What Wrong With Yield Pig???

Read? 10% dividend yield for 10 years? Fact or Fiction? (2) - updated after 9 yrs!

Read? Three Little Pigs In The Stock Market - Part 3

Next week, SCI XD on 26/4 and Kep Corp XD on 28/4 for 2022H1. 

Looking forward to add more passive income in 2022 H2 as yield pig!

Think of Investing in Stock Market as Game of Tug of War (2)

Read? Think of Investing in Stock Market as Game of Tug of War

Read? Singapore’s Retail Investors Load Up On What Institutions Dump

CW8888 : Insitutions have to follow their rules closely or else their performance bonuses will be affected; but retail can choose to follow heart and mind with Panadols. LOL!

Taking which side? Your own choice. After Point X, you will know right or wrong. 

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Retail investors are filling the void left by institutions in Singapore’s equities market this year, Singapore Exchange Ltd. data show.

Individuals have pumped a net S$4.8 billion ($3.5 billion) into the city-state’s stocks since March, whereas institutions offloaded a similar amount in the same period, according to calculations by Bloomberg based on data from the Singapore bourse. The divergence began to become apparent in March, when retail investors put in an aggregate of S$1.9 billion and professional investors sold around S$1.8 billion.

Parting Ways

Singapore retail investors piled into stocks while institutional ones exited.

Individual investors are drawn by high dividend yields offered by the nation’s stocks, “and they are sitting at home, they have nothing to do,” said Aik Hong Ng, deputy head of Phillip Investor Centre, a unit of Phillip Securities Pte. Some are using creative ways to take advantage of low valuations as well, using advances on credit cards and loading up on debt and leverage to purchase more shares.

Online brokerage apps with low transaction fees also helped boost the retail trading activity, according to Nirgunan Tiruchelvam, head of consumer sector equity research at Tellimer.

Source: Singapore Exchange

COVID-19 : Hen, Wolf And Three Little Pigs

Ha ha! Time flies. 10 yrs old blog post with new character add in.

Sunday, 13 June 2010

Read? Three Little Pigs In The Stock Market - Part 3

Introducing the Hen into this famous story of Wolf (COVID-19) and Three Little Pigs!

The Hen  ....  convincing the three little pigs on FIRE or Early retirement on leveraging on broker's margin account for higher yield stocks is a good idea! Passive income. Shiok!

How many can tell the difference between involved and committed?

Where Does The Money In The Stock Market Come From? (Time to refresh)

Monday, 18 January 2010

Read? Where Does The Money In The Stock Market Come From?


Look at investment blogosphere. There are so many retail value investors out there. So does the rest of us make money from the stock market?

Who Moves My Market? (Good time to refresh!)

Uncle8888 is the Pilot Fish and the Fisherman!

Read? Who Moves My Market?

Where Does The Money In The Stock Market Come From? (Time for a fresh as it is timeless!)

Some folks however good at their analysis still don't get it.

Monday, 18 January 2010

Read? Where Does The Money In The Stock Market Come From?

The Story Of The Duck (2)

Read? Dow Jones Industrial Average (^DJI) skidded 588.5 points, or 3.6%,

But, STI  is reovering!

Strange!!!
 

For those who may not have a chance to read this story and understand why the market is like that!

Read? The Story Of The Duck

 

The Story Of The Duck - Nice time for re-posting!

Uncle8888 was reading somewhere in the Cyber World some people complaining about their Market Maker!

Probably, it is nice time to do a re-posting of a story in 2009.


Read? The Story Of The Duck


CreateWealth8888:

The Market Makers play the role of the Bankers and especially true for markets such as covered warrants and retail forex.

The market sharks are also waiting at major technical charting points, turning points or levels and they have all the resources and expertise to know the charts better than anyone here and we are so naive to think that we can beat the market sharks at their game. So just open your eyes wide and understand why sometime market moves unexpectedly in the opposite direction - The Sharks are in Action!

Fear, fear, fear. Just too much fear in the stock market if it is your first encounter.

I  think it may be a good time to re-post what I have written at the height of the previous greatest fear in the stock market.

Read? Safety Net in the Market?

Go with Fund flows

invest, thesundaytimes, April 24, 2011

Market-picking could be more profitable than stock-picking.

... So, given the vast changes in the global financial landscape, rather than stock-picking, it may be time to consider market-picking as part of your investment strategy.

Read? Who Moves My Market?

Yalor. Something similar to what I am doing it now. I am using Pilot Fish indicator. So far, it has been profitable for me.

The Most Common Mistake of Investors

Read? Why does stock price move?

