Basic -What is important?

Many have written in their rule book "Never to lose Money" as a rule while making money is the criteria. But how?  Here is what I recommend for newbie in investment

1st Rule - Understand the company that you intend to buy.  Find out the market share, EPS,PE

2nd Rule - Find out the basic company performance ie Revenue and Earning.  Take a snapshot of the Earning vs Revenue ratio

3rd Rule - Compare sector performance eg OnG, Manufacturing, Property,. Compare those performing ones with similar 1 & 2 to your choice

4th Rule - Check the company's debt. This will be term in gearing if relative to income equivalent eg debt vs income, bond vs equity, borrowing vs free cash flow etc. 

5th Rule: Decision. Once you hv adhere and convince yourself on Rule 1 - 4 meeting your criteria, it is time to decide. But Wait! I hv also left the final rule within rule 5 itself called timing.  The is essential because timing itself plays a vital role. Eg OnG is down now due to price secondary reason because of supply and demand game played between the OPEC and non-OPEC and many reports citing price going down to US15-20 per barrel. Do you think bottom fishing is wise here or shud you focus on logistic company or other beneficiaries, similar to what we hv seen in the weak ringgit where exports business prevail under extraordinary gain

Intermediate - What is in the game?

In intermediate, we looks towards a few factors which require more research.  One of the more important aspect is the moving forward.  So the criteria here is 

1. Looking for continuous income. This maybe in projects. The company maybe bidding for a sizable project eg LRT and they stand a very good chance probably as incumbent of earlier phase or due to their track record

2. They maybe in for extraordinary gain due to high reserve in bank with improve rates,  due to forex, asset sale, etc. normally asset sale with large gain is preferable if deal is done. This is because there is no further waiting as oppose to projects whereby delivery of the project to determine the billing is still needed.

3. High unbilled - these are sales done but  billing is awaiting project or project phase completion.  Those with high unbilled is desirable as billing will follow upon project or phase completed barring any unforeseen circumstances such as bankruptcy, 

4. Momentum of sector performance - normally this is reflected in the sector index. If this is reflected in a bullish sector and consistent with sector trend volume may follow and should be monitored

5. Dividend play - this is one of the key aspect. Eg In the case of Tropicana where the price before the ex was below the 200d MA. Those who bought at 94c mitigated the risk with the below 200d MA for a 7% gain when the price went above RM1 and also earn the 5cents dividend (5%) in the process. Staggering 12% within 2weeks or less play

6. Penny stock vs blue chip play - determine at certain point, it will be penny stock or blue chip play.  Some thought are put in as reactive play while some other are proactive play. Reactive is when results tabulated show penny stocks are moving  and many will jump into the bandwagon and may also be due to more proactive eg non favorable market environment which determine penny stock is safer.

Expert - What is my mileage gain?

To some, basic and intermediate criteria may not yet be sufficient. They want to be able to predict beyond the Fundamental analysis (FA) to be exact. Here Technical Analysis is used with further data mine the FA to subjugate and refine the accuracy.