Thursday, December 13, 2007
I have just launch a new forum at www.lokaloka.net (Know your Neighbourhood Better).
This is NOT a forum about stock market in Malaysia, but LokaLoka.net is all about the news, gossips, and happenings in your neighbourhoods that matters the most to you.
I stay in Seri Kembangan, Selangor and I have posted a few stuffs in the Seri Kembangan's board. Take a look at the board here under Seri Kembangan or Puchong.
To make it simple, LokaLoka.net categorized Malaysia into different states and then subcategorized them into different cities/towns so that we can know our specific neighbourhood better. It is easy to use and registration is an ease.
I hope you can join us as a member in www.LokaLoka.net to listen and share all the news, gossips, and happenings around our city.
Until then, good luck to your stock investment and trading in KLSE. Cheers~
Posted by Leremy.
Tuesday, December 04, 2007
Climate change may wipe some Indonesian islands off mapBy Sugita Katyal and Adhityani Arga
JAKARTA (Reuters) - Many of Indonesia's islands may be swallowed up by the sea if world leaders fail to find a way to halt rising sea levels at this week's climate change conference on the resort island of Bali.
Doomsters take this dire warning by Indonesian scientists a step further and predict that by 2035, the Indonesian capital's airport will be flooded by sea water and rendered useless; and by 2080, the tide will be lapping at the steps of Jakarta's imposing Dutch-era Presidential palace which sits 10 km inland (about 6 miles).
Just last week, tides burst through sea walls, cutting a key road to Jakarta's international airport until officials were able to reinforce coastal barricades.
"Island states are very vulnerable to sea level rise and very vulnerable to storms. Indonesia ... is particularly vulnerable," Nicholas Stern, author of an acclaimed report on climate change, said on a visit to Jakarta earlier this year.
Even large islands are at risk as global warming might shrink their land mass, forcing coastal communities out of their homes and depriving millions of a livelihood.
The island worst hit would be Java, which accounts for more than half of Indonesia's 226 million people. Here rising sea levels would swamp three of the island's biggest cities near the coast -- Jakarta, Surabaya and Semarang -- destroying industrial plants and infrastructure.
"Tens of millions of people would have to move out of their homes. There is no way this will happen without conflict," Environment Minister Rachmat Witoelar said recently.
"The cost would be very high. Imagine, it's not just about building better infrastructure, but we'd have to relocate people and change the way people live," added Witoelar, who has said that Indonesia could lose 2,000 of its islands by 2030 if sea levels continue to rise.
CRUNCH TIME AT BALI
Environmentalists say this week's climate change meeting in Bali will be crunch time for threatened coastlines and islands as delegates from nearly 190 countries meet to hammer out a new treaty on global warming.
Several small island nations including Singapore, Fiji, Kiribati, Tuvalu and Caribbean countries have raised the alarm over rising sea levels which could wipe them off the map.
The Maldives, a cluster of 1,200 islands renowned for its luxury resorts, has asked the international community to address climate change so it does not sink into a watery grave.
According to a U.N. climate report, temperatures are likely to rise by between 1.1 and 6.4 degrees Celsius (2.0 and 11.5 degrees Fahrenheit) and sea levels by between 18 cm and 59 cm (seven and 23 inches) this century.
Under current greenhouse gas emission levels, Indonesia could lose about 400,000 sq km of land mass by 2080, including about 10 percent of Papua, and 5 percent of both Java and Sumatra on the northern coastlines, Armi Susandi, a meteorologist at the Bandung Institute of Technology, told Reuters.
Indonesia, the world's fourth-most populous country, has faced intense pressure over agricultural land for decades.
Susandi, who has researched the impact of climate change on Indonesia, estimated sea levels would rise by an average of 0.5 cm a year until 2080, while the submersion rate in Jakarta, which lies just above sea level, would be higher at 0.87 cm a year.
A study by the UK-based International Institute for Economy and Development (IIED) said at least 8 out of 92 of the outermost small islands that make up the country's borders are vulnerable.
TOO MANY ISLANDS TO COUNT
Less than half of Indonesia's islands are inhabited and many are not even named. Now, the authorities are hastily counting the coral-fringed islands that span a distance of 5,000 km, the equivalent of going from Ireland to Iran, before it is too late.
Disappearing islands and coastlines would not only change the Indonesian map, but could also restrict access to mineral resources situated in the most vulnerable spots, Susandi said.
He estimates that land loss alone would cost Indonesia 5 percent of its GDP without taking into account the loss of property and livelihood as millions migrate from low-lying coastlines to cities and towns on higher ground.
There are 42 million people in Indonesia living in areas less than 10 meters above the average sea level, who could be acutely affected by rising sea levels, the IIED study showed.
A separate study by the United Nations Environment Programme in 1992 showed in two districts in Java alone, rising waters could deprive more than 81,000 farmers of their rice fields or prawn and fish ponds, while 43,000 farm labourers would lose their job.
One solution is to cover Indonesia's fragile beaches with mangroves, the first line of defence against sea level rise, which can break big waves and hold back soil and silt that damage coral reefs.
A more expensive alternative is to erect multiple concrete walls on the coastlines, as the United States has done to break the tropical storms that hit its coast, Susandi said.
Some areas, including the northern shores of Jakarta, are already fitted with concrete sea barriers, but they are often damaged or too low to block rising waters and big waves such as the ones that hit Jakarta in November.
"It will be like permanent flooding," Susandi said. "By 2050, about 24 percent of Jakarta will disappear," possibly even forcing the capital to move to Bandung, a hill city 180 km east of Jakarta.
Copyright © 2007 Reuters
Wednesday, October 31, 2007
There's an old saying that goes, "It's a recession if your neighbor loses his job. It's a depression if you lose your job."
Watching the financial news networks and reading the financial publications these days, you'll see many people asking if the U.S. economy is heading into a recession. From my vantage point, the answer is yes. I believe that for many people in certain industries, like real estate, the worst is yet to come.
Economic Ripple Effects
Before getting into why I think there will be a recession, it's important to know the specific definition of the term. Very simply, a recession is a decline in a country's gross domestic product (GDP) for at least two quarters. That means that bywe'll know if we're in a recession or not.
In some ways, the coming recession is a product of the physical phenomenon known as precession. Precession is the effect of bodies in motion upon other bodies in motion -- or, more simply, a ripple effect, like when you throw a stone into a still pond and the waves emanating from it overlap.
While there are many such processional "waves" in the coming recession, one is the lack of integrity in the U.S. monetary system. The United States has defaulted on its financial promises many times in recent history. In 1934, we defaulted on domestic gold redemption. That year, it became illegal for U.S. citizens to own gold. Instead, the government required Americans to turn in their gold, and they were paid $20 in paper money for every ounce of gold they surrendered.
