..By Poornima Gupta
SAN FRANCISCO (Reuters) - Apple CEO Tim Cook has a problem, a $98 billion problem.
Just 18 months ago, Apple's $46 billion mountain of cash - while huge by most standards - attracted only muted complaints from investors, who did call for a dividend or share buyback, but were mostly happy with the meteoric rise in the stock price.
But with the growing cash balance now a much bigger overhang on the stock, widely considered to be undervalued, investors are clamoring more vocally for Cook to put the money to work.
No one could have foreseen just how quickly that warchest would grow. Indeed, some analysts estimated Apple's cash holdings would increase to $65 billion at the end of 201l. That it has swelled nearly 50 percent above even those lofty projections is nothing short of awesome.
Apple now has about $104 in cash per share.
But to paraphrase rapper P. Diddy, with more money comes more problems. Apple's runaway success presents Cook with his first real public test as chief executive officer - figuring out what to do with the money.
Apple's cash balance is now a quarter of its $415 billion market capitalization and roughly equals California's 2012-2013 state budget. And even though $64 billion of Apple's cash is overseas - meaning it will have to pay a hefty tax to bring it into the United States - calls for a dividend on Wall Street grew louder after the company said on Tuesday it was in "active discussions" internally on what to do with the money.
Wall Street is strongly in favor of Apple returning the money to shareholders through buybacks or dividends, even if it is only a one-time deal. But the ultra-conservative company, which typically ignores Wall Street, gave no clues about that during its earnings call on Tuesday.
"They are clearly trying to signal that they are not ignoring the issue," said Michael Holt, an analyst with Morningstar. "It doesn't mean that a decision is imminent."
Others, however, are convinced a dividend will be paid this year.
"With Apple stating that it is 'actively' pursuing its options with regards to its cash balance, we believe the commentary may be setting itself up for a cash dividend in FY12," Ticonderoga Securities analyst Brian White said, raising his target on the stock to $666.
Katy Huberty, an analyst with Morgan Stanley, echoed White's view, saying: "Apple appears committed to making a decision on cash return in the near-term and we continue to believe a dividend makes the most sense."
Some big technology companies have started paying a dividend to help allay investor concerns about slowing growth by returning part of their ample cash holdings. Cisco Systems Inc began paying a dividend last year, while Microsoft Corp started in 2003.
FAR TOO MUCH MONEY
Apple stock gained 25 percent in 2011, adding about $77 billion to its market cap and it touched an all-time high of $454.45 on Wednesday. Some continue to bank on a share-price rise to as high as $700.
The company's core business is throwing off massive amounts of cash every quarter - Apple recorded a $16 billion increase in cash sequentially - in part because of its reluctance to pay a dividend or buy back stock and its limited acquisition history.
The company earned a mere 0.77 percent on its cash and investments in fiscal 2011, mostly due to its preference for safe, but low-yielding U.S. Treasury and agency debt.
This is a tad higher than the 0.75 percent it earned in fiscal 2010, but down from 1.43 percent in fiscal 2009, 3.44 percent in 2008 and 5.27 percent in 2007.
Fiscal prudence has long been part of Apple's mantra and the Cupertino, California-based company runs a tight ship with total revenue rising 66 percent in fiscal 2011, but operating expenses rising only 37 percent.
For now, Apple's Chief Financial Officer, Peter Oppenheimer, has veered away from his usual script, which was to tell Wall Street that Apple has always had internal discussions on the best use of its cash, with capital preservation being key.
He characterized these discussion as "active" on Tuesday.
"We recognize that the cash is growing for all the right reasons," Oppenheimer said, but added he had nothing to announce. "In the meantime, we're not letting it burn a hole in our pockets."
Oppenheimer also suggested that Apple might invest in its supply chain or make acquisitions. But Apple has typically preferred to acquire small companies, which has had little or no material impact on its results so far.
Apple's major expense last year was paying the lion's share to acquire - along with Microsoft and a few other companies - the patent portfolio of bankrupt telecommunications company Nortel for $4.5 billion.
