Disclaimer: In Real Life is a platform for everyday people to share their experiences and voices. All articles are personal stories and do not necessarily echo In Real Life’s sentiments.
I was 21, just got my first job, and had a few extra zeroes in my bank account for the first time in my life. At the same time, I was dating someone new and playing lead guitar in my college band — it’s safe to say I was pretty optimistic and trigger happy. It wasn’t exactly the kind of circumstance that might push you towards the Bursa stock market.
I think it was probably the pay. It’s not hard to figure out that, even if you diligently saved 10% of your salary, you’d only end up with little more than a month’s worth of savings by the end of the year. It’s unlikely for you to save up for any kind of large financial goal unless you take some risks.
I started my investment journey with around RM1000. How was my market knowledge and experience? Well, let’s just say I was still learning on my feet.
I started out with Malaysia’s Oil & Gas market
My first foray into investing was in the midst of an oil cut by OPEC (Organization of the Petroleum Exporting Countries), so the price of oil was moving upwards (Figure 1).
But I didn’t know that. All I knew was, Malaysia is an oil producing country — we make oil and sell it to other countries. Surely, I can’t go wrong with investing in oil & gas?
Figure 1. 2017 oil prices — from Hart Energy (accessed 27.03.2021)
So I put my bets on oil. Looking back now at this graph, oil prices were just beginning to rise due to the lack of supply, which can be seen from the graph above. A bit of dumb luck since I was pretty much ignorant to this at the time.
I did a quick google search to figure out what companies around here were involved in the oil trade, and found Hibiscus and Sapura. Take a look at the 2017-2018 range, that’s when I went in:
Screenshot from Google Markets, accessed 27.03.2021
The stock market was only open during its trading hours of 9am – 12.30pm / 2.30pm – 5pm. But that didn’t stop me, an overeager newbie trader, from checking prices every waking moment and planning my next move.
One of those trading days, I was enjoying a late lunch at a mamak stall when suddenly I noticed a flash of red: Sellers were moving in to close Sapura.
I knew I had to get out fast. As soon as the losses dropped below 18%, I started selling.
The race to the bottom ended at 0.15, a whole 90% down from the near-peak where I had bought in. With that, my losses compounded to about a quarter of my invested amount (about RM250 in losses, all in all).
All told, I lost about 20–25% of what I invested on the first dip, not including fees, etc. Sapura lost about half of its value and hasn’t recovered, even up till today.
I tried to “Average Down” but it backfired on me
Screenshot from Google Markets, accessed 27.03.2021
Before I exited, I had tried to buy more stocks back when Sapura was still at 0.67, in a tactic known as “Averaging down”.
Averaging down is a method where, during a drop in price, you would purchase more shares in order to lower your acquisition cost. The hope was that, eventually, when the price recovered, you could still sell it at a profit. I spent all of my disposable income buying back those falling shares.
But it kept falling to 0.55, 0.45, 0.3, etc. From this debacle, “Averaging down” on Sapura was probably the dumbest lesson I ever learned.
Overall, I got burned. But hey, that’s part of your initiation as a trader. Lady Bursa was a good mistress for experienced traders — those who knew when to cut their losses, and when to take a profit.
But if you just throw money at her, she will be a bad mistress who will keep taking your money ntil you know better.
I had entered the smoky parlor of Bursa not knowing any better , and left a poorer man— but my first experience left me craving for more.
I rallied and made my next bet on the Airline Industry
I waited a month to resupply, and returned to the markets. I slammed a fistful of Malaysian Ringgit onto the greasy counter. Lady Bursa sneered at me with a contemptuous look, but her gaze lingered on the wad of cash. Without a word, she opened the beaded curtain behind her and led me through.
Now, I had a new plan. If oil prices were in decline — who would benefit from that? With my layman knowledge of economics, I decided to place my bets on AirAsia.
With oil prices becoming cheaper, it stands to reason that airline operation costs would be lowered, leading to cheaper flights, which leads to more demand, and more profit — driving the estimated value of the entire industry up.
Screenshot from Google Markets, accessed 27.03.2021
As you can see, 2017–2018 was a pretty good time for them. Somewhere near the peak, I sold it off and finally left the parlor a “made man” — earning RM 250, a profit of 33%!
I placed my next bet on the Hospitality industry, but it was stagnant for a long time
Screenshot from Google Markets, accessed 27.03.2021
I had finally made my first profit. But I couldn’t leave completely. Like many others will tell you, it’s hard to quit once you’ve tasted the siren call of success.
My next bet was on a well known hotel, restaurants, and resort conglomerate which was rumored to be contemplating a merger at the time:
I remembered waiting, and waiting, and waiting for the price to rise, but it never did. Looking at the chart above from pre-2017 to mid 2018, you can tell that the price movement was cyclical. Although, after 2019 it was a steep drop ever since Covid came into the picture.
I began to have a hunch that someone (likely to be the largest shareholders of the stock) could be buying and selling the stock in large quantities at predetermined times.
