1. Open a Trading Account
Open a trading account from the approved securities / broker company. This will come with your CDS account (account to record your share in Bursa Malaysia).
This is the securities / broker company that approved by Bursa Saham Malaysia.
http://www.klse.com.my/website/bm/brokers/equities/list_of_brokers_alpha.html
To open an account, you will need to fill in the form and a copy of your IC. Some company will provide free account. If not, you will need to pay RM 10 to open a CDS account.
There is 2 kinds of account:
a) Direct Account
b) Pledge Account
Pledge Account, where by the broker company will manage all your dividen, form to sign on rights, annual reports. The company will send everything to the Broker Company. And this Broker company will receive and respond on behalf. If there is any deviden, the Broker Company also will bank in to your account.
Normally if you register with Bank as your Broker Company will provide you this type of account.
And this also include some service charge by the Broker Company.
Direct Account, where Bursa Malaysia will directly link to you. The dividen of the company, Purchase form for Rights, and any other material will directly send to your mailling address.
Normally independent Broker Company will provide you this account.
There is no extra service charge in this kind of account.
2. Do your research / study
As mention in few articles, you need to do studies, know your investment plan.
3. Start Trade
a) DIY Online Trading
A lot of Broker Company provide online trading service. And normally this is cheaper in broker fee (around 0.3% per trading).
You just need to log in to the online trading page, select your stock, and click BUY.
Key in the units that you want(minimum 100 units) and the price that you want.
If your desire buying price is not achieve, then you can see that you are in the buying q.
b) Call your Remisier
This is a very simple way. Just call up your remisier, and tell the remisier on the stocks name, buying unit and desier price.
Normally the remisier will call back if your trade done.
After buying on the stocks, and you can also sell on the desier price.
4. Payment
Of course you will need to pay for the stocks that you buy. Normally, payment is require on T+3.
T means for Trading Day, 3 is the days after trading.
Let say you buy the stock on Monday. Monday is your Trading Day. Thursday is the due date for your payment.
If you sell off your share before or on Thursday, you does not need to pay on the share price. BUT you will pay / receive on the difference of the price or we call as Margin. (Explain more in Margin Trading)
If you plan to keep the share, you will need to pay on Thursday. Else, the broker company will sell off your share and you will pay / receive the margin and a Penalty.
5. Monitor and Respond
If you plan to hold on the share, you will need to monitor. Depends on your strategy, you can buy / sell the share. Some of the company activity might need your responce. (Eg. Rights issue, Bonus, Dividen)
Note: This is the BASIC trading method. We will share on more kind of trading ways and strategy in other topics.
HAPPY INVESTING
Saturday, May 15, 2010
Thursday, May 13, 2010
Annual Report Highlights
Every public listed company need to send in their Annual Report to all share holders and Bursa Saham Malaysia.
Annual Report content a lot information about the company. Normal Annual Report having more then 100 pages. Here we will share on reading the highlights in Annual Report.
1. Director Profile
You are going to invest your money into this company. You will need to know who is running on your money.
2. Company Structure
You will know what is this company about. How they doing their business, their product / service.
3. 3 to 5 years Financial Highlights
This represent the history of the company. You will know is this company consistantly making profit or just making profit by their luck.
4. Chairman StatementThis tell you on the future development in the company. Imagine the Chairman of the company is presenting his company to you. You are the investor of the company, of course you need to know what is he going to do.
5. Financial Report - Director ReportYou will know who is holding the share in this company. Imagine if you hold a share where their directors is just holding a very small portion of share in the company, will you invest in this company? This can show the confident level of the Directors in the company.
You also will know is there any conflic of interest; is any director having another company that making business with this company.
5. Income Statement
This is a VERY VERY important statement that you MUST READ.
This tell you how the company make / lost money. Look into the revenue, cost, number of shares, earning per share.
There is a NOTE column. This Note Column will lead you to the details on the number stated in this portion.
If you feel weird on how this company making / losing money, you can refer to the note, such as Revenue, Cost of Sale.
6. Balance Sheet
You can know what is the Asset that this company own (please refer to the note and identify is that the true value).
Here you also can know the loan that this company is taking. Long term loan and short term loan.
Lastly, we would like to share a common statement:
NOT all Annual Report are what they appear. Annual Report is one of the PR tools. Company might make some not true statement. BUT this is not right in the LAW.