Apple said it spent $4.3 billion in fiscal 2011 to acquire "property, plant and equipment," $3.2 billion in "acquisition of intangible assets" and $244 million in "payments made in connection with business acquisitions," according to its annual regulatory filing.
That is in sharp contrast to rivals such as Google Inc, which is acquiring Motorola Mobility for $12.5 billion in cash, and which completed 54 acquisitions during the first nine months of last year alone. The company's $44.6 billion warchest of cash and investments at the end of December was far lower than Apple's.
Google has also resisted pressure to announce a dividend or buy back stock.
Apple may do the same in the next few months, said Michael Walkley, an analyst with Canaccord Genuity.
"We believe Apple is likely to announce a dividend during 2012, potentially next quarter when crossing $100 billion in cash and cash equivalents," Walkley said. "We view this as very bullish for investors, as we believe a new group of investors seeking dividends would invest in Apple and drive shares higher."
(Reporting By Poornima Gupta; editing by Andre Grenon)
..http://finance.yahoo.com/news/apple-ceo-faces-first-test-000903265.html
Wednesday, 25 January 2012
Friday, 14 October 2011
SGX market update news
http://www.sgx.com/wps/wcm/connect/design_new/site/sa/news_flash?presentationtemplate=design_new/PT_Print_Friendly
Wednesday, 12 October 2011
Peter Lim - king of remisier secret to successful investing
Peter Lim king of remisier secret to successful investing
1) Prospect
2) Patience . 10 years
3) Longer term mindset.
WHAT is Peter Lim's secret to successful investing?
Prospect, he replied.
He looks at sectors.
'Like if I think solar is good, I go into solar; if I think palm oil is good, then palm oil.
'Share prices go up because the sector grows. So if I think this sector is going to be good in the next 10 years, then I'll just invest in it.'
Another key reason for his success, he said, is patience.
Mr Lim, who also acts as a consultant to companies and helps them find multi-million-dollar investors, does not subscribe to buying one day and selling the next to cash in.
His advice to young investors: 'You have to invest with a longer-term mindset. You buy a good stock, leave it there for 10 years. Come 10 years, this dollar can be many, many multiples.
'I think the trick is really to think long-term.
' You may not have a lot of money, but you have a lot oftime.'
'The minimum length of my investments are five to six years, if not 10 to 12 years.'
He cites the example of his condominium.
He owns an entire 11-storey block at prestigious Ardmore Park, near Orchard Road. He and his wife, with his 85-year-old mother, live in one apartment, while three other maisonettes and the penthouse sits empty.
'I bought it in 1994 for $13m and I just hold there and wait. With the current property market, it is worth more than $100m.'
Same with Wilmar, which he invested in in the early '90s. It was then a US$10m investment. Now, his stake is worth some US$700m.
Information extracted from http://finance.kampungtalk.net/2007/08/stock-market-turmoil-singapores-7th-richest-man
1) Prospect
2) Patience . 10 years
3) Longer term mindset.
WHAT is Peter Lim's secret to successful investing?
Prospect, he replied.
He looks at sectors.
'Like if I think solar is good, I go into solar; if I think palm oil is good, then palm oil.
'Share prices go up because the sector grows. So if I think this sector is going to be good in the next 10 years, then I'll just invest in it.'
Another key reason for his success, he said, is patience.
Mr Lim, who also acts as a consultant to companies and helps them find multi-million-dollar investors, does not subscribe to buying one day and selling the next to cash in.
His advice to young investors: 'You have to invest with a longer-term mindset. You buy a good stock, leave it there for 10 years. Come 10 years, this dollar can be many, many multiples.
'I think the trick is really to think long-term.
' You may not have a lot of money, but you have a lot oftime.'
'The minimum length of my investments are five to six years, if not 10 to 12 years.'
He cites the example of his condominium.
