Friday, July 27, 2012

A Reply to a Comment from 3Pm

just a day ago you mentioned our market had enter into exciting period due to the breakout of ci, now u are saying it may be over and turn into bear??
pls enlightened me, also, when does Fitter stock been classified into 1st liner?

My reply:

I will address your 2 questions as follows:

Q1.    "just a day ago you mentioned our market had enter into exciting period due to the breakout of ci, now u are saying it may be over and turn into bear??"

Answer: What I wrote on July 26 was: "Our market has entered an exciting stage after the FBMKLCI made new all-time high. Technically speaking, this technical milestone is a bullish signal. And yet, we do not feel that way because the market breadth is rather poor. The market sentiment is weak in our local bourse as well as in other global equity markets. The global economy is uncertain, with slowdown in US and China as well as an unresolved crisis in Eurozone. Because of that, we have to be cautious."

That statement can be easily understood by any layman as conveying a need for caution in the face of an apparently bullish market. In fact, I have written about the possibility that the current rally could simply be a pre-election rally which could result in a potentially sharp reversal (here). I have also commented on July 24 that the index was in a 2-month uptrend with support at 1628-1630 (here). Unfortunately, it broke that uptrend line on July 26 (here). The breaking of the uptrend line could be the beginning of a reversal of an uptrend. That would warrant us to be very careful, if not slightly bearish. 

Are these posts inconsistent? To me, they are not inconsistent. The market is a living & breathing organism that makes up of million of investors & traders. Things changed and we have to adjust.

Q2.    pls enlightened me, also, when does Fitter stock been classified into 1st liner?

Answer: I am not sure where you are going with this. You may want an idea of how I categorize stocks into 1st liner (or blue chips), and then 2nd & 3rd liners. I must admit that I do not have a clear guideline on categorizing stocks. The top 30 stocks that are components of FBMKLCI should be blue chips. The next 70 stocks that are components of FBM Mid70 should be near blue chips. That does not mean that any stock that falls out of the top 100 are necessarily 2nd & 3rd liners. Finally, not all 2nd & 3rd liners are risky stocks that we should avoid. I believe you are referring to my statement: “The stocks that I picked are those that I've regarded as reasonably good bet. While I could have been wrong, I prefer them to some riskier 2nd & 3rd liners that are the flavor of the week”. If you want to have my definition of what are riskier 2nd & 3rd liners, I also do not have any to offer. However, I would like to quote the words of Justice Potter Stewart when he expounded his threshold test for obscenity in Jacobellis v. Ohio (1964).

I shall not today attempt further to define the kinds of material I understand to be embraced within that shorthand description ["hard-core pornography"]; and perhaps I could never succeed in intelligibly doing so. But I know it when I see it, and the motion picture involved in this case is not that. [Emphasis added.]
—Justice Potter Stewart

As I 'd said before, we are in a difficult market. This market has broken to new high and it had promised to go higher. It is hard to stay out of such an enchanting market and yet we know in our bones & in our heart that this market is fraught with danger. We have all seen how our market made new high in January 2008 in similar circumstances- election around the corner, the global economy exhibiting weakness & a major part of the developed world in trouble- only to see it tumbled down. Having said that, we have seen some stocks performed very well in the past few weeks. It is my hope that I can help to identify more of these stocks for the benefit of my readers. I must remind myself to check my ego & to remember that I am only a market watcher, not a marquee fund manager or investment strategist.

Finally, I like to say that I have no quarrel with you, 3pm. If we have a differing opinion on things, just post your comment. Constructive criticisms are welcome. Even less-than-polite comments have been posted. I would however prefer people to be decent and do not post comments like: "your blog as lots of words, not much usefull content....lots of filler rubbish...." or "for godssake do not be a coward and start demonozing commenters". I have no answer to the first comment but to the second comment that I was demonizing you, I can only say that I have not intended it that way but if I have hurt your feeling, then you have my sincere apology.


JY said...

Well said, Alex!

Fitters has an annual profit of RM20m. It'll be an insult to say a company that generates RM20m profit as 2nd or 3rd liner stock.

There is no definite guideline on what 2nd or 3rd liner stock constitutes, but the terms "2nd or 3rd liner" according to my understanding refers to ace market counters, loss making counters and cornered and manipulative stocks.

As per the "exciting period" statement, I think 3pm may need to re-read a few times or even get ask someone who is fluent in English to explain to him if the statement was made with bullish bias or otherwise.

K C said...

good on you to accept criticisms. I think you are the most gentlemen blogger who can accept criticism. However, I find most if not all criticisms hurled are not constructive type. Tell people why you said the analysis is "rubbish"; why is it "incorrect" etc; and not just say something without basis and justifications. Alex, carry on with your blogging. You have many followers.

CP said...

HI Alex

Sorry to hear that someone do not appreciate your works but instead trying to 'bite'.

It saps our energy and our focus. But, I like the way you handle such readers and I really respect you for that.

Keep writing.

one day, I will look for you, for sure.



Mat Cendana said...

"It is hard to stay out of such an enchanting market and yet we know in our bones & in our heart that this market is fraught with danger."

Yes, it is, especially when you see various counters shooting up each and every day. Naturally, we would want to join the party.

And it's so very easy too - just choose any one (or more) of your favourite counters, choose the price, key in the number of lots and click the "Buy" button.

