大提琴家的股市投资笔记 / The Cellist's Share Investment Note

Wednesday, 11 September 2019

What is Financial Education(3) : LEARN THE LANGUAGE OF MONEY

I don't provide any buying/selling suggestion above,

please make your own investment decision and be responsible with it.

Recent articles :
PANAMY latest annual financial report
HARTALEGA latest annual report+quarter report
What is Financial Education(2): CHOOSE YOUR TEACHERS WISELY
What is Financial Education(1): ATTITUDE
TOPGLOV latest financial result

Other links:

Monday, 29 July 2019

What is Financial Education(2) : CHOOSE YOUR TEACHERS WISELY

Disclaimer : I wrote this article after reading <<Why The Rich Are Getting Richer>> by Robert Kiyosaki, so I referred to the book a lot.

Today let's continue to talk about the important aspects in REAL FINANCIAL EDUCATION.

Previously,
I mentioned that the first important aspect is "ATTITUDE".
(LINK: http://thecellist-investment.blogspot.com/2019/07/what-is-financial-education1-attitude.html)

Now,
the second important aspect would be "CHOOSE YOUR TEACHERS WISELY".

HUH?
What??
We need to learn how to choose a teacher?

YES!
OF COURSE!!!

Just take a look at ourselves,
from as a child until now,
we had how many chance to be able to choose our own teacher?
We have how many experience of choosing a teacher?

Especially during our time in school,
all the teachers were arranged by the school,
we had ZERO CHOICE.

Thus,
we ended up graduating from school without knowing how to choose a teacher,
and came to this society which full of all kinds of different "TEACHER",
do we really have the ability to differentiate and know how to choose a TEACHER wisely?

Frankly speaking,
I personally think that it is inhuman to take away the rights of the students in choosing their own teacher during school time.

This is because there are so many teachers in the world,
thus the quality of the teachers are definitely different,
and different teacher might be suitable with different student.

Some students are not doing good at school thus being labelled as "stupid",
but maybe those students just didn't have the chance to meet the teacher who is suitable for them?
Didn't we heard before that some students having better result after meeting the suitable teacher?

"Being not able to choose your own teacher" which I think is one of the lacking of today's education system.

That's why,
I personally think that the concept of KHAN ACADEMY is very good.

I remember that I watched one of the TED TALK by the founder of KHAN ACADEMY,
one of his purpose is to have the top teachers in the world to upload their teaching video at internet,
so that all the students will be able to choose the video by their favorite teacher to watch.

Thus,
students will be able to choose their own teacher instead of letting the school to assign them an unsuitable teacher.

SO...................
What this has to do with INVESTMENT?

As you can see,
nowadays there are a lot of "investment guru".

HOWEVER,
how many of the gurus are actually teaching about investment?
How many of them are just salesman?
How many of them are just trying to persuade you to hand over your money to them?

Before you decide to follow a certain investment guru,
did you spend time to study the investment background of the guru?
Is there any possibility that the guru is just a "lucky winner of rock paper scissor game"?

You might ask,
what is "lucky winner of rock paper scissor game"?

Okay,
first we gather ten thousand people for a "rock paper scissor game" contest,
at the end definitely there will be a champion.
The question is...............
is the champion really good at "rock paper scissor game" or he was just lucky?

In terms of probability,
we are "NOT SURE".
We can't conclude anything about the champion by just one contest only.

The problem now is,
after the champion won the contest,
he started to publish his book <<How I defeat 9999 people in rock paper scissor game>> and even started to held classes to teach about how to win in "rock paper scissor game",
he started to gain a lot of supporters and followers.

In order to truly find out whether or not the champion won the contest because of pure luck,
we have to let the champion to join a few more "rock paper scissor game" contest,
if every time also the champion won,
then only we can conclude that the champion is really good at "rock paper scissor game" and not because of luck.

THUS,
we need to know how to analyze whether the guru is actually really good at investing,
or the guru just had a good luck in buying a shares which the price skyrocketed.

It is very important to choose a teacher wisely,
because our mind is the most important asset.

Thus,
we have to be careful when trying to install any teaching into our mind,
and do not let our mind be controlled by the "FAKE GURU"!

So as to investment,
so as to other aspects of life.

The 2nd important aspect of Financial Education,
is "CHOOSE YOUR TEACHERS WISELY".

