My first stock analysis method
This is the first stock analysis method I used when I started learning how to invest in 2003. Like most beginners, I had absolutely no clue where to start.
Searching on the internet yield many stock analysis methods but most are not directly applicable to Singapore stocks.
So for a student with limited resources, expensive seminars touting instant profits were out. Subscription based data services were also out.
I chanced upon the booklet while buying the daily newspapers, which I was reading to keep myself updated on the financial markets. No exciting story there.
With my new 'tool', I am able to do simple research and analysis on Singapore stocks using the data in the booklet. It's basically a consolidated 'all in one' snapshot of listed companies with information on its business activities, recent developments, financial data, etc.
The $6 dollar booklet analysis
What I did was to flip through the booklet looking for companies with increasing profits year after year. Then I would work out some financial ratios such as price earnings ratio, dividend yield, etc, to determine if the stock is worth buying.
As with most investing methods, it has its limitations. This method worked well during 2003 when the stock market was at its lowest but as the uptrend progress through to 2005, almost all the stocks that I am interested in became 'too expensive' to buy.
In hindsight, we see the uptrend lasting for another 2 years to late 2007 where many stocks rose to astronomical levels before crashing back down to 2003 price levels.
I started learning technical analysis in early 2007 and managed to avoid the full effects of the financial crisis. Because of this, I am a firm believer in combining both fundamental and technical analysis when it comes to investing.
Where to buy the booklet
Major bookstores (R.I.P Borders!), some 24-hour convenience stores and newsstands. It used to cost $6 during my time but now it's $7. They have a website too. The booklet's name is 'Shares Investment'
For the purpose of using the booklet for simple research & analysis, you'll only need to buy it bi-monthly or quarterly, since most listed companies in Singapore release financial statements on a quarterly basis.
But if you find the other sections helpful, by all means, subscribe to them. Support local companies.
I don't think it's a coincidence that the company that publishes this booklet also publish horse racing and football guides. They must love statistics so much over there.