Sunday, November 11, 2012

Time Is Everything

You can't do anything without time. If time and money are on your side, you will eventually win.
To make money in 12 months is much easier than to make money in 12 weeks
Here are some clichés that refer to time:

• Time will tell: This means that something will revealed or become clear over time
• In the nick of time: This means something happened just in time
• Lost track of time: This means you stopped paying attention to the time or to how long something was taking
• Lasted an eternity: This refers to something that lasts for a very long time (or that feels like it does)
• A matter of time: This refers to something that will eventually happen or eventually become clear
• A waste of time: This refers to something that was silly or not valuable to do
• Rushed for time: This means you do not have sufficient time to do something
• In a jiffy: This means something will happen soon
• The time of my life: This refers to a really great time
• At the speed of light: This means something done very quickly.

The cliches stated above are from:

Wednesday, November 07, 2012

Where ignorance is bliss, 'tis folly to be wise

I am not a software vendor promoting TA (technical analysis). So whether people believe in charts or not is not my concern. In fact the more people believe that charts do not work, the better for those who believe in them. I believe charts are useful; I always refer to them before I buy or sell.

If you don't like charts and think of them as useless, I have no qualms about that. You have every rights to your own belief. I agree to disagree. So let us not quarrel over that for nothing.

I said in my previous article that the best way to stock market success was to choose good stocks and hold them for the long term. Buy and hold is a good strategy only when you buy the right stocks. However, I think that strategy can be improved to: buy, hold, monitor and switch.

To do this, you have to be on your toes all the time. You have to be on the lookout for something good to switch to. As soon as you find one, you let go the weakest stock in your portfolio and replace it with the new stock. This process has to go on and on and on. There is no end to it.

You must have full confidence in yourself. If you need to discuss with somebody before you buy, that is a sign of weakness. It shows that you are not ready yet to be an active investor.

Tuesday, November 06, 2012

The Best Way to Stock Market Success

The more I am involved with the stock market, the more I am convinced that the best way to build up wealth is to, first and foremost, master the skill to identify great stocks. Buy them at bargain prices and hold them for the long term is the best strategy. This is the surest way to financial freedom for your golden years.

Easy as it may sound, it is, in actual fact, not that easy. If you don't know how to read an annual report and understand the figures there, you will never be able to become a good stock picker.

So the first you need to do is to arm yourself with some accounting knowledge. You must at least be able to understand the Balance Sheet, Cash Flow Statement and the Income Statement. Once you know these, you can go on to calculate the key ratios such as:

the PER, EPS, NTA, Current Ratio, Quick Ratio, PSR, PEG, PBV, Debt-to-Equity Ratio and others.

Knowing how to calculate these ratios is not enough. You must understand their meanings and implications. Once you have learned and understood these key statistics, looking for a winner becomes a possibility.

There is an awful lot of work to do before you can say, " I found a winner".

MNRB Moving Higher

Every trade is a battle between a bull and a bear. The bull wins if the price moves up after the opening price; the bear wins if the price moves down. This should be easily understood.

Volume signifies interest. The higher the volume transacted, the more interest is shown in the stock. Thus big volume means more bulls and bears are participating in the fight.

The closing price of the day is the one to note. If the closing price is higher than the opening price, a white candle will be shown in the chart. If the closing price is lower than the opening price, the candle shown is black. Thus,a white candle means the bulls have the upper hand and a black candle means the bears are stronger.

MNRB opens at 3.09 with 10 lots traded. As a continuation of yesterday's run, the price promptly moves up to a high of 3.22 by 9.20 a.m.

Volume transacted is above normal. Because the price is moving too fast, profit-taking sets in. This pushes the price down. At the close of this morning's trading, the priced ends at 3.14, up 5sen. Total volume comes to 5174 lots which is above average for MNRB.

I notice that there is a lot of support at 3.10. I think this level should not be breached by the end of the day. Action to take is to average up if you have bought when the price was lower.

As usual, you listen to me at your own risk. The opinion expressed is that of the writer. You have your rights to disagree.

Monday, November 05, 2012


MNRB put on 13 sen today with 3696 lots traded while the FBM KLCI is down 2.09 points.

The bullish candle displayed in the chart is likely to prompt shrewd investors/traders to buy in. Whether there will be a pull back or not is difficult to say.

In the last few trading days, it volume has been improving. The overall view at MNRB is positive. The stock should move on to better things.

As usual, you buy at your own risk.

The market is most dangerous when it is most attractive

“Bull markets are born on pessimism, grow on skepticism, mature on optimism and die on euphoria. The time of maximum pessimism is the best time to buy, and the time of maximum optimism is the best time to sell.”
Sir John Templeton puts it aptly. I fully agree with him.

The problem is that you may have to wait 10 years before you see a time of maximum pessimism. What about maximum optimism, maybe another 10 years?