You can refer to the audit company. Perhaps the reputation of the Audit company can helps you to increase the confident level.
You can get all the Annual Report in KLSE website:
http://www.klse.com.my/website/bm/listed_companies/company_announcements/annual_reports/index.jsp
Note: You are an investor. You will invest your money in this company. It is totally worth for you to read through the Annual Report before decide to invest in the company.
Annual Report content a lot information about the company. Normal Annual Report having more then 100 pages. Here we will share on reading the highlights in Annual Report.
1. Director Profile
You are going to invest your money into this company. You will need to know who is running on your money.
2. Company Structure
You will know what is this company about. How they doing their business, their product / service.
3. 3 to 5 years Financial Highlights
This represent the history of the company. You will know is this company consistantly making profit or just making profit by their luck.
4. Chairman StatementThis tell you on the future development in the company. Imagine the Chairman of the company is presenting his company to you. You are the investor of the company, of course you need to know what is he going to do.
5. Financial Report - Director ReportYou will know who is holding the share in this company. Imagine if you hold a share where their directors is just holding a very small portion of share in the company, will you invest in this company? This can show the confident level of the Directors in the company.
You also will know is there any conflic of interest; is any director having another company that making business with this company.
5. Income Statement
This is a VERY VERY important statement that you MUST READ.
This tell you how the company make / lost money. Look into the revenue, cost, number of shares, earning per share.
There is a NOTE column. This Note Column will lead you to the details on the number stated in this portion.
If you feel weird on how this company making / losing money, you can refer to the note, such as Revenue, Cost of Sale.
6. Balance Sheet
You can know what is the Asset that this company own (please refer to the note and identify is that the true value).
Here you also can know the loan that this company is taking. Long term loan and short term loan.
Lastly, we would like to share a common statement:
NOT all Annual Report are what they appear. Annual Report is one of the PR tools. Company might make some not true statement. BUT this is not right in the LAW.
You can refer to the audit company. Perhaps the reputation of the Audit company can helps you to increase the confident level.
You can get all the Annual Report in KLSE website:
http://www.klse.com.my/website/bm/listed_companies/company_announcements/annual_reports/index.jsp
Note: You are an investor. You will invest your money in this company. It is totally worth for you to read through the Annual Report before decide to invest in the company.
Trader Model
This model, you believe that current rumors or news about the company and/or the sector will power-fully create a rapid increase or decrease in the price and that you can take advantage of this momentum by buying at the rumor stage and selling when the news comes out, or shortly thereafter. Therefore, you are not necessarily buying real value. You are taking quick ride on the tide.
You can develop a systematic approach that allows you to get in early and get out quickly. If you do not believe that you need to get the maximum profit, you will be happy taking you foot-foot Ring Toss/”Quick and Easy” profit.
Through a system of getting in, taking advantage of the accelerated pace of price increases, and quickly selling for a profit.
To be advance in Trade Model, you can use Technical Data Analysia to observe the movement of the stock. There is indication for the time to BUY in and SELL out.
This Model Require
1. Ability to quickly identify market momentum and news-related price increase/decreases;
2. Ability to make quick, powerful, and congruent decisions;
3. Risk taking, it can take months to build something that can be destroyed in minutes.
Strength
1. This model offers immediate return.
2. This model allows you to maximize your profit in the shortest amount of time.
3. This model strengthens your decision-making capabilities.
4. It requires that you think defensively – a good strategy for all business.
5. Use advance investment tools such as Options Trading, Margin, Margin Financing
6. You will need to expose yourself in Technical Data Analysis; to get know on Global Market all the time.
7. Since all your return is in Capital Gain; you does not need to pay Tax - Tax Free
Weakness
1. This model requires more time and focus.
2. This model has increased volatility – even more than stocks. What goes up, can come down even faster.
3. You have the potential for greater loss because you are buying market psychology, not real value.
4. What you are buying may have no long-term value. Since you purchased the stock base on momentum, you may have overpaid.
You can develop a systematic approach that allows you to get in early and get out quickly. If you do not believe that you need to get the maximum profit, you will be happy taking you foot-foot Ring Toss/”Quick and Easy” profit.
Through a system of getting in, taking advantage of the accelerated pace of price increases, and quickly selling for a profit.
