myinvestingnotes.blogspot.my (Bullbear Buffett Stock Investing Notes)

Keep INVESTING Simple and Safe (KISS) ****Investment Philosophy, Strategy and various Valuation Methods**** The same forces that bring risk into investing in the stock market also make possible the large gains many investors enjoy. It’s true that the fluctuations in the market make for losses as well as gains but if you have a proven strategy and stick with it over the long term you will be a winner!****Warren Buffett: Rule No. 1 - Never lose money. Rule No. 2 - Never forget Rule No. 1.

Showing posts with label investing. Show all posts

Wednesday, 18 September 2019

What is investing? My core.

Investing is all about buying a flow of earnings at an acceptable price.

The pace of earnings growth is a second-order issue.

Risk is the possible loss of long-term purchasing power.

Volatility of price is not risk. It is the ally of the long-term investor.

The market is NOT ALWAYS efficient. In general it is efficient, but NOT ALWAYS, and this small difference is crucial, enabling us to capitalise on it.

Tuesday, 4 December 2018

Investing as opposed to Gambling

Some aspects of investing can be very similar to gambling.

Not knowing what you are doing.
Not understanding what you own.
Trading in and out of the market.
Following the advice of interested parties.
Being in a hurry to get rich.
Relying on luck rather than skill.

Investing and wealth building is different.

It is both an art and a science and can be emulated.

Saturday, 3 April 2010

Stock investment can be lucrative, where your earned income earns more money as you continue your normal day to day office work.

Investing In The Nigerian Stock Exchange

Stock investment is a very lucrative investment, it is an investment alternative that brings you a good return and less risk compared to foreign exchange market (Forex), where you make so much but, stand a great chance of losing your entire funds within seconds.

Before going into stock investment, there is a need to know the basic terms and terminologies involved with stock trading. Although very lucrative also comes with its risk, but this risk can be minimized by you depending on how knowledgeable you are in stock investment. You can as well invest into stocks without a prior knowledge of what it takes to invest. This can easily be done with the aid of your stockbroker. In order for you to succeed with your stock investment your choice of broker matters a lot.

The Nigerian capital market has been rated as one of the most profitable exchange in the world, giving investors the opportunity to reap a bountiful return on their investment. It is only here in Nigeria, You see stocks giving investors up to 1000% return on investment within a very short period of time.

The Nigerian capital market is one of the fastest growing stock-exchange in the world. It is full of untapped opportunities awaiting potential investors like you. It has over 300 listed equities including the banking sub-sector, insurance, conglomerate, automobile, food and beverages sub-sectors to name but a few.

The banking sub-sector is the most capitalized sector in the Nigerian capital market, it accounts for over 60% of the total market capitalization. With its strong fundamentals, investors are rest assured with a high return on investment..

The Nigerian capital market is a place to invest your money and watch it accumulate over a short period of time. Here in Nigeria movement in stock price does not exceed a maximum of 5% for both upward and downward movement. What does that tell you? It means you can never lose your money investing in Nigeria stock exchange

Many stock-broking firms out here are well capitalized to manage your fund and ensure you make it great out here. As to what sector to invest in the Nigerian stock exchange I will personally recommend the banking, insurance petroleum sub-sector for you. This sector brought me the fame I have through stocks.

Banking stocks are very good to speculate because; activities in this sub-sector are very high. Some of the basic terms you need to know before investing in any stock are, the earnings per share (EPS), the price earnings ratio (PE), the bonus and dividend history of that stock, the future prospect of that stock. When all these are at your disposal, making a very good investment decision could be possible.

The earnings per share of a company is a very investment tool to consider, as this tells you the performance of the company you intend to invest your money, the price earnings ratio shows you the profitability of the company. You easily determine whether a particular stock is overpriced or underpriced with these two terms (EPS &PE ratio) I have detailed how to calculate whether a particular stock is overpriced or underpriced in my website, you can copy the page from my resource box to your browser for further tutorial on this.

In summary stock investment is a very lucrative investment that can change your financial status without stress, it is an avenue for you to increase your earnings by subjecting your earned income to earning you more income as you continue your normal day to day office work.

Try Nigeria today and you will not regret reading this article.

Author: Albert A. Johnson
Source: ezinearticles.com

http://sellingstock.fretail.com/investing-in-the-nigerian-stock-exchange/

Comment: The above introductory letter to potential investors is either the start of something good or the beginning of something painful. There are so many things to know about stock investing. Without the knowledge, it is better to stay away from the stock market. However, with the right financial education, this is a very good and safe place to invest for the long term; very rewarding too, even in the depth of the bear market.

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My 18 points guide to Successfully compounding your money in Stocks

Be a good stock picker.
Think as a business owner.
Always look at value rather than the price. Do the homework.
Buy and hold is alright for selected stocks.
Compounding is your friend, get this to work its magic.
Mr. Market is there to be taken advantage of. Do not be the sucker instead. BFS;STS.
Always buy a lot when the price is low.
Never buy when the stock is overpriced.
It is alright to buy when the selected stock is at a fair price.
Phasing in or dollar cost averaging is safe for such stocks during a downtrend, unless the price is still obviously too high.
Do not time the market for such or any stocks.
By keeping to the above strategy, the returns will be delivered through the growth of the company's business.
So, when do you sell the stock? Almost never, as long as the fundamentals remain sound and the future prospects intact.
The downside risk is protected through only buying when the price is low or fairly priced.
Tactical dynamic asset allocation or rebalancing based on valuation can be employed but this sounds easier than is practical, except in extreme market situations.
Sell urgently when the company business fundamental has deteriorated irreversibly.
You may also wish to sell should the growth of the company has obviously slowed and you can reinvest into another company with greater growth potential of similar quality. However, unlike point 16, you can do so leisurely.
In conclusion, a critical key to successful investing is in your stock picking ability.