Once the gold was collected, the government raised the price of gold to $35 an ounce. Talk about a lack of integrity. And in 1968, the U.S. defaulted on silver redemption, taking U.S. dollars backed by silver out of circulation. Finally, in 1971, the U.S. defaulted on international gold redemption.
Another reason for the coming recession is the subprime mess. And while issues related to the subprime fiasco may seem domestic, they actually have severe international consequences. The subprime mess seems to be a problem associated with lower-income people who can't afford their homes, yet it's really the tip of a very large international iceberg, and it'll affect all of us. Here's why.
In the Sept. 12, 2007, issue of Business Week, Kerry Capell asked the question, "Could any country be more exposed to the credit crunch than the U.S.?" The answer: "You bet, and that place is."
Unlike many of its European neighbors, Britain shares many of America's financial traits. In the last few years, access to cheap credit in Britain has fueled a decade of economic growth, with home prices tripling in 10 years -- an even faster rise than in the United States. With cheap borrowed money, the English consumer has caused the British economy to boom; consumers are responsible for two-thirds of the British economy.
Today, Britain is more dependent upon financial services than we are. So what will happen to the world if bothand the United States go into a recession? The precessional effect is bound to be dire -- especially for working people.
Too Much Money
As strange as it may seem to the average person, the problem is not a shortage of money -- it's too much money. The world is choking on too many U.S. dollars.
Normally, when a currency gets into trouble as the dollar is now, all the country has to do is raise the interest rates on their bonds and things are fine again. But because of the subprime meltdown, thecan't simply raise or lower interest rates.
In simplified terms, the Fed must keep rates low in order to save the domestic economy. This causes the international economy to dump the dollar by not buying our bonds, which is one reason why the price of gold keeps going up -- it's the true international money. And the rise in its price (and in the price of oil) signals the loss of the purchasing power of the dollar; the world simply doesn't want any more dollars. This is a ripple effect from 1971, when the dollar came off the.
Less for More
The tragedy of this excess of money is that most of the world's workers have to work harder to earn less. This is because the currencies of the world are becoming less and less valuable. Even if workers get pay raises, the boost won't be able to keep pace with declines in the purchasing power of money, increases in expenses such as oil, decreases in the value of homes, declines in the value of stocks, and increases in taxes.
Just look at what's happened in the last decade. Ten years ago, gold was about $275 an ounce. Today, it's over $700. That means that, compared to gold, your income would've had to go up by 250 percent just to keep up with the loss in purchasing power of the dollar. Or, compared to oil -- which was about $10 a barrel 10 years ago and today is over $80 a barrel -- your income would've had to go up by 800 percent.
Sure, there are many people whose incomes have gone up way beyond 800 percent in the last 10 years. The problem is that most people's incomes haven't kept pace, and they're technically in a state of personal recession with no way out.
Throw Yourself a Lifeline
As the global economy continues to gyrate, you'll hear more and more people calling for theto either lower or raise interest rates. The problem is that the Fed has less and less power to do much.
If it tries to save the domestic economy, the international economy will pound us. If the Fed tries to save the dollar internationally by raising interest rates, it'll kill the domestic economy.
Instead of looking to the Fed to save you, then, I recommend you save yourself by investing in real international money. One way to do so is by purchasing silver. Gold is expensive, but silver is still a bargain even for the little guy. When the recession comes, the ripple effect on yourwill be immeasurable.
Monday, October 29, 2007
Recognizing Value - the Key to Gaining a Gambling Edge
Risk is part of everyday life, more so than most people probably realize. From crossing the road to the more obvious financial decisions such as buying a house, or starting a business, all involve varying amounts of uncertainty which must be considered. Gambling is the purest expression of risk, yet even when presented with a seemingly simple choice of potential outcomes for an unknown event, such as a football match, many bettors display a worrying ignorance of the concept of value and the fundamental mathematical principals involved. In simple terms, if a bettor cannot recognize 'value' they will never be a long term winner.
Take a look at this seemingly simple mathematical puzzle, known as the Monty Hall paradox (named after the host of 'Let's Make a Deal', a popular US show in the 60's & 70's which formed the basis of the poser):
An unbiased game-show host has placed a car behind one of three doors. There is a goat behind each of the other doors. You have no prior knowledge that allows you to distinguish among the doors. 'First you point toward a door,' he says. 'Then I'll open one of the other doors to reveal a goat. After I've shown you the goat, you make your final choice whether to stick with your initial choice of doors, or to switch to the remaining door. You win whatever is behind the door.' You begin by pointing to door number 1. The host shows you that door number 3 has a goat.
Do you gain value and see your chances of winning the car increase by switching to Door 2 or do you stay with Door 1 as it has an equal chance with only two doors left to choose from? When this question was posed in Parade magazine, 10,000 readers complained that the published answer was wrong - including several maths professors.
The assumption of 'equal probability', while being intuitively seductive, is wrong. The simple answer is to always switch doors. The car is behind one of the two closed doors, but you have no way of knowing which. Most contestants intuitively see no advantage in switching and assume that now there are only two doors, each must have an equal probability of revealing a car. In fact, your chances of winning the car actually double by switching to the door the host offers. If you switch, you gain value as theoretically you now have a 2/3 chance of winning the car. If you stayed with your original selection you have just a 1/3 chance of winning.
The principle is underlined by increasing the number of doors to 100. If 99 doors have a goat behind them and only one has a prize, if the player picks a door and then the host opens 98 of the other doors that were all shown to contain goats and then gives the player the opportunity to switch, the intelligent player would switch. The reason being that on average, in 99 out of 100 times the other door will contain the prize, as 99 out of 100 times the player first picked a door with a goat.
This article is taken from Bettingadvice.com
Tuesday, October 02, 2007
Please be informed that I have created a Community Website known as "talkandshare.com".
Everyone is requested and welcome to join this Community.
Registration is free and easy. It will not take you more than a few minutes to get registered. After registration, you can start your chit-chat and have your say posted at your own convenience. All new postings will be at the new website. Posting at blisswise will be few and far between.
Please register early and make your presence felt. Thanks in anticipation.
Together, let us make this website interesting, meaningful and educational.
Our motto is: Share to Prosper. Click here to join.
With best wishes and regards,
Sunday, September 30, 2007
Termites are blind. Yet millions of them can co-ordinate their efforts to build their nest which has a system much like our air-conditioned room.
In a dark cave where wires are strung, bats can maneuver their flying without touching these wires.
A swift can easily identify its own nest which lies among thousands of them, all looking alike.
Certain kinds of water beetles can stay underwater for more than an hour because they have the ability to grasp a bubble of air for use then they submerge. Man uses the oxygen tank strapped to his body.
