29 September 2011

Tutorial: Intermediate Internal Rate of Return (IRR) - Calculation and Explanation 3

Previous example of 1 and 2 can be find at IRR Tutorial 1 and example 3 can be found at Tutorial 2.

Example 4:
Question: An investment plan with annual amount of 3000 for 15 years, one cash  return every two years as stated below (Year 1 of 1089, Year 3 of 1089 etc) until Year 13, and then annual return of 1742 until Year 29. Lastly, in Year 30, you will be give a lump sum of return of 42,952. What is the IRR of the below investment?

Year 0: -3000
Year 1: -3000 + 1089
Year 2: -3000
Year 3: -3000 + 1089
Year 4: -3000
Year 5: -3000 + 1089
Year 6: -3000
Year 7: -3000 + 1089
Year 8: -3000
Year 9: -3000 + 1089
Year 10: -3000
Year 11: -3000 + 1089
Year 12: -3000
Year 13: -3000 + 1089
Year 14: -3000 + 1742
Year 15: + 1742
Year 16: + 1742
Year 17: + 1742
Year 18: + 1742
Year 29: +1742
Year 30: +42952

26 September 2011

Three Investment Advices that Beginners Need to Know

To an inexperienced eye, the art and science of smart investment is more like voodoo magic than it is calculated risk. But, as with poker, all is not random chance or luck; there is skill involved with investment, there is strategy, expertise, and prediction that all go into making a good investment decision.

Many people are discouraged, though, by the complexity of investment, and settle for steady, stable jobs, instead of making unwise or uninformed investment decisions. While this is probably a wise move—you really shouldn't invest if you don't know what you're doing—you shouldn't keep a lack of knowledge keep you from investing if you're interested in it, or just want to make some extra money. The key is to just research and then apply that knowledge. And you can start that research right here, right now, by reading these three investment-beginner pointers.

24 September 2011

Apple: Is It Worth Hanging Onto? Factors to Consider Before a Panic Sale

Apple is one of the most successful electronics manufacturers in the world. Since they went public in 1980 they redefined the desktop experience, took the smartphone from obscurity to mainstream and made the tablet market viable. All of this under the watchful eye of Steve Jobs and, love him or loath him, few will argue his influence. Recently it was announced that Steve Jobs was stepping down as CEO due to his health and while it wasn’t surprising for most, it lead many to speculate about the future of Apple. Can the American electronic icon stay successful with out its iconic CEO? Here’s a look at a few factor to consider before jumping ship and selling off your Apple stock.

22 September 2011

Palacio Wedding Gallery Vs New York Image Studio

Today, my friend asks me to help her to find any relationship between Palacio Wedding Gallery and New York Image Studio. After trying few different key words, nothing seems related until I compare the telephone number of both companies - is the same. (That is: Tel: +607-333 2488)

In other words, what my friend heard about the Palacio Wedding Gallery is the replacement name of New York Image Studio is true, supposedly.

For those interested can contact them via the information I summarises below:

20 September 2011

The five rules for successful stock investing – Morningstar's Guide to building wealth and winning in the Market: Summary

This is a summary I jot down after read the great book of "The five rules for successful stock investing". From this book, Pat Dorsey (Director of stock analysis) recommends five rules for investors to succeed in their investment.

1. Do your homework

-Don't buy a stock unless you understand the business inside and out.
-Know about accounting and how to boil the analysis process down to a manageable level

2. Find Economic Moats

-Economic moats is used to describe a firm competitive advantage
-Focus on companies with wide economic moats that can help them fend off competitors.

19 September 2011

A Comparison of Mutual Fund and Stock Market Investment: Personal View

Mutual fund is a fund, which accumulates money from many investors, managed by a fund manager or a team for investment. Generally, most of the money will be invested in stock market. Personally, I more prefer to stock market investment. Maybe the mutual fund agent who tried to convince me to invest mutual fund is right: We do not need to spend time to analyze a particular company while we still can invest our money. However, there are five important points I care about:

1. Who is the fund manager?
Of course, if Warren Buffett is the fund manager, I will invest my money in the fund. But the problem, most of the investors is speculators. Unless I know who the fund manager is, I will never consider this kind of investment.

16 September 2011

Tutorial: Internal Rate of Return (IRR): A Road Map to Wealth via Constantly Saving plus Investment

In previous posts (IRR Tutorial 1 & IRR Tutorial 2), we have explained the use of Internal Rate of Return (IRR) via three general examples. Therefore, in this post, we are going to apply IRR for us to have a better understand about "the time value of of our money" in such a way that we will have a good knowledge to grow our wealth in the future.

Example 4:
A Road Map to Wealth via Constantly Saving plus Investment
Annual Saving: 3000
Annual Investing Return Rate: 10%
Period: 15 Years

15 September 2011

Value Investor: Five Important Steps to Succeed in Stock Market Investment

I still remember the first time I studied financial report and tried to analysis the data, I had no idea where should I start from and where should I go to. Finally, after unstoppable learning and trying, I figure out five essential steps which I do every time before I invest my precious money in the particular company. As my senior, who is my mentor in stork market investment, told me, sharing the way to get profit in stork market and ultimately improve the life of the people around us is one of the duty for value investor. Therefore, in this post, I will like to share with you a humble procedure I used in stock market investment:

10 September 2011

Bursa Malaysia: How to Find Announce of Listed Companies

As an investor, it is very crucial to find the first hand information of their invested company. Newspaper, however, does not give all the latest announcement of all listed companies in Bursa Malaysia. Therefore, as a shareholder, it is good idea to update your company yourself from Bursa Malaysia official website. In Bursa Malaysia, announcements are sorted into Current, History and Archives. All the latest announcement can be found in Current. Previous announcements that were published in last several months can be found in History. Archives records all older announcements that cannot be found in Current and History.

In this post, I am going to share with you how to check the announcements of listed companies in Bursa Malaysia.

05 September 2011

Cash Flow Statement: A Brief Introduction: Operating, Investing and Financing activities

Cash flow statement shows the amount of cash and cash equivalents that flow in and out of a company at the end of a financial report. For example, the cash flow statement of quarter 3 indicated the amount of cash flow in last nine months (quarter 1 + quarter 2 + quarter 3).

Next, there are three sections in a cash flow statement, that are, operating cash flow, investing cash flow and financing cash flow.

1. Cash flow from operating activities
In this section, normally, what we expect to see is positive cash flow, that is, a particular company can generate CASH from its operating activities. However, sometimes the negative cash flow is acceptable once awhile in some quarters due to the fact that some receivable cash is not yet received but some payable is paid first or inventory is increased. Nevertheless, good companies should always try their best to manage their financial properly in the way that positive cash flow from operating activities is maintained annually. Examples of Cash Flow into (positive) the Operating Activities are Sale of goods or services, interest revenue, dividend; and examples of Cash flow out (negative) from the Operating Activities are Inventory purchases, payroll, taxes, interest expense etc.

OPCOM HOLDINGS BHD (0035): Mini Review

I bought OPCOM at market price of RM0.805 last month (August 2011). The reasons for me to buy OPCOM simply because it has stable earnings (extension two-year contact with TM), strong internal cash flow generation, zero borrowing and no bad dividend.

Moreover, with the market price of RM0.805 to buy OPCOM, which contained RM0.56 cash per share, is equivalent to I only bought it with RM0.245 per cash. With expected EPS of 16sen annually, I will get back 100% investment capital within two years. Therefore, I believe that is the main reason why I was braved enought to enter the market during the period when bear market news were everywhere in the market.