Items by kenyantykoon

Kenyantykoon's Blog

• WE ARE MOVING TO WORDPRESS.ORG

  Posted: March 6, 2010, 12:46 pm by kenyantykoon

  Finally it is time to move this blog from wordpress.com to wordpress.org. I am changing everything from the domain to the username the themes. Am talking the whole package. The website may be completely offline for a few days as the new changes take effect. The new domain will be lifedividend.biz and the spinoff will [...]

• WHAT THE HECK IS DOLLAR COST AVERAGING??

  Posted: March 3, 2010, 9:23 am by kenyantykoon

  Many investors have heard of this investing strategy or have been practicing it unconsciously. This post serves to enligten investors and prospective investors on exactly what dollar cost averaging is and why value investors are so fixated on it. All investing formulas should be taken with a grain of salt and this is no different [...]

• WHAT EXACTLY IS CAPITAL STOCK??

  Posted: March 1, 2010, 9:44 am by kenyantykoon

  I have come across this financial term many times when reading through investing books and various financial pages but have never really had a clear cut definition of what capital stock is. So after some research, this is what I came up with. To understand this very well we first have to briefly look at [...]

• HOW TO BE VERY RICH

  Posted: February 26, 2010, 10:55 am by kenyantykoon

  Sometimes, i like doing the odd motivational post on long-term (financial) success. I have done it twice in secrets of the self-made millionaire and a post on whether being richer will make you happier So this post has a few ground rules that a person aspiring for a high net worth will want to remember. [...]

• WHAT IS A REVERSE STOCK SPLIT?

  Posted: February 24, 2010, 5:50 pm by kenyantykoon

  The past two posts have been about what corporations do with their stocks. I have handled stock dividends, cash dividends and stock splits. the difference between stock dividends and cash dividends was handled on my other site (ACKERTALK.BIZ) and the difference between stock splits and stock dividends here. In this post we will deal with [...]

• the difference between stock dividends and stock splits

  Posted: February 23, 2010, 9:29 am by kenyantykoon

  In the previous article I differentiated between stock dividends and cash dividends and I think that the difference came out well In this post, I will differentiate between stock dividends and stock splits but since stock dividends were fully accounted for in the previous post, I will concentrate on stock splits. Basically stock splits basically [...]

• the difference between stock dividends and stock splits

  Posted: February 22, 2010, 11:01 am by kenyantykoon

  I have been reading a lot about finance lately and i have come to notice that the corporations use these two things interchangeably. So this post is meant to enlighten the readers on the difference between cash dividends and stock dividends and in that you will come to understand why companies use them READ MORE…

• MARGIN OF SAFETY EXPLAINED

  Posted: February 8, 2010, 6:43 pm by kenyantykoon

  If you have read any books by any value investor or a blog written by a person more inclined towards fundamental investing, you may have heard this phrase “margin of safety”. So I decided to write up a post on this very important concept in fundamental investing. What is margin of safety? Since it is [...]

• 4 TIPS FOR VALUE INVESTORS

  Posted: February 4, 2010, 12:52 pm by kenyantykoon

  For reasons that are out of my control, i have not been able to post as regularly as i was last year but i am intent on reverting to my regularity very soon. It has been a long time since i linked to any article that i found too helpful for an finance reader interesting [...]

• WARRANTS; PROS & CONS

  Posted: January 30, 2010, 9:07 am by kenyantykoon

  I have doing a series of posts about warrants the first handled what they were and the types available while the second  dealt in how they work. To gain a better understanding of these investments, i suggest that you first read through these linked (short) articles. This post will deal on the advantages and disadvantages [...]

• HOW WARRANTS WORK

  Posted: January 29, 2010, 9:16 am by kenyantykoon

  The previous post was about warrants where I defined them and briefly explained the types of warrants commonly known[i suggest that you read this linked article first for better understanding] In this post I want to explain how they work in as simple a way that I can master In reading the previous post you [...]

• WARRANTS- DEFINITION AND TYPES

  Posted: January 25, 2010, 11:27 am by kenyantykoon

  I have been reading a lot of finance things in accordance with increasing my financial and investing knowledge and I came across this type of investment (if I may call it that since they offer no interest or dividend payments to the holder). So I decided to do a few shot posts in what they [...]

• LIQUID INVESTMENTS FOR VALUE INVESTORS

  Posted: January 14, 2010, 5:38 pm by kenyantykoon

  Some time back I did a post on money market funds and how they are used as alternatives to cash by investors- aggressive and conservative alike. They also come highly recommended by Benjamin Graham in the sixth edition of security analysis. He says that if an aggressive investor can see no investment that fits the [...]

• WEAPONS THAT HEDGE FUND MANAGERS USE

  Posted: January 6, 2010, 4:34 pm by kenyantykoon

  Some time ago, I did a post about hedge funds and why they are so attractive to the aggressive and conservative investor alike I happened to mention that there are some tricks that they use that most other investors cannot do because of the risk involved, equipment and expertise required or because they are just [...]

• THE SIMPLICITY OF INDEX FUND INVESTING

  Posted: January 4, 2010, 3:34 pm by kenyantykoon

  I wrote about index funds some time back and since then I have come across more information about then so I thought that instead of re-editing the former one. I should just make another index fund post. Basically the index fund is a passive investment where the money that you as an investor puts in [...]

• THE DIFFERENCE BETWEEN TAX AVOIDANCE AND TAX EVASION

  Posted: December 15, 2009, 11:06 am by kenyantykoon

  We have all heard of those stories about high fliers, CEOs and movie stars facing a very long time in prison because of failing to pay their taxes. Most of the time, it is normally tax evasion but there is a legal way of paying less taxes and it is called tax avoidance. This post [...]

• HOW A BEGINNER ANALYSES A STOCK

  Posted: December 14, 2009, 8:20 am by kenyantykoon

  The previous post was about the types of stock analysis and I briefly explained the difference between fundamental and technical stock analysis. Knowing this, let’s look at how to analyze a stock before buying it. The first thing that you have to consider is what type of analysis you will base your investments on; technical [...]

• TIME TO RE CHECK YOUR STOCK PORTFOLIO??

  Posted: December 12, 2009, 10:50 am by kenyantykoon

  In the financial papers many a finance guru are advising people to move from bonds and into dividend paying income stock but the intelligent investor from the wall street journal has other thoughts. He says that income from bonds to stocks isn’t as interchangeable in  real life as it seems on paper because at a [...]

• TYPES OF STOCK ANALYSIS

  Posted: December 11, 2009, 9:00 am by kenyantykoon

  We all know that when we want to go buy anything, be it groceries, clothing, cars and so on, there are procedures that are always followed like looking for the best quality at the right price from certain producers or manufacturers etc. It is just basic logic that before buying stocks, a similar pre-buy procedure [...]

• SELF HOSTED BLOGGING HERE I COME

  Posted: December 7, 2009, 3:40 pm by kenyantykoon

  This is the deal so far…. i have got a webhost that has all the necessities a self hosted wordpress blog needs and the prices are good but with the paperchase involved it will take sometime before the domain is registered and made active. Also i have been trying without success to redirect my incoming [...]

• SORRY FOR NOT POSTING CONSISTENTLY

  Posted: December 1, 2009, 8:32 am by kenyantykoon

  This post is to apologize for my inconsistent posting in the past week. This is because i am overhauling the blog like looking for a domain host and better templates which will suite the financial talk better. This is proving to be more hectic than i thought seeing that i am in a strange country. [...]

• SROCK OPTIONS; USES AND MISUSES

  Posted: November 24, 2009, 12:22 pm by kenyantykoon

  Yesterday, I did a post on stock options where I briefly explained what they are and how they are used. I also wanted to include their uses and misuses but I decided not to because it was getting too long (I don’t like monstrosities of posts). So in this post, I do just that. An [...]

• UNDERSTANDING THE STOCK OPTION

  Posted: November 23, 2009, 9:58 am by kenyantykoon

  Most of us have heard of this provision but how many know what it really is? If you don’t know, this post may enlighten you. This is a provision that gives the holder/buyer of the stock option the right to buy or sell the stock of a company he works in at a specified price [...]

