178,

Yes, I notice quite a few wish to go to property, forex etc etc. But where is the capital?

oop.

Buffett or more precisely, Graham criteria:

you don't buy a stock if you cannot sleep at night without knowing its share price.

Preferably at NAV or below. Div yield at least 5%. growth is evident. Low PE. etcetcetc.

If we were to apply these criteria, not even the bluest of the blue like Sembcorp, DBS etcetc would make the cut.

And if you're talking about FA pennies (of which there are some here): the trouble is our local market is very tightly controlled due to its total size (very small): so when an FA penny runs up is likely when a bull run is on. In which case, you may as well just hantam any penny in a bull year, the returns will be the same. it all depends on which penny the BBs choose to run up. Nothing to do with value at all. FA news is just another reason for a run. 

You can just as easily cook up any ol' story for a hungry market, and the px will go up. 

The only dif is in a bear market: where the div yield of the good penny will show itself; thereby reducing investor loss and actually providing a steady income; and where it can rise again like other blues, unlike most speculatives which will just crash and burn.

And yah. 14 stocks. How do you even find 14 stocks that are worth buying? o_0 i never hold more than 5 counters at one time.

178investors      ( Date: 28-Jul-2008 23:57) Posted: elf, i dont quite follow your comment. May be you want to elaborate a little more. elfinchilde      ( Date: 28-Jul-2008 23:02) Posted: hmm. the criteria are good, but it's perhaps more applicable for a large market. ours is so small, you wanna find a buffett kind of stock, it's more like, forget it. may as well be like this fella:

One very good reason why I wouldn't put my money in 14 stocks is simply because it is not easy to find 14 GOOD stocks. There lies the heart of the issue. It is far easier to find a few good stocks you have done researched thoroughly, then find so many stocks. Ask me to do research 14 times? No way.

As I mentioned before, managing your risk profile is far more important. With so many stocks in your profile, you lose sense of your risk profile. If the market crash the next day, can you quickly have a feel of whether you are still in net profit or net loss, or do you need to press the calculator 14 times? 

Put $200k in 14 stocks is over diversification in my opinion.You should read " The Winning Investment Habits of Warren Buffet and George Soros." Sometimes when you think about it, some of the habits they have are just purely "common sense". They apply to ALL investors. At the end of the day, each one of us see things differently.

Just like I keep telling my colleague not to buy so many stocks and he just won't listen. I think he has 30 stocks now. 

hi Livermore, you really lucky man to own 1 stock now meaning you're almost fully cashed up unless you are betting all your money on that one stock now.

If you're cashed up, plenty of good opportunities to pick in the next few months. Good luck.

Livermore      ( Date: 28-Jul-2008 21:43) Posted: Oops I fail as I have only 1 stock now 178investors      ( Date: 28-Jul-2008 14:08) Posted: Sharing some thoughts/knowledge which could be handy for new investors starting out. They have been very helpful in my case. Hope it can do the same for you. 10 Principles 1. Know yourself 2. Study the great investors 3. Beware of the sheep market 4. Keep a long term perspective 5. Analyse the companies closely 6. Don't fall in love 7. Diversify 8. Watch the environment 9. Get in and out in time 10. Don't follow the rules

on pt 7 "Diversify", i was not asking investors to over-diversify but the need to diversify. Say for a new investor who want to invest 200k. It is too risky to put that amount in just 4 stocks unless he really know what he is doing. Some people use a simple rule of thumb like dividing that amt by 1k and square-root the remainder, giving a number 14. So they would put that 200k on 14 stocks which i think is reasonable. (Please note diversification can also mean putting your money in uncorrelated investments, like putting some in stocks, bonds, currencies, commodities, hedge funds, real estates, alternative invts, etc.) Yes, Buffett had cautioned against over-diversification. But we have to acknowledge that many of us do not possess Buffett-like characteristics.

on pt 9 "Get in and out in time",  i know many fund managers said we should not be doing that. You're right. It isn't possible to time exactly. But if one diligently study and apply principles 3, 5 & 8, one would have some gut feel if it is a good time to get in or out before the herds. Timing may not be everything but it is a lot. Nothing is static; everything changes. No one can have confidence in any industry for an infinite length of time so it is important to close out  mistakes before they turn into big mistakes.

on pt 10 "Don't follow the rules". The 10 principles are for investors type, not traders. I know traders have their own trading strategies/rules. For new investors, "Don't follow the rules" meaning don't follow it slavishly. They have to be flexible, willing to change their thinking and to challenge the thinking of others. Eventually to succeed in their own way.

hope my explanations help to further the 10 Principles.

singaporegal      ( Date: 28-Jul-2008 21:26) Posted: Good principles. But I disagree with points 7,9 and 10. 7. Diversify  - over-diversificaiton will create a mediocre portfolio. In fact, even Warren Buffet warns against this. 9. Get in and out in time - I hope this doesn't mean that you time the market. It is not possible to time it exactly.  10. Don't follow the rules - For TA people, rules are everything. If we don't follow a fixed trading strategy, we are just doing guesswork. 178investors      ( Date: 28-Jul-2008 14:08) Posted: Sharing some thoughts/knowledge which could be handy for new investors starting out. They have been very helpful in my case. Hope it can do the same for you. 10 Principles 1. Know yourself 2. Study the great investors 3. Beware of the sheep market 4. Keep a long term perspective 5. Analyse the companies closely 6. Don't fall in love 7. Diversify 8. Watch the environment 9. Get in and out in time 10. Don't follow the rules

Good principles. But I disagree with points 7,9 and 10.

7. Diversify  - over-diversificaiton will create a mediocre portfolio. In fact, even Warren Buffet warns against this.

9. Get in and out in time - I hope this doesn't mean that you time the market. It is not possible to time it exactly.

 10. Don't follow the rules - For TA people, rules are everything. If we don't follow a fixed trading strategy, we are just doing guesswork.

178investors      ( Date: 28-Jul-2008 14:08) Posted: Sharing some thoughts/knowledge which could be handy for new investors starting out. They have been very helpful in my case. Hope it can do the same for you. 10 Principles 1. Know yourself 2. Study the great investors 3. Beware of the sheep market 4. Keep a long term perspective 5. Analyse the companies closely 6. Don't fall in love 7. Diversify 8. Watch the environment 9. Get in and out in time 10. Don't follow the rules