From my long experience in share investment, I realize you need more than just FA and TA to achieve maximum profit. You need to have some business sense and the ability to control your emotion of fear, greed, humility and ego so that you can think logically.
Very often a stock has a very good FA and TA report but you dare not buy for reason you only know. Or you have already bought some but you dare not buy some more even it is cheap, selling P/E less than 10.
If you have a good business sense and the ability to control your fear of losing money, you will dare to buy some more.
Or you have sold and dare not buy back at a higher price due to your own ego. You dare not admit your own mistake in selling too early.
All investors must check their track record to see how well they have been performing. If they have not been doing well, this article will be useful for them. They must change their old style or method of buying and selling.
All investors have a common problem:
That is the ability to foresee the future. For example, Focus Lumber reported a reduced profit about 3 months ago and the price has been dropping from Rm 3.00 to as low as Rm 1.50.
Another example is Gadang which reported 40sen EPS for the last financial year and also announced bonus share and warrant issues. The share price shot through the roof. But everybody was surprised to see that it reported 5 sen EPS, a big drop in its 1st quarter of its new financial year 2017. As a result, its share price came tumbling down. It looks like there is support for the price because investors are hoping to benefit from multi corporate exercise.
Focus Lumber and Gadang reported reduced profit which caused the share prices to fall. But Kian Joo reported increased profit a few days ago which caused its share price to rise. Because Can One owns 32.9% of the total issued shares of Kian Joo, investors are expecting Can One to report increased profit in the next few days. That is why its share price went up 10 sen and 14 sen in the last 2 days respectively.
Can One bought the 32.9 % of Kian Joo in 2012 at Rm 1.65. About 8 months ago, someone offered to buy all the Kian Joo shares owned by Can One. As a result of this announcement, the price of Can One went above Rm 5.00 per share because investors expected Can One to make a huge amount of profit. Unfortunately the deal did not go through and its price has been depressed since then except in the last 2 trading days.
Many investors who have no business sense would have sold or dare not buy even when its price was trading around Rm 3.50 in the last few months.
I am obliged to tell you that I am still a substantial shareholder of Can One and I am expecting its price to go higher. I am not asking you to buy. But if you do, you are doing it at your own risk.