• WHAT IS TAX CREDIT??

  Posted: November 23, 2009, 9:39 am by kenyantykoon

  Some time back i did a post on preferred stock and why i thought  that they were not that good particularly for individual investors. According to financial samurai and tax guru, the tax angle was interesting and so i decided to do another tax post. This will be a little about tax credit. This is [...]

• A DEEPER UNDERSTANDING OF BOND INVESTING

  Posted: November 21, 2009, 9:38 am by kenyantykoon

  For the past week or so, i have been concentrating mainly on bond and bond fund investing. While i have only skimmed the surface of this somewhat complicated bond market, it is better that you know some of these things because that is how education stars; first the introduction of concepts that are expounded later [...]

• ADVANTAGES OF CONVERTIBLE BONDS TO AN INVESTOR

  Posted: November 19, 2009, 9:10 am by kenyantykoon

  In a post that I did recently about convertible bonds (convertible bonds as the best of both worlds) a reader called Christian Pinnell Commented that I hadn’t really brought out the second part of the heading i.e. how they are the best of both worlds. So today’s post is dedicated to this. To sufficiently cover [...]

• DUAL PURPOSE FUNDS FOR THE OPTION SEEKING INVESTOR

  Posted: November 17, 2009, 9:09 am by kenyantykoon

  I recently stumbled across this type of mutual funds as I was doing a little independent study and I thought of making a little post on this after a little research. This is what I found out about them. These are in the closed end mutual fund category broadly meaning that they have a fixed [...]

• THE TRUST FUND EXPLAINED

  Posted: November 16, 2009, 2:21 pm by kenyantykoon

  We have all heard of this much media hyped financial arrangement and we have all wished at a certain point in time to be one of those enviable trust fund babies. But what are these trust funds and who exactly do they work? In this post, I will try to explain this in as few [...]

• CONVERTIBLE BONDS- THE BEST OF BOTH WORLDS??

  Posted: November 16, 2009, 2:05 pm by kenyantykoon

  As the name suggests, this is a corporate issued bond that can be converted into some other investment vehicle in this case, it can be converted into common stocks . This is done at only certain times and at a fixed conversion ratio. But the conversion is not as straightforward as it may seem. Let [...]

• WHAT IS (OR WERE) BEARER BONDS??

  Posted: November 12, 2009, 10:13 am by kenyantykoon

  These are just like normal bonds (corporate or government-) but the major difference is that they are unregistered i.e. when you invest in any other type of bonds, you go into the records as a registered owner and the paper you hold has proof of your ownership of the said bonds but with the bearer [...]

• PREFERRED STOCKS MAY NOT BE BETTER AFTER ALL

  Posted: November 10, 2009, 11:34 am by kenyantykoon

  Some time back I did a post about preferred stocks where I concentrated on the advantages that they had for conservative investors.

  A small  run-through is that;

  1- In the unfortunate event of liquidation or in profit sharing preferred stock holders are paid before common stock holders.

  2- The cumulative nature that preferred stock dividends have in that unpaid dividends are forwarded to the next financial year. This ultimately means a higher payday because of compounding interest.

  3- The non fluctuating dividend payment that is paid to preferred stock holders make it even more attractive mostly to people that live on regular income from their investments and the conservative investor looking for the security of regular checks in the mail.

  4- The occasional voting rights that the preferred shareholder has during important times in the company like election of new directors makes this investor feel like he has a part to play in the business.

  But be that as it may, aggressive investors tend to shy away from this type of stock, while favoring common stock because of the following reasons;

  1- The preferred shareholder is dependent on the desire of the company to pay dividends on its common stocks. Once common stocks are omitted, this shareholder finds himself in a bit of a problem since directors have no obligation to pay him any dividends. Like for instance very successful companies do not pay dividends to their commons shareholders e.g. Microsoft and others, means that a preferred stockholders should not expect much in the way of periodic checks in the mail from such companies.

  2- Since we above that the dividends(when paid) are fixed, this means that in highly profitable times this shareholder will not be entitled to more that his fixed share(the given percentage due to him). So he must never get excited when a company declares major profits in a certain year.

  3- Preferred stocks lack the legal claim of a bond holder (e.g. in times of liquidation, the preferred shareholder has a higher chance of losing his invested capital than the bondholders-who are creditors of the business) or the common shareholders who are more like partners in a company because of their obvious advantages. This weakness is mainly seen in bad economic times like recessions and depressions when the risk of default comes a knocking.

  4- Finally they have better tax advantages for corporations than individual buyers. Corporations  pay taxes on part of the dividends rather than the full amount. Let me illustrate. Supposing by law the corporation is to pay taxes on 20% of the dividends that they get in a year and the corporate tax is 40%. And assuming that the dividend is $200[all these are hypothetical figures]. The corporation will pay corporate tax* taxable income* dividend i.e. 0.2*0.4*200=$16. Whereas the individual preferred stock holder has no tax break and has to pay tax on the share of the dividend received i.e. tax* dividend= $200*0.4=$80. This shows that they are really not that attractive to an aggressive shareholder and there is a disservice to the conservative preferred shareholder.

  BTW the hypothetical numbers I have used change with time and country but the same logic is used

  If not for the corporations, the only time to but the preferred stock is during periods of economic adversity when they are at a major bargain i.e. they are selling at a price well below par.

  So preferred stock may not be better that common stock but it all depends on one’s point of view. Your opinions on this new perspective are welcome.

  you might like to read

  • HAVE YOU EVER HEARD OF LOAN STOCK??
  • PREFERRED STOCKS BETTER THAN COMMON STOCKS??
  • TIME TO RE CHECK YOUR STOCK PORTFOLIO??
  • ARE COMMON STOCKS YOUR CHOICE INVESTMENT VEHICLE?

• THE GENIUS OF THE ORACLE OF OMAHA

  Posted: November 9, 2009, 12:20 pm by kenyantykoon

  I am a personal finance blogger and there is no secret that i love Warren Buffett. I have linked to most articles that i have ever read of him, the most recent being “invest like the richest”

  I like the investing style that he crusades that is so different that what i hear from most financial pundits. He proposes, among other things, a thorough analysis of the fundamentals of a business before investing in it i.e. invest in a business that you would have no problem owning even in a financial crisis. This seems more sensible advice that those that say buy stocks when prices are going up and sell when the prices are going down.

  I am also carefully reading “the intelligent investor” a book that focuses more on the mentality that an investor should have in stock selection and a myriad of other things.

  I have just found another article on the second richest man in the world that is basically talking about what a good past 18mths that he has heard and his most recent deals he has made.

  Sort of makes you wish you were in his shoes huh?

  you might like to read

  • No Related Post

• WHY THEY CALL THEM JUNK BONDS

  Posted: November 9, 2009, 9:44 am by kenyantykoon

  [if you are new to the concept of bonds as an investment, then i suggest that you read thru this linked article on understanding bond investing]

  This is a type of corporate bond that is has a high risk of default and thus offers high yields.

  A salient feature of bonds is that their risk of default depends on among other things, the credit worthiness of the issuing company. If the company has low credit worthiness, there is a higher risk that the bonds they have offered have a higher risk of default. This risk is normally felt in economic slowdowns when most of these junk bonds default at around the same time, which has happened quite a few times in the past and will happen in the future taking some junk bond investors with them to their graves.  To counteract this, these bonds give unusually high yields that more often than not cannot be sustained in the long haul.

  To copy-paste Wikipedia, since the term junk bond is synonymous with risk, the types of risks involved are interest rate risk and credit risk, inflationary risk, currency risk, duration risk, convexity risk, repayment of principal risk, streaming income risk, liquidity risk, default risk, maturity risk, reinvestment risk, market risk, political risk, and taxation adjustment risk. Interest rate risk refers to the risk of the market value of a bond changing in value due to changes in the structure or level of interest rates or credit spreads or risk premiums. The credit risk of a high yield bond refers to the probability and probable loss upon a credit event (i.e., the obligor defaults on scheduled payments or files for bankruptcy, or the bond is restructured), or a credit quality change is issued by a rating agency including Fitch, Moody’s, or Standard & Poors.

