JESSICA AMIR | From Saxo Markets
JESSICA AMIR | From Saxo Markets
How do expert investors choose companies to include in their portfolios? Having a systematic approach to investing might make all the difference. In this episode I'm joined by Jessica Amir Australian Market Strategist at Saxo Markets
“When you're looking at a budget, you can really easily see how much money is going to go to a certain sector and where the government's priorities are. So, for example, we saw cybersecurity was going to get a record amount of spending. So, we like cybersecurity. Low emissions technology, the Scomo budget highlighted record money would be put toward low emissions. So that means hydrogen, rare earths, etc. And then the other sector that they highlighted was defence. They're putting more money to defence, agriculture and infrastructure. And so, these are growth sectors, they're all growth sectors. And then if you have a look at the performance of the sectors and stocks in their sectors and how they've performed over the past year, they've actually done pretty well and they've outperformed the market. So, it’s really kind of is a really easy way to kind of pick a growth sector just by having a quick glance.”
Jessica Amir has over 14 years of experience in financial markets and joined Saxo from Bell Direct, an online stock broking business, where she was the lead Senior Market Analyst and presenter. Jessica also has extensive broadcast experience with ABC, Sky News, Seven and Nine Networks - where she interviewed Prime Ministers including Tony Abbott, Julia Gillard and Kevin Rudd as well as Federal Treasurers and ASX 200 CEOs.
TRANSCRIPT FOLLOWS AFTER THIS BRIEF MESSAGE
Disclosure: The links provided are affiliate links. I will be paid a commission if you use this link to make a purchase. You will also usually receive a discount by using these links/coupon codes. I only recommend products and services that I use and trust myself or where I have interviewed and/or met the founders and have assured myself that they’re offering something of value.
Jessica Amir has over 14 years of experience in financial markets and joined Saxo from Bell Direct, an online stockbroking business where she was the lead senior market analyst and a presenter. Jessica also has extensive broadcast experience with the ABC, Sky News, Seven and Nine networks, where she interviewed prime ministers including Tony Abbott, Julia Gillard and Kevin Rudd, as well as federal treasurers and ASX 200 CEOs. So Jessica, without getting political, who was your favourite prime minister to interview?
Jessica (1m 13s):
Do you know what? Nothing politically charged, but because of the cultural heritage, I actually really enjoy chatting to Joe Hockey when he was treasurer.
Phil (1m 22s):
Oh okay, a little bit of the Middle Eastern thing going?
Jessica (1m 25s):
He's actually part Armenian. Yeah. So nothing to do with politics.
Phil (1m 30s):
Yeah. I actually met him once at a party and he was quite a charming guy.
Jessica (1m 34s):
He's lovely. Yeah.
Phil (1m 35s):
So tell us about your role. I mean, just before we started chatting today, you were talking about that your role was talking with clients, it was also doing media appearances. What's your day start like? What are you doing at the beginning of each day?
Jessica (1m 49s):
Well, I generally don't sleep very many hours, but I wake up, I see what happened in the US and how European markets closed and then what's happening with commodities. A great, easy to read website I sometimes refer to is CNBC. And then we go into a morning meeting in the office and say, "This is what's happened in markets. This is what I think clients should be aware of today. And here's some possible trading ideas."
Phil (2m 19s):
Jessica (2m 20s):
And then meetings roll on, the phone might call, media.
Phil (2m 26s):
And you've got a global team. You're part of a global team you said?
Jessica (2m 28s):
Yeah. Yeah. So I'm in the Asia Pacific team. So we've got a Singapore office, a Hong Kong office and China and Japan. And also more broadly, we've got a very large European presence in Europe, we're called Saxo Bank. But our license allow us to be a bank here in Australia. Yeah, so Copenhagen, France, Copenhagen being the capital of Denmark. Yeah. France, Italy, anywhere that you could think of almost there's a Saxo office.
Phil (3m 3s):
And you're all throwing ideas around, an international idea throwing around situation, I'd presume that's what you're doing, about views on markets. Yeah.
Jessica (3m 13s):
Totally. It's great to have feet on the ground and they can actually, you know, see what is most attractive to investors and why, or what's moving before it becomes a trend. So that's great to share it with clients as well.
Phil (3m 26s):
Jessica (3m 27s):
Phil (3m 27s):
Do you get excited by the job?