And more ideas from Jeff Augen ...

Investors often make the mistake of assuming that they have unique insights that market has failed to recognize. They buy stocks that they believe are under-priced, or they purchase high-yielding corporate bonds because their instincts tell that the risk of default is exaggerated. In the worst cases, these mistakes evolve into an an investment strategy.

Unfortunately, the investment community tends to overuse the words "under-priced" and "over-priced." Strictly speaking, a financial instrument cannot be under priced unless the market is inefficient. The opposite is generally true; market tend to be very efficient, especially with regard to pricing of heavily traded stocks that are closely followed by large institutions. An investor who believes he has discovered a discount would usually be better off assuming that he has missed something. Humbleness is the most valuable attribute an investor can have.

Most investors would prefer to believe that they can out-think the market. They continue to believe that have this capability even when they are wrong and lose money. When someone buys a stock and the price falls, they often blame the market or the lack of knowledge of other investors. In modern times, it has also become fashionable to blame large institutions and hedge funds. Message boards and investor char rooms on the Internet are filled with various forms of the statement: "Large institutions are driving down the price so they can buy more."

However, when a stock rises, the same person will automatically credit themselves with making a good investment. If the stock rises immediately, they are also likely to take credit for perfect timing. Few investors ever adopt the opposing view that when they make money it's because they are lucky, and when they lose money it's because they made a bad investment.

Finally, many investors may declare that short-term trading is always difficult because precisely timing the market is impossible. They believe, however, they have a better chance of making accurate long-term predictions. That belief implies that complexity and uncertainty decrease over time. Unfortunately the opposite is true - complexity and uncertainty tend to increase as new forces come into play. Complexity as the situation might appear, it can't compare to the uncertainty of the future, which includes new competitors, new products, and ever-changing market place. Nothing changes faster than future.

--------------------

Createwealth8888:

If you really like what you have been reading so far, you may want to read further "Trading Realities - The Truth, The Lies, and the Hype In-between" by Jeff Augen

Why does stock price move?

Read? What you may not know about stocks?

More ideas from Jeff Augen

Stocks rise when buyers are more aggressive than sellers. They fall when sellers are more aggressive than buyers. Most investors mistakenly believe that stocks rise when there are more buyers than sellers. The difference is significant and it has far-reaching implications. Liquid markets always have an excess of both buyers and sellers who generate bid and ask prices. A transaction occurs when the high bid and low ask come together; either the bid is raised or the ask is lowered. A rising bid represents aggressive buying and a falling ask represents aggressive selling. Aggressive buying drives up the transaction price while aggressive selling lowers it.

Buyers and sellers can become aggressive for many different reasons. Triggers can include news about the economy, other stocks, or individual industries. Money can also flow in or out of other markets as interest rates rise and fall and currency exchange rates fluctuate. News surprise also cause investors to shift money between stocks in the same sector. Investors make these choices thousands of times each day. Simply stated, money that flow into the stock market does not evenly into all stocks.

It is also important to understand the underlying forces that cause investors to become aggressive buyers and sellers of a stock or other financial instrument. The dynamics are simple. At any time, the market sets a price that comprehends everything that can be known about a particular stock including confidential information known only to insiders. The moment new information becomes available, market forces adjust the price.

Every stock trades at a characteristic price/earning (PE) ratio. The market bids up the price of a stock when it anticipates that earnings will rise sharply. A high PE, therefore, is the market's way of predicting future growth and pricing that growth into a stock. Analysts raise  their "price target" for a particular stock, when their forward-looking view reveals that earnings will rise faster than previously forecast. If the market completely agreed with new forecast, the price would immediately rise to equal the new predicted value. The difference between a stock's trading price and an analyst's future price target  is important because it represents the difference between two views. The market votes with real money and analysts vote with words on paper. Sometimes the gap reverses because information surfaces that causes the market to become more bullish on a stock than existing forecasts. The more optimistic view will drive the price above targets already set by the analyst community. If the situation persists, analysts will raise their forecasts.

Unfortunately, investors often misinterpret the meaning of price targets set by the analyst community. The common belief is that stocks experience steady growth, and that they are always on a trajectory to reach future price. In reality, there is no trajectory. The price will remain flat if company continues to perform as predicted by the market.

What you may not know about stocks?

Some ideas from Jeff Augen

Most investors who buy a stock believe that they are investing in a company. That view, while technically correct, is also misleading. A stock investment is really nothing more than a bet on the direction that money will take as it flows through the financial markets. A stock can rise only if market forces align to aggressively drive up the bid price causing new money to flow into the stock.

