HwangDBS Vickers Research in a report in December said Pos Malaysia has tax credits amounting to some RM317mil which is expiring by Dec 31, 2013, and is likely to declare a special dividend of 59 sen per share in the near future.
It said Pos Malaysia is a cash cow, supported by RM1.24 per share net cash or RM665mil by end-financial year 2014. Read more.
马 到 功 成. Success is when the horses come. Success goes only to those who dare and act, it seldom goes to the timid. The pessimist complains about the wind; the optimist expects it to change; the realist adjusts the sails.
Thursday, April 18, 2013
Sunday, April 14, 2013
Quality of Earnings Matters
Earnings are important, but it's the quality of the earnings that counts.
When it comes to fundamental analysis, the most important item is earnings. Indeed earnings are the lifeblood of a company. Without earnings, a company cannot survive. When a company reports earnings that are above expectation, the price of the stock rises. And when it reports earnings that are below expectation, the stock price drops.
When we look at earnings, we should look at earnings per share (EPS) and not only at the amount. A company earning RM10 million with an issued capital of RM10 million comprising of 10 million shares issued at RM1 each is better than a company earning RM100 million but with a capital of RM500 million comprising 500 million shares of RM1 each. While the former's EPS is RM1, the latter's EPS is only 20 sen. Many people look only at the amount earned when they should be looking at the EPS.
Another feature often overlooked is the quality of the earnings. Earnings from sales and received in cash is the highest quality of earnings. Earnings placed under Accounts Receivable may not be fully realized, and therefore has a lower quality. Earnings from sale of assets, not repeatable, are the lowest form of earnings. So when you look at earnings, you must take into consideration the quality of the earnings.
Ideally, earnings should go up in tandem with sales of the company's products or services, year after year. Sometimes earnings improvement is the result of cost cutting. If the cost cutting comes from decreasing the labor force thus demanding more work from each worker, this is not so good even though competency is enhanced.
The best scenario is that the quality of its products is upgraded resulting in more sales and better margins.
Next time you look at EPS, don't forget to look at the quality of the earnings.
Please click f if you find this article useful. Thanks.
When it comes to fundamental analysis, the most important item is earnings. Indeed earnings are the lifeblood of a company. Without earnings, a company cannot survive. When a company reports earnings that are above expectation, the price of the stock rises. And when it reports earnings that are below expectation, the stock price drops.
When we look at earnings, we should look at earnings per share (EPS) and not only at the amount. A company earning RM10 million with an issued capital of RM10 million comprising of 10 million shares issued at RM1 each is better than a company earning RM100 million but with a capital of RM500 million comprising 500 million shares of RM1 each. While the former's EPS is RM1, the latter's EPS is only 20 sen. Many people look only at the amount earned when they should be looking at the EPS.
Another feature often overlooked is the quality of the earnings. Earnings from sales and received in cash is the highest quality of earnings. Earnings placed under Accounts Receivable may not be fully realized, and therefore has a lower quality. Earnings from sale of assets, not repeatable, are the lowest form of earnings. So when you look at earnings, you must take into consideration the quality of the earnings.
Ideally, earnings should go up in tandem with sales of the company's products or services, year after year. Sometimes earnings improvement is the result of cost cutting. If the cost cutting comes from decreasing the labor force thus demanding more work from each worker, this is not so good even though competency is enhanced.
The best scenario is that the quality of its products is upgraded resulting in more sales and better margins.
Next time you look at EPS, don't forget to look at the quality of the earnings.
Please click f if you find this article useful. Thanks.
Thursday, April 11, 2013
ECS ICT EARNINGS TO IMPROVE
Malaysia’s leading ICT distributor ECS ICT Berhad and Samsung Malaysia Electronics (SME) have signed a business-to-business (B2B) distribution agreement that will see ECS distributing the global leading consumer electronics provider’s entire range of IT and mobility products to the enterprise market.
ECS and IBM Partner to Deliver SmartCloud Solutions
ECS inks deal with CA Technologies
Read about them here.
ICT products are part and parcel of life in our modern world. The importance of these products needs no explanation. One company that stands to benefit much from these products is ECS ICT Berhad which is a leading ICT distributor. The 3 activities mentioned above will go a long way to improve its revenue and earnings. At the last traded price of Rm1.16, there is plenty of value for your money.
Buy at your own risk.
