Looking back, it might be a blessing in disguise. During that time of political turmoil of 2018, the Malaysia stock market went tumbling down, given the fact that a newly elected government had taken over the long-ruling party of BN. Armed with my "AngPao" cash that I saved since young, I figured it might be a good chance to make some profit from it.
I am as blank as a slate of paper when it comes to anything related to the stock market. The only media outlet for me is the forum posts underneath the stock ticker of the KLSE investor webpage. People in the forum at best are informative, and bearing the animosity of the Internet, they tend to be either a troll or a mindless aggressor against other people's opinions. Among them, there is always the so-called 'Sifu', that voiced their precious opinion on the particular stocks. While they are appreciated by some, they also attracted haters that bashed their ideas and supporters. That's being said , all is good in an internet forum.
Randomly scrolling through the webpage, something caught my attention. One of the 'Sifu' gave 'Tips' about steel counters, in particular, Masteel Sdn. Bhd. (KL.5098), a company that supplies "long steels" AKA construction steels in the form of rebars and such. I am captivated by how sure he is about the economic revival that will bring prosperity to the construction sector, and in turn to the steel sectors. The comment section is basically an echo chamber that brainwashed you with the lucrative profit that you might miss out on. It is widely believed that the ECRL project will be given the green light and many will profit from it. Basically, I did little to no research, trusting some random 'Sifu' online and pray hard on it.
"When you leave it to chance, then all of sudden you don't have any more luck"
Initially, it was all sweet and rosy when I made my first profit by trading it, the typical "Buy Low Sell High" tactic. As trading volume diminished, I was stuck with about 7k worth of stock in a non-profiting company. The first mistake is not checking out the companies annual reports and financial conditions. The company had an unstable revenue stream and horrible profit records. It just screams and waves red flags all over it. I am frustrated as the price went downhill ever since the initial bullish trend dies out. It was priced around Rm 0.85 at the time.
Fast forwards to around Dec 2018, the stock has been steadily dropping to around RM 0.550 per share. I was thinking to buy more of it at a lower price, thus giving a lower price overall. Here lies my second mistake, buying a stock when it is still falling. After buying my second batch of stocks, I had around 10k worth of the stock in it. All that's left is to hope it rebound from it's low.
It didn't. The stock just went lower and lower over time as the company prospect wasn't looking good. Investor ain't touching this stock, and speculator flocks to glove markets. This stock is basically a dead fish, except you can't even cook with it. I had reached the acceptance stage of grief and decided not to bat my eyes to it.
In hindsight, my third mistake is not setting a stop-loss limit. If I had one in place, I could have retained more capital at hand and wait for the right moment to pounce. I went on and held the stock for another year until early 2020. I could have come to terms with it and sold it at a loss, albeit a smaller loss relative to the price in 2020.
"Respect your parents, they passed school without Google"
Meanwhile, I am trying to learn as much as I can about how the stock market operates and personal financial management in general. The most important lesson here is the right mindset about long term value investing, selecting the proper company and enter at the right price. I decided to cut my loss in March of 2020. resulting in a loss of around 4.5k, or 45% of the total investment. It is a painful realization, but a great life lesson and serves as a warning for the future me. There's a saying in Chinese, "The smart wins big, the wise loses small."
