Blog of stock trade

Trading apart from the crowd is the only way to consistently profit in the stock market.  History has shown that the majority of people are wrong, the majority of the time.

Even so, it is human nature to follow the crowd.  That has helped us to survive when we were hunters and gatherers.  It was either eat or be eaten and if you are in a big group you aren’t going to get eaten.  There is something to the strength in numbers after all.  But in the world of the stock market following others only leads to disaster.

Finding good stock market picks should be done with research and logic.  You should develop rules in which to trade.  Yet so many people will decide what to buy based off of what the news says, or what the bloggers are saying.

This could lead to good returns during a bulls market but can also completely destroy your account when the markets are heading down.   Following the crowd and buying the “Hot” picks can sometimes lead to good results in the short term, but will not make you money in the long term. 

The only way to make consistent money in the market as a short term trader is to develop your own strategy.  By developing a system that you trade you can make a profit in the long term. 

Your system doesn’t have to be perfect all systems fail now and then.  The only thing it needs to be successful is it needs to work in the long term.  If after 100 trades you make $10,000 then you have a working system that can generate money for you in the long term.

By refusing to take the extra mile to develop a strategy that works you will be unable to make it in the stock market.  And you will probably fall back to trading with the crowd.

For more information about the stock market visit http://www.stocks-simplified.com

Source: Free Articles from ArticlesFactory.com

Let’s look at valuations. Asia’s valuations have reached 1.2x P/BV. That figure is all of Asia minus Japan as Japan is a weird animal on its own. Earlier this year the valuations went as high as 3x P/BV, thus Asia as a whole has corrected severely. The question is whether it can go down some more. Well yes of course it can go down some more, there is always 0.00 to that P/BV figure.

The biggest crises for the past 40 years in Asia had been in 1982 and 1998 and during those times the P/BV went as low as 0.9x. Will we get there? I don’t think so. I think we are pretty close to the bottom give or take 10%.

Its interesting to also look at what the Asian investment banks are weighting Asia as a whole with the “new clearance prices”. Most are putting just 4 countries in the Overweight category, in order of attractiveness and weightage: Korea, Taiwan, HK and Malaysia.

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No investment advisor likes to admit it, but no stock picking system is perfect. Sometimes, the stocks we think will explode, don’t. Sometimes, the stocks we feature lose money.

There may not be a foolproof system to predicting the stock market, but we do have a foolproof system for managing risk. ChartAdvisor follows one of the safest risk reduction systems available.

Using these three simple steps, you can reduce the risk in your stock picking plan:

Beyond the Random Walk: A Guide to Stock Market Anomalies and Low-Risk Investing (Financial Management Association Survey and Synthesis Series) by Vijay Singal Read more about this book…

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Success Transformer

SUCCESS Transformer surged for the second straight session amid fresh bargain hunting yesterday. The MACD indicator is still in buy mode. This, together with curving up pictogram of the stochastic from the neutral zone, suggest a potential rally. Current support and strong overhead resistance are anticipated at 91 sen and RM1.05 respectively.- 6-May-08

Daibochi
DAIBOCHI recovered sharply on persistent bargain hunting interest, rising from the recent bottom of 40 sen on Feb 20 to a nine-month high of 76.5 sen during intra-day session yesterday. The MACD indicator is decisively bullish. Hence, any correction in the immediate term owing to overbuying is viewed as an opportunity. Firm support is seen at 67 sen while resistance can be expected at the 80 sen mark, followed by 89 sen.- 6-May-08

Berjaya Corp
BERJAYA Corp shares turned range-bound on consolidation after recovering from the recent low of 92 sen on March 10. Although the stochastic is curving up from the neutral zone, the moving average convergence/divergence (MACD) indicator and the 14-day relative strength index were flat, indicating an extended sideways pattern in the immediate term, with initial support pegged at RM1.06. A positive breakout of the RM1.21 level will increase volatility to the upside.- 6-May-08

TheStar.

Are you aware that you can invest in warrants as an alternative to shares? What is a warrant? Is it risky?.

Essentially, when you invest in a warrant, you are making a “reservation” to buy a predetermined number of shares at a certain price in the future. A warrant is a derivative, which means that its value is derived from the underlying shares.

It provides a cheap way of investing in a listed company’s shares without having to pay the full amount. The downside is that it has a maturity period – usually up to 10 years – and is worthless if an investor holds it beyond the maturity date. It also does not give warrant holders any voting right, dividend and right to claim against the company’s assets.

When a warrant holder wants to “exercise” and the exercise price (inclusive of the cost of the warrant) is less than the market price of the underlying share, the warrant holder will make a profit.
However, if the exercise price is higher, the warrant holder will lose money. Examples of warrants are Khazanah’s basket warrrants, CIMB’s basket warrants, single stock warrants and OSK’s zero strike call warrants.

What does it’s mean?

A stock that tends to trade at a lower price relative to it’s fundamentals (i.e. dividends, earnings, sales, etc.) and thus considered undervalued by a value investor. Common characteristics of such stocks include a high dividend yield, low price-to-book ratio and/or low price-to-earnings ratio.

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