4 Things You Need To Know Before Entering The Stock Market

For those who have set aside a considerable sum of savings, what usually comes next is how to jump onboard the investing bandwagon and to further amplify their fortune.

Similar to drivers who had just passed their driving test, new investors are usually lost as to what is in store for them on the bumpy roads ahead.

We highlight 4 things you need to know before entering the stock market.

1. Don’t let emotions dictate your investments

History has proven time and again that new investors often make the common mistake of buying when the stock market is high and selling when the market is low, the exact opposite of what they actually want to do. You may think it won’t happen to you, but from our experiences, that is usually the case for a new investor.

A possible reason could be due to the following sequence of events below, which by the way, happens really often.

1. Investors hop onto the investing arena after the cajoling of their close friends or relatives. They listen to stories about how their peers are making a quick killing in the stock market.
2. If they are lucky, they start off by losing a little money and decide they need to relook their investment strategies. If they are unlucky, they start off by winning small bets, and are quickly convinced that they have a knack for trading, and can somehow outperform professional fund managers who have many more years of experience.
3. When a meltdown in the market eventually happens, these investors are usually the last ones to exit, holding on to huge paper losses.
4. When these retail investors finally see their portfolio wiped out badly, they throw in the towel, usually at the point when the stock is finally bottoming out.

One good example would be the recent plunge in the China’s stock markets: after rising 154% in 4 months, it proceeds to tank 26% in just 1 month, with no end in sight, yet.

2. An investment in knowledge pays the best return

This quote from Benjamin Franklin sums it up best: “An investment in knowledge pays the best return”. Investing in the stock market at the start may seem like a confusing and intimidating process, as you are going head-on with the big financial institutions and savvy veterans.

In today’s context however, interested investors can tap on the numerous online articles and seminars readily available at little or no cost to learn. All it takes is a little effort to understand some basic stock investing principles, which could potentially save you from making basic mistakes that could easily cost you thousands of dollars.

3. Justify your reasons for investing in the particular company

Before you purchase the stocks of a company, you need to ask yourself why you are interested in investing in that particular opportunity. It is dangerous to simply buy the stock due to hearsay or analyst reports about it being a hidden gem that will soar 100% by the next year.

Instead, make sure to scrutinise the underlying fundamentals of the company (e.g. net profit margins, good management, etc.) and focus on the very reason behind this investment you have selected.

This is a concept not to be undermined. One year down the road, the market may go through a rocky patch, or the company may experience some temporary bad news. But as long as you can recall the initial reasons behind your investment, you can remove your feelings from the equation and analyse for yourself rationally what the next steps should be.

4. Investing takes time

Active trading and long term investing are a fine line away from each other. If you aren’t willing to buy stocks in a company and hold them for the next ten years, you really have no business owning these stocks in the first place. The simple but painful truth of this is evident on Wall Street every day. Professional fund managers who jump in and out of markets hoping to beat the Dow Jones Industrial Average fail to do the very thing they set out to achieve.

More importantly, it is imperative to know that good stocks do not have to appreciate just because you bought them. In fact, a good company can sometimes go under the radar despite consistently good earning results. Thus, patience is required in order for our investments to pan out over time.

Conclusion

We hope that the 4 factors mentioned above can help serve as helpful guidelines in your search for many good future investments opportunities in the stock market.

Article was first published on Dollarsandsense.sg, a website aiming to keep personal finance simple.

5 things to look out for when opening a stock account

For most people who are interested in investing, deciding to open a stock brokerage account is typically the first step to take in the investment journey. However, with the numerous stock brokerage firms available out there, selecting one over another could prove a daunting task.

Here is a simple guide on what to take note of when opening a stock brokerage account and the questions you should be asking.

Opening a CDP account

Before you can start trading, you have to first open a Direct Securities Account with The Central Depository (CDP).

The CDP account is owned by the Singapore Exchange and basically acts like a central storage place where all the local shares that you have bought are ‘kept’. To open a CDP account, you must be at least 18 years old and not be an un-discharged bankrupt.

There are 2 ways to open an account. 

