Lo Kheng Hong's Stern Warning: Don't Buy Stocks Because Of Influencers Joining!

Illustration. (Photo: Unsplash)

JAKARTA - Influencers and artists have recently started to 'show off' related to stock investment. A number of well-known names were observed to provide certain share recommendations which were then responded to by many netizens. Starting from Raffi Ahmad, Kaesang Pangarep to Ustaz Yusuf Mansur

It seems that this phenomenon has also caught the attention of veteran Indonesian investor, Lo Kheng Hong. The man who is often nicknamed Warren Buffett Indonesia, seems to be worried that many people will buy shares just because they follow suit, because the influencer has many followers on social media.

Furthermore, Lo, his nickname, reminds beginner investors not to buy stocks just because they get recommendations from influencers.

"Because influencers, what I hear are buying stocks with very expensive valuations. (There are) influencers who buy one share 162 times the PE, 110 times, it's terrible for me. Poor common people don't understand," he said, in a virtual discussion entitled 'Prospects Shares' investment in the Indonesia Stock Exchange, last weekend.

Lo Kheng Hong advised that if investors want to buy shares, it must be shares of companies that are known and have known fundamentals so they don't regret it later.

He also emphasized that for investors who are new to or want to enter the capital market, wanting to invest in certain stocks, the first thing to do is to read the issuer's annual report or financial report (lapkeu).

"Never buy a cat in a sack. God is merciful, the exchange is merciless, merciless on what is bought," he said.

Meanwhile, IDX President Director Inarno Djajadi said that even though the COVID-19 pandemic has hit Indonesia, the stock exchange floor is in fact flooded with new investors. The Indonesia Stock Exchange (IDX) noted that currently there are 4.1 million investors in the capital market.

"Yesterday (17 January 2021), our new investors had already reached 4 million. So, not 3 million. This is an extraordinary addition. If we flashback in 2016 it was still below 1 million, still 894. Currently, there are almost 4 million. 1 million, "he said.

In fact, he said, active investors in the stock market in 2020 will reach 94,000 per day. Daily transactions reached a high frequency in December 2020. The peak of average transactions on 22 December 2020 exceeded 1.6 million.

"In fact, if we look at these days we are again amazed. We have reached 2 million," he explained.

The position of the capital market in Indonesia, said Inarno, is further away from Malaysia. Since 2017, Indonesia has recorded the highest daily transactions among Asean countries. Prior to that year, Thailand recorded the top. Currently, daily transactions in Indonesia are 619,000. Leaving Thailand 496,000, and Malaysia 401,000.

"Singapore (its daily transactions) is far below our frequency," he said.