Then one will be filled with hopes and expectations; that your counter will move north. Hopefully, by the end of the session. If not, tomorrow... or day after that... or after that... Even when the trade isn't going our way, and even when a downswing has obviously started, often we are reluctant to cut loss. Until they grow big.

But your post of last week - it made me pause to think about and evaluate the situation. And I decided to be cautious by taking profits from winning positions and not adding.

In doing so, I didn't buy MK Land and missed its upswing. But at the same time, I also didn't buy counters that include SK Petro, YTL Land, Fitters etc where the losses from these would likely not be covered by the profit from MK Land.

My main point is this: I read the posts here (and elsewhere too), analyse the writers' points, do my own research and then make *MY* decision. Whatever profits or losses are due to ME and me alone. I thank all the writers for their analyses and opinions but I take full responsibility for all my decisions - buy, sell or not do anything (which is also an action, by the way).

Mat Cendana said...

BSKL was up by only 1 point or 0.06%. Compare that to the 1-2% rise in most other Asian markets. These other markets have no doubt been influenced by the very good showing in Europe and the US last night.

This is further evidence that our market is presently in the "will of its own" mode. You are most likely right about the pre-election rally although it remains to be seen whether the rather lacklustre performances of late are indications that it is over.

Investors who had jumped in early today, anticipating BSKL would emulate Europe and US, mostly end up disappointed. And we don't really know how sentiments will be next Monday.

But I think there are still opportunities in BSKL - with selected second- and third-liners particularly. I wonder what will replace MK Land next week as the new "flavour of the week"?

tok perak said...

very gentleman comment and no want can predict exactly what will happen in future in our market. all prediction is based on past historical data.

Stanley said...

Hi Alex, more effort should spent on researching rather than wasting your time on 3pm. It's not worthwhile. You would not be able to satisfy the whole lot.

Investor said...

Hi Alex, just ignore 3Pm. Noobs like 3Pm just choose to blame the others when they lose money (deservedly).

3Pm, why not blame yourself for buying the stocks? If you do not know how to invest/cut loss and simply follow whatever you read online I advise you to keep your money in the bank else you will just bankrupt yourself.

Digital said...

Hello Alex, no doubts you're helping your reader to understand the market and also trying to explain the message you want to convey to them but then you will be wasting a lot of energy and time trying to explain to the naysayer. You have already put in a disclaimer and that's good enough and afterall it is their money and their risk and not yours. Better to put your energy to help those people who really want to learn and understand the market instead of wasting your precious time and energy on the naysayer. It will never the opposition...will oppose for the said of opposing no matter how good it is.

Unknown said...

Dear Alex, there is a need for me to clarify with regards to my comment " for gods sake not to demonize your commenter" ..well firstly my comment was never directed at I said again you are such a gentlemen an this article again proves that point. I was more referring to "some bloggers" you noe who you are, that refuse to accept a readers opinion...or understand a commenters tots. I for one understand where 3pm is coming from.. This is my 2 cents worth.. People who put their tots out there on cyberspace should be ready to accept criticism... Good or bad. The reason behind having a blog is to to be seen or heard. The more the merrier... But there should also be a sense of responsibility esp when writing on financial matters. Whether you like it or not try to understand that not all readers are experts in this field, that's why we google in the first make my mssg bearable and spicy....screw u bloogers who wanna have an opinion but cant accept criticism esp that hired guy whose now advertising health supplements...hahaha coz no one wants to listen to his financial garbagen , I am all the way behind u 3pm...have a nice day

Mr ICICI said...

hi alex

i think u shouldn't even waste your time and effort to reply to these online trolls. they offer nothing constructive.
personally, i find your blog insightful and helpful. pls do continue to post your thoughts on the market.

Alex Lu said...

To all who had commented on this post,

Thank you. All comments are feedback which in turn is the result of evaluation. To be frank, they are more than evaluation but the result of action taken based on the posts.

If we ignore feedback, we cannot change our negative behavior. That's why I welcome feedback, even negative feedback. This & the earlier related post is not about you-shouldn't-criticize-me but about how you should give your feedback. I understand there is unhappiness & anger in some comments. I will take note of these comments & adjust accordingly.

titi said...

Dear Alex,
Your sharing and writing of your own analysis of stock is good for everyone who are interested to read it on and make their own judgement.
Keep on writing and post it to your website. Do not let someone to spoil your mood and wellbeing. Thank you.


Sam said...

It must be demoralizing to have these unconstructive, inappreciative, not to mention downright rude comments.

I actually think it is entirely your rights and prerogative to whether post comments as such, as they really serve no purpose, as far as this blog is concerned.

Well, kudos to you, Alex, for sharing your observations, ideas, studies out of interest, rather than for anything else. For that, my hats off to you.

I just like you to know that there are a lot of followers who have enjoyed, and some lucky ones, made some money from your postings.

Keep up the good work.


ikan bilis said...

Hello Alex
I am a ardent silent reader of your blog. I just would like you to know you are doing a fine, thankless job with your TA & FA analysis. Do keep on writing!
And maybe you need to state your disclaimer using bigger, bolder fonts.

alwayswin111 said...

Is this guy for real? Don't waste your time replying to him. Is he a newbie?