Me & My Money Series (Sunday Times)

I always know that HK's EX. is always more vibrant than Singapore's EX. The main thing holding me back to learn about HK's stocks is $HK is pegged to $US. i see this as a big disadvantage. What about capital gain tax? Anyone any idea how to overcome this currency peg problem?

(20-05-2012, 10:51 AM)KopiKat Wrote:

(20-05-2012, 09:34 AM)shanrui_91 Wrote:

(20-05-2012, 08:44 AM)Musicwhiz Wrote: Interesting, another guy who believes in investing in property, and his foray into equities lost him a lot of money (CAO saga). Wonder what proportion of our population believe more in property rather than equities? His car is also nearly ten years old - time to change to a new car and pay exorbitant COEs?

Around 12% of our population participates in equity. The figure is around 30% for Hong Kong and 50% for USA

It just goes to show that very likely, it's a lot easier to invest in Properties than Stocks. But, I believe the majority of us here will continue to allocate a much bigger proportion of our assets into stocks as it's a lot more fun and profitable, without the need to physically interact with agents, buyers, sellers, tenants, lawyers,.. It's also a lot more pleasant to interact with the Buddies here and you can switch off anytime you don't feel like doing that!

I wonder how many of the 12% are Investors, maybe less than 1% of our population? Outside of this forum, I don't know more than 1 handful of real stocks investors who're still around after 5 years!

IMO, one of the reasons people avoid equity investment is the skill required to success. It is the skill to decipher financial parameters and market terms. One of my peer who has no problem with Maxwell equations, but has issue to understand why some company success, and others fail.

IMO, it is nothing to do with IQ. It is more on having a biz-sense with the financial parameters. No one-number-fix-all kind of rules which you can follow. You need to see overall picture in order to have an insight of a company well-being.

In property, it seem much more simpler. "Location, Location, Location" is their slogan. All expenses are well templated. Broker has taken all the chores to complete the transcation. The story of the investment is much easier to draft and easier to follow.

My 2 cts.

(20-05-2012, 05:49 PM)CityFarmer Wrote: IMO, one of the reasons people avoid equity investment is the skill required to success. It is the skill to decipher financial parameters and market terms. One of my peer who has no problem with Maxwell equations, but has issue to understand why some company success, and others fail.

IMO, it is nothing to do with IQ. It is more on having a biz-sense with the financial parameters. No one-number-fix-all kind of rules which you can follow. You need to see overall picture in order to have an insight of a company well-being.

In property, it seem much more simpler. "Location, Location, Location" is their slogan. All expenses are well templated. Broker has taken all the chores to complete the transcation. The story of the investment is much easier to draft and easier to follow.

My 2 cts.

Hey! I went to check wikipedia on Maxwell equations and they looked very familiar. In my previous life, I used to enjoy those surface and volume integration maths as it's so challenging and stimulating to the brain - can even derive the equations during school days.. Haha...

BUT, I have since closely followed Warren Buffett's advice,

‘Read Ben Graham and Phil Fisher read annual reports, but don’t do equations with Greek letters in them.’

Now, I just need to know and apply simple Primary School Maths (+,-,*,/) and it'd been a lot more rewarding financially + other intangibles (eg. feel good when you are right).

True, in Stocks Investing, it helps a lot to be able to think like a biz owner and be able to understand what those figures in the financial statements means. Here, your working experience could also come in real useful - if you'd bothered to find out what's happening around you and what your other colleagues in the other departments are doing. At the very minimum (if you don't have a very large organisation), interact and you'll be amazed how much you can learn from the Accounts dept., aside from the usual useless gossips...

(20-05-2012, 06:19 PM)KopiKat Wrote:

(20-05-2012, 05:49 PM)CityFarmer Wrote: IMO, one of the reasons people avoid equity investment is the skill required to success. It is the skill to decipher financial parameters and market terms. One of my peer who has no problem with Maxwell equations, but has issue to understand why some company success, and others fail.

IMO, it is nothing to do with IQ. It is more on having a biz-sense with the financial parameters. No one-number-fix-all kind of rules which you can follow. You need to see overall picture in order to have an insight of a company well-being.

