Koon Yew Yin 官有缘 - Koon’s Investment Lesson #10: You must change your small trader’s mentality to make more money

The price chart shows that Lii Hen is shooting like a rocket. In the last few days it has gone up more than 20% to close at Rm 3.20 last evening 5th May 2016.

Many of my friends including professional advised me to take profit. If you look at Lii Hen’s announcement you will see that even 2 directors including Chua Lee Seng, the controlling shareholder were selling. In fact, Chua Lee Seng sold at Rm 2.14 on 22nd March 2016 and he must be regretting.

I did not sell at all. Instead I bought some more yesterday for my wife and for myself. You might think, I am crazy or boastful. No, I just want to record here a good investment lesson.

When the market opened this morning the price dropped to a low of Rm 3.09, 11 sen down. At the close of the day it went up 10 sen.

Will you buy back at a higher price?

Many people with knowledge of financial and technical analysis would have sold Lii Hen earlier at a much lower price to take profit. This reminds me of VS Industry about 12 months ago, many FA & TA experts sold during the price correction and did not buy back when the price continued to rise.

At Lii Hen AGM on 1st June 2016, I suggested to the Board of Directors to give out 1 free convertible warrant for every 3 shares held. It is like giving Aung Pow to all the shareholders because they can sell the warrants for cash. It is mostly likely the company will issue free warrants as I suggested.

The process to complete warrant issues will take more than one month. I am sure the price will go higher if the company announces warrant issues and I have plenty of time to sell at a higher price.

Have ever seen the share price drop when a profitable company announces warrant issues?

Please note the price went up by 10 sen at the close of today. Will you admit your mistake and buy back at a higher price than the price you sold?

Koon Yew Yin 官有缘 - Koon’s Investment Lesson #10: You must change your small trader’s mentality to make more money