Wednesday, December 05, 2007

My investment compass found a direction!

STI was very strong today, rising up 32 points (0.91%) to close at 3560 with a high volume of 2.33 billion. The volume is the thing that shocks me, because it's been quite a long time since I last saw this kind of figures. Funds are buying into stocks, possibly to gear up their portfolio for the coming year, starting the traditional christmas rally.

A lot of midcaps and pennies moved up today. Construction did very well today, closing up a lot to prices seldom seen in the past few weeks. After the contract awarded to BBR, it seems like there is an increased sentiment towards these stocks.

Had a wonderful session chatting with HH today. This is my action plan to act on what had been discussed today:

1. Focus on fundamental analysis. Time to set up a system to eliminate lousy stocks before going into an in depth analysis of them. Try to select an industry to focus on instead of shotgunning every sector - there's simply too much things to read.

2. Select a few core stocks - these are stocks that will last through the good times and bad times. A large % of the capital will be into these stocks, while the rest are 'play' funds. 'Play' funds should not constitute a huge percentage, no matter how attractive it looks. Profits generated from the play fund will be channeled straight back into core stocks.

3. Aim high! I WANT to own some shares of Bershire hathaway! I WANT to live on the interest of my interest of my capital!

4. I want to learn all these by next year - big words I know - but I'll try. It's time to be focussed on what I need to know and find my direction. Now. Not later.

DJ on fire...100 over pts right now.


sm@ll.fry said...

Hi Lp,

I think it's good to aim high. That's what we were taught in school wasn't it?! Then even if we don't meet the target, we are still not too far behind! So I want to encourage you to do it! ;=)

I'm interested to know how you plan to choose sectors. I agree that there are simply too many companies out there!


la papillion said...

hi fishman,

Plan sector ah? I want to do broadbased FA on every sector first. That means I'll select a few companies from each sector to do FA. This will give me a rough idea of their margins, growth, earnings etc.. Then after that I'll narrow down. Plans are quite sketchy lah, learn as I go along.

That's enuff time during bear market to do all these research, haha