Business Times Interviews - Starting Young

Thread Rating:
  • 0 Vote(s) - 0 Average
  • 1
  • 2
  • 3
  • 4
  • 5
#11
(30-05-2011, 07:42 AM)Musicwhiz Wrote: They helped me start my account and taught me to do technical analysis.

I hope that isn't the only thing they've been teaching the poor girl. But it's certainly the stand-out thing she's learnt from them right? Otherwise, why quote that in the interview?

' Wrote:Unlike the other investment club members, I do not like to use leverage,

This reminds me of my own experience as an undergrad in '07 where I saw many of my fellow cohort mates dabbling with warrants and ended up losing sums in the range of 4 to 5 figures. And this was even prior to the long down trend that started at the end of '07.

As they say, in a Bull market, everyone's a genius. When the tide goes out, we'll know who's been swimming naked.

Quote:A: I think it's best to set up your own business. When investing in equities, you need a large capital outlay to be able to get the returns that you want. With business, if it continues running, you can always get capital returns. It helps value-add your assets.

What's she been smoking?
Reply
#12
hmm equities large capital outlay. business small capital outlay?
Dividend Investing and More @ InvestmentMoats.com
Reply
#13
(30-05-2011, 12:52 PM)Drizzt Wrote: hmm equities large capital outlay. business small capital outlay?

In a way, she is right in the sense that for equity investment to become effective in generating sizable income, a large capital is required (assuming annual $50k income at 5% dividend yield will require $1million capital outlay)

Some businesses can have a high profit margin such that a $100k initial investment can give $50k annual income.
But, the risks are not normally comparable. Most small businesses fail during the 1st year of operation.

For more stable businesses like running a petrol kiosk, the capital outlay is pretty high and the return will not be astronomical.
Reply
#14
Business Times - 06 Jun 2011

STARTING YOUNG
Take calculated risks & read a lot


Raghav Gupta tells TAM YU LING that he thinks the construction and power supplies industries in Japan have great potential

AT 18 years old, Raghav Gupta is probably one of the youngest investors to be featured in this series. However, the first-year business undergraduate at the Singapore Management University (SMU) is confident that his love for money is here to stay, having subscribed to his own brand of Calvinism by making his first trade when he was 15.

However, it is not all work and no play for this member of the SMU EyE Investment Club. A self-professed gadget lover, he rewards himself by using some of the profits generated from successful investments to buy his favourite gadgets from Apple Inc.

Q: How did you get started investing?

A: I was introduced to the world of investing when I was ten years old and living in India. My grandparents had retired at that time and were mostly at home. They monitored the stock market closely through CNBC and this influenced me to do the same. When I was 12, I got so interested in the stock market that I started making notional trades - where I imagine that I had bought a certain stock at a certain price, and started monitoring its share price. It was only at the age of 15 that I made my first investment using my grandfather's account (the age requirement for opening a trading account is 18 in India)

Q: Do you use any credit cards?

A: As I am 18 this year, I am now eligible to sign up for a credit card. However, I do not use one as my living expenses are not that high. I rely mostly on cash and debit cards for my day-to-day cash transactions.

Q: What was your best investment?

A: My best investment was also my first. It was in Satyam Computer Services. When the accounting scandal involving billions of rupees in fictious assets was discovered, its stock price plummeted overnight. I felt that the stock price was undervalued and the main reason for this is due to a loss in investor confidence. After I bought 15,000 rupees (S$411.50) worth of shares at 34 rupees, it appreciated to 120 rupees. I then sold some of my shares and used the profits as capital for my future investments.

Q: What was your worst investment?

A: My worst investment was in Moser Baer, an optical storage media manufacturing company with manufacturing plants based in India. I bought it at 80 rupees and it rose to a high of 110 but has since fallen to 40. However, as I believe that this company has the potential to grow, I am still holding on to it.

Q: What is your current portfolio like?

A: As I am currently based in Singapore, I have decided to park most of my funds into blue chip companies in India. This will allow me more time to concentrate on my studies as I do not have to monitor stock prices on a day to day basis. Right now, my money is in Reliance Industries, Reliance Power, Satyam Computer Services and Moser Baer. My investment ratio is 60 per cent for the first two and 40 per cent for the last two.

Q: Would you describe yourself as a fundamentalist or a technician?

