"There are always opportunities if you are looking closely. And we do not want to give up looking for these opportunities. Perhaps there's no better time to invest. I look at it quite positively, even though I see that the market is still tough, but it's actually a good time to study. It’s a good time to learn"@ Feijoa8025
- How old are you and what are you doing? Your current occupation?
I'm 47 and I work in the information technology industry for over 23 years now, based in Christchurch. We have an Research & Development (R&D) centre I'm working in now, we are a foreign company, a Japanese company, but we have sales offices all around the world. So, yeah, I'm doing mainly support for all the sales offices.
- What is your background story in terms of your first trading or investment? How did it all start, and how did it all begin for you?
So, I first started trading not long after I graduated from university. Now, I remember blindly buying just two stocks for fun. One of the stocks I bought because it gave out KFC Vouchers every six months. That's the reason I bought the stock. So, I did not do any research. I didn't know much about the stock market back then. Then I stopped after that mainly due to other things in life that I'm pursuing. In 2019 I started to revisit the stock market again and over the years I have accumulated some savings and I've been putting the money in the bank, but it's not getting anywhere. So, I started to look into the stock market again and this time I did some research to start with.
So, we know that Covid hit at the end of 2019. 19 February 2020 marked the stock market peak before the outbreak of the Covid Pandemic. Since then, the world has changed, transforming our lives, our economies in the fortunes of our businesses and our share prices. Prices from some companies rocketed up at record speed while others tanked. This was when I really started to look into the stock market seriously. Back in March, when some of the premium stocks were at their lowest point, I started to invest in mainly New Zealand in our stock market. And after three months I expanded my investment to the Australian stock market. That's where I'm now.
I guess in terms of being an experienced stock trader, I'm probably a little bit more than a novice, but I'm not an expert yet. I'm still learning and I'm only starting to look at the US stock market recently.
- So how did you come across the Tiger Trade app?
Only a month ago, I had been doing a lot of research, including stock trading platforms. I saw Tiger Trade on a website, and it was appealing to me. So, I did some research and read some reviews and it all turned out quite good, so I decided to give it a try. I'm going to put into probably $10K to start with.
So now that I'm familiar with Tiger Trade, after three weeks I think I'm ready. I'm watching a lot of stocks but sort of ready to trade.
- What's in your current portfolio now? And why did you invest in these specific companies?
Mainly US companies at the moment. Mainly all the large capital stocks. Apple, Google, and a lot of tech stock like intel, micron and AMD chip manufacturer. I do put the Electronic vehicle (EV) stocks on my watchlist like Tesla, Nio, and Xpeng. Mainly the EVs technology stocks and all those with a high capital market.
I haven't looked into China and Hong Kong because there is a lot going on even in the US market. So, my next target is probably constrained to the US market.
Australian market I'm already familiar with banking Westpac, and ANZ. Those are the two that I started my investment with. And mining stock like Whitehaven Coal and the energy stock like BPT and also New Hope (NHC). Especially the Whitehaven Coal and New Hope, which have been a really good investment for me - over 100% return. So, everything is down, but with the recent economic crisis, but these two stocks have been still over 100%.
- What is your investment style or strategy?
I'm not sure about my investment style, but I am certainly attracted to stock that is stable and with large market capitalization and stocks with a good dividend return to start with. Because I’ve been in the stock market for three years now, I want to build a steady foundation. That's why banking, energy, and mining stocks are stable, they have a large capital, and they can't go wrong even when the economy is bad, they should be still doing good.
I usually look at some of the financial factors. I tend to look at PB (price-to-book) and PE (price-to-earning) ratio and some of the stocks that for example have a low price-to-equity (PE) ratio. Maybe they are undervalued, but I look into other financials and things like that. All these kinds of things really matter when you start to invest in a stock in a company. There are things like return on capital, return on equity, cash flow, future growth, earning trends, and company strength related to peers. And I only put money in where I know I'm investing.
There are a lot of valuable resources out there that you can use to check the company. There’s lots of groundwork to be done before I invest in a stock. That's my main strategy. Study and research.
Recently, I spent a lot of time on the Tiger Trade app. It seems like really good data and analysis, especially on the US market. So, a lot of US analysis is done on every stock. Other sources I use, are Google Finance, Simply Wall Street, Morningstar and Seeking Alpha. The other website I use is Bar Chart. You have to be wise enough to look and use multiple sources.
I also have an excel spreadsheet that lists all my stocks, how much I pay for them, and what will be my target sales price. All the PE values are listed, as are any dividends. I update it regularly, so I know the target for the stock and what return I want to get. Even before I buy, I stick the stock into my spreadsheet. I have a target price that when it drops below 10%, I will buy. A spreadsheet is also a good start. I built it up just to suit my own investment style. At least your investment is planned. It's not like randomly investing in something.
- How are your returns so far?
On average, I'm getting about just over 10%, so, I'm happy with that. As I mentioned before, all the mining and banking stock has really helped me. Also, I focus on dividend stock, high dividends, and just dividend payout, roughly, I get 6% of my dividend.
- If you could go back to when you were younger, what would you tell yourself about investing?
Do your homework before you start investing. Don't just invest blindly. This is important. That way you can at least have peace of mind when you invest. After all, you need to invest in the company you believe in, right?
