KC, at least you didn't ask money from people to learn from you.

Posted by kcchongnz > 2018-03-21 13:54 | Report Abuse

Posted by qqq3 > Mar 21, 2018 01:35 PM | Report Abuse
my approach.....come here...

https://klse.i3investor.com/servlets/forum/600151380.jsp

and tell your cult members not to keep deleting my posts.


What a rubbish link you sent me with someone talking nonsense to himself!

You don't even know why so many people deleting your comments?

Posted by qqq3 > 2018-03-21 18:47 | Report Abuse

kc...You should go through the points one by one.....better than your maths.

Posted by qqq3 > 2018-03-21 18:49 |

Post removed.Why?

Posted by qqq3 > 2018-03-21 18:50 |

Post removed.Why?

Posted by qqq3 > 2018-03-21 18:54 | Report Abuse

kc.....go write letter to Munger and your beloved Warren.....ask whether such small caps with their unstable P&L can qualify to be called value investing...whether they want some?

Posted by qqq3 > 2018-03-22 10:52 |

Post removed.Why?

Posted by qqq3 > 2018-03-22 11:45 | Report Abuse

On Sendai.....it will easily end 1H 2018 above $ 1.00

kc...you want to put your analysis to the test?

Posted by Ooi Teik Bee > 2018-03-22 11:54 |

Post removed.Why?

Posted by TanDavid88 > 2018-03-22 11:58 |

Post removed.Why?

Posted by qqq3 > 2018-03-22 12:04 |

Post removed.Why?

Posted by qqq3 > 2018-03-22 12:05 |

Post removed.Why?

Posted by qqq3 > 2018-03-22 12:59 |

Post removed.Why?

Posted by qqq3 > 2018-03-22 13:20 |

Post removed.Why?

Posted by qqq3 > 2018-03-22 13:22 |

Post removed.Why?

Posted by qqq3 > 2018-03-22 16:42 |

Post removed.Why?

Posted by qqq3 > 2018-03-22 16:44 | Report Abuse

kc...you want to talk bad about get rich schemes but only interested in small cap stocks....a little bit weird.

Posted by qqq3 > 2018-03-22 16:54 |

Post removed.Why?

Posted by brightsmart > 2018-03-22 23:35 | Report Abuse

kc...hang pig head to sell dog meat?

Posted by qqq3 > 2018-03-23 11:12 | Report Abuse

kc....people who sailang Sendai since you wrote is doing well...

81 sen vs 70 sen previously.