In property, it seem much more simpler. "Location, Location, Location" is their slogan. All expenses are well templated. Broker has taken all the chores to complete the transcation. The story of the investment is much easier to draft and easier to follow.

My 2 cts.

Hey! I went to check wikipedia on Maxwell equations and they looked very familiar. In my previous life, I used to enjoy those surface and volume integration maths as it's so challenging and stimulating to the brain - can even derive the equations during school days.. Haha...

BUT, I have since closely followed Warren Buffett's advice,

‘Read Ben Graham and Phil Fisher read annual reports, but don’t do equations with Greek letters in them.’

Now, I just need to know and apply simple Primary School Maths (+,-,*,/) and it'd been a lot more rewarding financially + other intangibles (eg. feel good when you are right).

True, in Stocks Investing, it helps a lot to be able to think like a biz owner and be able to understand what those figures in the financial statements means. Here, your working experience could also come in real useful - if you'd bothered to find out what's happening around you and what your other colleagues in the other departments are doing. At the very minimum (if you don't have a very large organisation), interact and you'll be amazed how much you can learn from the Accounts dept., aside from the usual useless gossips...

Maxwell equations represent the toughest formula to master for an engineer (or only for me? ). My apologies to those non-engineer, i should put up a short note with it.

To derive and understand those financial parameters is easy, but to get an insight base on those numbers need a skill.

For us, the endangered species may feel natural with those parameters, but it may not so natural for others.

I had once talked to an "experience" analyst. He expressed professionally with the jargons and numbers till i lost . Once we had gotten into more in-sight discussion, he seem quite ignorance. Maybe he focus too much on those parameters, instead of overall picture.

(20-05-2012, 07:24 PM)CityFarmer Wrote: I had once talked to an "experience" analyst. He expressed professionally with the jargons and numbers till i lost . Once we had gotten into more in-sight discussion, he seem quite ignorance. Maybe he focus too much on those parameters, instead of overall picture.

If my understanding of Benjamin Graham approach is correct (still have not gotten down to read again as I find his text very hard to absorb), it's all about looking coldly at the numbers in the financials ie. no need to know the biz. As long as the nos. shows a good enough 'Margin of Safety' to the 'Intrinsic Value', then Buy the stock.

If my understanding of why Warren Buffett started buying Berkshire Hathaway (when it was in the Garment biz) shares is correct, he'd used this Grahamian approach ie. Good 'Margin of Safety' over 'Intrinsic Value'.

It was the Philip Fisher influence that says we ought to know all we can about the biz + Charlie Munger influence that says there's nothing wrong to pay more for a Great biz. BUT, easy to say, hard to practise for most of us (me included)! Hee..

PS. Perhaps the ability to visualise H & B bouncing around in a cable + D & E relationship (I don't even know what I'm talking abt now) does help one to have a better ability to visualise a biz better using the numbers in the financial statements when it's ported over to Stocks?? After all, both uses visualisation techniques!

(20-05-2012, 10:15 PM)KopiKat Wrote: If my understanding of Benjamin Graham approach is correct (still have not gotten down to read again as I find his text very hard to absorb), it's all about looking coldly at the numbers in the financials ie. no need to know the biz. As long as the nos. shows a good enough 'Margin of Safety' to the 'Intrinsic Value', then Buy the stock.

If my understanding of why Warren Buffett started buying Berkshire Hathaway (when it was in the Garment biz) shares is correct, he'd used this Grahamian approach ie. Good 'Margin of Safety' over 'Intrinsic Value'.

It was the Philip Fisher influence that says we ought to know all we can about the biz + Charlie Munger influence that says there's nothing wrong to pay more for a Great biz. BUT, easy to say, hard to practise for most of us (me included)! Hee..

The lessons i learned from various "guru" are

From Warrent Buffet/Ben Graham, the lessons are concepts of 'Margin of Safety' and 'Intrinsic Value', the right attitute for equity investment and important of emotional control. An introductory to well-prepare me before venture into equity investment

From Philips Fisher, the lessons are "scuttlebutt" and 15 rules. It had gaven me a tool to do an effective analysis, and making sure all corners been coverred. An intermediate course to equip me to make an effective analysis before i determine 'Intrinsic Value' with a suitable 'Margin of Safety'.