Wasps and hornets are able to convert wood to paper to build their nests.
Homing pigeons and migrating birds know their ways by sensing the earth’s magnetic field.
Man has light bulbs. Fireflies and many kinds of fish also have their own lights.
Man tills the soil and tends livestock for food. Ants make compost form leaves and with their droppings, they can grow fungi for food. Some ants keep aphids (kind of small insects) as their livestock.
A humming bird beats its wings up to 75 times a second for 25 hours when migrating.
Penguins can spend months at sea in total darkness without getting lost.
The above are just some of the amazing wonders of our world. Do these wonders happen by chance or do we really have a Creator?
Can we use instinct to trade or invest in the stock market? We do not have this inborn ability. If everyone can trade profitably, who is to be the loser? The stock market is a zero-sum game. This means for someone to win, someone must lose.
Our skill and ability do not come by instinct. Our limps are not willing servants until they are trained and disciplined.
Fortunately, we are endowed with the most amazing wonder of the world. This is the human brain. With it, we have the faculty of speech, learning, thought and reasoning. With it, we can learn from plants and all living creatures and yet control them. With it, we are the master of the world.
But, can we control the market? To control is impossible; to benefit from it, yes we can.
Friday, September 21, 2007
“Oh you! I can actually dance around you and still beat you with my hands down.” He said to the Tortoise.
“Keep your boastings to yourself until you have beaten me,” replied the Tortoise. And so the race was arranged.
On the agreed day and time they met for the race. As soon as the race started, the Hare shot out to the front and quickly sped off. After awhile, the Hare said to himself: “Hey! What’s the hurry? I better check where the Tortoise is.” So he slowed down to check. As soon as he slowed down, he heard a voice. “I am here, right in front of you.”
The Hare was shocked. “How can it be,” he murmured to himself. A sense of urgency came over him and he quickly raced past the Tortoise. Then he slowed down to check again. As soon as he did that, he saw the Tortoise right in front of him again. “You are slow; if you don’t speed up, you’ll lose the race.” He heard the Tortoise said.
The Hare got the shock of his life. Quickly he sped off once more. That time he really raced with all his strength and speed. At the finishing line he was panting for breath but the Tortoise was there already.
Beaten in disgrace, he hung down his head and walked away in tears.
How did the Tortoise do that? What was the strategy?
Well folks, be careful, no matter how fast or good you are, you can be beaten or played out by someone smarter than you.
Sunday, September 16, 2007
One day, while Chicken Little was walking in the woods, an acorn fell and hit him on his head.
“Goodness gracious me!” said Chicken Little, “The sky is falling, the sky is falling. I must go warn everyone.”
We see this all the time. The stock market goes straight up for eight or nine months, and if there are 2 or 3 down days in a row, there is hand-wringing and the moaning all over the place.
Who are these people that panic at the first sign of a downturn or with the slightest bit of profit taking?
The first group are people who get in the near the top and are now worried that their small losses will turn into big losses. Also, people who haven’t invested in the stock market are in this same box. For many, many years they were wrong to not have invested, but now that the market has declined very slightly for a few days they would like the point out how smart they are and how dumb everyone else is.
Short–sellers are the next group. Short selling is selling a security that the seller does not own but is committed to repurchasing eventually. It is used to take advantage of an expected decline in the security’s price.
The press comes next. You have heard this before: “bad news sells newspapers.”
The 24–hour television news stations must make every tiny move in a stock or in the stock market seem like a momentous occasion. Imagine hearing such a stupid statement as “this is the largest stock market decline since last week.”
The slimiest are the politicians whose party is out of power. They try to make themselves look good by making the other guys look bad. It does not matter which group you belong to or who is in power or out of power at the moment.
An out of power politician must find the cloud in every silver lining.
So, how can you protect yourself? What should you do to keep out of “the sky is falling” trap?
The most important thing that you can do is to be clear about your long-term financial goals and objectives. Yes, in the very short run, many circumstances can affect the value of your portfolio. In a well-diversified portfolio, these declines will be relatively small and short lived.
Twenty years from now, it will not have mattered who was shot during the past twenty years or who was in power or who went to jail or to war. Simply ask yourself, “how will three dollar a gallon gasoline affect my retirement twenty years from now?”
Don’t worry about tales of imminent doom and gloom. Don’t listen to, and certainly, don’t act upon rumors and scare stories. And, most of all, don’t spread these stories yourself.
Saturday, September 08, 2007
Budget 2008 is indeed an election budget. What I really like is that all dividends will be tax-exempted. This will benefit all and sundry. Those in the high income group and those who never claim back the tax deducted from their dividends are the ones to benefit most.
Stamp duties for properties transferred to one's spouse are also exempted. It would be much more commendable if this is extended to the children as well.
Overall, the budget is an excellent one; in fact, the best I know of, so far.
Three cheers to that.
Saturday, September 01, 2007
Sunday, August 26, 2007
Smoking is no longer smart. All our ministers are smart. None of them smoke.
Cigarettes are slow poisonous drugs. They kill you slowly. Medical science has proved beyond doubt that smoking weakens your immune system. It is a cause of erectile dysfunction. It also adversely affects your heart, irritates your throat and eyes and causes insomnia as well.
It is not difficult to give up smoking once you realize how much pain and sufferings you will have to endure when some chronic diseases finally catches up with you because of smoking.
The moment you light up, you are actually burning cash. If your smoking habit causes you RM8 per day, you have to spend RM2,920 per year. At the interest rate of 3.1% p.a., to earn
RM2,920 per year, you need to have RM94,193! This means that the moment you give up smoking, you have got yourself a profit for that figure. Think about it.
Other than this, your health will improve, your food will taste better, your libido will be boosted and you will enjoy better relationship with your spouse. Your friends will congratulate you; your family will rejoice with you.
You don’t want your children to smoke. Right? Why encourage them by your own action? To stop smoking, change your mentality. Realize how much you can save in terms of cash and how much healthier you will be once you drop the habit. For those who wish to give up smoking, there is no better time than now. Just say, “I can and I will." Remember, smoking is no longer smart.
Be healthy, be smart, be a non-smoker.
Sunday, August 19, 2007
The Dow closed at 13,079, up 233 points. This couple with KLCI‘s off-low closing is likely to bring some cheers to the local burse, come Monday morning. We will have to wait to see whether it will be a flash in the pan. My reading of the chart is there will be resistance at 1214 points.
According to Prudential Fund Management Bhd, the subprime market stands at US$1.2 trillion out of a total
US have always emerged stronger after every crisis. This one will be no exception. Those who have plenty of cash in hand can start their bargain hunting. Look for sound solid companies that are cash rich, high dividend yielding with good prospective earnings. If you wish to play penny stocks, remember that low price is not cheap price.
