Out of the box Tips on speculative investing
A reader was impressed with the profit that I achieved on my speculative portfolio. He asked if I can give a talk on investing. He will be interested to attend. He had invested before, and lost money on stocks.

I wish to share some tips. 

a) My positive investment result is largely based on luck. I made profits on two investments, namely Country Garden and Tesla. In both cases, I bought the shares after they have fallen more than 40% from their recent peak. I was fortunate that they recovered, due to some positive news. It could have gone the other way.

b) I am still holding to two stocks that showed bad results, namely Sinopec and Koh Brothers. In the case of Sinopec, I am holding it for the dividend yield of 10%. I expect Koh Brothers to report good results from their current projects and to recover. But this is speculative.

c)  I used Google to look for "Share price of (name of counter)". It give me the price chart for various durations (1 day, 1 year, 5 year, maximum). It also shows the PE ratio and dividend yield. It also provides links to analyst reports and financial news on the company. I read these reports before deciding on the investment.

d) For shares that perform badly, I am prepared to take a long term view, e.g. if it gives a good dividend yield (like Sinopec). 

e) I was confident about Tesla, in spite of the many negative analyst reports because it has good customer rating on their electric vehicles and their gigafactory is highly automated. My hunch turned out to be right. It could have gone the other way.

When a person speculates on stocks, it could turn out to be right or to be wrong. So far, it turned out to be right for me. I do not consider it to be based on skill. It is really a matter of luck.

But there is one fundamental point. You should speculate only with spare cash. You should not speculate with money that you cannot afford to lose. You should not speculate on leverage, i.e. borrowed money). If the market turns against you, you should have the holding power to ride over a bad market.

If you are still interested to attend a talk, send an email to kinlian@gmail.com. I will organize one, if there are sufficient people who are interested.

Tan Kin Lian




 

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