From Peter Lynch, it is the lessons to prepare me for the practical session. Various approach for various categories of stocks.

IMO, the "Guru" theoris are consistent, but with different emphasis.

Now I am in the practical session, facing the real world and hopefully gain the experience, and of course the $

(20-05-2012, 10:15 PM)KopiKat Wrote:

(20-05-2012, 07:24 PM)CityFarmer Wrote: I had once talked to an "experience" analyst. He expressed professionally with the jargons and numbers till i lost . Once we had gotten into more in-sight discussion, he seem quite ignorance. Maybe he focus too much on those parameters, instead of overall picture.

If my understanding of Benjamin Graham approach is correct (still have not gotten down to read again as I find his text very hard to absorb), it's all about looking coldly at the numbers in the financials ie. no need to know the biz. As long as the nos. shows a good enough 'Margin of Safety' to the 'Intrinsic Value', then Buy the stock.

If my understanding of why Warren Buffett started buying Berkshire Hathaway (when it was in the Garment biz) shares is correct, he'd used this Grahamian approach ie. Good 'Margin of Safety' over 'Intrinsic Value'.

It was the Philip Fisher influence that says we ought to know all we can about the biz + Charlie Munger influence that says there's nothing wrong to pay more for a Great biz. BUT, easy to say, hard to practise for most of us (me included)! Hee..

(21-05-2012, 11:44 AM)CityFarmer Wrote: The lessons i learned from various "guru" are

From Warrent Buffet/Ben Graham, the lessons are concepts of 'Margin of Safety' and 'Intrinsic Value', the right attitute for equity investment and important of emotional control. An introductory to well-prepare me before venture into equity investment

From Philips Fisher, the lessons are "scuttlebutt" and 15 rules. It had gaven me a tool to do an effective analysis, and making sure all corners been coverred. An intermediate course to equip me to make an effective analysis before i determine 'Intrinsic Value' with a suitable 'Margin of Safety'.

From Peter Lynch, it is the lessons to prepare me for the practical session. Various approach for various categories of stocks.

IMO, the "Guru" theoris are consistent, but with different emphasis.

Now I am in the practical session, facing the real world and hopefully gain the experience, and of course the $

What I was trying to say is, the experienced analyst you spoke to may be following a pure Grahamian approach ie. looking only at hard numbers from the financials...
To the analysts, it's just a job where they get paid irrespective of the outcome of their research. People like us, who have to use our own hard-earned cash, are more likely than not, to combine multiple approaches to increase our odds of not losing money but make money.

(21-05-2012, 12:14 PM)KopiKat Wrote: What I was trying to say is, the experienced analyst you spoke to may be following a pure Grahamian approach ie. looking only at hard numbers from the financials...
To the analysts, it's just a job where they get paid irrespective of the outcome of their research. People like us, who have to use our own hard-earned cash, are more likely than not, to combine multiple approaches to increase our odds of not losing money but make money.

Oh.. I see. My apologies for not catching your meaning

(20-05-2012, 09:34 AM)shanrui_91 Wrote:

(20-05-2012, 08:44 AM)Musicwhiz Wrote: Interesting, another guy who believes in investing in property, and his foray into equities lost him a lot of money (CAO saga). Wonder what proportion of our population believe more in property rather than equities? His car is also nearly ten years old - time to change to a new car and pay exorbitant COEs?

Around 12% of our population participates in equity. The figure is around 30% for Hong Kong and 50% for USA

Thanks Shanrui. Now I know why rarely sgx stocks are valued over 20 PE ratio where you see Ben grah or Peter lynch books mentioning of stocks of over 50 PE.

It will be interesting if we have a long term plot of these percentages or the 200k quarterly buyers as I would like to know during the period 2003-2007 where did singaporeans place their money in.

(22-05-2012, 08:33 AM)mrEngineer Wrote: It will be interesting if we have a long term plot of these percentages or the 200k quarterly buyers as I would like to know during the period 2003-2007 where did singaporeans place their money in.

My guess is "Property". It is remain as a guess unless i can find a reference to back it up, but i am pretty confident on the "guess"