Warren Buffett recommend investors to read Security Analysis by his professors Benjamin Graham and David Dodd.
To know very much about your investment so that you are able to figure out its intrinsic value, you must know:
- how the company makes money
- the durability of its earnings
- what its weaknesses are
- opportunities for future growth
- the strength of its competitors
- the honesty and competence of its management
Only sell your investment when you find a more attractive investment.
Risk comes from not knowing what you are doing. If you know what you own, you will be fine. Never buy what you don't know. The dumbest reason in the world to buy a stock is because it is going up. Investment must be rational. If you don't understand it, don't do it.
Value investing is buying a business for less than you think it is worth.
Potentially superior investments can be found by looking for companies that are buying back their stock.
Take one industry at a time and develop some expertise in a half a dozen companies in that industry. Put yourself in the frame of mind that you just inherited the company and it was the only asset your family was ever going to own. What will you do with it? What will you be thinking about? What will you be worried about? Who are your competitors? Who are your customers? Go out and talk to them. Find out the strengths and weaknesses of this particular company versus the other ones in the same industry. If you have done this, you may understand the business better than the management.
To value a company properly, the only way to do that is to focus on what you know about them and own them.
Investing is like reporting. Imagine you have been assigned an in-depth article about that company you intend to invest. Ask a lot of questions and dig up a lot of facts. Be curious about the company you intend to own.
Warren Buffett look for business with high profit margins (e.g.32%), little debt, and outstanding returns on equity. Also good management and have expansion plans.
Warren Buffett recommends the practice of observing and writing down those characteristics and traits that you admire, and as long as you start soon enough, all of them can be part of your makeup and mind-set. Similarly, if you make a list of habits you admire, you too can have those same habits.
Saturday, March 31, 2012
Friday, March 30, 2012
How to select and determine a good stock to invest?
Before you select a stock to buy, it is important that you do a research on the internet.
Below are some of the stock research resources which you can refer:
1. Morning star at http://www.sg.morningstar.com/
2. Zacks Investment Research at http://www.zacks.com/
3. Yahoo! Finance at http://sg.finance.yahoo.com/
4. Standard & Poor's at http://www.standardandpoors.com/
Also, you can look at their:
Annual Reports - this report will reflect the performance and activities of the firm in the prior year. Every annual report includes a Letter to Shareholders from the chief executive and/or chairman of the corporation. This brief note tends to highlight important accomplishments, challenges, and setbacks of the company in the prior year. In addition, the annual report will often include financial highlights and a review of operations, which should provide more detail on important recent developments, including new product launches, acquisitions, mergers, or sales of units. Also the important element of the annual report is the firm's major financial statements, including its
Balance Sheet
Income Statement
Statement of Cash Flows
Balance Sheet
The balance sheet is a measure of a company's overall health at a particular point in time. It will list all of the company's assets, including its current assets, which are those things that can be converted into cash within about a year, such as inventories, accounts receivable, and cash on hand. The balance sheet will also reflect all of the firm's property, plant, and equipment. Similarly, the balance sheet will detail all of a company's liabilities, including its long-term debt.
By subtracting a firm's liabilities from its assets, you can figure out what's known as its shareholders' equity, a term that simply refers to the total net worth of the company. The formula is:
Assets - Liabilities = Shareholders' equity (net worth)
or Assets = Shareholders' equity + Liabilities
The sign of a healthy company is one of growing assets, it is also important to see increasing shareholder equity, since that reflects a company's health factoring in its liabilities.
Income Statement
If the balance sheet offers a snapshot of a firm's overall health, an income statement measures something a bit more specific: the profitability of that firm over a given period of time, typically on a quarterly or annual basis.
Sometimes, the income statement also called, Profit and Loss Statement, the P&L, or Statement of Earnings. Regardless of what it's called, a whole host of relevant information about a company's business progress can be found in this financial statement:
If you divide a firm's net income by the total number of shares it has outstanding, you get its earnings per share, or EPS:
Net income/Total shares outstanding = Earnings per share
Cash flow statement
This statement allows you to know whether the company is a net user or collector of cash?
It add up all the cash that comes into the company through its profits, accounts receivable and its inventories. Then, cash that leaves the company in the form of obligations (like accounts payable), debt financing, and depreciation of plant/property/equipment, are subtracted. What's left - if it's a positive figure - is considered a company's cash and cash equivalents for the end of a particular period. The bigger the number, the better. But, just as important is the growth of this figure over time.
