Archive for the ‘Investing’ Category

Posted on March 16, 2010 - by musicwhiz

Sun Tzu – War On Business Part 2 (Chinese Cultural Centre)Sun Tzu – War On Business Part 2 (Chinese Cultural Centre)

Part 2 on the Sun Tzu series shows James Sun in Beijing, China, where he is similarly applying the principles of the Art of War veteran onto businesses here. This time, he is focusing on the Chinese Cultural Centre (“CCC”) in Beijing, which is rich in cultural heritage, history and Chinese culture. The CEO and boss is called Feng Cheng (“Feng”) and he is by and large a very culturally rich person who strongly believes in promoting and preserving Chinese culture. However, as the program initially alludes, Feng is not a very business-oriented person and he is not running the CCC as a profit-maximizing business. Hence, James’ job is to review the organization to suggest improvements.

To start off, the CCC is located off a small side street, thus is not easy to find and has no visibility. When James visited the CCC, he found out that it was organizing many activities for participants such as noodle-making workshop as well as tours to the “original” Beijing, which consists of guided tours to parts of Beijing which have been spared China’s rapid modernization. In other words, the CCC’s job was to “sell” culture to foreigners and visitors who are interested to not only find out more about China’s culture, but to also immerse in it and experience it for themselves. However, the CCC had no marketing strategy in place. There was no marketing department as well as many of the contacts and customers were based on word of mouth – not exactly a very effective or wide-ranging method to garner more business.
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Posted on March 13, 2010 - by musicwhiz

My Learning Curve In Value Investing

This post is a somewhat reflective one as I mull over my investing journey after switching over to value investing in late 2007. So far, it’s been a rough ride over the last two and a half years with turbulence rocking stock markets and a “lost decade” appearing for many countries, thus shaking the core of beliefs which many had on the stock market always giving a positive return over time.

For me, this journey is poignant as I slowly but surely learn more about investing, understanding companies, applying lessons learnt, reviewing mistakes and improving my fundamental analysis skills. Somehow, at this point in time, I still feel that I have so much more to learn from many veterans in the field of value investing about how to select good companies which are being offered by Mr. Market at reasonable prices. I have had my share of “hits” and also the painful “misses”, to illustrate to me that there is an almost infinite number of companies out there and one can only do so much with the amount of time he has on his hands. (more…)

Posted on March 11, 2010 - by Alvin

Your investment capital looks like this

Everyone has seen how stock charts look like. But have you seen the chart for your investment capital – how your capital rise and fall with time? The way your investment capital moves depend on the type of investor. I have heavily generalised 3 kinds of charts for the Buy-and-Hold investor, Trader and the Clueless investor. This is important because all of us would always monitor our capital time to time to see if it has grown. By doing this, we subject our happiness to it’s rise and dejection to it’s fall. And whether we still have the tenacity to continue investing when we feel dejected. The end point maybe the same, but the journey can be very different. Find out which of the capital movement chart you prefer and you can find out the type of investor best suits you.

The Buy-and-Hold Investor

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Posted on March 10, 2010 - by Market Uncle

Do we need to monitor the stock market so closely?

Hectic but fruitful life after a new entrant

Ever since my girl was born and my confinement lady left, life have been very hectic, tiring and sometimes frustrating. Eventually, when she learnt to smile at us, its had been one of the happiest moment of my life and instantly felt all this was worth it :). Looking back, my last post was more than 3 months ago and I haven’t really got the time to meddle with my portfolio or look up company reports ever since.

Missed opportunities?

As my girl grow up, nearing her fourth month on earth (not counting the time she spent evolving in my wife’s womb), she finally seems to be able to adjust to our earthly culture and give me some peace to do my stuff without constantly crying and requiring us to decipher what she want. So finally I an able to find time to stock take on my portfolio, read up a little on my companies and what had gone on in the last 3 months. Surprisingly (at least to me), I neither didn’t miss much of the action nor any really great opportunities. As far as fundamentals go, the reporting seasons only occur once every 3 months and the last one was just concluded. Looking at the results and outlook stated in the financial reports of my companies and those I’m interested in, none really warrant much action and there isn’t really much changes in their stock price for me to bang wall on missed opportunities. Read more…

Posted on March 4, 2010 - by AK71

Seven steps to creating passive income from the stock market.

I have made it known to my family and many friends that I aim to create a minimum of $50k in annual passive income from investments in the stock market alone.  Recently, while chatting in the cbox at Bully the Bear, I mentioned this and at least one person was incredulous.  How to achieve this?

Well, to me, it’s quite simple, if I invest $500k in a basket of stocks that yields 10% per annum, I would have that $50k passive income.  Then, I gave it some thought later on and decided that perhaps I should share more in detail how this could be achieved.

