Technical | Fundamental Analysis Discussion Stocks Listed In Bursa

Monday, January 18, 2010

A Personal Million Dollar Story I Don't Mind Sharing

*This Article is written by one of our regular chatter in Bursa Chat. He or She doesnt want to reveal him/herself. BUT IF YOU CAN GUEST WHO THAT PERSON IS, you may want to take advantage of his/her kindness in helping other to understand stock picking and warrant selections to yourself. The person also very helpful in explaining TA. Read the article and be inspired..... tq.

A Personal Million Dollar Story I Don't Mind Sharing

I aspire to be a millionaire!. Yes.. a millionaire. But then who doesnt?

Way back in June 2006, I started planning my route to a millionaire's club. Way back then, I did not know whether I was an investor or a trader. This seems to be the first question a newbie has to response when chatting for the first time in the Now I know I am a trader because I despise tying up my money in the stock market if it is not growing daily.

I began trading/investing going against two in stock market. Firstly, I used an overdraft facility of RM200,000. But at any one time I did not exceed RM180,000 so that when the monthly interest was added to the account, it did not exceed the limit. Secondly, I traded/invested in warrants only, and only one warrant at a time.

In late November 2006, with the Bursa CI trending upwards plus a little knowledge in Fundamental Analysis and almost zero in Technical Analysis, I bought 1,050,000 units of TA-WB @ 14 sen/unit and started planning on my PDA what to do when I gained RM1,000,000. Hmm.. I am a normal human being. Before I slept each night, I would check and revise the plan. Many a times, I raised the target price because I needed more than a million to fulfill my immediate needs as a new millionaire.

Every trading day I started work at my workstation at 8.30 am, took a break from 12.30 pm to 2.30 pm, and stayed back until market closed at 5.00 pm monitoring my million-dollar-to-be TA-WB. I chose TA-WB because of TA Enterprise's solid fundamental. Furthermore, there were share buybacks at that time by none other than the spouse of the Executive Chairman of the Company. "When Datin bought back mother shares, the company must be going for the better", I reasoned. When the price reached 19 sen I told my wife I made a paper profit of RM50,000. She begged me to take profit. RM50,000 is a lot of money�, she said. I told her my target was RM1,000,000.

The price kept creeping up. It reached 21 sen. I was happy and excited. Then the price started falling. Its ok for the price to oscillate as long as its overall trend is up�, I told myself. Gone were my happiness and excitement. When the price came down to 15 sen, I panicked. Sell or hold, sell or hold I asked myself. Finally I sold @ 13.5 sen. I lost RM6,800. Not only that, the interest on the overdraft kept adding up, RM1,200 a month. Later I found out that the price I sold was the lowest that day. It closed @ 15 sen.

I was not to be beaten. I believe that during a bull market it is not that difficult to gain from stock market. I believe that it is a matter of choice and timing. I scrutinized all the warrants available, checked their exercise price and expiry date, and the health of their mother shares. During the second week of January 2007, I entered the market again. This time I purchased 1,020,000 units of Asiaep-WA @ 13 sen/unit. With the TA-WB experience still fresh in my mind, I disposed all of them @ 22.5 sen the following week with a gain of RM94,900. Not bad, I told myself. If I could repeat it ten times I would achieve my target.

Late January 2007, I bought TA-WB again. This time 700,000 units @ 24 sen/unit. The next day the price of TA-WB refused to rise, so I sold @ 23.5 sen. Again I lost, this time RM5,370. I had no luck with TA-WB although I believed that TA Enterprise Berhad was a strong and profitable company with diversified business. I immediately bought Ancom-WA the same day, 350,000 units @ 22.5 sen/unit. This time I was lucky again. The warrant price gained the next day with high volume, and I sold all @ 31.5 with a profit of RM30,683.

By then the Chinese New Year was fast approaching with a two-day break, 19-20 February 2007. I was contemplating whether to buy and hold over the two-day break or to buy after the new year when daily volume on Bursa started to increase. Not to miss the bull market, I finally decided to buy and hold. So on 14 February 2007, I purchased 1,200,000 units of Insas-WA @ 17 sen/unit. It closed @ 20 sen. The next day it opened @ 21 sen, went up to 24 sen but closed @ 21 sen. On the last day before the break, it opened @21.5 sen and went up to close @ 28 sen. I smiled to myself, happy that I had made a good decision.

Come 21 February 2007 after the Chinese New Year break, Insas-WA opened gap-up @ 30.5 sen and went up all the way to close @ 53 sen. I was ecstatic at the paper gain of RM427,500. The following morning it went up to 58 sen before it succumbed to selling pressure and closed the day at 47.5 sen. I did not sell, hoping for it to go up further. The next day it opened at 47.5 sen and went down to 40 sen before closing at 43 sen. I sold the following day @ 43 sen with a gain of RM308,000.

On 27 February 2007, Bursa CI experienced a sharp drop. I then decided to take a break and went to Singapore for a holiday.

Looking back, TA-WB reached a high of RM1.21 before the sharp drop. Had I held to 1,050,000 units of TA-WB I bought in November 2006 and sold @ above RM1.15, I would have achieved my target of gaining RM1,000,000. Sigh.

This article was first posted in Talk and Share 2 year ago.

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Marvin said...

Wow, great story.
Millionaire within a short span of 2 months.
Unfortunately it is not for the faint hearted or anyone without much knowledge of the trade.

KENNY BLOG said...

Good day,
In past 2 days, HLB anounced to buy EONCAP at 7.10 cash a piece for EONCAP shares.
Do u think we should accept the offer or bargain to get better price?
I personally think the price has not fairly valueing EONCAP.
According the announcement, 7.10 is arised from premium of 31.5% to the 180-day volume weighted average price ("VWAP") of EON Capital shares as at 16 December 2009.
This is no fair because they use 180VWAP instead of 30VWAP,because the past 6 months is the tough time for financial sector dampened by economy crisis. And secondly, calculation are as at 16 DEC, which is a month ago, they ignore the current performance by EON bank and those bought its share recently.
7.10 is just merely 1.4times Price to Book value of EONCAP as EONCAP has more than RM5 book value per share.
In comparison when CIMB bought the Southern Bank, CIMB paid 2.1times PBV.
I need your professinal opinions regarding this.

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