How to pick the best dividend-paying stocks

While the days of buying a stock and never worrying about it again are over, retirees looking for immediate income will likely have long-term relationships with a few dividend-paying stocks.

With that in mind, here are few tips on how to sort through the options.

1. Look for a company with a long dividend history. Many pride themselves on having continuously paid dividends for many decades.

2. The company's payout ratio should be no more than 80% of its earnings per share. If a company earns $0.50/share and is paying a dividend of $0.75/share, it could be in trouble. It's important to compare the earnings per share and the dividends per share of any investment candidate.

What if you discover that a company is paying out more than it's earning? Maybe it sold off some assets — a one-time event — and it's paying out part of the proceeds in dividends. That's not a problem. However, if the company is recklessly borrowing money to pay the dividends, that's a huge red flag.


3. Choose companies with a worldwide market presence, as they provide somewhat of a hedge against inflation.

4. Pick companies with a stable product line. Whether it's beer, food, oil, or computer chips, the company you're investing in should have a core business with a worldwide need for its product.

5. A dividend-paying company should have lots of cash. Check a company's current ratio, which measures its ability to meet short-term obligations. The "current ratio" is the ratio of current assets to current liabilities. If a company's current ratio is greater than 1, it's in good shape.

6. Pick a company that sticks to its core business. During the Internet boom, many companies were swapping stock and buying up businesses all over the place.

It's one thing when a pharmaceutical giant acquires a smaller drug company. That makes good business sense. It's quite another story when a company like General Electric decides to buy NBC because it wants to be in the media business. Every company needs to keep its competitive edge, but there's a benefit to knowing what you're good at and sticking with it.

7. Stock-price stability is also important. We need to continually remind ourselves that no matter how big or stable a company, its stock price can still fall. The stock prices of many huge, dividend-paying companies tumbled in the 2008 crash. However, they experienced less damage than the total market, and they recovered more quickly.

8. Some of the better yields are in sectors that experience more volatility. A prudent investor will diversify his dividend-paying stocks among different sectors to reduce the overall impact of market swings.

9. Look for a company with a history of buying back its stock. It's a big plus if the company has enough earnings to pay good dividends and buy back stock at the same time. Having stock appreciation in addition to generous dividends is the overall goal.

10. A company with a history of increasing its dividend is ideal, so check to see if the company has a pattern. Many old-line moneymakers have done very well for their shareholders by increasing their dividends every year.

11. Check the current dividend yield percentage. There are many good dividend-paying stocks out there, but you should factor in the price of any company you're considering. Look for companies paying at least 3%.

12. Set a trailing stop loss. You don't want to ride a stock down just to see your dividend income eaten up by loss of principal. A stop loss helps to keep that from happening.A traditional stop loss uses a fixed price. If you buy a stock for $100 and put in a 20% stop loss on it, you have an immediate sell order if the stock drops to $80.

A trailing stop loss is a little more sophisticated; it adjusts the start point every time the stock hits a new high. This gives investors the potential to lock in profits and still protect themselves.

Source : Marketwatch

Decision Tree For Buying A Stock

Source: http://musingzebra.com/a-simple-decision-tree-before-buying-a-stock/

The Long History of Oil Prices

Understanding Donald Trump's Win

Yesterday selloff was no joke! Foreign funds sold almost 700 million! Do we going to see massive selling next week! Let's see how things unfold next week! It has been a very shocking week! So shocking that it leaves a bad hangover, worst hangover ever!

(An extract from a post in i3Investor)

I think Trump's big win caught everyone by surprise. I had even predicted that Hillary Clinton will win. But what was MOST surprising was the way the financial markets reacted to Trump's win ...a mini-crash in US stock market then a sharp Trump rally for the US markets ...for Bursa and Ringgit it was drop and drop.

I think Trump's win will be good for America but bad for Malaysia. Part of his pre-election plans were to help America regain its' former glory by "hentam" other nations which he accused them of robbing Americans of their jobs and businesses.

And with Trump coming in as President, his other promise to improve and build infrastructures there creating inflation....made my 2nd prediction might come true after all - the US Fed will raise interest rate in their December 2016 Fed meeting!

This could be the reason why the RM dropped to 4.37 as yield investors took their money off our MGS and stock market to be repatriated back to USA.

Let's see how things develop from here.

40 PETUA JIMAT BERBELANJA TAHUN 2017

Berdasarkan Bajet 2017 dan trend dalam negara, keadaan ekonomi dijangka terus tidak berapa baik pada tahun 2017. Peluang kerja, berniaga dan mencari wang tambahan akan terus menguncup, sementara harga barang dan beberapa kos dalam kehidupan pula sentiasa terdedah kepada kenaikan.

Untuk itu, bagi menghadapi hari-hari sukar itu, di sini diperturunkan 40 petua yang boleh menjimatkan wang kita.

