Invest In What You Know
If you are going to beat the market, you will need to do something better than most investors out there. This is no easy task. Remember, most money is managed by professionals. To beat the market, you need to know something that most professionals don’t know about the stocks you trade.
What do I mean by this exactly? Well, look at it this way. There are always two sides to a trade. If you are buying a stock, then someone is selling the stock. You each are essentially making bets about the future of the security. The seller thinks it’s good for him to get out, while you think it’s time to pick up shares of the stock. Time will only tell who is right.
It’s difficult to beat the market by investing in large and mega-cap stocks like GE and Microsoft. Sure, these companies are generally safe investments for the long run. But it’s difficult for an average investor to tell which of these companies will have above-average returns. These companies have many analysts covering them, and the major institutions that invest in them do significant amount of research to know when it’s best to buy or sell these types of companies.
For an average investor to beat the market over the long term, he or she often needs to invest in under-followed companies, which are generally small caps. Since fewer analysts and professional investors focus on these companies, the chance for finding good bargains is higher. Of course, the chance for finding total duds is higher too, so small cap investing can be riskier.
How do you find good small caps? Well, generally, it’s best to start off with companies you know well. These companies may be locally-based or they may be in a field that you understand well. If you are in the web industry, then you may have a better understanding of web-focused companies and their prospects and risked, so you may be in a better position to make a calculated judgment about the future of a stock compared to most people in the market.
If you want to beat the market, then view your stock investments as bets. When you buy, do so because you think you know something or understand something that the seller doesn’t. The best way to do this is by investing in companies that you know well.
Source: http://www.tradingsphere.com : 10 Jan, 2008 Buying Stocks, Stock Market, Stock Portfolio, Stock Research, Stock Trading
Saturday, April 2, 2011
Tuesday, November 30, 2010
PM to announce projects under ETP to boost oil and gas sector By JEEVA ARULAMPALAM jeeva@thestar.com.my
PETALING JAYA: Prime Minister Datuk Seri Najib Tun Razak is set to announce several new developments and entry point projects (EPPs) under the Economic Transformation Programme (ETP) today which will boost the oil, gas and energy sector.
Oil and gas analysts said the announcements could either include the awarding of big contracts, discovery of new oil finds or a new oil and gas policy.
Petroliam Nasional Bhd (Petronas), the government-owned oil and gas company, did say during its first quarter results briefing last month that it was drawing up a masterplan on its potential growth areas, in line with the ETP's emphasis on the oil and gas sector.
The Government targets a 5% annual growth for the oil, gas and energy sector from this year to 2020.
Last week, Minister in the Prime Minister's Department Datuk Seri Idris Jala was reported to have said that Najib would announce some of the confirmed projects and provide an update on previous projects announced.
Under the overall ETP, Najib has announced eight early wins last month. Oil, gas and energy under the National Key Economic Areas (NKEAs) targets a 5% annual growth for the sector from this year to 2020. This target translates into an increase of RM131.4bil within a decade.
Under the ETP, there are some 12 EPPs as well as two business opportunities within the oil, gas and energy sector.
The first three EPPs would look at sustaining oil and gas production, which include rejuvenating existing fields through enhanced oil recovery, developing small fields through innovative solution and intensifying exploration activities.
Meanwhile, another two EPPs would look to enhance downstream growth by building a regional oil storage and trading hub and unlocking premium gas demand in Peninsular Malaysia.
Three EPPs are focused on making Malaysia the No. 1 Asian hub for oil and field services, by attracting multinational corporations to bring a sizeable share of their global operations to Malaysia, consolidating domestic fabricators and developing engineering, procurement and installation capabilities and capacity through strategic partnerships and joint ventures.
The final four EPPs look at building a sustainable energy platform for growth by improving energy efficiency, building up solar power capacity, deploying nuclear energy for power generation and tapping Malaysia's hydroelectricity potential.
The EPPs would contribute about RM47.1bil to gross national income to meet 2020 targets. An additional RM61.2bil would come from business opportunities and baseline growth.
Oil and gas analysts said the announcements could either include the awarding of big contracts, discovery of new oil finds or a new oil and gas policy.
Petroliam Nasional Bhd (Petronas), the government-owned oil and gas company, did say during its first quarter results briefing last month that it was drawing up a masterplan on its potential growth areas, in line with the ETP's emphasis on the oil and gas sector.
The Government targets a 5% annual growth for the oil, gas and energy sector from this year to 2020.
Last week, Minister in the Prime Minister's Department Datuk Seri Idris Jala was reported to have said that Najib would announce some of the confirmed projects and provide an update on previous projects announced.
Under the overall ETP, Najib has announced eight early wins last month. Oil, gas and energy under the National Key Economic Areas (NKEAs) targets a 5% annual growth for the sector from this year to 2020. This target translates into an increase of RM131.4bil within a decade.
Under the ETP, there are some 12 EPPs as well as two business opportunities within the oil, gas and energy sector.
