FA v TA

[Some-one]

yep, could not agree more.
FA, financial analysis is easy.

Foresight is the tough one.

You have really good foresight and being able to see Nokia rise up from $2 to $7

Well, I did buy Nokia at USD 4.4. I did not buy a lot and sold it when it reaches USD 6. However, minus away the forex, custodian fee, the returns are not a lot. Now, I stick back to SG stocks. Foresight is tough and this is the fun in buying stocks and the reason why stocks are considered risky.

 

[coolhead]

yep, could not agree more.
FA, financial analysis is easy.

Foresight is the tough one.

You have really good foresight and being able to see Nokia rise up from $2 to $7

I dare not say I've terribly good foresight since I'm just a beginner. For me to be bullish in a stock, there is probably an equally capable seller who is bearish on a stock. I believe one of these days my foresight will be incorrect. I did not foresee that msft will buy nok over. Otherwise, it will hit more than 10usd easily.

anyway, I am currently punting in organovo holdigs lol. Its like science fiction becoming reality. Very speculative in nature, no FA analysis to know its a hyped stock whatsoever. Just a token sum for speculative play.

 

[Bit Spark]

Take Nokia for example, its peers would be BlackBerry, HTC, Apple, Samsung. These are the big main competitors at that point of time. I had written off BlackBerry in 2012. HTC did not have any competitive advantage to begin with. Apple and Samsung had most of its growth potential realized. Nokia was beaten down heavily on restructuring fees but had a partnership with MSFT with quarterly payouts, strong competitive advantages in Windows Phone OS, one of the most profitable IP patents for mobile network/phones.

I bet many in 2012 would have written off Nokia as a bankrupt company. But it has risen from USD1.69 to a high of USD 8.2 a month ago. I bought in at USD 2.74 and sold off gradually with all my shares sold at USD 7.92.

I believe one of the main factors in stock picking, apart from FA (Which everyone is able to study) is your ability to have foresight in future direction of the company. Its a skill that can be honed and will gradually lead to easier stock picking as u become more experienced.

I'm eager to hear more examples from you beyond Nokia. Would you mind share ur rough return on a portfolio basis?

 

[coolhead]

I'm eager to hear more examples from you beyond Nokia. Would you mind share ur rough return on a portfolio basis?

started off with zero dollars in aug'12 when I had my first job. I put in an average of 1.2k per month from sep'12 till last year. Total capital inflow was 15.6k. Hit 19k at end of 2013. That would put profit at 3.4k. A pity it was shy off from
lost money in speculating on nugt as I betted that gold had hit bottom and would increase with sustained qe.

let me cite national bank of Greece as another case. Its peers are alpha bank, Piraeus bank and another Greece bank which I think is eurobank.

the FA metrics I used to judge to buy nbg were deposit to loans ratio, non-performing loans ratio, net operating margin and cost, revenue. Apart from foresight, I reasoned that in a high default environment, some metrics will become more important than others. Its more critical for Greek banks to survive at this point in time than to make a profit. Hence, under normal circumstances, npl ratio and deposit to loans ratio were unimportant. But personally, I felt they make the difference in determining health of a stock in bad circumstances. There must be a silver lining after a crisis and good news is that nbg is one of the biggest Greek banks after a consolidation of 13 banks pre-crisis to 5 banks post-crisis. That would give it room to grow after crisis. Recent developments had led me to sell this stock and to monitor it though.

 

[peterchan75]

Nokia is soon to be out of handset business. Network business is cut throat. But they have $7B from MSFT.

 

[Sinkie]

Which method do you use? If a combination, how do you utilise them?

choosing a stock to buy is like finding a jiken online

when u look at her 'FA', you look at her photo, vital statistic, age, height and weight etc.

when u look at her 'TA", you look at the field reports of her past customers.



so tell me, when you invest/trade? is it base on FA or TA or both?

 

[Bit Spark]

Nokia is soon to be out of handset business. Network business is cut throat. But they have $7B from MSFT.

U will be surprised that Nokia Windows phone is selling well in countries like Argentina, Brazil, India and Poland. They have equal or more sales than Apple in these places. Though not as good as samsung, it's still surviving.

 

[peterchan75]

U will be surprised that Nokia Windows phone is selling well in countries like Argentina, Brazil, India and Poland. They have equal or more sales than Apple in these places. Though not as good as samsung, it's still surviving.

Over the past 10 year, only the top 2 handset makers make money. The rests are struggling... only get the breadcrums for them. The handset margin in the emerging markets is razor thin. Selling high volume low-end phones is risky. One missed step, the dead inventory will pile mile high. Why not based on demand you might ask... because the long lead time for ICs and display + driver ICs. IC makers need time to bake ICs... unlike baking cake.

 

[wahkao3]

Over the past 10 year, only the top 2 handset makers make money. The rests are struggling... only get the breadcrums for them. The handset margin in the emerging markets is razor thin. Selling high volume low-end phones is risky. One missed step, the dead inventory will pile mile high. Why not based on demand you might ask... because the long lead time for ICs and display + driver ICs. IC makers need time to bake ICs... unlike baking cake.

and that explains why the semicondictor industry is so cyclical.

