Book Review: Come Into My Trading Room: A Complete Guide to Trading by Alexander Elder

I have been reading constantly in order to improve on my trading/investing knowledge since my first trade about 2 years ago.

Recently, I came across my notes on the book Come Into My Trading Room: A Complete Guide to Trading by Alexander Elder.

This book is more for the day/intra-day trader, who looks at market signals/TA, timings of entries/exits etc. Not so much for the value investor.

Here are some excerpts from the book which I highlighted:-

1) To succeed in trading you need several innate traits without which you shouldn’t even start. They include discipline, risk tolerance, and facility with numbers.

2) A good signal jumps at you from the chart and grabs you by the face—you can’t miss it! It pays to wait for such signals instead of forcing trades when the market offers you none. Amateurs look for challenges; professionals look for easy trades. Losers get high from the action; the pros look for the best odds.

3) Bullish fundamentals must be confirmed by rising technical indicators; otherwise they are suspect. Bearish fundamentals must be confirmed by falling technical indicators. When fundamentals and technicals are in gear, a savvy trader can have a field day.

4) Win or lose, you have to gain knowledge from a trade in order to be a better trader tomorrow. Scan your fundamental information, read technical signals, implement your rules of money management and risk control.

5) A professional waits for familiar patterns to emerge from the market. Technical analysis tools will work for you only if you have the discipline to wait for patterns to emerge. Professionals trade only when markets offer them special advantages.

6) Most company news is released on a regular schedule. If you trade a certain stock, you should know well in advance when that company releases its earnings and be prepared for any market reaction to the news. Lighten up on your position if unsure about the impact of a coming announcement.

7) Rallies top out after enough wealthy bulls take their profits, while the money from new bulls is not enough to replace what was taken out.

8) Three essential pieces of information—the direction of price movement, its extent, and volume. Price represents the consensus of value among market participants. Volume reflects their level of commitment, financial as well as emotional. Price reflects what people think, and volume what they feel.

One important thing to note: this book has a 4.5 star rating based on 136 customers review on the Amazon website. This means that quite a number of people have read the book and found it to be useful.

You can read the reviews from others and/or get the book from Amazon here:-
Come Into My Trading Room: A Complete Guide to Trading


Disclaimer: The ideas expressed in this blog should not be construed as an enticement to buy or sell the securities, commodities or assets mentioned. The accuracy or completeness of the information provided cannot be guaranteed. Readers should carry out independent verification of information provided. No warranty whatsoever is given and no liability whatsoever is accepted for any loss howsoever arising whether directly or indirectly as a result of actions taken based on ideas and information found in this blog.

My latest portfolio (as of 12 February 2013)

I started trading on Mar 27, 2011. The first stock I bought was F&N, and sold it for a 6.4% gain after 3 days :). Since then, I have made a number of purchases.. some good and some not so good. All in all, it has been a good learning experience.

This is latest snapshot of my portfolio.

No.	Name	Purchase Date	Purchase Px	Current Px	Gain/Loss
1	MCT	Apr 27, 2011	0.890	1.355	52.25%
2	Biosensors	Mar 16, 2012	1.450	1.330	-8.28%
3	Sabana REIT	Jul 26, 2012	1.000	1.225	22.50%
4	GP Hotels	Sep 3, 2012	0.242	0.275	13.67%
5	2nd Chance	Nov 22, 2012	0.417	0.410	-1.72%
6	Food Empire	Jan 2, 2013	0.580	0.685	18.10%
7	KSH Holdings	Jan 25, 2013	0.380	0.440	15.79%
8	Vizbranz	Jan 29, 2013	0.703	0.690	-1.85%
9	Saizen REIT	Feb 5, 2013	0.188	0.190	1.06%

Disclaimer: The ideas expressed in this blog should not be construed as an enticement to buy or sell the securities, commodities or assets mentioned. The accuracy or completeness of the information provided cannot be guaranteed. Readers should carry out independent verification of information provided. No warranty whatsoever is given and no liability whatsoever is accepted for any loss howsoever arising whether directly or indirectly as a result of actions taken based on ideas and information found in this blog.

