Malaysia

4 Ways How Your Fundamental Analysis Can Help You In Your Entrepreneurship by aqeel ungku

Written by Ungku Aqeel (@ungkuaqeel418)

Fundamental analysis is the cornerstone of investing. In fact, some would say that you aren't really investing if you aren't performing fundamental analysis. It’s no surprise many people find fundamental analysis daunting. After all, the subject of finance is infamous for its use of jargons. Unlike technical analysis that focuses on the price movement of a security and uses this data to predict future price movements, fundamental analysis instead looks at wholistic economic and financial factors that influence a business.

1. Fundamental analysis naturally helps you understand businesses better

One of the most notable but less obvious rewards of fundamental analysis is the development of solid understanding of the business and industry due to the in-depth, extensive research and analysis required to conduct fundamental analysis.

Before you even look into any financial statements, you need to know what the company is about. This means that you need to know how the company makes money. For example, British American Tobacco’’s revenue stream comes from the amount of products they sell while IHH Healthcare’s revenue stream comes from the number of sick people that are admitted into their hospitals.

Not every business functions the same way. The aforementioned companies are like mangos and durians, both are great fruits (companies) but you can only get them at different times of the year. Making fundamental analysis regularly will go a long way as it help you you familiarise yourself with the different factors or events affecting business operations. The quickest, simplest and most effective way to get started is to read up on research reports on companies released by banks and other research houses. These reports are usually written whenever there is a major event that could affect an entire sector, or whenever a company’s quarterly result is out. Research reports are exclusive to its clients, but these reports can be found all over the internet. One place is on stockbit itself. Follow @BursaBuzz. They post many research reports from various banks and brokers.

A prior understanding about how different businesses or industry works from fundamental analysis of your investment in the stock market will bode well in your overall perspective upon your next business venture!

2. It helps with your “lingo”

Unless the movie Crazy Rich Asians is the story of your life, starting your own business (especially a startup) might mean pitching your business ideas to investors (Venture Capitalists or Private Equity or Angel investors) and future stakeholders. Having a business lingo goes a long way. You can have an idea that could change the world, but ultimately, investors are risking their money with an expectation to generate returns; while future stakeholders are interested on why they would choose you to be their business partner / customer / supplier, etc.

Too shy or afraid to talk to people that are fluent in this “business / financial / investment” lingo in real life because you don't have any prior experience? You can always always practice this on Stockbit by asking other Stockbitors questions and analyse the way they reply you. You might actually learn a thing or two just by reading their conversations!

Knowing how to “talk” and “present” your ideas are always crucial in everyday entrepreneur life. Being good in fundamental analysis and being able to share or debate your investment thoughts and ideas will expose you to real world scenarios, especially on important negotiations.

3. It will help you faster and apt business decisions

Over time, you’re bound to witness a black swan event, be it Pakatan Harapan’s recent victory or the oil crisis in 2015, these events will affect businesses, and fingers crossed, your business too. How would you react to these scenarios? Well, if you have been in the investment world for a while, then you would have witnessed certain events and consequently, witnessed how different corporations and managements reacts to these events.

Marvel has long been the comic-book world’s biggest player. In the mid-1990s the comics market crashed. Consequently, Marvel went broke, and there was no superhero that could save Marvel from bankruptcy. After a series of restructuring, Marvel changed the way its heroes came to life, focusing on movies rather than paper and ink. Today, Iron Man, the Avengers, Spider-Man, and X-Men are all billion-dollar franchises, and the company’s master plan–to connect many of its characters in a single cinematic universe–has turned it into one of pop culture’s most powerful brands.

Being an investor and a shareholder, especially a fundamental long term one, every decision the management and the company makes affects you. And it’s your duty to keep yourself up to date and see how they overcome adversity throughout your holding period. At times, you will know which and what type of CEO and leaders and management team you want to stick around with, and which you will chuck out. Over time, you might just pick up a thing or two that will help you when you face your own business challenges.

4. Patience

Ask any seasoned investor. They’ll tell you that you will make losses from time to time. Sometimes it’s the market, other times it could be an inaccurate decision. You can sell at a loss if you’re not confident in the stock anymore, but if you are convicted with your decision, you can choose to ride out the market wave. It’s a painful journey, but you’ll come out stronger and more importantly, wiser.