In MBA, they call it the whipsaw effect

 

[coolhead]

Over the past 10 year, only the top 2 handset makers make money. The rests are struggling... only get the breadcrums for them. The handset margin in the emerging markets is razor thin. Selling high volume low-end phones is risky. One missed step, the dead inventory will pile mile high. Why not based on demand you might ask... because the long lead time for ICs and display + driver ICs. IC makers need time to bake ICs... unlike baking cake.

u r right that handset margin for emerging market is razor thin. We r referring to these handsets as basic phones. In fact, Nokia was fully into the basic phone market and the vision of the company in 2012 under Stephen elop was to discontinue resources into the Symbian os. Definitely this led to unhappiness within Nokia since most of their time were spent on Symbian os. Discontinuation of Symbian os meant alot of redundancy of support and staff which were geared towards Symbian os. The shift away from Symbian hence led to 2billion + cashburn per quarter from re-structuring and it was estimated that Nokia will fully exhaust its cash reserves in 4-7 quarters based on cashburn rate. It is this cashburn rate that led many investors to writeoff Nokia as being bankrupt sooner or later. In late 2012, its price to book ratio was 0.6-0.8. A tech company with a less than 1 price to book is usually valued as such becoz they have a major problem in some way. However, management guidance was that such cashburn was due to restructuring charges and the figures were not so bad once u remove these charges from the balance sheet. It was slated for restructuring to complete by q2'13. This also explains why share price increased gradually from $2+ to $3+. Investors were pricing Nokia back to fair value range. Their fair value range was consistently usd4.50. This is becoz the decreasing cash reserves was compensated by decreasing cashburn rate.

however, when bit spark mentioned that Nokia overtook iPhone in these countries, it is actually based on windows phone os sales and not the basic symbian/asha phones that u r referring to as high risk due to low margin and high volume. Windows phone was not intended to compete against iPhone but rather against android os. Rightly put, phone buyers in emerging countries also look for value for money. Some of them do not have computers at home and use their mobile phone as their primary communications device for web surfing. Customer experience in this area was important and if u try a Lumia 520 phone vs other android phones in a similar price range, the performance of windows os was superior and attested by the buyers themselves.

the number of countries where Nokia is overtaking iPhone is increasing and as we speak. 2 months ago, 10% of smart phones sold in Europe's 5 largest economies are now Nokia Lumia phones. Of course, nokia's stronghold in Europe does play a part to this good performance.

 

[peterchan75]

Handset OS is strange beast. Once the handset makers got stuck in a particular OS, they seldom come out alive e.g. Motorola's pre andriod OS, Blackberry, Nokia's Symbian. There is too much stake for software engineers to abandone what they are doing for a new platform. If it's low cost handsets, users don't give a shyt what's the OS. Anything goes. Assuming hardware is on par i.e. same cost, andriod is free and Window Phone OS is NOT free. Margin is razor thin. So, how to compete ? MS inside can charge more ?

 

[coolhead]

Handset OS is strange beast. Once the handset makers got stuck in a particular OS, they seldom come out alive e.g. Motorola's pre andriod OS, Blackberry, Nokia's Symbian. There is too much stake for software engineers to abandone what they are doing for a new platform. If it's low cost handsets, users don't give a shyt what's the OS. Anything goes. Assuming hardware is on par i.e. same cost, andriod is free and Window Phone OS is NOT free. Margin is razor thin. So, how to compete ? MS inside can charge more ?

Nokia receives 250usd million quarterly from MSFT to help offset the cost of choosing windows phone os on a quarterly basis. This gives it an unfair advantage over other windows phone os manufacturers and which is the reason why it is managed to dominate windows phone os. Windows phone license used to be USD 20 per phone but it has since been reduced to USD 8 per phone. Btw, I'll share a big secret with u.

Microsoft Earns $2 Billion A Year From Android: Is It Time To Drop Xbox? - Forbes

android is not free. We can assume hardware is on par. But windows OS is more efficient on performing on limited hardware.

in any case, while product makes a difference in sales figures, the point im driving is expectations vs reality in stock price.

and if windows phone os isn't good, I suppose it wouldn't catch up in emerging countries but I guess they do. ��

 

[peterchan75]

Let's hope that Windows phone will have the mother of "come from behind" and over take andriod.
Gartner Says Smartphone Sales Accounted for 55 Percent of Overall Mobile Phone Sales in Third Quarter of 2013

 

[sAVaGEmP5]

yep, could not agree more.
FA, financial analysis is easy.

Foresight is the tough one.

You have really good foresight and being able to see Nokia rise up from $2 to $7

Last time there were so many ppl betting Kodak. haha chose 10 and 1 survive. 9 died

 

[wahkao3]

[GPGT]My brilliant stock market selection method! Combine their power together surely will give me a lot of edge over Mr Market

Here is my brilliant stock market selection method.

My method is like this:

For me , i ish combine both TA+FA
both say buy, then i buy. Brilliant idea isnt it? Combine their power together surely will give me a lot of edge over Mr Market. How to lose money like that?
see I even made a cool banner for it

What u all think? Good method or not?