First off, everyone has their own recipe for the more speculative trades that they do. Just because I enjoy a bit of chilli jam in my fried rice doesn’t make me a heathen. If I’m partial to draining rice in a colander and washing it under running water, that should be my prerogative as long as the finished dish tastes good. Without innovation we will never have progress, correct or not?
That said, get your good wok, put on your chef’s hat, and turn on the gas stove because we’re now cooking with fire! 🔥
What does goreng mean? It’s a Malaysian term affectionately used to mean the more speculative trades that you make. I’ve also heard it used by older investors as taking advantage of the trading range movements of a share to buy low and sell high within that channel.
Similar to chefs, you need to follow a recipe to have the best chance of success. I set strict limits to the amount I dedicate to kitchen experiments. Limiting your exposure will ensure you don’t lose all your money and fan gai (sleep on the streets).
This number will vary based on your risk appetite but speculative investments should never form the bulk (or even a significant percentage) of your portfolio. If you have a RM100,000 portfolio, limiting yourself to 10% of that portfolio will give you RM10,000 to play with. Setting a hard figure of RM2,000 for every goreng stock will let you invest in 5 stocks. Let me break that down into point form so it’s easier to read:
Total stock portfolio size: RM100,000
Allocation for goreng: 10% or RM10,000
Max exposure per stock: RM2,000
This will give you 5 goreng operations (woks?) running at a time. You only get into a new trade after you’ve sold one of the five goreng stocks you hold. Goreng stocks are by nature short-term investments.
Needless to say, you must also have your cut loss plan in place if you kantoi and the trade goes against you to preserve your war chest.
At the end of the day/month/year review your goreng stocks and see how well they did versus your conventional portfolio. This will give you statistics and fuel to decide on whether your chef career is worth exploring or you should just stick to dividend stocks and roboadvisors.
This review session is important and will tell you hard truths about your decision-making process and system. Most people don’t do this but keeping track of your investment results is an important part of improving. Like digital marketing, always measure and improve. Limpeh use this example coz his full-time job is in digital marketing hor.
One of the stocks I goreng recently is BPURI (Bina Puri Holdings Berhad). It has been ranging from RM0.08 to RM0.10 in recent months. I set an order to buy 3,650 lots of BPURI at RM0.08 for RM2,920. My personal system/recipe is to keep all goreng stocks under RM3,000 (my hard limit). This explains the odd numbers – I go as close to RM3,000 per trade as possible without exceeding RM3,000.
I immediately set a sell order for RM0.085 for the entire lot and it matched the next day for RM3,102.50. The RM0.005 increase netted me RM154.60 after brokerage fees etc. That’s a 5% gain in 2 days.
Goreng operations work better on penny stocks coz every increase (but also decrease) is amplified. An increase of RM0.005 – the smallest possible step – is a 5.9% movement of the underlying stock price!
I am satisfied with that quick profit as it is relatively low-risk. Also, I rent parking in a Bina Puri property and I was very behsong with the recent 48% hike in parking fee. Nabeh, it went from RM100 per month to RM148! I wanted to claw that back. Hahaha.
Banyak ong in your kitchen experiments, fellow chefs! Aim for a Michelin star! Goreng dia sampai hangus!! 🍳
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