Hartalega

We are expecting the Group to maintain its net profit margin at around 20% despite bracing for headwinds of lower average selling prices (ASP) of gloves.


Earnings outlook/Revision

We lowered our earnings forecast for FY15F by 7% to factor in the lower average selling prices (ASP) of gloves as we expect that the increased competition in the nitrile gloves industry would keep selling prices subdued.

Double-digit earnings growth in FY16F. Earnings forecast for FY16F was nudged marginally higher by 1.5% as we update the installed production capacity figures for FY16. We are expecting FY16F earnings to grow by double-digit on the back of significant earnings contribution from NGC.


Valuation & Recommendation 

Maintain HOLD with a slightly higher target price of  RM7.00 (previous target price: RM6.98), following our upward revision of earnings for FY16F. We derive our target price by pegging FY16 EPS at PER of 16 times.

While we remain convinced on its growth prospect that underpinned by its expansion ahead, we still wary over the stiff competition in the nitrile gloves industry. Yet, we reckon that the high operational efficiency of the Group would aid to mitigate the adverse effect of lower ASP of gloves. Overall, we maintain our neutral view on the company.

JFApex Securities 30.9.2014

HARTA Quarter Report History

No.	Financial		Revenue		Profit Before		Net Profit		EPS	Div	NTA
	Quarter		(RM,000)		Tax (RM,000)		(RM,000)		(Cent)	(Cent)	(RM)	PBTM
1	30/06/2014		279,198		75,651		57,087		7.55	4	1.34	27.1%
4	31/03/2014		280,373		70,272		49,157		6.63	3.5	1.27	25.1%
3	31/12/2013		267,820		74,673		57,876		7.81	3.5	1.23	27.9%
2	30/09/2013		280,953		82,300		63,273		8.55	3.5	1.18	29.3%
1	30/06/2013		278,014		81,917		62,912		8.56	4	1.1	29.5%
4	31/03/2013		269,772		81,318		62,293		8.52	3.5	1.05	30.1%
3	31/12/2012		259,565		78,368		60,529		8.28	3.5	0.99	30.2%
2	30/09/2012		255,019		76,282		58,597		8.01	3.5	0.94	29.9%
1	30/06/2012		247,678		69,914		53,358		7.3	0	0.9	28.2%
4	31/03/2012		240,217		64,460		50,012		13.73	6	1.7	26.8%
3	31/12/2011		241,951		63,902		50,703		13.93	6	1.61	26.4%
2	30/09/2011		229,542		59,551		46,127		12.68	6	1.53	25.9%

Billionaire Hedge Fund Manager Explains To MBA Students How He Makes A Ridiculous Amount Of Money

JULIA LA ROCHE FINANCE  OCT. 1, 2014

Closely-followed hedge fund manager John Paulson spoke to a room of MBA grads and students on Tuesday evening about hedge fund compensation among other topics. 

Paulson, who shot to fame after making billions betting against subprime during the housing crisis, was part of a panel at NYU Stern called the “Future of Finance” with Citigroup CEO Michael Corbat and Warburg Pincus Joe Landry. The Wall Street Journal’s Francesco Guerrera was the moderator. 

Earlier on in the panel, Paulson discussed how the hedge fund industry has changed since he launched Paulson & Co., which now manages over $20 billion of assets.

It’s a big number even by today’s hedge fund size standards. Compared to  decades ago, however, it’s absolutely massive.

Paulson pointed out that in the early 90s, a large fund would have about $100 to $200 million. These days, the largest funds have billions in assets.

The larger AUM also contributes to a manager’s yearly take-home pay.  

When Paulson discussed the massive paychecks some of the top fund managers take home you could see folks in the audience grin.

Fund managers are paid through a compensation structure commonly known as the “2 and 20,” which stands for a 2 percent management fee and a 20 percent performance fee charge. More specifically, “2 and 20″ means a hedge fund manager would charge investors 2 percent of total assets under management and 20 percent of any profits.

“So hedge funds have grown, the fee structure has stayed the same. The capital of the partners has become a more and more significant part of the earnings of the hedge fund managers. The total compensation to hedge fund managers has really grown enormously.” 

Paulson pointed out that Institutional Investor’s Alpha magazine has a list featuring the estimates of the top 25 highest earning managers. He said that he lowest paid, No. 25, took home about $300 million and the top five averaged excess of $2 billion. 

“After this little ah quick John Paulson math, I am tempted to send my résumé,” panel moderator Guerrera joked.

