Monday, July 4, 2011

Train patience in choosing stocks – bring mama shopping often

In KLSE, there are over thousands of companies listed. How are you going to choose and buy a stock from the whole list? From A-Z companies, are you going to check each of their financial report and do analysis? If you have times, why not? Doing more homework will give you better return. We need more patience.

Choose by observing
Just like how my mama buys things from shopping center. She will never buy something without comparing the price, and without choosing the best quality of all. While choosing garlic, she removes the bad part of the garlic, and only putting the best part into plastic bag. After collecting a full big bag, she moves on choosing other stuff. While choosing vegetable, she observes carefully to make sure it is not too old, not damaged, and not ‘punched holes’ by insects.

Sometimes, I was too impatience of standing there and wait her. But I was inspired by her action, and understand she has to be so patience to make sure my whole family having the great meal every day, and being so healthy. That’s why I am writing this.

Price comparison
While shopping with mama, she can always compare the prices at other shopping centres by keep telling me the where can she get cheaper, and how much cheaper it is. She was reading all the discount brochure from all the shopping centres, and she manages to remember all the different prices of different products in different shopping centres.

I am so amazed by her memorising skill, and how I wish I could be like her, remembering everything. But I know, that’s because she takes it as her responsibility, and her love to the family, she has the power behind pushing her forwards.

Back to topic – How she has inspired me?
Not talking too far from topic, I am linking how my mama inspired me in investment. Her patience, her hardworking, her responsibility, and her love let her saving a lot of money and expenses. She used her extra time doing a lot of jobs behind us, making great meal. And the nice dishes on the dining table are the results from her effort that she has paid.

Respect to her patience, she is so willing to pay her time to do a lot of “homework”, by reading all the brochures, compare between each others, and get the best price and best quality of all to prepare our food. Same for us, as investor, choosing the best stock among others, we need to do a lot of homework too. Not only reading through their financial reports, but also understanding the companies background, including the management, the product they are selling, what factors will affect the company’s revenue, and everything. This is just like how my mama observing the vegetable to make sure it’s not damaged.

Besides that, comparing the prices between stocks is important. Getting high dividend does not mean getting high return. It depends on how much we pay for it. If we get dividend of 1 cent per share, with the share price of RM0.10. That’s 10% return. If we get dividend of 10 cent per share, but the share price is RM10, that’s 1% return. Comparison is important to get the best return. Just like how my mama did.

I believe, not only my mama, but most of the mothers will do the same thing. They will be the best housewives, best mothers to prepare the best food. So, bring mama shopping often, train your patience, investors!

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