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Taming the Money Sharks: 8 Super-Easy Stock Investment Maxims



Taming the Money Sharks: 8 Super-Easy Stock Investment Maxims

Philip Shu-Ying Cheng

ISBN: 978-1-118-55043-4 May 2013 200 Pages


Easy-to-follow guidelines from a pro for simplifying your investments, protecting yourself from the investment sharks and achieving financial freedom

Drawing on his years as an investor for leading banks in the U.S. and Asia, Philip Cheng delivers down-to-earth strategies guaranteed to make you "shark-proof" while you optimize investment returns. Statistics show that only 20% of small investors ever come close to achieving their investment goals. The other 80% get eaten alive by "investment sharks"—investment advisors, fund managers and other hucksters out to line their pockets with your hard-earned cash. Motivated by a sense of fair play, Cheng resolved to write an investor's survival guide in which he'd share everything he's learned in his years as a successful professional investor. The result is Taming the Money Sharks. The easy-to-follow guidelines you'll find in this book will help you navigate the shark-infested waters of the investment world, all the way to the financial freedom you dream of and deserve.

  • A must-have survival guide for novice investors, and a source of fresh thinking and innovative strategies for experienced investors
  • Features many illustrations, summaries, charts, real-world examples along with other powerful tools to help you avoid common mistakes and win at the investment game
  • Lays out 8 proven strategies for investing systematically and surviving and thriving in the shark-infested waters of the stock market

Acknowledgments xiii

Preface xv

Author’s Disclaimer xix

Chapter 1 Stop the Bleeding

Should You Continue to Invest by Striking While the Iron Is Hot? 1

A. Chasing a Hot Stock 3

B. Chasing a Hot Trend 8

C. Maxim No. 1: Don’t Rush into Buying, and Avoid Further Bleeding 11

Chapter 2 Select an Industry to Increase Probability of Profitable Investments

Apply Expertise from Work or Personal Interest 19

A. Basic Knowledge 20

B. Choosing an Industry to Invest In 25

C. Industry Characteristics 41

D. Maxim No. 2: Profit from One Chosen Industry or a Selected Few Industries 44

Chapter 3 Wise Use of Information Resources

Should You Follow Hot Tips? 49

A. Listen to a Friend or Relative 50

B. Listen to a Stock Guru 54

C. Listen to a Stock Analyst 56

D. Listen to an Investment Advisor 59

E. Listen to a Large Investor (Possible Shark) 61

F. Maxim No. 3: Reference External Inputs but Stay Focused 65

Chapter 4 Decide on Company Values and Buy–Sell Prices

Should You Trust a Company with Your Money? 73

A. Relevant Company Historical Facts 74

B. Most Basic Financials 84

C. Five Key Indicators 86

D. Don’t Be Blind to a Company’s Personality 98

E. Deciding on Buy–Sell Prices 100

F. Maxim No. 4: Trust but Verify 103

Chapter 5 Simple and Effective Portfolio Strategies

Do You Want a Windfall Profit or a Systematic Win? 111

A. Portfolio Planning Guidelines 112

B. Core versus Satellite Portfolio 115

C. Portfolio Risk Management 122

D. Maxim No. 5: Manage and Accept Portfolio Risks 132

Chapter 6 Capitalize on Policy Directions

Are Policies Your Friends? 145

A. Are Policies Fair? 146

B. Policy Directions 147

C. Maxim No. 6: Profit from Policies and Trends 153

Chapter 7 Loving an Investment or Loving to Make Money

Falling in Love 157

A. Is “Love” Forever? 158

B. All-or-Nothing Thinking 160

C. Love a Person? Invest for Love? 162

D. Maxim No. 7: Emotions and Investment Don’t Mix 166

Chapter 8 Fully Enjoy Your Profits from Stocks Rich and Healthy or Rich with Pain 171

A. Manage Your Investment Lifestyle and Health Simultaneously 172

B. Swap Poor Health for Big Money 173

C. Investment Emotions That Are Detrimental to Our Health 175

D. Investment Flowchart 179

E. Maxim No. 8: Maintain Health and Wealth 180

Appendix A: Basic Technical Analysis 183

Appendix B: Deciding on Buy Prices 189

Appendix C: Deciding on Sell Prices 195

Appendix D: Strategy for Investing in High-Dividend (HD) Stocks 201

About the Author 207

Index 209