Taking a leaf from successful authors using the number “seven”, this is AK71’s “Seven steps to creating passive income from the stock market”:

1.  Get full time employment – Sounds dreadfully straightforward, doesn’t it?  Well, sometimes we need to point out the obvious.  We cannot grow money in pots of soil or fabricate it at home; well, not legally anyway.  Get a well paying job that pays you as much as you are worth (or more than you are worth if you are lucky enough).  Don’t shortchange yourself.
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Posted on March 3, 2010 - by Drizzt

Dividend Investing:It matters when you buy the stock

A question alot of folks ask about dividend stock is that they aren’t realy defensive when a bear market comes along as the share price will still go down. It would be more worth while to sell then buy back at cheaper price.

What do i think of this kind of move? I am all supportive of it, IF you can foretell future events and price movements well.

Lets say you trust your skill in analysis whether it is fundamental or technical. You see that in the future this stock will go down together in a bear market. How well would you fare?

I created a Dividend Stock Simulation Spreadsheet here to illustrate and analyse this.

I chose CapitaCommercialTrust which is a commercial property reit listed on a stock exchange.

Posted on March 1, 2010 - by musicwhiz

February 2010 Portfolio Summary and Review

February 2010 was a somewhat interesting month, as troubles continued with PIGS (Portugal, Italy, Greece and Spain) amid talks of a potential bailout by Germany and France. Stock markets globally were on jitters due to fears of the potential fallout from these 4 countries, and the Euro currency was also threatened as people dumped it in favour of the USD as the Euro zone countries were perceived to be having numerous problems. There were even some calls for these countries to drop the Euro to prevent it from sliding further against the Greenback. Greece did get a little incensed at the Germans because Germany had implied that Greece had been imprudent with their finances, which led them into their current predicament. In retaliation, Greece demanded for more war reparations from Germany, citing the fact that Germany had yet to fully account for the atrocities they committed during World War II! This mud-slinging is likely to carry on for a while but Germany and France are unlikely to stand idly by and watch Greece sink, as a lot of their banks’ debts are also tied to Greek banks, so if Greece fails, the chain reaction would be catastrophic.

China also gave much cause for concern when it raised its reserve ratio twice within one month, reasons being possible overheating of its economy and also its frothy property market. Since China has remained the “bastion of strength” throughout the entire global financial crisis, managing to grow by a breakneck rate of 8-9% even amidst a global slump, many observers saw the tightening measures as a possible derailment to the global economic recovery. If China were to put the brakes on their red-hot growth, what would the impact be on other nations which are still struggling to overcome the effects of the deep recession?
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Posted on February 24, 2010 - by AK71

Money management: Needs and wants.

I first learned about needs and wants more than twenty years ago in an Economics class when I was a Junior College student. During the class, a female classmate told an irritating guy that he needed medication and asked if he wanted some. That made the distinction between needs and wants very clear to us all and we had a good laugh.

There will always be things out there to buy in the modern world. The question to ask is always whether we need these or we want these. The question seems innocent enough at first glance. However, one person’s needs might be another person’s wants. Do I hear some readers going, “Huh?”

Human beings have various needs for survival. In my mind, at the most basic, we need air, water, food, shelter and clothing. Some might say that the last item is debatable and it might be a want that has become a need due to the evolution of human society which invented the notion of modesty. (more…)

Posted on February 23, 2010 - by musicwhiz

Sun Tzu – War On Business Reality TV Series

During the Chinese New Year festive holidays, I managed to catch an episode of a new TV series called “Sun Tzu – War On Business”. It is hosted by a very prominent and prolific entrepreneur called Mr. James Sun (“James”), who made a name for himself as the only Asian to have appeared in the finals of the reality TV Series “The Apprentice”. In 1995, at just the tender age of 18, he set up his own investment firm Sun & Associates and invested US$5,000 of his savings into popular auction portal eBay. Six months later, he was staring at a huge profit of US$150,000. This and other instances of savviness has made him a successful entrepreneur and investor, and next on the cards is a hedge fund he plans to set up, targeting an annual return of 35% per annum. The Sunday Times also did an interview with James which was published on February 14, 2010, and it features some of his money habits and also details how he built his wealth.

What was intruiging, though, was his new TV show which was a sort of reality TV show in which James looks at businesses from top down and advises on how to improve the business, by focusing on aspects such as Management capabilities, division of labour, human resource, technical skills, operational details and financial management. (more…)

Posted on February 21, 2010 - by Jay

Concerns on ETFs

I love ETFs. They allow retail investors to invest in indices with low costs, liquidity, give dividends and even have a helpline that you can call everyday to ask about the ETF you bought. What else can we ask for? However, due to time constraint and limited resources, I haven’t been able to research and answer some thorny questions on them. If anybody reading this have answers, pls do comment and share the knowledge.

1. Forex risk

Most ETFs on the SGX are listed in USD and as we know, the USD is being dragged to hell as Fed prints money like there is no tomorrow to save the economy. Albeit this process will take many many years. However, if our ETF is in USD, wouldn’t that mean that we are being screwed? My answer would be no. Bcos the USD is just a medium to reflect the underlying securities. What matters is the underlying intrinsic value of the securities, not the medium. Take oil for example, it is also in USD. But the underlying value of oil will continue to grow because there is not much left. So USD goes down by 20%, doesn’t mean oil price will go down by 20%. Am I right? Read more…