Many different factors are involved including economic news, announcements from other companies in the same industry, political events, the actions of large institutional investors, analysts' forecast, and a variety of global economic forces such as changes to currency exchange rates and interest rates. the long-term performance of a stock represents nothing more than the compound effect of these forces over time.

It is important to recognize that the financial markets are zero sum game with competition at all levels. the stock market competes for money against the bond and currency markets; industries compete for money with each other; and money flows between stocks within a particular industry. An individual stock can fall because money is flowing into the bond market. It can also fall because money is flowing into another stock in the same industry. Conversely, the stock of a poorly performing company can rise if market forces are properly aligned. All factors considered, the price of a stock is often loosely connected to the performance of the underlying company.

There was a time, not long ago, when individual investors were the dominant force in the market. Buying a stock was equivalent to betting on the behaviour of other market participants. Those days have passed. Today's markets react to economic news in fraction of a second. Heavily traded stocks in the S&P 100 or DOW rise and fall for reasons that are nearly impossible to understand at the individual stock level.

Investors who recognise these complex dynamics can gain advantage because they have a balanced, realized view of the problem. They spend most of their time identifying the underlying forces driving the markets, and they always try to invest with those forces instead of against them. In this regard, the most important attribute an investor can have is humbleness because successful investing is a never-ending struggle.

Think of Investing in Stock Market as Game of Tug of War

Read? Think of Investing in Stock Market as Game of Tug of War

I am wondering why fewer visitors reading this article?

"Successful investing isn’t solely about choosing which rope, but also choosing the right side. And it’s vital that you take into account what the other players are or will do. You won’t always get it right (nor should you expect to), but understanding why markets move will help you make more logical and informed investment decisions." - Jeffrey D. Voudrie

How do you make your own informed investment decisions?

1. Rope only, Players are irrelevant
2. Players only, Rope is irrelevant
3. Rope first, can join either the Winning or Losing Team
4. Just join the Winning Team (Breakout!)
5. Just join the Losing Team (Falling Knife!)

What is your number?

Stock Market Is War - Part 4 (Re-visit)

The stock market is a highly dangerous place and it is not a level playing field. There is no such thing as amateur and you come into the stock market immediately as a Pro if you decided to play in the stock market.

Read? Stock Market Is War - Part 4

Right issue back again!

Read old posting on? Understanding Stock Market Risks - Updated

Dilution Risk

I heard loud chatting again on right issue!

Right issues are rarely good. It is either neutral, bad or suck!

Neutral

It is neutral if you have honestly already planned to increase your investment cost before the right issue announcement.

Bad

It is bad when you are forced to increase investment cost to prevent dilution.

Suck

No more money to subscribe for right issue. Suck Fingers liao!

Understanding Stock Market Risks - Updated

You may often hear this - Investing in Stock Market is risky.

In fact, investment of any kind including setting up your own business by nature is risky, and can potentially cause you lose some or all your investing or initial capital.

Actually as a paid employee you also face similar risks of losing your job when you approach 40s or 50s. It is a well known fact that HR department update this list of employees in these age groups during annual budget exercise.

So what are the possible Stock Market Risks and how can we as retail investors mitigate these risks?

1. Price Volatility Risk

• Need to learn how to time your Entry and Exit points
• Buy in batches by Average In (different from Average Down)
• Sell in batches

2. Companies Risk

• Select top tier blue chips that are likely to be rescued by Temasek.
• Limit your exposure to any stock to less than 10%, and for bigger account size less than 5%
• Limit your exposure to any sector to less than 20%, and for bigger account size less than 10%

3. Currency Risk

•  Invest in Singapore only

4. Lack of Knowledge and Skills

•  Read : http://createwealth8888.blogspot.com/2009/09/investing-knowledge-and-skills.html

5. No Time for Research & Monitoring

You mean other people got more than 24 hours? Time is the fairest commodity of all and everybody has the same amount of time, no more or no less. 24 hours a day!

Wake up if you don't have time and stop dreaming.

6. Liquidity Risk

This risk is associated with the ability to sell out our stocks easily without depressing the price level further and causing potential buyers to retreat to sideline in anticipation of more fire sales coming.

It is true that when we buy stocks which have low liquidity; we can have all the time in the world to buy slowly. I am not sure if the opposite is true when you need to sell? Do you really have the time in the world to sell slowly? Probably, you may have urgent need to raise money; otherwise, why would you be selling?

7. Dilution Risk

Even if you only invest in blue chips that are strategically important to Singapore and the government will never allow them to fail. So there is very little risk of complete failure but you are still expose to the dilution risk i.e. your interests in your holding get diluted by these companies injecting more capitals to strengthen up their balance sheets by raising more capitals through private placement or right issues.