1. Sentiasa berbelanja kurang dari pendapatan.
2. Cari cara untuk buat duit lebih setiap hari.
3. Ubah gaya hidup.
4. Rancang kewangan anda.
5. Mulakan menabung.
6. Potong kad kredit jadi  dua.
7. Kurang guna telefon bimbit, kalau boleh jangan pakai langsung.
8. Cari hobi yang boleh tambah pendapatan.
9. Hadiahkan diri dengan simpanan.
10. Tahan nafsu sehingga promosi harga murah baru membeli.
11. Jangan terpedaya dengan “Diskaun Akhir Tahun / Diskaun Awal Tahun”.
12. Ciptakan rasa seronok bila tiada hutang.
13. Kurangkan insuran kenderaan ikut harga semasa.
14. Nikmati hiburan percuma.
15. Kekal prestasi cemerlang dalam pekerjaan.
16. Sibukkan diri agar tidak ke shopping mall.
17. Jangan riadah di Pavillion atau KLCC.
18. Berhenti merokok.
19. Diet dan jaga makan, amalkan pemakanan sihat.
20. Makanan mahal bukan untuk dicuba.
21. Jangan berlumba tukar sofa dengan jiran.
22. Takaful jangan lebih 10% daripada pendapatan.
23. Sediakan dana pelaburan untuk hari tua.
24. Jangan mudah putus asa, kreatif dan kerja lebih masa.
25. Jangan salahkan panda bila kita susah.
26. Beli barang terpakai bukan dosa.
27. Beli Baju di Mydin pun kacak juga.
28. Beli secara tunai, jauhkan riba.
29. Pekan Takbai dan Golok bukan duty free.
30. Jangan jadi hamba bertukar kereta.
31. Guna motor itu ranggi.
32. Jangan berhutang hanya kerana layak meminjam.
32. Berhenti layan Maharaja Lawak atau Gegar Vaganza, Astro bukan percuma.
33. Lupakan impian tambah Neelofa dalam hidup.
35. Kereta kecil tetap bergaya.
36. Azam beli rumah bukan tambah orang rumah.
37. Lupakan sport rim dan spoiler kereta.
38. Bincang dengan keluarga tentang belanja harian.
39. Kurangkan tengok drama orang kaya kaya.
40. Tukar Perdana Menteri....😀😀😀                      

Sumber: http://shahbudindotcom.blogspot.my/2016/11/40-petua-jimat-berbelanja-tahun-2017.html

2017 will be another Tough Year For Malaysians

Yes, its' November and I can see that next year 2017 will be another tough year for us Malaysians. I need not to be cheong hei and blah blah as to why. You and I know.

Initially, I had wanted to put some money into Bursa stocks last month and this month but after thinking hard on 2017, I decided against it.

The share prices could go lower and cheaper in 2017. A CORRECTION might happened. But please lah, to those scaring people to death with market crash talk, there will NOT be a stock market crash. Go "google" what cause a stock market crash and you will see it won't happen for a long time.

I predict that Hilary Clinton will win and become US President and the US Fed will hike interest rate by 0.25% in December 2016 (like what they did in Dec 2015).

Also there will NOT be a GE in 2017 and our GE14 will only be held in March - May 2018 when the BN 5 year term expires (like previously).

Cheers!

Senarai Skim2 cepat kaya

For your Senarai Skim2 cepat kaya

🚩SUDAH HANGUS🚩

Swisscash
Geneva Gold
Azxpro
Gwgfx
MMM
MGCfx/MGCare
WadiahTrading
Rainbowfx
WCP
Tawund
Highway Group
YSLM
SolarBond
Islamic Fund
NexusFX
Moores Capital
Double Fast Track
Kazanah Melayu
CPO Trading
Tok Belagak
Utoken
Asia Business Machine bhd
azz marketing
Mastajak fx
Alfafa Banglo

🚩TENGAH HANGUS🚩

Kongsimakan 🍴☕🍴👈⬅
Komuniti Ikhlas
MonSpace
Bitkingdom
Bit Club Network
Pok Din Empire
MybcWorld
AuraSfx

🚩 TENGAH MELETUP LETUP 2 Ramai Join  🚩

Zenith Gold
Mym1

🚩POTENSI HANGUS🚩

VenusFX
FXUnited
JJ Poor to Rich
ARBA Network /CWC
ABN Network
Bio Niaga Abu Nur
iTijari
iBiz Star Network
AGRCarTrade
Shazamia Gold & Jewelry
Coince
Eurobits
IGOfx
T1FX
MCX Forex
THWGlobal
MYM Programme
PTM4U
Bookcoin
AGR car trade
arion xm fx
gmj4u
Amazing7 society
Mface
MMC (mamacaptain)
Affiliate
Phytoscience
MGSB i-comey kosipitih

⚠Hati2 diluar sana yang gemar skim2 cepat kaya macam ini. Sayangilah duit anda.

Source: From a friend in Whatsapp

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 ...in 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 ....

Google AdSense is an Awesome 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 ...

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 

Electric Cars Could Wreck Havoc on Oil Markets Within a Decade

US STOCK MARKET MIGHT FACE CORRECTION REGARDLESS WHO WINS THE US ELECTIONS

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

BULL V BEAR

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.

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

My Reply to "Tun Daim", msg from a friend from the financial sector....

DEAR "TUN DAIM",

This is my reply to you (your message in italics and mine in bold):

Just Sharing a msg from a friend from the financial sector....
Malaysian Currency is expected to depreciate further to RM 4.50 by end of September as Ringgit is not used as currency's for trading in world stock exchange. Ringgit will stumbled as the govt further cut on export of crude oil due to over over supply.

Currency go up and down. Right now we are at USD1 to RM4.00 but we were at USD1 to RM4.47 at the beginning of the year. Our lives did not change much when our ringgit depreciated from RM3:20 to RM4.00 over the past few years. Neither did we suddenly become richer when our currency appreciated from RM3.73 to RM3 from 2008 to 2012. Similarly, the United Kingdom also did not go bust when the UK pounds depreciated from £1 to RM6.75 in Oct 2015 to RM5.20 just recently.

In fact, a weaker Ringgit allows us to compete stronger as was evidence by our continued improvement in foreign trade and our trade surplus where our manufactured and services industry benefited strongly despite the weakness in GLOBAL oil prices, which is beyond the control of Malaysia. This will help Malaysia further diversify our economy so we will be less dependent on commodity exports.