Also important is the profitability of the stock. This can be determined by looking at:
1. Historic Earnings Growth - the most basic measure of profitability is the net income or earnings per share.
2. Future Earnings Growth - you can visit http://www.zacks.com/ or http://www.morningstar.com/
3. Return on Equity (ROE) - this is a measure of a company's earnings relative to its shareholder equity.
ROE = net income/shareholder equity
Historically an ROE of 20% or higher was considered the gold standard. But for screening for stocks, you may want to start off by focusing on firms with ROE of 15 or better.
4. Sales measures - Sales are a sign that its products and services are in demand. Smart investor should also look at sales growth becasue this is the company top line growth, other than the bottom line growth (profit) when selecting stocks.
5. Profit margins - it is important to know that the company you invest in has the ability to convert sales into earnings.
Profit margins = net income/sales
Below measures can also be used for Stock Valuation:
1. Price-to-Earnings Ratio (P/E)
P/E ratio = Price per share/Earnings per share (EPS)
The long-term average P/E ratio for stocks in the S&P 500 has been around 16 times earnings. In general, the lower the P/E, the better. In fact, historically, the broad stock market has performed better in periods of low P/E multiples. Low P/E ratios are like a "Clearance Sale" telling investors that there are good buys to be found. Typically, investors only willing to pay higher P/Es for stocks when alternative investments like bonds are not yielding as much.
2. PEG Ratio (short for P/E divided by Growth)
While value investors pay particularly close attention to P/Es, since they care most about prices, growth investors are often willing to overlook a stock's P/Es ratio if its growth rate is impressive. These growth investors look at PEG ratio to determine which stock to invest on.
PEG ration = P/E ratio / Annual earnings growth rate
The lower the PEG, the more attractive a stock is said to be. Companies with PEG ratios of 1 or less means their earnings growth rates meet or exceed their P/Es are considered very attractive by some investors. Indeed, many growth investors will forgive a high P/E stock so long as it trades a multiple that is close to its long-term growth rate.
3. PEGY ratio
This ratio is a slight variation of the PEG ratio. It add a stock's dividend yield to its growth rate, and then divide that into the stock's P/E multiple.
PEGY ratio = P/E ratio / Annual earnings growth rate + Dividend yield
The lower the PEGY, the better. And the closer to 1 the PEGY is, the better.
15 Questions Phil Fisher asked when he considering buying a business
Below are some of the stock research resources which you can refer:
1. Morning star at http://www.sg.morningstar.com/
2. Zacks Investment Research at http://www.zacks.com/
3. Yahoo! Finance at http://sg.finance.yahoo.com/
4. Standard & Poor's at http://www.standardandpoors.com/
Also, you can look at their:
Annual Reports - this report will reflect the performance and activities of the firm in the prior year. Every annual report includes a Letter to Shareholders from the chief executive and/or chairman of the corporation. This brief note tends to highlight important accomplishments, challenges, and setbacks of the company in the prior year. In addition, the annual report will often include financial highlights and a review of operations, which should provide more detail on important recent developments, including new product launches, acquisitions, mergers, or sales of units. Also the important element of the annual report is the firm's major financial statements, including its
Balance Sheet
Income Statement
Statement of Cash Flows
Balance Sheet
The balance sheet is a measure of a company's overall health at a particular point in time. It will list all of the company's assets, including its current assets, which are those things that can be converted into cash within about a year, such as inventories, accounts receivable, and cash on hand. The balance sheet will also reflect all of the firm's property, plant, and equipment. Similarly, the balance sheet will detail all of a company's liabilities, including its long-term debt.
By subtracting a firm's liabilities from its assets, you can figure out what's known as its shareholders' equity, a term that simply refers to the total net worth of the company. The formula is:
Assets - Liabilities = Shareholders' equity (net worth)
or Assets = Shareholders' equity + Liabilities
The sign of a healthy company is one of growing assets, it is also important to see increasing shareholder equity, since that reflects a company's health factoring in its liabilities.
Income Statement
If the balance sheet offers a snapshot of a firm's overall health, an income statement measures something a bit more specific: the profitability of that firm over a given period of time, typically on a quarterly or annual basis.