http://myinvestingnotes.blogspot.com/2012/07/my-18-points-guide-to-successfully.html

11 Lessons From Peter Lynch

Peter Lynch taught me:

1. Behind every stock is a company. Find out what it’s doing.
2. Never invest in any idea you can’t illustrate with a crayon.
3. Over the short term, there may be no correlation between the success of a company’s operations and the success of its stock. Over the long term, there’s a 100% correlation.
4. Buying stocks without studying the companies is the same as playing poker – and never looking at your cards.
5. Time is on your side when you own shares of superior companies.
6. Owning stock is like having children. Don’t get involved with more than you can handle.
7. When the insiders are buying, it’s a good sign.
8. Unless you’re a short seller, it never pays to be pessimistic.
9. A stock market decline is as predictable as a January blizzard in Colorado. If you’re prepared, it can’t hurt you.
10. Everyone has the brainpower to make money in stocks. Not everyone has the stomach.
11. Nobody can predict interest rates, the future direction of the economy, or the stock market. Dismiss all such forecasts and concentrate on what’s actually happening to the companies in which you’ve invested.

Lynch’s advice had a profound effect on my stock market approach. He taught me that investment success isn’t the result of developing the right macro-economic view or deciding when to jump in or out of the market. Success is about researching companies to identify those that are likely to report positive surprises.

Capital Expenditure

A great company with a Durable Competitive Advantage will have a ratio of Capital Expenditures to Net Income of less than 25%. Less is better.

Capital Expenditures are expenses on:
- fixed assets such as equipment, property, or industrial buildings
- fixing problems with an asset
- preparing an asset to be used in business
- restoring property
- starting new businesses

A good company will have a ratio of Capital Expenditures to Net Income of less than 50%.

A great company with a Durable Competitive Advantage will have a ratio of less than 25%.

Less is better.

Benjamin Graham's 113 Wise Words

The true investor scarcely ever is forced to sell his shares, and at all times he is free to disregard the current price quotation. He need pay attention to it and act upon it only to the extent that it suits his book, and no more. Thus the investor who permits himself to be stampeded or unduly worried by unjustified market declines in his holdings is perversely transforming his basic advantage into a basic disadvantage. That man would be better off if his stocks had no market quotation at all, for he would then be spared the mental anguish caused him by other persons' mistakes of judgement."

Philip Fisher's Wise Words

"The refusal to sell at a loss, while completely natural and normal, is probably one of the most dangerous in which we can indulge ourselves in the entire investment process.

More money has probably been lost by investors holding a stock they really did not want until they could 'at least come out even' than from any other single reason. If to these actual losses are added the profits that might have been made through the proper reinvestment of these funds if such reinvestment had been made when the mistake was first realized, the cost of self-indulgence becomes truly tremendous."

(Common Stocks and Uncommon Profits)

The Ultimate Hold-versus-Sell Test

Here is the overriding primary test, followed by observations on why it is so critically important:

Knowing all that you now know and expect about the company and its stock (not what you originally believed or hoped at time of purchase), and assuming that you had available capital, and assuming that it would not cause a portfolio imbalance to do so, would you buy this stock today, at today's price?

No equivocation. Yes or no?

Answers such as maybe or probably are not acceptable since they are ways of dodging the issue. No investor probably buys a stock; they either place an order or do not.

Here is the implication of your answer to that critical test: if you did not answer with a clear affirmative, you should sell; only if you said a strong yes, are you justified to hold.

Some thoughts on Analysing Stocks (KISS)

Ideally a stock you plan to purchase should have all of the following charateristics:

• A rising trend of earnings dividends and book value per share.
• A balance sheet with less debt than other companies in its particular industry.
• A P/E ratio no higher than average.
• A dividend yield that suits your particular needs.
• A below-average dividend pay-out ratio.
• A history of earnings and dividends not pockmarked by erratic ups and downs.
• Companies whose ROE is 15 or better.
• A ratio of price to cash flow (P/CF) that is not too high when compared to other stocks in the same industry.

Margin of Safety Concept: Stocks should be bought like groceries, not like perfume

The high CAGR in the early years of the investing period, due to buying at a discount, tended to decline and approach that of the intrinsic EPS GR of the companies over a longer investment time-frame.

Chapter 20 - “Margin of Safety” as the Central Concept of Investment

A single quote by Graham on page 516 struck me:

Observation over many years has taught us that the chief losses to investors come from the purchase of low-quality securities at times of favorable business conditions.

Basically, Graham is saying that most stock investors lose money because they invest in companies that seem good at a particular point in time, but are lacking the fundamentals of a long-lasting stable company.

This seems obvious on the surface, but it’s actually a great argument for thinking more carefully about your individual stock investments. If most of your losses come from buying companies that seem healthy but really aren’t, isn’t that a profound argument for carefully studying any company you might invest in?

myinvestingnotes.blogspot.my (Bullbear Buffett Stock Investing Notes)

Wednesday, 18 September 2019

What is investing? My core.

Tuesday, 4 December 2018

Investing as opposed to Gambling

Saturday, 3 April 2010

Stock investment can be lucrative, where your earned income earns more money as you continue your normal day to day office work.

Investing In The Nigerian Stock Exchange

All equity security investments present a risk of loss of capital

The Ultimate Hold-versus-Sell Test

Some thoughts on Analysing Stocks (KISS)

Benjamin Graham

Sell the losers, let the winners run.

Investment Style

Warren Buffett

Political and Economic News

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