To be advance in Trade Model, you can use Technical Data Analysia to observe the movement of the stock. There is indication for the time to BUY in and SELL out.
This Model Require
1. Ability to quickly identify market momentum and news-related price increase/decreases;
2. Ability to make quick, powerful, and congruent decisions;
3. Risk taking, it can take months to build something that can be destroyed in minutes.
Strength
1. This model offers immediate return.
2. This model allows you to maximize your profit in the shortest amount of time.
3. This model strengthens your decision-making capabilities.
4. It requires that you think defensively – a good strategy for all business.
5. Use advance investment tools such as Options Trading, Margin, Margin Financing
6. You will need to expose yourself in Technical Data Analysis; to get know on Global Market all the time.
7. Since all your return is in Capital Gain; you does not need to pay Tax - Tax Free
Weakness
1. This model requires more time and focus.
2. This model has increased volatility – even more than stocks. What goes up, can come down even faster.
3. You have the potential for greater loss because you are buying market psychology, not real value.
4. What you are buying may have no long-term value. Since you purchased the stock base on momentum, you may have overpaid.
Tuesday, May 11, 2010
Ownership Model
This model is buying qualities companies, and holding onto them and EXPECT their value appreciates over the long-term, eventually providing long-term income (from dividen, bonus, etc).
To use this model, you buy stock in a company only if you BELIEVE that you are buying something of value that will be worth much more over the long-term. If you are intelligent, you will develop a systematic approach. Some systems are more precise than others.
The model requires:
1.Intelligent evaluation of a company;
2.Willingness to have patience;
3.A strong stomach. Remember, the average stock price fluctuates 50% over the course of a year; however, the rewards over the long-term are immense, if you’ve done your homework.
Strength
1. This is a proven model that makes you money over the long-term when applied with precision, because profit is a measurable commodity and long-term profitability supersedes any market fluctuations.
2. When applied properly, this model frees you from the emotional roller coaster of worrying about the market or economy. (It offers the potential for peace of mind).
Weakness
1. There is little or no immediate rewards. You must give yourself the pride of ownership. This is the most significant downside and the reason so few people truly apply it.
2. This model is capital investment – in order to produce a sizeable cash flow, you must invest a great amount of capital.
3. This model requires a strong stomach. (Remember, the average stock price fluctuates 50% over the course of a year).
4. This model can cause you to miss the ongoing potential for profit (e.g., Timecom fluctuated from 35 to 45 several times in one year, thus providing many opportunities to profit.)
5. You will need to pay Tax for the dividen / bonus given.
To use this model, you buy stock in a company only if you BELIEVE that you are buying something of value that will be worth much more over the long-term. If you are intelligent, you will develop a systematic approach. Some systems are more precise than others.
The model requires:
1.Intelligent evaluation of a company;
2.Willingness to have patience;
3.A strong stomach. Remember, the average stock price fluctuates 50% over the course of a year; however, the rewards over the long-term are immense, if you’ve done your homework.
Strength
1. This is a proven model that makes you money over the long-term when applied with precision, because profit is a measurable commodity and long-term profitability supersedes any market fluctuations.
2. When applied properly, this model frees you from the emotional roller coaster of worrying about the market or economy. (It offers the potential for peace of mind).
Weakness
1. There is little or no immediate rewards. You must give yourself the pride of ownership. This is the most significant downside and the reason so few people truly apply it.
2. This model is capital investment – in order to produce a sizeable cash flow, you must invest a great amount of capital.
3. This model requires a strong stomach. (Remember, the average stock price fluctuates 50% over the course of a year).
4. This model can cause you to miss the ongoing potential for profit (e.g., Timecom fluctuated from 35 to 45 several times in one year, thus providing many opportunities to profit.)
5. You will need to pay Tax for the dividen / bonus given.
Monday, May 10, 2010
Understand Yourself as an Investor
5 simple behavior of being an Investor and NOT a Gambler in Stock
1. Opportunity vs Capital
–Selling too fast; worrying about making bad decision on selling too fast that making less money in a high earning stock
–Buying too slow; worrying miss opportunity in a Popular stocks that everyone buying (Especially on internal Tips)
Note: There is no selling too fast or buying too slow. Take time to analyse. Missing an opportunity is better then losing your capital.