As usual, this blog disclaims all liability for its comments.
Saturday, August 11, 2007
Amid bearish sentiment PPerdana (PP) jumped 38 sen to close at 3.28 yesterday. Demand for the stock is reflected in the long white candle with good volume.
This 50 sen par value counter has just changed controlling interest. E & O has sold its 50.6% stake to Swan Symphony sb (SS) at 2.90 per share.
SS is 51% owned by Abu Dhabi-Kuwait-Malaysian Investment Corp and 49% owned by Autron Investment.
Presently PP is a small-cap company. As at
The company is in its infancy of being transformed into a construction giant. A buy and hold strategy will probably turn out to be beneficial. To read more, click here.
As usual, you buy and sell at your own risk.
Thursday, August 09, 2007
Fantastic Personal Security Idea
A Simple and Easy Task for our Safety. (tips from Bukit Aman)
Next time you come home for the night and before you put your keys away, think of this :
It's a security alarm system that you probably already have and requires no installation.
Start keeping your car keys next to your bed on the night stand before you go to rest.
If you think someone is trying to get into your house, or if you hear a noise outside your house, just press the alarm button on the remote controller of your car.....
Test it! It should be triggered on almost when you press in
everywhere inside your house and will keep honking until your
battery runs down or until you reset it.
If your car alarm is activated when someone is trying to break in your
house, odds are the burglar or rapist won't stick around.....after a few seconds all the neighbors will be looking out their windows to see who is out there and sure enough the criminal won't want that.
Try yours to make sure it works before you rely on it. Just know that you must press the alarm button again to turn it off.
And remember to carry your keys while walking to your car at the carpark in the evening or while you are alone. The alarm can work the same way there.....
This is something that should really be shared with everyone.
Maybe it could save a life or from a sex abuse.
So put those car keys & remote controller on the night table now!
Or if you're at work, forward this message to your home so that you will remember to do this tonight when you get home. Let the rest of the family know about this too.
Someone known as CG posted the above message to me. I think the idea is excellent.
Saturday, August 04, 2007
Saturday, July 28, 2007
The company has 15 years of uninterrupted growth from 1992 to 2006.
Its vision is to be the leading Managed ICT Services Provider in
In 2002, VADS was listed in the Second Board with an offer price of RM2.10.
In 2003, it signed with AT & T to provide high speed international Managed Network Services to over 60 countries.
In 2004, it achieved Cisco Silver Partner status.
In 2005, it was transferred to the Main Board after a bonus issue of 1 for 2. In the same year, it won the Cisco Best Managed Services Partner award as well as the IBM Platinum award.
Besides in-sourcing business from TM group, its other customers encompass other industries with includes banking, insurance, shipping, power & telecommunications
For fiscal year 2006, its EPS was 52.9c. This compares well with EPS of 28.7 sen for 2005.
For the 1st half year ended 30.6.07, EPS jumped to 34.84. The 2nd quarter, in particular, shows phenomenal growth. EPS stand at 21.51 sen. This is a 96.79% improvement over the previous corresponding period of last year.
With some overseas contracts coming on stream, earnings will continue to grow unabated and with greater momentum as well.
The growth potential of this small-cap stock is immense and commendable. Recently, the company announced a share split of 1 into 2 and an interim dividend of 17 sen tax free.
OSK Securities has upgraded its share price to RM10.50 per share.
CEO Dennis Koh Seng Huat and his team have done superbly. May their splendid run continues.
A small-cap stock with explosive earnings growth is the key to great wealth.
As usual, this blog disclaims all liability for its comments.
Thursday, July 26, 2007
Boxing rings are square.
Quicksand takes you down slowly.
There is neither pine nor apple in pineapples.
French fried potatoes are not from
A French kiss is a play of the tongues.
You can have a Dutch wife as your sleeping partner without incurring the wrath of your wife.
While it’s normal for you to go Dutch when you take your lunch with your friends, you can’t take French leave without facing the sack.
A secretary bird is a large bird of prey. It feeds largely on reptiles and is an expert in catching snakes.
You can burn down a house by burning it up.
A vegetarian is one who eats vegetables. So, what does a humanitarian eat?
While you can cool your body with a cold bath, you can actually hot up the night with some cold beer.
A stop-loss is to limit your loss; a trailing stop-loss is to lock in your gains.
A bear lumbers; a bull charges, a stag bounds, a pig trots, a peacock struts, a rabbit leaps, a mouse scampers, a cat steals and a bird flies.
The stock market has the most talent. It can break out, gap up, crawl, climb, jump, fly, hit the top and burst through the roof. It can make you feel sad, frustrated, disappointed and sorry. It can also give you joy, glory, happiness and wealth.
English has eight parts of speech. Adjective is one of them. If you have trouble using a series of adjectives to say more about a noun, remember this word, “OPSHACOM” which stands for Opinion, Shape, Age, Color, Origin and Material. Thus we say: It is a lovely round new reddish Malaysian wooden table.
In English, we can use the present tense or present continuous tense to talk about the future. Hence, it is grammatically correct to say:
The bus leaves for KL tomorrow at 9 in the morning.
I am having a party tonight.
Thank you for reading.
Saturday, July 21, 2007
- Great minds think alike. Fools seldom differ.
- Save for a rainy day. Tomorrow will take care of itself.
- Life is what we make it. What will be, will be.
- Too many cooks spoil the broth. Many hands make light work.
- One man’s meat is another man’s poison. Sauce for the goose is sauce for the gander.
- Silence is golden. The squeaky wheel gets the grease.
- Opposite attracts. Birds of the same feather flock together.
- Faint heart never won fair lady. The meek shall inherit the earth.
- All good things come to those who wait. Those who hesitate are lost.
- Clothes make the man. Don’t judge a book by its cover.
- Nothing ventures, nothing gains. Better be safe than sorry.
- The bigger, the better. The best things come in small packages.
- Absence makes the heart grows fonder. Out of sight is out of mind.
- With age comes wisdom. Out of the mouths of babes come all wise sayings.
- Two is company, three is a crowd. The more, the merrier.
- Actions speak louder than words. The pen is mightier than the sword.
Saturday, July 14, 2007
The Chrysalis heard the Ant but said nothing. A few days later, the ant came back. He saw only the shell of the Chrysalis. He was wondering what had happened when he felt himself shaded and fanned by the wings of a butterfly. Then he heard the Butterfly said: “Behold in me, your much-pitied friend! Get me to listen to your boastings regarding your power to run and climb, if only you can come close to me.” So saying, the Butterfly flitted away and was soon aloft the morning breeze in the sun, leaving the Ant bewildered.
Never despise others. Appearances are deceptive.
