My stock gains/losses from Oct 09 to 31 Dec 09

No changes for my position this week. Unrealised capital gain has increased from $2125 to $3625 as compared to last week.

Cambridge Technical Analysis (30 Dec 09)

See it for yourself and make your own judgement. Cambridge may be reaching $0.60 as the first target and $0.70 for the second target. If that happen I will be selling half my holdings at $0.60 and another half at $0.70. Looking at the MACD, RSI and Stochastic, it may be a good time(though not the best time) to buy in my opinion. Please note that I am using TA to position myself for long term investing and not to predict the direction of the market.

SingPost Technical Analysis (29 Dec 09)

See it for yourself and make your own judgement. Singpost may be reaching $1.07. If it happens to speculate to $1.15, I will be selling. Looking at the MACD, RSI and Stochastic, it may not be a good time to buy in my opinion. Please note that I am using TA to position myself for long term investing and not to predict the direction of the market.

DBS Technical Analysis (28 Dec 09)

See it for yourself and make your own judgement. DBS chart is facing double resistance. Looking at the MACD, RSI and Stochastic, it may be the worse time to buy and best time to sell in my opinion. Please note that I am using TA to position myself for long term investing and not to predict the direction of the market. My target buy price is still $12.50. If the price never reaches $12.50, then I will not buy at all.

SuntecReit Technical Analysis (28 Dec 09)

See it for yourself and make your own judgement. SuntecReit chart is facing triple resistance. Looking at the MACD, RSI and Stochastic, it may be the worse time to buy and best time to sell in my opinion. Please note that I am using TA to position myself for long term investing and not to predict the direction of the market. My target buy price of $1 is unchanged since last week. If the price never reaches $1, then I will not buy at all.

Singtel Technical Analysis (25 Dec 09)

Just take my analysis as a pinch of salt. During the Jul 09 period, there is speculation or fake break out which bring Singtel price to $3.5x and after that, the price has been push down all the way to $2.8x on Nov 09. MACD, RSI and Stochastic also show a good buying opportunity. That is the point where I accumulate Singtel shares for long term. I am not afraid of losing any money, as I am targetting at dividends.

Based on my analysis, my target sell price for Singtel is $4. I am seeing a strong resistance at $3.5x. If it never reaches $4, I will just hold it to collect dividends for the next few years. Please note that I am using TA to position myself for long term investing and not to predict the direction of the market.

My stock gains/losses from Oct 09 to 24 Dec 09

No changes for my position this week. Unrealised capital gain has increased from $1100 to $2125 as compared to last week.

China XLX speculation play?

This is the price movement over a month.
Lowest Price on 24 Nov 09: $0.395
Highest Price on 8 Dec 09: $0.905
Lowest Price on 22 Dec 09: $0.605

Is this an example for short term speculation play? For those who had bought at $0.905 and hold it till now must be very nervous now, seeing his stocks falling more than 30%. So at what price will it stop falling? Nobody will know.

As mentioned in my post "Investor, Traders and Speculators Charts", identify which types of chart a stock is currently in can save you a lot money.

SunTec REIT Technical Analysis (22 Dec 09)

I have set myself $1.00 as a target price to buy Suntec Reit. Based on the past year dividend and a target price of $1.00, the yield is about 10%. Please note that I use TA to set my target price for long term investment, and not to predict the direction of the market. If the target price is not met, then I will not buy it at all.

How to invest using your CPF saving?

CPFIS stands for CPF Investment Scheme. It allows CPF members to invest their CPF savings so as to enhance their retirement saving. Currently 2.5% interest is given for the Ordinary Account (OA) and 4% interest for the Special Account. And there is an extra 1% interest to be paid on the first $60,000 of a member’s combined balances, with up to $20,000 from the Ordinary Account (OA).

For those who are willing to take risks in order to achieve higher return might want to consider CPFIS. CPFIS allows CPF members to invest in various instruments such as unit trusts, ILPs, fixed deposits, bonds shares and ETFs. These instruments must be stated under the CPF approved list.

In order to invest using CPFIS, you have to:

1) Open a CPF Investment Account. You can open this account with DBS, UOB or OCBC bank.

2) Check how much you can invest by logging into the CPF website. Please note that different limits are set on different investment products.

3) Link your CPF Investment Account with the necessary investment company. For example, if you are buying shares or ETFs, you have to inform your broker to link your CPF Investment Account with your trading account.