Also, Paulson ranked No. 3 for the “rich list.” His take home pay in 2013 was $2.3 billion. He was just behind Steven Cohen and David Tepper. 

http://www.businessinsider.my/john-paulson-compensation-2014-9/#.VCuEKGeSySo

Warren Buffett losing US$700 million in Tesco & iCapital International Value Fund

This fund started investing in July 2009. Its performance in AUD since then is shown below together with the benchmarks MSCI ACWI index and ASX200.

Table: 1 Jul 2009 to 31 Aug 2014

		Total Return		% Change
	Currency	01-Jul-2009	31-Aug-2014
ICIVF	A$	1.0000	1.4639	46.39
MSCI ACWI	A$	1204.2423	461.3982	50.71
ASX200	A$	306.1537	5625.9000	45.22

Commentary

Mindful of the rich valuation many markets are trading at, Capital Dynamics (Australia) Ltd continues to maintain the high cash level of your fund. Is this right?

Patience is more than inactivity; it is working diligently without being anxious. Although constantly on the lookout for new opportunities, Capital Dynamics (Australia) Ltd needs to have the patience to wait for the right investment to fall into the right price range.

Unfortunately, many amateur and professional investors succumb to all sorts of pressure to avoid subpar quarterly performance or personal pressures to avoid the feeling of being left out as the market surges. They make the classic mistake of seeing investment opportunities because they want it to be there, not because they’re actually there.

An investor who has fallen into this trap, in other words, will start to gradually twist the facts, skew his own perception of the situation, and even erode his own standards for investment, just to make that investment opportunity available.

In this day and age, patience is in short supply now, which is precisely why it is a valuable core strategy. As we wait, it is interesting to note that the Oracle of Omaha, Warren Buffett, is getting hit in the Tesco debacle, having lost over US$700 million on his US1.7 billion investment, which was made in 2007. 

What is not known to many, however, is the fact that Capital Dynamics (Australia) Ltd sold all of your fund’s holdings in Tesco Plc way back in 2011. Less than a year later, Tesco dumbfounded investors by issuing a profit warning for the first time in 20 years, and reported a decline in annual profit last year. While not a massive $320 billion global conglomerate and lacking the resources and manpower Buffett has, Capital Dynamics (Australia) Ltd, a relatively small investment firm, is proudly rooted in Asia but with a global perspective and capabilities.


The NAV and distribution history of i Capital International Value Fund can be viewed at www.capitaldynamics.com.au or www.funds.icapital.biz.


Those who invested in this fund would have received this report.

A Very Simple and Effective Approach to Investing.

From Detergent To Driverless Cars: Stock Picking Lessons From 60 Years On (And Off) The Street

Investors, entrepreneurs and financial journalists alike are obsessed with what the rise of the Millennial generation will mean for the future of money. Yet, a conversation with an industry veteran served as a reminder that looking back can be just as important as looking forward — even in stock picking.

Gail Winslow has worked in the wealth management industry for 59 and 1/2 years — “to be exact.” She got her start as a Girl Friday — a term coined in 1940 for what we now know as an executive assistant. A Radcliff educated go-getter, Winslow quickly tired of “doing all the dirty work” at D.C. based Ferris and Company so six months in she became a Registered Representative of the New York Stock Exchange. Today, Winslow is 84 and manages close to $200 million worth of assets at RBC Wealth Management, mostly working with clients nearing retirement age (though Winslow proves that is not always synonymous with nearing retirement).

A lot has changed during her six-decade career. To name just one: the S&P 500 finished 1955 at 45.5 points. This summer it crossed 2,000 for the first time. Nevertheless, when choosing stocks Winslow continues to depend on a few faithful principles she learned long ago – many of these drawn from unexpected sources like her mother-in-law, the hair care aisle of the drug store and her washing machine.

Sometime in the early 1960s Winslow called her mother-in-law to suggest she sell some stock. The market was getting “toppy.” Her mother-in-law pulled out her portfolio and asked, “Do you think Chase Manhattan is going to cut their dividend?” Winslow said no. “Do you think General Motors is going to cut their dividend?” No again. They went through every holding before the older woman declared, “I think I’ll just continue to hold.”

(For what it is worth, in 2000, Chase merged with J.P. Morgan, forming mega bank JPMorgan Chase. The company still pays a dividend; its most recent payout was 40 cents a share. For its part, General Motors cut its long standing dividend in June 2008 part of an attempt to save money before its 2009 bankruptcy. A quarterly dividend was reinstated earlier this year at 30 cents a share.)

