Market Outlook (May 31st - June 4th)

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How to Read a Financial Statement (Part 1)

Having discussed the basics of both fundamental and technical analysis strategies, I believe that the next step for the investors is to learn how to read financial statements of a company. By reading, I mean the investors should be able to understand not only the profit and loss of the company, but also other important info which are ‘hidden’ in the statement. By analyzing the statement, investors will be able to select and filter companies that have the most growth potential.
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Fundamental Analysis versus Technical Analysis (Part 3)

Finally, I’ve got some time to finish what I had started on this issue of Fundamental and Technical Analysis.

As I have discussed in previous entries, both FA and TA methods have their own pros and cons in the world of investing. Personally, I believe that every investor should invest some of their time and money to gain substantial knowledge about these two different strategies. A wise investor who wants success should be able to use both strategies, complimenting each other and increase the likelihood of profitable trades. Read More!

Fundamental Analysis versus Technical Analysis (Part 2)

Technical Analysis (TA) investors are often mistaken as speculators or gamblers. In my humble opinion, speculators in the stock market are gamblers in the true sense where they buy and sell shares for no apparent reasons.
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Fundamental Analysis versus Technical Analysis (Part 1)

Fundamental Analysis (FA), is the oldest and the largest school of investments analysis. Benjamin Graham aka “the Father of Fundamental Investing” and his famous disciple, Warren Buffet are the most respected gurus of FA. They introduced the concept of value investing as opposed to speculation, a method adopted by the Technical Analysis (TA) investors.
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Book Recommendation - Stock Performance Guide by Dynaquest

Okay, this is a book that I would recommend to anyone who wants to be an investor to have. This book is like your Holy Book in the world of stock market investing. I really appreciate those at Dynaquest for their effort in compiling and publishing these data twice a year.

This book contains the info regarding every counter that is trading in the FTSE Bursa Malaysia, back dated up until ten years ago. You and me can skip the hassle to find historical data and analysis of any stock counter just by referring to this book. You can see for yourself, the vast information contained in this book by looking at the sample page here.

Besides, I just got the latest March 2010 edition today. I will be using it from now on as a reference for the past performance of the stock and hopefully it will help me in finding the 'gem' stocks. I also would like to suggest fellow investors to get a copy of this book as well, so that we can know what we are investing in. You can order the book online by going here.

In the next post, I will start discussing on the technicalities of Fundamental Analysis (FA), one of the two schools of stock market analysis, and the reasons why it is better than the other school of Technical Analysis (TA).
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Bank Persatuan Malaysia Berhad – The Second Co-operative Bank in Malaysia

Koperasi Bank Persatuan Malaysia Berhad, also known as Bank Persatuan Malaysia Berhad, is a co-operative bank governed by Suruhanjaya Koperasi Malaysia under the Ministry of Domestic Trade, Co-operatives and Consumerism.

Bank Persatuan is now in the process to become the second co-operative bank in Malaysia after Bank Kerjasama Rakyat Berhad. As we all are aware, Bank Rakyat is very generous with its dividends to the members. Since the last 10 years, the dividend paid to the members are not less than 15%. But it is not open for membership anymore for the last five years.

Bank Persatuan on the other hand, paid an average of 10% dividend since the last 6 years to its members. I believe that it is a good return on investment compared to ASB (around 8%) and Fixed Deposit (around 3-4%). The membership is open for public from as little as RM 500 up to RM 10,000. For co-operatives, the limit is RM 50,000.

Since this bank is a 100% Syariah compliance, I don’t see any reason for any of us not to invest with this bank. Banking business is a very good business to invest in, and the returns are unmatchable. So, what are we waiting for? Click here to download the application form and submit it to the nearest branch around you.
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-Capital- (Part 2)

I think my previous post is not explaining enough about capital. So, i decided to elaborate more about it in this post.

In investment world, there are actually 2 types of capital, one which we use our OWN money and the other one which we use OTHER PEOPLE'S money. Other people's money may include banker's money(loan) and also public's money(listed companies). It is the ultimate intention of any investor to be able to invest using other people's money and to reap profits without using their own money.

In fact, we can see in a lot of situations where it is possible to use other people's money for investments, especially in real estate investments where the investor only needs to put around 10% of his own money, and the bank will cover the rest. When the real estate is being rented, the owner(investor) will use other people's money(rental payment by tenants) to settle the loan repayment. Most of the investor also enjoy positive cash flow from it too, when the rental payment is higher than the monthly payment of the loan.

However, it is not advised for an investor in the stock market to follow this strategy, simply because it is a different ball game from real estate. The volatility and uncertainty of the market movement is simply too risky for any investor to use borrowed money in the stock market.

Stock market can move in either direction just within a short period of time. So, investors who 'gamble' in the stock market using other people's money will have a difficult time if their investment is not as profitable so as to settle the debt. During the last economic downturn, we see a lot of people got stuck in heavy debts because they use borrowed money to invest in the stock market. We even heard people committing suicides because of this.

Remember, it is the cardinal rule of stock investment not to invest using borrowed money. It will only bring more harm than benefit.
Do not ever borrow money to invest. It's safer to use our own money, even if it takes a lot of time to accumulate our capital. I assure you, it's well worth it! Read More!

-Capital- (Part 1)

So, before starting any investment; be it stock market, real estate, unit trust and even business, an investor must first raise or set aside his capital for investment purposes.

I've heard countless times people said that,"Oh, he's from a rich family, no wonder got so many money to invest" or "My monthly allowance/salary is not enough to cover my expenses, how can I raise so much money for investments?". Rest assured, there is actually a simple solution for this.


Yes, the good old save.

But how?
Yeah, I can imagine how people react to the word save but most of us, including me, have a hard time implementing it. It's true that we are reluctant to part with our hard earned money, but bear in mind if we don't act now there will be no future where we are rich inside it.

I would suggest that every month when we receive our pay, firstly we should take away a portion of it (let's say 30%-40%) and set it aside as a capital for our investment. It may be hard at first, but after a few times it will be a habit. Once you have enough capital, you can start your own investment.

Money will take us only so far. But with strong urge of desire, passion and hunger for more, then only we can bring about to ourselves a better future, hopefully financially free!
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