•  Private Placement to Institutions
• You either get out or get diluted. If you have decided to hold on; then it may take a long while for your current holding to get even.
• Right Issues
• Same here. You can choose to get out or exercise your option to prevent your current holding been diluted by subscribing to all your entitled right issues to hold it at higher investment cost.

If you don't, then your interests in your holding will take a long time to get even.

8. Financial Fraud Risk

When it comes to financial  frauds, no companies, market makers, fund managers and etc in this world are immune from them. In the past, major financial frauds have happened and destroyed some well-established institutions or companies and it will definitely happen again.

Stock investing not always a gamble

No safety net in trading futures, options or forex!!! - 2nd Revisit

Some financial instruments like options and futures are zero-sum game as for every winner there will be a counterpart who will lose the same amount.

Some people may think that stock investment is not a zero-sum game. Yes, it is true that it is not a zero-sum game as for every winner there will be a counterpart who may not lose the same amount.

But, stock investment is still about winning a loser game. If you don't believe me, go and poll your colleagues, friends and relatives. You don't be surprised that to find out that there are more losers than winners.

Let me know if your polling shows more winners than losers.

Stock market is not only winning a loser game and is also great wealth re-distributor. So be careful with your wealth in the stock market.

"The Stock market is a financial redistribution system. It takes money away from those who have no patience and gives it to those who have." - Warren Buffet

Three Little Pigs In The Stock Market - Part 3

Three Little Pigs In The Stock Market - Part 2

We often hear this:

"Bull makes money. Bear makes money. Pig got killed!"

The story of  the 4th Little Pig who got killed was not widely told.

Bull is greedy to make money. Bear is greedy to make money. But Pig is even more greedy and always trying harder to make even more money.

Pig doesn't born on its own. Pig is a transformation from a Bull or Bear. When a Bull or a Bear becomes overly greedy and wants to make even more money; it transforms to a Pig when the overly greedy Bull or Bear begins to lose even more money.

Who is the 4th Little Pig?

The Piggy Couple or the Piggy Family

The Couple (Husband and Wife) and The Family (Father, Mother, and Children) all jump into the same investment product or stock because one of them believes he or she is a savvy investor and becomes a babe magnet to other family members.

A Pig is born when they begin to lose money and the whole family begins to suffer and everyone in the family looks at each other and wondering who else in the family is safe.

The Piggy Good Value

The stock price plunges further and dividend yield surges up. It has become even more attractive and the investor keeps averaging down and has little or no concerns of portfolio being over-exposed to this stock. The truth is Bear Market may seldom last very long but for individual stock it can remain low for years or even decades through the next Bull or Bear cycles. Don't ever mistaken the past dividends as how your future passive incomes will be like.

When the stock price plunges even further and now more money is lost and  the Good Value Bull has transformed into a Piggy Good Value. 

Cow becomes Pig

It is great to leverage and make even more money than one using only his or her limited resources.

Why does leverage work? 

At its heart, you are borrowing someone’s assets and reaping the benefits. It’s like borrowing a cow and selling the milk! What a great idea!

Don't worry. I have a great and carefully thought of plan. It will works! Nobody would like to stop and believe that Murphy Law and Black Swan will happen to them. These will happen to others but not me!

It’s great until the cow runs off. Now you’re stuck — you owe a cow and don’t have one to return. The risk of leverage is investing that debt and losing what you borrowed, which can wipe out any profits. This is when a Cow turns into a Pig.

So there is some truth in the common hearing:

"Bull makes money. Bear makes money. Pig got killed!"

So it doesn't matter if you are a bull or a bear but don't ever transform yourself into a Pig!

Understanding Stock Market Risks - No 7 Risk

Understanding Stock Market Risks - No 6 Risk

This Great Bear of 2008 taught me there is another risk to think about:

7. Dilution Risk

Even if you only invest in blue chips that are strategically important to Singapore and the government will never allow them to fail. So there is very little risk of complete failure but you are still expose to the dilution risk i.e. your interests in your holding get diluted by these companies injecting more capitals to strengthen up their balance sheets by raising more capitals through private placement or right issues.

Private Placement to Institutions

You either get out or get diluted. If you have decided to hold on; then it may take a long while for your current holding to get even.

Right Issues

Same here. You can choose to get out or exercise your option to prevent your current holding been diluted by subscribing to all your entitled right issues to hold it at higher investment cost.

If you don't, then your interests will take a long while to get even.