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.

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