It took me a very long time to start playing the stock market, simply because I felt the small investor is severely disadvantaged. We do not have the information resources of investment banks; neither do we have the economies of scale or the ROI to warrant buying this information or doing our own research. Worse still, I already lost so much money on Unit Trusts during the 2001 recession that I'm loathe to let anyone else manage my money. So I put it all in the bank earning a miserable 1% interest , and I blame the EMH.
Recently, I finally took the first steps into the market. I figured it's just for the learning experience, so if I lose money I'll consider that as tuition fees. My own experiences have since invalidated this theory, at least in Singapore. It is possible to make money, just by reading the newspaper and surfing the net.
Take the example of the casino. Everyone just knew the casino was coming. The government doesn't waste time creating a ruckus and inviting criticism over something it does not fully intend to implement. So you'd expect the stocks of companies involved in the casino to go up. In December 2004, the Business Times highlighted 3 property groups that stood to gain from the casino. Even after it was announced that we were proceeding with the casino, it took more than 2 weeks for their stock prices reacted to the news. In January, another company announced its intention to bid for projects both on Sentosa and in Marina and although the price increase was immediate, it was gradual enough for an attentive investor to hop in early and make a decent gain.
The other thing is information tools. SGX actually provides free stock analyst reports for anyone to download. So In January, I started an experiment - I dumped 1 lot of every stock rated a strong buy into Yahoo Finance, to test how good these recommendations are. Since then, they have gone up a decent 9%.
I hate to waste a good blog entry. Which is why I'm still posting this after I equalised the weight of each share in the portfolio and realised that the average increase was reduced to only 4%. Then I compared it to the STI which went up 10% over the same period. So does that mean if you randomly picked 10 stocks, you'd do better than following the recommendations of investment banks? So much for the premise of the post bah.
Not satisfied with their overwhelming information advantage, they are now out to mislead the public as well?? Sigh don't invest lah.
Table 1:
| Symbol | Last Trade | Paid | Gain | |
| A03.SI | 3:28am | 0.115 | 0.14 | -17.86% |
| E02.SI | 5:05am | 0.45 | 0.37 | 21.62% |
| 5DP.SI | 4:48am | 0.275 | 0.27 | -5.82% |
| H14.SI | 4:58am | 0.22 | 0.25 | -12.00% |
| H64.SI | 4:53am | 1.37 | 1.28 | 5.22% |
| S19.SI | 5:05am | 0.49 | 0.33 | 48.48% |
| S63.SI | 5:05am | 2.58 | 2.27 | 13.66% |
| T03.SI | 5:05am | 0.54 | 0.39 | 38.46% |
| 577.SI | 3:55am | 0.145 | 0.16 | -9.38% |
| 596.SI | 4:58am | 0.18 | 0.3 | -40.00% |
| - | - | |||
| Average | 4.24% | |||
1 comment:
I remember reading this blurb in Reader's Digest (forgot which issue, but it was in 2005):
5 groups of individuals were given some money to invest. 4 of the 5 groups consisted of investment managers or the like. At the end of the experiment, those 4 groups lost the most compared to the 5th.
The 5th group comprised of monkeys throwing darts to choose which stocks to buy or sell!
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