Everyone should take precaution as this is a economy disasters as a whole. Bank Negara held reserved is only RM101 billion at this moment. But Our debt has climbed to Rm 614,880,270 billion. Which means each tax paying citizen has a debt of Rm18,835. Current advice is Stop investing in any ventures , properties or car. Cash in hand is safe..as Disaster is on the way.

You have the amount of our BNM reserves correct but the currency is wrong. Our current BNM reserves is not RM101 billion but USD101 billion (or thereabouts as it fluctuates too), meaning RM400 billion. I am surprised that a "Tun Daim" would make such a silly mistake.

As for our govt debt, don't just look at the absolute amount but the debt to GDP ratio which means our debt compared to our yearly income. We are at about 54% right now. When Mahathir became PM in 1982, he ramped up this ratio from 40% to more than 100% within 5 years and we didn't go bankrupt then. Neither will we go bankrupt now at 54%.

In fact, according to the CIA's world factbook, Malaysia at 54% is at 71st place in the countries with the highest debt to GDP ratio - meaning 70 other countries have to go bankrupt first before reaching Malaysia's turn - and this includes countries such as Japan,, Singapore, UK, USA, Germany etc..

Penang has right now embarked on a Transport Masterplan project costing RM46 billion where the state govt said they will borrow to fund the project. Divided by 1.6 million people in Penang, this will mean RM28,750 per person And if you believe RM18,835 per person will make Malaysia bankrupt then RM28,750 per person would mean Penang will go bankrupt faster than the rest of the country.

World Economic Analyst predict within the next 3 months, Malaysia economy . will collapse. Stock market & currency value will take a nose dive in a drastic manner.
This is due to world negative economic outlook for the year 2017

I think we have heard this many times. Which "World Economic Analyst" are you talking about? Malaysia is still enjoying robust 4.1% GDP growth over the past 6 months, our stock market is still double of what it was in 2009 and our trade surplus and reserves are strong. So, how are we going to collapse?

Crude oil will crash due to oversupply. As Americans are pumping more crude oil. The reasons: i) to hurt Russian's economy and her currency as Russian is world's no1.ii) ISIS in order to finance their survival is also selling cheap smuggled crude oil from Syria & Iraq thus flooding the oil market..
Malaysia's oil production will be hit due to this...apart from the current political uncertainty and corruption which discourages foreign investments...

Our oil production and exports were already hurt - in 2009, oil represented 44% of our govt revenues and it is only 17% last year and 11% this year. And we still did not collapse. Even if it drops another 11% and it goes to zero oil revenues, we won't collapse as our other industries such as manufacturing and services and our domestic economy will continue to drive our growth.

The world has perceived Malaysia as ranking no.1 for : i) Corruption & Scandals and financial forgery in money laundering. .

Actually, Malaysia is ranked at 54th least corrupt out of 179 countries in the latest Transparency International Corruption Perception Index - certainly not number one. I am not sure who ranked us number one but it is certainly not any recognized bodies.

So my dear friends,please spend your money wisely. Keep your Money for rainy days. As we are heading towards difficult and bumpy days . The journey will be tough & unpredictable. This will hit hard on all of us, regardless whether you are rich or poor. All the best to All ..............Tun Daim

It is always good to spend where it is necessary but such fake whatsapp messages such as yours are frequently spread by sneaky opposition parties to destroy confidence in the Malaysian economy.

Therefore, the opposition frequently spread false, misleading lies such as this to destroy confidence in what is known as a "self-fulfilling prophecy". Imagine if everyone believe what is in this message then no one will spend and if no one will spend then all the shops will close down, he factories will also close down and then the banks will close down and et cetera. Somewhere along the line, you and I and everyone else will also lose their jobs or business.

Therefore, spreading such lies is not helpful to Malaysia but you are harming Malaysia and ourselves.

These people don't care what happens to Malaysia as long as they get what they want. They think that if the economy is bad then it is easier for them to win power. These people are despicable. Do not fall for their lies and spread such negative messages to incite hate, create fear which will eventually end up hurting ourselves.

Stop it, "Tun Daim" and the rest of you fake hateful people.

-------------------------------------------------------------------------------------

Malay version follows:

Kerapkali berlegar di kalangan pengguna aplikasi telefon pintar, mesej menggunakan nama ‘Tun Daim’ kononnya menceritakan mengenai ekonomi namun ditulis secara terpesong. Ia akan dikongsikan pelbagai pihak tanpa memeriksa kesahihannya. Terkini, mesej menggunakan nama 'Tun Daim itu mendakwa kononnya ekonomi Malaysia akan runtuh. Berikut dipaparkan jawapan kepada ‘Tun Daim’ mengenai ekonomi negara: DUHAI "TUN DAIM", Ini adalah jawapan saya kepada anda. ‘Tun Daim’ mendakwa: Hanya berkongsi satu mesej daripada seorang rakan daripada sektor kewangan.. Nilai matawang Ringgit dijangka akan menyusut kepada RM4.50 menjelang hujung September ini kerana Ringgit tidak digunakan sebagai matawang dagangan saham dunia. Ringgit akan runtuh kerana kerajaan menyekat eksport minyak mentah ekoran lebihan bekalan. JAWAPAN SAYA: Nilai matawang akan turun dan naik. Ketika ini, Ringgit adalah USD1 kepada RM4.00 dan kita pernah berada pada USD1 kepada RM4.47 awal tahun ini. Kehidupan kita tidak terjejas ketika ringgit menyusut daripada RM3.20 kepada RM4.00 pada beberapa tahun ini. Kita juga tidak tiba-tiba menjadi kaya apabila nilai matawang kita meningkat daripada RM3.73 pada 2008 kepada RM3 pada 2012. Begitu juga dengan United Kingdom yang tidak runtuh apabila Pound UK menyusut daripada £1 bersamaan RM6.75 Oktober lalu dan kepada RM5.20 just baru-baru ini. Malah, Ringgit yang lemah membolehkan kita bersaing lebih kukuh dan ini dibuktikan dengan peningkatan berterusan dalam dagangan asing dan lebihan dagangan di mana industri perkhidmatan dan pengeluaran menerima manfaat lebih baik disebalik kelemahan harga minyak dunia, yang di luar kawalan Malaysia. Ini akan membantu Malaysia untuk mempelbagaikan ekonomi negara agar kurang bergantung kepada eksport komoditi. ‘Tun Daim’ mendakwa: Semua perlu mengambil langkah berjaga-jaga kerana ia adalah keruntuhan ekonomi secara keseluruhan. Rizab Bank Negara pada ketika ini adalah RM101 bilion. Tetapi hutang kita telah melonjak kepada RM614,880,270 bilion. Ini bermakna setiap cukai dibayar rakyat menanggung hutang RM18.835. Nasihat pada ketika ini ialah berhenti melabur dalam apa juga pelaburan, hartanah dan kereta. Tunai dalam tangan adalah selamat kerana malapetaka bakal menimpa. JAWAPAN SAYA: Anda menulis jumlah rizab BNM dengan tepat sekali namun dalam matawang yang salah. RIzab BNM ketika ini bukanlah RM101 bilion tetapi USD101 bilion, bermakna berjumlah RM400 bilion. Saya terkejut kerana seorang bernama ‘Tun Daim’ boleh melakukan kesilapan yang mengarut seperti itu. Dan bagi hutang kerajaan pula, jangan melihat kepada jumlah semata-mata tetapi antara nisbah hutang berbanding Keluaran Dalam Negara Kasar (KDNK) di mana ia bermakna hutang berbanding perolehan tahunan negara. Kita adalah pada paras 54 peratus ketika ini. Ketika zaman Tun Dr Mahathir pada 1982, beliau telah meningkatkan nisbah hutang daripada 40 peratus kepada 100 peratus dalam tempoh 5 tahun namun kita tetap tidak bankrap. Kita juga tidak akan bankrap pada 54 peratus. Malah, berdasarkan kepada laporan fakta Agensi Perisikan Pusat (CIA) Amerika Syarikat, Malaysia dengan hutang 54 peratus berada di kedudukan 71 bagi negara mempunyai nisbah hutang tinggi berbanding KDNK, bermakna ia memerlukan 70 negara lain untuk bankrap terlebih dahulu sebelum tiba kepada giliran Malaysia, dan ini termasuk negara seperti Jepun, Singapura, UK, Amerika Syarikat, Jerman dan lain-lain. Pulau Pinang kini memulakan projek Pelan Pengangkutan melibatkan kos RM46 bilion di mana kerajaan negeri diterajui DAP itu mengesahkan akan membuat pinjaman bagi membiayai projek itu. Dibahagikan kepada 1.6 juta penduduk di Pulau Pinang, ia bermakna setiap rakyat Pulau Pinang menanggung RM28,750 setiap seorang. Jika anda percaya RM18,835 boleh membuatkan Malaysia bankrap, ia bermakna RM28,750 setiap seorang akan membuatkan Pulau Pinang bankrap lebih pantas daripada negara ini. ‘Tun Daim’ mendakwa: Penganlisa Ekonomi Global mengunjurkan bagi tempoh tiga bulan akan datang, ekonomi Malaysia akan runtuh. Pasaran saham dan nilai matawang akan menjunam dalam keadaan drastik. Ia lantaran unjuran ekonomi dunia yang negatif bagi tahun 2017. JAWAPAN SAYA: Saya rasa kita sudah mendengar dakwaan ini banyak kali. ‘Penganalisa Ekonomi Dunia’ manakah yang anda maksudkan? Malaysia masih lagi menikmati pertumbuhan menggalakkan sebanyak 4.1 peratus bagi tempoh 6 bulan ini, pasaran saham masih lagi berganda berbanding 2009 dan lebihan dagangan serta rizab masih lagi kukuh. Jadi, bagaimanakah agaknya kita akan ‘runtuh’? ‘Tun Daim’ mendakwa: Minyak mentah akan runtuh lantaran lebihan bekalan. Memandangkan Amerika Syarikat mengeluarkan lebih banyak minyak. Alasannya ialah: i) bagi menjejaskan ekonomi Russia dan matawangnya kerana Russia berada di kedudukan pertama dunia. Ii} ISIS dalam membiayai penjajahan mereka turut menjual minyak mentah seludup daripada Syria dan Iraq turut menjualnya pada harga murah hingga membanjiri pasaran minyak mentah. Pengeluaran minyak Malaysia akan terjejas berikutan keadaan ini, selain ketidaktentuan politik Malaysia dan rasuah yang mengekang pelaburan asing. JAWAPAN SAYA: Pengeluaran minyak dan eksport kita sudahpun terjejas, pada 2009, minyak mewakili 49 peratus daripada pendapatan kerajaan dan hanya 17 peratus pada tahun lalu manakala 11 peratus sahaja tahun ini. Namun kita masih tidak lagi runtuh. Jika ia jatuh kepada 11 peratus lagi sekalipun dan tiada pendapatan daripada minyak sekalipun, kita tidak akan runtuh kerana industry lain seperti pengeluaran dan perkhidmatan serta ekonomi domestik kita masih terus mengukuhkan pertumbuhan ekonomi negara. ‘Tun Daim’ mendakwa: Dunia telah menganggap Malaysia berada di kedudukan nombor 1 bagi i) Rasuah dan skandal serta penipuan kewangan dalam pengubahan wang. JAWAPAN SAYA: Sebenarnya, Malaysia berada di tempat 54 bagi negara yang paling kurang rasuah daripada jumlah 179 negara paling rasuah melalui Indeks Persepsi Transparency International, dan bukannya nombor satu. Saya tidak tahu siapa yang meletakkan kita di nombor satu, tetapi tentunya bukan sebuah badan yang dikenali. ‘Tun Daim’ mendakwa: Maka, sahabat sekalian, belanjalah wang dengan cermat. Simpan wang anda untuk waktu terdesak. Kerana kita menuju kea rah kesulitan dan kesusahan. Perjalanan ini akan lebih sukar dan tidak dapat dijangka. Ia akan menjejaskan kita semua, tak kira anda kaya atau miskin. Ucap selamat kepada anda semua.. Tun Daim. JAWAPAN SAYA: Adalah baik untuk berbelanja kepada keperluan tetapi mesej whatsapp palsu seperti daripada anda ini semakin kerap disebarkan oleh pihak pembangkang bagi memusnahkan keyakinan pada ekonomi Malaysia. Pembangkang kerap menyebarkan penipuan, cerita palsu bagi meruntuhkan keyakinan bagi memuaskan nafsu politik mereka. Bayangkan jika semua orang percaya penipuan dalam mesej ini dan tiada siapa pun akan berbelanja dan apabila tiada sesiapa berbelanja, maka tutuplah kesemua kedai, kilang juga akan tutup dan bank juga akan tutup. Pada masa yang sama, anda atau saya akan kehilangan pekerjaan atau perniagaan. Untuk itu, menyebarkan tipu daya seperti ini tidak akan membantu Malaysia tetapi anda sendiri akan merosakkan Malaysia dan diri kita. Manusia seperti itu tidak peduli apa akan jadi kepada Malaysia asalkan mereka mendapat apa yang mereka mahukan iaitu melihat Malaysia menjadi rosak. Mereka fikir, jika mereka dapat merosakkan ekonomi negara, ia akan lebih mudah untuk mereka merampas kuasa. Manusia seperti ini adalah manusia jijik. Jangan terperdaya kepada penipuan mereka dan menyebarkan mesej sarat dengan penipuan mereka bagi mencetuskan rasa benci, ketakutan yang akhirnya akan merosakkan kita semua. Hentikanlah duhai ‘Tun Daim’ serta anda semua yang palsu dan penuh kebencian.