Many that are down shall be restored and many that are now in honor may not remain so. At least two sleepy and normally quiet stocks showed some life yesterday. Fima Corp has been in a downtrend since its high of 2.74 in November 2006. It hit a low of 2.08 in May 07. Last Friday, the stock closed at 2.25 with some volume. The stock is 59.82% owned by Fima Metal Box Holdings Sdn Bhd as at 16.6.2006. Yesterday’s glimmer of hope could be an indication of better things to come for Fima Corp. Keep this in view.
The other stock is VADS which closed at 7 with some volume. The correction for this counter appears to be over. OSK said that the stock was worth RM9 plus per share some time ago.
Sunday, July 08, 2007
Fear leads to worries. Worries lead to miseries. Miseries lead to loss of sleep, loss of appetite and eventually to illness.
Medical science agrees that worries and anxieties aggravate high-blood pressures, diabetes, ulcers and many other chronic diseases.
Fear of poverty is the worst kind of fear. Man is by nature, avaricious. And because of his insatiable greed for riches, man finds satisfaction in preying upon man, not to eat his fresh and blood, but to rob him of this wealth. Thus man also creates fear for man. People can cause you trouble but if you know how to guard yourself, others cannot create worries in your mind.
Each type of fear needs a different approach to subjugate it. For example, if you fear illness, you must adopt a healthy lifestyle; do your exercise regularly and also control your diet. If you don’t want others to take advantage of you, you need to upgrade your skill and enhance your knowledge.
Fortunately man is endowed with the faculty of thought which is controllable. Every human being has the ability to control his own mind. By intelligence, we can mitigate fear. Negative thought creates fear and demoralization. Positive thought brings forth hopes and ideals. By refusing to think negatively, much fear if not all, is eliminated.
A newborn calf has no fear for a tiger because the calf does not know that the tiger can eat him up for lunch. A hunter with his men and guns has no fear for the tiger because he knows that he can kill the tiger before the tiger can cause him any harm.
A professional trader or investor has no fear in the stock market because he knows that he is skilful enough to win. A beginner in the stock market has no fear because he is as naïve as the calf.
Know who you are before you attempt to ‘play’ the market.
Lately, another kind of fear has emerged in the stock market. This is accounting fraud or accounting irregularities. How can anyone protect himself against such fear? (All comments and opinions are welcome.)
Saturday, June 30, 2007
Earnings per share for the year ended 30.4.2007 is 6.4c as against 6.9c the previous year. This is before the private placement of 60c per share cum the bonus issue of 2 for 1.
Chart-wise, the stock is traded to a high of 35c and a low of 26c after the bonus issue, where it appears to be well supported. I have no idea what’s in store going forward. There were some SMS scams and some bad publicity going on about the company. Action speaks louder than words. Perhaps it’s best to follow your chart. As for me, I am holding on to my stake and hoping for happier days. I am not a trader.
What about MNRB?
MNRB is a reinsurance company. Its business activity is the underwriting of all classes of general reinsurance business.
An interim dividend of 20 sen per share has been paid. It has proposed a final dividend of 26c per share. At it last traded price of 5.35, the dividend yield is 8.598.
MNRB has 1.6 billion under investment. This stake is surely worth very much more in view of our bullish market.
Linde AG has offered to buy MNRB’s shares of 4,488,000 in MOX at RM15 per share. The offered price is now raised to RP17 per share. These shares were bought in 1981 for RM914, 463. At RM17 per share, this will give a capital gain of 75,381,537.
MNRB shall be going to
The above comments should not be construed as a recommendation to buy or sell. You buy or sell at your own risk absolutely.
Saturday, June 23, 2007
There was a time when I was interested in bird-fighting. In a bird-fight, live betting is usually on. The bets are normally quite small, more for the fun rather than the money. However, in certain fights, bets can go up to a hundred thousand ringgits. Actually these bird-fights are very exciting and interesting. If legalized, bird-fighting can be turned into a tourist attraction. You need to see your bird fights to feel the adrenalin flow or the thrill.
I have a friend who is popularly known as Guaranteed To Win (GTW). He used to live-punt on these fights. Live-betting means as the fight is on, bets are on-going. If you know how to read a fight and the body language of the birds, you can more or less predict the outcome.
AT one time GTW had nine wins in a row. He felt elated and started to boast about his ability of reading a fight. “Guaranteed to win” he went about bragging his skill.
Soon after, some thing strange happened. He started to lose. Every bet he betted he lost. Even when the bird which was about to win would suddenly surrender as soon as he placed his bet on it. Eventually he lost all that he had won. Now he no longer talks about birds and has gone back to taxi-driving to earn his livelihood.
When lady luck smiles at you, everything will go smoothly. When you are in a loosing streak, your skill, for no obvious reason, becomes unskillful.
Winning is easy when lady luck is smiling at you.
Saturday, June 16, 2007
In the stock market, amateurs will do well to play a loser’s game to win. You cannot afford to play like the professionals. You do not have the skill or the resources to do that. You have to invest intelligently and play the market in your own terms. Appended below are some common mistakes you need to be aware of and avoid as well:
- Listening to rumors and taking advice at face value.
- Going after penny stocks that have no value.
- Overtrading and trading on thin margin.
- Buying in a downtrend.
- Buying a stock because of its name.
- Holding on to a falling stock. Hence failure to protect your capital.
- Averaging down indiscreetly.
- Failure to allow a winning stock to complete its uptrend.
- Confusing price with value; not knowing what is cheap and what is low-priced.
- Bargaining for a bid when you should buy or sell at the market.
- Overact to good news or bad news.
- Trying to make quick money without knowing the risk-reward ratio.
- Failing to know the importance of buying sound and solid companies.
- Not knowing fundamental and technical analysis.
- Overestimating your own abilities.
- Buying a Proton for the price of a Mercedes.
The fewer mistakes you make, the more is your chance of winning.
As for trading, this is what Benjamin Graham, the mentor and teacher of Warren Buffett, said, “Everyone knows that most people who trade in the market lose money in the end. The people who persist in trying it are either unintelligent, or willing to lose money for the fun of the game, or gifted with some uncommon and incommunicable talent. In any case, they are not investors.”
In every field, however, we do have the exceptional and the gifted few. If you are one of them, I salute you!
Friday, June 08, 2007
Sin Heng Chan did hit 60. From there the stock headed south very fast and by Jan 1998 it was traded at a low of 1.80 before it rallied to 4.68. Then it came down again! By August 1998, it hit a low of 1.15. A year or so later, the stock closed at 4.10 before it was suspended for restructuring. On
I understand that he (the person who got the tip) bought 2000 shares at 60 a share and had failed to use a stop-loss. Because of a tip and the failure to use a stop-loss, he had lost over 100 thousand ringgit in just one deal of 2000 shares.