He owns an entire 11-storey block at prestigious Ardmore Park, near Orchard Road. He and his wife, with his 85-year-old mother, live in one apartment, while three other maisonettes and the penthouse sits empty.
'I bought it in 1994 for $13m and I just hold there and wait. With the current property market, it is worth more than $100m.'
Same with Wilmar, which he invested in in the early '90s. It was then a US$10m investment. Now, his stake is worth some US$700m.
Information extracted from http://finance.kampungtalk.net/2007/08/stock-market-turmoil-singapores-7th-richest-man
Investment styles I (Time)
http://finance.kampungtalk.net/2008/01/investment-styles-i-time
So what kind of investor are you? Are you a typical 25 year old with not much spare cash, some debts, willing to take lots of risk, and will put in money every month? Or are you a 50 year old, semi retired, got $500k in the bank, and looking for stable but not necessarily high returns.
Those are some of the questions you've gotta ask yourself before you start to invest. Questions pertaining to: Time horizon, Risk portfolio, Active/Passive investing, types of research, amount of capital, etc..
While I won't go into all those topics on personal finance (for now), lets just look at how all these factors do affect your investment styles.
Time
Time is a very important element of investments. It is time that actually gives us the exponential growth of the compounding effect. As you would have already read about the compounding effect in the first article, you can see how making profitable investments as early in life can result in a large fortune 30-40 years down the road.
When most people talk about time in investments, they usually look at the time horizon. This basically means, how long are you able to hold the investments for. This doesn't mean how long are you going to hold the investment for. It just means, given that all the conditions for that particular investment is correction, will you continue holding it for 1 year, 5 years, 10 years? An investor with a long time horizon might decide to get out of the investment after 1 month, because he decided that the conditions present when he first made the investments is now gone. An example could be investing in the middle east could have been a good investment for the long term, but suddenly when there is a war, then it would probably be prudent to get out of there.
Just looking at this, it can generally be said that younger people would have a longer time horizon than older folks. A person can't just base his time horizon on that though. Perhaps, you are 25 years of age, and you are looking to get married in 5 years time, have 2 kids, and planning to buy a condominium. Then in fact, for a large part of your capital, your time horizon is only about 5 years at most.
On another aspect, time is also a factor in deciding your investing style. That is, your trade time span. Here would be where you determine if you are a day trader (who is someone who buys and sells within the day), or a buy-and-hold investor (someone who buys and hold till he dies). Of course, you can be anywhere in between, from the scalpers to the swing traders, to the sector players, to the cycle traders. Lets look at some of them.
A day trader is basically a person who does not hold any position overnight. The idea of this is that you are not able to quantify the external risk caused by the overnight movements. So the day trader might buy a stock in the morning, and sell it buy lunchtime, or maybe before market closing.
A scalper, is a specialised typed of day trader. The idea behind that of a scalper is to catch small movements that happen regularly in the day, by taking huge positions. For example, a scalper might buy a stock at 50cents, and sell it at 50.5cents. Though, he would probably buy a huge amount to justify his time and effort in that trade.
A swing trader, is a person who believes prices have some form of momentum behind it. Thus, he might buy a stock, and hold it for a couple of days, to a week or 2 at most. He would exit the position when he feels that the momentum behind it has waned or reversed.
A cycle trader/sector player, believes that the market moves in cycles or waves. As such, he would try to position himself at the beginning of a cycle/sector and ride it all the way to the top. Most of the time, the holding period could be days, weeks, or sometimes months.
A value investor, could be a person that seeks for companies that seem to have its value mispriced to the market. As such, he tries to position himself into such stocks, and would sell of when the stock becomes fairly priced. These kind of plays, are usually weeks to months usually.
A buy-and-hold investor, someone like Warren Buffet, is someone who believes that only companies with future growth potential should be bought, and that companies currently in vogue should not be bought just because its the new hot stories. To someone like him, its basically companies that will survive the economy for many years to come. Such investors, generally buy good companies, and plan to hold it forever, while collecting any dividend payouts and capital growth.
