As from April 2013 my Journey in Investing is to create Retirement Income for Life till 85 years old in 2041 for two persons over market cycles of Bull and Bear.

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This blog is authored by an old multi-bagger blue chips stock picker uncle from HDB heartland!

"The market is not your mother. It consists of tough men and women who look for ways to take money away from you instead of pouring milk into your mouth." - Dr. Alexander Elder

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Saturday, 22 October 2011

I don’t know what I don’t know

Read? Gambling - investment - speculation

Read? Known and Unknown?

In the stock market, instead of admitting that "I don’t know what I don’t know ", we turn it into "I think I know something that others don't know." That is speculation!

Investors or traders are all speculating at different levels using different method. Traders use charts to speculate. Investors use corporate and financial data to speculate. Basically, both traders and investors ultimately speculate on just two things: future earning and/or future cash back to shareholders.

Future Earning

There is no absolute certainty in knowing future corporate earning as there are just too many moving parts in them. We are just speculating on their future earning whether it is sustainable, growing or weakening.

Future cash back to shareholders

Investors and traders also speculate on future cash back to shareholders in form of stock dividends, special dividends, share buy-back, privatisation at premium. Just start a big rumor on any of these, the traders will jump in a big way.

In the stock market, all of us speculate!

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