Showing posts with label how to. Show all posts
Showing posts with label how to. Show all posts

Sunday, February 4, 2007

Advertorial: How to make money in stocks

I've been asked repeatedly how I learn my stock picking techniques. Over the years since I became interested, I've been reading into the mechanics of the economy, micro and macro. Its only with that understanding that I've been able to understand the stock market, quickly.

I've been largely influenced by this book, "How to Make Money in Stocks -A winning system in good times or bad". Although i've got to admit, the cover looks kind of dodgy, but take note, its the 3rd edition already, and i've read it, and it has influenced the way I choose my shares in a large and important way.
One thing to note here is that this book doesn't use P/E ratio. In fact, like me, it heavily dismisses P/E ratio in this book. It uses what i practice as well, EPS analysis. Using some of the techniques learnt from this book, I've been able to locate the winners and the losers.

"This book doesn't use P/E ratio to analyse stocks. Its uses EPS growth"

The only thing I don't really agree with is the fact that the author advocate market timing. As we all know, its impossible to do so, and by doing so it can diminish your returns. But this book was where i learnt the importance of "cut loss point", which has saved me a few times.

Though most books at the store aren't really relevant to SGX, the techniques taught in this book can be applied in our context, just like I did.

"Lessons learnt in this book can be easily applied to SGX"

If you are serious about learning how to pick good stocks, instead of listening to your friends at the cafe, buy this book.