Firstly, I bought the book Rich dad, Poor dad by Robert Kiyosaki. I'm going about 25% through on the first night and i find it very motivating to read this. Although i believe many would have heard the synopsis of this book, I shall briefly share in here what I've learn from reading it thus far.
There is this saying that is exactly similar to the teachings of Mentor, T Harv Eker. Robert (Kiyosaki) said:
"Money without financial Intelligence is money soon gone" True or true? TRUE!
I once shared here the reasons why this sentence is so true. For those who have trouble understanding this sentence. I hope this examples would help. Have you ever wondered why some superstars earning millions in their prime could be left bagging for money come retirement age or in their latter stage of their life?
Notice that i purposely chose celebrities because they are mostly the ones whom got rich from fame instantly without having basis of financial knowledge even though there are also some that are actually financially educated. Take a model for example, A young lady in her 20s could shot to fame and start earning millions for maybe the next 15 years until her late 30s if she's pretty enough. But that's not my point here.
My point here, as well as what Robert and T Harv are stressing is:
"It is not the amount of money you earn, but the amount of money you keep!"
Unfortunately, most people are not taught about financial Knowledge in school, and thus, not knowing how money works. Many believed that earning more money is the way out of troubles. But that i believe is that if an individual's mind is not tune to keep the huge amount income they've made, they're bound to lose it. Be it through spending on a high life, buying luxury cars, condos, you name it.
Here's a food for thought if you still disagree on what I've just said in the previous Paragraph.
Ask yourself, what is the first thing you think of if you today found that you had won a lucky draw prize of SGD$1 million dollars. What is the first thing on your mind?
You're welcome to email your answer to me, or post your answer on the tag board and I'm more than willing to tell you how you fare on your degree of financial knowledge.
Of course, If you wanna know more about how rich people thinks differently from the 'poor' people, I'm more than happy to lend you this book after i had finished reading it.
Moving on to i dare say, my area of interest and expertise, I've come to a few articles recently about some analyst saying that some stocks are 'dirt cheap' due to the recent market correction.
And here are my views on this, An objective mind would tell you to weight the pros and cons of the current situation of buying the 'cheap' stocks now. Firstly, the reason why analyst found some stocks that are undervalued now is due to the fact that these companies had strong foundation and base to survive the current credit crisis in Europe.
I received an email today on a recommendation of Noble group stock which company primarily deals with commodities. (E.g. Oil) In this email, It raised the target price of this stock to 'Outperform' due to the fact of the company's strong position in it's capabilities to capitalize the current situation (where oil prices are falling) to buy over some Oil field! It states that the company's balance sheet signifies a huge amount of capital set aside in aiding the day-to-day cash flow activities, thus, re-assuring their creditors that there will not be any cash flow problem in the the short-term.
So, the Micro factors are very favorable and it is now down to the Macro factors, I had stressed time and again that the market's volatility is here to stay unless there is signs of recovery in the credit crisis with the on-going measures being taken by the various Central banks.
I've also received an email from my broker today for the notification of the stock that there is going to be a buy-over for parkway's stock. The company generally invest in the health-care industry and they are the investors for the polyclinics group, Sing-health. I've attached the chart below:
In the email, it stated that the buy-over price for the shares is $3.78 per share. The market opened with a huge 'gap-up' from the previous trading results but is still poised for earnings if any trader could get the stock below the buy-over price. The fluctuation on this stock for the whole trading day was enormous and it isn't too difficult to know that people stopped buying once it hit $3.78 mark as displayed by the highest point of the blue bar.
Just last week, the stock was trading near a low of $3.00 and come monday, it have rebounded to $3.72. So, I would say that that's some neat profit if anybody have bought into this stock when it was hitting low last week.
Although I'm very envious of those whom had profited from this recent event, It is also noticeably to say that our trading methods discourage the entry of this stock especially of the big down bar just 3 trading days ago. Most of the t3b students would have left their positions but seeing this happens come monday may also be hard to take it too.
So, What i want to share here is that although in tradings, some 'crazy' events like this happens when people ditched their stocks and the next thing, the stock 'flies' and recovers. We SHOULD be reminded that having such thoughts of holding stocks when the stock broke the red bottom (trough) line as well as the big down bar come is still dangerous and not something that t3b students are recommended to do.
I would like to end today's post with a sentence from one of my t3b mentor, Derrick.
"You think that next time the stock break the trough line, you should not SELL since it'll rebound back anyway. You can get away from these 'mistake' 1 time, 2 time or maybe even 3 times but it just need one dig down bar (with no signs of recovery instantly) and your capital is being wiped off cleanly."
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