Category Archives: Letters

Why do clever investors make big money mistakes?


Statistics show that most equity investors, including professionals, cannot beat the stock index. Studies have also shown that more than 80 per cent of day traders lose money mainly due to transaction costs as they select shares based on hot tips. There are several reasons for their poor performance but the most frequent mistake is ‘loss aversion’. This is a psychological obstacle which has been consistently affecting their performance, especially in view of the ups and downs that is the normal behaviour of the stock market.

Loss Aversion
Some investors may object to the implication that loss aversion is a bad thing. After all, it is a very natural behaviour. They might justifiably point out that the tendency to weigh losses more heavily than gains is a net positive attitude. After all, investors who care too much about possible gains and too little about potential losses, run a great risk that can threaten their portfolios. It may appear better to care more about the share price falling than hoping for it to climb higher.

True enough; loss aversion can be helpful and is part of a conservative strategy. But an over sensitivity to loss can also have negative consequences. One of the most obvious and most important areas in which loss aversion skews judgment is in selling too early and missing the additional profit if you dare to hold it longer. Very often even clever investors who are well versed in stock selection cannot overcome this psychological fear.

What is tricky about this concept of loss aversion is that it can often lead us in the opposite direction- to hold on to a losing investment for longer than we should. I asked one of my friends why he sold a particular stock instead of selling his other holdings that he bought at higher prices? He said that he did not want to recognise the losses but preferred to lock in the profit. This is the most common mistake committed by investors because they do not want to admit their mistake of picking the wrong stock. Moreover, the profit from the sale could easily cover the losses.

Studies have shown that on average, it is easier for well managed companies to continue their good performance than for bad companies to improve their poor position. That is why we should not sell good shares too early and retain the bad shares.

How to select shares?
It is easy to master all the basic fundamental principles in stock selection. The most important criterion, in my opinion is that the stock must be ‘Undervalued and with good profit growth prospect’. I will not buy a stock which does not have this quality. In other words – buy on solid evidence of value and good profit growth – not on the basis of speculation or hot tips!

After you have bought some stocks that you think can perform well, you will have to decide when and which stock to sell. Often many investors make the mistake of selling the good ones to lock in profit early but retain those that are not performing because of their aversion to taking losses on these. Some regret their action later and may even jump back into the market to buy the same stock that they had just sold but at a higher price. Most of them do not jump back into the market for the stock and they can only watch the stock go higher and higher.

Why invest in public listed shares?
Statistics show that our Malaysian Stock Index has an average annual growth rate of about 10% which is more than most other forms of investment. You can make more than 10% if you buy really undervalued stocks with good profit growth prospect.

There is a classic saying ‘you can still buy the winning horse after the race in the stock market’. It means that you can still buy shares of really good companies after they have announced their good results.

Moreover, profit from share investment is tax free in Malaysia. You do not have to deal with people which are the most difficult from my experience, as you can never satisfy everybody. You do not have to consult anybody if you want to buy, sell or hold. Another advantage is that there is no bad debt, all cash deal.

When to sell?
After having said all that about selling too early due to the loss aversion phenomenon, we must not forget that no share can keep climbing up and up indefinitely for whatever reasons. In other words, we must not be too greedy and wait for the bubble to burst. Hence the time to sell is when the reasons you bought the share – undervalued and good profit growth prospect – are no longer
there or valid. Sometimes you have to sell to raise cash to buy another stock which is better.

Koon Yew Yin

Sinhalese Bar – A Relic of a Bygone Era


I refer to “Ipoh’s Nightlife Renaissance” (Ipoh Echo Issue 175) where a number of the city’s night joints which offers drinks, live music and fun for the younger generation were mentioned.

However, not being a young man anymore, I walked into this bar located in Old Town. One might wonder whether this is the Wild East! The swinging saloon doors of a Western movie, take you to a dingy bar that has not changed since it was opened in 1931.

