Investment strategies

My investing strategy:
1. Focus on only a few stocks
2. Identify a tipping point for each stock (e.g. building a MRT station next to its key property)
3. Buy slowly into any stock (as my timing is usually not good)
4. My investments are long term (This is money I can afford to leave under the pillow for years)
5. Low liquidity is OK (I am a collector and have no intentions of selling early)
6. Have an exit price for each stock (but be prepared to sell when prospects are not as rosy or when the entire market is on a bearish mega trend)

Selection criteria for fundamental stocks (in order of preference):
1. Potential to be a multi bagger (share price can double, triple, etc)
2. NTA is at a significant discount to current market price. NTA to me is cash and Singapore properties. This gives a good margin of safety.
3. Strong cash flow with conservative accounting.
4. It is in a growth industry and has good competitive advantage. The business is scalable. It is not a professional type business.
5. Its products can command a premium. It has a brand name or a unique product. It is not a commodity.
6. It has strong recurring income.
7. Credible management (e.g., no talking up stocks, false promises or creative accounting)

my tikam strategy:
1. Stop loss at 5 - 10%.
2. Take winnings at 10 - 20%
3. Top active counters mainly
4. Don't hold longer than 1 week (otherwise, it is likely to become an unwanted baby)
5. Trust no one but yourself (don't trust gossips)



Fundamental stocks, multi baggers and a High margin of safety

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I believe that I cannot achieve financial independence by punting the market as the playing field is not level and the odds are against the investor who is usually at the bottom of the information hierarchy.

To succeed as an investor, one has to look at stocks on the longer-term horizon.... looking for multi baggers. However, in searching for these stocks, the investor knows that he will still always be near the bottom of the information food chain and hence, he needs to have an even higher margin of safety. After all, these are the stocks that he will be holding on to and unlike stocks in the tikam category, if the stocks were to go down, he may want to add to his holdings.

This is because, if he truly believes that these stocks are undervalued and the market pushes these stocks further, these stocks should become even more undervalued and the margin of safety will be even higher by buying these stocks at a much depressed price.

At this point, it is important to clearly differentiate tikam stocks from fundamental stocks. For all my tikam stocks, I have a cut loss position, which is usually around the 10-15% level. For my fundamental stocks, it is not uncommon for me to average down. Hence, it is critical for me to differentiate the tikam stocks from the fundamental stocks.

For fundamental stocks, to achieve this margin of safety, I only like to invest in stocks that have a significant discount to NTA. My definition of NTA is very simple. It is either cash or properties in Singapore. I discount everything else as I have seen so many ways of creative accounting that I have learnt never to simply trust the stated NTA figure. This means that I don't take the NTA numbers from the annual report as gospel truth. Instead, I tear these numbers down so that I know how much cash the company has, how much the company owes and where their properties are. I then make it a point to visit these properties in Singapore.

Of course, having a sound NTA is only part of the picture. More importantly, I must like the industry that they operate and believe that with the right spark, the business will flourish. This is the toughest part of the call as there is much less science here compared to the confirmation of NTA.

Yes, if the share price were to go south, I don't automatically buy more but I will take this as a wake up call to reassess the company. If after this reassessment, I still feel that the company fundamentals have not changed, I will then consider buying more. There are many reasons why investors sell these stocks, as I believe that no matter how big an investor is, there will always be demands to liquidate holdings to put into what may appear to be a better investment.

The market is the sum total of human emotions which interestingly is manic-depressive. When emotions are good, stock prices zoom like there is no tomorrow. When the feeling is bad, it can hit rock bottom and yet there will be no takers. This is the reality of our markets and to be a fundamental investor in Singapore, one has to be able to take the rough and tough of investing and watch one's fundamental stocks get beaten and bruised. One has to have lots of patience and guts as well during these depressive states.

I believe that our market is in depression with regards to Sesdaq stocks where most of my fundamental stocks are. Hence, I continue to collect these stocks. As always, I know that my timing is never good and hence, I have a habit of collecting stocks slowly and I always make sure that I have set aside enough ammo to keep collecting over a long period of time. As such, I am seldom fully vested in terms of fundamental stocks.



Fundamental investing is about multi baggers

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When I started investing over 20 years ago, I did not differentiate fundamental investing from speculating. Whenever I have a profit of 10 to 20%, I will take my profits and run. Sometimes the profit will come in days, sometimes years but whenever I see good profits, I feel good about myself and the cycle repeats itself. Yes, there were also times when I had losses. There were also some years where the losses were more than the profits. But this was investing to me.

As the years progressed, I realized that there was a flaw in the way I invested. In building businesses, we are all looking for scalability. We want to take the risk in the initial stages of building a business but when the business is more stable, we hope that it will then take care of itself and give us good returns year after year without having to take the risks we took in the initial stages of building the business.

This same philosophy should also apply for our investments. When we invest in the early days, we will take risks as the company is likely to be unknown or the management unproven. However, if we hit it right, we should be able to ride the waves with the business. We are looking for a Microsoft or a HP or a Dell. If we identified such a company, then it would be a shame if we simply took the first 20% profit and then ran out. If we ran out, we then have to find another company and start the whole investing cycle again. We start taking all the risks associated with investing in an unknown company.

Yes, it is more interesting digging out the multi baggers of the future, but it will not do your wallet much good if one goes from flower to flower only to taste the bud. True, your ego will be stroked every time you identify the next multi bagger but investing is not about ego. It is about building a nest egg.

Hence, over the years, my philosophy in fundamental investing is one where I will trust my instincts and be willing to sink a significant percentage of my investing capital into just one, two or at the most 3 stocks. After all, there is no point in getting a multi bagger if this is not going to significantly improve one's net worth.

Yes, there is significant risk in putting so much of one's capital in just 3 stocks. But because so much capital is tied in just 3 stocks, you will be very focused on these 3 stocks. If you are right in any one of these, your capital will grow substantially. If you spread it over 10 stocks, even if one stock becomes a 2 bagger, your capital would only have grown 20% assuming that there is no capital gain in the other 9 stocks. More than likely the other 9 stocks will show declines and you will end up with a me too portfolio gain.

It is also true that true fundamental investing is boring. If you are right about your 3 stocks, then you are unlikely to want to change these stocks for many years. The only reason I change any of these stocks will be because the fundamentals have changed or that the margin of safety in these stocks have reduced so much that I don't have the safety anymore. As stated, my margin of safety is that all these stocks must be trading at a significant discount off their NTA for which I only consider cash and Singapore properties.

If someone tells you that it is less risky investing in the fundamental stocks than to tikam or speculate, I don't think that person understands the true nature of fundamental investing. As stated, fundamental investing is for multi baggers. The only way you can get multi baggers is if you hold on to the stock for many years. I have seen a few of my stocks fall over 50% before they return me multi baggers. If you are not able to take this risk, I doubt that you will be able to see multi baggers.

If you tikam and have a policy of cutting losses below 10%, your risks are contained. Hence, my view is that it may be less risky to punt if you have a system in place, than to invest in fundamental stocks as the nature of the stock market is such that stock prices rarely stay put. They go up and down and when they are down, they can go very low down. Can you stomach this risk? Can you watch your stocks get beaten and do nothing or even buy more? If you can, you have the stomach for fundamental investing.





Fundamental investing in a nutshell is investing for multi baggers. It is boring and based on your believe that a company can become the next Microsoft. All other forms of investing to me are speculating, some with a shorter horizon, others a little longer.

I set aside money for fundamental investing and also money for speculating. The money for speculating keeps my adrenaline flowing but I know that I am not going to be financially independent just by speculating. Having speculating money also prevents me from interfering with my longer-term fundamental counters.

Yes, I too am human and this is my way of controlling my emotions of greed and fear over my fundamental investment strategy.



The stock market is nothing more than demand and supply

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We all have a tendency to try to find reasons why a stock goes up or down. Humans created technical analysis and fundamental analysis trying to plant reasons for share price movements. Newspapers & brokers write daily commentaries, which give the impression that they know more than us.

Reality though is that the movement of stocks and shares is based on simple demand and supply. The unique thing about stocks and shares is that the number of stocks in issue is defined and limited. In other words, supply is limited. However, demand for shares though, can be unlimited. This is in sharp contrast to futures where both supply and demand are theoretically unlimited. It is for this reason that I don't play futures, as the strategy for futures is unlikely to be the same for stocks and shares.

What this means is that if supply is sucked up for whatever reason, even though the demand remains the same, the share price is more likely to go up. The supply can be sucked up in a number of ways. If there is strategic investor that keeps mopping up the supply from the open market, the number of shares available will be reduced. If however, the strategic investor takes a placement of new shares (i.e. the company issues new shares), then this is unlikely to affect the number of shares floating around.

If the company buys back its own shares from the open market, the same phenomenon will also happen. The supply will be being sucked up and there will be less shares floating around.

This is why the game of stocks and shares is skewed towards players with big pockets. They can affect the supply more than any typical retail investor. Theoretically, there is no art or science here. Simply a matter of financial muscle to buy up enough shares to reduce the available float. Even the largest counter in SGX is small by US standards and hence, every counter will be under the mercy of the laws of demand and supply.

If we look at the market darling counters of the past, we will notice that these counters usually have a number of funds as shareholders. The funds mop up the number of shares available and this in return, perpetuates the market darling status of these stocks. As stated, once supply is sucked up, even if demand remains the same, the stock price will continue to rise.... even though as we have seen in recent examples, the companies concerned can lack real fundamentals.

If one reflects on the dotcom boom the same thing happened where not only funds were pushing up the share prices, but also listed companies that wanted a part of the action. They too put in their millions in the stock market. Humans then need to try to reason to them why these counters deserve such a premium. During the dotcom days, we were valued at multiples of expenses. This is the folly of our human mind...trying to create a reason for everything. In actual fact, stock prices go up for the simple reason of demand and supply.

This is why there is logic in following where the big money goes. If the big money leaves a stock, regardless of fundamentals or technical, I too will be a seller.

This is also the reason why I don't have a concern investing in a stock with limited float if the company fundamentals are strong. After all, in any stock that I invest, I hope that the share price will go up. If stocks move because of demand and supply, then having a limited supply is really not a bad thing. Of course, if one wants to speculate and exit within days or weeks, then stocks with low liquidity will not appeal to him, as he will find it difficult to exit.

However, if one is looking at a stock for fundamental reasons, there may be good reasons to buy stocks with limited float.



When my stocks go down...

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If it is a tikam stock, I usually cut loss when it drops 10-15%. No ifs, no buts. This is trading. No emotions needed. It was a wrong call and it is time to lick the wound.

If it is a fundamental stock that I am slowly collecting and it is now moving southwards, I usually reassess the entire investment to see if there have been changes in the industry or upcoming events that will change my mind on the stock. Usually, this will not be the case as I keep a close eye on all my fundamental stocks. Anyway, at any one time, I am likely to have just 5 fundamental stocks. These usually make up over 80% of my capital. Hence, I look after these stocks like a hawk because one bad mistake can hurt very badly.

When one of my fundamental stocks go down, I am more than likely to average down on this. Yes, I don't average down on tikam stocks and hence, it is very important to me to differentiate one from the other. Recently, I went against my principles and converted a tikam stock into a fundamental stock and averaged down and I bore the consequences of this.

