Student Edwin question

"What the difference between basic and duilted EPS? When calculating PE, which one should we take? Thank you."

My answer:
Use the smallest available number, which is diluted eps. The basic EPS is the earnings divided by number of stocks they have during the IPO launch. After that, it is very common that companies issue shares to raise more capital.

Just remember always use smallest available eps no. for calculation of PE (conservative approach). Unless you are analysing historical prices, then use the older eps(you will never do that actually as it doesn't make sense you analyse past prices)

Student Jeffery question

"any comment on GKE Int'l? how is the FA for this. now i am stuck in this counter at 0.49. but my FA is weak. is it worth holding for long term? i did see news abt GKE buying up Van der Horst Biodiesel."
http://www.channelnewsasia.com/stories/singaporebusinessnews/view/272200/1/.html

My advice;
-You should never touch sesdaq companies as what I mentioned in class during the 1st class. This is because their market capitalization are smaller and subject more extremely to market volatility. Hence they are riskier.

Q1) How do you check that?
-Go sgx.com , listed companies, live quotes. Those with a "S" beside the counter means they are sesdaq companies.

Q2)What's the difference btw sesdaq and mainboard?
-To be listed on the mainboard, the company capitalization got to be a certain level. That means those listed on the sesdaq are smaller companies compared to the mainboard.

My advice continued:
GKE are making a loss in previous years. In addition , their loss has increased from 2004 to 2005. So basically, this company is not good. I guess this student did not read the annual report before investing.
Tip: One should always read all financial reports before investing. It doesn't matter if the stock was very high recently, and now is quite low. Example if a stock was $1.5 and now is $1, should u buy in? Answer: Price should never be your first indicator. You should always analyse the fundamentals of the company. If it is bad after analysis, you should never touch this stock no matter how cheap it is now. Because you might be buying a worthless company and the high price was being speculated up and not due to any good company news releasing.

This student made a mistake that all newbies made. Looking at the price of the stock to determine if you think is worth it anot. It's abit dangerous right now for this stock, if they keep making increasing losses, the stock should continue to go down.
Tip: Never buy companies that make a loss in recent years. This is extremely risky. Even when the economy is bad, they should still make a profit.

However they seem to enter the bio diesel market with the acquisition as their current market may not be doing well. Even so, normally for me, once i see a loss, I will never buy this company. This is because, I feel that their primary business should be profitable first (this is the business that made them listed also right). If not, that means the management or the industry is not good, and it is better to avoid such companies. They are too many good companies to park your money, why pick a lousy one.

Course Outline

Lesson 1 (2 hours) (Free to attend):
1) introduction to investment
2) introduction to stocks investing
3) compounding theory
4) warren buffet beliefs
5) mechanism of stock market
6) definitions of indexes, categories of stock, market conditions
7) fundamental and technical analysis
8) value investing and growth investing

Lesson 2 (3 hours):
1) Fundamental analysis (finding the good company)
- what constitutes a good company
- how to interpret and understand financial reports (KS energy)
a) profit & loss
b) balance sheet
c) cash flow
2) case study
- practice applying FA in chosen case study
- discussion of analysis

Lesson 3 (3 hours):
1) how to use pe to find entry and exit points?
2) Technical Analysis (finding the price to enter and exit)
- how to use TA in value investing (capitaland)
-how to use TA in growth investing (genting)
3) things to do after buying shares
4) Understanding company news and their effects
5 how to detect bad companies to protect yourself (case study on lkhsp)
6) questions and consultation

course introduction

Have you ever wondered:
- how to invest in stocks but lack the financial know-how?
- why courses out there cost a bomb?
- why you can't really apply what you learn even after understanding the financial books?
- why you still lose money even after applying exactly what is said in the books?
- why schools don't teach investing when it is so important?

Now you can invest, without making stupid mistakes,cutting short all that book to book reading because now there is a step by step guide to stocks investing. A simple course specially designed for amateurs. You will be able to make sigificant gains as long as you applied the strategies. You will be reassured you know how to apply because I will coach you. As the saying goes, tutoring is the best way to pick up new stuff. Join now and enjoy financial freedom!