Wednesday, 2 March 2016

My History with Stocks

Gambling in Stocks

I mentioned in many previous posts that I do not invest in stocks. This does not mean that I have not bought stocks before. In fact, I used to gamble in stocks.

There are no proper records kept for my stocks gambling, as the results were bad. So I am trying to hide them under the carpet. Without proper record keeping, the history is now hazy to me.

In my first foray, after setting up a trading account with Philip capital, I proceed to try out my luck. The first stock I bought was Harry's as it was familiar. I recalled buying about 3000 units of it, at a total price of a few hundred dollars but eventually sold it at a loss. Undeterred, I went on to buy stocks like China Taisan, MIDAS, PEC, Banyan Tree, Jiutian Chemical, KS Energy, SGX and so on. The only stocks that I made money was China Taisan, KS Energy and SGX. The rest were sold at a loss. That was in 2011 when I just opened the brokerage account. Ask me again what did all these stocks do, and I'm quite clueless. The actual loss from all the above adventure is about $5000, I believe. As such, as I mentioned, I gamble in stocks.

Last year, when Genting Singapore fell below a dollar, I and gambled, buying it at $0.975. It didn't perform, and is today worth only $0.76. Paper loss, as I have not sold it.

I did not keep any record at all, as I did not want to be reminded of my misadventure. Well, and I don't deserve to do well in the gambles anyway, since the chance of winning a gamble is always low.

Starting with Record Keeping

One of the main aim of this blog is to keep a record of my CEO journey, and one of my department is the finance department. I have decided to start keeping records of my stocks trading, even if the results are bad. Since I do not have much records of the previous trades, I shall keep Genting Singapore as the first share in my record, with each stock recorded as follows:

Genting Singapore
Purchase Price: $0.975; Number of Units: 10,000
Total amount paid: $9783.38 (2015)
Total dividend received: $100 [$100 (in 2015)]
Total amount received from sale: Not sold yet
Profit/ Loss: Not sold yet

Why a decision to move into stock investing?

I want to make more money. With bonds, you only earn interest, and as long as the company remains solvent, your capital is intact. There is no capital appreciation.

For stocks you potentially get capital interest and dividends (though you can potentially lose your capital as well). 

But we all know that in general, stocks will give better returns than bonds in the long run, provided that one buys the correct stock. And since stocks can potentially give better returns than bonds, shouldn't I try to jump on this bandwagon?

Going Forward

No more stock gambling from me. I want to do my homework properly, and learn the ropes of stock investing. Hopefully, gain more knowledge, experience and wealth on such investments.

Wish me luck!

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