To find what more on CPFIS investment, you can try to Google "CPFIS investment" using my Google search box located at the top left corner of my blog.

SPH Technical Analysis (20 Dec 09)

I have set myself $3.20 as a target price to buy SPH. Based on the last whole year dividend of 25 cents and a target price of $3.20, the yield is about 7.8%. Please note that I use TA to set my target price for long term investment, and not to predict the direction of the market. If the target price is not met, then I will not buy it at all.

Click here if you are interested to know more about when I will buy stock.

Singtel Technical Analysis (19 Dec 09)

Just do it for fun. I will not say whether it will go up or go down, so see it for yourself and make your best judgement.

My stock gains/losses from Oct 09 to 18 Dec 09

I will be receiving dividends of $310 in cash and $310 in CPF on 14 Jan 2010. Other than that there is no changes in my portfolio this week.

Will be receiving a dividend of $620 from Singtel on 14 Jan 2010

Currently I am holding 5 lots of Singtel in cash and other 5 lots of Singtel in CPF. Hence I will be receiving a total dividend of $620 from Singtel on 14 Jan 2010.

How to invest regularly if you do not have a lot of saving?

A lot of people may say that investment will need a lot of capital and it is almost impossible for them to invest regularly. This is quite true, just imagine you want to invest in Singpost regularly, you will need to save about $1000 just to buy one lot. For some people, it may take 3 to 6 months to save $1000, so it is impossible for them to invest in Singpost once per month.

However, there are plans from some investment companies which allow investor to fix the amount of money they want to invest per month. One of plans that I have found is the Phillip Share Builders Plan (SBP). For those who has a POEMS account might already know about this plan. But for those who don't know, I will just give a short description.

From what I have read from the Philip website, the minimum amount that an investor needs to put in is $100 per month per counter. Investor can select which counter to invest in from the list of counter stated by the company. For dividend, it can be reinvested or you can choose to receive the dividend. You may want to find out more detail by checking out the plan at the PhilipCaptial website.

Another plan that I found is Regular Savings Plan (RSP) from fundsupermart. However please note that this plan invest in funds(or unit trust) instead of individual share or stock.

You may want to google "Monthly Investment Plan" to find out other plans that are not stated in my posts.

Closed my CFD account today

Today I am on leave, so I make a trip to one of the Philip branches to have my CFD account closed. The reason why I close the account is because I don't see myself as a trader any more. So I do not need an instrument to do shorting, contraring and leveraging.

If you are not familiar with what is CFD, you may google "CFD account" to find out more.

I also go to the POSB bank to activate the link for CPF Investment account in my ATM card. I have transferred that unused amount (about 10k) from CPF Investment account back to my CPF. Why do I need to do that? I have recently read a blog post @ http://sti-stocksinfo.blogspot.com/2009/08/calculating-cpf-interests.html

Based on the blog explanation, CPF interest is calculated monthly and not yearly. So if I transfer back the money back to the CPF account, I will get more interest next month as compared to leaving it in the CPF investment account.

If you are interested to find out more about CPF investment, you may google "CPFIS" or "CPF Investment Account".

Singtel Technical Analysis (13 Dec 09)

Please note that I am only doing technical analysis for fun and I will never use it to predict the direction of the market. If you are reading this, just take it as a pinch of salt.

As in my previous post titled "Investor, Traders and Speculators Charts", I mentioned that there are three type of charts. Guess which chart Singtel is currently forming? I have put in three blue ovals in the three indicators. See it for yourself whether is it a good or bad point to invest.

My stock gains/losses from Oct 09 to 11 Dec 09

I have updated my gains and losses in my investment from Oct 09 to 11 Dec 09. I have added 5 lots of Singpost in 11 Dec 09 in my investment portfolio as my investment capital has increase which allows me to add in new position. As in my previous post, I will continue to hold my current holdings until some of the stocks reaches my expected values. I will put in new positions when I see new opportunites.

Bought 5 lots of SingPost on 11 Dec 09

I have bought another 5 lots of SingPost at $0.98 on 11 Dec 09.

Rule no. 3: It's far better for other to buy an overvalued stock from you, rather than you buy an overvalued stock from other.

