Today, just attend a course, the title is Malaysia Corporate Governance...
As per the title, the topic is very boring, luckily the speaker try to be funny. One of the funny joke presented on the slide show, how you know a CEO is a person you can trust? Then below picture came out...
So, next time, need to do extra home work, study or analyse the CEO's face before invest into a company's share, very good idea. The actual result is yet to be tested. Who can tell me if this is true or not?
Sunday, March 11, 2012
Recently, one of my client told me, invest in Stock market is similar to gambling, because he seem to lost money by speculate certain stocks.
First, let say you go to Genting (Malaysia's biggest gambling company) bring with you $5,000, what's the chances to win the money? You will say I don't know... well, you are right, you really don't know, because you are gambling. Some may think that if they are lucky, they might win. But I can tell you, the chances are very slim, because Genting's business owner already calculated the risk and rewards. They have already plan for each game, your chances are less than 50%. If you don't believe, you can bring $5,000 to try your luck.
Now you look at Genting's business, it's growing every year, not only in Malaysia, it grown it's business in Singapore, Hong Kong, UK and recently in US. The family who own the Genting, uncle Lim (now his son) is one of the Malaysia's top 5 richest business man. What make them rich if not because of they own a Great business? Those who kept the Genting share since day one when it was listed at Bursa Malaysia's (last time also known as KLSE) has became a millionaire too if he were to sold all his shares today. Do you think if someone just gambling $5,000 every month at Genting for the past 20 years can become today's millionaire?
What happen if you take $5,000 and invest into Genting's share today? I can tell you, unless Genting go bankrupt (the chances is less than 5%), if not, you can see your $5,000 grow every year. What happen if tomorrow Market suddenly goes down and Genting's share price drop? I will buy more, because I can own one of the Malaysia's best company with lower entry point, how great it is! Further more, it pay some dividend every year... ok, I don't tell you too much, as this is a public blog.
Now decision is yours, do you want people call you gambler or you want them to call you Investor? Do you still think invest in Stock Market is similar to gambling?