Looking back, Winslow says in that moment she learned that income is the difference between a speculator and an investor. “Investors say they want their stocks to go up,” says Winslow, “but they really don’t want them to go down.”

Winslow knew innately that women of the day were largely conservative, and with just one other female in the office, found herself uniquely qualified to help Washington’s high power women — researchers at the National Institute of Health, high ranking women in the military and wives of Senators (the nation had just one female senator in the 1960s). “They didn’t want to lose what they had. So I dealt early on with large American corporations that had proven track records.”

When Winslow got her start members of the Baby Boomer generation (born 1946 to 1964) were entering their teenage years. They liked, “Toni Home Permanents,” – hair perms – “bathing suits, potato chips, Frito Lay and Gillette.” Products, she says, that mothers were buying for their teens or helping them use. With 10,000 Baby Boomers now turning 65 each day Winslow is drawn to health care stocks and senior housing REITs.

These days Winslow also looks to the generation of 80 million born after 1980 for inspiration – the Millennials. With Millennials reluctant to purchase homes, Winslow is wary of housing stocks but intrigued by the rental industry. Pointing out that in her day “you put a cigarette in your mouth at 14,” she notes that young people today are health conscious, so avoids cigarette companies and looks to food companies that seem to be taking advantage of trends toward nutritious and natural.

Another thing Millennials love? Technology — and Winslow is a fan too. She has held Intel, Microsoft and IBM for decades. Apple has been in her portfolio for 15 years. (Apple shares are up 3,600% since September 1999.) Winslow is currently intrigued by driverless cars and other technologies that improve safety. For Winslow though, technology does not include just computer companies and complex software.

"Early on in the 50s new products came out and many of them were products used by women in the home – including detergent,” recalls Winslow. “Before that we used ivory soap which we squashed around and which left scum. When Tide came out I thought, ‘wow, is this great.’”

While she is still a fan of dividend payers for her contemporaries, she tells her grandchildren and their fellow Millennials to look for stocks with increasing earnings. Management, she says, should be investing profits back into company growth rather than paying out a high percentage in dividends.


An article from Forbes

http://www.forbes.com/sites/samanthasharf/2014/07/30/the-recession-generation-how-millennials-are-changing-money-management-forever/

A Warren Buffet styled “Investment checklist”

A Warren Buffet styled “Investment checklist” 

http://davidparmenter.com/files/buffet-checklist-v4.pdf

A Warren Buffet styled “Investment checklist”
Business tenets
1. Is the business understandable?
2. Do you know how the money is made?
3. Does the business have a consistent operating history?
4. Does the company have favourable long term prospects?
5. Is there a big moat around the business (a high threshold of entry) ?
6. Is it a business that even a dummy could make money in?
7. Can current operations be maintained without too much needing to be spent?
8. Is the company free to adjust prices to inflation?
9. Have you read the annual reports of the main competitors?

Management tenets
10.Has the management demonstrated a high degree of integrity (honesty)?
11.Has the management demonstrated a high degree of intelligence?
12.Has the management demonstrated a high degree of energy?
13.Is management rational?
14.Is management candid with shareholders (evidence in the past of open disclosure to the shareholders when there have been problems)?
15.Has management resisted the temptation to grow quickly by merger?
16.Has management the strength not to follow the institutional imperatives ( avoid following current business and sector fads)?
17.Has the business been free of a major merger in the last 3 years ( many merger failures come out of the woodwork within this period) ?
18.Are stock options tied to SMT performance rather organisation’s performance (if your team wins you do not pay a .35 hitter the same as a .15 hitter.) ?
19.Are stock options treated as an expense?
Financial tenets
20.Is the return on equity adequate?
21.Is the company conservatively financed?
22.Has the company had a track record of earnings growth in most years above the stock market average?
23.Are the profit margins attractive (better than industry)?
24.Has the company created at least one dollar of market value for every dollar of earnings retained?
Value tenets
25.Is the value of discounted earnings greater than the current market value?
26.Have you discounted at a rate equal or greater than the 10 year bond rate (risk free rate) ?
27.Have cash flows been based on net income, plus

depreciation, depletion, and amortization, less capital expenditure and additional working capital requirements?

28.Has the company been temporarily punished for a specific risk that is not a long term risk (the market tends to over punish the share price)?

Warren Buffett on The Dangers of Timing the Market

Warren Buffett Tells You How to Turn $40 Into $10 Million

By Patrick Morris 

Warren Buffett is perhaps the greatest investor of all time, and he has a simple solution that could help an individual turn $40 into $10 million.

