Saturday, July 28, 2007

Have you sold all your shares?

My eldest sister called today from overseas to ask if I had sold all my shares. She has heard the bad news that the world stock markets including the KLSE tumbled on Friday and sounded concerned. She is fully aware that I follow the Zhouyi to invest.

"No, I have not," was my reply. “When the Dow Jones Index had gone up so much what is a drop of a few hundred points? Those who have never seen a ‘big snake shit’ (a Chinese idiom) would have panicked." She laughed.

“While the KLSE plunged on Friday, half of my basket of shares went up. In fact one of them shot up by 50% on that very day.” ‘Did you sell that counter?’ she asked. “No, still waiting for more upside,” I replied. Having been reassured, she changed the subject and asked about family members. (Concerned friends could also be reassured with this entry.)

Markets that have gone up a lot would be volatile and can be subject to wild swings depending on the mood of investors. (Think Chinese and US stock markets) Herd mentality takes over whenever there is a panic or when the bull charges ahead.

Bull Runs are never meant for the faint hearted and the lemmings. Tycoons can be turned into paupers, and near bankrupts can become multi-millionaires depending on which way the stock market turned. I have seen or have known a few over the decades since the 1980s. Therefore those who have heart problems and those who cannot afford or are unwilling to lose should not dabble in the stock market. It can literally be a ‘killing field’ of sorts since markets and stocks have no sentiments whatsoever.

If you have done proper homework on your investments in the KLSE, and if there is no major impending financial crisis or wars out there, take heart. In a Bull Run, even the ‘salted fish’ (another idiom) can be revived. (Think phoenix rising from its own ashes) But there is no guarantee that in this Bull Run, the KLSE will not plunge from time to time because of the current volatility extant in the global financial and stock markets. (Think Chinese stock market as an example)

As long as at the end of the day, you make good money from your investments, you won the war.

Just do not be a ‘water fish’ (turtle) and get conned by syndicates and unscrupulous owners of public quoted companies. (Think Iris, Foutain and Transmil) If you have been swindled out of a big sum of money, it could take a long time to recover.

Also remember to take profits when your preset targets are reached. Small retail players like us need to build up our ‘foreign capital’. Who knows, one day we could be rich enough to invest mainly in the blue chips?


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