Cartier, Tag Heuer, Jaeger-LeCoultre, Bvlgari... Which one should I buy?

When I first started trading, I kind of regretted not studying and knowing much more. I guess I was really lucky, I could have lost much more but because it was almost the end of the downtrend, my counter rebound and I sold it off immediately. I still remember my money was all stuck in the counter and there was nothing I can do but just hope that the stock would recover. I tell you I am lucky... in half a year, I liquidate my portfolio... Some people waited TEN years. Yes, you didn't see wrong... 10 years and it never recovered..

Dec 2009, the devastating news of Chartered Semiconductor being delisted from Singapore Stock Exchange...

Another one.. is this familiar?


If you have never touch investment products before, i suggest you first go through a risk investment profile test. http://www.sorted.org.nz/calculators/risk-recommender/.
Please also spend some time reading the articles on investing on the right products. http://www.thedigeratilife.com/blog/index.php/2006/11/14/investor-know-thyself/

In a nutshell, an investment portfolio should contain bonds, unit trusts and stocks in different percentage. Of course, the different percentage is very much dependent on your risk appetite and your risk profile and this varies for different people. Even if we are only looking at buying stocks, we must diversify our risk by having more than 1 counter in our portfolio. Not the more the merrier, of course.... experts and economists are looking at 1-20 counters... but I much prefer just five from different industry and sectors so that I can spread my risk. . 20 counters?? My trainer will use this phrase again.. "Don't collect stamps in the market....." Sounds familiar?

Selecting a stock: Report reading for busy women

If a business does well, the stock eventually follows... Warren Buffet

A friend of mine knew a guy for the first time in her life, she thinks he has it all; cute, charismatic, tall and great physique... For months, they dated. He brought her to Paris, brought her back to his place to meet his parents and she has decided that he was the one for her. Six months later, they were married. The story begins, he started beating her after coming home drunk, he lied to her about his company and the debt collectors came knocking on the door every now and then..
How nice if someone could give her a report of his background, career, character and reviews when they first knew each other. Better still if she has an idea of his debt ratio, total liabilities, total equities, cash flow and profit statement. haahaa

Top down approach
1. Economic Analysis
2. Industry Analysis
3. Company Analysis (Fundamental and Technical)

Fundamental Analysis---READING COMPANY'S ANNUAL REPORT
Success is built on strong fundamentals

I stressed the importance of reading the company's annual report. Totally. It is usually the only published document that provides investors an annual snapshot of the progress of the company where the financial statements, operational discussions and chairman's message are revealed. It may seem a little challenging to understand the reports but just follow the few steps below, and you will be doing fine.

Please take note that this is only for beginners and if you are interested in understanding a company's report in full details, you can find the information in this website.
http://eucon.listedcompany.com/misc/Reading_AR.pdf

? Where and how to get annual reports
---> Company's Website
---> National Library Singapore

Step one: Light reading
Read the chairman's message, business review, corporate developments and the outlook for the following financial year.
Tip: Choose a company in an industry you are familiar in.
Are you comfortable in the business model? If yes, let's carry on...

Step two: Find out about the company plans for the following year
Acquisition?
Expansion?
New products/new services launched?
If any of these are in the pipeline, has the risks been assessed?
If the risks are assessed, are there adequate measures taken to address the pending issues?

Step three: Financial Performance/Report
- Net profit/Sales: Increase year on year and the sustainability
- Cash flow from operating activites/investing activites and financial activites:
Companies with ample cash on hand are able to invest the cash back into the business in order to generate more cash and profit.
- Net debt: How much debt really exists? What kind of debt is it (long/short-term maturities)? What the debt is for (repay or refinance old debts)? Can the company afford the debt if it runs into financial trouble? And, finally, how does it compare to the debt levels of competing companies?
- Gearing Ratio: A company with high gearing (high leverage) is more vulnerable to downturns in the business cycle because the company must continue to service its debt regardless of how bad sales are. A greater proportion of equity provides a cushion and is seen as a measure of financial strength.
- ROE: The amount of net income returned as a percentage of shareholders equity. Return on equity measures a corporation's profitability by revealing how much profit a company generates with the money shareholders have invested. Watch out if the ROEs decline with steadily rising earnings.
-Price to earnings ratio (P/E ratio): One of the most widely used ratios, it compares the current price with earnings to see if a stock is over or under valued.
Generally a high P/E ratio means that investors are anticipating higher growth in the future.
The average market P/E ratio is 20-25 times earnings.
The p/e ratio can use estimated earnings to get the forward looking P/E ratio.
Companies that are losing money do not have a P/E ratio.

Step four: Independent auditors' reports
Is the independent report clean as well?

Great! We are now done with the company's report. We cannot put all our eggs in one basket so we will be looking at portfolio diversification next.

www.sgx.com
www.investopedia.com
www.ibf.org.sg

Lesson 1: Basics of the stock market

Technical analysis is based on the principle that history always repeat itself... and that the future is found in the past plus the dynamics of demand and supply...

Alright, I know I know.. if you are a woman reading my blog, you will most likely be bored... the word TECHNICAL always have a drowsy and sleepy effect. You need to concentrate, and by that I mean imagine walking into Chanel and leaving the place with the diamond forever classic bag with the profits made from the stock market. Oh, by the way, this bag is labelled as one of the most expensive bags in the world and it cost $261,000. Gawd, it's the price of a small apartment. Can I live in the bag?