  The yields are like 3 to 9 percentage points higher than government bond issues

  As there is a high risk of an investor losing his invested capital, there is also a chance of him getting spectacular returns if he managed the risk involved well and he did his research well on the bond and the issuer. But in this, there is a lot of speculation. But still many investors take on the risk with the hope of higher returns but try to lessen this risk by a somewhat broad diversification in these corporate junk bonds and limit these high risk investments to a small part of their portfolio.

  In light of the above, the other two names of junk bonds are high yield bonds and speculative bonds or non investment grade bonds.

  These bonds have a low credit rating mainly because the issuing company is not financially stable e.g. like a young company with no other ways of getting much required funding or any other financially troubled institution that has very little in the way of raising funds for operations [bond offering is one of the last money raising options that most corporations have because the banks may not be willing to loan them the large amounts needed]-

  Here is a long linked article about the history of junk bonds and the strange case of billionaire Michael Milken, the Junk Bond King.

  That is basically the Junk bonds for you, any questions and/or comments are welcome

  you might like to read

  • TIME TO RE CHECK YOUR STOCK PORTFOLIO??
  • A DEEPER UNDERSTANDING OF BOND INVESTING
  • CORPORATE BONDS & CORPORATE BOND FUNDS EXPLAINED

• INVEST LIKE THE RICHEST

  Posted: November 7, 2009, 10:49 am by kenyantykoon

  We all know who Warren Buffett is-also called the Oracle of Omaha. In the financial world he is looked up to and emulated by all the investors who want large numbers of Zeros in their bank accounts.

  Anyways, a few days ago, i was reading through yahoo and i found an article that was reviewing a new book about him called the Warren Buffett portfolio. It basically talks about the psychological mindset that he and other accomplished investors have developed that have worked to their benefit. It is not a book about hot stock tips that will make you rich overnight but a mindset that will surely help you all your investing life.

  Here the linked review in the Warren Buffett portfolio. Please read through

  I haven’t read it partly because i haven’t got a chance to but judging from the review, it is more or less like ” the intelligent investor- Benjamin Graham”(which i am currently reading). Incidentally it was endorsed by Warren Buffett as the greatest book on investing ever written.

  So i guess this young investor is on the right path

  you might like to read

  • No Related Post

• THE CONSPIRACY OF THE RICH; A BLOGGER’S PERSONAL REVIEW

  Posted: November 6, 2009, 2:23 pm by kenyantykoon

  For those who don’t know, Robert Kiyosaki (of Rich Dad Poor Dad) has written and published another book that is called the conspiracy of the rich. It is available for sale at amazon.com and it is on the New York Times best seller list. Before it was published, I had the chance to read it for free as he was giving it away chapter by chapter as an online interactive book. (How’s that for a money hack?)

  (By the way this is no affiliate program, just a personal opinion of a personal finance book).

  In not so many words, the book covers the recession, some of the history of the world vis-à-vis money and true to himself, how to beat the game and become very rich. This last thing he does by giving tips for investing in the stock market, real estate, gold and other things.

  I found it very interesting and educative. To say the truth, it is how I came to understand what the recession was all about. My head was just reeling around as I listened to the news but after reading the book, I understood what was happening, to some extent anyways.

  Basically, the book is in two parts with the first part having five chapters and the second having seven chapters.

  In the first part, he goes into a brief history about money and how it is connected with the recession. But the pith of the book is dedicated to “the new rules of money” that this recession has heralded. This is what I am going to concentrate on.

  OLD RULE- save money, NEW RULE- spend money. This change has been brought about by compounding inflation and thus one must increase his/her financial education to spend (read invest) in ways that will make you richer.

  OLD RULE- diversify your investment portfolio, NEW RULE- focus and specialize. This change is put forth partly by a statement that Warren Buffett said- “wide diversification is for investors who don’t know what they are doing”. Instead one should learn a few types of investment very well and invest in them. This is in accordance his argument that savers are losers.

  NEW RULE- money is knowledge. Here he says that you do not need money to make money, you just need to know the right things. The example given is the ability of making money by selling stock that you don’t own i.e. shorting stock and pocketing the difference (details are in the book).

  NEW RULE: learn how to use debt. Here he says that there is a way to use debt to get rich-the good debt like a loan for an investment and avoid bad debts like using credit cards to buy televisions. I found this as another sensational way of saying that one should be frugal and a good money manager.

  NEW RULE: learn how to control cash flow. According to him, this is done by being very informed by the global flow of money, jobs and people so as to make wise investment decisions based on this information. (This seems to make sense to me).

  NEW RULE; prepare for bad times and you will only know good times. Robert says that everybody should act as if the worst is not over and constantly live as if the sky is falling. In preparing for the worst, a person will see better times. For instance, if one prepares for an inflationary depression that never happens, it means that later on your money will have a greater value, means that you will be richer.

  NEW RULE- the need for speed. I know it sounds like the racing computer game but what he is really talking about is looking for ways to do more business in a shorter time to a larger audience, as in using the internet to transact business. This is aimed to make more money than the banks are printing (this is also covered in depth in the book).

  NEW RULE- learn the language of money. Robert says this is to be done by getting to know the financial terms and investments available and being able to understand financial speak on tv and websites and in the papers etc. it  is much easier to grow wealth if you know what you are doing instead of gambling away hard earned cash in hot tips.

  NEW RULE- focus less on buying and more on selling. In other words, he is advising people to look for their entrepreneurship spirit to get financial independence and control the amount of cash that you spend. This means that more money will be coming in than going out to enrich others and thus you grow richer.

  NEW RULE- life is a team sport. Choose your team carefully. He proposes this according to the advice in his other book, rich dad’s guide to investing, mostly the BI triangle. He says that the worst is not over and everybody should start preparing his/ her financial team together. He neglects to show people exactly how to do this but he gives the example of his own financial team. While I am not so sure about how to go about this, it seems like logical advice to have a team in your investing endeavors.

  NEW RULE- Since money is becoming worth-less and less, learn to print your own. I know this sounds like the felony of counterfeiting but there is a point that he seems to put across in this second last chapter. In stocks he says to use options, in gold and silver, he says to build and gold and silver mines and sell the shares in the stock market(again, he does not go into detail on exactly how to do this).

  Basically these are the new rules of money that the recession has brought forth. While this is the most prominent part of the book there is also a lot of information like capitalism and socialism, things about the Federal Reserve, economic depressions, interesting timelines, “frugality being the new cool” and a large wealth of information but I chose to get into the rules of money as this is what really fascinated me. There are also issues he calls financial fairytales. These are common misconceptions that the average investor has been living with. The setting of the book is(was?) in the global recession and so there is a lot of reference to what was going on at the time the book was being written like the Bernard maddoff ponzi scheme, the bailouts, the presidential election etc. there also quite a lot of reference to his other books like rich dad poor dad and rich dad’s guide to investing.

  I found this book somewhat useful to read as there are a lot of things that I learnt about finances. Has anyone read this book? What do you think of it??

  you might like to read

  • robert kiyosaki’s conspiracy of the rich- my criticisms

• WHAT YOU NEED TO KNOW ABOUT GOVERNMENT BONDS

  Posted: November 5, 2009, 12:29 pm by kenyantykoon

  [This post will be dealing with a type of bond so if you are completely new to the concept of bonds it would be nice if you read through this linked article on understanding bond investing]

  Just like corporate bonds are IOUs by the companies issuing the bonds, government bonds are IOUs to the general public to borrow money that will be returned at a predetermined time at face value with interest payment periodically up to maturity.

  Governments issue these bonds when they have more money needs than can be satisfied by tax revenue. Another reason is to regulate the amount of money circulating in the economy. If there is too much money (which can cause inflation), the government issues bonds that it will buy back (redeem) at a given future date and this reduces the money supply. It does the exact opposite when there is too little cash in the economy i.e. redeems the already issued bonds.

  They also have other names in other parts of the world. In the UK they are called gilts or gilt edged securities and in the US they are called treasuries. Also bonds issued by governments in foreign countries are referred to as sovereign bonds.