Good things takes time. Likewise, when starting your own business, there are seasons where sky seems to be the limit and there are bad seasons where failure seems to look like the only door left to be opened. Be confident with your analysis just like how you need to be confident in your business. If you’re not, then why jump into it in the first place?

The Power of Compounding Interest. Making RM 1,000 into RM 1,000,000 by aqeel ungku

Written by Rondy Yunanda (@Ryunanda in Stockbit)

The not so secret investment tool

In this blog post, I will be sharing a “not so secret investment lesson” that probably everyone would and should have known. I’m talking about compounding interest. For those who are new to the investment world, compounding interest is basically just interest stacked on interest. Compounding helps your money grow exponentially as the interest earned is continually 'added' to the 'base' amount. This new net amount will then be the amount that interest rate will be calculated against. This forms a continuous cycle that will allow you to earn an ever increasing net amount of money!

Compounding is probably the most powerful investment tool ever. To illustrate this, assuming that I can offer you a 100% interest everyday on your investment. An initial RM 1,000 investment will become RM 2,000 investment on the second day, RM 4,000 on the third day, and… RM 1,000,000 on the twelfth day!

Of course the illustration above is unrealistic and way too good to be true. Currently, the best FD rate offered is 4.6% return per annum (year) and yes, while that interest rate feels like a bummer, everyone, yup, everyone can still be a millionaire through good saving habits and compounding interest.

The most important ally to compounding interest, apart from the rate of return (“interest”) are:

1) Time and

2) A good habit of allocating monthly savings to invest for the future

Do you know that you can become a millionaire after 35 years by saving RM 1,000 monthly in a risk - free fixed deposit paying 4.6% interest per annum If however, instead of investing in this relatively  lower yielding fixed deposit, you are to invest in an asset class that yields an average 20% interest per annum - you would have made your first million after only 16 years.. and made RM 36 million within 35 years!

The biggest takeaway therefore, is that a small difference in return can make a big difference in wealth in the long run.

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Investing in the stock market

This brings us to the next question - how can we increase the rate of return on our investments? Well, investing in the stock market is definitely one of the method of making that difference in returns. Stock market is deemed by many as “risky” and while that notion is not wrong, it is definitely one that can be argued.

Historically speaking, there is a high probability that long term investments in stocks will yield positive returns. For instance, if you compare the performances of any blue chip stocks in the KLSE / KLCI index over the past 10 years, approximately 90% will yield a positive return! Sure, there are some blue chip stocks that had lost its value over this period and can no longer be categorized as a blue chip. This scenario however, is uncommon.  Furthermore, if you happen to invest in the right company like Nestle, you could be looking at about 500% return. Do you also know that if you had invested in America’s S&P 500 index (an index that constitute 500 largest stocks in America) 10 years ago, you would have earned  an annualised 22.5% return? (you can do this via ETF but that’s a topic for another day!)

Time is therefore the most loyal partner to investors and the stock market is one of the most powerful investment instruments to gain compounding profits in the long run. Today's investors are blessed with a variety of support that ease their investment processes, thus allowing them to be able to begin investing early on in life. The difficult part is just to start this good habit! Last and foremost, investing in the stock market is a long term process - you will need time to learn and gain experiences to eventually be able to make sound investment decisions.

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Summary

In summary, compounding is a very powerful tool for wealth creation. Diligent investment in the stock market is a method to increase the rate of return / compounding on your profit, and it is important to start early with good investment habits to maximise this potential.

Reference

1) check out our fellow stockbitor's (@mengteck) video on compounding interest, very insightful! https://www.facebook.com/savwee.my/videos/1715154898715548/

2) Interest calculator - https://www.msn.com/en-us/money/tools/timevalueofmoney

Here are 6 Tips on How You Can Manage your Finances with Investments!! by aqeel ungku

Written by Ungku Aqeel (@ungkuaqeel418 in Stockbit)

How do you manage your finances well?

You've probably met someone who’s had a brilliant career during his/her youth, but eventually becomes less  prosperous when that person gets older. This often happen to people with poor understanding of financial management and did not make any good investments in the earlier part of their life. Facing financial difficulties at an old age  is a serious burden, hence,understanding money management at an early age is important.