KSH Holdings - my reasons for buying this stock

KSH Holdings first caught my attention after I read that it had obtained a Letter of Acceptance (LOA) for Qbay. Its order book now stands at more than $460 million, so there is visibility on its performance for the next 1-2 years. It has also been constantly paying dividends over the years to shareholders, with yield of 3.4% at closing price of S$0.44. PE ratio is relatively low at 8.5, which means that the stock is not overpriced. I also noted that its earnings over the years have been pretty consistent.

Initially, I was a little skeptical of construction stocks, as I feared that construction activities in Singapore is getting rather saturated due to boom in construction activities in recent years, and I had the impression that population growth in Singapore was going to be carefully controlled/curbed due to public sentiments post-General Elections. However, that changed after the White Paper came out, which projected that Singapore would have a population of 6.9 million in 2030. My feelings on this aside, I saw this information as an indicator that construction in Singapore is going to flourish for some years.

My entry price was S$0.38, which was still below its NAV of S$0.39. It's last closing price is S$0.44, which means a gain of 15% in less than a month.

There's a buy call from OCBC, revising its TP from S$0.50 to S$0.62.

Excerpt here (from http://sgx.i3investor.com/servlets/ptres/3848.jsp):

KSH Holdings: Another quarter of strong growth

KSH reported 3Q FY13 PATMI of S$8.1m, which surged 179% YoY mostly due to contributions from its property development segment as the group recognized earnings from The Boutiq, Cityscape@Farrer Park and Rezi 26. 9M FY13 earnings now cumulate to S$22.3m, up 108.3% YoY and forming 73% of our FY13 forecast. The group has sold a significant portion of launched projects, and we expect progress billings from already sold projects to underpin earnings growth ahead. Maintain BUYwith an increased fair value estimate of S$0.62, versus S$0.50 previously, as we lower the RNAV discount for its property segment from 50% to 40% to reflect a lower risk profile given a larger percentage of projects sold, and raise our PE multiple for its construction segment from 3.0x to 4.0x - a level closer in line with that of its peers. (Eli Lee)

The full report can be obtained from here: http://kshholdings.listedcompany.com/misc/KSH-130208-OIR.pdf

Disclaimer: The ideas expressed in this blog should not be construed as an enticement to buy or sell the securities, commodities or assets mentioned. The accuracy or completeness of the information provided cannot be guaranteed. Readers should carry out independent verification of information provided. No warranty whatsoever is given and no liability whatsoever is accepted for any loss howsoever arising whether directly or indirectly as a result of actions taken based on ideas and information found in this blog.

KSH Holdings - EARNINGS SURGE OVER 179.0%

KSH HOLDINGS’ EARNINGS SURGE OVER 179.0% TO HIT S$8.1 MILLION IN 3QFY2013 AND 108.3% TO HIT S$22.3 MILLION IN 9MFY2013

- Property Development division continues to achieve third consecutive quarter of strong growth, boosting bottomline 

- Strong construction order book of approximately S$461.0 million as at January 31, 2013

- Low gearing of 0.23x and healthy fixed deposits, cash and cash equivalents of S$66.7 million

Good set of results. Stocks may fly off the shelf tomorrow :) 

Disclaimer: The ideas expressed in this blog should not be construed as an enticement to buy or sell the securities, commodities or assets mentioned. The accuracy or completeness of the information provided cannot be guaranteed. Readers should carry out independent verification of information provided. No warranty whatsoever is given and no liability whatsoever is accepted for any loss howsoever arising whether directly or indirectly as a result of actions taken based on ideas and information found in this blog.

Peter Lim's Philosophy

Chanced upon an interview with tycoon Peter Lim while I was surfing the net.

Peter Lim’s secret to successful investing?

