Make money 'without actual work'

[shanrui_91]

BTW, I did hear from my broker about the US Options market. Anyone (including you and me) can write options and that's another useful way to make money for those shares you're already holding. However, I didn't explore further as my funds are still rather limited and am currently more focussed on our local market. Perhaps soon (I say that to myself every year...)

I have read news about option market in SGX though I am not sure if there will be sufficient liquidity and if it will realise.

There's 2 more ways to make money in option which is to write the options. From what I have heard, you can incorporate value investing principles in it.

For e.g SPH current price is $4.59

You are very positive on SPH's prospect and business but you are only willing to enter at $3.60. So you sell a put option to another person where you allow him to exercise the option to sell to you SPH share at a strike price of $3.60. You will earn a premium for writing the option for $0.10 regardless of what happens

If SPH don't fall to $3.60, option will not be exercised and you get to keep your premium of $0.10 for free.

If SPH falls to $3.60, as a value investor you will now be happy to own the business at this price and enjoy the premium for writing the contract.

The only pitfall is if you have misread the business, Sh** happen and you have to own it at the agreed strike price.

[camelking]

BTW, I did hear from my broker about the US Options market. Anyone (including you and me) can write options and that's another useful way to make money for those shares you're already holding. However, I didn't explore further as my funds are still rather limited and am currently more focussed on our local market. Perhaps soon (I say that to myself every year...)

I have read news about option market in SGX though I am not sure if there will be sufficient liquidity and if it will realise.

There's 2 more ways to make money in option which is to write the options. From what I have heard, you can incorporate value investing principles in it.

For e.g SPH current price is $4.59

You are very positive on SPH's prospect and business but you are only willing to enter at $3.60. So you sell a put option to another person where you allow him to exercise the option to sell to you SPH share at a strike price of $3.60. You will earn a premium for writing the option for $0.10 regardless of what happens

If SPH don't fall to $3.60, option will not be exercised and you get to keep your premium of $0.10 for free.

If SPH falls to $3.60, as a value investor you will now be happy to own the business at this price and enjoy the premium for writing the contract.

The only pitfall is if you have misread the business, Sh** happen and you have to own it at the agreed strike price.

The premium gets higher in a falling market....and vice versa.

[Musicwhiz]

Frankly, i am not too sure that value investing is the NEXT BEST THING.
You see, the moment, u decided that value investing is the BEST way...you have somehow excluded all other ways of making money...
Note: I am not saying value investing is NOT the way. But value investing could be well, one of the ways to make money.

When u refer to index, i believe u are talking about Dow Jones and S&P as our STI is still way from the historical high.
Well, instead of looking at index, perhaps a better way is to look at the PE ratio. Looking at index alone does not care of inflation.

I think you make a fair point - I do exclude many other potential methods of making money, which include but are not limited to strategies such as forex, TA and real estate to name a few. However, I've felt that value investing confers the right temperament and philosophy one should have with respect to minimizing losses; and it is not just that I feel it should be the "Best" method.

To add on, one's investment style should also be suited to one's own temperament and character. I believe most people have what it takes to be a prudent investor, but first they have to know themselves and what they are capable of before they are able to fully embrace their choice of investing, be it Value or some other hybrid method.

No, I am talking about our STI, which is hitting a 5-year high. PER is not a very good measure because earnings can be manipulated or deferred to a certain extent. Looking at FCF yield or level and consistency of FCF and/or dividends may be a better method.

[Temperament]

Anything can be faked or adjusted to look good in the AR; if the company wants to or needs to. At least for a while or a year or 2. or even more.
(We just take a look at history.) If not how come we have had famous "Enron (2001), WorldCom (2002), Tyco international (2002), HealthSouth(2003) and the famous Bernie Madoff's Ponzi Scheme(2008). And the just 2008/2009 financial fiasco triggered by banks' sub-prime loan practice re-packaged as CDO derivatives sold to the entire world, from of course US.
Not to mention almost all of the S-CHIPs listed in SGX. too.
Nothing is fool-proof. God bless us all.
Shalom.

[camelking]

Frankly, i am not too sure that value investing is the NEXT BEST THING.
You see, the moment, u decided that value investing is the BEST way...you have somehow excluded all other ways of making money...
Note: I am not saying value investing is NOT the way. But value investing could be well, one of the ways to make money.

When u refer to index, i believe u are talking about Dow Jones and S&P as our STI is still way from the historical high.
Well, instead of looking at index, perhaps a better way is to look at the PE ratio. Looking at index alone does not care of inflation.

I think you make a fair point - I do exclude many other potential methods of making money, which include but are not limited to strategies such as forex, TA and real estate to name a few. However, I've felt that value investing confers the right temperament and philosophy one should have with respect to minimizing losses; and it is not just that I feel it should be the "Best" method.

To add on, one's investment style should also be suited to one's own temperament and character. I believe most people have what it takes to be a prudent investor, but first they have to know themselves and what they are capable of before they are able to fully embrace their choice of investing, be it Value or some other hybrid method.

No, I am talking about our STI, which is hitting a 5-year high. PER is not a very good measure because earnings can be manipulated or deferred to a certain extent. Looking at FCF yield or level and consistency of FCF and/or dividends may be a better method.

PER is perhaps open to manipulation. But i think you will be able to mitigate the risk if you are looking at combined PER of STI index stocks.
Agree that FCF is much more difficult to manipulate. However, FCF is affected by business cycle of the company. Companies in expansion mode will be using more cash as compared to those in consolidation mode.
In my view, FCF is useful if you are looking at substainability of dividend payment. Reits and Telecom companies?
STI index stocks are selected from a wide range of industries. So, combined FCF of index stocks may not be as useful as PER.

[Temperament]

i only know most PERS go out of "whack" during a market like now. So usually i am coming out slowly. Too many rubbish to sell ma!