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Showing posts from December, 2012

Stock Market record new high, so what's your result?

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Index is breaking the all time high record! Maybe we need to thanks the hot money “created” by US, seem now already spread the effect, especially for Asia stock markets, from Hong Kong to Taiwan, Singapore, Thailand, Indonesia and Malaysia. However, you would be surprised if I tell you many investors are not making money, some even lost money in their trade. Why? And how could this happen when market is bull run? Unfortunately, this is what really happen in retail investors. School never teach how to invest like a millionaire. After all, if there's a school, I don't think there would be any millionaire teacher willing to teach those new bee how to earn their fortune in the stock market. What we could find are those half pass six teacher, so what kind of result can you expect? In fact, investment is similar to swimming. You can not and also dare not trust the advice from your friends or teacher. Furthermore, you may not know what they told is right or wrong, it

How the Margin account work?

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Margin account is one of the way for those qualify to borrow money against your existing stocks to buy more stocks. Different broker will establishes different margin of maintenance requirement. For example, if you deposit $20,000, you would have $50,000 of buying power. (some broker give 2.8x, which make the buying power as $56,000) You can margin up to 60% of your stock price (some time 65%), in other words, you use $20,000 of your own money and broker will loan you $30,000. If 65% of margin, then the high side you can borrow is $33,000. Some stock may have lower limit (cap price less than 1), hence the securities value will become less. Let assume we buy 10,000 shares of a stock at $5 per share and below are some of the possible scenarios. Scenario 1: Cap price 1 and stock price flag The 10,000 shares still worth $50,000 (securities value). In this case, there's no margin call as margin is 60% (money borrow $30k divide by securities value $50k), however, you lose o

SP Setia, could be right time to invest?

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Most investors would like to seek for stock tips, normally I seldom provide any. The reason is many people don't understand how to handle it, hence, many time Mr A is making money whereas Mr B is losing money though they bought the same stock, just because of the timing and experience make the different. Recently there is a stock, SP Setia which fall about 18% in share price for the last few days to close at RM3.05 last Friday. You can treat this as stock tips on how to trade it. I think this one is a good example to study and at the same time, trade it to make pocket money. First, let study what could be the reason for it share price to fall? According to some analysis, the main reason could be the foreign fund were selling due to the stock being removed from the MSCI Malaysia Index. Further add on to this is because of general election mood, many investors may stay sideline, wait and see first. Investors may also want to find out if the company turn bad? Or if th