As I know that unloved stocks are usually the fundamental stocks that I like to pick, it is more than likely that the shares will move lower down from my initial purchase. This is why I always buy any fundamental stock very slowly so that I always have backup ammo when needed.

As stated in my earlier posting, I feel that it is much more riskily investing in fundamental stocks than to tikam. When one tikams and have set a cut loss position, the most one can lose is the 10-15% cut loss position. With fundamental stocks, if one picks wrongly and average down, it can be a very costly lesson. Hence, I keep a close eye on all my fundamental stocks. Take care.



Liquidity and the stock market

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Alchemist, you are absolutely right that I am not bothered about liquidity for my fundamental stocks. In the past, I was. I was influenced by all the literature that I read about the importance of liquidity. ‘Professionals’ write most of these.

What shook my system was when I read about Warren Buffett and he mentioned something like he did not care if the stock market did not open for years. Why would one bother about the ups and downs of the market if one sees fundamental value in a stock?

I also believe that the markets are about demand and supply. If a share is thinly traded and there is not much liquidity around, if one keeps buying and buying a stock, there will eventually be less and less available stock. Even if the rest of the demand remains the same, the share price is likely to go up.

This happens all the time in our markets. When a big name buys into a company, watch the share price. Even more powerful is when he buys from the open market. He basically sucks up available supply.

I don't have that firepower and hence, I do the next best thing. Buy into fundamentally sound companies with not that much liquidity.

I agree that liquidity is important if you want to get out fast. But I have no intention of getting out fast. If I am right in my judgment and the stock does well, other investors will climb in later and will create the liquidity to allow me to liquidate my positions.

The other way of looking at liquidity is to ask yourself what you want in a share price. Well, I am very clear. I want the share price to go up. If a share is very liquid, does it mean that it has a higher chance of going up? No. In fact, if there is heavy trading, there is more likely to be big boys around pushing it one way or the other...depending on their mood. I rather have a stock, which trades in a blue moon, but once it is recognized as an unpolished gem, it shoots to the moon within a few days or months.

In the meantime, I can sleep like a log.



Margin of safety

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I have been reading the works of Benjamin Graham for well over 10 years and it is only recently that I started to understand the true wisdom of his words.

Many stocks have multi bagger potential but only a few have a high margin of safety. Like it or not, most stocks have potential. But with potential comes risk. What Graham instituted is that the stock market is of ups and downs and sometimes stocks are undervalued and sometimes overvalued.

When a stock is undervalued especially when assets support it, it would offer a higher margin of safety. Here is where most investors will bend the truth, as the key is what constitutes a high margin of safety.

I have seen some folks do discounted cash flow projections as if this were a science but really, most CEOs I know tell me that business is so fluid nowadays that no one can forecast more than a year in advance. For investors to try to forecast 10 years in advance, they must know a lot that even the CEOs don't. It may be possible to do DCFs 10 or 20 years ago, as businesses then were more stable. But today's real business world is very dynamic and I cannot understand how DCFs can be used to justify whether a company is undervalued or not.

Then, there are some who confuses margin of safety with potential. If a stock can go up 10 times, then the logic is that it is undervalued. I don't think this is the context in which Graham instituted his margin of safety.

Margin of safety to me is the existing asset backing of the company. Those who know me know that I drill deeper into the assets by only considering cash and Singapore properties as true assets. Reason for this margin of safety is a higher degree of comfort in the event the shares fall further.

When this happens, I usually reassess the existing business to gain confidence that the actual business is not loss making to an extend that the assets are being eaten into. Yes, there are some turnaround situations in which I have invested but these require an even higher margin of safety than the usual fundamental shares that I pick up.

As the Sesdaq has gone south for many years, there are bargains lying around. As such, I have been picking up stocks in which the cash and property components are more than the market capitalization of the company. In other words, the existing profitable businesses all come for free. There are jewels lying around in our markets. Just that these are unpolished and need time to shine.

Patience is a virtue in investing.



Riding your fundamental stocks

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When one's fundamental stocks are running, there is a tendency to take profits and run. My belief however, is that one should look at fundamental stocks different from his tikam stocks. For tikam stocks, if it goes up 20% or so, I would certainly have said thank you.

However, if one picks the right fundamental stocks that have the ability to become multi baggers, then one should not be in any hurry to liquidate the investment. Every stock has a fair value. I will only sell once it is near the fair value.

After all, the stock market is a manic-depressive individual. When it is down, it is really down. When it is up, it goes manic and usually overshoots its fair value.

Moreover, when one sells his stocks that are performing, he has then to search for another stock. Why switch over when your horse is running when you have taken so much time selecting your horse in the first place. With tikam stocks, you may not have spent much time in the selection and hence, it is fair to take a profits too early.

Of course, at the end of the day, your stocks may just be riding a short term trading trend in the market. Here, one has to make a judgment call as to whether it is just a short term trend or that the industry that the businesses is in, is really coming out of the doldrums.

One of the reasons I put most of my money in fundamental stocks is because I know that information dissemination in whatever markets, will never be fair. As George Orwell once said, we are all equal just that, some are more equal than others.

Those in the know can ride the waves. Those not in the know are best identifying fundamental stocks and investing in these rather than identifying the waves as there is a high chance of riding the waves wrongly given that those who create the waves do this for a living and they are clever enough to create waves that look positive only to be distributing to you.

For fundamental investors, we don't need to identify the waves. However, we can ride the waves created by those in the know. Then, it is a matter of knowing when best to get out when the waves get too large...



Accumulation and volume

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If you were running a large fund and wanted to collect a lot of stocks, it is likely that you want to collect slowly and not be noticed. However, sometimes your actions may be noticed and others start buying into the shares, forcing the share price up sharply.

When this happens and you are not in any hurry as you want to get the lowest price possible for your stocks, you are likely to withdraw from buying any more stocks. The volume then dwindles and those who want to ride with you suddenly realize that there is no one else buying and the share price comes under pressure. The share price either goes down or it goes sideways with a dwindling volume.

Those who are there for the ride may get concerned and with each passing day, they get more nervous. These folks are likely to be among the first to sell their shares as they don't want to see their profits turning into losses if the share prices go down further.

When the selling pressure subsides and the price is holding well, the fund may start collecting again and this is then seen as the next wave of buying. The process of share consolidation after a strong run on the shares is a natural human reaction and I don't read too much more into this.

However, if there were heavy selling resulting in heavy volume with the shares drifting downwards, I too will be more concerned. Saying that, after trading in shares for a while, one must be able to have the gut feel to differentiate real volume versus created volume.

In Singapore, brokers and remisiers may not need to pay commissions and hence, theoretically, if they buy 10 mil shares and then sell 10 mil shares, they may pay nothing for these actions. Hence, one should read volume carefully and not assume that the volume you see is always real. Sensing whether the volume is real or not is part of the art of the trading.



Knowing the CEO

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When I was much younger, I always assumed that investors who know the CEOs of the listed companies in which they invest, have an upper hand. After 5 years running SI and knowing many CEOs in the process, I realize that knowing the CEOs is not critical in any investment decision.

All the CEOs I know tell me that their companies are undervalued and how exciting their industries are. If one thinks about it, it is the CEOs job to 'sell' the company to investors. Hence, CEOs are selling their companies every day and I am no different when I market SI features!

If you want confirmation that you have invested in the right company, talking with the CEO of the company is bound to make you feel very good about your investment...

But if we are truly fundamental investors, we should get as objective a view as possible and it may be better for us to talk with the competitors, with the suppliers and anyone connected to the industry in which the company operates. We would certainly get more objective feedback.

I find it more useful to analyze the way the CEO answers Q&A questions. Also, I read every sentence of the Chairman or CEO's statement in the annual report very carefully. Again, the way the sentence is constructed and the use of words may give a good indication as to real message that they want to convey. Web casting is another useful tool as it shows the facial expressions of the CEOs when they talk on the subject and one can sometimes read more from the way they present than from the information that is put across during the web cast. After all, CEOs cannot say anymore than what had been previously reported in the SGXNet announcements.

Sometimes, non-verbal communications give more information than what is articulated directly in words.



Margin of safety and a falling market

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If one invests in stocks when they are near their highs, with a market downturn like what happened yesterday, it can be very nerve wrecking. Hence, my policy has always been to collect stocks when they are unloved. This will provide a wide margin of safety. Rarely do I average up my fundamental stocks as I would have collected enough over the past few months when they are unloved.

However, if the price falls below my average buying price, I am more likely to average down. This is why I always feel that fundamental investors have to take more risk than punters as punters never average down - they sell and make a trading loss and move on. For fundamental investors, if we believe in our selection of fundamental stocks, we are likely to see more value in the stocks when they go down further.

The market is always manic-depressive - it goes through a cycle of over pessimism and over optimism. Herd mentality dictates that it will over exaggerate the ups and downs so that when the market drops, nerves are unsettled and the selling becomes far overdone. Then optimism reappears and the buying becomes overdone.

Fundamental investors should not over react to the manic depressive characteristics of the market. If we still feel bullish about our economy, we should stick to our believe in the stocks that we have selected. However, if we think that the bear is around the corner, we should relook at all our investments. I, for one, am very bullish for the Singapore economy.

Those who know me know that there is another side to me, which is the tikam side. Yes, I have been buying some call warrants yesterday. If the market rises, I am most likely to say thank you and move on. If it falls, I will lick my wounds and move on. This is tikam, which needs an entirely different mindset from fundamental investors.



Are you a fundamental investor or a short-term trader?

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As I spend more time in the markets, I realize that there is a stunning difference between being a fundamental investor as compared to a short-term trader. The only similarity they have is that both want to make money. But in terms of the characteristics of a successful fundamental investor, it is almost the opposite of a short-term trader.

A short-term trader is by nature, impulsive, excitable and adrenaline seeking. He practices cut loss, profit taking and is glued to the trading screens looking for trading & arbitrage opportunities. He feels the energy and sentiments of the market and use this gut feel to trade the market.

A fundamental investor on the other hand is usually a calm, calculated & patient person. He practices averaging down if his stocks go down in price. If it goes up, he will willingly hang on until he feels that the share has been correctly priced. He is not glued to the screen and is happy just to look at the share price at the end of every week.

Both fundamental investor and short-term traders take risk. The short-term trader actually takes less risk than the fundamental investor as the short-term trader practices cut loss if the share price moves downwards. This strategy ensures that he preserves a significant part of his capital even if he makes a wrong move. For the fundamental investor, he is more likely to average down and if the share price keeps going down, his capital can diminish quite quickly.

Before one starts investing in the stock market, it is important to know whether one is a fundamental investor or a short-term trader. Both groups need different skill sets to succeed. Time to monitor stocks is also an important consideration as it is unlikely that one can be a successful trader if one is not full time in the stock market. However, one can be a successful fundamental investor even if one holds on to a full time job.

The key attributes of a fundamental investor is that he must identify the right stocks as he really does not have that much protection when the stocks go down given that he is more likely to average down than to sell his stocks. As such, it is wise for fundamental investors to select stocks that have wide margins of safety, in case something goes wrong with their stock selection. The concept of margin of safety is discussed



Putting all my eggs in only a few baskets

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For my long-term investments, I only have about 5 stocks. For one of these stocks, it currently represents over 50% of my portfolio value.