In the bar are various kinds of liquor stacked on the racks of the glass cabinet. On the wall is a Victorian pendulum clock, a sculpture of a deer skull and a faded photo of the founder, untouched since 1931. The surroundings exude much of the decadent colonial charms of yore.

It is a well known fact that the oldest restaurant in Ipoh is the F.M.S. Bar, which was founded in 1906 by a Hainanese. It was the most celebrated watering-hole of European planters and miners and their wannabes then.

With the migration of white-collar Ceylonese to Ipoh in the late 1800s, it prompted an enterprising Sinhalese businessman to start a similar bar in Treacher Street (Jalan Bijih Timah). After the Japanese Occupation the joint was managed by his sons and they called it, “The Sinhalese Bar”, being the only one of its kind in the country.

Like the F.M.S. Bar, which was a favourite with British planters and miners, the Sinhalese Bar became a popular spot for the Ceylonese, Tamils, Malayalees and Sikhs.

These days you can find all kinds of people patronising the Sinhalese Bar. Gulping mugs of beer and relaxing in the cool comfort of the bar, one is reminded of what it must have been like in an era gone by.

S. Sundralingam

Casuarina Trees


I like to draw your attention to the casuarina trees beside the Ipoh Padang that were brought down last weekend. The PTA of St Michael’s Institution wrote to the Mayor, Dato’ Roshidi and copied Councillor David Lai our concerns regarding the health of the trees. We requested the city’s authorities verify the health of the trees and to take appropriate action to prevent any tragedy that may arise from an unhealthy tree. Earlier this year a number of trees were blown over and it was fortunate that they fell onto the Padang and not towards our school or the mosque next door.

It is sad that these majestic Casuarinas, that had defined the image of Ipoh Padang and St Michael’s Institution, had to be brought down but we fully support the action taken by the city’s authorities as the safety of our children can never be compromised. I thank the Mayor and Councillor David Lai for their prompt decision and action.

I hope that the city’s authorities will immediately replant the perimeter of the Padang with trees again but to do so within the Padang and not at the same spot where the Casuarinas were removed.

Joseph Michael Lee
PTA President
SM St Michael’s Institution

AmanJaya Bus Terminal



I refer to the AmanJaya Bus Terminal in Jelapang which has received so much public complaints by users.

It should be on record that this was a project initiated by the Pakatan Rakyat State Government.

The then DAP majority State Government only presented the plans to the public after it coddled up a deal with some businessmen. There was no prior consultation with the public before the site was decided and the plans drawn up. If my memory serves me it was the State Exco for Local Government (Nga Kor Ming) who announced some sort of competition (naming the station?) with “fabulous” prizes as candy to soothe an irate public.

I wrote to the press then, condemning the high-handed manner the PR state government handled the matter. It was a “we know best” attitude DAP had often accused BN of. I also pointed out the inconvenience and extra cost to the travelling public.

However, whichever party blundered, this untenable situation must be corrected.

Don’t expect Joe-Public to pay for your mistake and arrogance.


The Miracle Boy



It is a miracle that Mohd Amar Mohd Azizi, 10, who was hit by a bullet, underwent a successful operation at the Ipoh General Hospital recently.

What was most amazing was that the boy tolerated the whole episode in spite of a dangerous and delicate operation and being placed under undue duress caused by public attention.

I join the rest in praying for Amar’s complete recovery so he can join his schoolmates at school. I praise Amar’s parents for their vigilance and care when he was in the hospital.

My heartfelt congratulations to Dr Cheang Chee Keong and his team of dedicated doctors and nurses for having performed the unexpected.

As a member of a non-governmental organisation based in Ipoh I wish to visit Amar at his home with my other members. However, this was being discouraged by the hospital for reasons best known to all. Amar needs all the rest he deserves for the moment.

Notwithstanding that, I wish to thank Ipohites for the concern you all have shown.