I will talk about the third aspect next time.

Thanks for reading.

I don't provide any buying/selling suggestion above,

please make your own investment decision and be responsible with it.

Recent articles :
What is Financial Education(1): ATTITUDE
TOPGLOV latest financial result
AEONCR AGM 2019+latest quarter financial result
My investment result for 1st half year 2019
Those who don't like to LEARN about investment

Other links:

Saturday, 20 July 2019

What is Financial Education(1) : ATTITUDE

Disclaimer : I wrote this article after reading <<Why The Rich Are Getting Richer>> by Robert Kiyosaki, so I referred to the book a lot.

I always mentioned about "FINANCIAL EDUCATION" in my previous articles,
but...............

What exactly is FINANCIAL EDUCATION ?

In the book I mentioned above,
author Robert Kiyosaki said that the Financial Education is not just learning some economic theories or learning how to balance account,
it involves a lot more.

The very first should be taught in Financial Education,
is..........
ATTITUDE.

ATTITUDE towards MONEY.

When talking about money,
some people's attitude is like "I have no interest at money."
"I don't care about money."
"Life is so short, we should just enjoy our lives."

The problem is,
those who spoke like the above examples,
are spending a lot of hours a day to earn money,
they spent most of their lives on something that they said they don't care about,
is it that they really don't care?
Or are they not telling the truth?
Are they lying to themselves?

Apart from that,
some people just like to say:"Oh, this is too expensive, I can't afford it."
Then they give up and stop thinking about it.

The author always encourages us to change our way of thinking,
instead of saying "I can't afford it".
we should say "How can I afford it",
so that we will start to operate our mind to find a way to have the money to buy what we want.

This is not just about money,
we should have this mindset in other aspects of life as well,
we human improved by started to think "HOW?",
that's why our lifestyle become so convenient nowadays,
and no more living in the cave.

Also,
our attitude toward the rich people.

Do you think that all the rich people gotten rich by doing something illegal?
Or do you think that all the rich people are crooks?

If someone hate the rich people,
do you think that that person will work hard to be the person he/she hating?
Or even he/she successfully became the person he/she hating,
will he/she has a happy life?

Lastly,
the attitude of thinking that government will take care of us.

Some people still think that they have no money because of the government,
not their own problem,
then they gotten excited to vote to change the government,
and hoping that the new government will take care of them.

Just like what I wrote in <<Enjoy Being The Victim>> article at 22th July year 2018,
now a year has passed,
did your lifestyle improve?
do you have more money now?

THE ATTITUDE DECIDES EVERYTHING.

Thus,
the first thing need to be in Financial Education,
is to learn about ATTITUDE.

I will talk about the second thing next time.

Thanks for reading.

I don't provide any buying/selling suggestion above,

please make your own investment decision and be responsible with it.

Recent articles :
TOPGLOV latest financial result
AEONCR AGM 2019+latest quarter financial result
My investment result for 1st half year 2019
Those who don't like to LEARN about investment
PANAMY latest financial result

Other links:

My investment return for year 2016

Saturday, 22 June 2019

Those who don't like to LEARN about investment

What do you feel when someone told you that you need to "LEARN" about investment?

Do you,
or anyone around you will feel headache when someone mentioned about "LEARNING" how to invest?

Or in general,
do you feel headache about "LEARNING"?

Now,
let's imagine a scene about how you "LEARN" something............
3............
2............
1...........

If in your imagination,
the scene of "LEARNING" is where a bunch of students sitting in a small classroom,
listening to the words of the teacher in front,
but the minds are wandering at somewhere else,
then you may have some misunderstanding about "LEARNING".

For me,
the scene mentioned above is not "LEARNING",
it is just "INSTALLING",
which is also a "EFFECTLESS LEARNING"

That's why,
I never say:"You can't learn well."
Instead,
I say:"It didn't install correctly."

The most obvious example,
are students who do not have good result at school,
but they are able to master some other things very fast!

No wonder there is a quote saying:
"I NEVER LET MY SCHOOLING INTERFERE MY EDUCATION."

I learnt before that a REAL EDUCATION should be able to fulfill this 4 missions:
1) INSPIRE
2) ENCOURAGE
3) EMPOWER
4) ENLIGHTEN

INSPIRE,
REAL EDUCATION should touch the student's spirit,
HOWEVER,
most of the students lost their spirit at school.