A: I do think like a fundamentalist but as I will only be investing during the summer vacation, I will be going towards technical analysis for such short term investments. Hence, I would like to think of myself as a mixture of the two investing styles. (laughs)

Q: How would you describe your risk appetite?

A: Back home in India, I have the financial backing of my parents, so I do feel that I can take more risks now as I will not be impacted in a big way even if I make some poor investments. However, I believe that as I grow older and have more financial responsibilities, I will become more risk-averse.

Q: If you had only $2,000, what would you invest in?

A: I would like to invest in construction and power supplies industries in Japan. As Japan is now currently in the recovery process after the Tohuku earthquake and tsunami, I predict that stock prices in the two industries will rise greatly. I guess this is where the fundamentalist side of me kicks in as I will link the infrastructural growth in Japan to share prices.

Q: What advice would you give to a young investor?

A: My advice would be based on three points. First, start young. Warren Buffett, who also happens to be someone I look up to, started investing when he was only 14. Likewise, I started investing when I was pretty young. When you invest when you are young, time is on your side and there will be more opportunities to learn.

Second, read extensively. Read from books, magazines, newspapers and financial journals to gain knowledge on what is going on in the world. The knowledge gained can then be applied to make wise investment decisions.

Third, do not be afraid to take calculated risks. When you are young, you can afford to take more risks as you have less financial responsibilities. Even if you make bad investments, I do think that one would rather learn from one's mistakes now then to learn from it later.
My Value Investing Blog: http://sgmusicwhiz.blogspot.com/
Reply
#15
Quote:A: I would like to invest in construction and power supplies industries in Japan. As Japan is now currently in the recovery process after the Tohuku earthquake and tsunami, I predict that stock prices in the two industries will rise greatly. I guess this is where the fundamentalist side of me kicks in as I will link the infrastructural growth in Japan to share prices.

I have been burnt too many times to learn that it is far more important to understand the strength of the company than the "booming" sector. In my view, this is not fundamental investing. The event may give u a clue, the win will depend on the detail study on the company, the micro-markets that apply and the management attitude towards shareholders.
Reply
#16
(06-06-2011, 09:42 PM)mrEngineer Wrote: I have been burnt too many times to learn that it is far more important to understand the strength of the company than the "booming" sector. In my view, this is not fundamental investing. The event may give u a clue, the win will depend on the detail study on the company, the micro-markets that apply and the management attitude towards shareholders.

Well to be fair to him, he might be practising what is known as "Industry Cycle Investing". If he can identify beaten-down sectors which will benefit from a particular event or trend, then he should be able to make decent money from it.

But I do think he's too young to experience a full cycle, and thus what he says is therefore all theory.
My Value Investing Blog: http://sgmusicwhiz.blogspot.com/
Reply
#17
I always remembered the same scenario applied back in yr 06, 07 where the media started to interview students in various local universities' investment clubs.
And what comes next is everyone's knowledge.

Oh well... its just another cycle I guess.

Reply
#18
(06-06-2011, 10:23 PM)arthur Wrote: I always remembered the same scenario applied back in yr 06, 07 where the media started to interview students in various local universities' investment clubs.
And what comes next is everyone's knowledge.

I am also rather wary of such "investment clubs". They are usually touted as being formed to encourage young people to start their investment journey early, and are therefore marketed as being "useful". But the techniques one learns may start one out wrongly on investing, as the gaudy appeal of speculation is usually more enticing than the boring yet steady principles of investment. I would assume investment clubs thrive more on trading than investing (can anyone confirm this?), and it is a trend I would not like to see.
My Value Investing Blog: http://sgmusicwhiz.blogspot.com/
Reply
#19
She did not mention which property she purchased or how much she paid for it (suspect she took up a loan). Considering her age, I guess it should be private property. Aren't prices a bit frothy now to be "investing" in property? Huh

Business Times - 13 Jun 2011

STARTING YOUNG
The virtues of thrift and saving


Pauljean Ang tells WONG SU-JIN how those 2 qualities instilled in her from young have shaped her portfolio

HAVING grown up in a cash-strapped household, Pauljean Ang had the virtues of thrift and saving instilled into her - qualities which shape her portfolio even today.

The third-year student pursuing a Bachelor of Accountancy (Finance) at Singapore Management University (SMU) scored within the top 10 per cent of her banking & financial services cohort in Ngee Ann Polytechnic, and has since built on her education to fortify her investments.

