PDSnet Online Investment Course

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There are many sources of information on the share market and related investments. In fact, your problem will not be how to find information, but rather to decide what information is relevant and useful. In the share market, money is not your most important resource – time is. How you spend your time will determine how you spend your money. So, consider carefully which sources of information to use, especially as part of your daily investment analysis. To begin with, you will find the plethora of available information confusing, but gradually, as your awareness increases and your understanding of what you are reading broadens, you will begin to be able to distinguish what is worthwhile. Initially, you will not have a great deal of knowledge about the various companies listed on the JSE. There are about 300 of them and you need to know at least what the major blue chips are and what businesses they are in. And you need to develop a knowledge of “who owns whom” in the market. This will take a little time. We suggest that you start a “watch list” of companies that interest you. Begin with one company, perhaps one that you read about in the newspaper, and then try to find out as much as possible about it. Keep files and records and notes. Later these may prove to be very useful. Cut out or save important articles and keep them. Download the company’s latest financial statements from their website and read them through carefully – even if you don’t understand everything. Your software has a direct link to the company websites of all the listed companies under the “Current Company Comments” icon (top left of the screen) in that company’s chart. Let us now consider some of the most useful sources of information:
 
THE NEWSPAPER
This is probably your easiest and most immediate source of up-to-date information. You should buy and read the Business Day newspaper right through carefully. Keep useful articles about companies that interest you or major events of importance and file them for future reference. The price page gives a detailed list of all the closing prices of listed shares on the previous trading day. Get into the habit of scanning through this information to spot anomalies or interesting developments. Carefully read the “Share Tables Guide” in the top right-hand corner of the page to understand the various columns. At the bottom of the price page there are several very useful and interesting tables. For example, there is a list of directors' dealings in the shares of the companies which they are directors of. It is always interesting to see whether the directors of a company are buying or selling their own shares and to speculate on their reasons. You will also find a list of the 20 shares which went up and down by the most in percentage terms on the previous day. This will give you an idea of what is moving in the market.
Reading the newspaper every day may seem a bit laborious, but every now and then you will spot something in what you read that changes your perspective. These moments are the “gold nuggets” because they can lead you to profitable investment ideas. These days, the Business Day is also available online – which you may find more convenient.
 
YOUR SOFTWARE
Your software is an enormously useful and powerful ready reference with huge quantities of daily-updated information on every listed company – and a great deal more.
 
CHARTS
Your software is able to draw charts of all the listed shares on the JSE going as far back as 35 years or at least until the date when the share was listed on the exchange. It is always important to view a share’s current performance in the context of its long-term performance – to see where it has come from. This is even more true for indexes. For each share, on each trading day, over its history, you can also see certain very important information – like its earnings yield, dividend yield, price/earnings ratio, market capitalisation and number of deals. These are displayed for each share’s chart in a row immediately below the share name at the top of your screen. They change as you move your mouse across the screen to reflect the data for the day where the mouse is. You can also open the “Data Window” screen by clicking on the icon in the top left of your screen (seventh icon from the left) or hitting the space bar on your keyboard. This opens a window which shows you the detail of each day’s trade – the highest and lowest price for the day, the opening price and closing price and the volume traded. You will also see the value of any indicator (like a moving average) which you may have added here.
 
DATA STREAMS
Your software contains about 1200 data streams, only 300 or so of which are the listed shares on the JSE. The “Share Explorer” window, which comes up when you press any letter key, lists all the data streams in your software. At the top of that screen there are certain categories shown in tabs for your convenience. These include the constituents of various indexes like the JSE Top 40, the fledgling, small cap and mid cap indexes. Also shown there are the Exchange Traded Funds (ETF), Unit Trusts, Sectors, Warrants and JSE/FTSE Indexes. You can create a list of “Favourites” (i.e. your watch list) and that will also be shown there.
Other important data streams in your software include:
<ol>
<li>Commodity prices (gold, silver, platinum, copper, zinc etc.). If you type in “M-“ in the software, you will see all the metals and minerals listed there in the “Share Explorer” window.</li>
<li>Currency crosses (rand/dollar, dollar/yen, pound/euro etc.) which all begin with “C-“. You should note that this section includes six cryptocurrencies like Bitcoin.</li>
<li>Overseas indexes (Nikkei, FTSE, Dow Jones, S&P, CAC, DAX etc.) all begin with “I-“ and JSE indexes which all begin with “JSE-”</li>
<li>Net advance/decline graphs – which show the number of shares in a particular sector are going up less than the number which are going down. These all begin with NET-</li>
<li>Krugerrands have their own section and there you can find the 1-ounce coin, the half, quarter and tenth. These all begun with KR-</li>
<li>Various other data streams like government bonds (the R186 and R208), and the repo rate which are in the “sundry” section.</li>
</ol>
 
You should take the time to investigate and understand each of these different data streams. You will find that there is an enormous amount of very valuable information in your software. Some of the data streams are very useful for analysing the progress of a particular share or sector of the market. The Share Explorer window enables you to scroll through the shares in each one of these categories and then immediately draw the chart of any one of them by selecting it and clicking on “enter”.  
SENS
The Stock Exchange News Service is a complete record of every public announcement made by every listed company. You can find a list of the SENS messages for each share by clicking on the 4th icon from the left at the top of your screen under “Current Company SENS” – 
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Any time a company is involved in a merger, a takeover, a share split, an acquisition, a company buy-back of shares, or the directors are selling or buying the company’s stock, a director is resigning or being appointed, and many other important events, it must make a public announcement on SENS. Companies are required to publish abbreviated forms of their interim financials and final financial statements on the SENS. You should try to read through these for the companies that interest you. Of course, you can then also go to the company’s website and download their full results usually in a PDF file – the link is given in the short-form announcement. They are also required to publish a “trading statement” prior to issuing their financials to give estimates of their expected earnings per share (EPS) and headline earnings per share (HEPS).
 