  To some extent these government bonds reflect what will happen to interest rates in the future. If interest rates are expected to rise, investors will sell to keep any capital gains and prices will fall. This is because as interest rates rise their prices fall. On the other hand, if the interest rates are expected to fall investors buy for the higher yields that the bonds have as at that time and for the future capital gains, means that their prices rise. It goes without saying that anything that affects interest rates, inflation, economic growth and expectations about both also affects these bonds.

  As am sure you have come to learn that more often than not returns in investments like bonds and mutual funds are directly related to risk i.e.  the lower the risk the lower the returns and vice versa, this means that governments bonds are good for the conservative risk averse investor that does not want to risk hard earned money and doesn’t necessarily require high yields. An investor like this would be interested in risk government bonds because of the higher safety in that at maturity, the government can raise taxes to get enough cash to redeem them and thus a lower risk of default.

  Other than a steady fixed income in the form of interest paid either annually or semi annually, the low risk of invested capital invested if bonds are held to maturity, a fixed date of maturity, they have a provide a more diversification to a portfolio mostly dedicated to more risky investments(everyone needs safety once in a while)

  The best time to but the government bonds is when they are first issued because buying them from the secondary market since expecting to profit from them here has a number of variables like the time to maturity, market interest rates, credit worthiness of the issue (the risk of default) and the liquidity of the bond(some bonds are virtually impossible to sell at certain times). Also if an investor pays less than the face value of the bond(at a discount), he stands to profit when the bond matures to its face value. If he buys at face value or at a premium(above), there is a higher likelihood for a loss when the bond matures.

  Another good thing is that you do not have to wait until maturity to sell the bonds. You can sell them in the secondary market and profit if the interest rates have gone down since you bought the bonds and lose if the rates have gone up. There is a lot more on this in a small fascinating government bond post that I have just found. Please read through it because their explanations contain figures and ease understanding.

  That is an overview of the government bonds. I will take you deeper into them in future so sit tight.

  you might like to read

  • A DEEPER UNDERSTANDING OF BOND INVESTING
  • the human nature; the investor’s enemy
  • Is active investing really for you??
  • Why I don’t envy super investors and neither should you
  • what are equipment trust certificates??

• SENIOR & SUBORDINATED CORPORATE DEBT EXPLAINED

  Posted: November 3, 2009, 12:21 pm by kenyantykoon

  Yesterday’s post was about corporate debt of which there are two types secured & unsecured debt and senior & subordinated debt. We will look at the latter in this post

  Senior debt is a secured debt in that it is the primary debt that is paid off in the unfortunate event of an issuer’s bankruptcy. Most high grade debt securities are senior debt and also loans from financial institutions. Since they are secured, this means that secured investors receive lower yield that their unsecured counterparts.

  In the words of Wikipedia, senior debt is a class of corporate debt that has priority with respect to interest and principal over all the other classes and equity that an issuer has.

  In most cases the law states that taxes and certain payments to employees be paid before creditors have their share of a dying company.

  The opposite of senior debt is junior debt also called subordinated debt.   It is a corporate debt that is serviced after senior debt(secured debt) in the event of liquidation. It goes without saying that a subordinated debt holder is exposed to more risk that in the senior debt holder because he will be paid by the portions left over in the loan repayments. This could be a portion of his initial capital.

  A little about subordinated debt is that a company issues it as a last resort in that it has already used its assets to back up senior debt but the money obtained is not enough and so they issue this corporate debt. It is more expensive to them in that they have to pay higher interest rates to the investor because he bears most of the risk in case the company goes bankrupt.

  Also not all companies can issue subordinated debt. Only those with good reputations and high credit worthiness find this debt somewhat success as no investor want to loan out cash to a company with a reputation of defaulting.

  But for the risk tolerant investor, even though there is a large possibility in losing invested capital in the case of bankruptcy, there is also the chance of a higher pay off if all goes well. But this is pure speculation as there is no way of knowing a company’s future. But still an investor will insist on details of a company’s financial records and past performance.

  Finally this linked Wikipedia article has quite a lot to say about subordinated debt

  That is senior and subordinated debt for you. If you have any questions or additions, the comment box is all yours.

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  • AN OVERVIEW OF SECURED & UNSECURED CORPORATE BONDS

• AN OVERVIEW OF SECURED & UNSECURED CORPORATE BONDS

  Posted: November 3, 2009, 12:04 pm by kenyantykoon

  Yesterday, I did a post on corporate bonds and Wikipedia stated that there were two types of these bonds;

  -secured and unsecured bonds

  -senior and subordinated bonds

  I will run through secured and unsecured bonds and the next post will deal with senior and subordinated bonds

  Secured corporate debts are bonds that are backed up by the issuer’s (company giving out the bonds) physical assets. This means that if the company is not able to pay back the debts to investors, these assets are liquidated to pay them.

  These assets are stocks and bond holdings, furnishings and/or real estate. Because of this backing, they are normally better investments that their unsecured counterparts.

  According to wisegeek, secured bonds are not 100% safe investments but the risk is substantially reduced with the asset backing. For instance, let’s say that a secured bond is backed by a mortgage. This means that in the event of liquidation, the mortgage will be transferred to the new owner (the investor). But there is no guarantee that the mortgage itself will not default (there has been a lot of this in recent times) or if the underlying real estate will still be worth the value of the mortgage. But this is better than no backing at all. Wouldn’t you agree??

  Needless to say, unsecured bonds are not at all backed by any physical assets but by the credit worthiness of the company issuing these bonds.

  They are also called debentures so let this not confuse you

  The fact that this debt carries more risk to the investor means that it becomes more expensive for the issuer which is in terms of higher interest rates to the investor. But this is not to say that if the issuer goes bankrupt the unsecured creditor will not be paid. Far from it. He will be paid but after the secured creditors which means that they may get a smaller portion that the secured investors.

  To understand this pay back scheme in the event of a bankruptcy, secured creditors are paid first and then the next group is the unsecured creditors, banks and financial institutions, insurance companies etc(the general creditors companies have). Finally preferred and common shareholders are paid last.

  As the unsecured bonds have higher yield, they are more attractive to risk tolerant investors.

  That is basically an overview of the secured and unsecured corporate bonds. There are other things that I have left out like the types of unsecured bonds and what not which I will cover later. This was just to familiarize green readers

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  • SENIOR & SUBORDINATED CORPORATE DEBT EXPLAINED

• CORPORATE BONDS & CORPORATE BOND FUNDS EXPLAINED

  Posted: November 2, 2009, 9:13 am by kenyantykoon

  First we will look at corporate bonds and then their corresponding mutual funds.

  I recently covered the bond funds and mentioned the types of bonds. If you are completely new to the concept of bonds as investments, it would be nice if you first read thru this post on understanding bond investing- so that you dont float

  Basically corporate bonds are debt instruments by which both private and public corporations (referred to as the issuer) use to raise money to expand their businesses by borrowing money from the general public. They have a relatively long maturity period(at least a year). Their corresponding shorter term securities are called commercial paper. The insurance of the corporate bond is the credit worthiness of the company and sometimes the company’s physical assets.

  BTW corporate bonds are riskier investments that government bonds since with the latter, the government will just increase taxes and print more money so pay bond holders- something that unfortunately corporations cannot do. Therefore to counteract this higher risk, investors are offered higher interest rates.

  In the agreement the principal is to be returned at a predetermined date until which you will be getting interest payments from the issuer. This is one of the major differences between corporate bonds and stocks because even though and investor gets interest payments from the company, he does not have any ownership interest as in the case of a stockholder.

  Another interesting feature of corporate bonds is that they have call provisions/call options that allow the investor to redeem get his money back before the maturity date.

  In investing in these bonds, the major thing that you should look for is that if the company has enough money to repay and the fixed interest so in a sense you could say that you have become a bank to the corporation

  Wikipedia says that there are other types of bonds called convertible bonds that allow investors to convert the bonds into equity

  Finally, as they are traded in the markets, their prices fluctuate a lot more or less like stocks.

  Of late, corporate bond yields have been very good unlike in the recent years and this is because of this recession, Banks were wary about lending money in volatile times and since the companies needed money the encouraged bond holders with attractive interest rates.