Sometimes, the income statement also called, Profit and Loss Statement, the P&L, or Statement of Earnings. Regardless of what it's called, a whole host of relevant information about a company's business progress can be found in this financial statement:
- Total sales or revenue - this income statement will show the current quarterly and/or annual sales figures for the firm and compare that with prior periods. Revenue are often the first line item listed in an income statement, which is why we refer to sales growth as top line growth.
- The cost of goods sold - this reflects the total costs it took to manufacture and distribute those goods and services that were sold in that period, including from labor, raw materials, shipping, insurring, and warehousing.
- Indirect costs - these expenses include long-term research and development costs, general administrative expenses, and other costs such as consulting fees.
- Interest income and expenses - companies may invest the cash they have on hand in an effort to maximize the use of their capital. Also firm may incur interest expenses to finance projects.
- Taxes - companies have to manage their tax expenses. The income statement will show a firm's income before and after taxes.
- Net income - it is the most common measure of a company's profitability, since it takes all of the revenues and interest income enjoyed by the firm in a reporting period and subtracts all of the costs required to engineer those sales.
If you divide a firm's net income by the total number of shares it has outstanding, you get its earnings per share, or EPS:
Net income/Total shares outstanding = Earnings per share
Cash flow statement
This statement allows you to know whether the company is a net user or collector of cash?
It add up all the cash that comes into the company through its profits, accounts receivable and its inventories. Then, cash that leaves the company in the form of obligations (like accounts payable), debt financing, and depreciation of plant/property/equipment, are subtracted. What's left - if it's a positive figure - is considered a company's cash and cash equivalents for the end of a particular period. The bigger the number, the better. But, just as important is the growth of this figure over time.
Also important is the profitability of the stock. This can be determined by looking at:
1. Historic Earnings Growth - the most basic measure of profitability is the net income or earnings per share.
2. Future Earnings Growth - you can visit http://www.zacks.com/ or http://www.morningstar.com/
3. Return on Equity (ROE) - this is a measure of a company's earnings relative to its shareholder equity.
ROE = net income/shareholder equity
Historically an ROE of 20% or higher was considered the gold standard. But for screening for stocks, you may want to start off by focusing on firms with ROE of 15 or better.
4. Sales measures - Sales are a sign that its products and services are in demand. Smart investor should also look at sales growth becasue this is the company top line growth, other than the bottom line growth (profit) when selecting stocks.
5. Profit margins - it is important to know that the company you invest in has the ability to convert sales into earnings.
Profit margins = net income/sales
Below measures can also be used for Stock Valuation:
1. Price-to-Earnings Ratio (P/E)
P/E ratio = Price per share/Earnings per share (EPS)
The long-term average P/E ratio for stocks in the S&P 500 has been around 16 times earnings. In general, the lower the P/E, the better. In fact, historically, the broad stock market has performed better in periods of low P/E multiples. Low P/E ratios are like a "Clearance Sale" telling investors that there are good buys to be found. Typically, investors only willing to pay higher P/Es for stocks when alternative investments like bonds are not yielding as much.
2. PEG Ratio (short for P/E divided by Growth)
While value investors pay particularly close attention to P/Es, since they care most about prices, growth investors are often willing to overlook a stock's P/Es ratio if its growth rate is impressive. These growth investors look at PEG ratio to determine which stock to invest on.
PEG ration = P/E ratio / Annual earnings growth rate
The lower the PEG, the more attractive a stock is said to be. Companies with PEG ratios of 1 or less means their earnings growth rates meet or exceed their P/Es are considered very attractive by some investors. Indeed, many growth investors will forgive a high P/E stock so long as it trades a multiple that is close to its long-term growth rate.
3. PEGY ratio
This ratio is a slight variation of the PEG ratio. It add a stock's dividend yield to its growth rate, and then divide that into the stock's P/E multiple.
PEGY ratio = P/E ratio / Annual earnings growth rate + Dividend yield
The lower the PEGY, the better. And the closer to 1 the PEGY is, the better.
15 Questions Phil Fisher asked when he considering buying a business
- Does the company have products or services with sufficient market potential to make possible a sizable increases in sales for at least several years?
- Does the company's management have a determination to continue to develop products or processes that will still further increase total sales potential when growth potentials of current attractive produce lines have largely been exploited?
