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Stock Investment Tips

Stock Tip #1 Understanding the

Stock Market

Stock Tip #2 Understanding Our

Emotions

Stock Tip #3 The PRINCED

Strategy

Stock Tip #4 About Technical

Analysis

Stock Tip #5 The Exit Strategies

In this section, we will look at the fundamental aspect of stock
investing. Let’s compare Stock A with Stock B.

Which stock is cheaper? If your answer is Stock B , you need
investment lessons and you’ve come to the right place to learn
more about stock investing. As a stock investor, we don’t just look
at the stock price alone, we study the entire business of the stock
or the company that we are buying. For the above example, the
better choice would be Stock A, with lower PE ratio. However, PE
ratio is not the only criteria, please read on if you want to know
more.

How do we know which stock to buy?

I have come up with a simple acronym for you to follow: PRINCE
D

P stands for         Price Earnings ratio, PE
R stands for         Returns on Equity, ROE
I stands for          Institutional support
N stands for        Net Tangible Assets, NTA
C stands for        Current Market Environmental Scan
E stands for         Earnings per Share Growth
D stands for        Dividend Yield

THE PRINCE D RULE

This is a simple criteria suitable for investors who have little or no
knowledge about stock investing. They are easy to follow. The
data can be obtained from our newspapers and the Bursa
Malaysia website at www.klse.com.my.

Price

Stock A

Stock B

P	Price Earnings Ratio	not more than 15 or the industry average
R	Return on Equity	at least 15 for the past 3-5 years
I	Institutional Buyers	stocks must be the favourites among fundmanagers
N	Net Tangible Assets	share price should not be more than its NTA
C	Current Environmental Scan	scan for any potential threats and opportunities
E	Earnings Per Share Growth	look for significant EPS growth

D	Dividend Yield	at least 5% per year

Tip #3 - The PRINCE D Strategy