ECS and IBM Partner to Deliver SmartCloud Solutions
ECS inks deal with CA Technologies
Read about them here.
ICT products are part and parcel of life in our modern world. The importance of these products needs no explanation. One company that stands to benefit much from these products is ECS ICT Berhad which is a leading ICT distributor. The 3 activities mentioned above will go a long way to improve its revenue and earnings. At the last traded price of Rm1.16, there is plenty of value for your money.
Buy at your own risk.
Wednesday, April 10, 2013
TDM Bonus and Share Split
TDM has announced a bonus issue of 1 for 5, and a share-split of 5 for 1. This means that for every five shares you have, you get 1 share free. And after the share-split you will then have a total of 30 shares.
TDM closed at RM4.21 yesterday. It will be interesting to see how the investors react to announcement.
TDM closed at RM4.21 yesterday. It will be interesting to see how the investors react to announcement.
Tuesday, April 09, 2013
TDM first and final dividend of 22 sen tax free
TDM said that for the financial year ended 31.12.12, it would propose a first and final dividend of 22 sen tax free under the single-tier tax system. This is good news for all shareholders.
Monday, April 08, 2013
TDM Cheapest Among Plantation Stocks
Jewels Among The Rubble
In scouring for jewels in Malaysia’s plantations universe, TDM and Chin Teck stood out among the 10 cheapest plantation stocks in terms of EV per planted ha valuation. We think these stocks’ EV valuations should still be, but are not, higher than Indonesia’s. These stocks could re- rate on account of their severe under-valuation, even if the plantation sector stays unexciting.
Source: RHB The Research Team. Read more here.
In scouring for jewels in Malaysia’s plantations universe, TDM and Chin Teck stood out among the 10 cheapest plantation stocks in terms of EV per planted ha valuation. We think these stocks’ EV valuations should still be, but are not, higher than Indonesia’s. These stocks could re- rate on account of their severe under-valuation, even if the plantation sector stays unexciting.
Source: RHB The Research Team. Read more here.
Interest Seen In Faber
Faber opened at 1.57. It quickly breached its overhead resistance at 1.58, and went up to a high of 1.63 before pulling back to 1.59 for the close. This is a good entry point. Total volume traded amounted to 1,978,400 units which is high for this stock.
Buy at your own risk. Good luck.
Thursday, April 04, 2013
ECS Heading To Cloud Nine
ECS is a leading ICT distributor. It is a small-cap stock with zero borrowings and plenty of cash in hand. The stock has all along been very quiet, but in the last few days, interest in the counter has picked up. This is clearly displayed in the above chart. Volume has also picked considerably.
The recent announcement that ECS is partnering IBM to provide cloud services, and an earlier announcement that the company has inked a deal with CA Technologies to distribute CA Technologies data management solutions are probably the reason that causes demand for the stock.
Going by the chart, the stock is likely to move up more.
Monday, April 01, 2013
Multico A Big Disappointment
Multico actually did well fundamentally as shown in my previous post. I had hope for a good performance today, but it did dismally. Although volume was high, the stock ended at 1.55 which is 5 sen below last Friday's close. The pattern of the chart has turned bearish with the formation of a Bearish Engulfing.
Is the stock price of Multico under manipulation? We have heard of "pump and dump." The exact opposite of this is "depress and collect."
Multico is a small-cap stock. Normally, only a small volume is traded in a trading day. Because of this, the stock can be easily pushed north or south as desired by the manipulators. Going by the chart, support should come in at 1.53, and if this is breached, the next support will be 1.46.
Saturday, March 30, 2013
Multico, Time To Move Forward
THE TECHNOLOGY BEHIND THE WINNING POWER Multi-Code is synonymous with the highest standards of quality through utilizing state-of-the-art technology and extremely stringent quality control to ensure product excellence for its customers. The high quality of Multi-Code’s products meet the exacting standards demanded by the local and international markets.
Multi-Code’s relentless passion for quality has won acknowledgement and recognition when the company was awarded the ISO 9001-2000 and ISO/TS 16949:2002 accreditation for its Quality Management System from TUV Rheinland. Read more.
Multico reported 2Q13 earnings of 7.54 sen per share and revenue of 27.146 million. This compares well with the preceding year's corresponding period of EPS of 4.90 sen and revenue of 25.282 million. From this, we can easily note that its profit margin has improved. This is a good sign.
Another good sign is that its MD, Lim Ming Kee has on Feb 5, 2013 bought 64,500 shares for RM89,010.
