What to Invest & What Price

For those who want to know more about Investment Basic, I strongly recommended the below web site by Malaysia Education Department of SIDC:
http://www.min.com.my/
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Go through articles for "Newbies" and later "Seasoned Investors", this may take you some time, but it's worth to learn from others experience.
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You may want to read this as well:  A Tutorial For Beginner Investors
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The fact, investment is not something can be studied from books or articles. Try to find out what are the common mistake made by others, study the case from people who perform well in stock market, learn from them then take action to start. Similar to swimming, points and theory are just other people's experience, investors need to feel and experience it before really know the concept.   

Below are some of check list for Seasoned Investor:
1. Is the company having ROE of more than 12? (earning growth?) ROA is higher than industry?
2. Is the company distribute dividend of at least more than two times of FD rate?
3. Is the management honest?
4. Is the company's financial position healthy, do they borrow a lot of money?
5. Is the company need a lot of capital expenses periodically? 
6. Do you have margin of safety, buy at low PE?
7. Do you plan to buy more if the share price of the company going down?

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Shareholder’s Equity = Assets – Liabilities
EPS Earning per Share = Net Profit after Tax/Total No. of Shares
NTA Net Tangible Asset = Net Tangible Asset/No. of Shares
ROE Return on Equity = EPS/NTA or Net Income/Shareholder’s Equity
PE Price Earning Ratio = Market Price/EPS
DY Dividend Yield = Annual Dividend per share/Market Price


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What to Buy & at what Price?

For new investor, most of the time they don't know what to buy. In this case, try to follow other successful investor who had consistently making the money in stock market. Learn the experience from them will save you a lot of time. If you still have no idea which company to start for investment, just try to follow my portfolio HERE for Malaysia stock. Among those stock, I like Maybank the most. Why we select Maybank? There are few reasons... basically we want a strong company, at least the business already run for the past 10 years and went through many market cycle up and downs. If someone bought 1000 unit of Maybank's share 30 years ago and forgot about it, to his surprise, today he will become a millionaire. If you want to find out more about this company, just check the below link:

1. Some Snippets about Maybank
2. Analysis about Maybank - Part 1
3. Analysis about Maybank - Part 2


Now the second question, at what Price to buy?

This is the basic question, I prefer to invest in company that would share the profit with investors, in form of dividend. Many investors didn't know beside capital gain (buy low and sell high), we can actually earn dividend as part of passive income. I am quite happy if the fund invested pay me at least 2 times or more than FD rate, consistently each year.


Last, when is the good time to sell this stock? If this is an excellent business and with the profit increase every year, why should one sell it? If you own a shop with very good business, do you want to sell it? I think i will only sell some if the value is extremely high or I find a better investment option which provide better return!