While the descriptions above seem to be fairly rigid, traders and investors actually fall into many categories at the same time.
Above information extracted from
http://finance.kampungtalk.net/2008/01/investment-styles-i-time
Learn more about investment style II on Risk
http://finance.kampungtalk.net/2008/01/investment-styles-ii-risk
So what kind of investor are you? Are you a typical 25 year old with not much spare cash, some debts, willing to take lots of risk, and will put in money every month? Or are you a 50 year old, semi retired, got $500k in the bank, and looking for stable but not necessarily high returns.
Those are some of the questions you've gotta ask yourself before you start to invest. Questions pertaining to: Time horizon, Risk portfolio, Active/Passive investing, types of research, amount of capital, etc..
While I won't go into all those topics on personal finance (for now), lets just look at how all these factors do affect your investment styles.
Time
Time is a very important element of investments. It is time that actually gives us the exponential growth of the compounding effect. As you would have already read about the compounding effect in the first article, you can see how making profitable investments as early in life can result in a large fortune 30-40 years down the road.
When most people talk about time in investments, they usually look at the time horizon. This basically means, how long are you able to hold the investments for. This doesn't mean how long are you going to hold the investment for. It just means, given that all the conditions for that particular investment is correction, will you continue holding it for 1 year, 5 years, 10 years? An investor with a long time horizon might decide to get out of the investment after 1 month, because he decided that the conditions present when he first made the investments is now gone. An example could be investing in the middle east could have been a good investment for the long term, but suddenly when there is a war, then it would probably be prudent to get out of there.
Just looking at this, it can generally be said that younger people would have a longer time horizon than older folks. A person can't just base his time horizon on that though. Perhaps, you are 25 years of age, and you are looking to get married in 5 years time, have 2 kids, and planning to buy a condominium. Then in fact, for a large part of your capital, your time horizon is only about 5 years at most.
On another aspect, time is also a factor in deciding your investing style. That is, your trade time span. Here would be where you determine if you are a day trader (who is someone who buys and sells within the day), or a buy-and-hold investor (someone who buys and hold till he dies). Of course, you can be anywhere in between, from the scalpers to the swing traders, to the sector players, to the cycle traders. Lets look at some of them.
A day trader is basically a person who does not hold any position overnight. The idea of this is that you are not able to quantify the external risk caused by the overnight movements. So the day trader might buy a stock in the morning, and sell it buy lunchtime, or maybe before market closing.
A scalper, is a specialised typed of day trader. The idea behind that of a scalper is to catch small movements that happen regularly in the day, by taking huge positions. For example, a scalper might buy a stock at 50cents, and sell it at 50.5cents. Though, he would probably buy a huge amount to justify his time and effort in that trade.
A swing trader, is a person who believes prices have some form of momentum behind it. Thus, he might buy a stock, and hold it for a couple of days, to a week or 2 at most. He would exit the position when he feels that the momentum behind it has waned or reversed.
A cycle trader/sector player, believes that the market moves in cycles or waves. As such, he would try to position himself at the beginning of a cycle/sector and ride it all the way to the top. Most of the time, the holding period could be days, weeks, or sometimes months.
A value investor, could be a person that seeks for companies that seem to have its value mispriced to the market. As such, he tries to position himself into such stocks, and would sell of when the stock becomes fairly priced. These kind of plays, are usually weeks to months usually.
A buy-and-hold investor, someone like Warren Buffet, is someone who believes that only companies with future growth potential should be bought, and that companies currently in vogue should not be bought just because its the new hot stories. To someone like him, its basically companies that will survive the economy for many years to come. Such investors, generally buy good companies, and plan to hold it forever, while collecting any dividend payouts and capital growth.
While the descriptions above seem to be fairly rigid, traders and investors actually fall into many categories at the same time.
Above information extracted from
http://finance.kampungtalk.net/2008/01/investment-styles-i-time
Learn more about investment style II on Risk
http://finance.kampungtalk.net/2008/01/investment-styles-ii-risk
Making the actual trade
http://finance.kampungtalk.net/2008/01/making-actual-trade
Now that you have decided that you want to invest, and you have considered what is the investment style you would like to try, it is time to make the actual trade.