In its latest filing with Bursa, the company said that it had won a contract of 74.1 million from PROTON for the supply of functional switches and anti-theft systems. This will enhance its future earnings.
The stock was last traded at 1.60 which is the previous high level. I believe this level will be crossed soon.
The company has declared a single-tier interim dividend of 3 sen which is the same as that for last year. Its NTA now stands at RM1.6267.
In respect of its lawsuit to recover some RM43 million from some of its former directors, the matter is still waiting for news from the court.
All in all, at RM1.60 per share, this stock is a good buy.
As usual, you buy at your own risk.
Multi-Code’s relentless passion for quality has won acknowledgement and recognition when the company was awarded the ISO 9001-2000 and ISO/TS 16949:2002 accreditation for its Quality Management System from TUV Rheinland. Read more.
Multico reported 2Q13 earnings of 7.54 sen per share and revenue of 27.146 million. This compares well with the preceding year's corresponding period of EPS of 4.90 sen and revenue of 25.282 million. From this, we can easily note that its profit margin has improved. This is a good sign.
Another good sign is that its MD, Lim Ming Kee has on Feb 5, 2013 bought 64,500 shares for RM89,010.
In its latest filing with Bursa, the company said that it had won a contract of 74.1 million from PROTON for the supply of functional switches and anti-theft systems. This will enhance its future earnings.
The stock was last traded at 1.60 which is the previous high level. I believe this level will be crossed soon.
The company has declared a single-tier interim dividend of 3 sen which is the same as that for last year. Its NTA now stands at RM1.6267.
In respect of its lawsuit to recover some RM43 million from some of its former directors, the matter is still waiting for news from the court.
All in all, at RM1.60 per share, this stock is a good buy.
As usual, you buy at your own risk.
Monday, March 25, 2013
Control Your Emotion or Other People Will Control You
Many people are controlled by fear. Fear of losing an opportunity causes you to act in haste. Fear of losing your paper profit causes you to sell out too early. And fear of losing everything causes you to sell right at the bottom. Although selling right at the bottom is caused more by frustration than anything else, fear also plays a part. How do we overcome these kind of fears? Knowledge is the best weapon. When you know, people cannot scare, frighten or intimidate you. They can't con you in anyway. Knowledge is your first key to success.
Hope causes you to hold on to a falling stock. Sometimes your hope is rewarded; your stock turns around and you make a profit. Unfortunately, hope often becomes hopeless. Experience tells me that it is much better to keep an uptrend stock and let go a falling one. This strategy is vital, simply because a trend in motion is likely to continue. Hope also causes people to buy into excessively high PE stocks. I prefer what is good today and better tomorrow.
You often hear people say: "Don't be greedy." Actually greed is necessary if you want to make big money. How else can you get a ten-bagger if you are not greedy. But unsatisfied greed is bad. Bulls make money, bears make money but never a pig, so goes the saying. (A pig is someone who will not sell, not matter how high the price goes up.)
Everything has a fair price. When a stock is overpriced, your concern is to sell it at a good price. The best way I know, is to use a trailing stop-loss. If you have no idea what a trailing stop-loss is, you can check it up at Investopedia.com.
This device is to prevent you from selling out too early.
Hope causes you to hold on to a falling stock. Sometimes your hope is rewarded; your stock turns around and you make a profit. Unfortunately, hope often becomes hopeless. Experience tells me that it is much better to keep an uptrend stock and let go a falling one. This strategy is vital, simply because a trend in motion is likely to continue. Hope also causes people to buy into excessively high PE stocks. I prefer what is good today and better tomorrow.
You often hear people say: "Don't be greedy." Actually greed is necessary if you want to make big money. How else can you get a ten-bagger if you are not greedy. But unsatisfied greed is bad. Bulls make money, bears make money but never a pig, so goes the saying. (A pig is someone who will not sell, not matter how high the price goes up.)
Everything has a fair price. When a stock is overpriced, your concern is to sell it at a good price. The best way I know, is to use a trailing stop-loss. If you have no idea what a trailing stop-loss is, you can check it up at Investopedia.com.
This device is to prevent you from selling out too early.
Thursday, March 21, 2013
The Sure Way To Stock Market Success
Knowledge, wisdom, discipline and patience are what you must have to succeed in the stock market. Without knowledge, you can't compete. Without wisdom, you can't strategize. Without discipline, you can't implement, and without patience, you can't control your emotion. Never allow greed, hope and fear to control you.
