As you know, part of a good Financial Plan, would include having instruments that help you to
1. Make your money work harder (not you working hard to make the extra dollar) so that you can achieve your goals faster and having adequate savings for your retirement
2. Beating the inflation (when the price of a certain good increases by a X%, the interest rate on your savings/investment account is more than X%, that’s beating inflation)
There are common methods to help you achieve the above like Investment-Link Plans (through Insurance Companies), Investing into Unit Trusts (through Financial Institutions or Brokerage Firms) or through Stock Trading (On your own and Trading like Warren Buffett).
And for the purpose of this post, I would like to recommend the method of Stock Trading with the introduction of two books, that I have personally read, that would help you to learn the Basics of Stock Trading.
These two books are :
- Ho Kok Mun’s How To Make Money From Your Stock Investment Even In A Falling Market
- Adam Khoo & Conrad Alvin Lim’s Secrets of Millionaire Investors
What You Can Expect To Learn From These Two Books
1. Ho Kok Mun’s How To Make Money From Your Stock Investment Even In A Falling Market (187 Pages)
You would get to understand the very basics like – What are Stocks, Why buy Stocks and Are you more of a Speculator or Investor.
You will also learn the basics to Picking Your Stocks like:
- Understanding the basics behind Average Return of Equity (ROE)
- Understanding Earnings Per Share (EPS) Growth Rate
- Analyzing the company’s Debts
- Learning what’s the Net Profit Margin
- Learning how to value a Stock
- Looking into Dividends
- The importance of Good Management and Competitive Advantage
And also the stuffs that you need to take note of before going into buying the Stock – i.e. The Business Model, The Current Business Stage of the Company, Share Buybacks and Understanding The Analysts’ Reports.
After these technical parts, you will learn more of the emotional side of Stock Trading like
- The Art of Investing in the Stock Marketing
- How You Can Maximize Your Returns in The Stock Market
Why You Would Love This Book?
If you are in Singapore or Malaysia, you will feel the content of this book close to your heart as the Author is a best-seller in Malaysia and the stocks he buys into are from Malaysia. The style of writing is also easily understandable.
I have read other books that intend to teach you to invest like Warren Buffett, like understanding the Intrinsic Value and Fair Value but ended up even more confused. But Ho Kok Mun’s way of explaining the methods of choosing your stocks in the book has made it much more clearer now.
For those of you who are more hands-on and would like to try your hand on calculating ROE, EPS Growth Rate, Net Profit Margin, Intrinsic Value and Fair Value, you would be glad that there are Formulas, Appendix and Examples given to you.
A good resource for you to calculate Intrinsic Value, you can head over to this link and download the excel template.
If you are from Singapore and Malaysia, you can easily get this book from bookstores like Popular and MPH.
And if you wish to contact the author of this book like how to get hold of his book outside of Singapore and Malaysia, please kindly drop me an email through my contact page and I will send you his email address.
2. Adam Khoo & Conrad Alvin Lim’s Secrets of Millionaire Investors (272 Pages)
This is also another good book that has helped me to understand more of Stock Trading and also bit of Option Trading. As you know there are two ways that investors would use to buy their stocks and they are the methods of Fundamental Analysis (understanding the nature and worth of a company) and Technical Analysis (understanding the value of a stock through Charts).
And Ho Kok Mun’s book is a good book on Fundamental Analysis and Adam Khoo & Conrad Alvin Lim’s book would be a combination of both – Fundamental and Technical Analysis. But I would say I learn more of Fundamental Analysis from Ho Kok Mun’s book and more of Technical Analysis from Adam Khoo & Conrad Alvin Lim’s.
Some of The Good Technical Analysis Knowledge Worth Learning From The Book:
- 20-day & 50-day Simple Moving Average (SMA)
- Moving Average Convergence Divergence (MACD)
- Slow Stochastic
- Relative Strength Reversal Index (RSI Reverse)
- Parabolic SAR
Another good portion that you will appreciate from Adam Khoo & Conrad Alvin Lim’s would be their Strategies of Choosing, Buying, Holding and Selling which you can take note, have these notes pinned on a wall and often make reference to.
Why You Would Love This Book?
I would say that this book is a whole package of understanding, learning and implementing strategies for Stock + Option Trading.
Given the many graphical presentations and charts, you can always take an Analyst’s Report and make reference to. So you get to learn more along the way.
Should you like to get hold of this book in ebook format (note that the ebook is still first edition), you can click over to this link. Or if you like to get this physical book (in the second edition), you can check out the book from this online book store.
Time To Learn Stock Trading and Make Your Money Work Harder!
I hope with this post, you have more resources to help you understand what’s Stock Trading all about or to enhance your current experience.