Let's not delve into the technical analysis as yet but let me prepare you for the basic necessary platforms and items...

1. Get a CDP account, securities firm and a broker/remisier. ( If you do not have one, please email me with your name and your contact number and I will get back to you as soon as I can).
2. Log into http://www.sgx.com/, find out about the trading hours and the terms/abbreviation used, i.e. bid, ask, volume, last, high and low. open, close, and contra. Your broker/remisier will be able to assist you.
3. Understand your brokerage statement, charges and what are these shares quantified by? 1000 shares = 1 lot, minimum purchase is 1 lot. How to calculate profit/loss?
4. A computer with a charting software. Optional: Get a trading coach, books and software

Great, now you have everything ready... I'm very sure that the next question on every woman's mind is : "Which stock to buy?"

History... A painful lesson, a reflection, a shadow or our future?

History always tends to repeat itself, as the cliche saying goes.. or should we learn from our past?

If past history was all there was to the game, the richest people would be librarians..... Warren Buffett

Someone once told me that the stock market is like the biggest casino in the world. It can make you a millionaire overnight but you can also be totally wiped out the next day. I know of people who burnt their fingers terribly in the stock market and spent the next few years working very hard to pay off their debts. Trading seminars, textbooks and software are exhorbitantly high priced but still, people are willing to pay. If they are equipped with the knowledge so what went wrong?
Type in the words "trading rules" in the google search box and you will find a lot of articles related to the search. We know the trading rules but are we really executing them? Is our mind strong enough to cut our loss to a minimum? I can't say too much, I am also guilty of that...

Trade with care and trade within your means... Do your homework.. Fundamental and technical analysis are equally important.. Be patient! Delayed gratification is a sign of maturity....

If you have been there, done that.. pick up the pieces and learn from your mistakes.
Some people learn from other's mistake, some learn from their own mistakes and others never learn... Which category do you belong to?

16th Sept 1992 Black Wednesday
Not able to keep the pound sterling at the agreed lower limit, the conservative government suspended Britain's membership from the European Exchange Rate Mechanism.
The UK goverment lost an estimated 3.4 million pounds.

1997 Asian Financial Crisis
The Asian financial crisis started with the devaluation of Thailand’s Bath, which took place on July 2, 1997, a 15 to 20 percent devaluation that occurred two months after this currency started to suffer from a massive speculative attack and a little more than a month after the bankruptcy of Thailand’s largest finance company, Finance One. This first devaluation of the Thai Baht was soon followed by that of the Philippine Peso, the Malaysian Ringgit, the Indonesian Rupiah and, to a lesser extent, the Singaporean Dollar. This series of devaluations marked the beginning of the Asian financial crisis. This first sub-period of the currency crisis took place between July and October of 1997. www.westga.edu/~bquest/2003/asian.htm

Late 1990s Dot-Com Bubble
We are all familiar with this. Remember the dot com stocks? The "dot-com bubble" (or sometimes the "I.T. bubble"[1]) was a speculative bubble covering roughly 1995–2000 (with a climax on March 10, 2000 with the NASDAQ peaking at 5132.52) during which stock markets in industrialized nations saw their equity value rise rapidly from growth in the more recent Internet sector and related fields. While the latter part was a boom and bust cycle, the Internet boom sometimes is meant to refer to the steady commercial growth of the Internet with the advent of the world wide web as exemplified by the first release of the Mosaic web browser in 1993 and continuing through the 1990s. http://en.wikipedia.org/wiki/Dot-com_bubble

Sept 11
Major economic effects arose from the September 11 attacks, with initial shock causing global stock markets to drop sharply. The attacks themselves caused approximately $40 billion in insurance losses, making it one of the largest insured events ever. http://en.wikipedia.org/wiki/Dot-com_bubble

2008
Lehman Brothers, one of the world’s biggest investment banks, has announced it is filing for bankruptcy, in one of the worst banking collapses in history. As the world economy prepared for a round of devastating blows caused by the credit crisis, Bank of America also agreed to buy Merrill Lynch, another giant of investment banking, for $50 billion in a deal creating the world’s largest financial services company and saving Merrill from Lehman’s fate. Asian markets tumbled on the news, while European and American markets were expected to follow soon after opening. Coupled with moves by other Wall Street giants, billions of pounds worth of value from pension funds and other investments could be wiped by the end of the day. http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/2966656/Lehman-Brothers-files-for-bankruptcy-as-credit-crisis-bites.html2009

Dubai Crisis
With the onset of a financial crisis of 2007–2010, Dubai's real estate market declined after a six-year boom. On November 25, 2009, the Dubai government announced that the company "intends to ask all providers of financing to Dubai World and [its subsidiary] Nakheel to 'standstill'[7] and extend maturities until at least 30 May 2010".[8] The company has laid off 10,500 employees worldwide[9] as the company restructures with the help of Deloitte consultants. At that time, Dubai World had debts of $59-billion, accounting for nearly three-quarters of the emirate's US$80-billion debt.[10] This includes a US$3.5-billion loan which the company is unable to repay by its December deadline.
http://en.wikipedia.org/wiki/Dubai_World