To have a good knowledge means knowing what is happening around you locally and internationally.
What is happening in some countries, especially the big ones, like America, China, India, Brazil and the European countries can have a profound effect on small countries like Malaysia, Singapore, Indonesia, HongKong, Japan, and Taiwan, to name a few.
Of utmost importance is that you must know how to analyze an annual report of a company. Once you know this, you will be able to distinguish a good stock and that of a rotten one. A rotten stock is like a bad egg which will not hatch no matter how long you sit on it.
Wisdom is the excellent use of knowledge. Without wisdom, knowledge cannot be put to good use. For example, if you know that smoking, gambling and alcoholism are bad for you, but you continue to smoke, gamble and drink. This means you are not putting your knowledge to good use, and thus your knowledge is useless to you.
Having knowledge and knowing what to do are not good enough. You must have discipline to implement those actions needed to bring about success.
If you know that buying in a downtrend is stupid, but continue to catch the falling dagger, you have no discipline.
Impatience is the cause of many a loss. The market is designed to transfer money from the impatient to the patient. So you have to be patient. If you overpay, even for a great stock, it will be a long time before you see a good profit.
When it's not the time to buy, don't buy, otherwise you will soon say to your money, "bye, bye."
Investing in the stock market is a serious affair. Don't take it lightly. Success is sure to be yours if you have knowledge, wisdom, discipline and patience. Unless you are well prepared and well planned, success may just remain a dream.
Good luck and may God bless your every trade.
To have a good knowledge means knowing what is happening around you locally and internationally.
What is happening in some countries, especially the big ones, like America, China, India, Brazil and the European countries can have a profound effect on small countries like Malaysia, Singapore, Indonesia, HongKong, Japan, and Taiwan, to name a few.
Of utmost importance is that you must know how to analyze an annual report of a company. Once you know this, you will be able to distinguish a good stock and that of a rotten one. A rotten stock is like a bad egg which will not hatch no matter how long you sit on it.
Wisdom is the excellent use of knowledge. Without wisdom, knowledge cannot be put to good use. For example, if you know that smoking, gambling and alcoholism are bad for you, but you continue to smoke, gamble and drink. This means you are not putting your knowledge to good use, and thus your knowledge is useless to you.
Having knowledge and knowing what to do are not good enough. You must have discipline to implement those actions needed to bring about success.
If you know that buying in a downtrend is stupid, but continue to catch the falling dagger, you have no discipline.
Impatience is the cause of many a loss. The market is designed to transfer money from the impatient to the patient. So you have to be patient. If you overpay, even for a great stock, it will be a long time before you see a good profit.
When it's not the time to buy, don't buy, otherwise you will soon say to your money, "bye, bye."
Investing in the stock market is a serious affair. Don't take it lightly. Success is sure to be yours if you have knowledge, wisdom, discipline and patience. Unless you are well prepared and well planned, success may just remain a dream.
Good luck and may God bless your every trade.
Saturday, March 09, 2013
MNRB Spectacular Earnings Surprise
MNRB Holdings - Spectacular Earnings Surprise
Author: kiasutrader | Publish date: Fri, 1 Mar 10:10 | >> Read article in Blog website
MNRB's 9MFY13 net profit at RM97.1m was above our expectations, accounting for 124% of our full FY13 earnings estimate. The 91.6% surge in profit was mainly due to lower net claims ratio, 24.4% higher investment income, and an improvement in
underwriting margins. We take the opportunity to upgrade our earnings estimates by as much as 50% for FY13/14 and thus upgrade the stock to a BUY, pegged to 0.6x FY14 BV. The stock is a laggard amongst reinsurers in the region which trade at closer to 1x BV with a 29% upside to our fair value.
Exceeded expectations. MNRB's 9MFY13 net profit at RM97.1m was above our expectations, accounting for 124% of our full year earnings estimates. During 3QFY2013, the group registered a net profit of RM59.0m, 333% higher than the previous year's corresponding period and higher q-o-q from 2Q's RM12.3m loss. The 9MFY13 profit surge of 91.6% was mainly due to: i) significantly lower net claims ratios across a few key business segments, ii) 24.4% higher investment income, iii) improvements in underwriting margins as well as increase in net profit margins from 3.2% to 5.6%. This was however
offset by: i) overall moderate growth of 8.4% in premiums/contributions, and ii) higher fee and commission expenses growth.