ENCOURAGE,
REAL EDUCATION should help the students to be able to overcome their fear and doubt,
HOWEVER,
most of the students lost confident and started to question, to doubt about themselves at school,
they are DISCOURAGED at school.

EMPOWER,
REAL EDUCATION should help the students to be able to act and make a difference in the world,
HOWEVER,
most of the students are afraid to act,
and only blaming the world instead of trying to make a change.

ENLIGHTEN,
REAL EDUCATION should help the students to stay curious and attach to lifelong learning,
HOWEVER,
the curiosity of most of the students are killed at the school,
and they thought their learning has ended after getting a paper of certificate from college or university.

Oh,
maybe you will say that my children are doing well in school,
they love to go to school,
they receive A for every subject,
they completed their PHD,
they are hired as CEO in multinational company,
their salary is high,
they even receive ESOS from company and do not need to put so much effort to invest at shares market.

Well,
congratulations to you because your children are the top 20%,
the minority who are able to do well in the school system.

HOWEVER,
how about the remaining 80%?
How about those who do not do well in the school system?
How about those who do not fit into the current education system?
How about those who is not suitable with the "EFFECTLESS LEARNING"?

In Maths textbook,
we still can see some questions like how much our money will become after saving at bank for 1 year at the annual interest rate of 8%?
Or how much is the housing price after 25% discount if the original price is RM50,000 ?
The questions which do not match with the reality.

In school,
there are Maths teachers who do not understand how did the formula come from,
and just telling the students to memorize the formula blindly.....

By long term going through the process of "EFFECTLESS LEARNING",
no wonder everyone will feel headache when they hear the word "LEARNING",
some even HATE "LEARNING".

The thing is,
what they are hating...........is the "EFFECTLESS LEARNING",
the true reason of feeling headache is because of "EFFECTLESS LEARNING".

Please think again,
Which exactly you hate?
"EFFECTLESS LEARNING" or "TRUE LEARNING"?
Which one is making you reluctant to LEARN?

This article,
is for those who hate and reluctant to LEARN.

Thanks for reading.

I don't provide any buying/selling suggestion above,

please make your own investment decision and be responsible with it.

Recent articles :
PANAMY latest financial result
AEON AGM+latest quarter financial result
The PHANTOM INCOME from shares investment

HARTALEGA latest quarter financial report

Other links:

List of articles of year 2018
List of articles of year 2017

Wednesday, 29 May 2019

The PHANTOM INCOME from Shares Investment

CAUTIOUS : I will talk about borrowing money for investment in this article, so if DEBT is your number ONE enemy, please read no further and just close this article.

At May year 2018,
I wrote an article with the title <<The cost of investment is much higher than we thought>>,
sadly that a lot of people didn't understand what I wanted to mention in that article.

I gotten the idea for that article while I was reading a book with the title of <<WHY THE RICH ARE GETTING RICHER>> by author Robert Kiyosaki,
recently I finished reading the whole book while on the plane,
so I decided to re-write the article.

Robert Kiyosaki used examples of property investment in his book,
and mentioned a lot of "DEBT & TAX".

At here I will use shares investment as example,
and the DEBT is SMF account (Shares Margin Financing Account),
basically is borrowing money to invest at shares.

I will use NESTLE as example since the shares price is around RM146,
so we can just assume it to be RM150 for easier calculation.

Please be reminded that,
the calculation below are all simplified,
if you want to know more details,
please ask the banker who in-charge of SMF account.

BASICALLY,
there are 3 types of PHANTOM INCOME that we can obtain from shares investment.

1ST,

For someone without SMF account,
if the person wishes to buy 1 lot of NESTLE,
then is 100xRM150 = RM15,000.
(Assuming shares price is RM150 for easier calculation.)

If that person earned RM15,000,
will that person be able to buy 1 lot of NESTLE?

If that person really did it,
then government staff will come and find that person,
since that person didn't submit the income tax!!!

Let's say the income tax bracket is 25%,
then the actual income of that person will be just 0.75xRM15000 = RM12,500 only.
Will that person still able to buy 1 lot of NESTLE?

OF COURSE NO!!!

So how much that person should earn to be able to buy NESTLE?

Then answer is RM20,000.
since 0.75xRM20000 = RM15,000.