My rationale is simple. If I diversify too much, even if a stock rises 100%, it may not increase the worth of my portfolio significantly. Of course, it is nice to feel that you have a one bagger. But what good is this if you only feel good and your portfolio worth only increases marginally. My aim in investing is to multiply my net worth and not to feel good. If I wanted to feel good, I will drink my Gin & Tonic. Good thing about investing is that one has only one mission, which is simply to make your money grow as fast you can.

For the stock that represents over 50% of my portfolio value, you can bet that I watch it like a hawk. I look out for announcements on the company and try to understand as much as I can about the industries in which it operates. Good thing about having a few stocks is that you can focus.

As human beings, by nature, we are all risk adverse and when we invest, the natural tendency is to spread our risk all over the place. Sadly, many so-called professionals recommend this spreading of risk approach to their clients.

But to me, if I want to invest properly in the stock market, I must be willing to take risks. I reduce my risk by understanding the companies that I invest in thoroughly. I understand their industries and keep myself updated on what is happening worldwide. I do not reduce my risk by spreading my investments as thin as I would spread butter on a toast.

Another analogy is that of your spouse. You have only one spouse. It was a tough decision when you signed on the dotted line. You are now fully committed and will take care of your only family. In stocks, we are in a way, allowed to be polygamous and we all know the problems of this. We should be happy already that we can have more than one stock!... Five is already a handful.....any more is a crowd that is really impossible to handle!



Riding the mega trends

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To be able to identify whether it is a bull or bear market is critical to any investor. To me, it is not so important trying to predict whether it is bullish today or not. So long as the general mega trend is bullish, I am comfortable investing.

To identify a mega trend, one has to keep a constant tab on what is happening locally as well as in the world, especially in the US, for us here in Singapore. When there is a correction, which I did not prepare for, I am more than willing to continue riding my stocks if the general trend of the market is still bullish.

In a bear market, I have a tendency of just keeping cash in the bank and playing the put warrants. This keeps my mind active and yet keeps my ammo ready when I smell an upturn in the mega trend.

Right now, I am almost fully invested as I feel that the bull has some more room to run. But as soon as I feel that the mega trend has turned negative, I will make no hesitation to liquidate most of my holdings, including my fundamental stocks.

Even as fundamental investors, we must realize that it is fruitless fighting against a mega trend. At best, the share price of our fundamental stock will remain stagnant. At worse, it can drop significantly in value. Hence, it is logical in a bear market not to be holding on even to fundamentally sound stocks given the risk, reward ratio.

The call as to whether we are in a bear or bull market is equally as important to a fundamental investor as to a speculator.



Worry is good, but not excessive

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Investing is risky. Don't let anyone fool you otherwise. With risk comes worry. If you are not worrying about your investments, it is likely that you are not investing enough of your capital. If you are not investing enough, whether your investments go up or down, really makes very little difference to your net worth. Yes, it will boost your ego when you have a stock that goes up 100% but as stated, investing is not about ego or feeling good, it is about multiplying your net worth.

In the past, I believed that one should only invest what one is willing to lose. But honestly, which one of us is willing to lose any part of our money? None of us should have any money, which we are willing to lose....,otherwise, give the money to me! We invest to win and we should invest sufficiently to make a difference to our net worth. Otherwise, investing is more like a game rather than a commitment. If one is committed enough, you can bet that he will spend sufficient time with his investments.

Of course, if one is just starting out, better to test water first and investing in our younger years is more like an education. However, as we age gracefully, investing should be something we take very seriously and passionately to prepare us for the future when we will no longer be so employable.

When I am too heavy in a stock position that it starts to affect my sleep, then I feel that I have gone over the limit and the degree of worry is too excessive. Humans should not be deprived of sleep as this will eventually affect our mental well being, which in turn may affect our alertness and we can eventually make mistakes in our investments. As such, when I lose sleep over an investment, I know that I am better liquidating my position regardless of whether the trade is profitable or not.

Everyone has his limits and we should know our own limits. For me, when I start losing sleep, I have reached my threshold and will act accordingly.



Use margin wisely

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When I formed SI 4 years ago, I did not know much about margin and the general consensus then and even today, is that margin is harmful.

However, when I meet up with other business leaders, I realized that many of these folks built up their businesses on margin or borrowed financing. They tell me that margin is a business tool that one needs to overcome & control. It is neither bad nor good. It is how we use margin that is more important. Margin used correctly can accelerate the growth of any company or for that matter, an investment portfolio.

Rather than ignoring the use of margin, I opened up a margin account 8 months ago to 'try' it out. Since then, I have learnt quite a bit more about margin and in the process, I also learnt a bit more about myself.

I learnt that some stocks are non-marginable stocks, i.e. one cannot purchase these stocks using his margin account. Initially I thought that this is a good list of stocks not to buy, given that the brokers must have done their homework.

Later I found out that brokers minimize their risks by having this list of non-marginable stocks. This list of stocks represent stocks that a lot of their margin clients have purchased and brokers do not want to have any more exposure to these stocks than they currently have. This list usually does not include stocks with poor liquidity as brokers do not want the issue of not being able to sell these stocks in the event they need to do so.

The list of non-marginable stocks can vary from broker to broker. Brokers just want to minimize their exposure to these stocks in the event these stocks drop in value. Hence, they do not want too much of their margin capital tied to these stocks.

The other thing I learnt about margin is that not all stocks are valued equally. Brokers have another checklist, which tells them the percentage of the stock price that they will recognize for each and every stock in their margin account. As I play warrants and some of these expire within a year, well, to this broker, such warrants have no value in the margin account...meaning that though I have bought these using the margin account, as far as the broker is concerned, the value of these warrants is zero.

This means that the available margin is reduced as the valuation of the stocks in my margin account is lower. This also means that the likelihood of a margin call is higher as on paper, my margin account is worth less than its actual market value.

When I was playing Star Cruises during the SARS period, I recall that the broker only recognizes 70% of its market value. Which basically means that the margin extended to me will be much less than what I expected.

With the first 2 trades, I lost money and before I knew it, I had a margin call warning. Hence, it is important when you use margin to have sufficient funds set aside in case of margin calls. Fortunately, for me the share price went up and no margin call was made.

Since then, the market has edged upwards and I have multiplied my initial investment through the use of margin. From these months of experience using margin, I can safely say that you need to be an even more disciplined investor if you want to use margin effectively. Margin can evaporate your portfolio if you are not careful.

My 2 basic principles in using margin are:

1. Try not to use more than 50% of the margin extended to you. This way, the likelihood of a margin call is substantially reduced. When you use margin to the fullest and the market goes against you, as it always has a tendency to do, you are likely to receive a margin call and may have to liquidate your positions at 'bargain' prices.

2. Margin accounts are more suitable for tikam stocks than for fundamental stocks. For fundamental stocks, you are more likely to average down and this increases the likelihood for margin calls if the stock goes down further. For tikam stocks, you should have a cut loss strategy and this reduces your risk of margin calls.

Margin is a double-edged sword. Use it well and you can be doubly rewarded. Use it incorrectly, and your capital may perish.



Attributes of a successful investor

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I am sure we all hold different views on what makes an investor successful. After having gone through the ups and downs of investing over the past 20 years, I think some of the key attributes are:

1. Foresight. Above everything else, a successful investor must have foresight. He must be able to successfully look into the future and predict correctly.

To develop foresight, an investor should have the experience of running successful and not so successful businesses. I think one of the reasons Warren Buffett did so well in his investments is because he had a bad time trying to turn around the original business such that in the end, he sold it.

The experience of running a business to me can only be gained by running one's own business. Some time back, I was running a regional division for IBM and I thought that I had acquired all the skills for running a business when I left IBM. I was dead wrong. Running a division within an MNC does not give one the full picture of what it takes to run a private enterprise.

Believe me that one has another 90% to learn when one gets out into the 'real world'. Without being out in the 'real business world', one may not truly understand what it takes to run a successful private business. Without this understanding, one may not be able to identify issues that a business may face in the future.

Hence, I see investing as the next step after entrepreneurship. But one needs to be an entrepreneur first to understand the issues that SMEs face in the real world. After all, most of our investments are in real world SME companies and what we are trying to do is to identify the high flyers of the future.

2. Ability to understand the fundamentals behind a company, especially, the financial statements. This is where those trained in accountancy may have an upper hand. However, this attribute is not that difficult to pick up. One of the first stops for any fundamental investor must surely be the annual report. Successful investors have an ability to read in between the lines of a financial statement such that he can foresee many of the issues that may surface in the years ahead. Reading the notes in an annual report can sometimes give one a better picture than the headlines.

3. Ability to appreciate technical analysis. This will help time your purchase and sale of shares.

4. Ability to control fear and greed. This one, we all agree and hence, no need for elaboration.

You may find it odd that I say nothing about the ability to identify and rate management integrity. This is because I find all CEOs such good salesmen and saleswoman that I really cannot tell the difference just by talking with them. In fact, the better I know the CEO, the more likely that I will be taken in by their personalities and charm.



Fundamental investing vs. trading

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During the Nov seminar, I spent some time talking about this and want to share it here as well. To me fundamental investing is really about getting the multibaggers - stocks that will multiply many folds in value. Trading on the other hand is about 10-20% gainers and then saying thank you.

Actually, the short-term risk of a fundamental investor is a lot higher as a fundamental investor should be one that is more likely to average down than to cut loss if his share price declines. A trader on the other hand is likely to practice a cut loss position when his shares drop 5 -10% in value. With a cut loss strategy, a trader limits his exposure and keeps the bulk of his ammo available for the next trade.

A fundamental investor will keep researching and researching and this can be boring. But this is the basis of fundamental investing - patience with researching and researching. A trader usually relies on technical analysis, trading tools or simply gut feel.

The gain for a fundamental investor is usually painfully slow but steady. A trader can come in and out of positions within minutes. His life is fast, exciting but erratic as he often loses as well as gains. A good trader is one who losses less but gains more.

A fundamental investor usually keeps his stocks for years. A trader on the other hand is more likely to close his position within seconds, minutes or intraday.

Both fundamental investor and trader need to monitor their positions. However, the fundamental investor is more likely to monitor end of day prices but a trader is one that has to be glued to his monitor.

For folks like me, on some days, I am a trader. On others, I am a fundamental investor. But one thing has to be clear. When I am trading, I don't intend to keep the stock for long. It is paramount to me to be able to know which stock is for trading and which stock is for fundamental investing.

Moving a trading stock to become a fundamental stock because it has lost its value, is asking for trouble. Hence, before one trades or invests, one has to be very clear what the objective is, as the strategies for trading may be very different from those of investing. Good night.



Valuation of stocks

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Surprisingly, for something so important as stock valuation, there can be so many different models. Sadly, many times, I see the application of the various forms of valuation as a means to justify a share price.

The most common form is of course that of price earnings or PE ratio. However, as earnings are really an accounting figure, one cannot just take this as gospel truth. One should always break down what constitutes profits as there are many ways to generate profits. True repeatable profits are usually operational profits.