In Singapore, the stock market is open every weekday from 9am to 5pm, with lunch breaks at 12.30pm to 2.00pm. Before the market opens there is this session called pre-open from 8.30am to 8.59am. During this pre-open period, no trades are done, but people are allowed to submit their orders to queue, such that all these orders will then get done simultaneously at 8.59am before the market officially opens.
There is also pre-open session from 12.30pm to 1.59pm where people can queue in orders before they get executed at 1.59pm, where the afternoon session will commence. Finally, there is a pre-close session at 5.01pm to 5.05pm. These orders will then be matched at 5.06pm to close the day's trading activities. Depending on your brokerage firm, you would be able to queue for the next days session from 5.30pm or 6.00pm onwards.
Without going into too many advanced topics, how the pre-open, pre-close, the matching sessions and how to jump queue will be separated into another post. Watch out for it!
Executing a trade (a.k.a what do all those numbers on the screen mean?)
When you have decided which stock you would like to buy, the first thing you would do is to find the details of its current price.
In this example, the stock we are looking at is Singtel. Some numbers to note are, Last (3.86), BVol(289K), Buy(3.86), Sell(3.87), SVol(17K), Vol(28,715K)
Last basically means the last done price, or the most recent price that Singtel shares were transacted. Vol basically shows the total amount of stocks that has been executed today.
As you would notice, the volume numbers have a K behind it. The reason for this is that shares are traded in 'lot sizes'. In short, 'a lot' of Singtel shares is 1000 shares, thus, the smallest quantity of Singtel shares you can buy or sell at 1 time is 1 lot, or 1000 shares. That would mean 28,715K translates into 28,715 lots, or 28,715,000 shares, of Singtel has been transacted today,
Remember our fruits market example about queuing? In this case, there are 289 orders (or people) queueing to buy Singtel at 3.86, and 17 orders (or people) queueing to sell Singtel at 3.87. It is not displayed here, but in fact, there are people queueing to buy Singtel at 3.85, 3.84, 3.83, etc, and there are people queueing to sell Singtel at 3.88, 3.89, 3.90 and so on. This is called market depth.
Lets say now you have decided you want to buy Singtel. You have 2 options really.
1) You can choose to buy it immediately. What this means is that you go to the guy at the queue selling at 3.87, and offer to buy their shares from them. If you decide to buy 10,000 (or 10 lots) of it, the SVol(K) will decrease by 10. Resulting in a final number of 7. the Vol(K) column will correspondingly increase by 10, because that is the total volume of Singtel shares transacted for the day.
2) You think that you can get it at a better price. In this scenario, you will decide what is the price you are willing to pay for it, and stand in that queue for buyers. Assuming that 3.86 is a fair price you decide to pay, and you want to buy 10,000 (or 10 lots) of Singtel shares, what happens is tha the BVol(K) will increase by 10 to 299. As with all queues, you are now at the back of the queue. What this means is that there must be enough people who wants to sell Singtel shares at 3.86 until it reaches your queue position.
Now assuming you want to buy 20,000 (or 20 lots) of Singtel instead. You decide 3.87 is a fair price to pay, however, there are only 17 lots available for sale at 3.87. What happens?
The same mechanism comes into play. You walk up to the 17 sellers at 3.87, buy all the 17 lots. When that happens, you have 3 more lots you would like to buy. Now, you become the buyer at 3.87. Remember there are ready sellers at 3.88, 3.89, 3.90 and beyond? What happens now is, the number 3.86 would disappear from the Buy column, and it would be replaced with 3.87. The BVol(K), would now become 3, since that is the total number of lots willing to buy at 3.87. The Sell column would then be replaced with 3.88, and the SVol would be the number of sellers willing to sell at 3.88.