2. Realised Lost vs Capital Stuck
–Emotionally affected by the purchased price of stock. Feel embarrass on a loss.
–Having the concept of; never sell never lost
Note: A lot of people just keep holding on the stocks; and never sell until it make a profit or back to cost. And this people always mention, never sell never lost
3. Best Buying / Selling Price vs Buying / Selling in GOOD Price
- Always q in the buying price or best buying price of the day
- Hesitate to buy on the selling price OR sell at the buying price
Note: Keep q in a lower / higher price cause the trade undone. The price might make much more different on the next day / hour.
4. Anchoring
–Often assume that the market price is the correct price, rely on recent market views and opinions even though it differs from historical, long-term averages and probabilities
–DON’T anchor yourself into recent performance without taking into account true historical returns: the compound historical returns
Note: Normally people will buy stocks in good time. This is a lesson to analyse on the economy cycle, look into the history and predict the FUTURE.
5. Over confident
–Believe you can consistently time the market? WOW!
–In reality, there’s an overwhelming amount of evidence that proves otherwise
–Overconfidence results in excess trades, with trading costs denting profits
Note: The feeling of having a third eye to predict a stock price without proper analysis bring you to become the best GAMBLER...
1. Opportunity vs Capital
–Selling too fast; worrying about making bad decision on selling too fast that making less money in a high earning stock
–Buying too slow; worrying miss opportunity in a Popular stocks that everyone buying (Especially on internal Tips)
Note: There is no selling too fast or buying too slow. Take time to analyse. Missing an opportunity is better then losing your capital.
2. Realised Lost vs Capital Stuck
–Emotionally affected by the purchased price of stock. Feel embarrass on a loss.
–Having the concept of; never sell never lost
Note: A lot of people just keep holding on the stocks; and never sell until it make a profit or back to cost. And this people always mention, never sell never lost
3. Best Buying / Selling Price vs Buying / Selling in GOOD Price
- Always q in the buying price or best buying price of the day
- Hesitate to buy on the selling price OR sell at the buying price
Note: Keep q in a lower / higher price cause the trade undone. The price might make much more different on the next day / hour.
4. Anchoring
–Often assume that the market price is the correct price, rely on recent market views and opinions even though it differs from historical, long-term averages and probabilities
–DON’T anchor yourself into recent performance without taking into account true historical returns: the compound historical returns
Note: Normally people will buy stocks in good time. This is a lesson to analyse on the economy cycle, look into the history and predict the FUTURE.
5. Over confident
–Believe you can consistently time the market? WOW!
–In reality, there’s an overwhelming amount of evidence that proves otherwise
–Overconfidence results in excess trades, with trading costs denting profits
Note: The feeling of having a third eye to predict a stock price without proper analysis bring you to become the best GAMBLER...
Sunday, May 9, 2010
Introduction to Stocks
What is Stocks?
Stock or share is consider part of ownership in the company.
For example Company ABC, if you are having 1,000 units of Share Company ABC, it means you are having 1% ownership of Company ABC.
Stock Market
Stock Market is a place to trade your shares; a place where people can buy and sell on various kind of shares.
In a simple way, imagine you have some money, and you can go to the Market to buy a piece of cake. After you bought it, you can also sell the cake in this Market place.
Stocks Trading
Person A is call a seller; where Person B is a buyer. The place that they trade is called as Stocks Market.
Because there is a lot of people trade in Market, so there is 3 kinds of price we normally see in the Market:
Last Done Price - Price for last trading / transaction
Buying Price - Person B offer price
Selling Price - Person A demand price
Stock or share is consider part of ownership in the company.
For example Company ABC, if you are having 1,000 units of Share Company ABC, it means you are having 1% ownership of Company ABC.
Stock Market
Stock Market is a place to trade your shares; a place where people can buy and sell on various kind of shares.
In a simple way, imagine you have some money, and you can go to the Market to buy a piece of cake. After you bought it, you can also sell the cake in this Market place.
Stocks Trading
Person A is call a seller; where Person B is a buyer. The place that they trade is called as Stocks Market.
Because there is a lot of people trade in Market, so there is 3 kinds of price we normally see in the Market:
Last Done Price - Price for last trading / transaction
Buying Price - Person B offer price
Selling Price - Person A demand price
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