Stock Market Wisdom

I am Ben Gan from Bentong, Pahang. Investing in the Malaysian stock market is my hobby and passion. Lots of money can be made from the stock market provided you know the correct approach. The correct approach simply means that you must invest. Do not gamble. If you do, you are finished! Look at Genting. They make millions and millions year after year. In gambling, the sole winner is the house. In speculation, you have a little more than 50% chance of survival. You must however, make a lot of calculation and research. Calculated risk is okay but not blind betting. Value investing is the best choice.

What is Value Investing? Value Investing means buying undervalued stocks. It means buying a Toyota with the price of a Proton and then selling it for the price of a Mercedes. Never get married to your stocks. Once they become overvalued they must be sold.

Do not confuse value with price. A share selling at 5 cents may be costly; whereas one selling at $5 may be cheap. Know the chaff from the grains. Know what the company has and what it owes others. Other than that, the calibre of the management, future earnings, earnings growth and the nature of its business must also be considered. Earnings are the lifeblood of a company. Therefore, companies with little earnings or no earnings at all should be avoided. These companies are the problem of other people. Do not make it yours. Earnings should be considered as earnings per share (EPS) without the exceptional gains, if any.

To be successful in the stock market, you need to have knowledge, wisdom, guts, discipline and patience. Of course you must have cash as well. Knowledge and wisdom are two different things. Knowledge is knowledge. Wisdom is the right use of knowledge. Knowledge without wisdom is not effective to bring about profits.

Before you invest or speculate in the stock market, ask yourself whether you have the temperament and swift reasoning power to cope with some of the best brains in the world. If you do, you will find that hardly a day passes without the market offering you great opportunities in money making.

Recently I read an article dated 10 June 2006 about FSBM by Tee Lin Say in TheStar. The article is informative and extremely well-written. FSBM is definitely undervalued at RM1.30+ a share. I like the nature of its business. I believe it has great potential to grow big. It should be good for your portfolio.

Good luck.

Disclaimer: You are absolutely responsible for your own action. You buy and sell at your own risk, remember.