Like it or not, economy cycle exist and will always repeat the same stage every few years. But the question here is 5 or 10 years?
If we think back, Malaysia had face Asean financial crisis in 1998 then the US sub prime mortgage crisis in 2008. It's looks like we will have a major crisis in every decade. But how about the minor one? Many of us didn't remember there was a minor adjustment in 2003 from 816 point in April 2002 dropped till 631 point in May 2003.
Coincidently 2013 is another five years after 2008. This make me wonder is there another round of adjustment coming soon? With both internal (general election) and external issue ( US and EU crisis) around, this prediction can happen any time. Timing is hard but what one can do is to always be ready by accumulating some money and set aside as back up. If it didn't happen, you may be earning less but it is always better to make preparation rather than losing the opportunity. This is the reason why I think saving come first while keeping spending to the minimum is necessary.
Sunday 24 March 2013
Friday 22 March 2013
Decision and choices
Everyday in our life, we have to make decisions all the time and usually we have choices. In order to success most of the time is simply by making the right choice. However, said is always easier than done. There will be always second thought that affect our decision. Reduce bad decision and you will found yourself gathering success.
Thursday 21 March 2013
SPM result
Yesterday almost half million of Malaysia youth received their SPM result. As usual we will see a lot of students getting straight As but how many of you actually know the true standard of our SPM result? Have you ever wonder why around 20 years ago, there are hardly students having straight As but now every where also flooded with straight As?
Even the author of this blog has straight As in spm in 2002. Is that means I am clever or I should be "some body" in future? The answer is simply not at all. SPM standard or any general examination in Malaysia have been altered from time to time following bell shape which is something I am sad of. Questions in the paper simply did not test the creativity and soficaticated thinking skill. For mathematic paper, one can score well as long as solving through the past year paper as question style hardly change. But why still so many who fail? That I also wonder until now.
Even the author of this blog has straight As in spm in 2002. Is that means I am clever or I should be "some body" in future? The answer is simply not at all. SPM standard or any general examination in Malaysia have been altered from time to time following bell shape which is something I am sad of. Questions in the paper simply did not test the creativity and soficaticated thinking skill. For mathematic paper, one can score well as long as solving through the past year paper as question style hardly change. But why still so many who fail? That I also wonder until now.
Tuesday 19 March 2013
Value of your time
I am sure everyone know time is valuable and priceless. However, how many of us actually realize our time is actually being bought? Your pay is the value you got for your time.
If a person work 10 hours a day, 20 days a month and the monthly pay is RM3000. Then one hour of that person is simply RM3000/(20x10)hours= RM15.
I am sure many of us work more hours than that and pay is even less than RM3000 per month. So how cheap is our time and how come those with RM800 per month never realize this? Working is like selling our time, try calculate yourself to see how cheap we are selling our time.
If a person work 10 hours a day, 20 days a month and the monthly pay is RM3000. Then one hour of that person is simply RM3000/(20x10)hours= RM15.
I am sure many of us work more hours than that and pay is even less than RM3000 per month. So how cheap is our time and how come those with RM800 per month never realize this? Working is like selling our time, try calculate yourself to see how cheap we are selling our time.
Analysis on a company
When we start targeting on a particular company, many of us don't really know where to start. Well, may be it just start from its product that we come across. In order to really analyze a particular company, we can use SWOT which is the short term for Strength, Weakness, Opportunity and Threat. These are the simple analysis on the company where we wanna know its strength and weakness while investigating its opportunity and threat in the industry.
To give an example, I will do a SWOT analysis on my blog.
Strength
1. I am a Mba holder so I know everything but expert at nothing.
2. I got plenty of time to update my blog with latest info.
3. I can reply the comment and request as long I get to online.
4. I have good foundation on mathematics so I like calculation a lot which is important in finance and business.
5. I can write and I love to read others' blog making me full of idea to write in mine.
Weakness
1. Still lack of experience in managing a blog because I am new.
2. Still new in finance industry because my background is mathematics.
3. Lack of first hand information which is the most important in trading stock. By the time we saw the announcement in Bursa, it is already a public known issue. However, this is not so important if investing for long term as long the firm progressing fine.
Opportunity
1. This blog industry is free for all, no payment needed, no maintenance fee and rising in blogging trend.
2. Rise in advertising through blog like Nuffnang, Google Adsense, private firms and others.
3. Information leading era which means we can be famous if we can continously provide some sound ideas on trading.
4. Anyone also can success as long you put in effort.
Threat
1. Many bloggers already in this industry meaning there are a lot of competitors.
2. Advertisement only come when page view is high.
3. Negative issue is not allowed I this country.
4. Readers have a lot options and hard to retain for subscribing to a particular blog.
To give an example, I will do a SWOT analysis on my blog.
Strength
1. I am a Mba holder so I know everything but expert at nothing.
2. I got plenty of time to update my blog with latest info.
3. I can reply the comment and request as long I get to online.
4. I have good foundation on mathematics so I like calculation a lot which is important in finance and business.
5. I can write and I love to read others' blog making me full of idea to write in mine.
Weakness
1. Still lack of experience in managing a blog because I am new.
2. Still new in finance industry because my background is mathematics.
3. Lack of first hand information which is the most important in trading stock. By the time we saw the announcement in Bursa, it is already a public known issue. However, this is not so important if investing for long term as long the firm progressing fine.