Don't invest in something that you don't understand. I mean, stock investment is not gambling. I think of stock as art. Imagine you are the artist. You have to have a good understanding of what you are painting to become a good artist. I mentioned reading multiple sources online, they do have very rich information on stock analysis. And most stock trading platforms do provide basic analysis and company information. Actually, the Tiger platform (Tiger Trade) is certainly a very rich and powerful source, particularly in US stock markets.
And then next you need to set up your investment target. It’s never too late to invest, but only when you can afford it. When you can afford to lose it. You don't borrow to invest. You have spare money, and then you invest. You need to set your goal. You can start small and slowly build up your profile. Look at different stocks across multiple industries. Diversity is the key here. I have stock in mining, I have stock in insurance companies, tech companies, and banks. It helps to spread the risk across your investment.
There's no better time to invest than now. If you don't start, you probably won't do it for a long time. For me, a lot of people say, “Oh, the market is bad”. You can say the stock market is never good enough for someone to invest in if you are a risk-averse person. But actually, bad times in the market are a good time for investment if you look at it differently. Right? A lot of stocks are undervalued because of the economic crisis. So, do I start to invest in a year’s time or do I start investing now? You may not be able to get the lowest point when you buy a stock, but it doesn't matter as long as the stock is undervalued. It's actually a good time to invest regardless of the market or economy at that time.
If you have done your research, if you have believed in a company that you can invest in, then just go for it. And you have to be patient, right? You have to set your goals. You have to decide whether this is a short-term or long-term investment. If you really want to be a good player in the stock market, you have to be invested in a stock that you believe in for at least a year to get a return. And you don't panic. Honestly, if the stock drops, you don't panic. Just hold on tight and don't panic.
- What are the characteristics of your ideal stock?
Okay, so at the moment it's all the mega capital stock. By mega capital, I mean anything with over 200 billion in market capital. I think it's probably a good choice because, for a lot of companies, the market has dropped. That’s for the longer-term investment, like Tesla, Google and Microsoft.
Then perhaps for a shorter-term investment, I always look at the PE values. Again, the PE is a good indicator of whether the stock is overpriced or under-priced. And I look at the PEG (price/earnings-to-growth) value that tells you the growth of the company. Or if you look at dividend stock that pays reasonably good returns.
That's why you need all these different websites. They tell you the growth prospects. Also, they tell you that they expect growth from the company. So, you can gauge and estimate the growth of your profile as well by looking into the growth potential of a stock.
- What are your opinions on global stocks in the next few months?
I think we are going through a very tough time in the stock market and economy. High inflation and the richest billionaires lost 1.4 trillion in 2022. If they lost 1.4 trillion for the first half of 2022, I don't think the rest of the year will be much better unless miracles happen. Well, some may say, there is nothing much we can do. But that's not true. That's not true. There's always something you and I can do. We can study why some companies suffer worse than others. And we can study why some companies and investors still do well and learn from them. And do not panic if your portfolio isn’t great. I mentioned that before. There are always opportunities if you are looking closely. And we do not want to give up looking for these opportunities. Perhaps there's no better time to invest. I look at it quite positively, even though I see that the market is still tough, but it's actually a good time to study. It’s a good time to learn.
You have to keep an eye on the news out there as well. That will help you in terms of investment.
- Are there any memorable achievements that you have made in your investing journey? What did you learn from them?
Most stocks I bought during the Pandemic were at a low price. I made a profit of over 50% on average and one of them got a 90% profit. Air Zealand, dropped just below $0.90 when I bought it. And I sold it for over $1.70. So, I got rid of it before it dropped. I knew maybe I already made over 90%, so why not drop it, and move on to other stocks? So, timing is quite important. But unfortunately, there's no formula for this. You have to learn by experience.
I also held onto some of the banking stock because they are giving out good dividends, so they are stable.
In the stock market, even if you are professional, you’re still learning all the time. You can't predict what happens. No one can. What I learned to do in this situation when you can't predict, you estimate how much your stock market investment will return over time. Know the bottom line, for example, I set my target, I can't go below 7%, for my return, for my growth. Then you have a bottom line you work towards. And I have been getting 10% on average. So, I learned to set my target. I learned to sometimes you need to be patient. And sometimes if you want to stop or to sell, that's up to you.
- What mistakes have you made? And what you have learned from those mistakes?
Okay, two mistakes I can think of. I waited too long to act. I remember I want to get into a stock, but I thought, well, maybe it can drop further. It can drop further! You just have to do a lot of research. If you believe in a company, even if it's not the lowest point, then you should go for it.
The other mistake I made, was I bought a stock near its highest point. Why did I do that? Because it gave a good dividend and it was growing, and it is actually the highest point in the history of the stock. I put my money on it and guess what, it's 40% down. So that's the second mistake I made. I bought stock in Hallenstine Glassons, which was over $7 when I bought it. If you check the price now, it’s dropped, that's the mistake I learned. Yeah, so I wouldn’t do that again. Now I have to figure out a way how to get out of it. Either you top up to correct a mistake, or you wait.
- What is your investment goal for the second half of the year or even the following year?
Goal number one is to never lose money. Goal number two is to never forget goal number one. Learn to stay cool. If you do lose money now, do not panic. I remember a quote that I read from Warren Buffet. You only learn who has been swimming naked when tides go out. So, it means it is during the hard times that the winners and losers get exposed.
So, you have to stay calm. My goal for 2022, don't lose money. And secondly, I think is to grow my return on investment by another 10%. I'll be starting to use the Tiger platform to purchase some stock in the next few weeks.
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