Source : http://limsiansee.blogspot.my/2016/09/my-reply-to-tun-daim-msg-from-friend_3.html

FBMKLCI - Bull market is coming!

Forget about the market crash, cause financial market will not crash this year!

In line with the Wyckoff accumulation schematic, the selling of FBM KLCI was well absorbed and hence was accumulated since the selling climax in Aug 2015, which indicates FBM KLCI has successfully formed a bottom for the 2 years correction (Jul 2014 to Aug 2016).

Today, FBMKLCI managed to close above 1681 to violate the downward trend-line shown in the figure.

Given that FBMKLCI is now trading well above the 200Sma, FBMKLCI is poised to regain strength to turn bullish again.

This is the weekly USD/MYR currency chart. Just to clarify in case if you are unfamiliar with currency chart, up move in USD/MYR means Ringgit is weakening, equivalent to US dollar gaining strength, and vice versa.

In the chart above, Ringgit has weakened against US dollar from May 2013 to Oct 2015.

The chart above clearly highlights the Bump and Run Reversal chart pattern formed on USD/MYR currency pair. This means the weakening of Ringgit against US dollar has reached an end for intermediate to long-term (1 year), and Ringgit has successfully retested the middle trendline in June 2016.

The is the USD/MYR chart but zoomed in onto the daily candlesticks of USD/MYR chart spanning from Jul 2015 to Aug 2016.

As we can see, the downward trendline for the USD/MYR is getting steeper, so we can expect an accelerated sell down of US dollar against Ringgit in future. 

So what does all these currency charts suggest?
These signals from the currency charts conveyed a clear message that Ringgit will strengthen moving forward.
So how does all these related to FBM KLCI and Malaysia stock market?

If Ringgit were to strengthen against US dollar, it means the foreign funds will be revisiting our market soon after the 2014 and 2015 capital exodus, and we will see the return of bull market.


Disclaimer: This is an expression of personal opinion of the author, the author is not responsible for anything happened to the readers after they read this post.

Source : http://klse.i3investor.com/blogs/Tech_Watch/102033.jsp

My comments: I mentioned how 2016 was going to be a mouse-trap year for investors. It will be a year full of surprises! I don't know what is happening but will use the "bull market" to dispose off slowly what I have when my TP is reached. Good Luck to all.

KLCI INDEX EVENTS 1990 - JUNE 2016

Good info. So, were you caught in any of these events? Ha ha

Good Advice from Sifu Fred Tam

KLSE OUTLOOK FOR 04-08-2016: CORRECT STOCK PICKS SAVE THE DAY FOR THE INVESTOR IN THIS SOFT MARKET - BY FRED TAM ....Extracted from Fred's Facebook posting today ....It is okay to buy on rumours and tips in a bull market because, as the saying goes, “all boats float in a high tide”.