A. Letchimanan

No Place for Self-Interest




I find the staff of Tourism Perak a rather curious lot. They are there for a purpose but from my observations most are there for some self-serving reasons.

When duty requires them to mingle and make their customers, especially tourism industrial players, feel at ease, they prefer to mix among themselves instead. By doing so, they lose a golden opportunity to promote Perak and the services the agency could provide.

They pride themselves in wearing T-shirts with Tourism Perak logos emblazoned on them. But what is the use if the net result is zero? They ought to realise that the larger task ahead is to prepare the ground works for the coming Visit Malaysia Year 2014.

Knowledge is power and if one fails to share it with others the efforts of the state government and its hard-working crew will then go to waste.

The Executive Councillor for Tourism, Health and Culture, Nolee Ashilin Dato’ Mohammed Radzi is on the right track. She needs all the help she can muster to forge ahead. The councillor cannot do it alone without the support of her staff. And that is a fact.


They say we are wrong to cut our trees to plant oil palms




Over a period of a few decades around 1850, 95 per cent of the two million acres of Redwood forest in California were cut and destroyed. What kind of men would cut down these ancient irreplaceable giant trees? Each of them was over one thousand years old.

Oil palm smallholdings and plantations meet the United Nation’s Framework Convention on Climate Change which defines a forest as an area of 0.5 to one hectare having more than 30 per cent canopy cover and having a potential height of two to five metres. To accuse the industry in Malaysia and Indonesia of contributing to global warming is sheer nonsense. In fact oil palm trees just as with other forest species, produce oxygen for us to breathe and act to counter coal and oil emissions which are the major cause of global warming.

Environmental activist groups such as World Wildlife Fund, Friends of the Earth and Greenpeace have launched many campaigns alleging that the expansion of oil palm plantations have destroyed forests, threatened endangered wildlife and robbed indigenous people of their land. Many of their arguments are not based on fact but are sensationalized from a small number of cases.

The anti-oil palm lobby in the west includes pro-soya bean and rapeseed groups who see oil palm as a major competitor and have recruited food lobbyists to play on fears of the health hazards of palm oil consumption. Together with environmental activists, these well-funded groups have created trade barriers to the global oil palm trade under the pretext of environmental activism.

In a fair contest amongst competing vegetable oils, palm oil will win hands down. The oil palm tree is the world’s most efficient oil crop because one can harvest five tonnes of oil per hectare. This is 10 times more productive than soya bean planted in the West, including United States and five times more productive than rapeseed, Europe’s main oil crop.

It is an undeniable fact that palm oil is the cheapest and most popular form of cooking oil for consumers, including many poor families in the west. Should trade barriers to benefit rapeseed farmers who are already heavily subsidised by the European Union (EU) government be successfully implemented, this will hurt consumers all over the world.

Also should alternatives to oil palm be grown, more land would be needed to produce an equivalent volume of oil to replace palm oil, resulting in more deforestation and problems for Mother Earth.

Finally, the western environmental activists’ campaign against oil palm plantation expansion, in the name of “saving rainforests”, is a violation of international norms and Malaysia’s and Indonesia’s sovereignty.

Koon Yew Yin

Leaning Tower




leaning tower (baljit gill)

A lamp post has been leaning precariously for a month now as of writing, and as usual we are just waiting for an accident to occur before any action is taken. The said area is on the way to the Lumut highway next to Taman Silibin. It appears that the local council again has turned a blind eye akin to Helen Keller’s famous quote: “The only thing worse than being blind is having sight but no vision”.

Baljit Singh Gill

City Hall Dreams




The Mayor of Ipoh City Hall must have the right facts before blaming and insulting residents for the filthy state of this city because there is evidence that these problems are due to neglect by City Hall.

During the past decade, residents have brought to the attention of City Hall the same problems they encounter daily. But for unknown reasons City Hall failed to upgrade the inefficient and inadequate essential services and allowed the state of the city to deteriorate. The easiest way out is to blame the residents and make broken promises of a cleaner city.

