Author: Create Wealth Through Long-Term Investing and Short-Term Trading

Peter Lynch’s 25 Golden Rules for Investing

Beating the Street (published in 1993), Lynch left investors with the following list of golden rules — 25 in all. Peter Lynch’s 25 Golden Rules for Investing Rule 1: Investing is fun and exciting, but dangerous if you don’t do any work. Rule 2: Your investor’s edge is not something you get from Wall Street experts. It’s something you already have. You can outperform the experts if you use your edge by investing in companies or industries you already understand. Rule 3: Over the past 3 decades, the stock market has come to be dominated by a herd of...

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Investing Made Simple by Uncle8888 (6)

Read? Investing Made Simple by Uncle8888 (5) Uncle8888 has been trying to understand this: Where does the money from stock market come from? He thinks that most of the money from the stock market will come from investors/traders participating in the stock market and only some money will be coming in the form of stock dividends distributed by companies and shares buy-back by companies. In fact, the amount of money coming from companies is nothing compared to the enormous amount of money changing hands in the stock market. Uncle8888 also remembered Warren Buffet once said: “The Stock market is a financial redistribution system. It takes money...

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Ensco and Keppel Fels in newbuild deal

US drilling contractor Ensco has finalised a fixed-price shipyard construction contract with Singapore’s Keppel Fels for two new ultra-premium harsh-environment jack-up rigs The rigs, which are capable of operating in water depths of 400 feet, will cost about $230 million apiece. The first rig is scheduled for delivery in the second quarter 2013 and the second rig in fourth quarter 2013, Ensco said in a release. The contract includes options for two additional jack-ups of the same design at similar terms that must be exercised by 2 August this year. Ensco will pay 20% of the rigs’ cost up...

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Will You Try To Pay Off Your Housing Loan ASAP If You Have One? (8)

Read? Will You Try To Pay Off Your Housing Loan ASAP If You Have One? (7) I am glad that someone like Dr. Michael Leong who is well-known and respected local BB has the same view of paying off housing loan asap. Guess who are telling you to take the longest housing loan that you can find?  Are these people from the property or housing loans industry? Think about it. You probably know them, right? May be we shouldn’t be taking advices from people who may profit from giving us such advices. By Dr. Michael Leong Firstly, pay off...

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Portfolio Management – Stop Losses? (2)

Read? Portfolio Management – Stop Losses? Stop losses: Do or Do not. Don’t doubt! – Createwealth8888 If you strongly believe in your technical analysis skills and also trust your favourite technical indicators then you should act on good faith, take that stop loss; go home and sleep. If you are like me don’t believe in stop loss, then how do you control the damages to your capital? Instead of using STOP LOSS to manage risks, I manage risks from different perspectives. I have trained myself very hard to look at Portfolio and not at stocks so a few falling stocks...

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Investing – No minimum paper qualification is required!

Just for Thinking … Some of you may at first guessed that Createwealth8888 has some background in Financials or Accounting. Yeap, you may be somewhat “right”. The only background that I have with Accounting was sadly walking around and taking the last look at the compound of School of Accountancy in then the University of Singapore after submitting my letter of withdrawal from the course to the admin clerk. Read? Parents can be an Asset or Liability to the children? To further educate myself on financial and investment knowledge, I have visited the book-shelf in “Finance and Investment” section in...

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Investing Made Simple by Uncle8888 (5)

Read? Investing Made Simple by Uncle8888 (4) What was Uncle8888 doing in the stock market during the 80s/90s? If Uncle8888 has recalled correctly; in 80s/90s he was just drifting along in the stock market without a clear and definite investing Goal as he didn’t even know what he actually wanted from the stock market. He was just hoping to strike more IPOs and would be happy to be able to make some money from selling “lucky-strike” IPO stocks. He didn’t have any big ambitions from making money from the stock market. Sometime, he might follow some investing tips from...