So that person need to earn RM20,000,
submit RM5,000 for income tax,
then only can invest at NESTLE with the remaining RM15,000.

As a conclusion,
the cost of NESTLE is actually RM20,000!

This is also the thing I tried to mention in my old article,
the cost that everyone didn't think about it.

With SMF,
then things will be different,
since I can just borrow RM15,000 to buy 1 lot of NESTLE.

In another words,
I don't need to earn RM20,000,
then don't need to submit income tax of RM5,000 just to own 1 lot of NESTLE.

The cost of investing at NESTLE with cash is RM20,000,
but the cost of investing at NESTLE with debt is just RM15,000.

The RM5,000 and the time I saved,
are all the PHANTOM INCOME.

2ND,

If last time we bought NESTLE at RM50 with cash,
currently almost RM150,
but the only way to use that money we earned for other investment,
is to sell it.

But things will be different if using SMF,
after NESTLE rose to RM150,
then my debt ratio decreased a lot,
thus I can withdraw some money from SMF account for other investment,
or buy more shares.

I am able to make sure that I keep my current asset without selling it,
then I can invest at more assets for more income,
thus this is another type of PHANTOM INCOME.

3RD,

When shares price of NESTLE was RM50 last time,
if we buy 10 lot with cash,
then every year we will receive RM2000 as dividend.

Thus in order to buy 1 more lot of NESTLE,
we need RM5000,
so we need to collect dividend for the next 2-3 years.

HOWEVER,
after 2-3 years the shares price of NESTLE already around RM70,
can't buy it with just RM5000....

Maybe you will say that the dividend will increase every year,
but don't forget that if the dividend increase,
the shares price will increase too.

Is different if we use SMF account since we don't have to wait another 2-3years and we can just borrow money to buy that 1 lot of NESTLE,
after collecting dividend for 2-3 years,
we not only can pay off the debt,
but we also own 1 more lot of NESTLE which the shares price is around RM70,
thus this is another type of PHANTOM INCOME.

That's all I wanted to share today,
but even though I mentioned about DEBT a lot,
I do not encourage everyone to straight away apply a SMF account and borrow money to buy shares,
same like Robert Kiyosaki also doesn't want all his readers to straight away borrow money and invest at property blindly.

The most important thing is,
do we have the sufficient financial education to help us in investment?

Also,
financial education is not about learning some economic theories or learning how to balance a checkbook,
the REAL FINANCIAL EDUCATION involve a lot of other aspects too,
if not the richest man in the world should be economist or accountant already.

Thanks for reading.

I don't provide any buying/selling suggestion above,

please make your own investment decision and be responsible with it.

Other links:

My Facebook Page
List of articles of year 2019

Saturday, 13 April 2019

One of my investing theorem -- "The SHIT Theorem"

If you always read my articles,
I think you already realized that I every time will put this sentence at the end of my articles:
"Investment is about doing own thinking, making own decision."

Last time when I was very active at Investalks forum,
there were many users kept asking me for investment advice,
for example:
"What do you think about this company?"
"Shall I buy this company shares?"
"Can you help me to have a look at this company?"
"Should I borrow money to invest?"
and bla bla bla...........

That's why,
I came out with "The SHIT Theorem".
(Please beware if you are eating.)

"I can't give comment,
I am not YOU,
I am not GOD,
I don't know anything about you,
so I don't know what is suitable for you.

Actually INVESTING is very PERSONAL,
YOU make your OWN DECISION,
YOU take FULL RESPONSIBILITY of it.

For example.....

If you want to shit,
will you ask other people: "Hey, do you think I should go shit?"

After shit, remember to flush.

If you didn't shit nicely,
and the shit is everywhere inside the toilet,
please be responsible and clean it,
don't hope for other people will clean it for you,
and don't blame other people for not making the hole big enough...."

For me,
INVESTING is very PERSONAL,
same like whether to shit or not is also very personal,
so please do your own thinking, and make own decision.

If you lose money at investment,
do not hope that other people will save you,
and do not go and blame other people for causing you to lose money.

Same like when you didn't shit properly and your shit is everywhere in the toilet,
do not hope that other people will clean it for you,
and do not blame that there is problem with the construction of the toilet.

That's all for "The SHIT Theorem".

Investment is about doing own thinking, making own decision.

Thanks for reading.