The first three EPPs would look at sustaining oil and gas production, which include rejuvenating existing fields through enhanced oil recovery, developing small fields through innovative solution and intensifying exploration activities.
Meanwhile, another two EPPs would look to enhance downstream growth by building a regional oil storage and trading hub and unlocking premium gas demand in Peninsular Malaysia.
Three EPPs are focused on making Malaysia the No. 1 Asian hub for oil and field services, by attracting multinational corporations to bring a sizeable share of their global operations to Malaysia, consolidating domestic fabricators and developing engineering, procurement and installation capabilities and capacity through strategic partnerships and joint ventures.
The final four EPPs look at building a sustainable energy platform for growth by improving energy efficiency, building up solar power capacity, deploying nuclear energy for power generation and tapping Malaysia's hydroelectricity potential.
The EPPs would contribute about RM47.1bil to gross national income to meet 2020 targets. An additional RM61.2bil would come from business opportunities and baseline growth.
New Incentives for Oil and Gas
New tax incentives to promote the development of oil and gas resources and stimulate domestic exploration activity were announced as one of the nine new developments under the Economic Transformation Programme (ETP).
Prime Minister Datuk Seri Najib Tun Razak said today that the new tax incentives would potentially lead to additional petroleum revenue of RM50bil for Malaysia over the next 20 years.
Prime Minister Datuk Seri Najib Tun Razak said today that the new tax incentives would potentially lead to additional petroleum revenue of RM50bil for Malaysia over the next 20 years.
Friday, April 17, 2009
Oil & Gas continues bullish
♦ Better oil demand trends will set the stage for oil price recovery. While demand trends in Europe and Pacific OECD (i.e. Japan, South Korea and Australia) remain depressed, more stable US demand and pick-up in China’s manufacturing activity suggest that the path to a recovery in demand has improved over the medium term.
♦ Sustainability of oil majors’ capex. Unlike North America, we believe the majority of E&P companies in Malaysia waters (i.e. international oil companies and Petronas) are cash rich and with a considerable portfolio of long-term sanctioned projects.
♦ Sector re-rated on stronger earnings growth in FY10-11. Crude oil prices appear to have reached a comfort zone of around US$50/barrel, although we still expect some volatility in the near term of around US$10 on either side. Longer term, we believe crude oil prices would gradually rise beyond that range against the backdrop of global economic recovery. Thus, we believe investors should already be looking at better earnings growth for the O&G service providers in 2010-11.
♦ Entry and exit levels for trading opportunities. We note that there is high correlation of share price performance to crude oil price and the general trend suggests that share price tends to lead on the upswing and lag on the downswing. Most of the O&G stocks under our coverage are trading at or below current crude oil price levels, with the exception of Wah Seong.
♦ Upgrade to Overweight. While we currently estimate FY10-11 EPS growth for the sector (ex-Petronas Gas) of 17% and 13% respectively, we highlight that there is upside to our estimates if contracts begin to flow again amidst the gradual recovery in crude oil prices. While we recognise the nearer-term risk that contracts would continue to be deferred/re-negotiated, we believe this is mostly discounted by the market. We reiterate our view that the continued shortage of offshore E&P assets will underpin the longer-term growth in E&P activity. Hence we upgrade the sector to Overweight (from Neutral). Given current trading environment our top pick are SapuraCrest
and KNM.
By RHBinvest
Analyst: Wong Chin Wai
Posted by Bursa Street at 9:46 PM
♦ Sustainability of oil majors’ capex. Unlike North America, we believe the majority of E&P companies in Malaysia waters (i.e. international oil companies and Petronas) are cash rich and with a considerable portfolio of long-term sanctioned projects.
♦ Sector re-rated on stronger earnings growth in FY10-11. Crude oil prices appear to have reached a comfort zone of around US$50/barrel, although we still expect some volatility in the near term of around US$10 on either side. Longer term, we believe crude oil prices would gradually rise beyond that range against the backdrop of global economic recovery. Thus, we believe investors should already be looking at better earnings growth for the O&G service providers in 2010-11.
♦ Entry and exit levels for trading opportunities. We note that there is high correlation of share price performance to crude oil price and the general trend suggests that share price tends to lead on the upswing and lag on the downswing. Most of the O&G stocks under our coverage are trading at or below current crude oil price levels, with the exception of Wah Seong.
♦ Upgrade to Overweight. While we currently estimate FY10-11 EPS growth for the sector (ex-Petronas Gas) of 17% and 13% respectively, we highlight that there is upside to our estimates if contracts begin to flow again amidst the gradual recovery in crude oil prices. While we recognise the nearer-term risk that contracts would continue to be deferred/re-negotiated, we believe this is mostly discounted by the market. We reiterate our view that the continued shortage of offshore E&P assets will underpin the longer-term growth in E&P activity. Hence we upgrade the sector to Overweight (from Neutral). Given current trading environment our top pick are SapuraCrest
and KNM.
By RHBinvest
Analyst: Wong Chin Wai
Posted by Bursa Street at 9:46 PM
Subscribe to:
Posts (Atom)