A few years ago, Berkshire Hathaway CEO and Chairman Warren Buffett spoke about one of his favorite companies, Coca-Cola, and how after dividends, stock splits, and patient reinvestment, someone who bought just $40 worth of the company's stock when it went public in 1919 would now have more than $5 million.  

Yet in April 2012, when the board of directors proposed a stock split of the beloved soft-drink manufacturer, that figure was updated and the company noted that original $40 would now be worth $9.8 million. A little back-of-the-envelope math of the total return of Coke since May 2012 would mean that $9.8 million is now worth about $10.8 million.

The power of patience

I know that $40 in 1919 is very different from $40 today. However, even after factoring for inflation, it turns out to be $540 in today's money. Put differently, would you rather have an Xbox One, or almost $11 million?

But the thing is, it isn't even as though an investment in Coca-Cola was a no-brainer at that point, or in the near century since then. Sugar prices were rising. World War I had just ended a year prior. The Great Depression happened a few years later. World War II resulted in sugar rationing. And there have been countless other things over the past 100 years that would cause someone to question whether their money should be in stocks, much less one of a consumer-goods company like Coca-Cola.

The dangers of timing

Yet as Buffett has noted continually, it's terribly dangerous to attempt to time the market:

"With a wonderful business, you can figure out what will happen; you can't figure out when it will happen. You don't want to focus on when, you want to focus on what. If you're right about what, you don't have to worry about when" 

So often investors are told they must attempt to time the market, and begin investing when the market is on the rise, and sell when the market is falling.

This type of technical analysis of watching stock movements and buying based on how the prices fluctuate over 200-day moving averages or other seemingly arbitrary fluctuations often receives a lot of media attention, but it has been proved to simply be no better than random chance. 

Investing for the long term

Individuals need to see that investing is not like placing a wager on the 49ers to cover the spread against the Cowboys, but instead it's buying a tangible piece of a business.

It is absolutely important to understand the relative price you are paying for that business, but what isn't important is attempting to understand whether you're buying in at the "right time," as that is so often just an arbitrary imagination.

In Buffett's own words, "if you're right about the business, you'll make a lot of money," so don't bother about attempting to buy stocks based on how their stock charts have looked over the past 200 days. Instead always remember that "it's far better to buy a wonderful company at a fair price."

http://www.fool.com/ecap/the_motley_fool/homerun-warren-buffett-tells-you-how-to-turn-40-2/?paid=7283&psource=esatab7410860090&waid=7284&wsource=esatabwdg0860078&utm_source=taboola&utm_medium=referral

Here's the truth: The last five years will probably be the best five-year period you'll ever experience as an investor.

Investors have been in denial for five years. Stocks went up 26% in 2009, but two-thirds of investors thought they fell. Stocks rose 15% in 2010, but half of investors said they went down. Stocks rose in 2011, yet more than half of investors said they declined, according to surveys from Franklin Templeton.

Volatile… but normal

Last year, Gallup showed that the average American thinks very little of the stock market. Only one-third agreed that it was an "excellent/good" way to grow assets. Millenials use words like "casino," "rigged," and "crapshoot" to describe stocks.

But if you calculate every five-year period since 1871, the last half-decade ranks as the fourth-best time to have been in an investor. Adjusted for inflation, the S&P 500 gained more in the last five years than it did from 1995 to 2000, during the roaring bull market of the 1990s. The difference is, back then, investors were obsessed with the market's gains. Today, they're oblivious.

Here's the truth: The last five years will probably be the best five-year period you'll ever experience as an investor. The last decade has been average. If you've struggled through this period, or keep telling yourself that buy and hold doesn't work, or that the market is a scam, it's your own fault. Stocks have done over the last decade what stocks have done for countless decades: offered a pretty decent return with lots of volatility mixed in the middle.

The fact that the average investor has been oblivious to this progress shows that the average investor is participating in a game he or she does not understand and doesn't agree with. That's unfortunate. But it means there's a simple answer to all the stories you hear about investors not trusting the market: the market isn't the problem. You, and your expectations, are the problem. You are your own worst enemy.

Read more: http://www.smh.com.au/business/motley-fool/investing-are-you-the-problem-20140902-10bchy.html#ixzz3CS9ir57I

Your Financial Psychology Determines Your Financial Success

Louis G. Scatigna, CFP | Wednesday, August 27, 2014

Nothing makes people crazier than money: not love, politics, sex, or religion. The smartest, most levelheaded people can suddenly become totally irrational when money is involved. For example, when it comes time to pay the check, the wealthiest, most extravagant people may calculate their shares down to the last penny.