(i) One, when you open your first brokerage account, the brokerage firm will assist you in opening a CDP account and automatically linking it to the trading account. 

(ii) Another way is to open an account directly with CDP itself via their online platform. Any subsequent accounts that you start with other brokerage firms will be linked to the same CDP account.

5 Key things to look out for when choosing a stock brokerage account

This brings us to the next question: which stock brokerage firm should you consider? A brokerage account is an account through which you will do the buying and selling of shares. It is usually tagged with a brokerage firm (e.g. UOB Kay Hian, Maybank Kim Eng), which will transact trades on behalf of the instructions of its clients.

Here are some important considerations to take not of when opening a brokerage account.

1. Fund Transfers:

If there is a need to transfer funds to the brokerage company where you purchase shares, some readers might find it more convenient to open a brokerage account with a bank that they already have a saving account with. For example, if you have aDBS account, it may be more convenient for you to open a brokerage account with DBS Vickers.

2. Level of Support:

The level of support received is important. We think it is essential to have someone whom we can call to when we have queries, whether technical or otherwise. Most of the brokerage firmshould provide this service, though the level of service received depends very much on the trading representative that is assigned to you.

3. Starters Pack:

If you are new to trading, you will need to start from somewhere. Some of the brokerage firms have introduced starter packs for investors who are new. For example, OCBC Securities have the OCBC Young Investor Pack, which offers commission rebate for the first trade and other support services. The CIMB Securities Youth Engagement is another such service worth considering.

4. Risk of Default:

Your brokerage firm defaulting is definitely an issue you DO NOT WANT to be concerned about. We can safely say that the risks of brokerage houses defaulting are very slim due to stringent regulations that MAS imposes. Nonetheless,a low probability does not equate to zero chance of the incident happening, as seen from the failure of MF Global.

One suggestion is to choose local brokerages that are generally safer as their regulatory standards are typically more stringent.

5. Commission Fee:

When an investor purchase shares, they have to pay a commission fee for the brokerage company to transact on their behalf. Bear in mind that this is a two-way charge. A commission charge is payable during both the purchase and sale of shares. 

Because the industry is so competitive, most of the rates offered by brokerage companies are quite similar and you shouldcheck out the rates offered from the different brokerage house.

6. Other Services:

In recent years, it has become more common for brokerage firms to offer affordable investment plans that enable customers to choose and invest in stocks via a regular monthly investment plan that could be as little as $100 monthly. Most of these investment plans are only accessible to those who already have a brokerage account with the firm. 

Hence, if your intention is to tap on some of these features, it will be good to consider a brokerage firm that offers this service. Example includes the newly introduced Maybank Kim Eng Monthly Investment Plan, which allows users to select from up to 225 stocks across 5 different markets. 

Why Money comes Later in Life...

If you have taken a chance to look at what my Fool.sg colleague, Ser Jing has mentioned in his post, You would kinda change your mindset on looking at how huge fortunes can be manifested with one word - Dream.

In the post, he talked about how many companies concentrate with a big dream be it like facebook (creating a social network for the world) or Apple (building great products with creative designs) and money will automatically flow into their pockets.

On another article by the Straits Times correspondent, Jonathan Kwok, he then mentioned about how some people should avoid following their passion if it does not equate to you making it big (something along the line). He concluded by saying that you should try to balance your personal interests and earning ability and you will be satisfied if you are good at something.

IMO, I will follow the mantra by the leaders of past eras to create the future ahead for me.

Like what Steve Jobs say, "would you want to regret living your life doing what people expect of you or doing what you love?"

Which one do you find meaning in? I have heard of many success stories from the newspapers where they started off part-time and eventually generate lots of money while doing something they love as well.

Body Shop is one famous example too where the founder wanted to make natural body soaps/lotions without chemicals that harm the earth. In the process of selling to millions of people, she became very wealthy as a result, a by-product from pursuing her passion. 

Hope this post will set you thinking for your good Friday tomorrow! I hope one day I will pursue my dreams & passion of educating the masses on how to get rich too! Cheers!

