Yeo Enk Loui
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Top Contributor (Apr)

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(Mar, Apr)
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  • Asked by Anonymous

    Yeo Enk Loui
    Yeo Enk Loui
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    Top Contributor (Apr)

    Level 6. Master
    Answered on 21 Apr 2019
    The main difference between a top-down and a bottom-up approach is that in a top-down approach, investors focus on the "big picture" or how the overall economy, geopolitical considerations, politics and macroeconomic factors drive the markets,, affecting different industries and ultimately the stock prices. In a bottom-up approach, analysts will examine the fundamentals of a stock and that is largely independent of the market trends. The main focus of a bottom up approach is to ascertain the performance of a specific company vis-a-vis its peers in the same industry, through looking at some key financial metrics such as its financial ratios, cash flows, balance sheet, revenue and management. If one is investing in an asset class that is highly correlated to macroeconomic factors (like currencies or government bonds), then using a top-down approach may be more effective. However, for value-investing and for investors looking to stay invested for the long term, a bottom-up approach would be more appropriate.
  • Asked by Anonymous

    Yeo Enk Loui
    Yeo Enk Loui
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    Top Contributor (Apr)

    Level 6. Master
    Answered on 21 Apr 2019
    Like what Jonathan has mentioned, buying options are only profitable if you are 100% certain that the stock price will move in the direction that you bet (depending on whether you bought a call/put option). Here's an example of payoffs assuming you bought 100 shares of IBM at 100 per share, compared to say 10 contracts of 100 shares of IBM call options. (at say $10/call which equates to a total expenditure of 10,000) While buying options magnifies one's profits and could potentially be a better investment than just buying the underlying shares, you could potentially lose all your capital if your options expire worthless at maturity. For a start, perhaps it is more advisable to purchase stocks instead of options!
  • Asked by Anonymous

    Yeo Enk Loui
    Yeo Enk Loui
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    Top Contributor (Apr)

    Level 6. Master
    Answered on 21 Apr 2019
    I could be wrong but I believe that the currency conversion is done through the respective broker's exchange rate. For Saxo Capital Markets, "Currency conversions of trading costs as well as profits and losses from trading activities are executed at the mid FX Spot rate when you close the position, plus/minus 0.5 % for settlement of actual payments to or from the trading account are included, for example, buying/selling cash Stocks, paying/receiving options premium etc.".
  • Asked by Anonymous

    Yeo Enk Loui
    Yeo Enk Loui
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    Top Contributor (Apr)

    Level 6. Master
    Answered on 21 Apr 2019
    You could gain exposure to S&P 500 by purchasing the SPDR S&P 500 ETF (SPY), iShares Core S&P 500 ETF (IVV) or Vanguard S&P 500 ETF (VOO). As for the Hang Seng Index, you could consider buying the Tracker Fund of Hong Kong (HKEx: 2800), managed by State Street Global Advisors, one of the largest asset managers in the world. The expense ratio of the fund at a very competitive rate of only 0.09% per year. Another alternative to gain exposure to the Hang Seng Index would be the Lyxor UCITS ETF Hong Kong (SGX: A9B), first listed in Singapore in March 2007 and is denominated is US dollars.
  • Asked by Anonymous

    Yeo Enk Loui
    Yeo Enk Loui
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    Top Contributor (Apr)

    Level 6. Master
    Answered on 21 Apr 2019
    It is going to a tough 2019 ahead for Tesla, espeically with earnings report coming out this Wednesday and how thet are expected to make losses for Q1FY19 Even CEO Elon Musk said " Tesla is unlikely to report a profit this quarter". The first few months of 2019 spelled bad news for Tesla, renewing doubts about its future profitability, growth and cash position. This came at the back of how Tesla delivered about 63,000 vehicles in the first quarter, including 50,900 Model 3s - an underwhelming result when compared to the expectations of around 76,000 vehicles, including 54,600 Model 3s. Furthermore, demand for Tesla Model 3 will most likely weaken especially with federal electric-vehicle tax credits being reduced mid-year and going away at year-end. Coupled with that, competition for its luxury cars and even for the cheaper Model 3 could be heating up. The biggest competitor in the US will probably be the Chevy Bolt and other competitors include the likes of Nissan Leaf and Volvo's Polestar 2, which are both cheaper and long-range alternatives to the Tesla Model 3.
  • Asked by Anonymous

    Yeo Enk Loui
    Yeo Enk Loui
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    Top Contributor (Apr)

    Level 6. Master
    Answered on 21 Apr 2019
    In essence, momentum investing attempts to take advantage of the most recent market trends, contrarian investing takes the opposite approach. Contrarians go against prevailing market trends by selling when others are buying, vice versa. Mr Warren Buffet himself espouses these contrarian values, famously urging investors to "be fearful when others are greedy, and greedy when others are fearful". Contrarian trading is built on the idea that investors overreact to news developments and overvalue "hot" stocks while undervaluing distressed stocks. Contrarian investors often target undervalued stocks and then sell them once the share price has recovered, hoping to profit from that. On the other hand, momentum traders buy and sell according to the strength of recent price trends, usually utiliising technical indicators as a basis to buy/sell to profit off of high-volume stocks movements. Basically, momentum traders believe that an asset price that is moving strongly in a given direction will continue to move in that direction until the trend loses strength.
  • Asked by Anonymous

    Yeo Enk Loui
    Yeo Enk Loui
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    Top Contributor (Apr)

    Level 6. Master
    Answered on 21 Apr 2019
    I think for retail investors like ourselves, some good and free online sources that I personall use and would recommend are: 1) Yahoo Finance 2) Motley Fool 3) Zacks Investment Research 4) SG Investor io 5) SeekingAlpha 6) MarketWatch
  • Asked by Anonymous

    Yeo Enk Loui
    Yeo Enk Loui
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    Top Contributor (Apr)

    Level 6. Master
    Answered on 21 Apr 2019
    This is because there are some benefits associated to issuing shares. 1) Provides cash flow for the company , especially if the management believes that the business requires cash to see it through future down cycles in the economy, or other issues that will constrain its cash flow. Moreover, this cash flow can also help to fund its projects and expansions in the future 2) Less costly than debt financing as the company does not have any fixed monthly interest payments to make. This can be particularly helpful for firms that have high capital outlays and have negative cash flows. Moreover, companies issuing shares are not obliged to give out dividends to common stockholders. 3) Majority shareholders can also bring expertise and connections to the company, assisting with strategy and key decision making. There is more freedom as compared to the strict debt convenants that companies must abide by when seeking debt financing.
  • Asked by Anonymous

    Yeo Enk Loui
    Yeo Enk Loui
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    Top Contributor (Apr)

    Level 6. Master
    Answered on 21 Apr 2019
    Some key differences compared to stocks Preferred Shares Compared to ordinary shares, preferred stockholders usually have no or limited, voting rights Have a higher claim to dividends or asset distribution than common stockholders - i in the event of liquidation, preferred stockholders have seniority over common stockholders and will be paid first Perps (Perpetual Securities) Most perpetual securities are fixed-income instruments just like bonds, paying a fixed interest rate at regular intervals No maturity date and the issuer has the right to never return the principal amount to you. (Like the Hyflux saga) Convertible Bonds Fixed-income debt security that pays interest payments but can be converted into a predetermined number of common stock or equity shares. Attractive option for investors as they often provide a win-win situation for them; ensuring seniority in the event of liquidate and capital appreciation if investors choose to convert these bonds at the end of maturity to common stocks
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