Then there is valuation based on assets and again, one has to break down the assets as here again, there are so many definitions of assets - some real, some not so real!

Valuation based on future earnings is getting nearer to the grey side. Then there is valuation based on what similar companies are valued, is getting nearer the arts as this assumes that the comparable company is similar to that company - which really is quite rare as companies are usually more different than similar. Then of course, one can compare 'peers' that are listed abroad which is even more dissimilar given that investors may have different risk appetites and the main country in which it operates may be different as well.

I have also seen valuations based on various cash flow models like DCFs that may project cash flow for 10 years. If I can predict the cash flow of SI beyond 1 year, I would be very elated, let alone 10 years in this rather dynamic global business environment that all businesses are in. If I cannot predict the cash flow 1 year ahead, I would be surprise that anyone without the benefit of actually running the company, can do better.

Of course, the most creative way of valuing companies was based on amount of money spent, which was the valuation yardstick of dotcom companies at the peak of the boom. It goes to show that humans are so creative that they will find ways to justify any share price. When this happens, we should be extra careful when we read such reports.

I personally, will stick by the PE and NTA ratios but will then drill down the earnings & NTAs so that I know what constitutes these earnings and NTAs. Any other forms of valuation, I take with a pinch of salt.



Information flow is not level

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FD, I agree. When I was new to the market, I tripled my money within a year and I thought that I was gifted in investing. It was a bull market then. Well, 3 years later, I lost it all as my bets got bigger and bigger. Luck can come but luck can go just as quickly.

You can do all the research you want but your research will be based on available information. Information flow is not level. Running a business is not like turning the TOTO wheel and when the ball drops, everyone is told the number immediately. In a business, before deals can be made, many people have to be in the know....such as lawyers, business partners, suppliers, PR consultants, etc. Hence, even before a deal can be announced, many are already in the know. As investors, we must realize that there is this deficiency in the market.

This is why if you are a typical punter, it is likely that you will be among the last to know. Your chances of success are unlikely to be more than 50%.

As a long-term investor, you stand a much better chance as you are not dependent on the sudden ups and downs. Put another way, if you believe in the future of a company and invested early, it really does not matter if information flow was not efficient as you will be able to ride the share whether or not the share price went up before the announcement.

Investing successfully requires a combination of experience and foresight. It is very tough to get all these experiences when you are young. I always encourage those who want to be successful in the market to excel in what they are currently doing as every occupation teaches you something in the university of life. Following which, they should try their hand at running businesses. Only after that, should they consider investing as a career as I don't think you can learn the experiences of life by clicking on your keyboard.



Buy on rumors, sell on news

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So many stocks in our exchange are exhibiting this behavior of rising before the news is out and succumbing to profit taking thereafter.

The fact that there are rumors before the actual news suggests that information had been leaking out. In other words, there may be insider activities. However, the way it is reported is as if this is a normal occurrence in our stock market.

In an ideal stock market, of course, this should not happen. But in the real world, it does and everyday we see instances of this happening. However, I feel it is not correct for these instances to be reported as buy on rumors, sell on news. It is as good as saying that there were insider activities and this is OK. It should not be OK to have insider activities before the release of news.

In fact, in the ideal world, whenever this happens, the authorities should be on the lookout for insider activities. But sadly, I don't think that this is the case.

Because there is this gap between those who know and those who don't that I am a believer that the best way to invest in our stock market is to look for fundamentally sound stocks and hold these. With this strategy, it really does not matter if there are insider activities before the release of news because one would have bought the counter way before the leakage of the news.



Are company issued warrants good or bad?

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Thought this is an interesting topic and hence, hijacked it over here.

Vajra, personally, I feel that when company’s issue warrants, they are better off not underpricing or overpricing their warrants.

For example, if the mother share is at $1 and the company issues warrants with exercise price of 20cts, more than likely there will be folks who will convert the warrant. But the company will only get 20cts per warrant converted. The effect is that new shares are created which then dilutes the eps of the mother shares and all the company gets is 20cts.

On the other hand, if the warrant exercise price is at $2, it may be out of the money and no one converts. If this happens, then the company may have to find money somewhere else as warrants are usually issued when the company takes a loan and the concept is that when warrants are converted, whatever the company gets from the conversion of the warrant, will be used to pay off the loan.

Hence, ideally, if company’s issue warrants, the exercise price of these warrants are pegged at a price in which the company feels its share price will be at expiry of the warrants.

If one takes the same example and the company thinks that in 5 years time, its share price will be $1.50, it may do better pricing its warrants at $1.30 or so rather than pegging it at 20cts exercise price. After all, those shareholders who get these free warrants are actually not getting anything free as their shareholdings will be diluted and so will the PE when these warrants are exercised.



The market is Manic Depressive

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Loupan, I have hijacked your posting and will answer it here so that it is easier to locate in the future.

My experience is in line with yours. What I realized was that being too rationale may not be in the best interest of one's financial health. This is why you will notice that I will hold on to my shares and let it run way beyond what I think is fundamentally sound. Reason for this is because the market is manic-depressive in nature.

When it is depressed, it will push your stocks downwards to bargain levels and when it is manic, it will push it up, way beyond levels we would imagine. The manic-depressive mood swings are a reflection of the moods of the common investors. They are greedy and this will push stocks way higher than anyone can imagine. Their fear will push prices to bargain levels and below. To maximize one's return, one has to take into consideration the manic depressive moods that Mr. Market has.

I also believe that our markets are too small to try to apply the full herd instinct theories. As a result, demand and supply become even more important factors for us to understand.

Imagine if everyone were to buy up Lion Teck Chiang. The supply will run out as the demand soaks up all available supply. The price will go up and up. It will then cross the fundamental comfort level that a sensible investor will have. But to a lot of investors, as the price climbs, they get roped in and with this, the price zooms higher and higher and goes beyond what is fundamentally sound.

The herd instinct than takes over the fundamentals. I don't underestimate the power of herd instinct at this stage. But at the back of my mind, I am also aware that illusions will have to end one day and one does not want to carry the baby. Hence, in climbing the mountain, after attaining a comfort level, it is good to continue climbing for a bit more but one certainly does not want to climb to the top as the fall from there is not very pleasant. How far higher to climb is an art I am still trying to master.



The market's mood swings

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Gerrald08, if I knew the market was going to tank the way it did, I too would have sold off everything and bought back later. However, reality is that none of us knew that the market would lose hundreds of points in a matter of days. Those who knew could have been millionaires overnight.

There will be many who will say that they saw it coming. But if they are not millionaires from the last few days, take their statements with a large pinch of salt. With hindsight, we are all millionaires.

If you are like me and cannot predict the mood swings of the market, we have to invest based on our understanding of the future of a business and not that of the market. The market is manic-depressive and has mood swings. I am not good at predicting these mood swings and will never be. Hence, my focus is not to predict the future of the mood swings of the market. I am better at predicting the future of the companies in which I invest.

However, saying that, where I differ from most fundamental investors is that I also like to have a feel of the market in general. Thought I cannot predict the ups and downs and mood swings of the market, I like to hold a long-term view of the market direction. I am still of the opinion that the market uptrend is intact. However, if my view changes on the overall direction of the market, I too will sell my fundamental stocks.



Controlling one's emotion in a falling stock market

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It is a fact of life that markets go up as well as down. When markets go up, everyone is happy. When it goes down, most are very sad and depressed. There is nothing wrong with these feelings of elation and depression as this is how God made us. To be human, we are all made to be emotional.

Successful investors can control their emotions better. As the way we react to market circumstances vary between all of us, each of us has to find our own ways of controlling our emotions.

For me, I control my emotions this way. I split my stocks up into tikam stocks and investment stocks.

For tikam stocks, if I read the market wrongly and I lose 10%, I would cut loss. No ifs, no buts. I simply cut loss. To be a successful trader, you must be discipline. By being discipline, you remove the element of emotions in your trades. It is emotions that will give you a 101 reasons why you should not cut loss. Ignore your emotions. Cut loss and move on.

In trading, you must preserve your capital above everything else. Capital to trading is like bullets to a war. Lose your bullets and no matter how good you are, you are as good as dead without bullets.

For my investment stocks, if the market falls and the stock is now cheaper, I would be inclined to buy even more of these stocks. Herein lies the risk of fundamental investing. You must choose your investment stocks very carefully or else you can lose a lot of money.

In fact, I always tell people that it is more risky investing in fundamental stocks than to tikam. After all, if you are disciplined in your trading and stick rigidly to a 10% cut loss strategy, the maximum you can lose is 10% of your capital. If you invest wrongly in a fundamental stock and keep averaging down (buying more stocks at a lower price), you can lose your pants if the shares keep falling all the time.

The key to reducing your risk in fundamental investing is to define your margin of safety very careful.

If you define your margin of safety correctly, you are putting in place a mechanism to control your emotions, even in a falling market. If you define this correctly, you can sleep well as you know that solid assets underpin your fundamental investments. This is why during the last few days, I have been adding to my fundamental stocks and I continue to sleep well.



Surviving a market downturn

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Firstly, one must make an educated guess as to whether the market downturn is the start of a bear market or just a hiccup in a bull market.

To me, if fundamentals remain strong and there is nothing major that is wrong with the world markets, then I will remain bullish. If a bubble starts bursting, then there is something seriously wrong....like the worldwide dotcom bubble of the past.

Many talk about the potential bubble in China....the empty apartments and office buildings and the increasing property market. True that there is growth potential because of the population of China but there is also this risk of a bubble. As everyone is in China, any effect here will have a drastic worldwide effect. If China falters, everyone will feel it. Also falling demand will result in falling commodity prices, which may be good for some industries, but for others, it may suck their growth away. This is something that I will continue to keep an eye on. However, even if this were a bubble, it will take time to develop and hence, I do not see any immediate concern yet.

As a result, I remain very bullish on the stock market and have been adding to my positions.

The other reasons why I can remain calm in a downturn are because:

1. I don't invest in the latest concept stocks like China stocks in the weeks preceding the downturn. Yes, I tikam these stocks but as I am just trading in these stocks, I have a clear-cut loss strategy. In any market downturn, I will cut loss. No ifs, no buts. This is the key to profitable trading - Discipline.

2. Although I have margin accounts, even though I occasionally use margin, I use these sparingly. If you are close to maxing your margin account, in any significant downturn, you are likely to be hit by margin calls. In a market downturn, if you have to sell your positions because of these calls, these sales are likely to be at your disadvantage. Hence, use margin sparingly.

3. I always have some available cash for such market downturns as there are buying opportunities during these times. Worse thing is that one does not have ammo to buy when he feels strongly that the market is still bullish but is in a correction phase.

Of course, at the end of the day, the most important decision to make is whether the downturn is the start of a bear market or just a correction in a bull market. If it is a bear, do not get me wrong. I will sell everything. Yes, everything, including my fundamental stocks.

However, in this case, I am still very bullish and continue to buy. Take care folks.



Strong hands & weak hands

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Money drives our stock market. If you have lots of money, you have the ability to encourage prices to move the direction you want. After all, the market is about supply and demand and if you have the money to suck up the available supply, the share price is more likely to rise. Strong hands are people with money.