How Small Caps can present a GREAT deal of Opportunity

Found this article from Investopedia... Worth a read... its quite interesting..

Sometimes, buying stock in small capitalization companies - those with market caps of between $300 million and $2 billion - is more profitable than buying shares in large caps. In fact, according to Ibbotson Associates, an investment-consulting firm that also tracks long-term market data, small caps have increased in value by an average of more than 12% per year between 1927 and 2007. Meanwhile, large caps have increased just over 10% during that same time period.
This performance advantage is no coincidence. In fact, small caps have several advantages that large caps simply can't match. Read on as we cover how small caps can produce big gains and how you can pick a winner.

Temporary Valuation Disconnect
Small caps may outperform larger companies over time, but the operative words here are "over time." That's because smaller companies, primarily because of their lack of visibility within the investment community, often experience a disconnect between their stock prices and their fundamentals. This discrepancy between price and fundamentals presents a tremendous opportunity that small cap investors can take advantage of.

Thin Market
Small caps tend to be thinly traded, and while this is a characteristic that can slice both ways, it often presents a huge opportunity for shrewd investors. As the company grows its revenues and earnings over time and the public becomes more aware of its existence and future growth prospects, demand for the stock inevitably perks up. And when a large number of investors start to clamor over a very limited amount of stock, this gives small cap stocks the potential to rise quite rapidly.


Lack of Analyst Coverage
According to First Call, on Jan. 8, 2007, UBS Securities raised its rating on IBM from "neutral" to "buy." The stock edged up $1.17 on the news, or about 1%. But that move was nothing compared to what happened on Sept. 6, 2005, when Brean Murray upgraded Wilson's Leather from "accumulate" to "strong buy." The day the report went out the shares moved up roughly 4%, and within a week they rose almost 12%!

Why the discrepancy between reactions?

It's simple. At the time of the IBM upgrade, about 25 different analysts were covering the stock. This meant that there was a great deal of information already in the public domain, and it would take a major news announcement or an unusually bullish report or group of reports to move the stock substantially. However, at the time, only about five different brokerage firms had disseminated research on Wilsons. As such, the investment community was more apt to react in a positive manner.

Institutional Sponsorship
With regard to the benefits of institutional ownership, a terrific example can be found in a small cap called Labor Ready, which changed its name to TrueBlue Inc. (NYSE:TBI) in 2007. Back in late 1997, the temporary employment provider was trading in the mid-single digits. However, its then Chief Executive Glen Welstad went on several road shows where he met with a number of institutions, which warmed to the stock almost immediately.

The result of Welstad's aggressive public relations campaign was nothing short of amazing. Within a year's time, a number of big-name funds got involved in the stock and the shares skyrocketed into the $25 range.

A small cap company's lack of institutional sponsorship can present a huge opportunity, particularly for investors who get in early.


Eric Schmidt, who headed up Novell and later moved on to Google, once said in a conference call that big companies were like aircraft carriers or cruise ships, "they take a long time to change direction."

In many ways, this is a perfect analogy. In fact, it can take years for a larger company to bring a new product to market because of the committees that need to review its practicality (before its introduction), the legal vetting it must receive and the work that goes into its marketing and promotion. Small companies, on the other hand, have less bureaucracy and a genuine need to push products to market just to survive.

Take, for example, a small-cap restaurant business that has operations dispersed throughout the United States. Over time, this type of company would be able to refurbish its locations and make menu changes many times within a period of weeks or months. However, similar changes would be impossible for a restaurant giant like McDonald's (NYSE:MCD), which had more than 30,000 restaurants in 2007 - not to mention a bulky senior management staff with a reputation for moving at glacial speed.

The ability to be nimble enables a small company to seize opportunities (enter new markets, release new products, etc.) in a much more efficient way than its large cap counterparts. This allows it to grow sales and earnings at a 20 or 30% rate, whereas most corporate behemoths tend to experience mere single-digit growth.

Acquisitions
While larger companies can and do merge with or acquire other large companies, it doesn't happen very often. On the other hand, smaller companies always seem to have a target on their backs.