  According to thisismoney.com (and coincidentally Benjamin graham- the intelligent investor) the main risk for bond investors is inflation. If central banks see as if the economy is slowing down faster than the rising prices, they tighten monetary policy and this leads to the interest rates of bonds rising and their price falling, making investors wish that they has kept away from them.

  In light of the above, the corporate bond fund is a mutual fund that invests in these corporate bonds. They make it easier for a small investor to invest in the somewhat complex bond market. Since the fund manager wants to maximize returns he selects corporate bonds (investors have no control over selection) and sometimes the bonds are not held up to maturity. This therefore means that interest payments fluctuate. Also these funds have low volatility and this yet another reason that they are good for risk aversive individual investors.

  The corporate bond funds were hit hard by the recession just like the lower rated bonds.

  Finally this linked article that I have found shows that one must never get into an investing craze because of the masses by showing the major losses that investors suffered because of this misjudgment.

  That is basically the corporate bond and their corresponding mutual funds. Any additions or corrections or whatever are welcome.

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  • A DEEPER UNDERSTANDING OF BOND INVESTING
  • WHY THEY CALL THEM JUNK BONDS

• WHAT REALLY CAUSED THIS RECESSION??

  Posted: November 1, 2009, 12:18 pm by kenyantykoon

  To the above question, i have just an inkling but there is an author/writer that has a more detailed and credible argument on this economic catastrophe.

  A while back, i did a post on type of economic depressions and for some strange reason the post still gets a lot of traffic. Anyways, i was reading through the forbes website and i found a really fascinating article on the great depression of 1930,

  It basically tries to explain the relationship between that depression and capitalism and what has been done to curb a repeat. It is quite the interesting read even though somewhat long.

  Over to you. Do you think that there is going to be another great depression in the future?? Speculation on this is allowed. You do not have to be an economics expert to contribute. Personally i think that this excessive money printing by the major economies may cause an inflationary depression. What of you??

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  • unemployment status in the US

• THE FUND OF FUNDS- THEIR GOOD AND BAD SIDES

  Posted: October 30, 2009, 9:04 am by kenyantykoon

  These are investment funds that invest in other investment funds e.g. a newer investment fund with a somewhat inexperienced fund manager can invest in very profitable investment funds that have been around a long time and well known by the masses.

  They are also referred to as multi manager or multi management funds.

   

  According to iloveindia.com, the types of fund of funds include;

  1.   Mutual fund of funds- a mutual fund that invests in other mutual funds.

  2.  Hedge fund of funds- investment funds that invest in other hedge funds. This fund of fund is not a hedge fund per se.

  3.  Private equity fund of fund- mutual funds that invests only on private equity mutual funds.

  4.  Investment trust fund of fund

  Something that you must understand is that a fund of fund investor owns shares in the fund of fund and not in the underlying investment fund(the investment funds that these funds invest in)

  It is common logic that these funds of funds are meant to provide greater diversification since it will invest in many mutual funds each of which are invested in their own set of stocks bonds and other securities and investments. The main disadvantage that comes from this is that some of the mutual funds may have invested in the same stocks and this overlapping means lesser diversification not to mention that it will be somewhat hard to keep track of what the individual managers are doing with your money.

  Also another serious disadvantage is that the expense fees are typically higher than normal mutual funds. It’s almost twice since there are two sets of fund managers and their teams that have to be paid.

  The absurdity of these fund of funds is that some charge incredibly high prices and don’t deliver with equal high returns. Also since they are invested in many mutual funds, high returns from well performing mutual funds may be outstripped by major losses in another mutual fund cancelling any hopes that an individual investor had of beating the market and on top of that, there are the management fees that will cut deeper into the already meager returns.

  In light of all these disadvantages, fund of fund investors seem to be happy with them and the main reason is that since they are already invested in numerous mutual funds, there is no need to keep switching to other mutual funds since the fund manager has already done that for you(that is the reasoning anyways)

  Basically that is the fund of fund for you. I hope it was well explained…..

  Have you guys got any additions, corrections or comments?? You own the comment box

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• BEFORE YOU INVEST IN BOND MUTUAL FUNDS…

  Posted: October 29, 2009, 10:19 am by kenyantykoon

  The previous post was about municipal bond mutual funds, a member of the larger bond mutual funds and so it is just logical that we tackle the bond mutual funds today.

  Quite a while back, I did a post on fixed income mutual funds and I said that bond mutual funds are a member of these funds. I think that you should read through that linked post to broaden your understanding.

  Bond mutual funds are mutual funds that invest in bonds plain and simple. Because of the nature of bonds, these funds are there to provide stable income with minimum risk of loss of initial cash invested.

  There are three types of bonds:

  According to borrower- corporate bonds, government bonds and municipal bonds.

  According to investment period- short term bonds, intermediate bonds and long term bonds.

  I will cover this class of investment(bonds) in the near future with greater detail so just calm down

  This means therefore that there are mutual funds that invest in each of these bonds When you invest in a bond mutual fund, you receive periodic dividends from the mutual fund that includes interest payments from the underlying investments(the bonds) plus capital appreciation on the price of the bonds both of which are inversely related.

  There is an interesting relationship between interest rates of bonds and their Net Asset value. When interest rates increase their value decreases and vice versa. As interest rates rise, you lose cash even if you are earning some form the increasing interest. The converse is also true.

  To divert a little, I want to explain this price-yields relationship. Assuming that a bond in $100 and the annual interest rate is 10% (means that you get $10 at the end of the year). If you get a discount and buy the bond at $90, you will still get the $10 but the yield will be 11.1%. So you can see that as the price falls and the yield increases. Still let’s say that you buy the bond at $100. You will still get the $10 but the yield still is 9.09%.

  One of the major advantages of bonds funds is that they are have tax advantages like exemptions and a form of stability in investment since these are the best parts of the bonds that they invest in.

  Finally a good bond mutual fund should have lower expenses like management fees and whatnot because as compared to investments like stocks, they have lower returns and thus more expenses will definitely lower the returns more.

  They should be very well/highly diversified as in each fund owning hundreds or thousands of bonds so as to provide the investor with what he was looking for in this investment- security for his invested capital.

  I have found this article(well it more like a book) that talks about all things bond mutual funds. If you want more information on these investments read through the linked article.

  I hope this short post has enlightened you more on bond funds.

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• AN OVERVIEW OF THE MUNICIPAL BOND FUND

  Posted: October 27, 2009, 9:18 am by kenyantykoon

  Like all the mutual funds we have covered, the logistics of the funds are in some way explained in the name of the mutual fund and this fund is no different.

  Basically this mutual fund invests in municipal bonds. A municipal bond is a fixed interest debt security used by a country’s government or local governments to raise money to pay for public projects like roads, schools. They have some tax exemptions that make them popular with high income earners but only in the state, country etc in which they were issued.

  They are also referred to as muni funds.

  Since the projects that are undertaken by the money raised by municipal bonds are mostly very successful, the government rarely defaults and this increases their popularity with investors seeking security and liquidity.

  While they are somewhat popular because of the obvious tax advantages, they have been losing popularity because of returns that are too low, according to financial-planning.com in which case investors are looking for investments with higher returns.

  A few advantages of the municipal bond mutual fund are the same for all other mutual funds like professional management, great diversification, good for small individual investors etc. Others are;

  -they allow for the dividend obtained to be reinvested and thus higher returns in the future.

  -if invested in non rated non investment grade securities which may mean greater returns even if it means more risk.

  Other advantages are covered in this municipal bond fund resource

  On the other hand, these type of bond funds make it impossible for the investor to dictate which municipal bonds are to be invested in-whether he agrees with the decisions of the fund managers or not, there is no fixed maturity date and this means that an investor will recoup his initial investment according to how the market conditions and also this suggests that periodic income earned fluctuates with market conditions.

  Just like all investments, when investing in these funds, you must first put two things into serious consideration; your risk tolerance and your investment period.

  Basically that is the municipal bond mutual fund that is a part of a larger group of bond mutual funds that I will be covering in the coming posts.

  QUESTIONS?? COMMENTS?? ANYBODY??

