We r into a biz of cutting losses according to stock mkt legend, Bernard Baruch.
It is just old normal to have made wrong bets.
According to teachings of stock mkt expert Bernard Baruch, adviser to 3 USA Presidents :
" If a speculator is correct half of the time, he is hitting a good average. Even being right 3 or 4 times out of 10 should yield a person a fortune if he has the sense to cut his losses quickly on the ventures where he is wrong ".
Doing the math, that means we r into a biz of cutting losses, 5 to 7 times out of 10 stocks.
And in a down trend, 1st loss is the Best loss !
For some of us who r long enough in the mkt, we can recalled the worst period in the history of KLSE during the Asian Financial Crisis. KLCI crashed from a high of 1278 points on Feb 1997 to a low of 262 points on Sep 1998 in the longest recorded purebear cycle of 18 months. Mind boggling to imagine a drop of more than a 1000 points, from 4 digits to 3.
How did those involved handle this ?
n how did I able to manage this great escape ?
purebull , 97-98 was financial crisis throughout the regions ...now it is localise GE ... will the market fall ? definately but not to the extent you see in the 97-98 .... most companies are still business as usual
ReplyDeleteDear juicy,
DeleteWell said.
But most pple r overly 'gungho' on FA. Yet to hear somebody say they r taken to holand by FA.
FA has its big limitation TOO. It is best applied to food n drinks biz, esp foreign franchise branded plc like, DLADY, NESTLE, CARLSBG, BAT, etc... These plc will grow perceptually with the economy of Msia. Using FA tools on many other biz/stocks can be very challenging.
Key is pureBull pureBear cycles r created by the smart money.
Have a way to follow them.
To do it we have to travel at the same speed as the smart money ! Then we can see their faces.