Have you ever wonder what is the difference and similarity between a normal RAMLY burger stall and MCDonalds ？
Yes, both of them are selling BURGERS, and yet both of them are trying to PROFIT,EARN MONEY AND SURVIVE.
But why the hell do both of them have the same objective of earning money but MCDs is able to open up thousand branches, having over 1000billion in market caps?
My answer to that is very simple: it is theSYSTEMthat make a huge difference from ramly burger stall to a international corporation MCDs.
The same goes to stock market, if you want to make big bucks and acquire wealth in stock market, you must learn, implement, and develop your ownINVESTING SYSTEM.
Today I will share with you how I realised a decent profit of 15% within a short period of just 16 days in MPI with my investing system.
As you can see, I first bought MPI on 7 October @RM9.86/unit , and sold all of them @RM11.38/unit, realising a profit of 15%.
I do not bought this due to instinct or luck but with my own investing system. You can gamble your way through the stock market and earn some money maybe once or twice, but to earn consistent profit one must need his own investing/trading system. So here is why I bought MPI:
First rule: Valuation (The NOW)
Firstly, I noticed that MPI are one of the undervalued stock among the chip sector. While all the semiconductor counter have make a good run, MPI is still a laggard compare to the average valuation of the sector. I bought MPI at RM9.86 with P/E of 16.16, and sold all of them at P/E of 18.81. Valuation is one of the most important metrics you should look for when picking stock, it will determine whether the stock you bought have a large or low margin of safety, and how decent your profit will be.
Second rule: Growth
If valuation determines whether you should buy the stock now. Then growth will determine how long you need to wait for the undervalued stock to make a good run or for the market to rerate the stock fairly. There are thousands of undervalued stock, but one cannot buy a stock just because it is undervalued as you can be trapped by the "value" myth. One must buy an undervalued stock with a good and sure prospects so that you will not wait ten thousand years for your stocks to finally run.
For MPI, semiconductors industry are extremely pessimistic few months ago, but now that most counters are beginning to finally recover due to the 5G and digital transformation coming ahead. I first announced that I'm bullish on the semiconductors on June 2019 as you can see from my previous posts in facebook. Right now, I'm beginning to secure some profits from the stocks that I bought in, including Elsoft, MI, Gtronic, UWC and now MPI.