From this instance, you can imagine the madness of the investing or speculating crowd at that time.
The KLCI closed at 1,352.39 today. Its all time high at 1,374.33 was established two days ago. Our present bull market is entirely different from the previous bull markets. This one has great disparity between the blue chips and the second liners.
The 2nd board index closed at 106.10 today. This is only a fraction of its historic high of 682.99. Most second liners, even the ones with good fundamentals, have not been restored to their previous glories. Some examples are:
HSL as at Mar 1997 high: 36.00; now 3.88
Ranhill as at Sep 2003 high: 9.85; now 1.70
MNRB as at Dec 1996 high: 9.00; now 4.64
DRB as at Jan 1994 high: 11.30; now 1.83
FSBM as at Feb 2000 high: 10.50; now 1.47
Choo Bee as at May 1997 high: 4.82; now 2.38
Oriental as at Feb 1997 high: 9.00; now 5.50
For those who have bought any of the above stocks at its historic high, they are still licking their wounds. Hopefully, the market will continue to be bullish going forward. Until the second liners catch up and close the gap between them and the blue chips, the market is unlikely to crash for the present.
Disclaimer: This commentary is the opinion of the writer. It should not be construed as a recommendation to buy or sell. You buy or sell at your own risk absolutely.
Friday, June 01, 2007
The fiasco of Transmile was a sorry sight to behold. Right from the opening bell, the stock gapped down from 8.90 to 6.25. It was limit down.
In the afternoon, the stock came down further to 5.20 before moving up to 6.00. Volume traded amounted to 17,597,800 units which was moderately high. At the end of the day, a black long-lower shadow candle appeared. This looks bullish and there is hope that the price may move up come the next trading day. Much will depend on the outcome of the investigation that is now ongoing. Better be safe, better avoid this counter until the dust settles.
It is incredible how a blue chip counter like Transmile can have irregularities in its accounts. Those who are responsible for the scandal should not be let off easily. A through investigation should be made and proper action without fear or favor should be taken. Confidence in the stock market must be restored before investors moved out with their money.
A lawyer says that Transmile is now open to legal suits. If you are interested to know more, here is the link.
There is also an article at Blisswind.
Saturday, May 26, 2007
In the stock market, how many times have we picked a well-reasoned stock in anticipation of a price rise which never came? How often have we patiently waited, become disgusted and eventually sold off just when the stock began its upward moves?
What about the times when we kept holding on to a falling stock only to sell at the bottom? Again there were times when we delayed our purchases in an advancing stock only to buy at or near the ultimate top? Why so precisely wrong?
Is knowledge, wisdom, experience or charting the solution to these errors?
Jesse Livermore popularly known as the greatest speculator and trader made 100 millions in the 1929 cash. He became the richest American. For more than 30 years he had been successful in trading in commodities and the stock market. Who would have thought that Jesse would one day end tragically?
Jesse made two fatal errors. According to his tape-reading, Union Pacific was under accumulation. After he had bought 5000 shares, a personal friend, Ed Hutton, a great financier and owner of a broker firm, told him that he had inside tips that Union Pacific would tank. Acting on this tip, he sold his 5000 shares at $162 per share and made a profit of $10,000. The next day the stock jumped 10 points which meant $50,000 additional profits if he didn’t sell. He vowed never to listen to tips again.
There was a time when he shorted cotton. He was doing well when Percy Thomas, the “Cotton King” came into his life. Percy was a great talker. Before long, Jesse was under his influence. He covered his shorts and began to go long when cotton price was declining. The price of cotton continued to decline. For some mysterious reasons, he started to average down and kept on averaging down against his own principles. Eventually he lost 90% of his capital before he finally came back to his senses and sold out his stake for $300,000.
He tried to make a come back in the stock market. But from then on, his decisions were never right. From brilliancy to stupidity, he lost all his money; he was in debt to the tune of $1 million.
Eventually, he became a bankrupt in 1934 and committed suicide in 1940. He left a suicide note to his wife admitting that he was a failure.
Why did Jesse, a master speculator and trader with ample experiences, go against his own principles? Did God send Percy to bring about his downfalls? Is he destined to end in tragedy?
God helps us in mysterious ways, but he also brings about our downfall in the same manner.
Friday, May 18, 2007
Bulls are those who buy in anticipation of a rise in the market.
Bears are those who sell in anticipation that the market will drop.
Stags are those who will only apply for new issues in the hope of making a profit.
Chickens are very scared to enter the market. They keep their money in the banks, in bonds or in treasury bills. When chickens turn bulls, the market will be at a very late stage of a bull market. At this stage, the market will be most tempting and the most dangerous.
Pigs are lazy; they will not do any research; their ideology is to wait for a good tip to make them rich. They forget that in this world, you can’t get something for nothing.
The market has a way of fattening the pigs, and then sending them to the slaughter house.
Lately, monkeys have also come in.
There was once a monkey who saw some fish swimming about in a river. As it was watching, a flock of wild ducks also came to swim and play happily in the water. The day was hot. The lure of the cool water was too tempting to resist. As the monkey watched, it said, “ Oh! Swimming is fun, it’s enjoyable and it’s easy. I also can do that even without any practice.” The monkey then jumped into the river. It tried very hard to swim and keep itself afloat. Unfortunately, it did not have the skill and drowned.
Which character would you rather be? You are the one to decide.
Tuesday, May 15, 2007
Saturday, May 12, 2007
The magic lure of a constantly rising market soon becomes too much to resist. Now people are looking at future earnings, prospective dividend yields, and big contracts to justify buying. Little did they realize that the bubble has become much bigger and a burst can happen anytime.
In a prolong market advance, people become accustomed to the daily market rise. They soon throw cautious to the wind and start to buy in earnest. They think that with stop orders, they can limit their losses and hence only a small amount is at risk. In the meantime they can luxuriate in yielding to the herd instinct.
In real trades, stop orders may not be executed when they matter most. A suspension or sudden drop in price very much below your stop order can often happen at any time. This can inflate your limited loss to a catastrophe loss which may result in your inability to bear. And this can be disastrous.
The market gives and the market takes away. Don’t expect too much from the market if you don’t want to get hurt too deeply. The market does not owe you anything. Bet only what you can afford to lose.
When you are seduced into buying a stock you know is overvalued and hope to sell it a little higher to make a quick buck, this is a good indicator that a severe bear market is about to follow.
In the well-known philosophy called the ‘bigger fool concept’ it involves buying very date in a bull market in anticipation of a bigger fool to pay a higher price for your purchase. As the stock changes hands, the price hastens to the ultimate top. Eventually the person holding it finds that there is no one willing to pay a higher price for it. Thus if you do not find someone willing to pay a higher price for an overvalued stock, you must quickly sell it at a slightly lower price. Had the poor souls who bought Hwa Tai in 1997 at 200 sold it at 180, he would not have to ‘cut his limps’ when it subsequently dropped to below 3.