Opportunity
1. This blog industry is free for all, no payment needed, no maintenance fee and rising in blogging trend.
2. Rise in advertising through blog like Nuffnang, Google Adsense, private firms and others.
3. Information leading era which means we can be famous if we can continously provide some sound ideas on trading.
4. Anyone also can success as long you put in effort.
Threat
1. Many bloggers already in this industry meaning there are a lot of competitors.
2. Advertisement only come when page view is high.
3. Negative issue is not allowed I this country.
4. Readers have a lot options and hard to retain for subscribing to a particular blog.
Bank Run
Becoming a full time trader
Monday 18 March 2013
Greed and fear
I am sure every investor out there experience this kind of situation before. When the stock you bought shoot up high, you would probably regret why no buy more last time. This is called "greed". However, when the reverse happen, u would think why bought too much. This is called "fear".
One should always buy a suitable amount and still dare to top up when drop further. This is the best way to avoid buy and sell regularly which I think every investor will come accross. Only pick a stock that you can let it be there for more than three years since firm need time to grow. This is referring on fundamental analysis rather than technical which require highly discipline trading experience.
One should always buy a suitable amount and still dare to top up when drop further. This is the best way to avoid buy and sell regularly which I think every investor will come accross. Only pick a stock that you can let it be there for more than three years since firm need time to grow. This is referring on fundamental analysis rather than technical which require highly discipline trading experience.
Early retirement
I wonder if one day I can just wake up everyday, relax and need not worry of going to work. I am sure everyone out there think of this before unless you are really a workaholic.
Being just an ordinary middle income person, I wonder early retirement is possible. As a result, I did some simple mathematics. Assume if I invest in a stock portfolio with 5% dividend every year and I want a monthly income of 4000 generated from this stock portfolio, the capital needed would be 4000x12/0.05= 960,000. Wah, that is almost a million.
What if I just want a small start for 100 per month, the capital needed is 100x12/0.05=24,000. Hmm, this sound more achievable for me. Well, this will be one of my target to achieve 1200 dividend from stock market this year. One step closer to my early retirement plan.
Being just an ordinary middle income person, I wonder early retirement is possible. As a result, I did some simple mathematics. Assume if I invest in a stock portfolio with 5% dividend every year and I want a monthly income of 4000 generated from this stock portfolio, the capital needed would be 4000x12/0.05= 960,000. Wah, that is almost a million.
What if I just want a small start for 100 per month, the capital needed is 100x12/0.05=24,000. Hmm, this sound more achievable for me. Well, this will be one of my target to achieve 1200 dividend from stock market this year. One step closer to my early retirement plan.
Sunday 17 March 2013
Choosing a stock is like choosing a wife
If you think closely, choosing a stock is just like choosing a wife.
Here I summaries each similar process as below:
1. Put a stock into watch list : Target a girl to become girl friend.
2. Do study on the stock : Start ask here and there about that girl.
3. Monitor the stock : Getting to know the girl and get together.
4. Buy the stock : Marry the girl as wife.
5. Cut lose : Divorce with your wife.
6. Get bonus : Have children.
7. Get dividend : Wife earning money to help living.
Buying a good stock is just like having a good wife. If one have a good wife, I believe definitely he will never hope to get divorce. This is just like having a good return in stock that we prefer to buy and hold rather than getting a little gain and sell off. As a conclusion, make sure you pick a stock like you pick your wife. Definitely you will reduce the number of time in cutting lose.
Enjoy this youtube that I think is one really BAD stock to pick. Hahaha.
Here I summaries each similar process as below:
1. Put a stock into watch list : Target a girl to become girl friend.
2. Do study on the stock : Start ask here and there about that girl.
3. Monitor the stock : Getting to know the girl and get together.
4. Buy the stock : Marry the girl as wife.
5. Cut lose : Divorce with your wife.
6. Get bonus : Have children.
7. Get dividend : Wife earning money to help living.
Buying a good stock is just like having a good wife. If one have a good wife, I believe definitely he will never hope to get divorce. This is just like having a good return in stock that we prefer to buy and hold rather than getting a little gain and sell off. As a conclusion, make sure you pick a stock like you pick your wife. Definitely you will reduce the number of time in cutting lose.
Enjoy this youtube that I think is one really BAD stock to pick. Hahaha.
Share Buyback VS Dividend
Well, I bet many will question which one is better. I am on my way doing a research on Share Buyback using Buy and Hold calculation method for public listed firm in KLSE. Well so far, not many of the share buyback companies in KLSE show positive return after they initiated share buyback program.
A simple explanation for firms to choose share buyback rather than dividend is because they have some extra cash that is derived from cost saving rather than operation earning. This is because such extra cash from cost saving only rarely happen. If firm choose to distribute dividend, investor will expect more in coming years. If the firm fails, it will perceived as negative impact to the firm's image. Will update everyone when I finish my research. This is also my mba thesis. Hope to finish it as soon as possible to graduate.
A simple explanation for firms to choose share buyback rather than dividend is because they have some extra cash that is derived from cost saving rather than operation earning. This is because such extra cash from cost saving only rarely happen. If firm choose to distribute dividend, investor will expect more in coming years. If the firm fails, it will perceived as negative impact to the firm's image. Will update everyone when I finish my research. This is also my mba thesis. Hope to finish it as soon as possible to graduate.
Exciting 2013
2013 for Malaysia Stock Market is definitely exciting. What other to wait than the General Election that simply cannot be delayed any more. With Negeri Sembilan parliament coming to due in end of this month, I believe BN must resolve parliament by the same time to avoid more troubles. By then, its better to keep some cash to buy in. Remember to buy in when all are selling, this is a critical moment that is 2013 best entry opportunity.
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