- How effective are the company's research and development efforts in relation to its size?
- Does the company have an above-average sales organization?
- Does the company have a worthwhile profit margin?
- What is the company doing to maintain or improve profit margins?
- Does the company have outstanding labor and personnel relations?
- Does the company have outstanding executive relations?
- Does the company have depth to its management?
- How good are the company's cost analysis and accounting methods?
- Are there other aspects of the business somewhat peculiar to the industry involved that will give the investor important clues as to how outstanding the company may be in relation to its competition?
- Does the company have a short-range or a long-range outlook in regards to profits?
- In the foreseeable future, will the growth of the company require sufficient equity financing so that the large number of shares then outstanding will largely cancel the existing benefit from this anticipated growth?
- Does the company's management talk freely to investors about its affairs when things are going well, but clam up when troubles and disappointments occur?
- Does the company have a management of unquestionable integrity?
Thursday, March 29, 2012
Exchange-Traded Funds ETF
ETFs are index-fund-like vehicles that track market benchmarks, like broad indexes like the S&P 500, the Wilshire 5000. It can also include specific sector indexes, such as the Dow Jones U.S. Technology or the S&P Global Healthcare sectors.
ETFs are created by financial firms like BlackRock, Vanguard, and State Street.
Example of ETF has iShares S&P 500 ETF, run by BlackRock that tracks the S&P 500. They charge small fee of 0.09 percent in annual fees.
More information about ETFs, can visit:
http://www.sg.morningstar.com/
http://www.ishares.com/ (an ETF website run by BlackRock)
http://www.tdameritrade.com/ (website of online broker TD Ameritrade)
ETFs are created by financial firms like BlackRock, Vanguard, and State Street.
Example of ETF has iShares S&P 500 ETF, run by BlackRock that tracks the S&P 500. They charge small fee of 0.09 percent in annual fees.
More information about ETFs, can visit:
http://www.sg.morningstar.com/
http://www.ishares.com/ (an ETF website run by BlackRock)
http://www.tdameritrade.com/ (website of online broker TD Ameritrade)
Saturday, March 24, 2012
Singapore is a Premier Asia Asset Management Centre
Singapore is a leading Asia hub for wealth management in the Asia-Pacific region.
According to the result of 2010 Singapore Asset Management Industry survey result, the asset under management (AUM) by fund managers in Singapore have reached a new high of S$1.4 trillion.
The industry remains well diversified across asset classes, with slightly over half of assets in equities, and the remainder split across fixed income, alternatives, mutual funds and cash.
There has been a strong expansion of the alternative investment industry over the last few years. Singapore now have a vibrant community of alternative investment managers running a wide variety of hedge funds, private equity funds and real estate funds, which add diversity and depth to the broader asset management industry in Singapore. This diversity, as well as the strong ecosystem of ancillary service providers such as lawyers, tax advisers, prime brokers and fund administrators, helps to sustain the industry's long-term growth.
The fund management industry employed closed to 11,200 staff in 2010, of which about 2,700 were investment professionals. This means that the number of investment professionals has grown by 6.5% year-on-year. The increase was largely due to the growth in the number of portfolio management positions.
Asia's economic ascendency has created an increasingly prominent high net worth segment. According to World Wealth Report 2010, the number of millionaires in Asia Pacific surpassed Europe's for the first time in 2009. More than ever, this will generate unprecedented demand for professional money and wealth managers in the Asia Pacific region.
As Asian economies grow, its financial system will mature and grow in complexity, and Asian institutional investors will increase in number, size and sophistication accordingly, with greater numbers of sovereign wealth funds, pension funds, insurers, foundations, endowments, etc demanding money management services.
Demographic trends will generate demand for retirement planning. Fund managers based in Asia are well-placed to provide these solutions and services to harness these opportunities.
Singapore's standing as an international financial centre will continue to be underscored by our high regulatory standards, robust governance and legal framework, world-class infrastructure, highly-trained industry professionals and the government's strong partnership with the industry.
However, the asset managemetn industry will have to overcome challenges that have arisen as a result of the global financial crisis.
First, investors have become more savvy and also more risk-focused. They are demanding greater transparency from their fund managers, and are putting greater focus on managers' abilities to manage risks, particularly counter-party credit risk and liquidity risk. In order to continue attracting funds, managers must provide a clear indication of the strategy, risk and performance of funds and demonstrate to investors the investments are properly managed.