On top of money, strong hands usually have patience. If strong hands want to buy, they usually don't like to have too many passengers on board. Hence, before they buy, it is more likely that they will want to push the shares lower. As the shares go lower, those with poor holding power will start wondering whether they should cut loss.

Those with poor holding power are called weak hands. When the share price drops 10-20%, weak hands are likely to sell to the strong hands. If the price falls further by 30-40%, those weak hands that have been holding will soon have weak legs as well and they are even more likely to sell.

These weak hands then lose money and start licking their wounds. If the strong hands are keen on the stock, you can bet that the strong hands were buying from the weak hands during this downturn.

When the strong hands have collected enough, they use their financial might to buy up whatever shares the sellers have left. As the supply of stocks dry up, the share price is most likely to escalate upwards very quickly.

The weak hands that sold at a loss will then start regretting their decision to cut loss. Some will start buying back at much higher levels. Others, will buy at even higher levels as they are then afraid of missing the boat. What many of the weak hands may not know is that the strong hands are now distributing back to them.

When the distribution is completed, the volume for the shares may dwindle significantly. Market interest in the stock dies down. The stock price slowly edges downwards, leaving the weak hands to hold on to the baby.

Sometimes, the strong hands will help the market downwards by shorting the shares and making on the downward path as well. Strong hands may even repeat the cycle again and make on the way up and on the way down.

When you invest in the stock market, it is always useful to know what kind of hand you have. If you have weak hands like most retail investors, know that there are usually strong hands around and you have to be extra careful as to how you read a stock direction as the involvement of strong hands can affect the stock chart.

Hence, it is important to take your time to identify your fundamental stocks. Ideally, you have a good margin of safety such that if these shares fall in value, you have the stomach to hold on to the stocks or even buy more by averaging down.

Of course, if the fundamentals of the stock change, it is a different matter. In such circumstances, I too may be a seller. But if the fundamentals remain unchanged, be prepared to hold on or buy more. Fundamental investing is OK if you do not have strong hands....but you must certainly not have a weak heart.



Gut feel & neural networks

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There is a proliferation of neural network software’s that claim to be able to predict stock market movements by either mapping existing stock patterns with chart patterns from the past or extrapolating charts. As human beings, we are always trying to explain stock market movements and find tools to predict the future.

What most of us don't realize is that we all have a very powerful brain that collates conscious and subconscious data and information which is far more powerful than the most powerful neural networks, yet, most of us do not trust what we are blessed with. Our brain is more powerful than the most powerful machines and more dependable than our cars.

As we don't understand the full powers of our brain, we don't trust what it is telling us. Our brain collates information and presents it as gut feel. Gut feel consolidates all the information that passes through our 5 senses and taints it with a little bit of emotions and past experiences.

Most of the information that passes through our 5 senses is actually subconscious rather than conscious. For example, you may see a pretty girl walking past and this is remembered in your conscious mind. But in the background, there may be someone walking a dog and a bird flying past. These are captured in our mind as subscious images.

Logic comes from our analysis of our conscious mind. Gut feel is the sum total of our conscious and subconscious information. When our gut feels talks to us, it is extracting subconscious data, adding it to the conscious data and analyzing these in the background of past experiences. No neural network can come close to the power of our brains yet, in trying to guess the future, most of us do not fully use what is in between our ears.

We should never underestimate the power of gut feel when we invest in stocks and shares. Gut feel is especially important to me when I tikam stocks as time is of the essence and the ability to process conscious and subconscious data quickly can make the difference between a winning and a losing trade.



Developing your own style of investing

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All of us have different personalities, circumstances as well as expectations. To be able to invest successfully, we have to be at one with ourselves. We must firstly understand ourselves. We must understand how we would respond in times of fear and greed.

If we succumb to greed, we are more likely to hold our stocks forever in the hopes that the stocks will continue to rise and rise, even though most of us know that very few stocks will rise forever. We are best to try to learn to control our element of greed or to have a cut loss strategy even for our fundamental stocks.

For those of us who succumb to fear, it is most likely that we would be selling too early in any bull run. We would take our profits early and then see our shares zooming to outer space and regretting our decision to take profits too early. We must learn to overcome this element of fear by not taking profits on our fundamental stocks too early or not be too involved in the market and only viewing our fundamental portfolio every week instead of every minute.

For those of us who have both greed and fear, with hindsight, we will realize that we have greed and fear all at the wrong time. When the stocks are near their peak, our fear prevented us from selling at the peak and we land up carrying our babies. When the stocks are crashing, our greed takes over and we buy even more stocks as the market is crashing.

To overcome our elements of fear and greed, we should have an investment system in place. For those of us who trade, we should have a trading system in place. The systems that you use should be tailored specifically to your circumstances, expectations as well as to the way you handle fear and greed.

I have my own trading and investment systems, which I have shared in this forum but it may not be that applicable to you given that your circumstances and expectations may vary. For me, I can park my money for a long time. However, I have high expectations for my investments and I want to multiply these very quickly. Hence, I am willing to take more risks. Moreover, as I have aged, I have gone through over 20 years of investing and am more able to control my fear and greed.

All of us should develop our own styles of investing (and for that matter, trading) that fit in with our character. Yes, it is good to learn from others how they invest but do bear in mind that everyone's circumstances, expectations and control of fear and greed are different.



Knowing both fundamentals and technical

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Rlin, successful investing requires an in-depth knowledge of how companies are run and how the stock exchange works. To understand how companies are run, there is no substitute for being an employee, to start with.

Working for big companies is also different from working for SMEs. I spent 7 years in IBM, the last 3 years in an executive position. I then spent 2 years heading an SME owned by Australian Jews. I learnt much more about businesses in that 2 years than I did for my entire spell in IBM. But IBM taught me what large companies look for and I have to add that many things are different from SMEs. Only when one is exposed to both will one understand what each looks for and this knowledge is important in investing.

Running SI over the past 6 years have given me insights into the stock market that I would never have got otherwise. Being a member of the SGX securities committee has opened my eyes further into the workings of an exchange. Being close to senior management in Bursa has added more depth to my understanding of other regional stock markets.

Hence, investing is not something that came naturally to me. I have to learn about businesses, stock exchanges on top of being active as a trader and investor.

Mega trends are long-term trends. Yes, I need mega trends to help me decide whether I should be vested in the stock markets as my fundamental stocks depend on a bullish mega trend. However, my entry into my fundamental stocks is partially determined by the technical. Hence, I use both fundamentals and technical for my fundamental stocks.

For my tikam stocks, I use a lot of trading data like Vol Distribution and Quote Movements on top of technical data.

To be an investor/trader, you need to be fluent in both fundamentals as well as technical.

I will be away in Beijing for the next few days as SI starts exploring the China market. Take care.



Companies I avoid

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With smaller companies especially, one has to ensure that the objectives of the management (who are usually the controlling shareholders as well) are in line with those of minority shareholders.

1. Salaries. If management pays themselves high salaries relative to the profits of the company, one has to be extra careful. This is especially the case if the company barely makes a profit but the management takes home healthy salaries. Sadly, it is not possible to know how much actual salary is paid as the current requirement is just to give salary bands rather than actual salaries. A salary band of $500K to $1 mil is really too wide to be that useful. Moreover, on top of salaries, there can be performance shares, bonuses or options which makes the calculations even more difficult.

2. Poor investor communications. These companies keep a very low profile and management rarely gives updates to the minority shareholders. In AGMs, these companies do not take too well to the feedback of the minority shareholders.

However, there are some companies that do this so as not to alert corporate sharks as to the real value of their companies. Hence, one has to sift out the real undervalued stocks from the rest of the stocks in this category.

3. Significant interested party transactions. The company does a lot of transactions with related companies. Some of these companies are co-owned by the majority shareholder. This makes it difficult to gauge the actual profitability of the business as one can buy from a related company at a higher price or at a lower price, depending on what the majority shareholder wants to achieve.

Similarly, I am extra careful if the daughter company is listed rather than the holding company. For example, if the holding company owns a manufacturing plant, it can theoretically lower the price of manufacturing and make the daughter company look very profitable. The manufacturing company on the other hand will chalk up huge losses but as this is unlisted, few will know or care.



Are high volume counters better than low volume counters?

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If you are a trader, you should certainly trade only in high volume counters. Otherwise, you may not be able to exit your positions. This is a fact, which no one can deny.

However, if you are an investor, do you really want to invest in high volume counters? High volume can suggest a few things. Firstly, the counter is well researched as it is well traded. This means that it is unlikely that there are jewels in this company that has not been revealed yet. The counter is likely to be trading at its fair value and if you are looking for bargains, I doubt you will find many in high volume counters.

High volume can also suggest that strong hands are at play together with all the 'funny' hands and all types of hands. I am a believer of supply and demand and when there are so many hands involved, truly, the share price can go either direction depending on what the hands are doing. This puts an investor at the mercy of these hands.

For me, as an investor, I go for counters that no one wants. The trading volume is usually very low as I am looking for jewels and the chances of finding these in a remote island are far better than finding in a crowded place like Singapore. I know that when others find out that there are jewels in this remote island, all the speculators will come and the volumes will then swell. When this happens, it is time to say thank you and move on to identify the next remote island.

Investors should not shy away from low liquidity counters just because these have low trading volumes. The best values and the highest margin of safety can be found in these unloved counters. Good thing too about unloved counters is that there are usually no funny hands around and what you see in the queues is what you get.

However, investors must realize that it can take months or years before these counters get the attention of other investors and speculators and as such, investors must have good holding power to invest in such counters.



20% returns should be achievable

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Decided to answer this private message here so that others can also voice their opinions as well. Nothing better than to hear as many views as possible.

I must admit that a lot of my money is in the stock market. I feel comfortable with this because I spend a lot of my time analyzing and keeping an eye on the stocks that I hold. If I had a full time job elsewhere, I would certainly not recommend putting so much into stocks and shares as I would then not have the time to monitor these stocks.

Successful stock market investing requires a lot of time. Don't belief those who tell you otherwise. Believe me, there is a lot of sweat and tears. The pre requisites will be a sharp, analytical mind as frankly, one is competing against the best brains to make that extra buck. Even better if you have the experience of running your own business and one can put oneself into the shoes of the management and predict what they are likely to do given those circumstances. Also, one has to belief in him as frankly, whenever money is concerned, you can only trust yourself and your judgment.

If one spends quality time analyzing stocks and shares, you should at least have a return of 20% or more. To show what is possible with just $10K, 3 years ago I opened my first margin account. Today, the account is worth over $65K with no borrowings and I did just 3 trades this year. As a margin account is a fully documented account, I intend to share the details when the account reaches $100K. When this has been achieved, I will close the account and liquidate everything to cash to show that the money is real. This is not a demonstration account. The shares that I have in this account are a close reflection of the shares that I hold in my other accounts. There are only 4 stocks in this account.

In the early years of the account, yes, I did use margin as it was not easy to grow $10K. But margin eats both ways and the end of the second trade only left me left with $5K of cash! Fortunately, after the first 2 money losing margin transactions, I learnt how to use margin effectively.

If one does not have so much time to dedicate to stocks and shares, unit trusts and endowment policies may make more sense even though one has to pay the 1% or so of upfront marketing costs.