Really, its all just like a fruits market.
http://finance.kampungtalk.net/2008/01/making-actual-trade
Now that you have decided that you want to invest, and you have considered what is the investment style you would like to try, it is time to make the actual trade.
In Singapore, the stock market is open every weekday from 9am to 5pm, with lunch breaks at 12.30pm to 2.00pm. Before the market opens there is this session called pre-open from 8.30am to 8.59am. During this pre-open period, no trades are done, but people are allowed to submit their orders to queue, such that all these orders will then get done simultaneously at 8.59am before the market officially opens.
There is also pre-open session from 12.30pm to 1.59pm where people can queue in orders before they get executed at 1.59pm, where the afternoon session will commence. Finally, there is a pre-close session at 5.01pm to 5.05pm. These orders will then be matched at 5.06pm to close the day's trading activities. Depending on your brokerage firm, you would be able to queue for the next days session from 5.30pm or 6.00pm onwards.
Without going into too many advanced topics, how the pre-open, pre-close, the matching sessions and how to jump queue will be separated into another post. Watch out for it!
Executing a trade (a.k.a what do all those numbers on the screen mean?)
When you have decided which stock you would like to buy, the first thing you would do is to find the details of its current price.
In this example, the stock we are looking at is Singtel. Some numbers to note are, Last (3.86), BVol(289K), Buy(3.86), Sell(3.87), SVol(17K), Vol(28,715K)
Last basically means the last done price, or the most recent price that Singtel shares were transacted. Vol basically shows the total amount of stocks that has been executed today.
As you would notice, the volume numbers have a K behind it. The reason for this is that shares are traded in 'lot sizes'. In short, 'a lot' of Singtel shares is 1000 shares, thus, the smallest quantity of Singtel shares you can buy or sell at 1 time is 1 lot, or 1000 shares. That would mean 28,715K translates into 28,715 lots, or 28,715,000 shares, of Singtel has been transacted today,
Remember our fruits market example about queuing? In this case, there are 289 orders (or people) queueing to buy Singtel at 3.86, and 17 orders (or people) queueing to sell Singtel at 3.87. It is not displayed here, but in fact, there are people queueing to buy Singtel at 3.85, 3.84, 3.83, etc, and there are people queueing to sell Singtel at 3.88, 3.89, 3.90 and so on. This is called market depth.
Lets say now you have decided you want to buy Singtel. You have 2 options really.
1) You can choose to buy it immediately. What this means is that you go to the guy at the queue selling at 3.87, and offer to buy their shares from them. If you decide to buy 10,000 (or 10 lots) of it, the SVol(K) will decrease by 10. Resulting in a final number of 7. the Vol(K) column will correspondingly increase by 10, because that is the total volume of Singtel shares transacted for the day.
2) You think that you can get it at a better price. In this scenario, you will decide what is the price you are willing to pay for it, and stand in that queue for buyers. Assuming that 3.86 is a fair price you decide to pay, and you want to buy 10,000 (or 10 lots) of Singtel shares, what happens is tha the BVol(K) will increase by 10 to 299. As with all queues, you are now at the back of the queue. What this means is that there must be enough people who wants to sell Singtel shares at 3.86 until it reaches your queue position.
Now assuming you want to buy 20,000 (or 20 lots) of Singtel instead. You decide 3.87 is a fair price to pay, however, there are only 17 lots available for sale at 3.87. What happens?
The same mechanism comes into play. You walk up to the 17 sellers at 3.87, buy all the 17 lots. When that happens, you have 3 more lots you would like to buy. Now, you become the buyer at 3.87. Remember there are ready sellers at 3.88, 3.89, 3.90 and beyond? What happens now is, the number 3.86 would disappear from the Buy column, and it would be replaced with 3.87. The BVol(K), would now become 3, since that is the total number of lots willing to buy at 3.87. The Sell column would then be replaced with 3.88, and the SVol would be the number of sellers willing to sell at 3.88.