Second, the asset management industry faces tighter regulations which have been implemented globally, post-financial crisis. However, the change in regulatory requirements should be seen in a positive context as increased supervision and heightened corporate governance standards will help restore investor confidence and trust in professional money managers.
The asset management industry needs to build long-term trust relationships with their investors. More robust risk management practices, stronger corporate governance frameworks and enhanced transparency, as well as higher disclosure standards will bolster investors' confidence in their fund managers.
The industry should seek to develop tailored investment products and solutions that would help clients to achieve their long-term investment goals effectively while keeping within their overall risk appetite.
Singapore government is taking a few initiatives to help support the industry's long-term development.
First, building up the talent pipeline and enhancing competencies for the industry. Success in the investment management world hinges on finding the right talent and the right competencies. In order to develop the pool of available talent for the industry, MAS has implemented initiatives such as the Financial Training Scheme, which co-funds training costs for industry-professionals to pursue recognized accreditation programs such as the Chartered Alternative Investment Analyst (CAIA) and other technical training.
Second, reviewing the regulatory framework to ensure that it remains relevant. MAS has concluded public consultations on its proposed enhancements to the regulatory framework for the fund management industry. The revised framework calibrates the level of supervision and capital requirements to the size and complexity of the fund manager, its potential market impact and the sophistication of its client base. The proposed enhancements will help raise the standards and quality of the fund management industry in Singapore.
Third, enhancing financial research. Unlike developed markets, Asia is highly diverse, with countries at vastly differing stages of economic development. This creates a strong need to step up the understanding of Asian financial markets. MAS has identified the need for more relevant Asian-focused research to facilitate the growth of the industry, and has taken steps to encourage the build-up of research capabilities here in Singapore. This includes the Risk Management Institute (RMI), BNP Paribas Hedge Fund Centre, the EDHEC-Risk Institute and the NUS Centre for Asset Management Research and Investments (CAMRI). The government hope this will help build intellectual capital and develop innovative solutions through industry-academia collaboration.
Singapore continue to build on its role as a hub for Asia investments by supporting regional initiatives aimed at improving the depth and liquidity of Asian capital markets. Singapore has been actively involved in various regional projects and initiatives across multiple fora. This includes efforts to link regional stock exchanges, participating in ASEAN initiatives to develop its bond markets, and working with the World Bank to promote public-private partnerships (PPP) in funding regional infrastructure projects.
According to the result of 2010 Singapore Asset Management Industry survey result, the asset under management (AUM) by fund managers in Singapore have reached a new high of S$1.4 trillion.
The industry remains well diversified across asset classes, with slightly over half of assets in equities, and the remainder split across fixed income, alternatives, mutual funds and cash.
There has been a strong expansion of the alternative investment industry over the last few years. Singapore now have a vibrant community of alternative investment managers running a wide variety of hedge funds, private equity funds and real estate funds, which add diversity and depth to the broader asset management industry in Singapore. This diversity, as well as the strong ecosystem of ancillary service providers such as lawyers, tax advisers, prime brokers and fund administrators, helps to sustain the industry's long-term growth.
The fund management industry employed closed to 11,200 staff in 2010, of which about 2,700 were investment professionals. This means that the number of investment professionals has grown by 6.5% year-on-year. The increase was largely due to the growth in the number of portfolio management positions.
Asia's economic ascendency has created an increasingly prominent high net worth segment. According to World Wealth Report 2010, the number of millionaires in Asia Pacific surpassed Europe's for the first time in 2009. More than ever, this will generate unprecedented demand for professional money and wealth managers in the Asia Pacific region.
As Asian economies grow, its financial system will mature and grow in complexity, and Asian institutional investors will increase in number, size and sophistication accordingly, with greater numbers of sovereign wealth funds, pension funds, insurers, foundations, endowments, etc demanding money management services.
Demographic trends will generate demand for retirement planning. Fund managers based in Asia are well-placed to provide these solutions and services to harness these opportunities.
Singapore's standing as an international financial centre will continue to be underscored by our high regulatory standards, robust governance and legal framework, world-class infrastructure, highly-trained industry professionals and the government's strong partnership with the industry.
However, the asset managemetn industry will have to overcome challenges that have arisen as a result of the global financial crisis.