That's why, as of 2007 companies such as Isle of Capri Casinos, a casino operator in the Southeast, or Ameristar Casinos, a casino operator in the Midwest tend to do so well even during tough economic times. The ongoing possibility that they will be bought out by larger players acts as a perpetual catalyst for the stock.

It's also much easier for a large company, which probably has pretty deep pockets, to buy a small company that's already up and running than it is for the larger company to start a comparable operation from scratch.

The fact that smaller companies often have a target on their backs and that larger companies are often willing to pay a premium to acquire them makes small caps all the more attractive.

The Bottom Line
Small caps aren't necessarily a panacea for all portfolios, but they do have operational advantages that their larger cap counterparts do not. Factors such as being thinly traded or not having many analysts cover the stock may act as a double-edged sword but, for the astute investor, these factors can actually present a great deal of opportunity.

Personal Opinion

Small caps are without a doubt attractive when it can score you home run returns of 50 - 100% in a short period! Nevertheless, they come with risks as well.

The best way to play small caps is during a stock recovery phase as their % returns will exceed their blue chips counterparts easily. 

On the other hand, when it is recession time or during periods of uncertainty, REITs and blue chips which offer stable dividend yields can be your best buddy.

How to save on income tax in Singapore

It's the season to file your income tax again (1 Mar to 18 Apr 2013)! Right now, the Government has made it even easier for us to submit the income tax with the No-filing service; means your income tax is submitted automatically!

In this link: https://mytax.iras.gov.sg/ESVWeb/default.aspx;

You can seek additional help from the tips if you are unsure of certain stuff or even visit their e-learning guide.

Usually, the fields will already be pre-filled by IRAS based on the info it receives from the relevant organisations such as CPF and our companies if they are in auto-inclusion inside the program. Thus, if you have no changes in income/relief claims; you are relieved of the extra work to login to the portal & submit your tax.

However.... many people i know are ignorant about the tax reliefs they can claim to reduce their tax significantly! Right now, lets take a look on some ways you can SAVE TAX & GET RICH.

(i) Parent Relief/Grandparent Relief: Many people tend to miss out on these. and they give huge tax reliefs seen below:

	YA2009 and before		From YA 2010 onwards
Type of relief	Staying with parents	Not staying with parents	Staying with parents	Not staying with parents
Parent relief	$5,000	$3,500	$7,000	$4,500
Handicapped parent relief	$8,000	$6,500	$11,000	$8,000

And its not just YOUR Parents! You can do it for your parents, grandparents, parents-in-law or grandparents-in-law! Just make sure nobody else in the family are claiming under the same parent's name :)

(ii) Life Insurance Relief: Many people do buy insurance in many forms so prevent from letting your premiums paid go to waste! There is a limit though, you cannot claim this if your CPF contributions exceed $5,000 annually... what a waste!

(iii) Course Fees Relief: If you are constantly upgrading yourself in relation to your career; you can also claim for the tax relief for this. Examples may include: ACCA, CFA, CPA etc..

(iv) SRS/CPF Top-Up: I found a very good link showing you how you can kinda allocate your cash to your SRS/CPF and use them to claim tax reliefs. The benefits are that you can earn interest on the accounts, use the funds inside to invest after a certain min. sum & lastly, claim your tax reliefs!

But do take note that your funds will be locked in for a long time so don't jump in without doing your homework!

Conclusion

On a side note, other types of Personal Reliefs are usually included automatically. No point in handing out tax revenue to the government when you can claim claim claim it all! All the best in filing your income tax!

Contrarian Trading with Common Sense

I read an interview where a trading expert shares his views about trading on the contrarian side. I find it rather enriching and actually sometimes it can turn into common sense when you think it simply.

I was advocating investing during the past year (as you can see from all my posts) when P/E ratios were really low for the taking and globally, the bad stuff is coming to the rock bottom and turning tides soon.

With the STI touching 3,300 today and Dow Jones breaking 14,000 level; it shows a spectacular bull run is on the way. However, some pull-back is necessary. After the recent steep rise, a consolidation followed by a decline in STI is closing in especially when the May effect takes control once again...

Nevertheless, let's enjoy the article below...