They were doing this to influence the price, by creating an artificial wave of demand or supply.
As such, hospitality it never reached a new peak. So this investment ended up stagnant.
My next attempt was to look for companies dealing with IT implementation.
My belief was that any reasonable IT company would be caught in the updraft of innovation.
After all, I reasoned, it was around the time when smartphones really started to become an everyday-use tool.
And so I picked my two horses in the race: EA Holdings and Nexgram Holdings.
Screenshot from Google Markets, accessed 27.03.2021
Screenshot from Google Markets, accessed 27.03.2021
Unfortunately, neither of them would reach any new heights, even after a few years. I kid you not, these prices were the exact same prices as I bought them in 2017–2018.
With that, my relationship with Bursa ended for a while. I was disappointed, but at least I didn’t lose in the end. I exited with probably around the same amount of money I had entered with.
I started with RM1000, lost about RM250, then regained RM250, and ended up pretty much recouping my losses but having no gains.
I had begun to resent Bursa. All that time studying annual reports, income statements, reading every available news outlet had led to zilch. Stocks were for suckers, I thought.
The viral rise of Gamestop changed my mind
I quit stock trading for a few years. I enjoyed life with what I had. Things were going fine, and I was only passively invested in the market.
Then, there was one explosive cry heard all over the world: GME.
My feelings about stocks immediately changed after Gamestop’s incredible rally in early 2021:
As I wrote in this article covering Gamestop’s rise, this event could signal the start of a new asset class — decentralized hedge funds managed by members via collective action.
As soon as it spilled over to the Malaysian news cycle, I saw something unusual on reddit’s suggested communities: r/bursabets.
Having missed the heart-pounding life-changing action of Gamestop, I set aside some funds I could afford to lose, and join whatever insanity these new kids on the block were cooking up.
The plan was to go in on glove stocks: Top Glove, Hartalega, Comfort, etc. Looking at the subreddit’s membership of about 14,000, it didn’t seem as promising as r/wallstreetbets’s millions of members. But still, I had to see what would happen on this ride.
The long story short was, very little happened after all:
The price of glove stocks had initially jumped up during the pandemic year of 2020, when the world was first introduced to the terror of Covid-19. High global infection rates filled hospitals with patients, and doctors were running out of gloves.
Then those prices shot sky high, especially since Malaysia had some of the largest glove production lines in the world. But as soon as market sentiment started to be optimistic in the hopes of getting a vaccine, prices started to fall.
The proponents behind r/bursabets’s fight for glove stocks alleged that their price was too low, and due for a rally. They wanted to emulate r/Wallstreetbets, but it was a big ask considering the difference in capital. Comparatively, r/bursabets had 14,000 members, which was less than 1% to r/Wallstreetbets’ 2 million members.
The price rally only lasted about 1 day before it started sinking like a biawak that forgot how to swim. Luckily, I managed to sell my holdings in Top Glove and Comfort before I lost more than 10%. But for many others, it was a different story. Both stocks closed nearly 50% down from their peak. And that would mark my final trade with Bursa.
In summary
My fling with Bursa provided me with a story to tell, as well as lessons that I could apply to the rest of my investing journey. Risk is just a number until you lose real money—that’s pretty much the hard truth I learned along the way.
Here’s what I learnt from my personal experience trading with Bursa:
- If one market is declining, there is often another market benefiting from it.
- There are some instances where insiders are controlling the market so that it cannot rise or drop as organically as it should, so you don’t stand to gain much in the short term
- Bursa is a less elastic market than most. That can be beneficial if you’re looking to invest in the long term as part of a balanced portfolio. But for day traders, there’s a lot of misinformation and insider moves that you won’t be privy to, so your short term losses can be greater than you think.
- Investments are commitments that take time to mature–If you buy or sell on a whim, you’ll be riding the “emotional rollercoaster”, and it’ll burn a hole through your pocket.
One of the key lessons that I took away from investment was patience. I waited three years to sell my technology stocks just so I could break even. Granted, I didn’t make any gains, but I protected my initial investment and learned.
I don’t regret the losses, but it has definitely encouraged me to put a certain amount of money into more passive investment options like index funds, which hold a “basket” of stocks from various markets in a way that automatically diversifies your risk.
In the meantime though, this experience also encouraged me to put some funds into riskier ventures like Bitcoin and Ethereum. There’s a lot of promising crypto projects brewing this year, and simply “HODL-ing” is not enough to understand the potential change they bring to the concept and practice of finance.
2021 truly is the year of crypto, as Visa, major banks like Goldman Sachs, and capital investment funds are starting to open up pathways to Bitcoin and cryptocurrency payments for their mainstream and high net worth investors. In the upcoming chapters of my investment journey, I’d like to take you through my walk with Bitcoin, Ethereum, and DeFi respectively. Stay tuned!
For more stories like this, read: Personal Finance: How Easy Is It To Shore Up RM50,000 in Savings In Malaysia? and How I Got Laid Off Twice & How It Influenced My Personal Finance.
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