It is a pity that we don't have a Bershire Hathaway equivalent over here in Singapore and it is my hope that once SI is on a firmer foundation, I intend to look into this. I like the principles of Bershire Hathaway as there are no upfront charges to investors or yearly 'maintenance' fees. I also like the concept of an investing community taken to the next level.



Cutting loss or averaging down

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Wormbunny, in the past, I too tried to practice a cut loss strategy for all my stocks and realized that this does not work for the reasons that you have cited.

Today, I only cut loss on my tikam or speculative stocks if they fall 10% in value since I bought these. These are my short-term trades, may they be intraday or intraweek. These stocks are usually the top 10 most active stocks in that day or week. Hence, there is sufficient volume on both buys and sells queues to run when there is a need to do so. Also, because there is sufficient volume, it is most unlikely that any one player can cause the stock to drop 10% in value so quickly.

For these stocks, if they rise more than 20%, I am out. This way, I need 1 winner to neutralize 2 losing trades (of course, not considering the broking commissions). Most of us are right 50% of the time and hence, this strategy works well for me.

However, for my fundamental stocks, I practice the reverse of cut loss. I actually buy more or average down. Yes, it is a lot more risky investing than tikaming because if you make a mistake and buy a lemon of a fundamental share, you can lose big time as you keep buying and buying when the shares go down in value.

Hence, I spend a lot of time researching every single stock in my fundamental list. Also, I need a large margin of safety in terms of discount to net cash and properties before I park a significant amount of my net worth into these few fundamental stocks.

It is crucial to me to differentiate which of my stocks are my fundamental stocks and which are my tikam stocks as each of these has totally reverse strategies. Do read my investment strategy link below to understand the importance of this differentiation. Take care.



My timing is usually not good

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Rebek, different views make the market what it is today. I love the market. You can play it any, which way you wish. I think you have to find a strategy that fits your personality and of course, your wallet.

Personally, I find it hard to time the market. Hence, I always buy small and then add to my positions. Even if the short-term trend is downwards, it is never easy to know when to sell and when to buy back. Most of the time, I got it wrong in the past and ended up not being able to ride the wave upwards latter as I procrastinate on when to buy back. Hence, now, I just average down. Reason I can do so is because I always start by buying small and have reserves to buy more when the price goes down further.

A common mistake that many investors make is that they think they have perfect timing. They think that the share price will rise the following day after they bought and hence, they use all their available capital to buy as much as they can on that day. I too used to suffer from this delusion of perfect timing. Nowadays, I simply tell myself that my timing is usually poor and hence, I buy slowly and add on to my positions gradually. What I have found is that I can usually buy lower as the months progress.



Having an investment strategy helps us overcome our emotions

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For my fundamental stocks, I find it very important to have a investment strategy that I follow closely. This strategy helps me overcome my emotions of fear and greed.

In the event my fundamental stocks fall in value without any obvious changes to the fundamentals of the stock, the element of fear will result in most of us taking our profits too early. To hold on to these stocks will not be instinctive to most of us. To buy even more stocks would contradict even the more bullish of investors. But, for my fundamental stocks, this is exactly what I would do - buy more.

Hence, it is very important to me that before I identify a stock as being a fundamental stock, I would have gone through the stock fundamentals with a fine comb and ascertain that it has a good margin of safety. If I did not do my homework thoroughly, I would not have the guts to buy more if it continues falling in price. If I am wrong, I can suffer significant financial loss. Hence, I take the issue of identifying a fundamental stock very seriously.

When the stock climbs in value, our element of fear will encourage most of us to take our profits and run. With my fundamental stocks, if the fundamentals remain strong, I would continue holding on to these stocks unless the stock has exceeded my exit price for it. Yes, for every stock, I do have an exit price, which I keep, close to my chest for obvious reasons!

Having an exit price allows me to overcome my element of greed. As the share price races ahead, one can be easily swept by the euphoria and when that happens, one will continually elevate one's exit price. Hence, when one's mind is sound and the external environment peaceful, it is the best time to determine a fair valuation for exit. My exit price is usually already at a premium to the fair market value of the stock.

Rules for Scalping

Rules for Scalping in Spot Forex Market

Setups of the 0.3-minute Chart and the corresponding Indicators:

For Buy Entry, Observe:


1.Price decreases and drops outside the lower Keltner's band (period 20 / offset 2);

2.Full Stochastics (5,3,3); signal lines turn up from below 20% line towards 80-100% area;

3. CCI (Period, 8 / Signal ,0); signal line turns up from -100 line towards positive +100 line;

4. MACD (5,34,5); Red histogram changes to Green histogram; and also signal line pointing upwards.

Confirmation of high probability of profit with 1-minute chart and the setups:


1.Price also drops outside the lower Keltner's band (period 20 / Offset 2)

2. Full Stochastics (5,3,3) also turns up frpm 20% line towards 80% line;

3. CCI ( period 8, signal 0) turn upwards from -100 towards +100 line;

4.MACD (5,34,5) ; Red histogram changes to Green and also signal line points upwards.

For Sell Entry, Observe:

1.Price increases and protrudes outside the upper Keltner's band (period 20 / offset 2);

2.Full Stochastics (5,3,3); signal lines turn downs from 80% line towards the 20%and below;

3. CCI (Period, 8 / Signal ,0); signal line turns down from +100 line downwards to -100 line;

4. MACD (5,34,5); Green histogram changes to Red histogram; and also signal line pointing

downeards:.

Confirmation of high probability of profit with 1-minute chart and the setups:


1.Price also protrudes outside the upper Keltner's band (period 20 / Offset 2)

2. Full Stochastics (5,3,3) also turns downwards from 80% line towards 20% line;

3. CCI ( period 8, signal 0) turn downwards from +100 towards -100 line;

4.MACD (5,34,5) ; Green histogram changes to Red and also signal line points downwards..

Confirmation with Highest Probability of Profit with 5-min Chart and the setups.

5-min Chart setups


Keltner's Band same as for 0.3 and 1-min charts.


Full Stochastics set as ( 21/3/3)


MACD : (12/26/9)


CCI : 8 or 10, to get a smooth signal line

Leafy Greens for a Long Life

Looking for another way to go green? Start with your salad — there is much more in the produce section than just iceberg lettuce. With benefits ranging from a healthy immune system to strong bones, dark leafy greens will add fantastic flavor to your salads — and years to your life.

Greens: A Great Source of Folate
There is no way to predict who will contract fatal age-related conditions such as Parkinson's or Alzheimer's disease, but one way to lower your odds may be to raise your daily folate intake. Scientists have found that older people have a tendency to be deficient in folate, which enables vitamins B6 and B12 to aid in hormone secretion, synthesize DNA, and manufacture the protective coating around nerves.

These three tasks are considered to be major factors in our bodies' defenses against these diseases. Folate is found in numerous foods — spinach, kale, beet greens, chard to name a few — but it is destroyed by heat, so these foods must be eaten raw or lightly cooked. This is one rare instance in which the synthetic form of folic acid is more easily absorbed by the body than the natural one. For people over the age of 50, a dose of 800 micrograms per day is recommended.

Can't Beat Beet Greens
Beets are an all-in-one superfood! The colorful beets contain powerful nutrients that help protect against heart disease, birth defects and cancer, especially colon cancer. And studies show that beets protect liver cells from harmful chemicals with a compound called betacyanin, one of the flavonoid families of antioxidant nutrients. So while roasted and boiled beets are a tasty and nutritious addition to any salad, consider that the beet greens are more nutritious than the beets themselves!

Beet greens are delicious and are rich in vitamins and minerals as well as beta-carotene and lutein. They have almost twice the potassium of beets and contain high levels of folic acid, which can help ward off certain birth defects and lung cancer. Beet greens can be prepared like any leafy green vegetable — sautéed in olive oil, steamed on the stovetop, or thrown into soups to up the health content.

Spinach Makes Health a Cinch
Spinach — packed with iron, beta-carotene, and vitamins C and K — is an essential food for strong bones and a healthy immune system. And it is rich in the antioxidants lutein and zeaxanthin, which protect the retina from age-related macular degeneration, making spinach crucial for healthy vision.

Before using, swish the spinach in a bowl of cold water until all grit is gone. Curly spinach will require cooking but the more readily available flat-leaf spinach is sweeter and works well in salads. Baby spinach is tender and mild, making it great to use raw in salads. To get healthy benefits for your eyesight, sauté your spinach in a little olive oil, since fat can increase lutein absorption. Keep in mind that fresh spinach decreases dramatically in volume when cooked. One pound will cook down to 1 cup — but you will be getting a hearty helping of nutrients in this small portion!

Fine and Dandelion
Disdained by gardeners as a pesky weed, this leafy green has been revered by traditional Chinese medicine as a powerful liver tonic. Dandelion is said to enhance the flow of bile in your body, improving the function of your liver, and remedying liver conditions such as hepatitis, gallstones, and jaundice. A daily cup of dandelion tea is recommended for anyone who feels run-down, sluggish, and over-stressed.

Aside from its herbal merits, dandelion greens are also an incredibly healthy food — chock full of vitamin C, higher in beta-carotene than carrots and richer in iron and calcium content than spinach. Toss a few raw dandelion leaves in your salad to add a hearty flavor. For the bigger, bitter-tasting leaves, blanch in boiling water for 45 seconds to soften the bitterness. Or sauté them for about 15 minutes with onions and garlic in olive oil.

Revolutionary H-bath - Natural remedy for your healthier life

Many years ago, during my Ph.D. program at Osaka University Medical School, I first heard of the half-body-bath (h-bath). My first impression of the idea to “Put the lower half of the body in warm water until the whole body is warm” was that it was hilarious. How could you warm up your body, while your upper half-body is out of the tub?

I had completely forgotten about it until 2 years ago, I was reminded of the h-bath by a friend, did some investigation on it, and then started the h-bath by myself. I read books about the h-bath and watched TV programs produced in Korea and Japan, and then I learned in detail about the h-bath. The h-bath was started by Dr. Yoshiharu Shindo, Japan, and spread into Korea and China over the years.

After I started the h-bath, first I was surprised at the amount of sweat in only in 20 minutes by putting lower body in the tub. Secondly, I felt my whole body was still warm enough even long after the h-bath (it lasted about 2 hours). I then recommended it to my wife who was suffering from “cold hands and feet”. Guess what! She was able to get rid of “cold hands and feet”, and was able to have good night sleep. Now even my 10-year-old daughter is enjoying the h-bath every night.

What other health benefits did we get from the h-bath practice?
I lost 17 lbs in 8 months and also was relieved of shoulder pain I had for more than 15 years. Best of all, is the daily stress management by the h-bath. As mentioned previously, my wife was finally relieved of “cold hands and feet” (Raynaud’s disease), as well as the long-time-suffering of GERD (Gastro Esophageal Reflux Disease), a.k.a. acid reflux. We both gained much more energy than we previously had. Of course, I also did a daily exercise of 30 minutes of walking combined with 30 minutes of the h-bath. I am sure that the h-bath had a synergic effect in my weight loss.

Since I am not an exercise orientated person, like many of you, I knew that both walking and the h-bath were programs I could continue. My daily walking program is not strenuous; rather it is a relaxing slow walk of 30 minutes around the work place or on the treadmill during a lunch break. At night, I did 30 minutes of h-bath everyday. That’s it! I feel much energized now.

