Sunday, October 23, 2016

When will the Stock Market Crash?

Definition: A stock market crash is a sudden dramatic decline of stock prices across a significant cross-section of a stock market, resulting in a significant loss of paper wealth.Crashes are driven by panic as much as by underlying economic factors.

For some time now, a prominent trader and investor have been telling stories about a coming stock market crash. He has been telling everyone that he is getting prepared with tons of cash waiting by the sidelines for a stock market crash to happen and then profiting handsomely from the event.

I can say from my experience that predicting a stock market crash is the most futile exercise I have ever done.

Very few people will be able to forecast correctly this event. Many more will see it but do not believe or understand until too late!

I know because I have been caught in 3 major stock market crashes in the past (1987,1998 and 2008) and each market crash was caused by a different factor from the other. 

I expect the next one will also be affected by a different factor from the last one and the others. What factor is it going to be is your guess is as good as mine.

So forget about predicting when the next stock market crash will happen. If you keep all that cash and the crash happened in 10 years time, you would have lost 10 years opportunity in the stock market. 

From my own experience, you will be better off investing slow and steady with SPARE CASH on good listed companies that paid good dividends and companies with growth potential for capital appreciation. Treat investing like a business and not a get rich quick scheme or a casino.

Also a general rule is don't put a large percentage of your CASH the stock market. Your long-term investments and future need to be diversified and NOT dependent on a single vehicle. Good Luck!

More of this in a later article ....

Saturday, October 22, 2016

Google AdSense is a Good way to Earn Some Extra Income

I registered myself for Google AdSense way back in 2006.

I had a personal blogger site and it was quite easy to apply for Google AdSense during those early years and my application got approved in a week or so.

Not so anymore.

Due to extreme good response, Google has made it very tough now to apply for Google AdSense for your site, if you do not have Google AdSense and would like to apply for one, do read this article on applying for Google Adsense.

You can see from above article that it's difficult to get approved for AdSense !

I'm glad that I did not terminate the Google AdSense account a few years back when I stopped blogging for a while.

They say the proof of the pudding is in the eating so here is the results ...

My Google AdSense earnings so far -

24-08-2016 US$100.18 equivalent to RM 394.22

23-12-2014 US$104.07 equivalent to RM 355.87

31-07-2014 US$108.72 equivalent to RM 338.02

                         Grand Total   =        RM1,088.11

I've had at most 2-5 blogs to earn Google AdSense on.

I am not a natural or gifted writer and writing isn't one of my strong points. I am quite lazy in character and do not write frequently.

That is why the earnings are irregular, it's more of a part-time side income fun work for me. But still, I manage to make RM 1,088.11!

However, I would like to encourage you as I know the earnings can be good if you are hard-working, read good tips on how to boost your earnings and treat it seriously like a full-time work.

More on this in another article later ...

Saturday, October 15, 2016

Understanding Stock Prices Change

Stock prices change every day as a result of market forces. By this we mean that share prices change because of supply and demand. If more people want to buy a stock (demand) than sell it (supply), then the price moves up. Conversely, if more people wanted to sell a stock than buy it, there would be greater supply than demand, and the price would fall.

Understanding supply and demand is easy. What is difficult to comprehend is what makes people like a particular stock and dislike another stock. This comes down to figuring out what news is positive for a company and what news is negative. There are many answers to this problem and just about any investor you ask has their own ideas and strategies.

To further complicate things, the price of a stock doesn't only reflect a company's current value, it also reflects the growth that investors expect in the future.

The most important factor that affects the value of a company is its earnings. Earnings are the profit a company makes, and in the long run no company can survive without them. It makes sense when you think about it. If a company never makes money, it isn't going to stay in business.

Public companies are required to report their earnings four times a year (once each quarter). Bursa watches with rabid attention at these times, which are referred to as earnings season. The reason behind this is that analysts base their future value of a company on their earnings projection. If a company's results surprise (are better than expected), the price jumps up. If a company's results disappoint (are worse than expected), then the price will fall.

Of course, it's not just earnings that can change the sentiment towards a stock (which, in turn, changes its price). It would be a rather simple world if this were the case! During the dotcom bubble, for example, dozens of internet companies rose to have market capitalizations in the billions of dollars without ever making even the smallest profit. 

