Koon Yew Yin 13 Dec 2019
Although the title of this article sounds very boastful, nevertheless it is a very useful lesson for all serious investors. I have been trying very hard to control my egoistic attitude. Fortunately, or unfortunately, ego is not one of my strong point. In fact, it is my ego that drives me to make more money than I really required.
I have written about my method of using the magic wand of margin finance tomultiply my profit before but most readers did not believe or really appreciate my idea of using borrowed funds to make money. They do not believe that it can do such a fantastic magic. In fact, most investors do not even use margin finance.Of course, margin finance is a double-edged sword. It cuts both ways. It is only meant for experienced investors. If you have poor record, you should not use margin finance.
I have been borrowing money to do business all my life. That is how the banksmake money by taking free money from ordinary current account holders and lend the free money to business men and investors to help them make more money.
On 29 March 2019 Dayang’s 2018 annual report, page 164 shows that Tan Kit Pheng, my wife has 5.267 million Dayang shares held in Hong Leong Investment Bank. I have a total of 18.005 million Dayangshares held in Kenanga, Alliance and RHB Investment Bank.
We have a total of 23.272 million Dayangshares and on the 29, March 2019 when it was selling at about Rm 1.30 per share as you can see from the price chart below.
The open market value of our holding is worth Rm 30.25 million.
Currently my wife Tan Kit Pheng has 7.2million and 1.6 million totalling 8.8 million Dayang shares in Hong Leong and Alliance Investment Bank respectively.
I have 10.88 million, 3.9 million, 4.2 million, 6.02 million and 2.07 million totalling 27.07 million Dayang shares in CIMB, RHB, Kenanga, Alliance and Hong Leong Investment Bank respectively.
My wife and I have a total of 8.8 million + 27.07 million = 35.87 million Dayangshares.
Based on the last traded price of Rm 2.46, the open market value of our holdings is Rm 88.25 million on 13 Dec and on 29 March the open market value of our holdings was Rm 30.25.
We have made 88.25 million – 30.25 million = Rm 58.00 million within 9 months.
This is my fastest speed record of making money from the stock market.
I trust this important lesson on using margin finance is useful to all experienced investors.