My Rule no. 3 states that "It's far better for other to buy an overvalued stock from you, rather than you buy an overvalued stock from other." As mentioned in my post titled "Investor, Traders and Speculators Charts", stock can be undervalued and overvalued as there are traders and speculators in the market.

I value the stock simply by calculating its yield. See my post "Buying Stocks based on price and value" If the yield is no longer attractive as the price of the stock goes up, I will sell a portion of it first. If the price goes up again, I will sell the next portion. It will make my investment less risky as I know that I will be holding less and less overvalued stocks and I have free some money to target to buy other undervalued stocks.

Please note that I am adopting averaging down strategy when buying stocks. This will keep the average buying price as low as possible. As for selling of stock, I am adopting averaging up strategy. This is kept my average selling price as high as possible.

My Quotes/Rules of Investment

Who can be trusted in the market?

There are so many players in the market and who are the one you can trust?

Recently one of my friends told me that his broker recommended him a stock. He bought it, and since then the price of that stock keeps dropping. I don't understand why he chose to believe in his broker where his broker don't even share out his portfolio at all. This incident make me has the urge to write this post.

In my opinion, there are two people that you can trust in the market. The first one is you of course. If you cannot trust your own judgement in buying stock, why buy it in the first place?

The second one is someone who shares with other what are the stocks he buy or sell, show people how his strategy can work by using himself as an example, but will not make any recommendations.

Give you an analogy. If you want to learn how to play a piano, will you find someone who can talk about the history of piano all day, or someone that can demonstrate his skills by playing the piano in front of you? Of course for myself I will choose the second one as he has the skills who can show me the right way to play the piano.

Every morning, some tv channels always have analysts to talk about the market. They can talk very well and normally with some recommendation on what share to buy. Do these analysts ever show you their portfolio, tell you exactly what strategy they are using, any prove of their winning track record? The answer is almost all "NO". Basically these analysts are just paid to write and talk, just like someone who just talk about the history of piano and you don't know whether he can actually play the piano or not.

Dealing with Market Randomness

Before you read this post, you must convince yourself that direction of the market can never be predicted. You may see my other post titled "Rule no. 1: Never predict the market." and see whether you are convinced.

Methods on dealing with certainty and randomness are completely different. For things that are certain, you just need to go for the best approach to get maximize gain. For things that are random, you will need to manage your risk in order to maximize your gain.

So how to deal with the market since it is random? The keys are:

1) Fixed your own winning strategy and follow it all the way. Don't use it randomly or stop it half way. You can find my strategy in my post "My strategy in investing stocks. "

Have you ever hear of stories from people who had bought the same 4D number for many years. For many years, they have not strike the number, but when the moment they stop buying the number, the number suddenly appeared as the first three prizes in the next few days or weeks. I am not encouraging people to buy 4D as it is a losing game in long run, but I just use it as an illustration. Fixing your own winning strategy and following it all the ways is perhaps a better method as compared to those who never follow it consistently.

Following your strategy all the times is one of the hardest thing to do in the stock market as you are facing real time prices jumping up and down every second. If your will is not strong, your emotion will prevent you from following your strategy. "Buy and don't look back" is one of the ways one can use to ensure strictness on your strategy.

2) Make “dropping of price” and time as your friends and not enemies.

As an investor, I will make “dropping of price” and time as my friends and not enemies.
Seeing a good stock falls in price after buying it at a fair value is not a surprise to me. It is because I have already convinced myself that market is random. See my post "Investor, Traders and Speculators Charts ".

For a trader, he may just cut loss immediately after seeing the price drop. But for me, it provides me a good opportunity to buy more. If the price goes up, I will not buy anymore, but rather wait for the stock price to be overvalued to sell.

Time is my friend as I will just wait as long as I like for the stock to go up. I will collect dividends while waiting. Remember, contra player make time as their enemies as they cannot hold their position for more than 3 days. They are most likely to lose money as compared to a investor who is doing averaging on a good stock.

Rule no. 1: Never predict the market direction.

As stated in my post "My Quotes/Rules of Investment", my first rule is never predict the market direction and my second rule is don't forget the first rule. I have been following these two rules since Oct 09. In my opinion, market direction can never be predicted. Why do I say so?

In mathematics, you might see this simple formula,
y = x + 1. So if you know what is x, you can easily know the value of y, the formula is very easy.