This blog disclaims all liability for your perusal of the above article. Whatever action you take, intelligent or otherwise, you do so at your own risk absolutely.
Saturday, May 05, 2007
Low 512.41 --- (Nov) Volume for the month 5,791,000 units
1998 High 764.94 (Feb) Weekly volume 4,259,000 units
Low 261.33 (Sep) Weekly volume 1,542,000 units
1999 High 870.39 (July) Weekly volume 5,702,000 units
Low 488.90 (Mar) Weekly volume 455,000 units
2000 High 1,021.20 (Feb) Weekly volume 5,188,000 units
Low 673.74 (Dec) Weekly volume 122,000 units
2001 High 737.56 (Feb) Weekly volume 780,000 units
Low 547.72 (Apr) Weekly volume 590,000 units
2002 High 816.94 (April) Weekly volume 2,168,000 units
Low 614.00 (Dec) Weekly volume 510,000 units
2003 High 818.57 (Oct) Weekly volume 5,027,000 units
Low 615.77 (Mar) Weekly volume 921,000 units
2004 High 920.57 (Dec) Weekly volume 3,261,800 units
Low 769.29 (May) Weekly volume 2,017,500 units
2005 High 953.88 (Aug) Weekly volume 2,849,100 units
Low 858.84 (June) Weekly volume 2,262,600 units
2006 High 1,110.12 (Dec) Weekly volume 4,893,800 units
Low 883.29 (June) Weekly volume 1,671,200 units
From the above data we can easily see that the volume at the highs is very much greater than that at the lows. This means that if you want to buy low and sell high you should buy when the volume is very low and sell when the volume is very high. Also to be noted is that the favorite month of the year for the yearly high was February.
Looking at 2007, a top was established on 26 February with very heavy volume transacted in the previous few days. The top was followed by a correction that lasted for six trading days. The CI closed at 1,090.39 on 5.3.07. Support came in the next day. From a low of 1,113.29 it resumed it uptrend.
Yesterday the CI closed at 1,363.40 with 1.533 billion shares traded. This volume is moderately high considering that the lowest of the year so for was 808,100 shares and that the highest was 4.7817 billion traded on Feb 22.
I believe we have not seen the best of 2007 yet. The valuation gap between the blue chips and the second liners and mesdaq counters is too wide. Until the lower liners and penny stocks are whipped up as well, the ultimate top will not be formed yet. When people are fearful of a crash, the crash will not happen. It is only when everyone is most optimistic; when new comers come in droves to drive the market crazy; when permanent prosperity is deemed everywhere; when price rises are the norm and expectation of the day and when the market is at its strongest, then and there, a crash will suddenly come.
When will this happen? Nobody knows. The market itself does not know where the ultimate top is. So how can anyone know? Wait till you see people behaving like lemmings trying to cross the ocean in search of food or flying insects mesmerized by a fire in the darkness of the night and performing as kamikazes.
For the present, the good time is likely to continue.
The above point of view is my personal opinion only. You are entitled to your own.
Tuesday, May 01, 2007
Cash flow is cash coming in and cash going out. Operating cash flow is net cash inflow from operating activities.
A profitable company may have liquidity problem if its cash inflow is inefficient. That means its incoming cash derived from its services or products is not enough to meet its outgoing cash obligations, such as salaries and wages, rental, utility bills, telephone bills, etc.
Operating cash flow minus tax, interest, and capital expenditure is called free cash flow (fcf). Thus fcf is cash that is left after all essential bills and what must be paid to stay in business, have been paid.
The management has the option to decide what to do with the fcf. It can be paid as dividends to its shareholders; for share buy-backs; for acquisition or simply be retained in the company. What it does is reflective of its view for the company going forward.
Thus, don’t forget to look closely at the Cash Flow statement when you evaluate the solvency of the company.
Saturday, April 28, 2007
We know that when we open an account with a broker firm, a CDS a/c will be allocated to us. Thus, if we open accounts with three broker firms, we have three CDS accounts. Often we have the same stock in each of the accounts, and thus, three same annual reports will be sent to us. You can imagine how many millions of annual reports are wasted in this manner. This is money down the drain for nothing. Why waste shareholders’ funds when they can be saved?
I understand that in
Why can’t we follow such a system of one person one CDS account? Apart from the possibility of using the wrong account to sell, there are plenty to be saved.
Underutilization of assets is a waste. To use, consume, spend or expend thoughtlessly is also a waste. Like most people, I hate to see waste. Over the years, I have been wondering why
Not so long ago, some companies have gotten smart. The YTL Group for example; they packed the annual reports of YTL Corp, YTL Power,
How about those companies who got fined year after year for late filings or other obligations not carried out? What can you say of their management when the red ink at the bottom line has become redder and redder? You already got the answer.
Be smart, associate with successful people to be successful.
Thursday, April 26, 2007
Once there was a man who left 17 horses for his three sons. The eldest was to get 1/2 of them; the second son, 1/3 and the third son, 1/9. None of horses was to be slaughtered. And they were not supposed to do that.
How are you going to solve this problem? Before you read on can you find a solution?
They were concurring as to what they should do and how best to share the horses when a mathematician happened to be there. Upon hearing their plight, the mathematician said, “Let me do the sharing for you. I have one horse which I shall add to the 17 horses so as to enable the sharing to be carried out efficiently.”
Thus with 18 horses, half of them means 9; one-third means 6 and 1/9 means 2. 9+6+2=17. After the sharing, the mathematician walked away with his own horse. The three sons were amazed, happy, and satisfied as well, with the solution.
Where is the catch or trick? Can you figure it out?
Well folks, if you have a problem do not despair. Surely, there is a solution somewhere.
Saturday, April 21, 2007
Small losses and small winnings cancel themselves out. They are of no use except for the fun and the experience. Your aim is to win big when you are on the right stock, Just like in a game of poker, you must make the best use of a good hand otherwise the best of cards will go to waste.
If you are an intelligent investor, you will only be buying undervalued stocks. There is no need for you to cut losses. Warren Buffett says there is no need for you to panic even when the value of your stocks has dropped 50%. You can actually buy to average down. In trading, an entirely different strategy is called for. You never average down but cut your losses quickly. If you are one of those who cannot bear the pain of a small loss, never be a trader.
Prospective earnings are more important than current earnings. They are what people look at when they buy. That’s why some companies are selling at high price earnings ratio.
Do not buy anything you do not understand. If you are really serious about the stock market, keep a daily trading diary. Every time you buy or sell, write down the reasons for the actions. You will be amazed at how smart or stupid you have been when reading them a year or so later. In any case, these recordings will go a long way to grooming you as a smart trader or investor.