Ans: The two Ps - Prospect and Patience


He looks at sectors for their prospects.

‘Like if I think solar is good, I go into solar; if I think palm oil is good, then palm oil.

‘Share prices go up because the sector grows. So if I think this sector is going to be good in the next 10 years, then I’ll just invest in it.’
Another key reason for his success, he said, is patience.

His advice to young investors: ‘You have to invest with a longer-term mindset. You buy a good stock, leave it there for 10 years. Come 10 years, this dollar can be many, many multiples.

Food for thought indeed.

Disclaimer: The ideas expressed in this blog should not be construed as an enticement to buy or sell the securities, commodities or assets mentioned. The accuracy or completeness of the information provided cannot be guaranteed. Readers should carry out independent verification of information provided. No warranty whatsoever is given and no liability whatsoever is accepted for any loss howsoever arising whether directly or indirectly as a result of actions taken based on ideas and information found in this blog.

My holdings - January 2013

January 2013 has been a good month for the stock market. Stocks have been rallying, after fears of US and Europe crisis are quelled by cheery reports from the two economies.

For my holdings, on the REITs side, MCT has gone up by 12% during January from S$1.22 to reach a high of S$1.37 today. Sabana has also performed well, and increased 7% from S$1.14 to reach S$1.22 today. After doing some research, I noted that Saizen Reit is trading at S$0.19 which is a significant discount to its NAV value of S$0.30. Making use of the correction today, I bought some lots at its day low of S$0.188.

I sold my Singtel lots during this time for a profit of about 6%. Even though on hindsight, I should have hold onto the shares, however, as it is rather expensive at $3+, this gives it a lot of room to fall in price + tying up my limited $ resources, therefore I decided to sell it. If Temasek goes on a selling frenzy again, I can always buy it then :)

I still have my Second Chance. In fact, I bought a few more lots when it went XD recently and price dropped to S$0.40. Price movements are rather flat for this counter, but with a yield of 8.9%, I treat this stock like a fixed deposit. I am also holding on to my  Global Premium Hotel lots. Prices have gone up 8% during January from S$0.25 to S$0.27.

Other stocks that I hold include Food Empire (good prospects with expansion of business in China and India), KSH Holdings (booming construction in Singapore, good order outlook, and company is performing well), Vizbranz (bought on impulse recently on the basis that Lam Soon may privatise the company), and Biosensors (which I have been holding for close to a year, very low PE ratio of 5x). Of these, I am most inclined to sell Vizbranz to release the funds I have tied up in this counter.

Disclaimer: The ideas expressed in this blog should not be construed as an enticement to buy or sell the securities, commodities or assets mentioned. The accuracy or completeness of the information provided cannot be guaranteed. Readers should carry out independent verification of information provided. No warranty whatsoever is given and no liability whatsoever is accepted for any loss howsoever arising whether directly or indirectly as a result of actions taken based on ideas and information found in this blog.

Global Premium Hotels - 2012 DPU S$0.0141

Since my last post on Global Premium Hotels, it has announced its third dividend payout of S$0.0101. Coupled with the $0.002 cents for the last two payouts, total payout for FY2012 is S$0.0141. This translates into a dividend yield of 5.2 % (80% payout ratio of net profit after tax).

With my 52,000 shares, the DPU of S$0.0101 amounts to a nice final payout of S$525.20. XD on 17 April 2013.

Given the low price at which I bought the shares, there is greater potential for the shares to go upside than down, further in view that the share is still trading at a discount to its NAV of S$0.31. I will be holding on to the shares for a long while :)

Disclaimer: The ideas expressed in this blog should not be construed as an enticement to buy or sell the securities, commodities or assets mentioned. The accuracy or completeness of the information provided cannot be guaranteed. Readers should carry out independent verification of information provided. No warranty whatsoever is given and no liability whatsoever is accepted for any loss howsoever arising whether directly or indirectly as a result of actions taken based on ideas and information found in this blog.