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The Most Common Mistake of Investors

Read? Why does stock price move? And more ideas from Jeff Augen … Investors often make the mistake of assuming that they have unique insights that market has failed to recognize. They buy stocks that they believe are under-priced, or they purchase high-yielding corporate bonds because their instincts tell that the risk of default is exaggerated. In the worst cases, these mistakes evolve into an an investment strategy. Unfortunately, the investment community tends to overuse the words “under-priced” and “over-priced.” Strictly speaking, a financial instrument cannot be under priced unless the market is inefficient. The opposite is generally true;...

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Why does stock price move?

Read? What you may not know about stocks? More ideas from Jeff Augen Stocks rise when buyers are more aggressive than sellers. They fall when sellers are more aggressive than buyers. Most investors mistakenly believe that stocks rise when there are more buyers than sellers. The difference is significant and it has far-reaching implications. Liquid markets always have an excess of both buyers and sellers who generate bid and ask prices. A transaction occurs when the high bid and low ask come together; either the bid is raised or the ask is lowered. A rising bid represents aggressive buying...

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What you may not know about stocks?

Some ideas from Jeff Augen Most investors who buy a stock believe that they are investing in a company. That view, while technically correct, is also misleading. A stock investment is really nothing more than a bet on the direction that money will take as it flows through the financial markets. A stock can rise only if market forces align to aggressively drive up the bid price causing new money to flow into the stock. Many different factors are involved including economic news, announcements from other companies in the same industry, political events, the actions of large institutional investors,...

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Measure, Measure, Measure (5)

Read? Measure, Measure, Measure (4) – Revisit Someone said to me: “Just started to follow your excellent blog. If I’m successful, will definitely buy u a few cups of kopi.” How do we measure our success in investing in the stock market? If they can’t measure their success, I will never get my kopi? LOL! Read? Portfolio Management – Measuring your success! So generally, we may measure our success in investing in the stock market in two ways: Sustainability: e.g. beating bank FD rate, inflation rate or passive income streams. Progressive: e.g. building up kid’s university fund, retirement fund or financial independence. While...

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Will You Try To Pay Off Your Housing Loan ASAP If You Have One? (7)

Read? Will You Try To Pay Off Your Housing Loan ASAP If You Have One? (6) Another colleague told me two years ago she has fully paid for her home by 41. The couple is now looking into either investing in another property for rental income or investing in blue chips. So it is not true that people nowsadays don’t choose not to pay off their home as early as possible. Did the couple really lose out by clearing off housing debt first instead of having more cash for investing? Does it make more sense to have a peace of...

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Compound Interest is not the same as Compound Returns (3)

Read? Compound Interest is not the same as Compound Returns (2) Read? 3M’s – Inside Investor’s Mind Optimism Bias: Believing that you are above average and that misfortunes are more likely to befall others Seriously, how many average retail investors fully understand the big difference between 2.6% Compound Interests payable on HDB housing loan and Compound Returns on stock investment. To be able to beat that 2.6% Compound Interests payable on HDB housing loan with Compound Returns on stock investment will require you to stay fully re-invested most of the time across several stock market cycles of bulls and bears. This low figure...

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Fundamental or Technical Analysis? (3)

“Much of technical analysis is magical mumbo-jumbo that people think will tell them where the markets going. And it never will. It’s just a bunch of nonsense. Unfortunately, I’ve also participated in it” – Larry Williams Read? Does Shorting always win in a bear market? Last time, I  used to follow that honest Guru’s cbox and blog everyday without fail. I was trying to learn from him as much as possible on TA since he is our local well-known full-time Chief Trainer and Chief Strategist in his School of Whatsoever Kung Fu Charting. He has even developed new indicators and modify/adapt...

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Investing Made Simple by Uncle8888 (4)

Read? Investing Made Simple by Uncle8888 (3) How did Uncle8888 come into the stock market? During Uncle8888 time, the easiest way to invest in stocks was through IPOs. There were no shortages of them. Sometime it could be more than one IPO in a month. This was how Uncle8888 got started in the stock market. To tikam for IPOs, he would check with his colleagues. If there were more colleagues interested in them, he would try for them too. If Uncle8888 was lucky to kena these IPOs; he would try to sell them a few days later for quick profits. But, if Uncle8888 got stuck with his...

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