I don't provide any buying/selling suggestion above,
please make your own investment decision and be responsible with it.

Recent articles :
TOPGLOV latest quarter financial report
My investment return for 1st quarter 2019
AEON latest quarter financial report
HARTALEGA latest quarter financial report
AEONCR latest financial report

Other links:
My investment return for year 2018
My self-introduction article

Wednesday, 5 December 2018

My 3 weapons in shares market

You are recommended to read this:
Why did I use SMF for my investment
before reading today's article.

This article was originally written at between year 2014 and 2015,
and published at Investalks forum.

The original title was different,
because I was intended to calculate how much time I need to re-accumulate the wealth I was having if out of a sudden I lost everything.

After publishing the article,
I was reminded that actually if I try not to repeat doing the same thing,
it might be faster for me to re-accumulate my wealth.

Since the original title was not suitable anymore,
of course I need to think a new title.

After reading my article again,
I decided to title it as "The three weapons that boosted my speed of accumulating wealth at shares market",
to share with everyone how did I accumulate my wealth at shares market for the first 3 years of my investment life.

Of course,
it was all based on my personal experience,
I am not God,
so it doesn't mean my experience was the best.

As for the numbers used in the article,
just a reference,
doesn't mean it is real.

So...........
Let's begin:

In order to accumulate wealth faster,
the 1st weapon is high income.

At the start of my investment life,
I kept on searching for customers to increase my income,
so that I was able to save RM3500 every month.

The 2nd weapon is reasonable return of investment,
around 15% every year.

1st year,
if every month save RM3500,
after 12 months,
I will have 12xRM3500 = RM42,000.

This year even though I got shares investment,
but since my capital was still low,
so even a 15% return also not much,
can be ignored.

By having RM42,000 capital,
I can use the 3rd weapon which is SMF.
(SMF = Share Margin Financing)

SMF don't have to use so much,
just 30% is enough,
so around RM18,000.

As a result,
Asset=RM60,000.
Which RM42,000 is equity, RM18,000 is debt.

2nd year,
every month save RM3500 again,
so by adding another RM42,000...........

Asset = RM102,000.
Which RM84,000 is equity, RM18,000 is debt.

Then return of investment of RM60,000 from last year is 15%,
so is 0.15x60k = 9k, earned RM9000 from investment.

Thus,
Asset = RM111,000.
Which RM93,000 is equity, RM18,000 is debt.

By having more equity,
more SMF can be used,
but still maintain at 30% ratio,
so around RM22,000 from SMF.

As a result,
Asset = RM133,000.
Which RM93,000 is equity, RM40,000 is debt.

3rd year,
continue to save RM3500 every month,
so will have another RM42,000 capital, net worth 6 figures.

Asset = RM175,000.
Which RM135,000 is equity, RM40,000 is debt.

Then return of investment of RM133,000 from last year is 15%,
so 0.15x133k = 20k, earned RM20,000 from investment.

Thus,
Asset = RM195,000.
Which RM155,000 is equity, RM40,000 is debt.

Since already have RM195,000,
so another RM5000 from SMF,
it will become RM200,000.

If want to continue to accumulate more wealth,
SMF 30%,
another RM25,000 can be used from SMF.

As a result,
Asset = RM220,000.
Which RM155,000 is equity, RM65,000 is debt.

During the early days of my investment,
I used high income, reasonable shares investment and SMF these 3 weapons to accumulate my wealth.

Of course,
this was my method,
it might not be suitable for other people.

Every month save RM3500??
A lot of people like to hypnotize themselves for not being able to do it.

SMF 30%??
A lot of people reject and scared of debt.

Investment return 15% ??
I guess a lot of people will accept this,
since there wasn't any bearish market lately,
and most of the people earned more than 15%~

That's all about my 3 weapons.

How many weapons are you holding to face the shares market?
Are those weapons really suitable for you?

Investment is about doing own thinking, making own decision.

Thanks for reading.

I don't provide any buying/selling suggestion above,
please make your own investment decision and be responsible with it.

Recent articles :
HARTALEGA latest financial report
Year 2018 version:the consequence of long term investment
AEONCR latest financial report
Waiting and waiting, when will the stock market crash?
AEON 2nd quarter 2018 financial report

Other links:
List of articles of year 2018
List of articles of year 2017
My investment return for year 2017
My self-introduction article