Just based on Technical and Financial analysis will not enable you to maximise your profit. You need some business sense and the ability to control your emotion of fear and greediness.
For me to explain these human difficulties, I have to boast by telling you that I started buying Lion Industries shares a few weeks ago when it was selling at 70 sen and I have bought very aggressively. Now I have a total of 28 million Lion Industries shares.
With due respect to Mr Ooi Teik Bee, I started buying it before him. I started buying as soon as I see that it has reported increased profit and it is a good business with good profit growth prospect.
Mr Ooi’s method is very safe. He will only buy when its price has passed it 70 day moving average. As reported, Mr Ooi has bought 5.8 million shares for me. He has made profit for me and the value of my portfolio with him is more than Rm 20 million.
As reported Tabung Haji has sold its holdings on 10th, 13th and 17th August and it has 49.4 million shares left.
As I said above, you must be able to control your emotion and not be afraid to buy even if you see Tabung Haji is selling. This reminds me of my buying when EPF was selling VS Industry which I have explained in greater details below.
The price chart shows that it has dropped in the last few days because Tabung Haji has been selling. The total volume traded was 27.3 million shares when the price shot above Rm 1.20 per share.
Share price does not go up in a straight line
Even a very good share does not move up in a straight line. Occasionally, there will be more sellers than buyers causing the price to drop. When there are more buyers than sellers, the price will go higher. Many day traders take advantage of this phenomena, to make money. They buy during correction and sell when people are buying aggressively.
Lion Industries 2017 annual report showed the substantial Shareholders as at 30 September 2017:
1.Tan Sri Cheng Heng Jem 216,865,498
2.Tan Sri Cheng Yong Kim 9,253,289
3.Dynamic Horizon Holdings Limited 74,472,627
4.Lembaga Tabung Haji 44,152,700
As you can see Tabung Haji has about 44 million shares in September last year, when the price was above Rm 1.40 and it must have bought more shares at higher prices to have more than 50 million shares before it started to sell.
I am not sure what is Tabung Haji’s average cost per share and whether it is making money to sell at this price level.
Based on Mr Ooi’s Technical and Financial analysis, Tabung Haji should not be selling at this price level. Mr Ooi’s target price is Rm 2.24 per share based on P/E 8.
Ability to control your emotion
The chart below shows V S Industry went up from 30 sen in June 2014 to Rm 1.70 in Dec 2016, an increase of 550 % within 18 months. I was buying it when EPF was selling. Its 2015 annual report showed that I was the 2nd largest shareholder, holding 102 million shares.
I know instinctively when to buy and when to sell because I have been doing it for more than 35 years. It started serious share investment in 1983 when China gave notice to the British Government to recover ownership of Hong Kong. The Hang Sing Index plunged to 660 points. Who dared to buy shares when the Communists from China were going to control Hong Kong?
Within 3 years, I made so much money that I bought 46% of Kaiser Stocks and Shares Co Ltd, a stock broking company in Hong Kong.
Today being a public holiday gives me this opportunity to write this useful article, although it may sound so boastful.