Wednesday, September 30, 2009

Reasons Why You Should Try To Read Business Times

I have a subscription of Business Times at the office which I get to read. A columnist that you should look out for is Teh Hooi Ling (left). She is a CFA charterholder as well as the writer of the "Show Me The Money" series of books. It's actually one of the rare few books on the Singapore stock market that is not trash. There is so much trash on the book shelves that I wonder why does not Ms Teh's book get sold out.

Her column on the Business Times is primarily on portfolio strategy, show casing portfolios of various constructs premise on different formulas. There are a wide range of investing ideas like investing in the biggest lossers, highest yield, etc. She tracks her portfolio fortnightly if I am not wrong and it is definitely worth a look. Borrow from your friend if you don't have a subscription.

Nonetheless, I believe that Business Times is not a value read like the Straits Times. I still believe that the Straits Times plus your checking of the SGX filings should suffice when tracking your portfolio. But Business Times does have very insightful opinion and commentary. Sometimes, very aggressive pieces get to print, raising questions at the financial regulation authorities for perceived lack of oversight.

Monday, September 28, 2009

A Thoughtful Column

Here is a very thoughtful piece from Kenneth Fisher (You can find the link at the side). What follows is extracted for your reading pleasure. Nonetheless, I will endeavour to comeup with 2 good pieces a week starting next week. One will focus on my portfolio monitor (Saturday Morning/Evening). The other will be general market thoughts. So do subscribe to my blog and let your friends know about it. I do appreciate comments!

Quarter-Century Mark
Ken Fisher, 06.24.09, 06:00 PM EDT
Forbes Magazine dated July 13, 2009

To avoid overpaying, use multiple metrics--not just price-to-earnings but price-to-sales and price-to-book.

This issue marks the 25th anniversary of my column. That's a long run in columnland. It's been a blast. Thanks for your attention. Reviewing my first year's columns, I pondered: What would I still say? What would I say now that I didn't then?

Sunday, September 27, 2009

Reversion To The Mean

I happened to briefly glance through the book "Bogle's Guide to Common Sense Investing" and it raises a serious issue for me and to every stock picking individual. The underlying thread is that you should forget about selecting a good mutual fund, but rather invest passively and through the use of an Index Fund.

Reversion To The Mean
Why invest passively through an Index Fund? To do injustice to the book, he says that in the long run, no one style (value, dividend, sectoral) can beat the broad market in general. Every style that gains in one particular year will suffer eventually. Something called reversion to the mean. And due to cost efficiency and the ability to buy the broad market (S&P500), he recommends buying Index Fund.

Can I Beat The Market?

Investment Advice

1. Invest with money you do not need for the next five years. This includes setting aside some savings for emergencies (1 month minimum), unemployment (3-6 months worth). This are basically money you cannot afford to lose. Put them in a high interest deposits or money market funds so that they do not get eroded by inflation, a very real phenomenon.

2. Where you end depends on where you begin. Right now, with markets slowly

The Five Rules for Successful Stock Investing: Morningstar's Guide to Building Wealth and Winning in the Market

You can read about the book here.

If you did not do any finance, I think this book is a close as it gets to a textbook. A very useful book in the sense that it teaches you how to read a financial statement. Costs close to $30.00 but it is hard to find at the library.

The approach to stock picking is even more metric laden than Peter Lynch and it is little wonder due to them being from MorningStar. Morningstar has an impressive portfolio analyser and stock screener for American citizens.

What I like about the book

The only three questions that count: investing by knowing what others don't

This is the book I recommend reading by Kenneth Fisher, "The only three questions that count: investing by knowing what others don't", costs about $33.00 but you can get it from the library.

Kenneth Fisher is the son of the later Philip Fisher. The elder Fisher was famous for the book "Common Stocks, Uncommon Profits". Kenneth Fisher's contribution has been the Price to Sales ratio, which he claims is no longer useful.

What I learnt from the book

1. Time in the market counts.

Saturday, September 26, 2009

A look a the Portfolio

I will try to post a screen shot every week and add some comments. At the moment, I am up by more than 80% and that includes all the dividends from FY08 and the current FY. This is a simple number because theoretically, I should calculate on an IRR basis to factor in the money I added at various times.

Tuesday, September 22, 2009

Stock Picks Explained

As explained in my education post, I adopt an eclectic approach towards stock investing. it will sound a bit incoherent when i explain my stock picks at first cut. but remember the following:

Diversify but not too much, 9-12 stocks in your portfolio should be manageable

Some Books To You Must Read

most retail investors try to look for the way when it comes to investing. my way is a mix between fundamentals and market timing. i will admit upfront that i am not adept at technical analysis. i prefer to look at general economic signs as well as look at the stock in the particular.

there are three books which i deem to be the cornerstone of my stock picking.

1. Kenneth Fisher's

$10,000 Fully In Stocks

Following a rumor (something which you shouldn't do!) I bought 21 lots of Stratech, this brings my portfolio to $10,000 (plus a little spare change) fully into stocks.

My $10,000 portfolio now looks like this:

5 Asiatic

Sunday, September 20, 2009

My Investment Objective

I will refocus my blog to trek my stock investing.

My objective: To reach $700,000 in stock investment by 55, excluding CPF and House.

Learning Objective: To show people that you can build wealth for retirement even if you start off with a small amount of capital.

Start Point: I have invested close to $10,000 in capital as end Sep-09, buildup earlier in Feb-09.

Strategy: While putting some money for my life neccesities, annually I will inject at least $4,000 into the portfolio.

My 1st 6 months holdings in order of acquisition:

Sunday, September 6, 2009

August Recap; Will I wake up when September ends.

Sorry for the belated postings. I have been flooded at work.

A quick recap of August.

The most notable has been the wild fluctuations in the the stock market. Notable stocks that have been steadily appreciating in price are: Sinotel, Genting Singapore and RTO Seroja Investments.

Going forward, there is one stock you should keep a look out for, Falmac.

It is also another RTO target this time by Peter Choo who might want to inject his mining assets into this troubled textile machine making company. I am suggesting only a small bet on the day it is lifted from suspension. This would take place after its EOGM at the end of Sept.

Before it got suspended, its last done price was $0.06. Also, Peter Choo and his associates own a large chunk of the company, despite its accounting iiregularities. What I dare hazard a guess as, would be that you should make a bid within 10 bids of this price ($0.06-0.11).

I do not know how they are going to solve the financial problems, but if they do, it would make Falmac at least worth $0.20.

you have been told.