Really, its all just like a fruits market.
http://finance.kampungtalk.net/2008/01/making-actual-trade
What is stock?
http://finance.kampungtalk.net/2008/01/what-stock-market
Visit above link to learn more information.
What is the stock market? To some people, it is a gold mine. To others, it might be a strange place that does not belong in their 'world' and thus, something that should not be explored. And to the rest, its basically a legal casino.
Stocks, in a very general concept, represent ownership in a company. A stock market is not unlike a wet market where you bought your groceries from. The only difference, is that the people wear suits and they don't smell like fish.
Buying stocks in a stock market is very much like buying apples. Everyday, when the stock market opens, people who want to buy apples or sell apples will then gather in a large open field. Everybody's very civilised here, so they will queue up. At the front of the queue, it will be a big signboard saying how much this particular queue of people are willing to buy or sell apples at.
Lets say that today apples are currently worth 50cents. At the side where people want to buy apples, there are people lining up in the 49cents queue, the 48cents queue, the 47cents queue, and so on. On the side where people want to sell apples, there are people lining up at the 51cents queue, the 52cents queue and so on.
When a buyer who is queuing up decides he's really hungry and he wants an apple now, he will then go to the 51cents seller and buy the apples from him. Likewise, if a seller really wants to sell an apple, maybe because he ate apples for the past 20 years of his life, he goes to the buyers at 49cents, and sells to them his apples. When that happens, the price transacted at will be known as the last done price.
And that would only be for apples, which is liken to just a single company on the stock market. Thus, the stock market on the whole, is just like a really really huge wet market, with tons of different kinds of fruits, and thousands of buyers and sellers everyday.
Jump to the rest of the articles here:
Why invest
What is the stock market
How to invest and trade
Choosing a brokerage house
Investment styles I (Time)
Investment styles II (Risk)
Investment styles II (Research)
Making the actual trade
Recommended books
Similar posts
•What is bid, ask? And why can't I buy a stock for 0.5cent and sell it for 1cent immediately for profit?
•Making the actual trade
•Who decides the opening price of a stock? (How does pre-opening work?)
•What is the difference between IPO offer shares and placement shares?
•Why Invest?
•Investment styles I (Time)
•How to trade on the Singapore stock market?
http://finance.kampungtalk.net/2008/01/what-stock-market
Visit above link to learn more information.
What is the stock market? To some people, it is a gold mine. To others, it might be a strange place that does not belong in their 'world' and thus, something that should not be explored. And to the rest, its basically a legal casino.
Stocks, in a very general concept, represent ownership in a company. A stock market is not unlike a wet market where you bought your groceries from. The only difference, is that the people wear suits and they don't smell like fish.
Buying stocks in a stock market is very much like buying apples. Everyday, when the stock market opens, people who want to buy apples or sell apples will then gather in a large open field. Everybody's very civilised here, so they will queue up. At the front of the queue, it will be a big signboard saying how much this particular queue of people are willing to buy or sell apples at.
Lets say that today apples are currently worth 50cents. At the side where people want to buy apples, there are people lining up in the 49cents queue, the 48cents queue, the 47cents queue, and so on. On the side where people want to sell apples, there are people lining up at the 51cents queue, the 52cents queue and so on.
When a buyer who is queuing up decides he's really hungry and he wants an apple now, he will then go to the 51cents seller and buy the apples from him. Likewise, if a seller really wants to sell an apple, maybe because he ate apples for the past 20 years of his life, he goes to the buyers at 49cents, and sells to them his apples. When that happens, the price transacted at will be known as the last done price.
And that would only be for apples, which is liken to just a single company on the stock market. Thus, the stock market on the whole, is just like a really really huge wet market, with tons of different kinds of fruits, and thousands of buyers and sellers everyday.
Jump to the rest of the articles here:
Why invest
What is the stock market
How to invest and trade
Choosing a brokerage house
Investment styles I (Time)
Investment styles II (Risk)
Investment styles II (Research)
Making the actual trade
Recommended books
Similar posts
•What is bid, ask? And why can't I buy a stock for 0.5cent and sell it for 1cent immediately for profit?