As we all know, these valuations did not hold, and most internet companies saw their values shrink to a fraction of their highs. Still, the fact that prices did move that much demonstrates that there are factors other than current earnings that influence stocks. 

Investors have developed literally hundreds of these variables, ratios and indicators. Some you may have already heard of, such as the price/earnings ratio, while others are extremely complicated and obscure with names like moving average convergence divergence.

So, why do stock prices change? The best answer is that nobody really knows for sure. Some believe that it isn't possible to predict how stock prices will change, while others think that by drawing charts and looking at past price movements, you can determine when to buy and sell. The only thing we do know is that stocks are volatile and can change in price extremely rapidly.

The important things to grasp about this subject are the following:

1. At the most fundamental level, supply and demand in the market determines stock price.

2. Theoretically, earnings are what affect investors' valuation of a company, but there are other indicators that investors use to predict stock price. Remember, it is investors' sentiments, attitudes and expectations that ultimately affect stock prices.

3. There are many theories that try to explain the way stock prices move the way they do. Unfortunately, there is no one theory that can explain everything.

Source: Stock Alliance 

Wednesday, September 28, 2016


This is from Daniel Loh

As the US elections (8th November 2016) draw closer, almost the entire world and especially investors are watching the elections closely. While the results might not directly concern the world, the future of the global economy might pretty much depend on who becomes the next US leader.

Aside from the US elections, the US stock market bull run has been going on for seven years now. One might question, the interest rates, core inflation and employment rate in the US were less than desirable, to say the least until recently, so are stock prices really a reflection of fundamentals or pure optimism (and delusion)?

How will all these affect the eastern side of the world, namely the Asia-Pacific region and more importantly, China? To answer these questions, local stock guru and investment trainer Daniel Loh shared some of his insights and perspectives for retail investors like us.

Daniel will also be speaking at our half-yearly Shares Investment Conference 2H2016 (Mandarin event) to cover these topics in more detail, alongside other investment experts such as Dr. Chan Yan Chong, Pauline Teo from 8I Education and Margaret Yang from CMC Markets.

US Stock Market Might Face Correction in Nov or Dec Regardless Who Wins

In Daniel’s opinion, the US stock market is indeed due for a correction, especially when a Fed rate hike happens – the question now is when and not if. The only reason for the delay in a Fed rate hike is the election. Daniel says that the Fed is doing this for Hillary.

Nevertheless, regardless of who wins the US election, there is a good chance that the stock market will face a correction in November or December. As such, Daniel thinks this might be a good opportunity for retail investors to pick up some corrected but fundamentally strong US stocks.

In the longer term, however, Daniel (and many other economists and investment experts) thinks that Trump’s economic policies are bound to hurt Asia and of course, Singapore. Most of Trump’s proposed policies are pro-US and anti-Asia.

Some include lowering corporate taxes to compete with Hong Kong and Singapore; building the US to be energy-independent and cutting on oil imports; slapping tariffs on Chinese goods to go in a trade war with China; and slapping taxes on US companies that outsource their manufacturing outside of US among many other pro-US, anti-Asia policies.

Daniel acknowledges Trump’s goal of bringing more jobs back to the US and to stop China from becoming the number 1 economy in the next decade. But this economic warfare, in Daniel’s view, would hurt Asia and indefinitely, Singapore too, affecting multi-national corporations’ decisions to set up offices and creating employment opportunities for Singapore.

On US Bull Run: Remember This One Thing


As for the US bull run, Daniel explains we must remember one thing: stock prices is not a reflection of the fundamentals of the companies but rather, a reflection of stocks performance compared to market expectations.

Thus, as long as interest rates remain low, he would not be too worried about the US stock market’s health. Money will continue to return to the stock market as long as corporate earnings continue to beat market expectations.

However, he still thinks that a Fed rate hike is something we should keep a close watch on – when interest rates rise, investors start to realise stocks can no longer outperform market expectations. That is when the US stock market will head for a correction, at the very least.

Monday, September 5, 2016

Bursa China stocks Modus Operandi

1. IPO listing

2. Substantial shareholder keep selling

3. Report lesser profits

4. Cash calls + Free warrants

5. Substantial shareholder keep selling

6. Report losses after losses

7. PN17

8. Cannot submit accounts

9. Delisted