Friday, April 30, 2021

The research part of investing is undoubtedly more interesting than the act of investing itself.

 So, after KAB, I picked up Hartalega somewhere in 2019. Why? I can't remember now. I think it was because of the name - perhaps I thought the name meant my fortune was in safe hands. Another non-investing move that was. The good that came out of it was I bought when it was priced around RM5 and we all know it shot up to the teens and even touched circa RM20 sometime in 2020. 

Having 400% unrealized return was real nice - I'll give you that. 

Not knowing whether to leave it or cash out though, was not so nice coz I didn't know if:
a) I should put in more capital
b) I should take some money off the table and if so, how much?

In the end, I decided to take cash out half of my harta holdings and leave the remaining 50% - that way I would have recovered my initial capital while still having a position in it.

Thursday, April 29, 2021

Having many great stock ideas but no conviction in any one of them is the same as having no great stock ideas

Having caught the investing bug, I then looked at other stocks - the second one was GCB which i read about in an edition of The Edge. What caught my eye was the fact it was a Malaysian company which was like a top 5 player in the cocoa industry, worldwide. The article also had an interview with the CEO detailing the company's plans, his background etc - all very good stuff as he is part of the founder's family and has the controlling share of the company.

Well, I bought and hold for awhile, but what I should have done more of, was to look into the industry which it was operating in - Cocoa is a commodity and this asset class is cyclical; subject to the peaks and troughs of the economy. Given GCB operated globally, it was subjected to the global economy's swing.

I would also have gained more insights into the company had I read between the lines that the company was investing in factories and machineries - all of which will only start to realise their benefits over the next couple of years. Of course, that meant the stock was still priced priced or slightly undervalued I think - I can't remember as I sold it off about a year or two after that. 

After GCB, there were a bunch of other stocks I bought - all Malaysian at this point still, perhaps because of a nationalistic pride or the belief Malaysian companies can do it and excel like our American counterparts. Bolehland after all.

Among some of them were KAB, which I bought after hearing Ian Yoong talking about it on Khoo Hsu Chuang's podcast haha - man this is really not investing but just buying based on gut. After I bought, it went up perhaps 10-20% then went down almost 50% in the span of 2 months - being naive and new, I did what many would have done - hold and hope the price recovers. Again, at this point, I did not due much due diligence or investigated what caused the share price to fluctuate as such. Well, I did by googling the company and looking out for any news which may shed light on it. Not much could be found and in hindsight, I could have looked out for other investors in KAB and open a discussion for more insights, or looked at their annual report (Yes, I did not do the most obvious thing any one who calls him/her-self as an investor, would have done). Miraculously, the price did recover close to the price I bought and maybe about 5% more - needless to say, I cashed out faster than you could say jho low.

"You got to speculate to accumulate" - (Lamar Davis, 2013, GTA V)

 So, I first started investing somewhere in mid 2018. Well, I say investing but looking back, it was really just looking at the prices of stock and buying on gut feeling, which in turn was influenced by whatever I read on the newspaper, social media, or whatever that came within the scope of my consumption of information. Fancy way of saying I don't know what I'm doing but I hope it will work out fine. I think all if not most of you would have been in my shoes, to some percentage or more.

I think my first stock purchase was Maybank - based on a snippet from a conversation Khoo Hsu Chuang had with then BFM presenter Tan Chung Han, which pretty much went like: "invest RM800 a month into Maybank and by the time you hit 50, you'll be a millionaire".

So, I literally took that advice and did that for a few months. But the price of it didn't budge much, and it went down over those few months, if memory serves. But I digress, there is nothing wrong with what he said and there is merit to doing so, especially if you know the ins and out of Maybank, and of course you stick to the plan till you're 50. Odds are you'll most likely make a million - its a solid company, part of the bedrock that supports the river of money that is the economy, too big to fail too and certainly big enough to ensure many companies do not fail too.