•Making the actual trade
•Who decides the opening price of a stock? (How does pre-opening work?)
•What is the difference between IPO offer shares and placement shares?
•Why Invest?
•Investment styles I (Time)
•How to trade on the Singapore stock market?
http://finance.kampungtalk.net/2008/01/what-stock-market
Can I trade full time?
A good series and explanation about what you need to prepare for yourself to trade full time
Undercapitalized causes
Overtrading
Forcing trades. Lower your standard criteria to trade.
Excessive risk
Feeling behind. Pscychology.
Refuses to lose (snowball losses)
Averaging down trade to exit.
Attempt to nail turning points. Trying to catch top or bottom of market
Underestimating the difficulty of trading. Trading is against the brightest people.
Too much importance on one trade to bail you out of slump. Don't use one trade to make or break your trading
Blowing out. lose it all.
Get married to an opinion
- Major losses, feel the need to "make it up" of the losses.
- Loss of confidence. replace capital is easy, but not easy to replace confidence.
Protect your confidence, don't married to an opinion.
Capital tied up. missed opportunity.
Risk
Comfort with risk. Willing to take some risk, to lose money.
Able to accept winning / losing
Maintain a level head. Regardless of facing tremendous opportunity or facing adversary
Support network. Family member, or spouse supporting you to trade
Needs
Monthly cashflow. Know what is your one year expenditure.Amount set aside.
Desire for stability? Trading involve losing, you may have down days, down weeks, down months. Compound your emotion
Discipline
- willing to put in the work
- Stick to your plan
- Avoid danger/ excitement. Trading can be boring.
PLAN
- A trading strategy that's working
- Understand risk per trade and sizing
- An exit strategy for every trade
- Willing to adapt to change
- What will you trade?
- When will you trade?
- Know when you will NOT trade! outline the boundary not to trade.
Video
Part 1 http://www.i3investor.com/servlets/fdblog/21956.jsp
Part 2 http://www.i3investor.com/servlets/fdblog/22287.jsp
Part 3 http://www.i3investor.com/servlets/fdblog/22807.jsp
Part 4 http://www.i3investor.com/servlets/fdblog/23104.jsp
Undercapitalized causes
Overtrading
Forcing trades. Lower your standard criteria to trade.
Excessive risk
Feeling behind. Pscychology.
Refuses to lose (snowball losses)
Averaging down trade to exit.
Attempt to nail turning points. Trying to catch top or bottom of market
Underestimating the difficulty of trading. Trading is against the brightest people.
Too much importance on one trade to bail you out of slump. Don't use one trade to make or break your trading
Blowing out. lose it all.
Get married to an opinion
- Major losses, feel the need to "make it up" of the losses.
- Loss of confidence. replace capital is easy, but not easy to replace confidence.
Protect your confidence, don't married to an opinion.
Capital tied up. missed opportunity.
Risk
Comfort with risk. Willing to take some risk, to lose money.
Able to accept winning / losing
Maintain a level head. Regardless of facing tremendous opportunity or facing adversary
Support network. Family member, or spouse supporting you to trade
Needs
Monthly cashflow. Know what is your one year expenditure.Amount set aside.
Desire for stability? Trading involve losing, you may have down days, down weeks, down months. Compound your emotion
Discipline
- willing to put in the work
- Stick to your plan
- Avoid danger/ excitement. Trading can be boring.
PLAN
- A trading strategy that's working
- Understand risk per trade and sizing
- An exit strategy for every trade
- Willing to adapt to change
- What will you trade?
- When will you trade?
- Know when you will NOT trade! outline the boundary not to trade.
Video
Part 1 http://www.i3investor.com/servlets/fdblog/21956.jsp
Part 2 http://www.i3investor.com/servlets/fdblog/22287.jsp
Part 3 http://www.i3investor.com/servlets/fdblog/22807.jsp
Part 4 http://www.i3investor.com/servlets/fdblog/23104.jsp
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