Monitoring our stocks

Being minority shareholders, we are at the mercy of the management of the companies we own when it comes to disclosure of information. So, there is always a strong preference to be vested in companies which are transparent in their business and timely in announcing any development which might affect the value of our investments.

Every day, we should scan the announcements on the Singapore Exchange for possible news from the companies we own or, simply, are interested in. Apart from extraordinary events, I am usually very interested in the quarterly financial reports. That's the best tool we have to see how a company is progressing through the year. I also like to look at the quaterly financial reports of other companies in the same sector to determine the comparative performance of the competition.

From a technical perspective, I look at the charts every night. Charts provide a window into the mass psychology of the market participants with the two emotions of fear and greed being much talked about in investment communities. So, it is not good enough that we identify investment opportunities, it is equally important to be able to read charts in order to approximate when to buy and when to sell.

Monitoring our stocks is a daily affair.
Thoughts on methodology

Determining the impact of news on specific companies

Investors have to determine the implications which news might have on the economy, specific sectors and companies within the sectors. In so doing, investors will be able to position themselves to take advantage of any developments.

So, for example, a year or so ago, when we read about how most cities in China do not have clean drinking water and how the Chinese government intends to spend more on infrastructure, the implication was that companies in the water sector with exposure in China should benefit.

For examples in Singapore, we could consider the near completion of the integrated resorts (IRs) and a growing population. The IRs are expected to attract many more tourists to Singapore in 2010. The hospitality and retail sectors are prime to benefit from this.

With a growing population in line with the government's aim to achieve a long term target population of 6.5m residents in Singapore, we expect real estate developers, healthcare services providers and transportation companies to benefit.

These connections are not difficult to make. Investors just have to keep themselves informed of the latest news. A nightly scan of the latest business news online has become a routine for me.
Identifying trends and value: FA and TA.