First, investors have become more savvy and also more risk-focused. They are demanding greater transparency from their fund managers, and are putting greater focus on managers' abilities to manage risks, particularly counter-party credit risk and liquidity risk. In order to continue attracting funds, managers must provide a clear indication of the strategy, risk and performance of funds and demonstrate to investors the investments are properly managed.
Second, the asset management industry faces tighter regulations which have been implemented globally, post-financial crisis. However, the change in regulatory requirements should be seen in a positive context as increased supervision and heightened corporate governance standards will help restore investor confidence and trust in professional money managers.
The asset management industry needs to build long-term trust relationships with their investors. More robust risk management practices, stronger corporate governance frameworks and enhanced transparency, as well as higher disclosure standards will bolster investors' confidence in their fund managers.
The industry should seek to develop tailored investment products and solutions that would help clients to achieve their long-term investment goals effectively while keeping within their overall risk appetite.
Singapore government is taking a few initiatives to help support the industry's long-term development.
First, building up the talent pipeline and enhancing competencies for the industry. Success in the investment management world hinges on finding the right talent and the right competencies. In order to develop the pool of available talent for the industry, MAS has implemented initiatives such as the Financial Training Scheme, which co-funds training costs for industry-professionals to pursue recognized accreditation programs such as the Chartered Alternative Investment Analyst (CAIA) and other technical training.
Second, reviewing the regulatory framework to ensure that it remains relevant. MAS has concluded public consultations on its proposed enhancements to the regulatory framework for the fund management industry. The revised framework calibrates the level of supervision and capital requirements to the size and complexity of the fund manager, its potential market impact and the sophistication of its client base. The proposed enhancements will help raise the standards and quality of the fund management industry in Singapore.
Third, enhancing financial research. Unlike developed markets, Asia is highly diverse, with countries at vastly differing stages of economic development. This creates a strong need to step up the understanding of Asian financial markets. MAS has identified the need for more relevant Asian-focused research to facilitate the growth of the industry, and has taken steps to encourage the build-up of research capabilities here in Singapore. This includes the Risk Management Institute (RMI), BNP Paribas Hedge Fund Centre, the EDHEC-Risk Institute and the NUS Centre for Asset Management Research and Investments (CAMRI). The government hope this will help build intellectual capital and develop innovative solutions through industry-academia collaboration.
Singapore continue to build on its role as a hub for Asia investments by supporting regional initiatives aimed at improving the depth and liquidity of Asian capital markets. Singapore has been actively involved in various regional projects and initiatives across multiple fora. This includes efforts to link regional stock exchanges, participating in ASEAN initiatives to develop its bond markets, and working with the World Bank to promote public-private partnerships (PPP) in funding regional infrastructure projects.
Using MACD indicator (Moving Average Convergence-Divergence) in your technical analysis
Most analysts call it the "Mac-D".
It was developed by Gerald Appel, and is based on exponential moving averages (EMA).
There are 3 components to the MACD:
By using MACD indicator (MACD Crossover) - to buy the instrument being charted when the fast line crosses above the signal line (bullish crossover) and sell (or short) it when the fast line crosses below the signal line (bearish crossover).
It was developed by Gerald Appel, and is based on exponential moving averages (EMA).
There are 3 components to the MACD:
- The MACD fast line - black think line
- The MACD signal line - blue thin line
- The MACD histogram - the powder-blue bar chart that shows the difference between the MACD fast line and signal line
By using MACD indicator (MACD Crossover) - to buy the instrument being charted when the fast line crosses above the signal line (bullish crossover) and sell (or short) it when the fast line crosses below the signal line (bearish crossover).
Friday, March 23, 2012
Monday, March 19, 2012
Singapore to become Asian trading hub for precious metals (gold)
Standard Bank, one of the players of precious metals, a South African bank with a branch in Singapore offering wholesale trading of commodities, including precious metals.
World Gold Council, is a market development organisation for the global gold industry.
World Gold Council, is a market development organisation for the global gold industry.
Saturday, March 17, 2012
To check if stock or bond going to lead the market?
One way is to check the earnings yield of the equity market. It means the amount of corporate earnings an investor is purchasing for every $1 he or she is buying in equities.
To calculate the stock market's earnings yield, simply take the inverse of a stock market's price-to-earnings ratio.