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• LIFE CYCLE FUNDS THAT SIMPLIFY RETIREMENT

  Posted: October 22, 2009, 10:04 am by kenyantykoon

  Yesterday, I did a post on asset allocation funds. In the post I gave two examples of these types of fund; the balanced mutual fund which I linked to and the life cycle fund which I didn’t link to. So I decided to make a post on this fund today. The life cycle fund is a [...]

• THE ASSET ALLOCATION FUND FOR AN INDIVUDUAL INVESTOR

  Posted: October 21, 2009, 12:01 pm by kenyantykoon

  To get a feel around this fund, we first have to understand what asset allocation is. Asset allocation is simply the distribution of money available for investment over the chosen investment classes in a way that will reduce the risk involved and maximize returns and focusing on vehicles that are expected to perform the best over [...]

• THE CAPITAL APPRECIATION MUTUAL FUND; A RISKY VEHICLE

  Posted: October 20, 2009, 8:51 am by kenyantykoon

  By definition capital appreciation is the increase in value of the initial/principle investment or the price of a single unit of stock over a given period and this is what this fund seeks; capital appreciation in as little time as possible over a given period These mutual fund invests primarily in growth stocks and while they [...]

• THE SPECIALTY MUTUAL FUND UNPLUGGED!!

  Posted: October 19, 2009, 6:00 pm by kenyantykoon

  Truth be told, I just stumbled on this type of fund very recently. As their name implies, these funds specialize in the shares of companies in a particular industry, sector or geographic region or a specific type of stocks e.g. some invest in IPOs, others in sectors that undergo cyclic patterns like agriculture, others in emerging [...]

• WHAT MAKES THE HEDGE FUND SO ATTRACTIVE??

  Posted: October 16, 2009, 8:09 pm by kenyantykoon

  I have heard of this fund and I have noticed that most of the forbes billionaires that made their fortunes in finance are hedge fund managers. So I did some digging and this is what I came up with. Just like the mutual fund, this hedge fund is an investment company that pools money from investors [...]

• INTERNATIONAL MUTUAL FUNDS; WORTHWHILE INVESTMENTS??

  Posted: October 15, 2009, 11:38 am by kenyantykoon

  These are mutual funds that invest in non- domestic securities around the globe i.e. if this fund is American, it can invest in stocks, bonds, real estate, precious metals etc of any other country apart from the US. These funds have grown in popularity in the recent times due to removal of trade barriers, expansion [...]

• STOCK MARKET INDICES; HOW THEY ARE CALCULATED

  Posted: October 13, 2009, 9:34 am by kenyantykoon

  I am currently reading the intelligent investor by Benjamin Graham and I can see why Warren Buffett says that it is one of the best books on investing ever written. I am not even half way through but I noticed that there is a lot of usage of the Dow Jones Industrial Average (DJIA), S&P500 and [...]

• CLOSED END MUTUAL FUNDS; HOW THEY TICK

  Posted: October 12, 2009, 5:10 pm by kenyantykoon

  The last fund post was about open ended mutual funds and this time we are going to touch briefly on the closed end mutual funds. These funds are created by financial institutions like banks, investment companies and the like for a particular investment objective that need a given amount on money. This money is raised in [...]

• DO BILLIONAIRES OWN YOU??

  Posted: October 11, 2009, 12:20 pm by kenyantykoon

  Being a Sunday, i thought i might link to something a little different in the line of finances I  have been reading a lot about these group of people as they fascinate me to no end. I mean lets be real here, which one of you wouldn’t want  so much money that you could run entire [...]

• THE OPEN-END MUTUAL FUND; THINGS EVEN I DIDN’T KNOW!!

  Posted: October 9, 2009, 11:38 am by kenyantykoon

  This is one of the broader categorizations of mutual funds and I think that I should have started with it and the closed end mutual fund before posting on the subcategories (like I have) The majority of mutual funds are open ended. Other open ended funds include hedge funds, exchange traded funds, unit trusts, SICAVs, OEICs [...]

• AN OVERVIEW OF THE INDEX FUND

  Posted: October 7, 2009, 3:07 pm by kenyantykoon

  Some time back, I got a comment asking if there was a difference between index funds and mutual funds and this post is to clear this issue of the index funds up. Basically an index funds is a type of mutual fund that follows a market index like the NSE 20 Share index, the S&P 500 [...]

• WHY I BLOG ABOUT INVESTMENTS

  Posted: October 6, 2009, 9:23 am by kenyantykoon

  There is a saying that ignorance is bliss. This is true but only for a while. It may be bliss not to know that a catastrophe is coming because one does not have to take precautionary measures and better still one does not have to lose precious sleep worrying about the consequences of the imminent [...]

• THE BALANCED MUTUAL FUND;DETAILS EXPLAINED

  Posted: October 5, 2009, 10:46 am by kenyantykoon

  A balanced mutual fund is one that is invested in a combination of different stocks and bonds also a money market investment so as to provide both capital gains and a steady income. By now i am assuming that you already know how mutual funds work. Like all other highly diversified investments, these balanced funds are [...]

• THE GILT FUND EXPLAINED

  Posted: October 2, 2009, 11:00 am by kenyantykoon

  These gilt funds are mutual funds of British origin but are also in India that invest in medium and long term high quality low risk investments like government securities and some forms of corporate debt. A gilt fund investor wants security for invested money and that is why this funds are invested in high security [...]

• FIXED INCOME MUTUAL FUNDS; THE GOOD, BAD AND UGLY!!

  Posted: September 28, 2009, 9:13 am by kenyantykoon

  As the name suggests, these funds are sunk into investments that offer fixed income like certificate of deposits, bonds, preferred shares, mortgages, debentures etc (either one or some) Just like money market funds, these offer a certain level of security at the expense of greater returns. They still offer a certain level of returns and preservation [...]

• MONEY MARKET MUTUAL FUNDS- AN ALTERNATIVE TO SAVINGS??

  Posted: September 24, 2009, 8:53 am by kenyantykoon

  First of all we have to define the money markets so that this type of fund is easily understood. A money market is a “market” for short term financial instruments like treasury bills, certificates of deposit, bankers acceptances, commercial paper , federal funds, municipal notes etc. These money market instruments are explained by eagletraders.com and so  [...]

• EQUITY/STOCK MUTUAL FUNDS; TYPES AND DETAILS

  Posted: September 22, 2009, 1:48 pm by kenyantykoon

  As the name suggests, these mutual funds invests strictly in stocks(equities) and so in a sense fluctuate just like the stock they are invested in These are further divided into growth funds and aggressive growth funds, balanced funds ect. Growth funds These have a medium to long term investment period in large well established companies with a [...]

• LIST OF MUTUAL FUNDS THAT YOU SHOULD KNOW ABOUT

  Posted: September 22, 2009, 11:43 am by kenyantykoon

  THE MAJOR TYPES OF MUTUAL FUNDS AVAILABLE In the post before the last one, I started out with mutual funds and in the post I defined them and very briefly described how they work. In this post and the next we look at the various types of mutual funds. Mutual funds are categorized according to their investment objectives [...]

• THE ALPHA-WOMAN: MYTH OR FACT??

  Posted: September 20, 2009, 12:41 pm by kenyantykoon

  On weekends, i prefer posting something along a little different(and very short) from the serious stuff i write about and today’s post is on the alpha woman These breed of women even though very rare are growing in number. Not long ago it was unheard of for a woman to hold high office, attain high levels [...]

• I BET YOU DON’T KNOW HOW MUTUAL FUNDS WORK

  Posted: September 18, 2009, 1:21 pm by kenyantykoon

  From this post onwards, i will be concentrating mainly on mutual funds. This is because in the paper investments you should look into there were stocks bonds mutual funds etc. i have since covered mutual funds in detail and made a page for them called stocks. This is by no means exhaustive and i will [...]

• THE SELF MADE MILLIONAIRE; ‘SECRETS’ I HAVE LEARNT

  Posted: September 16, 2009, 9:06 am by kenyantykoon

  This group of people has always been the object of interest for most if not all of the rest of the people who do not have this very envied title around their neck. I mean wouldn’t anybody want to have no money problems and to have the ability to buy whatever they wanted and go [...]

