How can I make so much money from the stock market? Koon Yew Yin
Author: Koon Yew Yin | Publish date: Wed, 7 Oct 2015, 12:03 PM
Since the publication of my Rm 50 million donation to the Penang State Government to build student hostels to help the poor students, many people wrote or telephoned to ask for financial help and many wanted to know how I managed to make so much money from the stock market to help the poor students. They all want to know my secret formula.
After I read investment books by Warren Buffet, Benjamin Graham, Peter Lynch and other investment gurus and with my 32 years of experience, I have formulated a simple way to select shares that I am sure of making money. I cannot lose money if I buy shares following my simple golden rule.
My golden rule for share selection:
It is that the company whose share I want to buy must be able to make more profit this year than last year because when it announces its annual increased profit, the share price will surely go up. By looking at the last few quarterly results, I can estimate whether the company can make more profit this year than last year.
I am only willing to buy the share if it is selling at a P/E of less than 10. I may buy it at a higher P/E if the company is the famous or leader of its industrial group and many financial institutions are holding the share.
There are many share selection criteria such as NTA, Cash flow, return of equity etc. I consider the earning per share (EPS) is the most important. It is the most powerful catalyst to move share price. When its EPS goes up the share price will also go up.
For a start, you must think like a businessman. Since the value of our Ringgit is dropping, I want to find export manufacturers that sell their products in US$. I do not think like an accountant, worrying about cash flow, too much borrowing etc. As a businessman, I know you need more loan to do more business and it takes time to manufacture the products and it takes time to deliver the products.
Moreover, most buyers will not pay cash. They want delay payment of 60-90 days. As a result, the company account will show increased borrowing and poor cash flow.
How to use margin finance?
I also use margin finance to buy more shares to make more profit. As my shares go up in price, I can increase my borrowing to buy more shares. I dare to use margin finance because I am confident that I can make more than the interest of 4.8% pa I need to pay.
When to sell?
I will only sell any of my holdings when I am not sure that it can make more profit this year than last year. If I am sure it can make more profit this year than last year, I will not sell because I am sure its price will go up when it announces increased profit.
NOTE: Readers must check all their holdings to make sure that the companies can make more profit this year than last year.
After I read investment books by Warren Buffet, Benjamin Graham, Peter Lynch and other investment gurus and with my 32 years of experience, I have formulated a simple way to select shares that I am sure of making money. I cannot lose money if I buy shares following my simple golden rule.
My golden rule for share selection:
It is that the company whose share I want to buy must be able to make more profit this year than last year because when it announces its annual increased profit, the share price will surely go up. By looking at the last few quarterly results, I can estimate whether the company can make more profit this year than last year.
I am only willing to buy the share if it is selling at a P/E of less than 10. I may buy it at a higher P/E if the company is the famous or leader of its industrial group and many financial institutions are holding the share.
There are many share selection criteria such as NTA, Cash flow, return of equity etc. I consider the earning per share (EPS) is the most important. It is the most powerful catalyst to move share price. When its EPS goes up the share price will also go up.
For a start, you must think like a businessman. Since the value of our Ringgit is dropping, I want to find export manufacturers that sell their products in US$. I do not think like an accountant, worrying about cash flow, too much borrowing etc. As a businessman, I know you need more loan to do more business and it takes time to manufacture the products and it takes time to deliver the products.
Moreover, most buyers will not pay cash. They want delay payment of 60-90 days. As a result, the company account will show increased borrowing and poor cash flow.
How to use margin finance?
I also use margin finance to buy more shares to make more profit. As my shares go up in price, I can increase my borrowing to buy more shares. I dare to use margin finance because I am confident that I can make more than the interest of 4.8% pa I need to pay.
When to sell?
I will only sell any of my holdings when I am not sure that it can make more profit this year than last year. If I am sure it can make more profit this year than last year, I will not sell because I am sure its price will go up when it announces increased profit.
NOTE: Readers must check all their holdings to make sure that the companies can make more profit this year than last year.
1 条评论:
EPS真的是很准的指标。
AEON EPS, digi EPS跌，股价也是跌，然后无力回升。
karex, padini, hup seng, 很多有出口的公司，都因马币贬值，交出更靓丽EPS上升数字，股价涨得很快。
只是，老虎大大说，那些因马币贬值，而盈利提升的， 不属于基本面变好。
所以，用马币贬值买入，就要留意马币走向。
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