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07-05-2013, 10:22 PM
Note: Expert investors might want to give this a miss.
Yes,
strange, I tried to post twice at around 8pm plus but nothing came out. ? virus ? tech error
anyway, I shall try another time now:
With regards to the dividend vs speculative portfolio, as aluded to earlier, i think the more apt consideration would be defensive(ie capital preservation) vs offensive(ie capital gains) portfolio, with defense being the priority.
Allow me to elaborate from my own experience:
Criteria of consideration (which may not be in order of importance in all cases as each and no two companies are the same. These are the criteria which personally I think would provide me with a reasonable assessment of the downside risks of a company as well as its potential upside.
1) pb ratio - personally I go for companies trading at 60% plus minus
2) pe ratio - depending on industry, but sometimes there's a premium to pay in certain cases
3) div-above 5% would be preferred
4) ascending trend of market cap/NAV(beware of splits)
5) rising dividends over a period of time (remember cash is real)
6) look at debt ratio. no/low debt is preferred
7) cash per share
8) anything gems to unlock, for eg some old land bought donkey years ago not reflected in books.
9) look out for a rising eps qoq. a consistent rise qoq even mild one, might suggest price may trend upwards(take note, this is regardless of technical analysis-I do not advocate too much emphasis on TA). A rising eps would lower pe ratio, and that might catch the eye of analysts screening out on company pe. The trick is to go in before those analysts go in and report the company leading to interest generated and price upswings. Things will happen very fast from there. It would be hard to buy as much as possible at as cheap a price as possible.
Once you get pass the company selection step, decide whether you want to adopt a focused portfolio or a diversified one. For younger people who can take a bit more risk, I advocate the focused appoach. This approach using the above criteria has the potential to create credible gains and at the same time limit the downside risks.
Personally, I take 3-6months to be completely satisfy myself that I am buying into the right company, as I used the focused approach.
Remember: a good night's sleep is actually priceless!
Yes,
strange, I tried to post twice at around 8pm plus but nothing came out. ? virus ? tech error
anyway, I shall try another time now:
With regards to the dividend vs speculative portfolio, as aluded to earlier, i think the more apt consideration would be defensive(ie capital preservation) vs offensive(ie capital gains) portfolio, with defense being the priority.
Allow me to elaborate from my own experience:
Criteria of consideration (which may not be in order of importance in all cases as each and no two companies are the same. These are the criteria which personally I think would provide me with a reasonable assessment of the downside risks of a company as well as its potential upside.
1) pb ratio - personally I go for companies trading at 60% plus minus
2) pe ratio - depending on industry, but sometimes there's a premium to pay in certain cases
3) div-above 5% would be preferred
4) ascending trend of market cap/NAV(beware of splits)
5) rising dividends over a period of time (remember cash is real)
6) look at debt ratio. no/low debt is preferred
7) cash per share
8) anything gems to unlock, for eg some old land bought donkey years ago not reflected in books.
9) look out for a rising eps qoq. a consistent rise qoq even mild one, might suggest price may trend upwards(take note, this is regardless of technical analysis-I do not advocate too much emphasis on TA). A rising eps would lower pe ratio, and that might catch the eye of analysts screening out on company pe. The trick is to go in before those analysts go in and report the company leading to interest generated and price upswings. Things will happen very fast from there. It would be hard to buy as much as possible at as cheap a price as possible.
Once you get pass the company selection step, decide whether you want to adopt a focused portfolio or a diversified one. For younger people who can take a bit more risk, I advocate the focused appoach. This approach using the above criteria has the potential to create credible gains and at the same time limit the downside risks.
Personally, I take 3-6months to be completely satisfy myself that I am buying into the right company, as I used the focused approach.
Remember: a good night's sleep is actually priceless!