Saturday, April 14, 2007
1) Sell the losers and let the winners ride! - Time and time again, investors take profits by selling their appreciated investments, but they hold onto stocks that have declined in hopes of a rebound. If an investor doesn't know when it's time to let go of hopeless stocks, he or she can, in the worst-case scenario, see the stock sink to the point where it is almost worthless. Of course, the idea of holding onto high-quality investments while selling the poor ones is great in theory, but hard to put into practice. The following information might help:
- Riding a Winner - Peter Lynch was famous for talking about his "tenbaggers", his investments that had increased tenfold in value. The theory is that much of his overall success was due to a small number of stocks in his portfolio that returned big. If you have a personal policy to sell after a stock has increased by a certain multiple - say three, for instance - you may never fully ride out a winner. No one in the history of investing with a "sell-after-I-have-tripled-my-money" mentality has ever had a tenbagger. Don't underestimate a stock that is performing well by sticking to some rigid personal rule - if you don't have a good understanding of the potential of your investments, your personal rules may end up being arbitrary and too limiting.
- Selling a Loser - There is no guarantee that a stock will bounce back after a protracted decline. While it's important not to underestimate good stocks, it's equally important to be realistic about investments that are performing badly. Recognizing your losers is hard because it's also an acknowledgment of your mistake. But it's important to be honest when you realize that a stock is not performing as well as you expected it to. Don't be afraid to swallow your pride and move on before your losses become even greater!
2) Don't chase the "hot tip" - Whether the tip comes from your brother, cousin, neighbor, or even broker, no one can ever guarantee what a stock will do. When you make an investment, it's important you know the reasons for doing so: do your own research and analysis of any company before you even consider investing your hard earned money. Relying on a tidbit of information from someone else is not only an attempt at taking the easy way out, it's also a type of gambling. Sure, with some luck, tips may sometimes pan out. But they will never make you an informed investor, which is what you need to be to be successful in the long run.
3) Don't sweat the small stuff - In tip No.1, we explained the importance of realizing when your investments are not performing as you expected them to - but remember to expect short-term fluctuations. As a long-term investor, you shouldn't panic when your investments experience short-term movements. When tracking the activities of your investments, you should look at the big picture. Remember to be confident in the quality of your investments rather than nervous about the inevitable volatility of the short term. Also, don't overemphasize the few cents difference you might save from using a limit versus market order.
Granted, active traders will use these day-to-day and even minute-to-minute fluctuations as a way to make gains. But the gains of a long-term investor come from a completely different market movement - the one that occurs over many years - so keep your focus on developing your overall investment philosophy by educating yourself.
4) Do not overemphasize the P/E ratio - Investors often place too much importance on the P/E ratio. Because it is one key tool among many, using only this ratio to make buy or sell decisions is dangerous and ill-advised. The P/E ratio must be interpreted within a context, and it should be used in conjunction with other analytical processes. So, a low P/E ratio doesn't necessarily mean a security is undervalued, nor does a high P/E ratio necessarily mean a company is overvalued. (For further reading, see our tutorial Understanding the P/E Ratio.)
5) Resist the lure of penny stocks - A common misconception is that there is less to lose in buying a low-priced stock. But whether you buy a $5 stock that plunges to $0 or a $75 stock that does the same, either way you'd still have a 100% loss of your initial investment. A lousy $5 company has just as much downside risk as a lousy $75 company. In fact, a penny stock is probably riskier than a company with a higher share price, which would have more regulations placed on it. (For further reading, see The Lowdown on Penny Stocks.)
6) Pick a strategy and stick with it - Different people use different methods to pick stocks and fulfill investing goals. There are many ways to be successful and no one strategy is inherently better than any other. However, once you find your style, stick with it. An investor who flounders between different stock-picking strategies will probably experience the worst, rather than the best, of each. Constantly switching strategies effectively makes you a market timer, and this is definitely territory most investors should avoid. Take Warren Buffett's actions during the dotcom boom of the late '90s as an example. Buffett's value-oriented strategy had worked for him for decades, and - despite criticism from the media - it prevented him from getting sucked into tech startups that had no earnings and eventually crashed.
7) Focus on the future - The tough part about investing is that we are trying to make informed decisions based on things that are yet to happen. It's important to keep in mind that even though we use past data as an indication of things to come, it's what happens in the future that matters most.
A quote from Peter Lynch's book "One Up on Wall Street" about his experience with Subaru demonstrates this: "If I'd bothered to ask myself, 'How can this stock go any higher?' I would have never bought Subaru after it already went up twentyfold. But I checked the fundamentals, realized that Subaru was still cheap, bought the stock, and made sevenfold after that." The point is to base a decision on future potential rather than on what has already happened in the past.
8) Investors adopt a long-term perspective - Large short-term profits can often entice those who are new to the market. But adopting a long-term horizon and dismissing the "get in, get out and make a killing" mentality is a must for any investor. This doesn't mean that it's impossible to make money by actively trading in the short term. But, as we already mentioned, investing and trading are very different ways of making gains from the market. Trading involves very different risks that buy-and-hold investors don't experience. As such, active trading requires certain specialized skills.
Neither investing style is necessarily better than the other - both have their pros and cons. But active trading can be wrong for someone without the appropriate time, financial resources, education and desire. (For further reading, see Defining Active Trading.) Most people don't fit into this category.
9) Be open-minded when selecting companies - Many great companies are household names, but many good investments are not household names (and vice versa). Thousands of smaller companies have the potential to turn into the large blue chips of tomorrow. In fact, historically, small-caps have had greater returns than large-caps: over the decades from 1926-2001, small-cap stocks in the
This is not to suggest that you should devote your entire portfolio to small-cap stocks. Rather, understand that there are many great companies beyond those in the Dow Jones Industrial Average, and that by neglecting all these lesser-known companies, you could also be neglecting some of the biggest gains.
10) Taxes are important, but not that important - Putting taxes above all else is a dangerous strategy, as it can often cause investors to make poor, misguided decisions. Yes, tax implications are important, but they are a secondary concern. The primary goals in investing are to grow and secure your money. You should always attempt to minimize the amount of tax you pay and maximize your after-tax return, but the situations are rare where you'll want to put tax considerations above all else when making an investment decision (see Basic Investment Objectives).
In this article, we've covered 10 solid tips for long-term investors. We started off saying that there is an exception to every rule, and we can't overemphasize this point. Depending on your circumstances, you might even disagree with some of these pointers. However, we hope that the common sense principles we've discussed benefit you overall and provide some insight into how you should think about investing.
I believe readers will find the above tips useful. At Blisswind, you have nothing to lose and everything to gain. You are welcome to join us.