Saturday, September 26, 2009

Lesson Two

Caution: I just draft the stuffs that I remember in the lesson which are not included in the handout of the instructor, so hopefully I do not interpret and remember something incorrectly

- if the dividend is too stable (e.g. hkmtr) and has regular pattern, the company may not worth investing ( look for rising dividend)

-asset is observable, but liability is not (except the creditors)

- it is almost impossible to see the return of a stock is 20% continuously ( over the years)

-what Starbucks sells is its brand as it shows customers' status

-Coke ads in Vietnam > for future return> children grow up and have purchasing power> tend to like Coke ( c.f. Disney's products )

- not everyone needs to buy insurance

-avoid buying insurance at the end of the year ( the agents are required to meet the quota every year and they rush to sell the product), buy insurance products at different companies ( risk control measure)

- NPV> 0 (reject e.g. illegal) NPV<0 ( accept e.g. Charity)

- price of real estate Vs rent

- the interest rate increases > mortgage> disastrous

- banks may not usually use compound interest

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