A member of the SMU E.y.E. Investment Club, her interests extend to travelling, cycling, and music.

Q: How did your upbringing affect the way you handle money?

A: When I was younger, my family was quite poor, but things improved when my father started his own engineering business. My parents have always emphasised the importance of saving up. I have since inculcated this habit - I save about 30-40 per cent of my monthly allowance, and usually won't spend more than my allowance.

Q: What first got you interested in investing?

A: While in polytechnic, my finance courses taught me how important it was to manage your money well. I also realised that instead of simply leaving my money in the bank to yield a low interest, I could actually make my money work for me by investing.

Q: When and how did you get started investing?

A: I started investing in 2008. I did not have a trading account then so what I did was to buy a few lots of whatever shares my father bought.

However, it was brainless trading then as I did not actually do any homework or make decisions on my portfolio. After thinking about it, I told myself that this should not be the way to invest. I then began to do my own research instead of relying solely on my father.

I now lean more toward technical analysis when deciding whether or not to purchase a particular stock and do rigorous research beforehand.

Q: How would you describe your risk appetite?

A: Low to moderate. Just as I don't spend beyond my allowance, I would not trade more than my capital when I invest in equities. The capital for my investments comes from my savings, I invest 80 per cent of my savings and keep 20 per cent cash for liquidity.

My parents were wary of me trading on the stock market at first, due to the inherent risks.

Both in deference to their wishes and to my own risk appetite, I trade only on a full cash basis, and never on leverage or margin. It's relatively less risky, and lowers my chances of getting my fingers burnt.

Q: What is your current and ideal portfolio?

A: I recently sold all my stocks and used the money to purchase a property, so my current portfolio is property and cash. Although expensive, I feel that property is a good long- term investment for my portfolio.

However, I am currently re-saving my capital so that I can get back into the market soon and diversify my portfolio.

My ideal portfolio would typically consist of 20 per cent bonds, 20 per cent properties, and 60 per cent shares.

Properties, aside from being a good hedge against inflation through capital appreciation, can also contribute passive income through rental - a good way to accumulate wealth in the long run.

Bonds would help to balance out the risks in my portfolio, and equities serve as a shorter term investment.

Q: What are your best and worst investments to date?

A: My best investment so far was UOB. The stock price dipped immediately after I bought the stock last year, with the downtrend lasting for a few months. Nevertheless, I chose to hold. Finally, earlier this year, the stock price rose 10 per cent within a month or so and I sold my shares.

The worst investment would have to be Genting. Although I did not make a loss, I missed the spectacular run-up in August last year before the announcement of their full-year results. Selling too early caused me to lose out on a five-digit profit.

Q: What are your long-term investment goals?

A: My long-term investment goal is financial freedom. I aim to retire by the age of 60, be debt free, and continue to maintain my portfolio and a passive income. Investments will allow me to do this, as CPF alone is usually inadequate.

Q: Any tips to share from your experience in investing?

A: One should research before entering the market. Paint a few possible scenarios of how you think the stock price might move and then prepare your trading strategy accordingly.

For example, if a stock were to shoot up above the target price that you have set, what will you do? Sell all your shares or hold or sell half and hold the other half or buy in more?

It is good to pre-empt yourself with all these scenarios so that you won't be in a panic when you are faced with the actual situation.

Most importantly, try not to let emotions come into play when trading as it will affect your objective judgement. It is often easier said than done. Nevertheless, I think discipline and planning might do the trick.
My Value Investing Blog: http://sgmusicwhiz.blogspot.com/
Reply
#20
(13-06-2011, 07:29 AM)Musicwhiz Wrote: She did not mention which property she purchased or how much she paid for it (suspect she took up a loan). Considering her age, I guess it should be private property. Aren't prices a bit frothy now to be "investing" in property? Huh

Reading about what happens in 1997 and actually experiencing it is two different matters.
Although I am too young(=> no money..haha) to be affected during the period, I do know some colleagues that were holding on to properties that were in negative equity as late as 2007 or now if interest paid is factored in.

Investing without looking at history will mean that history will repeat one day.
The phrase "This time will be different" is enticing but I think the phrase "Every time is the same" is more applicable..Tongue



Reply


Forum Jump:


Users browsing this thread: 2 Guest(s)