TEMPO.CO, Jakarta – Seasoned investors Lo Kheng Hong gives three main tips to millennial investors who are also novice investors in the stock market. What tips did he mean?
The first tip shared by the man who is also known as the Warren Buffett of Indonesia is about the importance of fundamental analysis before deciding to buy a stock. Because, according to him, investors cannot see the company’s performance and the honesty of the company’s management in a technical analysis.
Pak Lo, a familiar nickname Lo Kheng Hong, evaluated the technical approach used in selecting share is untrue and even misleading or fallacious. This, he said, quoted Benjamin Graham – teacher of Warren Buffett – in his book entitled The Intelligent Investor.
He admitted that when buying stocks he only relied on fundamental analysis. “I only see the company’s performance and the company’s value. So I don’t look at the charts at all,” Lo Kheng Hong, Wednesday, December 15, 2021.
Pak Lo then explained what he meant by not being able to see the honesty of management only through technical analysis of stocks. Because, through the charts in technical analysis, according to him, potential investors cannot see a company’s profit. In fact, company profits are highly correlated with stock prices.
On the other hand, with fundamental analysis, Lo Kheng Hong is used to assessing stocks by reading the company’s financial statements. This is done by imitating the strategy carried out by Warren Buffett.