Recently, the Mayor mischievously stated he was unable to clean the city because residents could not be disciplined and refrained from throwing rubbish indiscriminately.

One of the important duties of the Mayor is the maintenance of cleanliness. He is held responsible and accountable if he fails to perform this task with commitment. All problems pertaining to cleanliness must be solved and not swept under the carpet. Is it so difficult to find  solutions to these problems? If he had investigated and analysed the thousands of reports lodged, the results would indicate most of these problems are created by his own staff, particularly the “illegal dumps”. This is to remind the Mayor of the assurance made on September 2012 of a cleaner Ipoh by the end of this year. After 13 months and a new management programme implemented, this assurance is another failure and as usual it is the fault of the residents. To cover up this failure and distract the attention of the residents, there are now plans to transform Ipoh into a sustainable and dynamic city by 2020, another mission impossible.

Despite failing to clean up the city for the Visit Perak Year 2012, the Mayor has again embarked on an impossible mission, grooming the city to regain its reputation as the cleanest in the country, ahead of Visit Malaysia 2014. The Mayor must be realistic. It is far beyond the capability of City Hall to achieve this target. He had admitted of not being able to clean the city because of indiscriminate dumping.

At present, drains in residential areas are cleaned once every few months and the large amount of rubbish are not collected for weeks or left permanently to rot on the road sides. The monthly collection of garden and other bulky rubbish is never on schedule and residents are forced to dump this rubbish wherever convenient. More dumps appear as the interval between each collection gets longer.

The trash collectors are also responsible for the illegal dumps. They are seen on their motorcycles heaping the bagged rubbish for collection by the dumpster. Spilled and damaged bags at these collection points are not their responsibility and soon become mini dumps.

Street sweeping in residential areas is no longer a service given by City Hall. Littering in the commercial areas will continue because there are very few litter bins. Pedestrians continue to lose rights as more businesses boldly display their wares on the pavement. The wet markets are just as dirty and congested. There is lax enforcement of law and order.

With such poor quality services, is it possible to maintain the city in an orderly and clean state? The four members of the state assembly and two members of parliament elected by the residents on promises to look after their interests have remained silent over the huge problem. City Councillors without executive powers, rely on the same lackadaisical MBI officers to resolve the similar complaints brought to their attention by residents. There were no zoning duties when the city was clean.

The mayor’s vision of a cleaner city was hampered by the lack of support and coordination from his senior officers and an inefficient workforce. Until such time that MBI is able to improve its services to a satisfactory level, City Hall should be very careful if it intends to blame the residents. The city would have been in a worse state if residents failed to cooperate. The state of the city is not solely due to littering but lack of commitment to develop Ipoh into an orderly spic and span city.

If City Hall is serious in cleaning up the city, it should cease all activities which does not benefit the residents. Set up a board of inquiry and take appropriate disciplinary action against all those who are responsible for this dirty state of the city.

Meanwhile, residents must wait patiently for the appointment of a Mayor of action and not words, to untangle the mess at City Hall.

City Guardian

Dog Bounces Back!




dog bounces back

In the Ipoh Echo Issue 167 (June 1-15, 2013), News Roundup carried a heart-breaking story about a neglected dog in Mansion Park. ISPCA (Ipoh Society for the Prevention of Cruelty to Animals) immediately contacted the owner and was told it wasn’t an abuse case.

ISPCA has been following the case closely and we are glad to inform readers of Ipoh Echo that the dog has been given a new lease of life, thanks to rescuers Judy Tze and Irene Boey.

Recently we visited Irene and found the dog, now called Abigail, in good health with a new coat of fur. Irene told us Abigail showed fast recovery within the first three months under her care. Abigail is now in the care of Irene’s father and her son Aaron.

Keith Yoong
ISPCA Vice-Secretary