But this is a bear market we are in. We are in a “low tide” situation. Buying on rumours and tips when the tide is low will only deplete and ruin an investor’s capital rapidly as most tips will not result in follow-through buying as finding a “greater fool” is that much more difficult.

In other words, “in a low tide all boats sink”. ...Good Advice from Sifu Fred😊

The Market Operators

I believe that most of us have heard of stock market operators. They are known by many different names and they are constantly the blame for our financial losses. In some parts of the world, they are known as sharks, syndicates, big bosses, speculators, liars, cheaters or stock market manipulators. Some of us cheer their existence and their operations while some cursed them as if they are the culprits to our financial ruins. Are they our friends or foes? As the famous saying goes, know thy foes and you will have the upper hand in battle. In this post, I will challenge and dare you to swim with the sharks and eat from the crumbs of their feeds and not to be their feed. Here I would like to bring out some of my personal thoughts on this question that most newbie has.

Ok, here is the short answer. Yes, you are right. They existed and their operations are hidden from most people especially the newbie in these financial markets. I believe if we know them and how they operate, we could actually move along with them. In fact, the whole purpose of technical analysis is to determine the balance of demand and supply and the stock market operators are some of the powerful and rich individuals or groups with much buying and selling power. If we are able to track their movement, we will be able to profit from their operations. However, if we are ignorant of their existence, we could be their next meal.

Basic facts of stock market operators are listed below for your reference :

**They work individually or in a group.
**They rely on the market trends to help them in their mission.
**The general public are their big customers.
**They together work with the public listed company owners or insiders.
**They have a main mission objective to accomplish.
**The bulk of their operation revolved around the accumulation and the distribution of stocks from / to the general publics.
**They are rich and powerful figures but they are also humans that have emotions like all of us.
**They have extensive credit facilities and lower transaction costs than the retail investors.
**They do make mistakes like any one of us. Their mistake costs millions in dollars.
**Market news, stock market analyst, corporate announcements, word of mouth advertising, price bidding and order queues are some of their tricks and tools that they used to achieve their main objective.

**They don’t try to pick the bottom or the top like most retail investors do. Again, some of them try to do this and it costs them much sorrow and dismay.
**They do attempt to manipulate the chart to trick the chartist whether you like it or not.
**They are both the buyer and seller in the queue order at any given time.
**They are not doing charity work. They existed to make your money.

It is important to understand them well as they are big volume buyers and sellers. They can tilt the balance of demand and supply. Understanding the above traits of stock market operators will help to clear some of the myths that we have of them. Remember, they are humans like us. Some of the above points deserved to be elaborated further to bring out the secrets of trading methodologies that we will employ in our technical analysis.

Primary market trends are very important to their success and failures. If they judge wrongly on this, they could go bust easily as the power of leveraging will work against them. Remember this, they cannot fight against the trends and they don’t have the strength to do so. Don’t ever think that they can swim against the tides.

If their mission objective is to acquire stocks, they might push down the prices to cause temporary market panics to squeeze out the stocks out from the speculators and investors and this is especially true in certain countries where short-selling is not allowed. The success of this technique will depends on what sort of people that are holding the stocks. This will get rid of the intra-day and short- term traders. However, they will try to maintain the prices around a certain range as to keep the sellers motivated. Usually the public listed company owners and insider will work in tandem to collect the shares from the general public. After they exhausted the fearful speculators and investors, they will then turn their eyes to the stronger speculators and investors by pushing up the prices higher to catch their interests.

If their mission is to distribute stocks, they will push up the stock prices to catch the attention of speculators and investors. They will work with market analyst to create beautiful pictures of the company prospects. They will work with the public listed company owners and insiders to create scarcity of stocks. At this moment of time, they will also announce all the good news while pushing up the stock prices. They will queue up as buyers and sellers in the order queue. They will buy their own stocks to create volume to entice the crowd to follow. As they bid up and down the prices, stocks were distributed without the awareness of the general public.

I believe that this write-up will increase our trading knowledge and make us a wiser trader. I will continue to write of how we can profit from their operation in future posts whenever I managed to get my time organized.

*not from me but forward from some other places.. Massive respect to the write and credits to him..

Source : Big Canon Finance Blogspot

Tough times ahead

The Monkey Business

There lived a lot of monkeys near a village.

One day a merchant came to the village to buy these monkeys.

He announced that he will buy a monkey @  hundred rupees each.

The villagers thought that this man is mad.

They thought how can somebody buy stray monkeys
at 100 rupees each?

Still, some people caught some monkeys and gave it to this merchant and he gave 100 rupees for each monkey.

This news spread like anything and people caught monkeys and sold it to the monkey merchant.

After some days he announced that he will buy monkeys @ 200 each.

The lazy villagers ran around to catch the remaining monkeys.

They sold the remaining monkeys @200 each.

Then the merchant announced that he will buy monkeys @500 each.


The villagers  lost sleep. .They
caught six or seven monkeys ,which was all that was left and got 500 each.

The villagers were waiting anxiously for the next announcement.

Then the merchant announced that he is going home for one week.
And when he returns, he will buy monkeys @ 1000 each.

He asked his employee to take care of the monkeys.
He was alone taking care of all the monkeys in a cage.

The merchant went home.

The villagers were very sad as there were no more monkeys left for them to sell it at 1000 rupees each.

Then the employee told them that he will sell some monkeys @700 each secretly.

This news spread like fire. Since the merchant buys monkey @ 1000 each, there is a 300 profit for each monkey.


The next day villagers made a queue near the monkey cage.

The employee sold all the monkeys at 700 each.
The rich bought monkeys in lots. The poor also borrowed money from money lenders and bought monkeys.