Here are some good financial management tips to to help you earn enough where you’re older

1. Set clear financial goals

The first step to good financial management is to clearly define your long-term goals (10-20 year), A well defined goal will give you clear direction for your future which will give you a strong sense of self-motivation to apply good habits of financial management. Such motivation will put you in the spirit of getting a prosperous life that you want in the future.

2. Allocate funds by priority

Begin to make a clear list of how you want to distribute your money. Remember to prioritize your needs over your desires. Prioritizing your needs over desire will help you save money more effectively. The way you allocate your money should be realistic in order for it to be achievable.This allocation is very important and must be done carefully, so that all needs will be well fulfilled.

3. Reduce consumptive habits

Reduce consumptive habits by prioritizing non-desirable needs, as explained in the previous point. Reducing consumptive habits means reducing the amount of expenditure on things that are not important. By reducing this habit, you will be able to save your money for more productive needs.

4. Regularly allocate funds for investments

Reducing your consumptive habits will help you to efficiently accumulate funds for your savings and investments. You can invest in various financial assets such as deposits, mutual funds, stocks, or real assets such as property. Of these financial asset selections, stocks is an investment options that has attractive long term benefits. Other than its lucrative potential, stocks are also easy to get started on as everything, from opening an account to information gathering and trade execution can all be done at your fingertips online

All you need is a smartphone or a computer with internet connection to start making  investments in the stock market. Shares represent long-term investment instruments, so the benefits can also be perceived in the long run.

A simple method of investing stocks as a precursor to managing finances is to buy stocks on a regular basis, weekly or monthly. You can start by buying reputable corporate stocks you know first, because the probability of gaining profit from this stock in the long run is very high. Avoid day trading as it can be psychologically draining. This is due to the characteristic of stock prices that tend to be volatile in the short term. Only apply for long-term benefits.

5. Do it with discipline

The key to successfully financial management is discipline. You need to be disciplined and organized in managing finances. Otherwise you may lose control. Set your priorities. This helps you focus on your financial goals, so we can be more disciplined and more stringent in meeting these financial priorities.

6. Make it as early as possible

Do not procrastinate  implementing good financial management, the sooner you start the greater the benefits you will get in the future.

4 Things You Should Do if Your Share Price Falls when Investing in The Stock Market by aqeel ungku

Written by Ungku Aqeel (@ungkuaqeel418 in Stockbit)

When investing in shares, one would of course we expect the stock prices of was bought to keep rising. But in reality, that isn’t always the case, there will always be periods when your stock price will go down. It is thus, important to remember that stock investments comes with risks, one of which is capital loss. Capital loss occurs when your stock price falls and you sell the stock in a loss position.

So what to do in the event of the stock you bought had dropped?

1. Don’t panic

The most important thing when your stock price keeps dropping is to keep your composure and do not panic, do not rush to buy more just because it is cheap and definitely do not rush to sell at a loss. Take a breather, and look at the big picture (to be explained more in number 2). As a rule of thumb, the money invested into stocks should be a fraction of your disposable income. Do not go all in and invest all your money in stock. Also try to diversify by buying shares of companies from various sectors.

2. Review the company again

Before making a decision to buy more or sell your stock, review the company again. Are all the factors considered still in line with your initial analysis or has something changed? How much does this change affect the company? Are the changes significant enough to stop the operations of the company? Or will it create difficulties for the company to pay its debt? In cases of events that had negatively impact your initial thesis, it might be wiser to sell the shares of the company.

3. Ask & listen to other people's opinions

Sometimes while making your analysis, you may have missed or be unsure of somethings. You can ask other people's opinions, and you should never be afraid to do so. There will always be people who are more experienced, who are more knowledgeable / are experts in a certain area. A different perspective / angle in looking into your stocks go a long way to establish conviction in your investment call. Also listen to news / professional analysts take on both macro and micro news. Stocks sometime move irrationally based on people’s emotion, and in times like these, waiting it out is not a bad idea.

4.  Buy again & be patient

When you have reviewed the company again and have gotten opinions from other investors, and the results shows that your initial thesis and the fundamentals of the company is still good, then when the stock falls lower, it is actually a good time to increase the ownership of the stock especially if you invest in the long term! Sale and bargain hunting is always the best. Now we just need to sit back, relax and wait for the market to be rational again.

