This is a story about how Jimmy turns RM10k to RM100k in KLSE within the first half of 2016.
Jimmy had a capital of RM10, 000 and throughout the first half of 2016, he only traded 2 stocks.
In the beginning of 2016, he studied the effects of declining oil price and came to a conclusion that aviation sector could benefit largely from it.
He picked AAX-WA as it offers the greatest leverage.
He bought 200k units of AAX-WA at RM0.05 on 13th of Jan 2016.
AAX reported a return to black on its Feb QR and its price surged.
Jimmy was convinced with the performance and decided to continue holding AAX-WA despite its extremely high premium.
In between, Jimmy had been constantly studying other stocks that can offer him good return in KLSE.
Out of 1000 of stocks in KLSE he found EMETALL.
He found that EMETALL had also just recovered from making losses on Feb 2016.
But, he was puzzled and unsure why EMTALL price was not moving.
Hence he continued to hold AAX-WA, meanwhile closely monitored EMETALL.
In early Apr, he noticed EMETALL started to have action.
At the same time, AAX-WA also started to rebound after 1 month of correction.
After some studies, he decided to find a good price to sell his AAX-WA and switch to EMETALL.
On 20th of Apr 2016, he sold all his AAX-WA at RM0.22. (refer AAX-WA price chart)
His capital together with profit had become RM44k.
He then switched all his money to EMETALL.
On the next day, 21st of Apr 2016, he bought 125k units of EMETALL at RM0.35.
By end of May, EMETALL reported another good QR and caused its price to move higher.
Within 2 weeks, the good QR had driven EMETALL price from RM0.47 to highest at RM0.9, almost 100% gain.
Jimmy felt that the rally had become irrational and he decided to sell EMETALL.
He sold all his EMETALL at RM0.875 on 10th Jun 2016. (refer EMETALL price chart)
His capital together with profit had now become RM110k, which is equivalent to 1000% gain of his capital.
And the story ends here….
(AAX-WA price chart)
(EMETALL price chart)
So, what lesson does Jimmy’s story teach us?
Firstly, it is possible to make profit from KLSE when broader market underperforms.
Secondly, it is even possible to make huge gain, a 1000% gain, from KLSE within short period.
Thirdly, with sufficient knowledge and skills, it is possible for us to win in KLSE.
(Disclaimer: this is a fictional story to showcase, theoretically, how one could make good gain from KLSE)
P/S: To sharpen my skill, I do share some stock watch in Invest for Life and investing videos in facebook https://www.facebook.com/investforlife.com.my/.