I am a scientist, majored in the medical sciences and quite often I couldn’t control the stress from research, discussions, and presentations and so on, until I started the h-bath. I never knew that a bath could be fun. Different from ordinary whole-body-bath, your arms and hands are free, which means you can read a magazine, book etc and fully enjoy the half bath experience.

I want to share the experiences and science of the h-bath with you and recommend the h-bath for healthier you. Best of all, you don’t need to purchase any special equipment for the h-bath, but you should learn proper instructions to start.

What is the half-body-bath (h-bath)?

The main purpose of taking a bath is to sanitize the body. After a bath, we feel relax and relieved of day to day stress. This implies that a bath has a stress relief effect. Fatigue can be relieved when submerging your whole body into the tub-full of hot water. And a bubble bath or few drops of essence oils can also help you to be relaxed. You may have experienced falling asleep while taking a bath, right? Taking a bath is not only good for cleaning purposes, but also for mental health.

The history of submerging-body-bath is older than we think. According to the history records, there was a public bath in Rome, AD 300. The ancient Greek mathematician Archimedes shouted “Eureka, eureka!” when he found the principle of buoyancy (Archimedes’ principle), while he was taking a bath. For a long time, taking a bath meant whole-body-bath (w-bath), which is submerging a body up to the neck. In the early 1980’s, Dr. Yoshiharu Shindo, an ENT clinician, established a revolutionary bathing method, the half-body-bath (h-bath). Dr. Shindo mentions this in his first book, [Remedy for all diseases - controlling the thermodynamics of the body];

“I have been suffering from the “cold hands and feet” especially during the winter, so I used to wear long boots and thick cloths. And, finally came across the thought that what if I warm up the lower-half-body in the bath. It was cold winter, but I tried everyday. I thought that winter is the best time to test the effect of the h-bath, since it is the most severe season for the “cold hands and feet”. After many trial and errors, I concluded that maximum effect can be obtained by using warm water (100-104oF = 38-40oC), which is slightly higher than the body temperature. And keep the water level up to the 3-4 inches above the belly button, and then stay in the water for 20-30 minutes.

I even tried that when I got a common cold. After 20-30 minutes for the h-bath, I started to sweat a lot, and experienced a complete cure from fever & cold the next day. I was also relieved of the shoulder and upper arm pains. They were gone after few months of the h-bath. Of course, a common cold is not the problem anymore. I used take a short nap during the day to have enough energy for the rest of the day, but after continuing the h-bath, I realized I could keep up my activity without a nap. After I investigated the relationship between coldness and diseases, I am assured that the unbalance of the thermodynamics of the body is what causes many diseases. By fixing this heat unbalance by the h-bath, many diseases related to thermal unbalance can be cured naturally. This can be confirmed through the observation of my patients. In combination with conventional medical treatments, the h-bath enhances the cure index in the most of respiratory diseases including common cold”.

Dr. Shindo not only found that the h-bath primarily controlled his “cold hands and feet”, the so called ‘Raynaud’s disease’, but he realized that the h-bath helped to restore the human body naturally by equilibrating body heat.
Blood flow is a prime method of distributing heat evenly throughout the body. Poor blood flow can cause a reduction in the temperature of the extremities, and researchers theorized that poor blood circulation can cause cold hands and feet, subsequently causing other problems such as insomnia. Needless to say, the heart is responsible for the delivering of “warm blood” throughout the body. However, for some reason, it does not go flow through to the end of the body, like the hands and feet. If you take thermography of the whole body, you can see that the heat distribution of the body is not even. The upper body has higher temperature (98.6 oF = 37 oC around the heart), however lower body has comparatively low temperature; especially the temperature of the feet which is below 87.8 oF (31 oC).

Japan was built up from volcanic eruptions, and has many naturally formed hot springs all around the country. So over a long period of time, they developed unique bathing culture. Taking a bath is a daily part of a life in Japan. Paradoxically, on average 10,000 people die in the bath every year. The majority of people who die in the bath are elderly, mainly caused by cardiac arrest, myocardial infarction and cerebral hemorrhage etc. If so, is taking a bath deadly for elderly?

The answer is “it depends on the way of bathing”. A traditional w-bath can produce a lot of stress to the heart, mainly caused by water pressure. Since the whole body is warmed up from the w-bath at the same time the heart is experiencing stress, the heart beat rate and blood pressure rapidly increases and sometimes can cause cardiac or vascular problems. Besides, body heat can hardly be equilibrated since 85 - 90% of your body is submerged in the same temperature, and head is the only place to get the extreme blood stream and excess heat.

However, with an h-bath, the blood circulation increases gradually and reasonably with less stress to the heart and also does not provide the added stress of the water pressure. According to scientists, the h-bath does not significantly increase the blood pressure, shown by measuring cardiograph during the h-bath. The h-bath is comparatively safe, and is hugely effective for blood circulation. However, it doesn’t mean that the h-bath is “totally safe” for elderly and cardiovascular disease patients. Consult your doctor prior to start the h-bath.

The h-bath has spread all around Japan, Korea and China in a short time period. Millions of people continue the h-bath everyday and are accumulating their experiences and pre-scientific data. According to the h-bath people’s network, the h-bath is very effective in weight loss, improving skin health, helps to decrease the discomfort during a woman’s menstrual cycle, and lowers the blood pressure by enhancing the blood circulation in general.

There is no need to purchase expensive equipment for the h-bath. A bathtub and warm water are basically enough. A thermometer, reading materials and a rubber ducky are optional. The rest is continuing the h-bath with consistency and making this part of your daily activity.

The half-body--bath is not a medical treatment, but helps to recover body’s natural function. This concept can be a good supplement for western medicine. Half-body-bath is natural way to recover from the unbalanced body temperature, and ultimately improve your health condition. The h-bath contributes to natural weight loss.

如何才能快速成功

云生尝试做过餐饮业、服装业、保健品业、美容业。遗憾的是每个行业他都没有做成功。在20岁那 年，杜云生上了一个课程，老师说了一句令他震憾许久的话："一个人要想成功，最快的方法是使用别人已经有效的方法，最慢的是摸索"。

先疾后徐，先声夺人，徐图良策

先疾后徐，先声夺人，徐图良策
先疾后徐是指做事要先快后慢，做事要雷厉风行，说要做就要马上去做。但是同时又要慢慢来，认真地做好。先声夺人是指先出头的那个就可以吸引住大家的注意，就能成为最好的，所以做事要比别人快一步，才能成功。
他认为凡成功不可或缺的是培养好自己的能力，做好事前准备，有独到眼光，方能先别人一步。
李兆基以“眼疾手快、先声夺人”著称，他行事处处抢先别人一步，然 而他在作了决策之前，从来都做足了准备工作。20 多年来，他搜集了香港各 区域房地产价格及变动、人口分布及增长等各种资料，非常齐备。有人戏称 他那儿差不多是一个小型的田土厅，李兆基犹如“田土厅长”，对香港地产 业及其走势了如指掌。
正因为如此，李兆基的大动作，少有失利的，看来稳有稳的好处。

他认为，一定要勤奋，要头脑灵活，有眼光，培养自己有先知先觉的能 力，什么事都比别人先行一步，才能在地产界脱颖而出，他十分注重学习与 研究，多吸收知识，使自己在事前做好充分的准备工作，这样使他的眼力每 每比别人敏锐，长远，博得了“眼明手快、先声夺人”之誉，资深的评论家 曹仁超说恒基兆业“政治触觉最敏锐，重新部署投资策略最快”，看看李兆 基前后几次上市时机的把握，及房地产低潮时吸纳，高峰时吐出的雷厉作风， 自会觉得评论家之言非虚。


1973年的大股灾，一直延续到1974年年底，其后股市有所回升，仍持续低迷一年多。原因是世界性经济衰退，本港股灾使不少地产商和投资者受损，造成地产低潮。

“股拉地扯”，成为20世纪70年代后，香港经济的独特现象。

李嘉诚对香港的经济兴衰规律已有较深的认识，经济总是呈波浪式发展之中，若干年为一周期。股市地产低潮，正是拓展的有利时机，地盘价格偏低，物业市值亦偏低。低潮过后，又是新一轮高潮。

港女星黎美娴未婚夫 拒为旧爱供楼

原訴人為謝興肇，早年他在大型地產公司未進駐元朗區時，便當上地產經紀，曾促成多宗元朗舖位買賣，因而被冠以「元朗舖王」美譽。謝現時持有元朗多個舖位，近年在舖位買賣巿埸亦不見活躍，為人低調。他入稟控告前女友Ho Po Yin。

稟狀稱，他們曾經是一對情侶，01年底分手。原訴人於03年8月初，基於對何的愛及關心，才答允幫助她買樓，並簽下一份借據。雙方協議是原訴人分18年支付168萬多元給何，頭三年會每月支付6000元，其後15年則每月支付8000元。

為「愛及關心」付168萬
入稟狀指原訴人一直按協議支付金錢。至今年2月，何突然發律師信要求原訴人更改付款辦法，但原訴人認為不合理。今年4月，何再發信要求原訴人一次過支付70萬元，餘款則要分24個月付清。

原訴人認為，何的做法違背了當初協議的原意，屬違反合約；且按合約法，何並無付出代價換取合約，故雙方協議應屬沒有法律效力，應予撤銷。按「合約法」的精神，締結合約或協議，雙方必須付出（consideration）支持，例如買方付錢，賣方則出售他手上的財產，才構成有法律效力的協議。但法庭向來認為「愛及關心」並不構成法律上的「代價」，且一方付出愛及關心，另一方沒有付出代價，協議將變成無效。

趙世曾亦曾遇相似情況
此項法律原則，富豪趙世曾就引用過對付前女友兼名模Terri Holladay。趙世曾94年在律師樓簽下文件，指基於「愛及關心」支付Terri巨額生活費，但有關協議因為無「代價」支持變成無法律效力。 Terri 96年曾入稟控告律師行失職，案件2000年4月開審幾天後，雙方突然庭外和解。

女人喜欢厚脸皮的男人

有人说恋爱成功的秘决，在于“脸皮厚”。各人都有自以为是的恋爱技巧，但是最根本的技巧，也就是旺盛的进取精神。反正，第一次要厚脸皮，第二次也要厚脸皮，第三次仍然要厚脸皮――只要厚着“脸皮”进攻，女性就会被“攻下”。

一位名叫赫莉尼．多易秋的女性心理学者说：“女性与生俱来有‘被虐’的倾向。”不过，我感到这种说法有些偏颇。通常，女性都喜欢冲着她心仪的男子说：“我讨厌你！我讨厌你！”其实，她的内心却是喜欢对方。事实上，女性并没有那么严重的变态。

一般论调是――女人还是喜欢“温柔地爱我――情切切，意绵绵地爱抚我”。

在一般的情形之下，恋爱具有“跷跷板游戏”的一面。男方热腾起来时，女方就会逃避，男方冷淡，女方又会热腾起来。这种情形，很像拍岸的浪花，以及与浪花游戏的少女。不过，一旦有巨浪似的男人出现，女人心的动向，就会跟原则完全不同了。