Source: OSK
Labels: MNRB
Comment
For fiscal year ended 31.3.12, a final dividend of 17% less tax was paid on 26.10.12. This is about 39% of its full-year earnings.
For fiscal year ended 31.3.13, dividend is expected to be not less than 25% less tax, assuming that the 4th quarter earning is the same or not less than 19.60 sen per share.
As at 31.12.12, the NTA of the stock was RM5.50 per share. The stock was last traded at RM2.89.
My concern about this stock is that there is no consistency in its earnings. This is perhaps the reason why the stock is being traded at such a big discount to its net tangible assets. Nonetheless, at RM2.89, the stock should eventually turn out to be an excellent buy.
As usual, you buy at your own risk.
Author: kiasutrader | Publish date: Fri, 1 Mar 10:10 | >> Read article in Blog website
MNRB's 9MFY13 net profit at RM97.1m was above our expectations, accounting for 124% of our full FY13 earnings estimate. The 91.6% surge in profit was mainly due to lower net claims ratio, 24.4% higher investment income, and an improvement in
underwriting margins. We take the opportunity to upgrade our earnings estimates by as much as 50% for FY13/14 and thus upgrade the stock to a BUY, pegged to 0.6x FY14 BV. The stock is a laggard amongst reinsurers in the region which trade at closer to 1x BV with a 29% upside to our fair value.
Exceeded expectations. MNRB's 9MFY13 net profit at RM97.1m was above our expectations, accounting for 124% of our full year earnings estimates. During 3QFY2013, the group registered a net profit of RM59.0m, 333% higher than the previous year's corresponding period and higher q-o-q from 2Q's RM12.3m loss. The 9MFY13 profit surge of 91.6% was mainly due to: i) significantly lower net claims ratios across a few key business segments, ii) 24.4% higher investment income, iii) improvements in underwriting margins as well as increase in net profit margins from 3.2% to 5.6%. This was however
offset by: i) overall moderate growth of 8.4% in premiums/contributions, and ii) higher fee and commission expenses growth.
Source: OSK
Labels: MNRB
Comment
For fiscal year ended 31.3.12, a final dividend of 17% less tax was paid on 26.10.12. This is about 39% of its full-year earnings.
For fiscal year ended 31.3.13, dividend is expected to be not less than 25% less tax, assuming that the 4th quarter earning is the same or not less than 19.60 sen per share.
As at 31.12.12, the NTA of the stock was RM5.50 per share. The stock was last traded at RM2.89.
My concern about this stock is that there is no consistency in its earnings. This is perhaps the reason why the stock is being traded at such a big discount to its net tangible assets. Nonetheless, at RM2.89, the stock should eventually turn out to be an excellent buy.
As usual, you buy at your own risk.
Saturday, March 02, 2013
Multico To Move Higher
Multico closed up 12sen from Thursday's close at 1.53 last Friday with 1537 lots traded which is above normal volume transacted daily. This is a bullish display. I believe the stock is on track to move higher. As shown in the chart, the resistance is at 1.60. This means that there will be a lot of sellers at 1.60. Whether this resistance will be breached or not remains to be seen. If the resistance is surpassed, then the stock is likely to move up further. Another 20 to 30 sen rise is most likely.
Multico is in the course of claiming back some RM41.77 million from some of its former directors. It is likely to be successful as the high court has ruled in favor of the company. This amount is a big sum to the company as its paid-up capital is only RM44.4047 million.
Multico was traded to as low as 10.5 sen in 2008. I became interested in the stock in 2011 when on Dec 28 of that year I bought 19000 shares at 76 sen per share. Since then I have been accumulating the stock every now and then. In fact I added another 13,000 shares at RM1.39 per share on 27 Feb 2013.
In the annual report for the year ended 31 July, 2012, I noted that Fong Siling (Cold Eye) has 1.2 million shares in the company. This give me added confidence as Mr Fong is well known as a savvy investor.
I believe Multico has a bright future, and I shall hold on to my stock.If you wish to join me on this profitable ride, you are welcome.
I am at Facebook. Anyone who wishes to befriend me there, please do so. Thanks.
Whether you buy, sell or hold as as result of this article, you do so at your own risk absolutely.
