Business Ideas

Placing funds in the stock market becomes one of the options to invest. An experienced investor can reap profits from tens to hundreds of millions of rupiah. Running an investment in the stock market can bring in a lot of money.

However, before actually plunge into this investment, you should better understand the leading stock in the stock exchange, namely blue chips stock. Is that a blue chips stock? Here is the review.

What is Blue Chips Stocks?

Speaking of blue chips, you need to know the history of the blue chips stock itself. Blue chips or Lapis One stock is the type of stock with the highest market capitalization above Rp10 trillion. Companies whose shares fall into this category have a reputation in terms of fundamental.

The use of the term blue chips itself comes from one game in the gambling world, namely poker. In this game, bets are used using three pieces of coins with red, white, and blue. The blue color generally has the greatest value.

The term was first introduced in 1923 by Oliver Gingold. At that time he was observing the movement of stocks in the stock market. There are some interesting transactions that occurred at that time with shares worth USD200-USD250. The stocks became a stock that attracted many investors.

Coming home from the stock market he asked his colleagues to write about blue chips stock (blue chips stock). Until now the term is still used.

Blue Chips Share Characteristics

There are several characteristics of blue chips, among others:

1 .Blue Chips Shares Has Large Capitalization

Shares can be regarded as blue chips stocks if the stock of the company has a large market capitalization. Value up to trillions of rupiah. The value of this market capitalization will make the stock players or investors difficult to manipulate the price.

2. Blue Chips Stocks Have Good Liquidity

In addition to the large capitalization value, it is necessary to see how large shares of the company are publicly owned or circulated in the stock. If public ownership is too small, it is likely that the stock price is easy to manipulate, making it illiquid in the stock market. Conversely, if the stock has a high level of ownership, that means the stock is somewhat liquid.

3. The Older Is In The Stock, The Shares Allow to Sign Blue Chips Shares

The longer the company’s stock is on the stock is also an important category in the determination of the stock can be regarded as blue chips stock or not. Usually the benchmark taken is a minimum of five years.

4. Company Performance is the Benchmark of Blue Chips Shares

The fourth category is how the performance of a company that sells its shares in the stock. Can it make a profit every year? Can I earn an ever increasing profit every year? Is the value of profits generated can be quite large compared to the company’s capital?

By taking the benchmark five-year period, please note how the stability of the company’s performance. Companies that always make profits every year if one year has decreased, the next year should be able to rise. This ensures that shareholders can still earn dividends annually. Stock companies like this can be regarded as a blue chip stock.

Window Dressing phenomenon: Advantages for Blue Chips Shares

Entering December or coinciding with the end of the year there will usually be an increase in stock prices, especially blue chips. This phenomenon is commonly referred to as window dressing or conditions in which the traded stock prices tend to strengthen ahead of the end of the year, ie December.

This phenomenon that not only happened in Indonesia can also happen all over the world. Not only the stock market experienced window dressing, but also equity funds. The following causes the phenomenon of window dressing that makes stock prices strengthened.

Corporate action to boost sales targets by the end of the year significantly so that the company’s year-end report could post earnings beyond expectations.

Speculative profit taking action by investors seeking to pursue profits in the short term as stock price forecasts are up by the end of the year.

The action of investment managers increases stocks to boost the performance of the mutual funds they manage so that the overall performance looks good in the eyes of investors.

Advantages of Blue Chips Stock Investments

Is the investment in blue chips stocks will always get a profit? The answer is no. Because if it is always and surely a profit, no investor will invest in the shares of a small company or the Lapis Three Shares. As a result small companies are becoming difficult to grow and it is impossible to enter into blue chips.

In the stock market, every stock of the company …

Being in business as an entrepreneur or entrepreneur does require the expertise to make the most of all the resources and make them worth something.

As many people know, some of today’s big business starts from a small place with minimal capital. Just as Microsoft’s IT giant started its business from a car garage or Facebook that first runs in a dormitory.

Little did we hear of many small entrepreneurs and started pioneering often complaining and blaming themselves or their rivals for losing business competition. Well, here is what to consider really by entrepreneurs in order to win the market competition.

Find Out Business Knowledge as much as possible

The main problem that is generally experienced by entrepreneurs is the insight or knowledge of business that is less mature and perfect. This business knowledge is about how to start a business, create a simple plan, designing the right marketing, branding, packaging, product distribution, to simple things and corporate administration.

Often beginner entrepreneurs do not have many years of the basics of business knowledge. Though this is a major investment and very valuable for business continuity.

This source of business knowledge can be easily obtained. Could by following a business seminar or forum of young entrepreneurs. Especially now access to information via the internet is very easy. All this business knowledge can be obtained easily without having to spend a lot of money. We can also join the entrepreneurial community to get business sciences from experienced ones.

Build and Expand Market and Distribution

Many factors determine whether a product is in demand or does not sell well. Starting a matter of promotion to prospective consumers or product marketing flow. However, the most important factor of whether or not the product depends on the location of the sale and the distribution of the product to the consumer.

Often the constraints faced by small entrepreneurs are the limitations of capital to open their own stores or do distribution so that products can be seen and purchased by consumers. This limitation can be handled by utilizing internet technology that is now a trend. Beginner entrepreneurs should also develop marketing and branding online to all social media and internet marketing media, including using the online store platform.

With online marketing, we can market products without geographical restrictions. Of course very profitable for entrepreneurs. Only, we need to build an online marketing network well so that consumer product search always leads to our products.