• WHY THE BANKING INDUSTRY SHOULD BE ABOLISHED

  Posted: September 14, 2009, 9:44 am by kenyantykoon

  I think that the banking industry should be totally wiped off the face of the earth, its existence totally annihilated never to be spoken of again by the lips of a clean soul. You want to know why? There are a multitude of reasons but the one that rises to the top is a concept called [...]

• HOW TO KEEP COMPUTER HACKERS AT BAY

  Posted: September 12, 2009, 12:45 pm by kenyantykoon

  It has been quite a while ever since i linked to another person’s blog post but it was for a number of reasons. When this blog was much younger i did an post on hacking stories and how to protect yourself and i got a lot of feedback that it really helped(still gets traffic). So in the [...]

• GROWTH STOCK DEMYSTIFIED

  Posted: September 10, 2009, 12:21 pm by kenyantykoon

  What is growth stock?? Basically this is a company’s stock that is expected to grow at an above average rate than other stock in the markets. Investopedia also calls these types of stock glamor stock So in a sense, they are all the other types of stock that we have been discussing in the past weeks, but the [...]

• HAVE YOU EVER HEARD OF LOAN STOCK??

  Posted: September 7, 2009, 10:55 am by kenyantykoon

  To be brutally honest, this is a type of stock that i learnt of fairly recently. Some of this stocks seem to be related because loan stock  are common stock and/or preferred stocks that are used as collateral to get a loan from a financial institution, individual business or any other third party. Just like with most [...]

• PENNY STOCKS FOR THE SPECULATIVE INVESTOR

  Posted: September 4, 2009, 1:54 pm by kenyantykoon

  The previous post was about some of the dynamics of speculative stock and i mentioned that penny stocks were an example of speculative stocks [By the way, i know i said that i would handle penny stocks yesterday but i got caught up couldnt find time to post] Basically a penny stock is a share that trades [...]

• A LITTLE ABOUT SPECULATIVE STOCK

  Posted: September 2, 2009, 10:32 am by kenyantykoon

  Speculative stock is basically a stock that an investor, banking on gut feeling, invests in with the hope that the stock value will appreciate. This conclusion is normally not backed by detailed analysis. The end result is that these types of stocks have a very high risk compared to any profit that they MIGHT generate in [...]

• SMALL COMPARISON BETWEEN THE NSE AND WALL STREET

  Posted: August 31, 2009, 11:32 am by kenyantykoon

  In  the previous post, a list of the most successful east african public companies, i briefly delved into the fact that the Nairobi Stock Exchange is the most developed in East Africa and is a major contender in the African Stock Markets. I have been reading a little about Wall Street and i found the most [...]

• MOST SUCCESSFUL EAST-AFRICAN PUBLIC COMPANIES

  Posted: August 28, 2009, 1:32 pm by kenyantykoon

  In the last post that i wrote,(income stock explained), the issue of east african companies came up in the comments box and i thought that instead of emailing that reader, i should make a post on them. So the following is a brief history of the nairobi stock exchange(NSE) and the most well known companies that [...]

• INCOME STOCK EXPLAINED

  Posted: August 26, 2009, 12:11 pm by kenyantykoon

  What are income stock you may ask? To be obscenely honest, i only got to know about them fairly recently. So this is a post on what i discovered about them. If a stock has returns higher than the market average then it can be referred to as an income stock Basically income stock are stocks a [...]

• PLEASE DO NOT INVEST IN MUTUAL FUNDS!!

  Posted: August 24, 2009, 2:10 pm by kenyantykoon

  Yes, against my better judgment, I am telling you what not to do with your money. Read on and see why I am saying this. If you own a mutual fund, you will most likely retire with less cash than if you had put your initial investment in a boring investment like an index fund There is [...]

• MERGERS AND ACQUISITIONS EXPLAINED

  Posted: August 21, 2009, 4:10 pm by kenyantykoon

  As is the fashion in this blog, i will break down the mergers and acquisition in to its constitiuent words and then explain them from there A merger- more precisely referred  to as a merger of equals, as the word implies is the coming together of two companies in to one larger one there are many types of mergers like;                  -market extention mergers                              -horizontal [...]

• WILL GETTING RICHER MAKE YOU HAPPIER?? PROBABLY NOT.

  Posted: August 19, 2009, 6:37 pm by kenyantykoon

  Its been a long time ever since i posted something out of the norm and here it is….. I have always thought that making more money would make me happier but of late i have realised that nothing could be further from the truth. Sure, more money will buy you toys that will make you the envy [...]

• ARE SAVERS LOSERS??

  Posted: August 17, 2009, 1:41 pm by kenyantykoon

  Recently, i visited robert kiyosaki’s site  and i watched a video on savers being losers. According to him people, who work hard at a job and then open a bank account and save the money they earn will in the end be the losers. [Robert Kiyosaki is the financial advosor that is the author of the best seller [...]

• WHAT EXACTLY ARE SMALL CAP STOCK??

  Posted: August 13, 2009, 3:17 pm by kenyantykoon

  Like all the stocks i have covered of late the definition and dynamics of the stock is in the name of the stock. Small cap stocks are no different. To understand what small cap stocks are first break it down  into small cap and stocks small cap, according to investopedia.com means a low market capitalization of between [...]

• TYPES OF ECONOMIC DEPRESSIONS

  Posted: August 10, 2009, 5:07 pm by kenyantykoon

  I once read that the difference between a recession and a depression is this; when your neighbor losses their job we are in a recession, when you loose your job we are in a depression. This obviously shows that a depression is a rock bottom case of a recession. Recently i wrote a post on unemployment in [...]

• YOU SHOULD INVEST IN VALUE STOCK!!

  Posted: August 7, 2009, 5:54 pm by kenyantykoon

  First we begin by introducing what value stock is. Basically a value stock is a stock that is considered good value for money. ‘Therefore this value stock can be any other of the company’s stocks This brings the question on how to value the stock of a company. This is where financial literacy comes in like being [...]

• CONVERTIBLE STOCK UNPUGGED!!

  Posted: August 5, 2009, 1:51 pm by kenyantykoon

  What are convertible stocks? First, convertible stocks are also referred to as convertible preferred stocks. As the name implies it is in essence a preferred stock that can be exchanged (converted) into another of the company’s securities usually a common stock anytime the stock holder feels like ie his option according to dictionary.bnet.com these these type of investments [...]

• THE HISTORY OF THE STOCK MARKET

  Posted: August 3, 2009, 1:43 pm by kenyantykoon

  Have you ever wondered how the stock market came to be? Personally, i have and luckily i found someone else how had and written a comprehensive post on the history of the stock market (here is the article) Apparently it did not begin as the super complex investment destination that very few people totally comprehend but [...]

• PREFERRED STOCKS BETTER THAN COMMON STOCKS??

  Posted: July 30, 2009, 5:20 pm by kenyantykoon

  Preferred stock is in many ways like common stock but it differs from common stock in that the preferred stock holders are paid before common stock holders in profit sharing and liquidation. Another cool aspect of preferred stock that common stock doesn’t have is the cumulative nature i.e. if dividends are not paid to a preferred [...]

• ARE COMMON STOCKS YOUR CHOICE INVESTMENT VEHICLE?

  Posted: July 28, 2009, 2:47 pm by kenyantykoon

  What is common stock? First of all a stock is a part of a company. Basically when a company goes public through an IPO they are basically selling part of the company to the interested prospectivee shareholders. Once you buy common stock like in a company like facebook then you are entitled to a share of the [...]

• BLUE CHIP STOCK EXPLAINED

  Posted: July 24, 2009, 6:43 pm by kenyantykoon

  what is blue chip stock? To understand this, you have to know what blue chip companies are. These are very stable and well managed companies that have weathered many financial upheavals. It goes without saying that these companies are very old and have excellent track records in provision of quality products and efficiency. This causes their stock to [...]