Friday, March 01, 2013
Multico More Upside On The Card
Multico moved up 4 sen in the morning session with 647 lots traded. The chart displays encouraging signals with the MACD and Stochastic hooking up. I expect the stock to have more upside from here.
Always buy at your own risk.
Wednesday, February 06, 2013
Gong Si Fa Chai, Happy New Year
Once again the New-Year Greetings are back in touch
To those we seldom write to, but think of much
It's time to send a greeting that's sincere and dear
Wishing them happiness, prosperity and good health
Throughout and beyond the new year.
Plan with Wisdom, stay with Wisdom, and money will come in at random.
To all my readers, I wish them good luck, good health and good profits for all their trades. "Enjoy, it's Happy New Year."
To those we seldom write to, but think of much
It's time to send a greeting that's sincere and dear
Wishing them happiness, prosperity and good health
Throughout and beyond the new year.
Plan with Wisdom, stay with Wisdom, and money will come in at random.
To all my readers, I wish them good luck, good health and good profits for all their trades. "Enjoy, it's Happy New Year."
Tuesday, February 05, 2013
Change, Change, Change
God grant me the serenity to accept the things I cannot change, the courage to change the things I can, and the wisdom to know the difference.
Reinhold Niebuhr
Read more at http://www.brainyquote.com/quotes/topics/topic_change.html#ByEJFPCCO5tKqJO5.99
To improve is to change; to be perfect is to change often.
Winston Churchill
Read more at http://www.brainyquote.com/quotes/topics/topic_change.html#ByEJFPCCO5tKqJO5.99
A small group of thoughtful people could change the world. Indeed, it's the only thing that ever has.
Margaret Mead
Read more at http://www.brainyquote.com/quotes/topics/topic_change.html#hwmOBTGQfceOxBBw.99
Reinhold Niebuhr
Read more at http://www.brainyquote.com/quotes/topics/topic_change.html#ByEJFPCCO5tKqJO5.99
To improve is to change; to be perfect is to change often.
Winston Churchill
Read more at http://www.brainyquote.com/quotes/topics/topic_change.html#ByEJFPCCO5tKqJO5.99
A small group of thoughtful people could change the world. Indeed, it's the only thing that ever has.
Margaret Mead
Read more at http://www.brainyquote.com/quotes/topics/topic_change.html#hwmOBTGQfceOxBBw.99
Saturday, February 02, 2013
Are We To Have a Chinese New Year Rally?
The chart shows 4 weekly red candles in the last 4 weeks. For the trend to reverse, a green weekly candle must appear first. So keep watching for this to happen. If you don't see any green candle in place, you have to assume that the downtrend will continue. This is likely as the stochastic is also trending down
Going by the chart, some support will come in at 1590, and if this is breached, the next likely support will be 1527.
So, are we going to have a Chinese New Year Rally? I don't think so. My opinion is that there will not be much fanfare until the GE13 is over. But if there is political chaos in the country over the GE13, and foreign funds pull out, the market will take a dive.
Good luck and Happy Trading. Always bet at your own risk.
Tuesday, January 29, 2013
The 10 Commandments
1. Thou shall not go against the trend.
If it be down, let it be down. The market is bigger and stronger than you.
Follow the market but be one step ahead of the crowd.
2. Thou shall not follow the herd instinct
Just because many people are buying a certain stock does not mean you should follow suit. If people want to buy rubbish stocks, that is their bad luck. Don't make it yours.
3. Thou shall treat the market as a business, not a casino
The stock market is not meant to be a casino and you should not be there to gamble.
4.Thou shall not buy high-debted and no-earnings stocks
All companies that folded are highly geared with negative earnings. Don't buy rubbish shares; don't buy somebody's liabilities.
5. Thou shall only buy solvent companies with good-growth prospects
Present earnings are important, but future earnings are more important. That's why we have companies selling at high PER (Price earnings ratios).
6. Thou shall not be overconfident
Overconfidence leads to overtrading. Once you overtrade, you may not be able to control your own emotion. Fear may set in when the market is not going the way you expect it. It may disrupt your plan, turning your profitable trade into a loss.
7. Thou shall invest within the comfort zone
Don't be too greedy; don't play with borrowed money. Debt is a disease. It can cause you a lot of problem if you are not careful.
8. Thou shall be patient
The market is designed to transfer money from the impatient to the patient. You must have very good reasons before you switch counters. Very often, the shares you sell move up faster than the shares you buy.
