MANY INVESTMENT psychologists think that some of the following 7 traits or

characteristic features cannot be learned once a person reaches adulthood.

By that time, your potential to be an outstanding investor has already been determined. It can
be honed or improved, but not developed from scratch because it mostly has to do with the
way your brain is wired and experiences you have had as a child.
That doesn?t mean financial education and investing experience are not important. Those are
critical just to get into the game and keep playing. As a result, your income will be more than
the average earning of most people.
Let me first test your boldness to go against the crowd.
Trait 1: Be a contrarian investor. Develop the ability to buy stocks while others are
panicking and sell stocks while others are euphoric. How many of you are willing to hold on to
your share after it has gone up more than 100% within 12 months? How can you ignore
people or friends who advise you to sell and take profit?
Let us look at the price charts of Latitude, Lii Hen and VS Industry.
Latitude has gone up from Rm 1.00 to above Rm 6.40 within the last 24 months.
Lii Hen has gone up from Rm 1.40 to above Rm 5.50 within the last 24 months.
VS Industry has gone up from Rm 1.50 to above Rm 5.50 within the last 18 months.
As you can see these 3 stocks have been shooting up so rapidly. How can you not sell?
About 7 or 8 months ago, Jimmy Chee invited me to talk in Calgary Hall, KL where I
recommended a buy of Latitude at Rm 3.50. Some of the attendees who bought and would
thank me.
Almost all of you would have sold when the price went up 100% within one year. After you
have sold and the price keep going up, will buy it back? This is a test of your true quality!
After I started buying Latitude, Lii Hen and VS, I only sold to meet margin call or to buy
another counter which I expect to go up faster, bearing in mind that all shares do not move up
or down at the same rate. But once the prices went up, I dare to increase my borrowing to buy
more.
Substantial Shareholders: As a result, I have to declare as a substantial shareholder of all
these 3 counters on Bursa Malaysia. Besides these, I also have some Poh Huat and
Xingquan.

Out of more than 1,000 listed

companies, I only own shares
in 5 companies.
I started serious investing in
public listed shares after I
retired from active work in 1983
at the age 50 year. I am not an
accountant by training. I was a
civil engineer and I hardly
knew how to read a balance
sheet at that time.
I started by reading to
understand the basic
fundamentals of share
selection as practiced by
Warren Buffet, Peter Lynch and
other great investment gurus.
Of course I made some
mistakes at the beginning,
which in retrospect seem so
silly. But I was prepared to
learn from my own mistakes.
In 1983 when China wanted to
take back Hong Kong, the
people were selling as if there
was no tomorrow. I bought with
all the money I had and used
margin financing to buy even
more.

"In 1983 I had a serious

heart angina. At the time heart by-pass
operations could only be done in Mayo Clinic
or Harley Street London and the casualty rate
was frighteningly high. Before my heart
surgery in London, I passed all my assets to
my wife and children.
"After my heart operation, I retired from being
an executive director in Mudajaya / IJM
Corporation Bhd and I started to learn how to
make money from the stock market.
"In 1983-4 the Hong Kong stock market
crashed because China wanted to take back
H.K. Almost all the Hong Kong investors were
afraid of the arrival of the Communists and
they sold their holdings as quickly as possible.
"One of the most important investment
lessons I learned was to be a contrarian
investor, buy when everybody is afraid to buy
and sell when everybody wants to buy."
--Koon Yew Yin, in a blog post

As soon as H.K. was given 50 years extension of the capitalist system, the market rebounded.
How I took advantage of the situation is history.
Trait 2: Obsession in playing the game and wanting to win. These people don?t just enjoy
investing; they live it. They wake up in the morning and the first thing they think about, while
they are still half asleep, is a stock they have been researching, or one of the stocks they are
thinking about selling, or what the greatest risk to their portfolio is and how they are going to
neutralize that risk.
They are obsessed in the investing game.