When stocks are being sold ex-hope and cum-despair; when no one wants to talk about stocks, and when remisers are looking for another job, that is a good time to buy. During such time, professionals are accumulating at their own leisurely pace. You should be there to join them.

On the contrary, when people are rushing in to buy; when stocks are being the talk in coffee shops, restaurants, and wet markets among the hawkers, barbers and shoe-shine boys, that is an excellent time to sell everything.

You see new comers everyday and all the seats in the broker firms fully occupied. You will also hear lots of people bragging about their gains. During such time, the rewards are fantastic, but the risk is extreme. If you can't stand the heat, don't get close to the fire.

Patience is a must, an important ingredient, in the recipe of success.

Know the market, know yourself, and you win.

Sunday, November 04, 2012

It's Best To Be Flexible

The Chinese has a saying: 随机应变. In English, it means: change with the circumstances, or set your sails accordingly to the direction of the wind.

The world is forever changing; we need to change with it. He who does not change when there is a need to change, is sure to be left behind.

What about a stop-loss you placed in a trade? As with everything, there are exceptions, this is one of them.

A stop-loss is a device you use to limit your loss. A trade without a stop-loss is equivalent to driving a car without brakes.

If your stop-loss is usually triggered, obviously something is wrong. Probably, you are not as good as you think.

After you have bought a stock, the share price moves up fast. It reaches the overbought level. The price is moving ahead of the fundamentals. What is your next move? Average up or take profit?

Different people have different opinions. Some will average up while others will take profit.

Smart traders will use a trailing-stop to lock in their gains. This is how they do it:

When the price moves up to a certain level, they will place a trailing-stop a small percentage below the price. And as the price moves up further, the trailing-stop moves up as well. As soon as the trailing-stop is hit, they will sell. This strategy is to ensure that they do not sell prematurely.

The stop-loss and the trailing stop-loss are devices designed to minimize your losses and maximize your gains. Using them gives you the competitive edge.

Saturday, November 03, 2012

Are You Fit To Trade

Are you fit to trade?

ABC bought a stock at $1. He placed a stop-loss at 95 cents. The stock dropped to 96 cents. He said, " I will give the stock a little more room". He moved his stop-loss to 90 cents. He has breached his discipline; he is not fit to trade.

To be a successful trader, you must have ironclad discipline. Once you set your stop-loss at 95 cents, what does that mean? Does it mean you should place your sell order at 95 cents? In my opinion, it is not. It means that as soon as a trade is done at 95 cents, you should sell at the next bid. This next bid could be at 95 cents or lower, maybe 94.5 or 94. You must not delay; you must sell it immediately.

Ask yourself, can you do this? If you can't, you are not fit to trade.

Friday, November 02, 2012

The only way to convince a fool is to let him have his ways.

The person who likes to ridicule others out of envy or jealousy or for whatever reason is doing a great disfavor to himself. What he does not realize is that by trying to pleasure himself (shock sendiri), he is creating bad blood; he is not doing himself any good or to anybody.

This type of personality is not limited to the uneducated. Well-educated men or women also have these kind of traits.

They are mean in their praise and generous in their criticism. They are always on the lookout for the bone in the egg.

Criticism is okay provided that it is constructive and logical, and expressed in a euphemistic manner. The person who cannot do this should refrain himself from making any comment at all.

A wise man speaks because he has to; a food speaks because he has to say something.

How do we deal with this kind of people? The best way is to avoid them. It is no use trying to change them.

You can alter the mountains or rivers, but you can't change the inborn character of a person. A leopard never changes its spots.

Thus, the saying: The only way to convince a fool is to let him have his ways.

If you are interested to upgrade your trading or investing skill, join my Super Telegram Group, Intelligent Investing, by using the link below:

Thursday, November 01, 2012

Gold or Silver

Gold or Silver

Historically, the ratio of gold to silver is 16 times to 1. This means, if gold per ounce is USD1700, then silver should worth US$106.25 per ounce.

A quick check at the prices reveal that gold is now selling at around US$1720/oz whereas silver is traded at around US$32/oz. So the ratio now is 53.75. This disparity is not logical.

Silver has hundreds of uses, maybe a thousand. It can kill bacteria, and is used in water filters. Your computers, smart phones, i-pads and other ICT products all use silver. In fact what gold can do, silver can do. But what silver can do, gold may not be suitable to do it.

The price of gold is about to explode, come Jan 01, 2013, If this happen as predicted by some experts, the price of silver will shoot up as well.

Silver is so low now because some large banks are controlling the price. Once the government step in and changes the rules, you will see silver shoot up easily to US$100/oz.

What is the best way to invest in silver? My opinion is to buy stocks whose core business is mining silver or involving in silver. If this is not within your reach, you can open a gold account or a silver a/c at a local bank.

Should you be interested in silver stocks listed at the NYSE, Click here.