• PAPER INVESTMENTS TO LOOK INTO

  Posted: July 23, 2009, 5:51 pm by kenyantykoon

  paper investments are those that are- shall we say intangible and the only proof of their existence is in documentation T hey include stocks, bonds, mutual funds, hedge funds etc What this post and subsequent others will be dealing with is  that it will break up the different paper assets into its subcategories and discuss how investors [...]

• TYPES OF LOSSES

  Posted: July 22, 2009, 3:40 pm by kenyantykoon

  I have been debating with myself whether there are good losses and bad losses because according to me a loss is where you loose something – money or whatnot. So in the end you end up at a worse off state than before the loss. In his book Rich Dad’s Guide To Investing Robert Kiyosaki says [...]

• WHY I LOVE EXPENSES

  Posted: July 18, 2009, 2:21 pm by kenyantykoon

  Last time I was telling you a little about good debt and how to use it to make money. I wanted to post the other part yesterday but I couldn’t. But not to worry, seeing that today is a brand new day with brand new opportunities I will expound a little on what I mean on [...]

• ADVANTAGES OF DEBT, EXPENSES AND LOSSES

  Posted: July 16, 2009, 5:03 pm by kenyantykoon

  I know the heading looks sensationalist but read on to see what I mean exactly. In my journey towards financial independence I have read books and am on my to find entrepreneurial spirit. In some of these books this has been covered. There are both sides of even the bad aspects mentioned above. Everyone tries to steer [...]

• TYPES OF INVESTORS {PART II}

  Posted: July 14, 2009, 4:24 pm by kenyantykoon

  This is a continuation of yesterday’s post about types of investors.(read them first. It won’t take long) This post dwells on the remaining types ie: -the sophisticated investor -the inside investor -the ultimate investor THE SOPHISTICATED INVESTOR This is a very specialized type of investor. He has a deep financial education, a lot of experience(read a lot of [...]

• TYPES OF INVESTORS

  Posted: July 13, 2009, 10:39 am by kenyantykoon

  As I said in earlier post investing is a plan or a profession and like any profession there are classes or levels. For example, in the computing world there are computer technicians consultants, hackers, teachers and lecturers. There are also so many fields like internet security, website building and maintenance, graphic design etc. The world [...]

• GREAT CORPORATE RIVALRIES IN 2009

  Posted: July 10, 2009, 3:30 pm by kenyantykoon

  There are a few things that i like more than corporate battles. In 2009 there are a few corporate streetfights that i have been keenly following. Here they are: GOOGLE vs FACEBOOK vs MICROSOFT vs APPLE Microsoft and Apple started this battle back in the 1970s. Bill Gates (19yrs at the time) and Paul Allen (22) [...]

• INVESTING REAL ESTATE

  Posted: July 8, 2009, 1:34 pm by kenyantykoon

  I have been observing people and it seems that ones anyone with an investor mind gets any money the most common investment they go for is real estate. This is because its seems easy to get into than the stock market. i mean what is so hard in buying apartment buildings and renting them out? But there [...]

• RICH INVESTOR MENTALITIES

  Posted: July 7, 2009, 3:03 pm by kenyantykoon

  In investing there are so many schools of thought and am sure that you have heard some of them. The most common are - Do not put all your eggs in one basket but diversify (your investments) This really popular phrase makes people invest in so many financial products all in the name of diversifying like stocks, [...]

• TO INVEST OR NOT TO INVEST

  Posted: July 3, 2009, 3:51 pm by kenyantykoon

  Someone once said ignorance is bliss. This is true to some point. It may be bliss to not know that an earthquake is coming as we do not have to worry or take action. But while your head is in the sand, your bum is in the air and the earthquake is still coming. If [...]

• my new girlfriend

  Posted: July 2, 2009, 2:46 pm by kenyantykoon

  I havent been blogging for a week now and believe me it really hurts…particularly when  look at my blog stats. Its like i’ve just registered the blog!! or being hit by a brick! But not to worry, am back and am bad!!! The reason it that my prized acer laptop had been attacked by viruses. Most of  the [...]

• unemployment in the US

  Posted: June 27, 2009, 1:29 pm by kenyantykoon

  I was just passing through the Daily nation(kenya) and there is an article about foreigners in the US being sent packing. It made me remenber a piece i did about unemployment in theUS. Its basically the same thing but mine came first. Don’t say i didnt warn you……

• MICHAEL JACKSON IS DEAD

  Posted: June 26, 2009, 11:33 am by kenyantykoon

  Today, June 26 2009 will be remembered as ther day that the music fraternity lost one of their most famous singers, Michael Jackson. According to his brother Jermaine his death was caused by cardiac arrest. Paramedics rushed to his Los Angeles home after responding to a call but died shortly afterwards  in the UCLA Medical Center. He [...]

• DO NOT DESTROY YOUR MONETISED BLOG

  Posted: June 23, 2009, 4:32 pm by kenyantykoon

  Hi people? This is my second post today. the first was about Somalia trying to involve kenya into their political issues. I have been blogging for three weeks now and what was an aggravating activity is becoming quite fun. [Those hostel owners should switch on the WIFI again because I have to go to campus everyday to work on this [...]

• KENYA REJECTS SOMALIA’S PLEA FOR MILLITARY HELP

  Posted: June 23, 2009, 1:42 pm by kenyantykoon

  For the longest time now, Somalia has been having political unrest. So it should come as no surprise that militants are trying to overturn the current gvernment. To combat this threat to government the Somali parliament speaker Sheikh Adan Madowe  called on Djibouti, Ethiopia, Kenya and Yemen to send in their military forces to help [...]

• To all kenyan Webring members

  Posted: June 20, 2009, 12:43 pm by kenyantykoon

  This blogging thing can become really aggravating. Am not one to word vomit but what’s going on? I have been blogging for the past month but i have come to the realisation that i am on very few blogrolls. I really want to be a major contributor to this webring so pliz…. any kenyan webringer that [...]

• hacking stories and how to protect yourself

  Posted: June 19, 2009, 5:50 pm by kenyantykoon

  Has your computer ever been hacked into? Yes, no, don’t know? This post is all about the cybercrime revolution in Africa and easy steps to protect yourself Computer hacking has many definitions depenning on how you look at it. But essentially it is obtaining personal or privileged information without the owner’s permission by overiding passwords or other backdoor means [...]

• GOOGLE WAVE IS THE FUTURE

  Posted: June 16, 2009, 4:53 pm by kenyantykoon

  Yesterday i wrote an article overviewing google’s latest innovation, google wave{IS THIS THE END OF SOCIAL NETWORKING?} Most of the feedback inform of comments ans e mails is that it is ONLY a way to make communication better and that it will be incorporated into ”traditional” communication like Email telephone calls etc. But I kindly beg to differ. Someone once said [...]

• IS THIS THE END OF SOCIAL NETWORKING??

  Posted: June 15, 2009, 3:07 pm by kenyantykoon

  Why google may wipe out all the other social netwoking sites before the year is out

• unemployment in the US

  Posted: June 10, 2009, 6:04 pm by kenyantykoon

  the sad cruel reality in the US

• global recession explained

  Posted: June 6, 2009, 3:28 pm by kenyantykoon

  How much does the average kenyan(read person) know about the global recession? It’s all really confusing isn’t it? This post is more or less an overview of the whole thing from when it started to the present. I will try to be as simple as i can. Let’s get started shall we? This whole mess started in the US  and [...]

• knowledge is the new money. Love knowing ...

  Posted: May 30, 2009, 3:02 pm by kenyantykoon

  knowledge is the new money. Love knowing things

• breaking the ice

  Posted: May 29, 2009, 6:12 pm by kenyantykoon

  This is my first post:) This blog will mainly be about investing and other globally changing trends. I realised sometime ago that there is a lot of financial misinformation particularly in Africa and so i have decided to start a blog to change this. I will be explaining investment terms and other things in the [...]

• ...

  Posted: May 29, 2009, 5:23 pm by kenyantykoon

• Hello world!

  Posted: May 29, 2009, 3:54 pm by kenyantykoon

  Welcome to WordPress.com. This is your first post. Edit or delete it and start blogging!

Blah blah blah

Fish cakes

Alas a fish cake.

Yet more fish cakes

Guess what ... yeah ... fish cakes.

The end of the fish cakes