Dear readers,
What a volatile market it was for the last 1 week. You will see sudden sell down despite all the positive news in the regional market.
Malaysia is a "Apa pun Boleh"(anything also can) land, as for equities market , if you do not know what you are doing, you will be hit with losses when you're trying to pick the bottom or the top.
One key strategies that i always advocate is buying stocks on the cheap and do not follow the herd mentality where practically everyone is chasing after a stock. Though you may be getting some profit but at the end of it, you will lose your pants as most often the stock prices will be affected by short term profit taking or sell down.
Key things to look at is buying stocks when it is trading at a historical low PE versus its peers or versus its historical PE.
But just purely looking at PE alone is not enough as most often, the ratio can be manipulated. One rule of thumb use by fund manager is also factoring the earnings growth rate of the company. The higher the growth rate the better it is. Most often that not, a lot of investor always look at quarterly earnings only. Mind you, quarterly earnings are cyclical in nature and does not give a true reflections of a companies earnings.
Investor should be looking at the growth of annual earnings of the company versus its previous years. If a companies is constantly growing by double digits and increasing, you should consider buying the stocks for investment and hold it. Buy and hold strategy in this case will work, just try not to look at your portfolio on a daily basis as the noises in the markets will affect your judgement calls on investing into the stocks you pick.
I hope this small tips will help you in your journey of investing.
regards,
Keith
http://klse.i3investor.com/blogs/klseStockPicking/144789.jsp
