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

Portfolio Management – Rate of Returns

Portfolio Management – Diversification Is Your Friend – Part 2 What is your method for stock picking? FA or TA or just buying on any major pullbacks or corrections? What is your objective of coming into the stock market? Having a positive returns over a long-term period If your objective is to have a long-term (20 – 30 years) positive returns on your portfolio with re-investing all dividends and periodic adding of sizable capital, do you really need to do any serious FA or TA? I don’t think so. Probably you just need to save enough money to buy some on...

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Q1 2010 Quarterly Performance Report

“However beautiful the strategy, you should occasionally look at the results.” – Winston Churchill “What gets measured, gets managed.” – Peter Drucker 1. Year Goal Hit Rate Year Goal Hit Rate improved by +4.8% from 14.4% in  Q1 2009 to 19.2% in Q1 2010. (In 2003, I set some bullish progressive year goals from 2003 to 2011. 2010 Year Goal is 74.9% of 2009 Total Salary including all CPF contributions. Quite a big goal!) 2. Active Investing Performance Since 1 Nov 08 1. ROC from 3.1% to 34.3% (I don’t use stop loss so no negative ROC. Never blindly...

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5 Myths About ETFs – Part 3

5 Myths About ETFs – Part 2 Does STI ETF really give average market return? I still think that STI ETF is just another beast in the stock market and its behavior is no different from any other beasts in the stock market – some are hares, some are tortoise, and some are dying and waiting to be buried. If you look at the price volatility of STI ETF, it can be scary depending when you last bought it. Read...

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Buy And Hold – Is this the best use of limited capital? – Part 2

Buy And Hold – Is this the best use of limited capital? There will never be short of debates on passive income vs capital gain. No absolutely right or wrong method. I like both but treat them differently. My income from stock dividend just forms part of the minimum sum of Yearly Earning Goal. Yearly Earning Goal = Stock Dividends + Capital Gains I split my portfolio into two parts: Passive Investing: Passive Income from stock dividends Active Investing:  Active Income from capital gains. Passive Income forms part of the safety net if I fail to make Active Income from...

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Is Your Company Hoarding Too Much Cash For You? – Part 4

Understanding cash flow Cash flow is the amount of cash generated from all sources within a specific period of time. Cash can be generated by the following: from operations from owners’ equity from loans from investing from one-time activity such as an asset sale A cash rich company does not mean it is a highly profitable company or its future earning growth is secured. Cash flow and Profit is not the same. Cash flow is the money that flows in and out of the firm from operations, financing activities, and investing activities. Profit, also called net income, is what remains from sales revenue after all the...

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Olam – Amazing recovery!

Olam Q2 gain hits quarterly record of $158.9m OLAM International yesterday reported its best ever quarterly performance and for the first time, declared an interim dividend of 2 cents a share. Chief executive officer Sunny Verghese said the company could pay a dividend midway through the fiscal year because of its strong first-half performance and good visibility for the rest of the year. Read...

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Protecting Our Portfolio From The Next Bear – Revisit

Market Truism: Every Bear market is followed by a Bull Market, and every Bull market is followed by the Next Bear market. Protecting Our Portfolio From The Next Bear Portfolio Management – Diversification Is Your Friend. http://createwealth8888.blogspot.com/2009/10/portfolio-management-passive-income.html “However beautiful the strategy, you should occasionally look at the results.“ – Winston Churchill Let look at the results: As on last Friday closing @ 2684, STI has lost -8.5% of its value from its recent high @ 2934 while my portfolio value has lost -4.1%. What really help? Read...

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Don’t Forget 200 EMA

Newton’s First Law Every body continues in a state of uniform motion in a straight line, unless it is compelled to change that state by a force impressed upon it. You may remember this law as “an object in motion, stays in motion.” This means that once the stock price starts to move in one direction, it’s very likely to continue to trend in that direction until something changes the overall bias of the stock movement. Simple EMA for my Lizard brain The 200 EMA could be considered the most important trend indicator. Why? Because the stock price is...

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The Truth About Retail Investors

Retail investors are profoundly different from institutional investors like mutual, pension, endowment funds or even Warren Buffet. 1. Source Of Investing Capital Retail investors, where does the source of investing capital come from? Some of you may have rich parents to provide you with big sum of investing capital so it is not a problem; but for most of us, our investing capital come from saving from our hard-earned money. Every dollar saved for investment means a dollar less to spend on other “luxuries”. Someone even goes to the extreme to save on his daily dose of 70 cents coffee by making...

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CPL Weekly – CapitaLand growing presence in China

PROPERTY firm CapitaLand announced yesterday that it has a pipeline of 14,000 homes in China and plans to launch an average of 5,000 units a year there with its strategic partners. The announcements came as CapitaLand celebrated the 15th anniversary of its entry into China with a gala dinner. The festivities were held at Shanghai Port yesterday. It aims to grow the figure to around $10 billion over the next three to five years. Its China arm will then constitute between 35 per cent and 45 per cent of the group’s total business. ——————————————————————————————— CreateWealth8888: If you love the...

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TA – Always Two Sides To Every Technical Decision

You may look at a chart with your own favourite indicators and system and see one thing, while another person who likes to look for e.g. reversals may look at the chart and see something else or totally different. Every buyer and seller have their own reasons to buy or sell and every transaction is matched between buyer and seller. So who is right? Read...

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Who Moves My Market? – Part 4

I like the simplicity of support and resistance. It can work because it is based on simple crowd psychology; but, sophisticated traders don’t like to admit it that it can work. Many Gurus have developed so many technical indicators, and every Guru claims their indicators work best. Who should we believe? If you could predict where the market is heading, you would be a millionaire many times. Unfortunately, no one has developed an indicator that will predict the future. Many indicators have been created that will give you a probable direction of the market. But, the concept of support...

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Why Do We Still Need To Read Charts?

Some real hardcore retail Value investors will argue charts are not helpful and they don’t care about charts as holding the stock for long term makes charts irrelevant. But to the rest of us charts are the best way to judge the emotions and psychology in the market as stock prices are primarily driven by investors’ sentiment. Stock prices move because of what the Big Boys (Market Sharks) are currently feeling and thinking, and not just because of the fundamental numbers that have been released to the market. The stock market is never a level playing field and will...

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Portfolio Management – Growing Money Tree

This is the Symbolic Picture of Growing Money Tree in My Profile – It helps me to visualize why am I actively Invest or Trade. “What the mind can conceive and believe it can achieve” – Napoleon Hill Common saying: Money Is Not Yours Until You Spend It. (or someone else will spend it for you) And I said: Profit Is Not Yours Until You Realize It. (or Mr. Market may take it back unexpectedly) Take a good look at the components of a Portfolio: Mathematically, LHS (Left Hand Side) = RHS (Right Hand Side) LHS = Current Value...

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Portfolio Management – Stop Losses?

http://createwealth8888.blogspot.com/2009/10/portfolio-management-price-volatilty.html What is Stop Loss? Setting a stop-loss for x% below the price you paid for the stock will limit your loss to x%. This strategy allows investors to determine their loss limit in advance, preventing emotional decision-making. What are the Guru’s recommendation of Stop Loss? Alexander Elder strongly believes in (the 2% and 6% rules). William O’Neil: Whenever a stock is bought, a tight stop loss of 7-8% is set below the purchase price. No matter what the reason for the decline, each stock should be sold without hesitation if it drops down to or below this limit....

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