This week attended a one hour seminar with a Telco analyst to know what their picks for this specific sector are.
He shows how’s this sector has perform compare to the STI, what are the companies in the sector, the companies fundamental factors, which company they are in favor of.
In fact, most of the brokerage houses issue a buy call in their research report for this company due to its high dividend of 6%. However, I am not interested to invest in this company due to its debt which had been trending up for the past few years with the payout ratio of more than 100%.
Which means there is a possibility to cut its dividend if anything happens?
As the seminar ends, Q & A session with the rest and I did ask some questions. The analyst starts to ask me whether I am in the same industry as him or with accounting/finance background.
In fact, most of the analysts that I have come across are too wire to the modern finance as what the university has been teaching. Typically, they think and speak, using what they have learnt in school.
When I read their research report, I only take it with a pinch of salt and I do not bother with the price they set for the buy, hold or sell. Thus, I am only interested in the companies operation, how and what they have been doing.
To make money in the stock market, we have to be different and do not follow the herd.