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Stockbit

A platform such as Stockbit can help in assisting you to look for other people’s views and opinions on a stock you intend to or already invest in. Stockbit gathers like minded people in the stock market together to learn, discuss and debate each other, all in good spirit, to ultimately give strong conviction on potential investment which will lead to better decision making. Join the investment community today!

Hello Malaysia! Introducing Stockbit by Wellson Lo

Hello Malaysia! Introducing Stockbit: What you should know

Profiting from trading or investing in the stock market is not always easy. Perhaps you’ve read the “Intelligent Investor” book from Benjamin Graham, or perhaps you’ve even paid some money to learn about charting. Whichever style you adopt, there’s a lot to know and there are risks involved. So the more you know, the more tools you have at your disposal to study about the market and the companies, the better your investment decisions will be. And that’s ultimately what Stockbit is here for, to be your perfect sidekick in the stock market.

Originating from Indonesia, Stockbit is a one stop social networking platform for stock investors. We at Stockbit know that we have been of a help to the retail investment community in Indonesia, and now would like to extend our horizon to help investors in Malaysia too! Here’s a brief summary of the features to get you quickly acquainted with Stockbit:

Stockbit Malaysia

1. SOCIAL NETWORK FOR STOCK INVESTORS

Stream

We promise new users will be able to quickly familiarise themselves with Stockbit’s base layout. Why? Because Stockbit has a user interface that’s similar to your favorite social media platforms! Post your ideas, discuss your opinions, attach your charts, $cashtag (our own version of #hashtag) your companies, tag your friends, click like on posts you appreciate, save your favourite posts and scroll through the streams for the latest going ons!  

User Profiles

Like a user? Click on their profile and follow them! Profiles are transparent on Stockbit. All users are able to see what others have posted, the number of followers they have, analyze their reputation etc This increases credibility so we are able to create and  maintain a healthy community truly interested in quality discussions.

2. RELEVANT INFORMATION IN ONE PLACE

Price

You will be able to create your own personal watchlist and monitor all of your favourite stocks including its price movements throughout the day on the Stockbit platform.

News & Announcements

Get all the latest news & announcements from one place. Stockbit will also alert you on real time updates & official announcements on your companies right on your smartphone. Never miss an important update again.

Keystats

A quick & reliable snapshot of any company’s financial metrics & performance to make a quick judgement / decision if the need arises.

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3. COMPREHENSIVE ANALYTICAL TOOLS

Whether you are a short term trader or a long term investor, Stockbit has you covered. Stockbit offers a unique learning experience via its analytical tools. Some of its features are:

Chartbit

Stockbit’s Chartbit tool enables you to analyse price movement and trends using a comprehensive set of indicators including moving averages, RSI, MACD, Fibonacci, Oscillators, Ichimoku clouds and lots more. You can compare price movements between companies, save your personalised layouts and share your analysis with everyone.

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Price Seasonality

You will also be able to enjoy Stockbit’s very own exclusive feature – the Seasonality tool. This unique tool will enable you to see interesting historical price pattern and trend MoM, QoQ and YoY. This feature will definitely give you a few pointers like never before.

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We are also working and will continuously adding more unique and interesting features into the platform.  

GETTING STARTED…

Hopefully all of the above is getting you excited! The next step to join is to simply go to https://stockbit.com/ for the web or download “Stockbit” app on you mobile! Click on the sign up or join now icon, pick either to register from facebook or via email, select your primary market, fill up your details, key in the SMS verification code and voila! you’ve set up your account with Stockbit.

SUMMARY: Stockbit is your perfect sidekick in the stock market!

To sum up, here are some of the advantages Stockbit offers:

  1. Social: Stockbit believes that investment and trading are better done with a community. Retailers do not possess the monetary capacity, nor more importantly, the information like that of big institutions, hence the idea of helping each other to bridge that information gap is very important. Plus, it’s always fun to make more like minded friends and to learn together!
  2. Innovative & Simple: Stockbit strives to be as pleasing to the eye as possible. Furthermore, the platform has the flexibility to constantly improve itself to cover and suit everyone’s needs. We are how we are today due to the constant feedback of our users. Do let us know what we can improve on together!
  3. One platform fits all: Whether you’re new to trading or already have some experience; a short-term trader or long-term investor- Stockbit has the community, information, and analytical tools you need to fulfil your trading and investing needs.

Stockbit is now ready and available for the Malaysian market.