If EPS=$50 Price=$1000
Earnings yield=EPS/Price
=$50/$1000
=5%
Compare this earnings yield for stock against bond yield. If bond is yielding more than the earnings yield of the stock market, then bond would appear more attractive than stock at the moment, since an investor could earn more per yield through bond than he or she could in corporate profits in stock.
Friday, March 16, 2012
Financial websites
New-fangled brokerage at Sharebuilder
To learn more about the basics of bonds visit the website of Bond Market Association.
Always wanted to make your money work harder? Visit BTINVET.COM.SG to learn how to grow your wealth through stocks, bonds and property investments. Brought to you by The Business Times, the one-stop portal allow you to attain financial success.
A Singaporean website teaching you how to invest stock in Singapore market at http://www.singapore-stock-analysis.com/index.html
SGX one-stop portal to educate stock investors
Avendus Capital is a local investment bank in India.
Mape Group is also another local investment bank in India.
Scorpio Partnership is a company providing wealth management.br>
BlackRock is a global investment company.
Fundsupermart is an online unit trust distribution arm of iFAST Financial Pte Ltd.
Bigfatpurse is a blog by Alvin giving ideas of finance topics.
Morningstar is a fund-tracking company. They also offer screening capabilities and tools for stocks.
Zacks Investment Research is a financial research website gathers data on analysts' recommendations on a stock, their earnings estimates for that stock, and calculates a consensus of those earnings estimates. The site also show you how many analysts follow a stock; how many have buy, sell, or hold recommendations on that stock; and what the consensus recommendations is.
Yahoo! Finance is a website that will help you assessing the recent and historic performance of a particular stock's price movements. Through this site, you cannot only look up a stock's basic performance but you can also study its fundamentals. The chart will link you to a company's financial statements, its government filings, analyst research, and key news that might affect the company's shares.
To learn more about the basics of bonds visit the website of Bond Market Association.
Always wanted to make your money work harder? Visit BTINVET.COM.SG to learn how to grow your wealth through stocks, bonds and property investments. Brought to you by The Business Times, the one-stop portal allow you to attain financial success.
A Singaporean website teaching you how to invest stock in Singapore market at http://www.singapore-stock-analysis.com/index.html
SGX one-stop portal to educate stock investors
Avendus Capital is a local investment bank in India.
Mape Group is also another local investment bank in India.
Scorpio Partnership is a company providing wealth management.br>
BlackRock is a global investment company.
Fundsupermart is an online unit trust distribution arm of iFAST Financial Pte Ltd.
Bigfatpurse is a blog by Alvin giving ideas of finance topics.
Morningstar is a fund-tracking company. They also offer screening capabilities and tools for stocks.
Zacks Investment Research is a financial research website gathers data on analysts' recommendations on a stock, their earnings estimates for that stock, and calculates a consensus of those earnings estimates. The site also show you how many analysts follow a stock; how many have buy, sell, or hold recommendations on that stock; and what the consensus recommendations is.
Yahoo! Finance is a website that will help you assessing the recent and historic performance of a particular stock's price movements. Through this site, you cannot only look up a stock's basic performance but you can also study its fundamentals. The chart will link you to a company's financial statements, its government filings, analyst research, and key news that might affect the company's shares.
Monday, March 5, 2012
How to measure the risk of a particular stock
Beta
One classic measure of risk is known as beta. Beta gauges an investment's volatilty relative to the overall market. A stock with a beta of 1 is said to be as volatile as the overall mariket. A stock with a beta less than 1 is said to be less volatile than the market. But a stock with a beta exceeding 1 will be more erratic. For example, if a stock has a beta of 1.7, it would be considered 70% more volatile than the S&P 500. In the short term, the higher your beta, the greater the likelihood of losing money. But over very long periods of time, high-beta stocks could end up doing much better than the overall market.
One classic measure of risk is known as beta. Beta gauges an investment's volatilty relative to the overall market. A stock with a beta of 1 is said to be as volatile as the overall mariket. A stock with a beta less than 1 is said to be less volatile than the market. But a stock with a beta exceeding 1 will be more erratic. For example, if a stock has a beta of 1.7, it would be considered 70% more volatile than the S&P 500. In the short term, the higher your beta, the greater the likelihood of losing money. But over very long periods of time, high-beta stocks could end up doing much better than the overall market.
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