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KLSE with The Bull and The Bear

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1) The Most Basic: What is Stock Exchange? What is KLSE?

I love stock market, and i have learned to trade in the stock market for over a year now. However, so far, i have only made a single trade, which resulted in a loss rm600. It was about a year ago, and since then i have been on the sideline, learning, observing, simulation trading, reading about trading in stocks and the KLSE.

KLSE is short form of Kuala Lumpur Stock Exchange. It is the place where you trade holding of shares of companies.

you can imagine the KLSE is like the building of a wet market, containing many counters, each counter for different company, same as in the wet market (pasar borong), where you can imagine, one counter for one type of item only.

So Everyday from 9am to 12pm and 2pm-5pm, everyone will come and buy other people’s share of some company, and some will sell their own posession of a part of a company.

Say one company issued 200 million unit of shares, if you buy 100 unit, it means you are owning 100/200,000,000 of the company, in terms of percentage, you own 0.00005% of the company.

Then you must have heard one unit is Rm8.00 for this company, then 1 unit is 50 cents for that company. It depends on the price they issuing when they want to put their company to be traded in the Exchange/Market. The valuation of it is complex so it’s no use telling it.

After the company have been listed, the trading began between people in the market, and the price will fluctuate from the demand/supply of the particular company.

Why any company want to be listed in the Exchanges? When they listed themselves, they get a lot of money(capital) to use to expand and accelerate their businesses, but, their company is open to be own by anyone, meaning the original founder won’t be the owner of the business if the owner himself sell every shares that he own.

2) What is The Bull? What is The Bear?

Strangely in the stock market world, when i just getting to know it, few terms quickly strikes me as it is used almost ubiquitously everywhere. The Bull & The Bear.

The Bull: It is the period of time when the stock prices going up and up and away, The Bull bring happiness to many people, The Bull is the driving force of everything good

The Bear: It is the period of time when the stock prices going down and down and down, The Bear bring sadness to many people, The Bear is the pulling force of everything to go down.

Why the name like that? The bull usually signifies strong, fast, and useful thus the price increase over a period of time called the Bull, while the Bear is slow, stronger and not useful msot of the time, thus the prices going down is given The Bear.

Stock prices fluctuate in a fashion, or we call it The Trend.

At all time, both Bull force and Bear force are there. Which one is stronger dictates The Trend for the Market. If the Bull is stronger, The Bull will run way, sometime people call it The Bull Run, Bullish Market, and whatever else. When the Bear force overcome the Bull, They call it Bearish Market, and etc..

Basically the dynamic of selling & buying pressure is the dictating aspect of whether the Bull or the bear is strong.

Wall Street (US stocks exchange) people are so enthusiastic they even erect a Bull & Bear monument in front of their building!


THE BEAR cartoon


Written by abduljabbar

August 17, 2009 at 6:58 pm

Posted in kehidupan seharian

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