Let us see another formula,
y = x + z + 1. Again you must know what is x and z, then you can calculate the value of y. The formula is a bit complicated but still managable.

How about this formula,
y = a + b + c + d + e + 1. There are total of 5 variables and you need to find out all the variables before you can calculate the value of y.

Why economics news make a trader hard to predict the market? Let say there are 5 economics news which can affect the market, you must know whether all the 5 news are positive or negative. To find whether y (the market direction) is postive or negative, you will need to sum up a, b, c, d, and e economics news first. But before you are able to calculate based on your formula, the market direction has already affect in the news. So if you try to predict the markets, you are often too late.

Why Technical Analysis cannot be used to predict the market direction?
I agreed that TA can be used to calculate risk/rewards ratio, but never the direction of the market. If someone were to predict the random market direction accurately, his or her brain will be more complex than the random market direction.

For example let's says the daily share price of a stock is as follow, 1, 2, 2, 3, 3, 4, 5, 5, 4, 3, 5, 6, 7, 8, 9, 8, so what is the next price after 8? You can say is 7, 8, 9 or other number by using TA. That is simply guessing. If you do not know what is the next number in my mind, how do you know what is the next number. The only way you can guess correctly is to read my mind. That will mean that you have powerful six sense or you are a super human being who can control my mind. Even you can read my mind accurately, can you read millions of people mind who trade in the market?

So next time if there is a stock guru tells you that he can predict the market direction, give him a series of ten numbers and ask him to guess whether the next number is higher or lower than the tenth number.

My Quotes/Rules of Investment

My stock gains/losses from Oct 09 to 3 Dec 09

I have tabulated my gains and losses in my investment from Oct 09 to 3 Dec 09. As in my previous post, I will continue to hold my current holdings until some of the stocks reaches my expected values. I will put in new positions when I see new opportunites.

The Goose That Laid the Golden Eggs

One of my favourite childhood stories is "The Goose That Laid the Golden Eggs". I believe most of you have heard of the story. For those who have forgotten the stories, I have written a summarize version of it below.

The story goes like this: A farmer had found a goose that will lay a golden egg every day. Even though his life is getting better as he no longer needed to do any farming, he found himself not getting rich enough. Due to his greed, he decided to kill the goose thinking that he can get all the eggs inside the goose. Unfortunately, he was not able to find any egg inside the goose. For that day onwards, the farmer grew poorer and poorer as he can no longer find another goose that will lay golden eggs for him every day.

In the stock market, there are many such farmers or investors around who do not know how to value their stocks. Some of the stocks are actually providing a lot of yields or golden eggs every year, but because of a sudden increase or decrease of stock price, they decided to sell the stock away for a short term gain or cut loss. After selling their stock, they realised that the price and the yield of the stock went up even higher. They had decided not to buy back the stock as the price has increased a lot.

My purpose for this post is to suggest that it is good to hold those good fundamental stocks with good yields which are bought at low prices. It doesn't matter that the price movement of the stocks may be slow. What is more important is that these stocks are providing good yield consistently. So don’t try to sell them for a short term gain or cut loss as most of the times the price of the stocks will go up after selling it. You will find yourselves very hard to buy it back at high price even thought it is still a "Goose that laid the Golden Eggs".

Why I am not afraid of losing money in my investment?

Here are the reasons why I am not afraid of losing money in my investments.

Reason 1:
I am using my own extra money that I can lose.
In my post titled "Do you have a peace of mind after buying shares?", I have mentioned that I am using the money that I can lose, and losing this money will not affect my life at all. I did not borrow any money, or using any leverage instrument to increase the risk of investment.

Reason 2:
I am buying fundamental good stocks.
In my post titled "My Stock/ETF choices", I have mentioned that I only buy fundamental good local stocks that are very safe in my opinion. I only buy stock that I can understand and I will never speculate.

Reason 3:
I am buying under valued stocks which give good dividend.
In my post titled "Buying stocks based on price and value", I have mentioned that I am targeting stocks that produces good value or yield. With this in mind, I am not afraid to hold these stocks for long term as they are constantly giving me good dividends. In the same post, I have stated my formula to calculate the value of the stock.

Received dividends of $187.50 from SingPost (1 Dec 09)

I am happy to see that dividend of $187.50 from my 15 lots of SingPost has been transferred to my bank account today. I will not spend but save this amount of money for further reinvestment.