Adam Khoo, in his book "secrets of millionaire investors", teaches how to identify great companies (the 7 tenets) and when to buy them (the 2 tenets). He incorporates both Technical Analysis and Fundamental Analysis in his approach toward stocks.
Honestly this isn't strictly his approach as I've read another book that states basically the same thing
I'll put the 9 tenets up here for easy reference for future use
Criteria for Value Investing
1.) History of Consistently increasing sales, earnings and cash flow
2.) Good competitive advantage (good thing i studies Economics at A levels)
3.) Future growth drivers
4.) Long term debt < 3x per annum profits
5.) ROE above average
6.) Low capital expenditure reqd. to maintain current operations
7.) Senior management staff are holding, buying the stock
When to Buy:
1.) Undervalued
Px less than intrinsic value
2.) Stock price in consolidation phase/ uptrend
I used to think that A levels were a waste of time...that we studied things that were not useful in reality, like differentiation, organic chem, quantum physics (urgh) and economics...but since I started my investing journey, i've realised the importance of ALOT of what A level econs taught us... Perfect Competition, Oligopoly, monopolistic competition , demand and supply etc...
anyways, i will be posting on some companies i'm currently interested in soon, when i have the time. Currently interesting in Singapore Medical Group, NOL.
Showing posts with label Invest. Show all posts
Showing posts with label Invest. Show all posts
Sunday, December 5, 2010
Friday, November 26, 2010
Paper Losses and Warrants
In my fledgling investment hobby, I've made my first paper loss.
The loss is from Sabana REIT. This counter debuted on SGX at 1.00 and closed at 1.02, leaving me with a $30 paper loss (not including my brokerage fees). Oh well, there's still the 8% dividend to look forward to.
If Sabana rises to maybe $1.12-$1.13 (doubt it though), I will sell it off immediately. Reason being I'm not very sold on Sabana's parentage, which is Freight Links, and also the multiple restrictions on Shariah financial products, which is pretty cumbersome.
So for Sabana, my selling point will be $1.12 onwards.
I doubt REITS have a very low support level, since if it drops, the dividend yield is higher, hence the support level should be quite strong.
I also bought my first derivative product on POEMS today.
I bought 2 lots of "CoscoCorBNPeCW110530", KG6W, at $0.485, from the market maker. I was the only buyer of the stock today.
Reasons for buying:
1.) After reading Cosco's 3Q financial statement, it seems to be in a good position, with positive cash flows and increasing revenues and profits. They may also have a few big contracts which will hopefully increase their profit.
2.) 1 lot of Cosco cost $2060 today. Hence, by buying the warrant, issued by BNP Paribas Warrants, i gained exposure to 2 lots of Cosco for a mere $995 incl. brokage fees.
The warrants have an exercise price of $1.68, and is due to be redeemed on 30th May 2011. Warrant:Share ratio is 1:1, hence my break even price (after factoring in all costs including brokerage fees) is $0.51 per warrant.
My short term view on Cosco is bullish, and hopefully I'll be able to gain some profits in the short term, hopefully before CNY.
The theoretical Delta for this warrant is 0.78, hence, for every 1c the counter moves, the warrant will move 0.78c. Hence, for my target profit taking level, Cosco Corp has to move roughly about 20.5 cents up.
If there's anyone reading, would you care to comment on my buying on this warrant?
Anyway,
Target Profit taking level: $0.65
Self Declared Stop Loss: $0.380 (21.8% away from my purchase price- at this price i will lose $260)
The loss is from Sabana REIT. This counter debuted on SGX at 1.00 and closed at 1.02, leaving me with a $30 paper loss (not including my brokerage fees). Oh well, there's still the 8% dividend to look forward to.
If Sabana rises to maybe $1.12-$1.13 (doubt it though), I will sell it off immediately. Reason being I'm not very sold on Sabana's parentage, which is Freight Links, and also the multiple restrictions on Shariah financial products, which is pretty cumbersome.
So for Sabana, my selling point will be $1.12 onwards.
I doubt REITS have a very low support level, since if it drops, the dividend yield is higher, hence the support level should be quite strong.
I also bought my first derivative product on POEMS today.
I bought 2 lots of "CoscoCorBNPeCW110530", KG6W, at $0.485, from the market maker. I was the only buyer of the stock today.
Reasons for buying:
1.) After reading Cosco's 3Q financial statement, it seems to be in a good position, with positive cash flows and increasing revenues and profits. They may also have a few big contracts which will hopefully increase their profit.
2.) 1 lot of Cosco cost $2060 today. Hence, by buying the warrant, issued by BNP Paribas Warrants, i gained exposure to 2 lots of Cosco for a mere $995 incl. brokage fees.
The warrants have an exercise price of $1.68, and is due to be redeemed on 30th May 2011. Warrant:Share ratio is 1:1, hence my break even price (after factoring in all costs including brokerage fees) is $0.51 per warrant.
My short term view on Cosco is bullish, and hopefully I'll be able to gain some profits in the short term, hopefully before CNY.
The theoretical Delta for this warrant is 0.78, hence, for every 1c the counter moves, the warrant will move 0.78c. Hence, for my target profit taking level, Cosco Corp has to move roughly about 20.5 cents up.
If there's anyone reading, would you care to comment on my buying on this warrant?
Anyway,
Target Profit taking level: $0.65
Self Declared Stop Loss: $0.380 (21.8% away from my purchase price- at this price i will lose $260)
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