The Hengyuan price chart shows that it had gone up from about Rm 2.50 to close at above Rm 17, a rise of about 700 percent within 12 months. It has created a new record in the Malaysian stock market and no one has seen this new situation before.
As a result, many have reacted so foolishly. They have sold earlier to take profit because they believed profit is not a bad word.
What are they going to do when they see the price continues to shoot like missile?
Many egoistic investors will not eat a humble pie to buy back at a higher price than what they sold.
Only very few humble investors would dare to admit their mistake and buy back at higher prices.
As I said many a time, I am not good in day trading, sell high and buy back at lower prices. To do this style, I have to watch the price movement very closely and decide quickly. Since I am not good in day trading, I have formulated my selling principle. I will only sell when I see the company reports a reduced profit.
In the case of Hengyuan, it has not reported a reduced profit yet and I have not sold any of my holdings.
My golden rule:
By the way, I wish to tell you my golden rule for buying which I think cannot be found in any text book.
I will start to buy when I see the company reports a sudden increased profit in one quarter. I will continue to buy more shares if the company continues to report increasing profit by using margin finance.
In fact, based on the better crack spread in the 4th quarter, Hengyuan will most likely report increased profit. I will continue to buy on Monday even at above Rm 17.00 per share because I believe the price will continue to rise until the 4th quarter result is announced before end of February 2018.
I have used the same method to buy and sell Latitude, VS Industry and Lii Hen, each of them went up a few hundred percent within a couple of years. I am proud to say that I was the 2nd largest shareholder of each of the 3 companies.
I trust this article will help investors improve their technique to make more money.
http://klse.i3investor.com/blogs/koonyewyinblog/143359.jsp
