Trading = Playing with fire? Investing = The SAFE way out?

Hello fellow human beings , ken back with his random thoughts of the day :)


The topic at hand : Trading = Playing with fire?
Investing = The SAFE way out? 



This happened about 2-3months back? Didn't have the time to blog then , ah boy was having exams.

Characters Involved:

1) Me
2) Auntie A
3) Auntie B
4)SA -Son of Auntie A
5)SB-Son of Auntie B


Convo lasted about 5 mins

 I was just q-ing outside this financial institution to draw cash (nicer way to term a bank lar , ken now upgrade the engerish standard can or not? :p ) u know , the one with that red ship one yea, the one lar .... So Auntie A was putting in her $ for an ipo counter and was telling her other friend that the son is very good at trading wor (ah boy kaypoh ma , cause the q so long , wait until i can q for old chang kee curry pok on sundays and come back leh , can imagine lar , sure salary release day one -.-) then Auntie B was saying wah , trading bery bery high risk wor ! Son A must either be big huat or big red lor , Her son B , was on the other hand investing and seems quite safe to Auntie B, then Auntie A siad safe, not safe , make $$ can liao ma !

I didn't reply ,not because i see ppl no up ah , ah boy was dead beat after my papers :(  so i just withdrew cash and ciao le


If Ah boy wasn't tired and had a bit of time to spare

*Ah Boy narrates to myself that day*

Me: Hello Aunties ah! Wah here macam coffee shop wor , the both of u add up together minimum 100yrs old le , still wanna 比来比去 tak boleh tahan leh! I ask u all ah , SA trade for what? got a goal in mind? Also, SB invests for simi , got goal or not?



Lesson from this story:

1)

Be an INFORMED Trader/Investor

Be sure of your time frame!

You need to know what you're in for , i've repeated this line like countless time (ken is becoming a broken tape recorder soon , yar )

You can earn loads of $ but without a goal , a purpose , u are a headless fly , a rich one lar , albeit.

For a trader (RETAIL) : know the following

A) Your EP (Entry Price) 

B) TP (Take-Profit price)  

C) SL (Stop-Loss) 

D) LIMIT! (Hello, doesn't mean u got 2M , you dump 2.5M into it leh!)

For an Investor (RETAIL) : know the following

A) The Various ratios (Quick , Debt to equity , Liquidity etc.) 

B) The Enterprise Value of the Biz and strip it DOWN part by part to see if the Biz has enuf to sustain ops for one year at least after HALVING its  cash and liquid assets :) 

C) Know the Management (Advice from Mr X, a HR veteran, don't know? check out my previous post.)


D) The Industry's heading / bearing / general direction , obviously when u pick counters don't pick a jialat jialat one lar , or a sunset industry unless the company is doing something innovative and right , and obviously need to earn money lar , don't suka suka slide close to 15% in profits in a quarter la(u know i know who experienced this lar) :p


E) If you're in for the long run , better monitor the dividend yield , for short and long term , pls pls look for the growth potential.

2) IF YOU LOSE $ , BLAME NO ONE BUT YOURSELF

Your $ is your $ , dun dump it into the market because of some "guru" and when the call doesn't come thru , you have a just made yourself a roasted suckling pig (delicious for the banks and yr creditors to eat wor!)

DYODD lar (Do Your Own Due Diligence)






Cheers
Ken







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Disclaimer:

The views expressed in this Blog should not be used as financial advice. Accuracy of information in page cannot be guaranteed .

Readers need to do their own diligence.

I bear no undertaking in the information provided and for any losses incurred directly or indirectly based on the views expressed in the Blog.