Manage Capital with Cash Flow Management

Starting a business requires capital and investment. In order for business to continue running and developing, the capital must be managed properly. Do not get too much expenditure to the extent of capital obtained from borrowing, but the business has not made a profit that can cover the debt.

 It would be nice to have your own capital to fund the business run. However, there are certain times, loans are really needed and taking out a loan is not something wrong. Good financial management is by focusing on sales and how to apply cash flow well. If you get a profit, some can be used to increase the business to be larger so that income increases. Loans for business gradually pay off until paid off.

Utilizing Technology that is Becoming a Trend

Today’s modern age with technological advances, internet availability, and the digital world also benefit beginner entrepreneurs. Although small entrepreneurs, with the power of technology we can still compete with big businessmen who already have a name. In this case, it takes careful use of existing technology. Condition is quite easy. We simply invest in a computer or smartphone. No need to be sophisticated, enough that can operate well some frequently used software.

Develop and Create Financial Administration and Business Legality

In running a business, making financial administration is very important. The development of this business that requires the creation of good financial administration from the beginning pioneered the business so that no problem will occur later.

Especially if there are investors who are interested in investing in our business or cooperation with other parties. In addition, do not forget about the legality of permits and registration of brands, logos, patents legal entities, and so forth. This is so that there is no legal dispute or stumble problem if our business grow bigger later.

Establish friendship as wide as possible

Being friends and having lots of acquaintances really gives many advantages. Especially when starting a business, the more friends, the easier it is to run the business. By making friends, we can learn many new things that science can apply to the business. Or maybe there are friends who have important information related to the availability of raw materials of cheap quality products. Can also start from a friend to be a business partner. Most …

Choosing a quality stock requires analytical skills, both fundamental and technical analysis. Many novice investors are trapped in stock transactions based solely on technical analysis and ignore fundamental analysis.

Investing only by looking at the ups and downs of stock prices in the stock exchange dashboard is very risky. To help you get the best results in stock investing, here are some ways to choose the best stock.

How to Market Capitalization? What Is Liquid Stock Input?

The first step in choosing a good stock is to pay attention to market capitalization. For information, market capitalization is the share price multiplied by the total number of shares issued by the issuer and listed on the Indonesia Stock Exchange (IDX).

Market capitalization is important to look at because:

Can provide information related to how high the volatility of stock prices.

Know how much public ownership in the issuer.

Seeing the potential of the company in the future.

In addition, it should also be sought to know the nature of the stock itself. Is it somewhat liquid, liquid enough, or less liquid? A good stock is a liquid stock. Why? Because the stock is traded with a higher frequency or above the minimum limit of a predetermined frequency.

Useless capitalization value large, but less liquid. So, look for a large capitalized stock and is fairly liquid.

Observe the Income, Profit, and Margin

How is the company’s financial report contained in the capital market dashboard? To select quality stock, it is necessary to observe the income, profit, and margin. How:

Check revenue (revenue) and net income over the last two years.

Check earnings comparison in quarterly report (first quarter with second quarter) and annual report (last three years).

Consider the ratio of price to sales (P / S) and price to earnings (P / E) ratio.

Pay attention to the latest trends whether the growth is fluctuating or consistent. Or is there a big change (more than 50% in a year) up and down.

Also check the company’s margins whether the trend is generally up, down, or stay the same.

Level of Competition and Future Industry Prospects

Rapid technological developments often “kill” companies who are not ready. Do not let you get stuck buying shares of companies that are insensitive to changes.

You can compare a company with a competitor company to measure how much the overall market share for the products the company produces. Do not forget to projection the future of the industry. Whether it can survive or tend to decline.

Create Multiple Ratio Analysis Here

In choosing a good stock, there are several ratios to note, namely:

The price-earnings ratio (P / E ratio) is calculated by dividing the stock price by the earnings per share / EPS (earnings per share) of a company. Make sure the net earnings figure for several years to ensure the numbers are normal and not skyrocketed due to drastic changes.

Price-to-book-ratio (P / B ratio) to determine the fair value of shares. This indicator is obtained by dividing the stock price in the stock market with the book value value of the stock.

Price / earnings to growth ratio (PEG ratio) to take into account future earnings growth expectations and compare them with current earnings conditions. Shares with a PEG ratio close to 1 are usually valued as valuable under normal market conditions.

Management Reputation and Share Ownership Composition

The thing to note is whether the company you seek is still run by its founders or the company’s management has driven new people. Pay attention to reputation and find information related to the bios of key corporate figures to see how extensive their experience is.

Pay close attention to the Financial Statement

Viewing the financial statements do not need up to the detail that can make us so dizzy. Just note the following important things:

Consolidated Financial Statements to view overall assets and liabilities

Check the company’s ability to pay short-term obligations and the amount of long-term debt borne by the company.

Check the debt-to-equity ratio to see how much positive equity the company has and compare it with competitor data to get a better perspective.

It’s also a good idea to take note of every footnote that accompanies the financial statements and annual / quarterly reports. Financial statements can be obtained easily on the capital market dashboard.

Stock Price History At least in the last 3 (Three) Years

See the stock price history is important to do so you can get a reasonable price when buying these shares. In addition, the stock price history can also give you clues about how projected profit can be gained in the future.

Find Out Possible Option and Dilution

Corporate action such as issuing options, dilution, or other actions is important to know because it can change …