COMPANY INFORMATION
If you look at the top of the screen of your software you will see a menu item “Company Info”. When you click on this the computer will display three useful charts of the share on the screen:
<ul>
<li>The share’s performance over the past year against its sector and the JSE overall index.</li>
<li>The share’s price at the end of each year since it was listed or for the last 12 years.</li>
<li>A pie chart of the company’s major shareholders.</li>
</ul>
 
You will also see on this screen a menu of other useful items across the top of your screen. These include SENS, director dealings, a link to the company’s website, ratios, yields and financials. All of these additional screens offer useful information to you as an investor.
 
COMMENTS
Up-to-date information on each listed company such as their nature of business, who their directors and major shareholders are, their net asset value, headline earnings per share and dividends per share going back 15 years or until their date of listing.
 
DIRECTOR DEALINGS
This shows the quantities and prices of the company’s shares that the directors of the company are buying or selling. This can be very interesting, especially if they are off-loading in a falling market or accumulating in a rising market. After all, they should know what is going on better than anyone else.
 
PDSNET OPINIONS
This is a comprehensive feature which includes an individual, detailed and elaborate description of the shares on the JSE. Written after in-depth study of the company’s financials and technical formations, these opinions give an overview of the company in the present economic conditions, taking into account their recent results, fundamental ratios and technical outlook. The opinions are constantly updated as new information about the company becomes available. The PDSnet Opinions, can also be accessed by going to News in the Menu Bar, then click on Opinion.
When you become interested in a share, reading the current PDSnet opinion on it, is the best way to get a quick overview of it. From there you can go into more depth on its financials or charts.
 
SCANS
The scans feature of your software provides an excellent overview of the share market by sector and it allows you to search for shares which conform to specific criteria which you can select. Click on “Scans” at the top of your screen and a drop-down menu will display four options:
<ol>
<li>Overall market view   this displays the various JSE indexes arranged by their performance over any period which you select from one day to five years. If you move your mouse around on this diagram the window will display the details of the particular sector and the chart on the left will display the chart of the index over the past six months.</li>
<li>Market carpets – this shows the same information on all the JSE sectors over whatever period you want in a different form. For example: <img src="http://www.pdsnet.co.za/onlinecourse/images/multi_squares.png" /></li>
</ol>
This shows the sectors sorted from the best to the worst by the performance of their indexes over the past 6 months. You can choose how far back you want the analysis to go. A green square shows a positive growth over the period and a red square shows negative growth. Within each square are smaller squares representing the individual shares in that sector.
<ol>
<li>Market scan – This option allows you to get the computer to search through its database for shares or other data streams which conform to criteria which you have set. Thus, for example, if you select “Unusual percentage change in price” you can then decide what size change you want to see (either up or down) and the time period over which you want to scan the database. The computer will then give you a list of shares which conform to your scan criteria. There are many different scan options which allow you to list shares which conform to a range of different criteria. You need to explore all these scan options because they can help you to find interesting looking shares.</li>
</ol>
If you are not currently a ShareFriend user, you can view more information about the software by <a href="/index.php/sharefriend-pro-technical-analysis-charting-software/">clicking here</a>.
 
THE INTERNET
This is undoubtedly the most powerful source of data on any subject, including the share market, however, useful data is not always easy to find and your biggest problem with the Internet will be to sort out what is worth reading from what is not. Here are some ideas:
 
COMPANY WEBSITES
Almost all companies have their own websites, and these are often enormously useful sources of information. A direct link to the company’s website is available from the company chart in your software. For example, go to “Sasol” then click on the “current company comment” icon in the top left-hand corner of the screen and you will find a wealth of information about Sasol – including a link directly to its website. Most company websites have a section headed “Investor Relations” or something similar. In this section you should find the company’s annual reports and much more useful information.
 
THE JSE
The JSE has a useful website at <a href="http://www.jse.co.za/">www.jse.co.za</a> with investor education and all the JSE rules and regulations.
 
FINANCIAL NEWSPAPERS AND MAGAZINES
These usually have excellent websites featuring all the latest financial news. For example, go to <a href="http://www.businessday.co.za/">www.businessday.co.za</a> or <a href="http://www.nytimes.com/">www.nytimes.com</a> and you will find more financial and other news than you can easily read.
MONEYWEB
Moneyweb provides what must be the most useful and up-to-date website on the economy, listed companies and financial news in South Africa.
MAJOR STOCKBROKING FIRMS
Every major stockbroking firm has a website usually with examples of their research into major companies and their opinion of current events in the financial markets. Thus, for example, you can go to <a href="http://www.psgonline.co.za/">www.psgonline.co.za</a>
INTERNATIONAL REFERENCE SITES
These include sites such as Wikipedia and Investopedia which offer excellent references plus study material of international finance and investment.
 
THE SA RESERVE BANK BULLETIN
This comes out every quarter and gives an excellent detailed review of the entire economy. Go to <a href="https://www.resbank.co.za/Publications/QuarterlyBulletins/Pages/QuarterlyBulletins-Home.aspx">SA Reserve Bank here.</a>
Aside from these sources of information you will also find innumerable books on investment, radio programs and television programs (such as Summit, CNBC Africa or Bloomberg).
 
TIPS
You are bound to get tips from your friends and business acquaintances from time to time. Treat these with great caution. Always do your own homework on the share and ask yourself the question,
 
“Would I have bought this share even if I had not received the tip?”
 
If the answer to this question is yes, then you are probably fairly safe, but if it is no, then be very careful indeed. There is an old Wall Street saying which goes “Where there’s a tip, there’s a tap”. Always back any tips up with a great deal of homework.
 
 
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