Author: The Fifth Person

The Psychology of Market Cycles

As global markets tumble due to worries about China’s economy and ailing stock market, it’s easy to get caught up with your emotions when stock prices fall drastically. This infographic sums up best the roller coaster of emotions many investors face when markets go through their ups and downs: Source: The Cheat Sheet Before you get caught up in the panic, remember that the best time to invest in a good stock is during a crash when prices are low and now might be a good a time as any. As Warren Buffet famous quote goes: “Be fearful when others are greedy...

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Lessons for Singapore from China’s Third Equity Meltdown in Seven Months

China is the second largest economy in the world. There used to a saying that if the United States catches a flu, the world will get sick. This analogy is now being used on China now. The fact that China is now experiencing a major economic flu can be seen in its recent market volatility. But before we dive into that, let us put the global economic conditions into context. The largest economy in the world, the United States, is now the bright spot of the global economy. It has grown solidly to the extent where the Fed rose...

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The January Barometer: Does the STI Rise for the Rest of the Year When It Rises in January?

In my previous article, I explored the January effect and whether the STI tends to rise in the first month of the year. From my data, it seems that is indeed the case. The STI climbed higher in January for 15 out of the last 26 years. In this article, we’re going to explore the January barometer and whether it holds true for the STI. The January barometer is a hypothesis that if the stock market rises in January, it is likely to continue rising for the rest of the year. Similarly, if the market falls in January, it...

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8 Timeless Quotes from Warren Buffett about Life, Business & Investing

With a net worth of $67 Billion, Warren Buffett is one of the (or the) greatest investors of our time. Just as how we like to evaluate the management of a company through its words and actions, Buffett’s quotes also reveal a great deal about his character, beliefs, and investment philosophy. And I believe we, as investors, can draw huge inspiration from the wisdom and experienced offered by his timeless quotes. So here are, in my opinion, eight timeless quotes from Warren Buffett that everyone can learn something important from:  “Be fearful when others are greedy, and be greedy...

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[QUIZ] How Financially Literate Are You?

Are you ready? Simply answer five questions on these four topics to find out if you’re considered financially literate. (Remember to note your answers down.) Risk Diversification Suppose you have some money. Is it safer to put your money into one business or investment, or to put your money into multiple businesses or investments? Inflation Suppose over the next 10 years the prices of the things you buy double. If your income also doubles, will you be able to buy less than you can buy today, the same as you can buy today, or more than you can buy...

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Where to Invest in 2016

The past year has been challenging for equities. Markets started the year on a positive footing as the US economic recovery continued to strengthen and it appeared likely that China’s central bank would be able to engineer a soft landing for its economy. But a surprise devaluation of the renminbi, followed by a broad selloff in China equities, quickly changed things. The third quarter of the year was marked by falling asset prices and a souring of investor sentiment as concerns about China, weakness in other emerging markets and uncertainty over when the US Federal Reserve would raise rates...

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The January Effect: Does the STI Always Rise in January?

The January effect is a hypothesis that the stock market tends to outperform in the first month of the year. The effect was first observed in 1942 by investment banker Sidney B. Wachtel and that small-cap stocks tend to perform better than the broader market in January. There are a few reasons why stock prices tend to rise in January but I wanted to find out if the January effect holds true in Singapore as in the U.S. Can investors simply ride the January effect and make decent gains simply by investing in the STI for the first month...

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Merry Christmas 2015!

Christmas is traditionally known as the season of giving. Find out how The Fifth Person has been doing our part, not just this holiday season, but since we founded our company two years ago. Are you looking for a formula that can consistently pick out the best companies to invest in and make you a LOT of money in the stock market? If you are, then this might finally be the answer you’ve been looking for. Because this is the same exact formula we used to create 7-figure results in a single stock portfolio – and we did it in just two years. Find out what...

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4 Local F&B Companies That Make More Money Outside Singapore

When we think of local F&B companies, we may find it hard to identify one that has achieved consistent success on an international scale. But the truth is, while many local companies choose to stay within our borders, there are many who are successfully established overseas as well. We all know that Singapore’s domestic market is pretty small. For a company to really make it big, it has to look beyond our island for growth and expansion. As investors, we all prefer companies which are able to grow successfully beyond their local markets. So in the case of the...

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3 Quick Things I Learned from Singapore Post’s AGM 2015

The recent resignation of CEO Wolfgang Baier raised worries among shareholders about SingPost’s performance moving forward. According to an article from The Business Times, there is speculation that Dr Baier may have been poached by a global firm in a similar space. So why are many people lamenting Dr Baier’s sudden resignation? The answer can be found from what I learned at SingPost’s AGM 2015: With traditional mail slowly declining, Dr Baier has been widely credited for turning SingPost around by expanding into the e-commerce logistics space. Since his tenure from 2011, SingPost’s revenue has grown 59% in four...

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3 Things You Need to Evaluate in a Company Before You Even Look at its Stock Price

“It’s far better to buy a wonderful company at a fair price than a fair company at a wonderful price.” – Warren Buffett We all know that finding a wonderful company to invest in isn’t always that easy to do. There are thousands and thousands of companies out there in the stock markets around the world (776 in our SGX alone), so how do we tell which companies are quality and which aren’t. A high-quality company is one that will continue to be more successful and profitable in the long term and see a rise in its share price...

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7 Quick Steps to Pick the Best Value-Growth Stocks

In my previous article — 7 Quick Steps to Pick the Best Dividend Stocks — I covered how dividend stocks are great for investors who love to build a portfolio of passive investment income. But we have to admit that not every investor is interested in an income investing approach. Rather, their aim is to invest in growth companies that are able to grow multiple times in value which most dividend stocks can’t achieve. These types of stocks are known as value-growth stocks. So if you are investing for growth and looking for potential multi-bagger stocks, the question is: How do you pick the...

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Top 5 Aspects of Quality When Assessing Companies for Equity Investment

Search the Internet for “measures of investment quality” and you are likely to find roughly one-tenth as many results as you would if you searched for “measures of investment return” or “measures of investment risk.” Quality, it seems, is hard to define. Across the investment management industry, definitions differ. Here we summarise the five aspects of quality we consider most important when assessing companies for inclusion in a fund. 1) Business strategy and prospects Before investing, we need to believe that a company’s business model is durable. We, therefore seek evidence of industry growth, a clear business strategy and...

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4 Warning Signs the S&P 500 Might Have Run Out of Steam

Looking at the roaring performance of the S&P 500 since the financial crisis, it has certainly been a great half-decade with the index outperforming hedge funds as a whole and leading the world out of a deep recession that would otherwise have caused another depression if not for the Fed stepping in. The arguments on the topic of asset managers’ failure to outperform the market index can be saved for another day, I’m going to talk more about the S&P 500 index itself, and why I think it may have run out of steam. Referring to another article on...

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A Step-By-Step Guide How to Apply for Rights Shares by ATM

A rights issue offers existing shareholders the option to purchase additional shares from the company usually at a discounted price. A company may issue rights to raise money for a few reasons: to save a cash-strapped company, to pay off debts, to finance a new acquisition or to fund business growth and expansion, etc. For example, ARA Asset Management, a fund management company, recently conducted a rights issue worth S$150 million for seed capital for new funds and to finance strategic investments. In October, Croesus Retail Trust used a rights issue to raise S$70 million to acquire a retail...

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