August 05, 2021

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The Stock Market Has Its Own Dark Side

Pic Credit : FM 988 DJ Chan Fong


Recently, I was shown a video clip on Facebook where a retail investor who suffered major losses in the stock market contemplating suicide and called up DJ Chan Fong of FM 988 seeking for advice. (For full video please go to DJ Chan Fong 988 facebook link HERE ) 

Briefly, prior to Covid-19, he was working in the tourism sector but lost his income stream, so he decided to put his savings into the stock market to make some money. He decided to follow a "fake guru" (one of those with Facebook Ads saying how easy investing is, how they are rich and successful etc) and went big into the market. After gloves, he went into Serba Dinamik. Ultimately, he lost everything. He is only 35 years old but he said he is at his wits end as he lost everything and is looking to end his life. This prompted me to write this article, in part to address the extremely dark and painful side of the stock market. In addition, is to reach out to others who suffered the same fate of this gentleman.

Many retail investors look to the stock market as a path to "get rich quick". Often they are misled or misrepresented by those who appear on youtube / facebook videos ad "saying how easy it is to quit a day job to be a full time trader." These same bunch of "Gurus" like to use social media to flaunt their wealth whether driving a sports car, wearing a fancy watch or expensive suit. Those who are taken in pays astronomical sum as "fees" to these "fake gurus".

In all honesty, these "fake Gurus" are very easy to spot. This is because in order to prove their "success", they need to appear "successful". It is all part of their marketing strategy to lure fresh lambs to slaughter. The worst kind of hypocrites are those who mask themselves as value or fundamental investors when they in fact know nothing about valuation, macroeconomics or reading financial accounts. They are just scam artists and charlatans. In the olden days, they are known snake oil salesman. They move from circle to circle and once they cannot find new "lambs", they simply work on a new scheme altogether. When things go bad, they say everyone should be responsible for their own action totally excusing themselves of their liabilities.  If you look at the best value or fundamental investors in the world, they are never showing off or flaunting their wealth. Warren Buffet, Charlie Munger and Peter Lynch are very good example of modesty and humility. 

To put it simply, investing in the stock market is not easy at all. It is not for everyone. However, it is ten times more dangerous if someone enters the stock market with a wrong mindset. A wrong mindset would amplify the most heinous desire - greed. It takes you to do things no rational person would. This is why I am so angry when there are prominent investors in our society telling people to take margin or leverage to invest in the stock market. This is morally reprehensible of the highest order. Those "Fake Gurus" who tell retail investors to "show hand" or "sailang" is just as bad.

Most people who invest in the stock market hope to make money. But if that is the sole purpose, then one must be prepared to lose everything. If you are not prepared to lose everything, you do not enter the stock market. It is just like being an entrepreneur, if you choose to start your own business, be it big or small, you must be prepared to lose everything as there is always risk when it comes to business. If you are not ready for that, do not be an entrepreneur, be an employee instead. It is both a safer and less emotionally tormenting route. Hence, investing should always be about using excess funds set aside for the purposes of investing. It should not dip into your savings, children education fund or monthly commitments. 

Personally, I have been tested many times through out my investment journey. I have made countless mistakes over the years. I have made huge losses especially in the early days. To me, the stock market is where many facets of my existence are constantly being challenged, for example my aptitude, patience, greed, confidence amongst many others. This is also where life lessons can be frequently picked up while it helps me mature not only as an investor but also as a person. Until today, I am learning and in order to continue to sustain or to do well, it is a continuous process. Voracious reading is a pre-requisite followed by the need to maintain a strong psychology and healthy mindset to weather headwinds. If you are not able to do so, it is best to keep your hard earned money in the Fixed Deposit. 

In the beginning of my book, the Chapter "The Million Dollar Question", it starts off like this "Investing is a journey. The passage of time breathes life into this. I have not come across anyone, who can convincingly tell me he or she has mastered the art of investing. Probably, if someone did claim that, it would be a hoax. Most of the successful investors in the world share one common trait - humility". 

With this, I hope all retail investors out there who are passionate with the market do not lose hope when you are losing money in the stock market. Rather, think of where you went wrong, find out your mistakes, learn from it and do better next time. It is a life long journey, I know it for a fact because I am still learning every day.

Ps: I want to express my utmost respect to FM988 DJ Chan Fong who have been tirelessly providing counselling and assisting those who went through emotional, traumatic, mental health issues over the years. Even when I was much younger, before mental health awareness was in focus, DJ Chan Fong was already helping many people with his programme. #DJChanFong 

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Comments 1

Eng Chee on Sunday, 04 July 2021 14:44

Yes, some so called "guru" not even has basic education in accounting or related field, they made their wealth by luck perhaps, then talk big like they know everything about share market, alway give impression to their students it was so easy to make money from share, worst thing was told them " don't ask, just follow", that I think was the most irresponsible word or advice that the guru had given.

Very agreed that they lack of sence of humanity and responsibility, and a great person is always has these senses in their heart and to responsible for what they had said or done. Really feel sad for those followers.
Hope this gentleman able to get thru this difficulty period , learn from his mistakes and coming back strong and successful one day.

Yes, some so called "guru" not even has basic education in accounting or related field, they made their wealth by luck perhaps, then talk big like they know everything about share market, alway give impression to their students it was so easy to make money from share, worst thing was told them " don't ask, just follow", that I think was the most irresponsible word or advice that the guru had given. Very agreed that they lack of sence of humanity and responsibility, and a great person is always has these senses in their heart and to responsible for what they had said or done. Really feel sad for those followers. Hope this gentleman able to get thru this difficulty period , learn from his mistakes and coming back strong and successful one day.
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This  information should not and cannot be construed as or relied on and (for  all intents and purposes) does not constitute financial, investment or  any other form of advice. Any investment involves the taking of  substantial risks, including (but not limited to) complete loss of  capital. Every investor has different strategies, risk tolerances and  time frames. You are advised to perform your own independent checks,  research or study; and you should contact a licensed professional before  making any investment decisions.

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