Monday, May 6, 2013

The lessons of GE13 on stocks investment

By now, there are many who would be feeling frustrated and disappointed over the GE13 results - especially for those who are hoping for a change in federal ruling government. If the percentage of popular vote is taken into account of the support, probably there are a higher percentage of those whom would be disappointed as Pakatan has managed to garner a 51% popular vote as against BN whom managed a 49%.

For those who are disappointed as we are Malaysians and the fact that I see some of my friends whom have been overseas, and made their point by coming back to vote speaks volume of their patriotism despite being away from the country for many years. The majorities who traveled thousands of miles just to put in that one vote may have been voted for the opposition, ended up disappointed but at least they have done their part. They are very much a Malaysian.

Fortunately, for stocks investment, the attachment need not be that strong. There should not be that sense of too strong a feeling for one's investment, but you must know the company that you invest in. Without that, you are just blindly supporting the company by putting your money.

As a minority investor, one should know that there is only a limit that one can exercise. Just like a voter, your vote is one out of the 13 million whom can vote in Malaysia. As a shareholder, you can vote, but your vote is just as much as the number of shares that you hold. In fact, it is even worse as in stocks, the majority shareholder pretty much can dictate the vote as they are the majority. And being a minority, in most cases (despite the protection that is provided to minorities) investing is that much you can do. You can highlight the wrongs and rights that the management have done, or pretty much avoiding the companies that do not have interest of shareholders is probably the best thing to do. No point getting upset over what the management have done which may not be to our interest.

I have invested in many companies which over time, I feel that they have not done to what I believe is right - an example of it is AEON when it uses its parent holding in Japan to buy Carrefour in Malaysia. After I have sold the stock, its prices continued to rise. But I still believe in what I believe, and that's my decision. Even if it continues to be doing well, there must be a certain principles which one should follow as being a minority investor, you should know what you are doing. Not having the right principles in investments can cause heavy losses and holding to something bad for a long period which will just disappoint one as an investor. An example is KNM, which many a times, people just hoped that it turned. It has not so far - how much longer should you wait?

The beauty about stocks investment is that there are a whole long list of stocks which one can choose. Sometimes, there are no right or wrong company. A person who knows the oil and gas industry may like Dialog. As I am not too familiar with that industry, I tend not to buy the stock although it has done well for many investors.

In yesterday's election, one tend to get overly excited and hope that things can change overnight. Change is good but change does not happen overnight most of the times. The common flaw that most people do in investment is that thinking any change in event or management will cause change in the prospect of the company. That most of the time do not happen - in stocks and country you live as well.

A bad company despite one can put in the hope - chances are it will remain to be a bad company. A good company, despite some turn of event that may affect it over the short term will in most cases be a well managed company. While the leader is important, the core of the company or country are the people.

Hence, try not to be too disappointed. If you believe in the people, you should be with the company that you invest in. If you do not, change your portfolio.

That can't be said of the country you are born in though.


Newbie said...

It is amazing how well you can relate GE13 with stock investment.

The truth is many are disappointed and heart broken not because they lost the fight but the manner the fight was lost.

It wasn't even a fight. Our hands were tied while the opponent keep pounding us.

Like I say it wasn't even a fight from the start. It was unfair and outright dirty.

Many would still have HOPE if we had lost the fight fair and square. Unfortunately this experience is just too bitter to swallow.

It is as if there is no hope at all in this country anymore.

I am still feeling the pain.

Newbie said...

When I talked to my mom today I can sense the deep disappointment in her, the feeling of no hope.

Many of my colleagues didn't turn up to work today. No prize for guessing why.

We are just, simply heart broken.

Newbie said...

In an election there is bound to be winners and losers.

As mature grown up we can accept that.

But the manner this event has unfold just tell us it has been a lost cause from the very beginning and will continue to be so.

fithri said...

Well written..

Black Ink said...


Keep calm, carry on and stay focused on goals.

felicity said...

Well, this is life - it is not fair. We only have to make the best of it and keep on fighting...

Big Sea said...

The journey to democracy is never fair.
Do not expect your opponent to give you a level playing ground before beating you. You need to outsmart your opponent or play to your advantage. This has happened again and again in history.

If it is fair, any Tom Dick or Harry would have done it long long time ago !

Black Ink said...

in keeping with the not fair but reasonable theme, the GE13 report came out with a conclusion saying - partially free and not fair.