This post is for those who have "Learn by Doing" as their predominant learning style.
You'll be amazed how many people have strong views on certain matters without personally experiencing or trying it out for themselves.
I know learning from other people's mistakes is wise, but to go through life parroting this is what this person says, that person said, I mean do you have an opinion of your own?
Leverage is bad
How do you know?
Warren Buffet says so.
But he owns an insurance company.
Is using Other People's Money (OPM) not leverage?
Did you use debt to buy your apartment and your car?
So is your fear of leverage logical? Not very consistent are you?
I am not saying you go crazy and use 5 times leverage with CFDs. Just "tikam tikam" 2 times leverage and see for yourself.
It's not about making more money. That's greed.
It's more to see if you can sleep at night using leverage. If yes, there you go! You now have confidence listening to yourself.
If you can't sleep, you confirm confirm know trading with leverage is not for you!
The good thing is now you can tell others its because you know so! And not because Warren Buffet says so. See the difference?
Profit from your own homework
As a long only investor/trader, you have done homework on several stocks and found one that provides the best risk/reward proposition. It doesn't matter whether you've used fundamental or technical analysis. And that's the stock you bought right?
How about the rest of the stocks you passed over?
Is there one that is so grossly over-priced or toppish in your view that you murmur to yourself only a fool will buy at this current price!
How about profiting from this conviction from the other side?
Why let all that hard work go to waste?
Again its not about asking you to bet huge sums on shorting. That will come later when you have mastered the craft of shorting stocks.
Before mastery, you have to take the first baby step in shorting to see if it's OK for you; and you don't get struck by lighting! To hear some talk about shorting, it's like talking about blasphemy!?
No you won't die, or go to jail. The most lose money - just like buying high selling low like you already do now. Just the reversed No difference what?
Johnny come lately
If you are the type that likes to buy stocks on tips and follow the buys of others, but somehow you tend to lose money 90% of the time, how about using yourself as an indicator?
You are at the bottom of the information food chain, but if you have a mind-flip, you could be the canary in the coal mine!
The moment you are excited about a stock, it's time to sell!
You pessimist you
I can't remember where I read this story but it goes that a money manager has an analyst that consistently gave the "wrong" buy and sell recommendations. When asked why the money manager has not fired this analyst, the money manager replied if he did, where would he get the inputs to fade this analyst bad calls and make money for the fund?
Don't laugh!
Try this trick next time you're in a casino. Spot the person who is down on his luck and bet against this person and see if this strategy works!
Some of us are more pessimistic in nature. You may have an edge in that you can spot trouble or bad news long before others.
Perhaps that's why after decades in the market, you have not made much progress. All this time, you have been trying to fit a round peg into a square hole! Silly you!
Maybe your mind works like the short specialist Jim Chanos of Kynikos Associates fame?
Why CFDs
First of all, share borrowing is not that cost efficient for retail unless you can borrow shares directly from Prime Brokers for shorting - but that's the realm of accredited investors.
CFDs is much more cost efficient and administratively simpler.
But don't take my word for it.
Explore yourself! Own time own target.
You may want to check out this website as a start: Features and Benefits of CFDs
By the way, for those of you who will be attending the 17th Jan 2015 Bloggers thingy, I found out that CIMB CFD team will have a lady speaker at this event too.
So if you interested, come prepared and make full use of the Q&A time.
Guys, the lady speaker is quite easy on the eye. If you are coming with girlfriend or wife and not convenient to ask, buy me coffee and I'll find out her number for you ;)
Deal?
I sad case or what? What do do? No job what? Will do anything to get a free meal or drink :)
P.S. This is not an advertorial OK? I am not plugging anyone nor am I paid to write this post. Last time another reader asked about Futures I also "hantam bolah" gave him another broker's website to explore. You guys are adults; I trust you can do comparison between 3 shops before buying?
Singapore Man of Leisure (welcome to my blog; just google it!)