9. Thou shall be disciplined
Don't change your strategy at the eleventh hour. If you have placed a stop-loss in your chart, don't remove it unless it is replaced with a trailing stop-loss.
10. Thou shall be knowledgable
Investment in knowledge pays the best dividend. No one is so skillful that he cannot better his best. Keep learning for knowledge is boundless.
Happy investing.
If it be down, let it be down. The market is bigger and stronger than you.
Follow the market but be one step ahead of the crowd.
2. Thou shall not follow the herd instinct
Just because many people are buying a certain stock does not mean you should follow suit. If people want to buy rubbish stocks, that is their bad luck. Don't make it yours.
3. Thou shall treat the market as a business, not a casino
The stock market is not meant to be a casino and you should not be there to gamble.
4.Thou shall not buy high-debted and no-earnings stocks
All companies that folded are highly geared with negative earnings. Don't buy rubbish shares; don't buy somebody's liabilities.
5. Thou shall only buy solvent companies with good-growth prospects
Present earnings are important, but future earnings are more important. That's why we have companies selling at high PER (Price earnings ratios).
6. Thou shall not be overconfident
Overconfidence leads to overtrading. Once you overtrade, you may not be able to control your own emotion. Fear may set in when the market is not going the way you expect it. It may disrupt your plan, turning your profitable trade into a loss.
7. Thou shall invest within the comfort zone
Don't be too greedy; don't play with borrowed money. Debt is a disease. It can cause you a lot of problem if you are not careful.
8. Thou shall be patient
The market is designed to transfer money from the impatient to the patient. You must have very good reasons before you switch counters. Very often, the shares you sell move up faster than the shares you buy.
9. Thou shall be disciplined
Don't change your strategy at the eleventh hour. If you have placed a stop-loss in your chart, don't remove it unless it is replaced with a trailing stop-loss.
10. Thou shall be knowledgable
Investment in knowledge pays the best dividend. No one is so skillful that he cannot better his best. Keep learning for knowledge is boundless.
Happy investing.
Friday, January 25, 2013
The Importance Of The Trend
One of the most importance features in TA (Technical Analysis) is the trend. Before you buy or sell, you should have a look at the trend of the stock. How do you do that? The only way I know is to look at the chart. ( I wonder how people who do not believe in charts do it.)
With a chart it is easy for you to know the trend. When you see higher highs and higher lows, you have an uptrend. When you see lower highs and lower lows, you have a downtrend. Your can also have a sidetrend which means that prices are moving sideways in a narrow range.
Once you have determined the trend, you can then decide what action to take.
Buying in a downtrend should be avoided, especially when the downtrend is initially moving down after a long uptrend.
Similarly, selling in an uptrend should also be avoided, especially when the uptrend is just beginning to trend up after a long downtrend or a long sidetrend.
Many people make the mistake of selling in the initial stage of an uptrend. This is because they have been holding the stock for too long at a loss, and when they see a chance to get out at a small profit or a small loss, they quickly do it. This is a grave error, because more often than not, the price continues to move up after their sales.
How many times have you heard people say this, "I sold out just before the big rise?" Remember this: A trend in motion is likely to continue.
Never be the first to sell in an uptrend nor the last to buy. Never be the first to buy in a downtrend nor the last to sell.
If you find this article useful, please click "f" or tweet it. Thanks.
With a chart it is easy for you to know the trend. When you see higher highs and higher lows, you have an uptrend. When you see lower highs and lower lows, you have a downtrend. Your can also have a sidetrend which means that prices are moving sideways in a narrow range.
Once you have determined the trend, you can then decide what action to take.
Buying in a downtrend should be avoided, especially when the downtrend is initially moving down after a long uptrend.
Similarly, selling in an uptrend should also be avoided, especially when the uptrend is just beginning to trend up after a long downtrend or a long sidetrend.
Many people make the mistake of selling in the initial stage of an uptrend. This is because they have been holding the stock for too long at a loss, and when they see a chance to get out at a small profit or a small loss, they quickly do it. This is a grave error, because more often than not, the price continues to move up after their sales.
How many times have you heard people say this, "I sold out just before the big rise?" Remember this: A trend in motion is likely to continue.
Never be the first to sell in an uptrend nor the last to buy. Never be the first to buy in a downtrend nor the last to sell.
If you find this article useful, please click "f" or tweet it. Thanks.
Subscribe to:
Posts (Atom)