Trait 3: The willingness to learn from past mistakes. It is hard to acknowledge your own
mistake. But you need to learn from your own mistake. Most people would much rather just
move on and gross over
the dumb things they have
done in the past. I believe
the term for this is
repression. But if you
ignore mistakes without
fully analyzing them, you
will undoubtedly make a
similar mistake later in
your investing decision.
Trait 4: An inherent
sense of risk based on
common sense.Most
people believe analysts?
reports which are
invariably ?a buy?
recommendation. They
cannot recommend ?a
sell? because they would
lose the companies?
business. You must always
take an analyst report with
a pinch of salt.
I believe the greatest risk
control is common sense
which is not so common.

Photo: malaysiafinance.blogspot.com
"In 1970 when the new economic policy was
introduced, the GDP per capita of Singapore,
Taiwan and South Korea were the same as ours.
They became developed nations in spite of the
fact that they do not have natural resources like
what we have.
"We are still not a developed nation because of
bad management and corruption of the BN
(Barisan Nasional) government. I will continue to
write to point out all the bad things of the
government until voters can vote the BN
government out of Putrajaya." - Koon Yew Yin.

See more at: www.themalaysianinsider.com

Trait 5:
Confidence: Great
investors must have confidence in their own convictions and stick with them, even when
facing criticism. Buffett never get into the dot-com mania though he was criticized publicly for
ignoring technology stocks. He stuck to his guns when everyone else was abandoning the
value investing ship. He was proven right when the dot com bubble burst.
Trait 6: Clear thinking. If you can?t write clearly, it is my opinion that you don?t think very
clearly. And if you don?t think clearly, you?re in trouble. There are a lot of people who have
genius IQs who can?t think clearly, though they can figure out bond or option pricing in their
heads.
Trait 7: And finally the most important and rarest trait of all: The ability to live through
volatility without changing your investment thought process. This is almost impossible
for most people to do; when the chips are down they find it hard to sell their stocks at a loss.
They find it difficult to average down or to put any money into stocks at all when the market is
going down. People don?t like short term pain even if it would result in better long-term gain.

Very few investors can handle the volatility required for high portfolio returns. They equate
short-term volatility with risk. This is irrational. Risk means that if you are wrong about a bet
you make, you lose money. A swing up or down over a relatively short time period is not a loss
and therefore not risk, unless you are prone to panicking at the bottom and locking in the loss.
But most people just can?t see it that way. Their brains won?t let them. Their panic instinct
steps in and shuts down the normal brain function.
To become a super investor, you must have the patience to master the above 7 traits.
How did I pick these 5 stocks?
Out of 1,000 listed companies, I do not buy GLC, Bank shares, Plantation shares, Property
shares, and construction contracting shares. In view of our ringgit at 9 year low, I concentrate
on companies that manufacture products for export.
Check from Bursa the quarterly result. As soon as you see any company reporting a
sudden jump in profit, study its business more carefully to see its future profit growth prospect.
Golden Rule: Do not buy if you are not sure it can make more profit this year than last year
because when the annual result shows reduced profit, the price will not go up.
Increase buying when you see the profit is improving from quarter to quarter.
Invest like a businessman: How does a businessman look at the business of the company?
He does not worry too much about the audited accounts because it is a recorded history of the
company. He looks at the future profit growth prospect. The future may not be so clear and
straight forward but he is willing to take some risk.
For example when a businessman buys a piece of land to develop houses, shopping mall or a
hotel, he cannot be 100% sure that his project will be successful. But he is willing to take a
chance.
When I buy Latitude, Lii Hen or VS shares, I consider myself as part owner of the companies. I
can foresee their future profit growth prospect.
Charity to help the poor:
As I mentioned in my opening paragraph, your experiences when you have had as a child
would help you become a super investor. As I came from a poor family, I know how hard it is to
survive without enough money. My ambition is to make more money to help the poor. I have
given about 300 scholarships to help poor students to complete their tertiary education and I
also have written in my will that all my remaining wealth will be for charity to help the poor and
needy when I die. I think my objective for wanting to make more money has helped me make
better investment decisions.
I am obliged to tell you that I am not responsible for your profit or loss if you decide to buy
those shares I recommended. You buy at your own risk.