How to Enjoy a Lifetime of Trading Success

The Daily Crux: You've mentioned in the past that to enjoy a lifetime of trading success, you've got to be able to spot "extremes" in the market… that you must become a "connoisseur of extremes." What do you mean by that? Brian Hunt: By saying you should become a "connoisseur of extremes," I'm saying you should always be searching for situations where a market is in a drastically different state than normal. By locating these extreme states – and then betting on conditions returning in the direction of normal – you can consistently make low-risk profits in any type of market. It's important to realize that extremes can occur in any market – from stocks to commodities to real estate to bonds to currencies. Extremes can be fundamental in nature… like how cheap or how expensive a stock market is. Another name for this is a "valuation" extreme. Extremes can also be price-action based… like how overbought or oversold a market is. That's a "technical" extreme. And extremes can show up in sentiment readings, like surveys that monitor investor pessimism and optimism. Crux: Let's cover valuation extremes… Hunt: Sure. A good example of a fundamental valuation extreme came in U.S. stocks in 1982. Back then, stocks became extremely cheap relative to their earnings power. For U.S. stocks, the normal price-to-earnings multiple over the past hundred years or so is 16. In 1982, the economy and the stock market had been doing so poorly for so long, people simply gave up on stocks. Since nobody wanted to own stocks, they became extremely cheap. The price-to-earnings multiple fell to around 8. It was one of the greatest times ever to buy U.S. stocks. The market rose 50% in just one year. It doubled by 1986. It rose more than 10-fold over the next 17 years. Fast-forward about two decades and you find the opposite extreme. In 1999, optimism toward stocks was so high that the market reached a price-to-earnings ratio of 33. This was a ridiculous, extreme level of overvaluation. Remember, the normal price-to-earnings ratio of the past 100 years is around 16. The extreme level of overvaluation made it a terrible time to buy stocks. The market crashed for several years after hitting that extreme. When it comes to fundamentals, you need to study an asset's historical valuation and find out what's normal for that asset. When an asset gets very cheap relative to its historical valuation, you need to consider buying. When an asset gets extremely expensive relative to its historical valuation, you want to consider avoiding it… or even betting on it falling. This goes for oil stocks, tech stocks, real estate, and lots of other assets. Crux: OK… so people need to buy stocks when they get extremely cheap relative to their historical norm, and avoid them when they get extremely expensive relative to their historical norm. How about extremes that are "technical" in nature? Hunt: Before we get into particulars, let's define the term to prevent confusion. Technical analysis is the study of price action and trading volume. Many people think technical analysis is all about predicting the market, but it's not. It simply comes down to using price and volume data to gauge market action… and to help guide decisions. That's it. There are dozens of technical indicators that measure a stock's oversold/overbought levels. One I've found useful is the "RSI," which stands for "relative strength index." The RSI is nothing magical or predictive. It's simply an objective way to gauge the overbought/oversold nature of a stock. My colleague Jeff Clark is amazing at finding short-term technical extremes in the market. He uses an indicator called the "bullish percent index" to identify overbought/oversold extremes in broad market sectors. I'm sure Jeff will tell you there's nothing magical or predictive about the bullish percent index. Again, it's simply an objective way to gauge price action. We are using these gauges to identify extremes in the market… then betting on the conditions being "relieved" in the other direction. When the pressure behind an extreme is released, the market tends to snap back like a rubber band stretched to its limit. There are literally hundreds of technical indicators and chart patterns people use. While I have a handful of things that I know work, what works for me or you or someone else isn't as important as knowing the overarching goal: That you're using this stuff to spot extremes and trade them. For example, I often trade short-term moves in blue-chip stocks, like Coke and McDonald's. These are elite businesses with tremendous competitive advantages and long histories of treating shareholders well. But like any business, even stable blue chips go through rough patches. If they report a weak quarter or have a product recall, or any other of a dozen solvable problems, the market tends to overreact and sell the shares. The stock price will reach a state we can term "oversold." This is a condition where the stock has reached an extreme level of poor short-term price action. It's around this time that I'll step in and trade the stock from the long side. World-class businesses have a way of rebounding from short-term setbacks. They tend to snap back from extremely oversold levels. Crux: OK, when it comes to technical analysis, we're looking for extreme conditions that when relieved, produce "snap back" moves. You mentioned extremes in sentiment. Let's cover that idea… Hunt: Let's also define this term to prevent confusion. The study of market sentiment comes down to gauging the amount of pessimism or optimism toward a given asset. You can gauge the sentiment for