刚开始时，她对于无视那种原则的男人，将感到心里发火。
“他的脸皮好厚，真令人讨厌！。
不过，只要更有耐心，厚着脸皮地对她求爱，她就会如此的想着――“乖乖，他真是不可理喻的家伙，他的那种热情，实在叫人吃不消！。

“没有你的话……”对方如此一恳求，立刻就会刺激到她的“自怜”（自己爱自己）心理。当对方说出“你是我心爱的人”她却又要抑制自己的举止，这却能满足她“被虐”的心理。女性所以抗拒不了厚脸皮的男子，乃是喜欢被爱的心理，远超过爱人的心理所致。

塞万提斯曾对唐吉诃德说――“把你自己的爱心表现出来。对女人来说，对于爱她的男人，虽然会装模作样地说：‘我讨厌你，我讨厌你……’但是在内心里，她一点儿也不讨厌。。

圣·西尔也如此说――“对于女人采取断然行动的男子（他的爱人），所以会被称为可恶的男人，只限于他没有遂行自己的行动，在中途放弃的场合。。

怎么？你已经涌出了勇气，对不对？可是，我还是要提醒你——切勿展开莽撞式的“进攻”。唐吉诃德毕竟是唐吉诃德。莽撞只会招来他人的嘲笑而已――到头来只有失一败涂地。

事实上，只有那种“怒涛”般压倒性的男子，才能够凭这种手法获得战果。以电影来说，只有“乱世佳人”里的白瑞德一般的男人，才能够凭这种手法获得佳绩。

教训―“对兵法一知半解，将带来大灾害。”

泡妞秘诀：一句话就可打动女人的心

“来年今天，让我们继续在一起欢笑吧！”一句极其普通的话，却不简单。你能读懂其中滋味吗？有没有感受到丝丝暖意？
　　
据英国《泰晤士报》报道，这是日本心理及社会学家精心推敲出的示爱金言。它能引发无可抗拒的力量，令诸多矜持女性难以招架。在即将到来的“情人节”里，有心的男人不妨试上一试。细细推敲，示爱金言大有深意。首先，“来年今天”暗示言者希望相互关系能长期发展，而非只图一时欢愉；“继续在一起”则是言者希望经过一年的交往后，双方的感情和爱慕仍像初相识一般新鲜炽热；“欢笑”则巧妙地没有提及任何严肃的承诺，只是简单道出自己希望与对方在一起时，都有愉快的心情。

示爱金言的重要提示处，在于它道出了女性心中的隐秘追求：重感情、爱浪漫，更加追求一种归属感，总希望与心爱的男人长相厮守。可见，男性善于把握沟通机会、恰当表达内心情感，有时甚至能胜过万贯家财的诱惑力。什么样的话最能打动女人的心呢？有以下几个要点值得关注：

开心的话能打动女人。比如，“和你在一起总会让我忘记时间的存在”，“你在我心中永远是最有气质、最特别和最具吸引力的”。这些话往往让女性如痴如醉。女性需要赞美，喜欢有趣、活泼、清新、豁达、积极的异性。因此，惯于理性思考的男人也需要学会幽默和赞美别人。也许你深知男人的责任和使命，也许你在努力为她创造物质条件，但这些都要放在心里，外面尽量表现出开心和快乐。深邃是一种美，但千万不要太沉重。

忠贞的话能打动女人。比如，“我愿意照顾你、保护你，一生一世”，“不管将来发生什么事，你变成什么样子，依然是我最爱的人”。这类话总让女性激动不已。因为女性需要可靠的男人，她知道自己有一天会老，身边比自己年轻、漂亮的女人太多，因此，希望男性更能接受她这个人，而不仅仅是容貌。她自信能让男人暂时接纳，却担心他们缺乏恒久的耐心。所以，忠贞的誓言才是她心中的福音。

亲密的话能打动女人。比如，“此刻我很挂念你，请为我小心照顾自己”，“能和你结婚的人一定非常幸福”。任何女人都希望自己成为所钟爱的男人的最爱，她希望听到只说给她听，也只有她能懂的话。感情就是她的生命，委婉动听的呢喃爱语总是百听不厌。亲密无间的情话会把女人送到天堂，让她们变成天使。

浪漫的话能打动女人。比如，“只要你愿意，当你失意、需要一个肩膀的时候，我会立即出现”，“只要能和你在一起，我愿意付出任何代价”。尽管女性自己也不能确定这些话是真是假，但话中的浪漫情调总能让她感动。女性善于想像，虽然关心房和车的实际存在，更需要超越这些现实的浪漫。

尽管如此，男性还是不应忘记，感情容不得欺骗，所有的技巧必须建立在诚实有信的基础上。所以，当你打算说出“来年今天，让我们继续在一起欢笑吧”之前，务必扪心自问：“我真的还想见她吗？”甜言蜜语是把双刃剑，用得好，能切断两性之间的障碍，直奔主题；用得不好，会使双方都伤痕累累，欺骗别人的同时，也让自己背上沉重的心理包袱。

How to Flirt

Flirting is, at its most basic, a way to meet potential mates and see if they are compatible. In some situations, such as at a dance or a party, flirting is the only way to open the door to a romantic relationship with someone you don't know and might not otherwise ever see again. Because of all of this, flirting is a very important skill, and it's one that makes a lot of people nervous. There is an art to flirting, though, and it's an art that can be learned.

Here are some pointers.

Lower your expectations.
Flirting is fun, but only if you don't take it too seriously. Most of the time, you'll just flirt with someone for a short time and then maybe never talk to them again. If you always go in to flirting expecting to date or even marry the person you're flirting with, you're going to be very disappointed--and you'll probably seem a little desperate. Remember, you're just flirting.

Look approachable.
Relax and smile. Use your body language to give signals that you are the fun person that you are, and to show that you're comfortable and confident. There's nothing to be nervous about.

Read body language.
Does the person look approachable? Do they appear interested in you? From the moment you see someone with whom you might want to flirt, you should read his or her body language. Once you're actually flirting with the person, body language is often the only way to tell if the person is actually interested in you . We all have a natural ability to read body language, but it's easy to misread signals, so be careful and take it slow. If you see one signal that indicates the person is interested in you, watch for other signals that might confirm that.

Make eye contact, but not for more than a moment or two.
Do not stare. Just shoot the person a quick gaze, smile with your eyes, and then slowly look away. If you look back and notice the person looking back to meet your eyes, they're likely interested in flirting a bit.

Initiate a conversation with the person you're interested in.
If you don't already know them simply make small talk. Perhaps the best way to strike up a conversation is to start with a simple observation which ends with a question: "Nice day, isn't it?" or "This place sure is packed, eh?" are just a couple examples. What you say isn't important. You don't really need an answer to the question; you are simply inviting the person to talk with you. If the person responds pleasantly, continue the conversation. If the person doesn't respond or seems preoccupied or disinterested, he or she probably isn't interested in flirting with you. At the beginning of the conversation, you don't want to talk about anything personal. Talk about the environment around you, the show you just saw, etc., but don't talk much about yourself and don't ask the other person personal questions.

Gradually share information about yourself in a reciprocal manner. If this small talk goes well, proceed to share a little information about yourself--just something small like what you do for a living or how you liked the show you just saw, for example. At some point, of course, you'll want to introduce yourself and, hopefully, get the other person's name. The key to sharing information is that you both gradually open up. Take turns talking, and each time the other person gives you some information about himself or herself, give similar information about yourself, and maybe give slightly more personal information than that person gave. For example, if you're talking to a girl who says she's taking summer classes, you might disclose that you are also taking summer classes, and then proceed to tell her which class you are most excited about. This invites her to disclose more information about herself. In this manner, the intimacy of the conversation increases over time. You don't want to share too much about yourself too quickly, and you shouldn't try to get the other person to do so either.

Give the person your complete attention.
Laugh at their jokes, listen to their stories, and don't get distracted by what's going on around you. It's more important to seem interested than to seem interesting, and you don't want to hog the conversation. Being a good listener is far more important to successful flirting than being witty.

Use body language to hint at your romantic intentions.
If things are going really well, you might want to try to break the touch barrier.
Touch his or her arm briefly and gently as you talk. Or be more assertive and hold the person's hand when you cross the street, or if walking to a seat or a table, lead them by gently holding their arm. Touching in this manner helps break a "personal space" barrier. Pay attention to red flags, because some people have "personal space" issues and you don't want to make them uncomfortable. In general, women can get away with touching much earlier in a conversation than men can. Many women feel a little threatened when a man they just met enters their personal space, while most men are more open to being touched. In any case, proceed with caution, and back off if you get negative or mixed signals from the person.

Close the deal.
Most flirting is just harmless fun, and nothing will ever come of it. Every now and then, though, you'll meet someone who you'd like to see again and who you think would also like to see you again. Flirting is, after all, a type of courting ritual, a way to meet potential boyfriends or girlfriends, maybe even your future spouse.

Don't worry about wedding plans just yet, though; start by getting the person's phone number. For most people, this is the hard part, because you have to actually make your intentions known, and in doing so you risk rejection. Be brave. Tell the person you'd like to see him or her again, and just ask for their phone number or, if it feels right, try to set up a date for some future time. If the person isn't interested, don't sweat it. There'll always be another guy or girl to flirt with.

Tips
What you say is not particularly important(as long as it's not completely idiotic), but whatever you say, try to keep your conversation positive. Don't be negative, arrogant, or pushy; just be friendly.

When you first start talking with someone, don't aim to flirt. Just aim to have a conversation. This takes a lot of pressure off both of you.
Do not pursue anyone if they do not reciprocate. Walk away if the person doesn't seem interested. Don't presume they're playing "hard to get" because they might interpret any pushiness in a negative light.

Compliments can go a long way. It's a great idea to compliment the person during your conversation, but don't try to pass off a compliment that you don't really mean, and be careful about compliments that might be embarrassing or offensive (compliments about a woman's figure, for example).
If you don't feel comfortable asking for their number, try giving them your number. If they are truly interested in you they will give you a call. You could also pass them your email address that way the conversation could continue without any pressure.

Warnings
Don't flirt with someone who you are sure that you're not romantically interested in, period. Otherwise, you risk accidentally leading them on, which can lead to an embarrassing moment and uncomfortable interactions afterwards. But still remember that you are not getting married, yet. Flirting is like compliments, in that it should have a kind of sincerity attached to it. Flirt with people who seem different than you or who you do not know much about, and they could surprise you.

Use flirting that is appropriate for the setting. Meeting at a library or loud dance hall, for example, might not be conducive to talking too much. In this case, smile, act interested, and wait for a spontaneous opportunity to meet at the punch bowl or in the lobby. Do not however, appear to be a stalker or you will scare them away.

Flirting is not appropriate everywhere. Funerals, for example, are generally not good places to flirt. Flirting in the workplace is also generally a no-no. If you happen to flirt at work, be on your best behavior, and don't press the issue if the other person isn't interested.

Though humor is often a good way to flirt with people, try not to make any jokes that might make your flirting recipient uncomfortable. Though dirty jokes often come to mind when flirting with someone, they often have little or no place in a conversation and can result in the person being turned off or an awkward silence, killing the mood and making you feel embarrassed. Think before you speak, and remember, you don't have to be funny all the time.