Our financial psychology determines how we deal with money. It’s important to understand this about ourselves because it will provide greater insights into why we handle our money as we do. People tend to make more financial mistakes as a result of their feelings about money than they do because of the financial realities involved.

Diagnosis
Essentially, we all fall into one of 2 basic financial psychologies. We may be mild or extreme cases, but we all tend to fit in one of the following categories. They are:
 

Attitude of abundance
Believing that we have or will always get whatever we need to live a good life and to support our families and ourselves. Those who have an attitude of abundance feel that the world is filled with opportunities and possibilities.

I have clients who have little money and don’t seem concerned. They never complain about finances, live comfortable lives, take frequent vacations and are generous. They seem to feel that everything will be fine and that somehow they’ll get whatever they need.

Attitude of lack
Believing that you may not have or be able to get whatever you need. I also have clients who are millionaires and have an attitude of lack. They’re always concerned that they won’t have enough.

Many of them are tightwads, compulsive savers who are always worried that they may lose what they have. Most of these people grew up in difficult financial conditions that left a lasting impression they can’t shake.

The way we relate to money has more to do with our attitude about life in general than how much money we have. Our feelings of abundance or lack do not correlate to how much we actually have, but our financial state of mind.

So what are the symptoms of each financial psychology?
 Those in the abundance camp tend to invest rather than save. They are not always looking for guaranteed or safe investments and are more prone to taking risks. They feel that if they lose money, they can always make it back. People with an attitude of abundance usually live better lifestyles and fuller lives. They are not averse to spending their money to buy the good things life has to offer and don’t waste much time worrying about the stock market, their mortgages and money in general.

Conversely, people with an attitude of lack are always worried that they won’t have enough. Deep down, they’re afraid that they might have to struggle so they sock money away to make it through those difficult times. People with an attitude of lack tend to be savers rather than investors. They would be devastated if they lost any money since they only have a finite amount. They like to stockpile their money and avoid risk, so they put their money in the lowest yielding, but safest vehicles.

The groundwork for our attitudes toward money is laid in childhood. We are strongly influenced by our parents’ attitudes and their fears, as well as our family’s financial status. “Depression Era” children, whose parents struggled to put food on the table, naturally have different attitudes toward money than children who grew up in affluent environments.

Many of us have also been influenced by how we saw our friends, family, and neighbors deal with money. We wanted what they had and wanted to live like they did, so we adopted their attitudes and tried to copy their behavior. They became our role models.

Unfortunately, many people sabotage their financial futures. Spendaholics, who get a rush from spending money, feel better when they do so. In some extreme cases, the only time certain people feel good is when they’re spending.

Our psychology affects how we invest. Some of us are high rollers (always willing to shoot for the moon in the hopes of making a big score), while people at the other end of the spectrum are the squirrels (frightened investors so afraid to lose money they own the most conservative investments that bear the smallest returns).

Which are you? Here are some of the most common profiles. See where you fit.
 

The High Roller
Thinks that everything in life is a gamble. Wants big returns in a short period of time. Uses high-risk investment strategies and is always looking to hit the jackpot.

Usually, incurs big losses since his or her investments lack good diversification and asset allocation. Gets bored with conservative, long-term investments and tends to speculate in individual stocks, commodities and real estate.

The Abdicator
Has little or no interest in managing money. Frequently, women who know nothing about investments, but also includes men. Prefer to have someone else handle their money and will usually do what their financial advisors suggest.

Trusting and often surprised when they lose money. They are frequently taken advantage of by unscrupulous characters.

The Credit Junkie
Addicted to acquiring things rather than to building their wealth. They are usually in denial regarding their addictive spending. Tend to carry big credit card balances, drive nice cars purchased with large loans.

Since much of their income goes toward debt payments, they have little savings or net worth. They wonder why it’s so hard to get ahead while they sabotage themselves through needless, compulsive spending.

The Money Master
Like the fitness freak who spends all his or her time in the gym, the Money Master is obsessed with money management. Is well educated in all money-related matters, tends to avoid others’ advice and takes full control of his or her investments.

Employs risk controls, but isn’t fearful of investing money in a diversified investment portfolio. Reaches financial goals, but also enjoys his or her money success by living an abundant and balanced life.

The Squirrel
Savers who are as conservative as they come. They don’t overspend and they live frugally. Squirrels operate with an attitude of lack because they fear they will never have enough money.