just about any kind of asset… be it stocks, commodities, real estate, or currencies. Gauging market sentiment is more an art than a science. There are lots of ways to gauge sentiment that cannot precisely be measured… and some that can. Whatever gauges you use, the goal is the same: to find extreme levels of pessimism or optimism. You want to find situations where the majority of market participants are extremely bullish or bearish… and then bet against them. You want to go against the crowd. When most folks can't stand the thought of owning a particular kind of investment, chances are good that it's cheap… and that it's due for at least a short-term rebound. On the other hand, when everyone loves an asset – like when everyone loved stocks in 1999 – chances are good that the asset is expensive and due for at least a short-term drop. A few informal sentiment gauges – the kind that can't be precisely measured – are magazine covers and cocktail party chatter. If a mainstream publication like Newsweek or Time has an asset on its cover, chances are good that the asset is far too popular, far too expensive, and due for at least a short-term drop. Magazine publishers have to write stories lots of people want to read. Plus, it's mostly journalists – not great investors – who write those stories. Mainstream magazines are just going to write about what's popular so they can sell lots of magazines. Back in 1999 and 2000, they always had stocks on their covers. It was a danger sign. In 2006, it was all about how to cash in on the real estate boom. That was a danger sign. The idea behind studying cocktail-party chatter is similar. It's another way to get a feel for what the general public thinks about a given investment. You can get a feel for this by talking to people at cocktail parties, family gatherings, holiday parties, and dinner parties. When lots of people are excited about a given asset and are buying as much as they can, it's a major warning sign. It's a sign the asset is too popular, too expensive, and due for a fall. On the other hand, when most folks can't stand the thought of owning a given asset, chances are good that it's a good buy. For example, back in 2003, I put a large portion of my net worth in gold. When I'd tell people that I owned a lot of gold, they'd look at me like I was crazy. You could say there was an extreme amount of disinterest in gold. Gold went on to rise many hundreds of percent. Crux: What are some sentiment indicators that can be measured precisely? Hunt: Money managers and investment newsletter writers are always being surveyed and monitored. Just like most regular investors, the supposed professional investors get swept up in crowd-following behavior. You want to bet against extremes here as well. Crux: It sounds like being a "connoisseur of extremes" is all about finding abnormal situations, and then betting on them becoming normal again. Hunt: Exactly. It's important to note that being a "connoisseur of extremes" – and trading them – is about getting a powerful force of nature to work in your favor. That force is called "reversion to the mean." "Reversion to the mean" is a broad term that is used to describe the tendency for things in extreme, or abnormal, states to return to more normal states. You see "reversion to the mean" all the time. You see it in academics, business, trading, and dozens of other areas. For example, winning an NFL Super Bowl requires an extreme set of circumstances. A football team has to have a great coach… a great set of players… and they have to play extremely well for an extended period of time. The team's elite players have to avoid injury. And they have to beat a series of excellent teams at the end of the season. It's really hard to get all the stars aligned and pull off a Super Bowl winning season. That's why Super Bowl winners tend not to win the championship the next year. They tend to "revert to the mean" and not win it. To go back to the example of trading extremely oversold blue-chip stocks, if a blue-chip stock like Coca-Cola is sold heavily day after day for several weeks, chances are good that its trading action will "revert to the mean" and cease being so extreme. Chances are good that it will stop falling and start rising. Crux: Understood. Any final thoughts? Hunt: One last thing I think is important to note is that an extreme in valuation is often accompanied by extreme technical and sentiment readings. That's why I believe studying and trading the market with "just" fundamentals or "just" technicals can be a limiting mindset. Consider what happened with offshore drilling stocks in mid-2010, just after the terrible Gulf of Mexico oil-well disaster. After the disaster, investors dumped shares of offshore drilling stocks. They completely overreacted. It was like people believed we'd never be drilling for oil again. Sentiment toward the sector was terrible. Even companies with little business exposure to the Gulf of Mexico fell more than 30%. This big decline left the whole sector in an extremely oversold state. It also made the stocks very cheap. Great drilling businesses were sold down to valuations of around five times earnings. After the selloff, you had a sector that was extremely unpopular, extremely cheap, and extremely oversold from a technical standpoint. So I went long offshore drilling stocks and made big returns in a short amount of time. The stocks enjoyed a sharp "snapback" rally. Again, this rally was preceded by "extreme" valuation, technical, and sentiment readings. Crux: That's why it pays to look for extremes of all types. Hunt: Yes, exactly. Crux: Thanks for your time. Hunt: My pleasure.

