31 January 2014

Free Lunch in Stock Investment: Tips or Experience Sharings

Very often, we receive tips from 'guru', 'insiders', or 'expert' about:
- which counters will be the next winner,
- which counters are good for investment now,
- which counters can be invested for long term, and so on.
However, what have bothered me is - are these  'guru', 'insiders', or 'expert' sincerely to help other people to earn money in stock market? This is because it is quite rare (impossible) for a person to be too free to help other to earn money. 

24 January 2014

One Common Misunderstanding in Value Investing: Patience for Buy

Patience is the state of endurance under difficult circumstances (ref. Wiki). In stock market investment, there are two very difficult circumstances that investors need to endure - Bull Market and Bear Market. In this article, I am going talk a little bit about Patience in Stock Market investment. Particularly, I would like to share my insight about the role of Patience in both Bear and Bull Market.

Bear Market

  • During Bear Market, market is full of bad news. The trend of market price goes downward in a long period of time. Most investors lose their faith in market.   

Good Patience

  • I think we should be very patient to wait for very attractive deals for long term investment during Bear Market. After 'estimating' the bottom line of each good business, any deal with more than 50% discount is already a very good investment for me.

17 January 2014

Stock Investment is a Ponzi Scheme: Insight

"Stock investment" is a Ponzi Scheme? Personally, I think it is true. Specifically, we should admit that stock investment can be 'legally' used to implement Ponzi Scheme. In order to avoid to be a victim of Ponzi Scheme, there are two red flags that we should pay attention to.

All about the Future

Future is unknown and uncertain. If you find a particular stock (or business) have many "too good to be true" stories about the company's future prospect without any tangible evidence, then you may need to take a long breath and rationally analyse those stories in different perspectives.
Particularly, it is extremely dangarous when the main 'evidence' to support the stories is merely from the belief of people - fear and greed.

10 January 2014

How to Estimate the Intrinsic Value of a Company / Business - Part 1



The motivation of estimating the intrinsic value of a company or business is to provide a benchmark and reliable information for us to make a better investing decision (Buy or Sell or Hold). 

Example of valuation

The reliable information that we are going to compute is the intrinsic value of the company or business. This is slightly similar to a situation for us to figure out whether the price of "Nasi Lemak" is reasonable, cheap or expensive.
That is, we need to quantitatively and qualitatively compare the price of a "Nasi Lemak" with others, and also other related products such as "Nasi Goreng", "Mee Goreng", and "Fast food".
In other words, the more information we have, the better the estimation we will make, and also the more complex the estimation is.

03 January 2014

Are You Willing to Give Up High-Paying Job and Follow your Passion?

Last couple of days, after my friend told me about he had accepted a low paying job because the job scope is what he is really interested in. His salary is suddenly reduced at least 33% due to this decision. Surprisingly, without any hesitating, I spontaneously fully support his decision. After re-thinking about this 'brave' decision his made, I found out that I have changed quite significantly in terms of my mind set. This is because if the same situation occurred in the last 5 years, I believe that I was going to 'consult' he to re-think the decision. Thus, I decide to record this case in my blog to remind myself that I am not a slave to money.