FINANCIAL CHRONICLE™
Dear Reader,

Registration with the Sri Lanka FINANCIAL CHRONICLE™️ would enable you to enjoy an array of other services such as Member Rankings, User Groups, Own Posts & Profile, Exclusive Research, Live Chat Box etc..

All information contained in this forum is subject to Disclaimer Notice published.


Thank You
FINANCIAL CHRONICLE™️
www.srilankachronicle.com


Join the forum, it's quick and easy

FINANCIAL CHRONICLE™
Dear Reader,

Registration with the Sri Lanka FINANCIAL CHRONICLE™️ would enable you to enjoy an array of other services such as Member Rankings, User Groups, Own Posts & Profile, Exclusive Research, Live Chat Box etc..

All information contained in this forum is subject to Disclaimer Notice published.


Thank You
FINANCIAL CHRONICLE™️
www.srilankachronicle.com
FINANCIAL CHRONICLE™
Would you like to react to this message? Create an account in a few clicks or log in to continue.
FINANCIAL CHRONICLE™

Encyclopedia of Latest news, reviews, discussions and analysis of stock market and investment opportunities in Sri Lanka

LISTED COMPANIES

Submit Post


ADVERTISE
Poll

EXCHANGE RATE PREDICTION: 2022

 
 
 
 

View results

ශ්‍රී ලංකා මූල්‍ය වංශකථාව - සිංහල
Submit Post


CONATCT US


Send your suggestions and comments

* - required fields

Read FINANCIAL CHRONICLE™ Disclaimer



Latest topics

» The war in Ukraine is no longer shocking the wheat market
by ResearchMan Today at 12:44 pm

» POSITIVES & TARGETS BY IMTIAZ BUHARDEEN
by cseguide Today at 11:34 am

» Analysis: China casts giant shadow over emerging nations' chase for debt relief
by ChooBoy Today at 7:38 am

» In STOCK MARKET despite all odds, there is always hope. Never ever give in nor give up.
by atuts Yesterday at 2:14 pm

» India raises import tax on gold to support rupee and amid trade deficit
by ResearchMan Sat Jul 02, 2022 2:09 pm

» When will supply chain disruptions ease?
by ResearchMan Sat Jul 02, 2022 9:57 am

» Expolanka to continue its winning streak
by samaritan Fri Jul 01, 2022 4:12 pm

» Govt gets its priorities wrong
by samaritan Fri Jul 01, 2022 10:25 am

» Ambassador assures U.S. support to Sri Lanka to find solutions to economic issues
by samaritan Fri Jul 01, 2022 10:16 am

» IMF-Sri Lanka bailout talks end without a deal
by ChooBoy Fri Jul 01, 2022 9:16 am

» Sri Lanka Breaks Into Hyperinflation Zone Amid Dollar Crunch
by CHRONICLE™ Fri Jul 01, 2022 8:11 am

» Sri Lanka needs to do more on debt restructuring before a bailout package is finalised, says IMF
by CHRONICLE™ Fri Jul 01, 2022 8:06 am

» Global COVID cases rise as BA.4 and BA.5 expand
by samaritan Fri Jul 01, 2022 7:04 am

» We’re seeing a shift toward international and value stocks, says Schwab’s Kleintop
by target1 Wed Jun 29, 2022 2:40 am

» Wall Street stumbles as consumer pessimism stokes growth fears
by target1 Wed Jun 29, 2022 2:34 am

» Free Market Capitalism vs. Crony Capitalism
by target1 Wed Jun 29, 2022 2:30 am

» Sri Lankan corporations reap large profits as workers and rural toilers face poverty and starvation
by CHRONICLE™ Tue Jun 28, 2022 6:37 pm

» අද රාත්‍රියෙන් පසු, යක්ෂයාගේ හෝරාව ඇරඹේ!
by God Father Tue Jun 28, 2022 6:13 pm

» Derana 360 with Minister Dhammika Perera
by samaritan Tue Jun 28, 2022 1:07 pm

» CENTRAL INDUSTRIES PLC (CIND.N0000)
by LHW Tue Jun 28, 2022 9:24 am

EXPERT CHRONICLE™

MARKET CHAT


CHRONICLE™ ANALYTICS


ECONOMIC CHRONICLE

GROSS DOMESTIC PRODUCT (GDP)


CHRONICLE™ YouTube

LATEST TWEETS

You are not connected. Please login or register

FINANCIAL CHRONICLE™ » CORPORATE CHRONICLE™ » How to Be a ‘Shark’ Investor in a Bull Market Don't rent stocks, own them.

How to Be a ‘Shark’ Investor in a Bull Market Don't rent stocks, own them.

+3
stevenapple
shadow walker
SHARK aka TAH
7 posters

Go down  Message [Page 1 of 1]

SHARK aka TAH

SHARK aka TAH
Expert
Expert

Stock investing is misunderstood by many, which is a key reason why many investors have missed out on the current bull market. It’s often viewed as too risky, confusing or most recently, rigged. Others turn the market into their own personal casino, looking to get rich quick, but leave empty-handed. However, when treated appropriately, the stock market is a remarkable opportunity that enables individuals to become partial owners and share in the fortunes of the world’s most remarkable companies.