Stocks Mkts Down, down & Down... How to Capitalize on them?!

Total Massacre out there! Who have not been spared?!


Anyway, an idea came to my mind... Why do we only think of buying when stock markets go up? Why not capitalize on them when they come down?


According to my past experiences.. There are 3 methods to do that in stock markets:

1. Short - Selling: It is to borrow and sell. From the singapore context, i think that Short-selling can only lasts for T+3. Which means you have to close the position within 3 days and your technical analysis or hunch must be damn zhun!
   An example will be like today - Monday 04 June 2012. If you see how the US stock markets fare last friday [A near 300 point drop for Dow Jones], you can roughly guess the impact it will have on stock markets on Monday.
   
2. Buying Put warrants / options: To be honest, i am not familiar with Warrants although i know they function like Options. I done a little research and it seems that Warrants are bought directly through the same portal where you buy/sell your stocks.
   More information can be found here:  http://www.dbsvickers.com/warrants/Pages/default.aspx#3
   
3. CFD trading: I think this is by far the most popular tool used to go short the market. They are offered by many providers like phillip-securities, city index, igmarkets.com.sg etc..
   The bad point about CFD is that the number of stocks you can short is limited to the selection they offer you & they are mainly blue chip stocks.
   Despite paying a daily fee for shorting CFD, the blue chip stocks don't usually fall much in value within a short period of time. Thus, you really need to also time the market well in order to maximize the winnings with minimum costs of holding to the short position.

I believe the list is not exhaustive... I have quite limited knowledge on this field and would appreciate greatly if someone can also share their experience here! Thanks!

How to Use Stock Intrinsic Value Calculator

Guide on "How to calculate Stock Intrinsic Value"
[Download the Stock Intrinsic Value Calculator]

Below is how it looks like:

We will be teaching you how to utilize this Free Calculator to grab Undervalued Stocks!

(Discounted Cash Flow Method)

1. Key in Stock name & symbol

2. Enter the Operating Cash Flow [This figure signifies the Free Cash Flow (FCF) for the company. You can obtain this figure from the Annual Report: Take the "Operating Cash Flow" minus "Capital Expenditure (usually used to purchase fixed assets)]

You can see below pictures for example...

3. Cash flow growth rate is a bit troublesome... You need to obtain the FCF for every last 5 years and determine the average growth rate.

4. Shares outstanding - Many people do not know how to go get this number. Above is one picture on how to easily retrieve it.. Just Ctrl + F and search for shares outstanding in the Annual Report.. and there it is!

5. Last but not least, the discount rate is usually set at the 3 months US Treasury rate in the past. However, It can be adjusted to how much return do you wish to obtain from this investment. E.g. If you wish to get 10% return annually from the stock, just enter "10" inside the box! Simple as that!

Things to Note:

If you are looking to purchase an undervalued stock, learn from warren buffett. Pick a company with Strong Fundamentals and purchase it at a margin of safety of 50% below the Intrinsic Value you just calculated! Profits behold!

Hope you like this guide on "How to Use Stock Intrinsic Value Calculator" & May you make lots lots $$$! Kindly Like my page at http://www.facebook.com/pages/KissInvesting.. Thanks!