Apr 3, 2008

STOCK MARKET LOVE AFFAIR

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Just after my tertiary studies, having nothing much to do but desperate to find a job and it was just so scarce in Sabah.
I had even tried for a supervisory job with a stinky factory which processed animal feeds and was rejected. The job had, in fact required only SPM level of education, I would not have minded starting from the bottom.
It still puzzled me that the Sabah state government had won so handsomely in the just concluded election.
What I do find out is, about 70% of my classmates who made it to tertiary studies landed working in Peninsula, there is just no job for those who are better prepared.
The way I see it, there is only demand for unskilled or semi-skilled labourers in Sabah, what a pity, this had resulted in the influx of both legal and illegal migrants from neighbouring countries which now made up about 30% of Sabah population. Can Sabah get out of this pit? That would be another story for another day.
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In my day-dreaming days, my dad left me with his friend, a remisier with a security firm, there I was able to have a feel on investment tools. Quite a lot of these so called investors were just treating the security market like a casino. They just love rumours, buy on rumours and sell on facts, come to think of it, some of them did make quite a bundle but in the long run, got burnt.
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My simple introduction got me to treat the market with respect, investments are made where you can make a difference in your returns.
Choices are ample, some companies are genuine and capable, some are there to make a living out of greedy investors, a form of legalised con-job.
What I had learned were fairly simple. The stock I pick must have a decent PER(stock price divided by it earnings, Ratio), any stock that requires more than 10 years in its earnings to make up for its stock/market value is automatically off my list. It must have consistent, positive earnings for at least the past 3 years (to prevent creative accounting which is rampant, remember the Transmile case which is under the nose of Kuok group), the longer the better, a good management team with qualified professionals. The dividend payout must be better than what the bank can offer. This seems like a tall order but you be surprised that there a quite number of these companies around.
What makes the difference between an ordinary investor and an outstanding one, is the foresight. The ability to read and feel into the future, in fact quite allot us possessed it, kind of guts feeling the product is good, value for money and the world cannot do without it. Mould these together and you can hardly go wrong.

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