Usually most or all of their money is in banks and treasury bills. Willing only to get low returns because they find the stock market way to risky and are deathly afraid of losses. Since they get such low returns, they have trouble keeping pace with inflation.

The way we relate to money is a learned behavior that is hard to change. And when it comes to money, people tend to go to extremes. Some spend their working years saving for retirement, but when they retire, they won’t spend any of it — even the interest generated by their savings and investments. Others spend freely and then have nothing left.

- See more at: http://www.hcplive.com/physicians-money-digest/blogs/the-financial-physician/08-2014/Your-Financial-Psychology-Determines-Your-Financial-Success?utm_source=Informz&utm_medium=PMD&utm_campaign=PMD+8%2D28%2D14#sthash.knIrgN3T.dpuf

What a Pump and Dump Looks Like

How to avoid the pump and dump
When a company is promoting a low-priced stock with low trading volume, it's a sure sign that it's a pump and dump.

Some investors think they, too, can benefit from the scam by buying the stock on its way up, then selling before the dump. The problem is that you don't know when the crash will come and you will likely be caught in the trap. 

- See more at: http://www.hcplive.com/physicians-money-digest/investing/IU-Have-You-Been-Pumped-and-Dumped?utm_source=Informz&utm_medium=PMD&utm_campaign=PMD+8%2D19%2D14#sthash.WLmYizQr.dpuf


http://www.wealthdaily.com/report/anatomy-of-a-pump-and-dump/81g

Warren Buffett's Bear Market Maneuvers

Buffett's strategy for coping with a down market is to approach it as an opportunity to buy good companies at reasonable prices. Buffett has developed an investment model that has worked for him and the Berkshire Hathaway shareholders over a long period of time. His investment strategy is long term and selective, incorporating a stringent set of requirements prior to an investment decision being made. Buffett also benefits from a huge cash "war chest" that can be used to buy millions of shares at a time, providing an ever-ready opportunity to earn huge returns.


http://www.investopedia.com/articles/stocks/09/buffett-bear-market-strategies.asp?rp=i&utm_source=coattail-buffett&utm_medium=Email&utm_campaign=WBW-8/14/2014

A lesson in risk control

On April 28, there were four listed stocks on Bursa Malaysia that fell dramatically and devalued by 50 to 80 per cent in during two market days.

They were; Vis, Mnc, Itronic and Solution companies. This incident was similar to Singapore’s stocks such as LionGold, Asiason, Bluemont companies that plunged more than 80 per cent in markets values during October last year.

Sad to say, many investors still fell into the trap and incurred huge losses! After the ‘Black Monday’, many remisers, stock brokers, account executives, retail traders and even proprietary trading groups reported their losses from each party ranging from few tens of thousands to few millions of ringgit. Following that, some salaried staffs in the industry lost their jobs while some self-employed remisers lost their careers.

Amid the rout, many losers began to look for loan draft; some are ready to file bankruptcies while a minority have disappeared! Honestly, I have seen this situation in late 80s when I first entered the industry.

I saw that again in mid 90s when Singapore and Malaysia equities plunged, then followed by 1997 Asian financial crises.

In late 2001, the same situation occurred after the September 11 terrorist attack that rattled the global stock markets.

In 2008, the subprime crisis again dragged down global equities while everyone still enjoyed the high inflation growth.

Somehow, people always regretted when the worst things had happened. Prior to this situation, those who made handsome profits during ‘peaceful time’ would say I have been too ‘naggy’ and persistent about emphasising on risk management.

Perhaps, they felt like being cautious on risk control would hamper their trading growth! Nevertheless, it is true that the inefficiency of risk management is always the prime factor that brought these people down to their knees whenever there is a ‘Black Swan’ day! In my opinion, the easiest protocol is to cut losses like a robot whenever your stock falls by 10 per cent in value from your entry price.

If you want to be stubborn, then let the final 15 per cent value be your last gateway to remove your losses! For financial brokers, use this as a benchmark to check your clients on a daily basis.

Otherwise, the risk is too high to take on clients’ ignorant losses onto your back and erase your trading limits in the business.

Once, a senior had told me: If you think education from an experienced mentor is expensive, then try ignorance! To end this message, of course I totally agree with this statement! ~

DAR Wong is an approved Fund Manager in Singapore with 25 years of trading experiences in global financial markets. The expressions are solely his own.

theborneopost.com/2014/05/10/a-lesson-in-risk-control/