The villagers took care of their monkeys & waited for the merchant to return.

But nobody came...😳
Then they ran to the employee. ...

But he has already left.

Then the villagers realised
that they have bought the useless & stray monkeys
@ 700 each and unable to sell them.

This is the business  known as STOCK MARKET.

This business has made a lot of people bankrupt &  a few people filthy rich in this monkey business.

This is the story of the stock market...no no ..monkey market ?

Brexit - The Aftermath

Yes, Brexit was a disaster for capital markets ... but mainly because most traders did not hedge their positions for such an eventuality. Most traders assume the Brits would never do something so silly. Yes, it is silly because Britain has a 75% export market and depends on the union in more ways than one.

London as the financial centre has been magnified for the past 10-15 years thanks to the free movement of labour, capital ... the flow on benefits of that cannot be minimised.


WHAT IS LIKELY TO HAPPEN

- REGRET: More and more Brits will regret their decision. There will be movements to garner sufficient support for a second referendum - even though that is not written in stone, it could be debated in Parliament if there is sufficient pressure.

- POLITICAL WILL: Cameron did what I considered the smartest chess move, and swiftly too, by resigning immediately. He is basically saying, you want to eat shit, then I am not going to be the one to open the door and scoop the shit. No wonder Boris looked like Becker having lost Wimbledon yet again. Boris should be celebrating but with Cameron's resignation, he is in line to be the "the leader" and its really a no win situation for Boris of London. If you look around, none of the vocal Brexit leaders are now trumpeting to invoke Article 50 immediately. This is the classic case of "be careful what you wish for, cause you buggers do not know what to do when you have it".

- E.U. STANCE: The 6 foreign ministers of EU came out strongly to basically ask Britain to move quickly to exit. That might be a surprising stance to many but its a calculated stance to stand strong and send a signal to other nations wanting to leave the union. Its still a stance.

- This will lead to a discordant British society with youth vs seniors, as the majority of the seniors voted for Brexit while the majority of youths voted to remain. Looking at actual impact, most youths have another 40-60 years to live with the decision while the seniors have between 5-20 years. You do the math. As you stop people from coming in, you also limit the "opportunities" to work in the rest of Europe. There are also many British retirees in Spain, Portugal and Greece ... I think they will make it tougher for these seniors to retire there soon.

- OTHER EXITS: Naysayers will cite that now more countries will go for the referendum route to exit EU. Well, thats a probable route because most right wing parties in every country will try to jump on the bandwagon. Again, we have to look at this logically. Not every country want to leave the union as they are in a position of weakness in economic terms, structurally and being too inter-dependent on the union.


WHAT IS REALLY REALLY LIKELY TO HAPPEN

- Both side will quickly try to negotiate a "new treaty" ala Switzerland, Norway. The EU really really needs Britain to be in at least in economic terms. If Britain can get some new terms in free movement of labour, I think that can sway the way for a second referendum. If you look at it, both sides really want to be in. Even Brexit leaders will concede that much if the terms can be changed somewhat.

- At the end of it all, its the immigration issue, nothing else. Maybe a special passport will be needed for other Europeans wanting to work or stay in London. Actually its not that difficult. Just accept Temporary Resident, renewable for every 3 years, provided they have a proper job offer. And they must leave the country within 3 months if they do not have a job anymore.

MARKETS

- Very hard to try to discount when there are still so many permutations. To try and guess, will make you making good money or lose a ton of money. If thats the kind of bet you want, go ahead. But if I am forced to bet, based on the arguments above, I'd bet for sanity to prevail and the human will to survive and reconnect - bullish, even though its mad-like bullishness.

Remember that, when presented with a great unknown with an equal amount of uncertainty, markets will discount down and will overshoot. The 'what mights' are all tainted with worst case scenario ... but we should look at what is probable given that people will make decisions based on new evidence on the table, and new evidence is neither Britain nor the EU liked the ramifications. Thus safe to say, it is likely both sides will try and hammer out something which will keep the EU intact - because a nasty breakup will cause EU to disintegrate, and Britain will be whiplashed terribly being an export reliant market (to EU mainly).

Source: Malaysia-Finance Blogspot

Don't Let Stock Prices Fool You

A common saying says, "Don't judge a book by its cover." Some equally valid words of wisdom for investors could be, "Don't judge a stock by its share price." Despite much readily available information for investors, many people still incorrectly assume that a stock with a small dollar price is cheap, while another with a heftier price is expensive. This misconceived notion can lead investors down the wrong path and into some bad decisions for their money.

The cheapest stocks - "penny stocks" - also tend to be the riskiest. That stock that just went from $4 to $0.40 might end up at zero. And a stock that goes from $1 to $2 might double again to $4. Looking at a stock's share price is only useful when taking many other factors into account.

Many Factors to Consider

Investors often make the mistake of looking only at stock price, because it is often the most visibly quoted number in the financial press. However, the actual dollar price of a stock means very little unless many other factors are considered. For example, if Company A has a $100 billion market capitalization and has 10 billion shares, while Company B has a $1 billion market capitalization and 100 million shares, both companies will have a share price of $10, but Company A is worth 100 times more than Company B.

A stock with a $100 share price may be intimidating to many retail investors, because it seems very expensive. Some investors think that a triple-digit share price is bad, and they feel that a $5 stock has a better chance of doubling than the $100 stock. This is a misguided view, because the $5 stock might be considerably overvalued, and the $100 stock undervalued. The opposite also could be true as well, but share price alone is no sign of value. Market capitalization is a clearer indication of how the company is valued, and gives a better idea of the stock's value.