Here are five tips to help make the stock market work for you:

1. Be a “shark” not “Fast Money.” The TV series “Shark Tank” provides valuable lessons for individual investors. For those that haven’t seen it, it is a reality show about aspiring entrepreneurs seeking capital from a panel of investors, or “sharks,” to help grow their business in exchange for an equity stake in their company. First, the “sharks” hear a business pitch and then ask questions about strategy, competition, growth trajectory and profitability to get a better feel on the company’s future prospects. Then, after determining whether the valuation is attractive in relation to the firm’s growth potential, the “sharks” decide whether to take an equity stake to share in its long-term fortunes.

On the other end of the spectrum is the CNBC show “Fast Money.” Here, traders talk about which stocks they like with time horizons measured in days, weeks and months. Certainly there are successful short-term traders, but this is an investing style that is often ill-suited for most individual investors.

The lesson here: Successful long-term investors know that it is better to be an “owner” of stocks – not a “renter.” In essence: Be a shark.

2. Know what you own and why you own it. One common mistake that individual investors (and some professional ones as well) make is that they don’t know much or anything about the stocks in their portfolio. They either received a tip from a friend or a co-worker, read something in a financial publication or saw a news segment that influenced their thinking. The problem is, investors could end up owning something far riskier than what they’d prefer, or, if the stock doesn’t initially move in their direction, they might sell too early, only left to tell the story of the one that got away. Of course most people can’t spend their days researching companies. However, a little bit of effort can go a long way. There is a wealth of information online, especially on the company’s “investor relations” website. There, individual investors often can find archived presentations made to professional investors that give a good synopsis of the firm and its strategy that typically only last 30 minutes.

A good exercise to try: Write down the top three reasons why it makes sense to own a stock. If tempted to sell, revisit that list and determine if the investment rationale is still intact.

3. Stick with quality. There are many characteristics that define a quality company. Professional investors consider firms with high profit margins, strong returns on capital, sustainable competitive advantages and healthy balance sheets. This accomplishes two things. First, it helps weed out riskier stocks. Sure, there is money to be made buying firms with high debt loads in capital intensive industries that trade at deep discounts, but this requires intensive research and carries considerable risk. Another benefit of focusing on quality is that it increases the chance that the decision is right, even for the wrong reasons. One of the best-performing recommendations of my career unfolded in a similar manner. This unloved company was a victim of the dot-com crash, but it has a unique product offering, strong margins and a cash-rich balance sheet. Although my investment thesis was correct, what eventually made the stock a 45-bagger was an acquisition that transformed the firm.

The bottom line: Good things can happen to good companies.

4. Volatility is not risk but can be opportunity. Volatility can turn any investor’s stomach and test their resolve. However, many incorrectly equate volatility with risk. Volatility is the price fluctuation of an asset. Risk is the permanent loss of capital. Volatility does not become risk unless an investor is forced to sell. In other words, investors that understand the difference and can set aside money for multiple years put themselves in a better position for success, especially if they are buying quality companies at reasonable prices. Even better, they can take advantage of those that get squeezed out of a position that turns volatile because they invested short-term money.

When investing in stocks: Don’t confuse price volatility with permanent loss of capital.

5. There’s no such thing as a free lunch. In this ultra-low interest rate environment, many yield-hungry investors have turned away from bonds towards dividend-paying stocks. However, simply picking stocks with the highest dividend yields can be dangerous. When the average dividend yield of the Standard & Poor's 500 index is roughly 2 percent, there’s a reason a stock may yield 8 to 10 percent. It’s riskier. Often these very high-yielding names have deteriorating financials, are loaded up with debt or are dependent upon capital raises to pay the dividend rather than internally-generated cash.

The same is true for value stocks, or those that carry low price-earnings multiples. There’s a reason these stocks trade at a steep discount to the broader market.

The bottom line: It is wise to understand why a stock is valued like it is before investing. Know the risks.

Stock investing is difficult and not for the faint of heart. It requires time, patience and resolve. Individual investors who are unable or unwilling to put in the necessary effort, should consider working with a financial advisor who has a strong research team that can help do the heavy lifting for them.
http://money.usnews.com/money/blogs/the-smarter-mutual-fund-investor/2014/05/08/how-to-be-a-shark-investor-in-a-bull-market

shadow walker

shadow walker
Vice President - Equity Analytics
Vice President - Equity Analytics

cheers 

stevenapple


Assistant Vice President - Equity Analytics
Assistant Vice President - Equity Analytics

SOme good points thanks.
BTW u r already a SHARK. Smile

yellow knife


Senior Manager - Equity Analytics
Senior Manager - Equity Analytics

a very good article...thanx shark.....

CONTRARIAN


Stock Trader

Know what you own and why you own it. Absolutely right.

Sstar

Sstar
Vice President - Equity Analytics
Vice President - Equity Analytics

Well said Shark. Now I know the reason why you chose the Pseudo name 'SHARK'!! Super stuff, I loved reading.

VALUEPICK

VALUEPICK
Expert
Expert

“Shark Strategy

Then, after determining whether the valuation is attractive in relation to the firm’s growth potential, the “sharks” decide whether to take an equity stake to share in its long-term fortunes.

Know what you own and why you own it.

Good things can happen to good companies.

Volatility is not risk but can be opportunity. “


About good things can happen to good companies. But bad things also can happen due to unforeseen circumstances beyond control and due to poor risk management systems. Definitely shark investor is going to reap harvest from the market.

Back to top  Message [Page 1 of 1]

Permissions in this forum:
You cannot reply to topics in this forum