This is a 2-day seminar conducted by Dennis Ng. The experience I have in stock investing was mainly trading and I took up this course because it offers to build my arsenal in the stock market with fundamental analysis.
The lesson began with the bonus material – investing into gold and silver. In recent years, gold and silver prices have gone up significantly to deserve attention from the retail investors. It was so popular that there are businesses that claim to pay interest on the gold you buy. Gold is a negative yielding asset and it does not pay interest. I don’t mean to play down gold. Do not get me wrong. Dennis advised us to buy gold and silver as an insurance and allocate some percentage of our capital to gold and silver to hedge against inflation or stagflation. Here are 2 posts to see how to buy gold and silver.
Fundamental Analysis
Starting the course proper, we were taught to create our own income and expense statement, as well as the balance sheet. Thereafter we calculated some important ratios to assess our financial health. It is easier to understand these financial calculations based on personal experiences and context. The point to be made was that companies and businesses use similar statements and balance sheets to report their finances. And the ratios are what we can use to determine the financial health of the companies.
Holding power is one of the key principle being emphasized and hence, having a sum of “just in case” fund is crucial to ensure you are not financially troubled when the stock prices dip. Dennis’s investment horizon is 2 to 5 years.
The type of stocks that Dennis look at are stocks with market cap of less than S$50 million to under S$100 million. These are considered small cap stocks and one of the reasons given was that Fund Managers are not able to invest in. Secondly, these are stocks that are targets for invisible hands to move them.
There are several strategies taught in the course. You can just be expert in one area to make money from stocks.
1) Cum Dividends (CD) and Excluding Dividends (XD) – CD means you will receive dividends if you buy the stocks now while XD means dividends have been given out. There is a golden time for you to buy to make capital gains (not dividends).
2) Bonus Issue and Stock Splits – Bonus issue is good piece of news as only companies making money can issue bonus shares. When bonus issue or stock splits is announced, there is a way to make money from it too.
3) Rights Issue – Rights issue is for company to raise funds from existing shareholders by offering new shares at a discount to market price. There is also a golden time for you to capitalise on this company announcement.
4) Invisible hands – This is one of the key concepts emphasized during the course. Dennis termed this as the tipping point for his stock investing journey. It was only he knew about this concept that he began making money from the stock market. He was lucky to learn this from his shifu as it wasn’t taught in any books. Only if you are able to identify invisible hands in action, then you can get on the same side with them. Only this way you can buy low and sell high.
5) REIT – There are 3 ratios to evaluate a REIT. These 3 criteria are sufficient to buy a good REIT stock. REIT are easy to understand business and are less volatile than stocks. It allows investors to hold diverse portfolio of properties with small amount of money.
6) Financials – Financial institutions basically deal with money and hence there is an effective way to value whether a financial stock is undervalued or expensive.
7) Warren Buffett & Philip Fisher investment methods - We were taught how to use the combined teachings of these 2 gurus how to evaluate businesses.
Technical Analysis
Dennis engaged his long time friend to teach the session on technical analysis. He does not buy or sell stocks strictly based on charts but he does use it to gauge the market sentiment. It is still important to use the chart to look at a long term picture, to discern if the market is toppish or if a particular stock is reasonably priced. It is a combination of fundamental analysis, technical analysis and market cycle investing that form his investment style.
It is also from the charts that he can identify the invisible hands. Price can be faked but volume cannot be faked.
Cycle Investing
Another “aha” moment was the discovery of the investment clock. The investment clock was invented by Trevor Greetham but Dennis adapted it for his own use, which is simpler to understand. It gives us additional clues to whether the market is topping and what should we position ourselves for the next phase of economic cycle.
Dennis understands the financial statements do not reveal everything and he shares his personal lessons so that we can avoid them. He described 8 warning signals in financial reports, 4 common tricks done by companies and 6 non-financial warning signs. When the stocks that we hold have one or more of the warning signs, we should re-evaluate our position and sell before things go wrong.
At the last part of the course, we were given financial statements and charts of companies to apply what we have learned to select winning stocks. We were also given the chance to buy Traded Endowment Policies (TEP) if we think the stocks are overpriced and would like to keep our money in TEP, since it is not correlated with the stock market. This practical session is useful as it forces us to run through the concepts in our mind and explain to our group mates why we select certain stocks. We also punched numbers to calculate the relevant ratios for the stocks. It really consolidated our learning altogether.
Throughout the course, he quoted stocks to illustrate his concepts and how they are still undervalued. It was up to us if we want to invest in them after the course. I have bought into BreadTalk and will also look at other potential stocks to invest. I have apportioned half of my capital to fundamental analysis and the other half to trading. (Please do not take this as investment advice, do your due diligence!)
Contact me if you are interested to attend the course. I maybe able to get you a special price.
You may also like:
- Your First $1,000,000 Making It In Stocks by Dr Michael Leong
- Review: How to Save and Accumulate One Million Dollars Seminar
- My Formula! Seminar by Thomas Matthew
- You can lose money even if you select the right stocks
- Categorize Your Stocks
- Warren Buffett – "Never count on making a good sale…"
- Review – Insight to a Professional Trading Career
- Why Stocks?
Discover the Secrets of Singapore Trading Gurus!
Interviews with Singapore stocks, forex, futures and options traders and trainers! This book is written for you:
- learn how professionals trade
- discover their strategies, money management and approach to the markets
- understand their stories and motivation behind trading
- know your trainers before attending their courses
{ 4 comments… read them below or add one }
Dear Alvin,
Is this course applicable to Malaysia contex?
Dear Alvin,
Is this course applicable to Malaysia contex?
Hi xuicin, the strategies are currently used for Singapore stocks.
Hi xuicin, the strategies are currently used for Singapore stocks.