Real World Example


An example of where a high price may have made investors pause is Warren Buffett's Berkshire Hathaway (NYSE:BRK.A). In 1980, a share of Berkshire Hathaway sold for $340. The triple-digit share price would have made many investors think twice. However, Berkshire Class A shares are worth $173,300 each in 2013. The stock rose to those heights because the company, and Buffett, created shareholder value. At $173,300 per share, would you consider the stock expensive? The answer to that question does not depend on the dollar price of the shares.

Another example of a stock that has generated exceptional shareholder value is Microsoft (Nasdaq:MSFT). Microsoft's shares have split multiple times since its IPO in March 1986. Microsoft closed at $27.75 on its first day of trading, and is currently valued at $32.93 per share in 2013. That seems like a meager return over 20 years, but when all the splits are accounted for, a $27.75 investment in 1986 would be worth significantly more today. Because the stock did split, the share price in 2013 was $33, but each share also represented a much smaller piece of the company.

Microsoft and Berkshire both produced stellar returns for investors, but one decided to split several times, while the other did not. Does this make one more expensive than the other now? No - if either should be considered expensive or cheap, it should be based on the underlying fundamentals, not the share prices.

Conclusion

Some investors may focus on share price when looking at a stock, because it is the most visible number in the financial press. Investors should not get fixated on share price alone, because companies can change share prices dramatically through stock splits, reverse splits and stock dividends without changing fundamentals. Dig a little deeper when thinking about your next investment, and remember that a stock with a high price can go much higher under the right circumstances, just as a stock with a low price can sink even further if it isn't really a good value.

*Note: Article have been extracted and edited from: Don't Let Stock Prices Fool You | Investopedia http://www.investopedia.com/articles/stocks/08/stock-prices-fool.asp#ixzz4C87INg7S

Binary options are a scam

A scam is a dishonest representation, meant to trick someone. What makes binary options a scam is that it presents itself as an investment method, while it is nothing short of gambling with bad odds.

The simplicity of binary options is part of its attraction.

Binary means “two” and refers to the fact that you only have to make a single decision about one of two outcomes. You decide on whether you think a certain asset will rise or fall in the future.

The size of the movement does not matter. If you are wrong, you lose the money you have “invested”.

If you are right, you will get a pay out of between 65%-85% of the “invested amount”. Note this is already unfair as you stand to lose 100%, but you can never win 100%.

Some brokers will give you a small percentage – 5% to 15% – back, in case you lose, but they compensate this by giving you less when you win.

You can bet on almost any asset: stocks (for example Shell), indexes (for example the Dow Jones), commodities (for example gold, oil), or currency pairs (for example Ringgit and Dollar).

Here is the tricky part: the duration of the binary option is extremely short. It typically ranges from 60 seconds to 24 hours.

For such short time periods, assets move in essentially random directions and cannot be predicted. The short duration makes any investment technique worthless.

Binary option brokers will tell you “the trend is your friend”, but to call movements of a few second or minutes ‘trends’ is a grave misuse of the term. If you do spot a trend, it is only because the human mind is trained to see patterns and trends, even if they aren’t really there.

Similar to how people see “trends” at the roulette table, while it is completely random what happens: roulette balls have no memory and don’t care what happened the previous roll.

This means you are not investing, but gambling. It is just that you have worse payout ratios than if you were to go to the casino and gamble red or black on the roulette table.

Predicting what the stock is going to do in the next ten minutes is impossible, even for companies about which an abundance of information is available, such as Apple or Facebook.

Random, unrelated events, such as interest announcements, large buyers / sellers, bad weather, a terrorist attack or a flash-crash could temporarily influence the stock price.

But more often, there is no attributable reason at all for short term stock movements. This makes binary options gambling with unfair chances. The broker will always win at the end, just like at the casino.

As short-term fluctuations in stock prices are random and irrational, you have 50% chance of being right. Let’s say you “invest” RM100 and are wrong, you lose RM100. If you “invest” RM 100 and are right, you will get RM75 (a payout percentage of 75% is common).

This means on average you will lose RM12.5 per trade: (lose RM100 + win RM75) / 2 trades. Betting red or black on the roulette table is a better deal (through you will still lose on average), as the payout is 100% and the chance that you win is 18/38= 47% (due to the occurrence of the 0 and 00).

As you have to accept the 75% payout, it means you would need to be right in 57% of your gambles, instead of 50%, in order to break even. In order to win money, you need to be right even more often! This is because 57% x RM 75 (you win) – 43% x RM 100 (you lose) equals zero Ringgit.

But there is no knowledge that can help you to improve your win rate to 57%. After multiple gambles, you will always gravitate toward the 50% average and lose money.

It is easy to see how all the human weaknesses – greed, jealousy, overconfidence in your own trading ability and knowledge plus the underestimation of risk – come into play when you see the unwanted ads for binary options pop up on your screen.

They scream at you: “no knowledge required!”, “Make money from your own home”, “Start earning thousands of ringgits in a few hours”. Then, the fake testimonies from paid actors start to play. It’s the latest ‘get rich quick’ scheme. It’s too good to be true, literally.

You don’t need to be Einstein to realise this is a scam. If it would work as advertised, everybody would do it. Regrettably, it is always the financially illiterate people that end up being the victim and become even poorer as a result, while the brokers are the only ones who profit.

No serious investor, such as Warren Buffet, would ever consider binary options. No financial investor worth his or her salt would advise it.

Short term stock movements are “noise” that can only be filtered out by holding a stock for an extended period of time – not even months, but years.

As Warren Buffet said in his Chairman letter of 1988: “Our favorite holding period is forever.”


Source : The Star