Jessica (3m 29s):
I love it. Yeah. Yeah. Yeah. Definitely. Definitely. I think I'm blessed to be in my dream job, I think. Yeah. So just helping clients, helping people understand what's going in the financial world so that they can make money. That's pretty much it. Yeah. It's pretty cool to see people come up to you, you know, publicly or a client they're like, "Oh, thanks so much for talking to me about that stock" or, you know, "I've made so much money." I'm like, "Oh, that's so good." Yeah.
Phil (3m 58s):
That's great. And what was it like working in the media as well? I mean, it's a completely different vibe, isn't it working in the media to finance?
Jessica (4m 5s):
Yeah, totally. I wasn't at Triple J for probably as long as you but I did.
Phil (4m 12s):
Oh, you worked at Triple J as well, did you?
Jessica (4m 14s):
I did some news at Triple J very seldomly. But very different being in media. The hours were really long, but I think it just taught you, being in media and I think you'd probably agree, that everything's moving so quickly. How do you possibly do everything at once? And it just teaches you to have a look at everything and then take action quickly. So it helps you with any job I think.
Phil (4m 41s):
Jessica (4m 42s):
And you can easily and quickly read something and then understand it and then relay in really easy to understand language. So I think that was probably the best thing.
Phil (4m 52s):
Yeah. I think it's communication skills, isn't it? Yeah,
Jessica (4m 54s):
Phil (4m 55s):
Yeah. Because you can take those skills and use them in face-to-face interactions with colleagues and even when you're talking to the general public in the media, as you do, was it, 30% of the time?
Jessica (5m 6s):
Yeah. 30% of the time all the time now that's that's from a movie. Yeah. So 30% of the time helping Saxo clients understand what's going on and helping them with considerations. So we say, well, why don't you look at this sector? And here's some stocks to look at this company is likely to grow their earnings by this much and earnings drive share price growth. So that's probably more attractive than the other company that's losing market share. So just kind of keeping it really simple, but giving them ideas and strategies. So 30% of my role is helping clients. 30% is media and then 30% is research.
Jessica (5m 48s):
But I think it's more research.
Phil (5m 51s):
Jessica (5m 51s):
But I think I've got the numbers wrong, but yeah.
Phil (5m 55s):
So today we're going to be talking about a recent article that I read where you're talking about the process that you can go through to screen for choosing stocks to put in your portfolio. And we'll, we'll put a link in the episode notes to that particular article, but let's go through it. So what you referred to one of the first points is becoming observational. What does that mean? What's being observational when you're looking at companies to invest in
Jessica (6m 20s):
Good question, what is being observational? So it's simply just switching on, I guess, as many aspects of your brain, as you can just look at things, almost like a brainstorming exercise and think about how could that potentially be an investment opportunity. So when you walk out into the street here, what do you see on the road? Do you see less cars? Do you see more cars? Do you see more electric vehicles and then in your office, what do you see? More people using a particular type of brand of mobile phone? How do people pay for their transactions? And they're using zip pay or they're probably not using zip pay anymore.
Jessica (7m 1s):
They might be using apple pay, et cetera. So just observe what's going on around you and then think about the companies that could benefit. So let's say for example, if you're seeing more Teslas on the road, I know for example, I'm seeing a lot more Teslas.
Phil (7m 15s):
They were everywhere out there. Believe it. Yeah. There's one just up the road here. And I just, you know, cause there's no off street parking here and I don't understand how they can keep a charge, but they must do it somehow.
Jessica (7m 25s):
Yeah. And I charged him for like three hours. It seems like forever.
Phil (7m 28s):
I never see an extension cord out across the footpath.
Jessica (7m 31s):
Oh you don't?
Phil (7m 32s):
No, no, no. However,
Jessica (7m 35s):
Yeah. So you might see more electric cars on the road and then think, okay, well I might have a look at Tesla. So that means that their earnings might be growing over time. And then that's probably where you'd start
Phil (7m 48s):
Because that's the Phillip Lynch line. Isn't it? Just watch your nose.
Jessica (7m 52s):
Yeah, totally. Totally. Yeah. So a famous investor, Peter Lynch said, yeah, you had your name on,
Phil (8m 1s):
I think that he was a treasurer at one stage Philip Lynch.
Jessica (8m 5s):
Yeah. So Peter Lynch wrote a book called one up on wall street, which is a great book that I, I probably recommend. And I think he's wife actually kind of said, well, have you thought about this? Or, you know, seeing more Starbucks doors opening up here, there and everywhere. Have you thought about Starbucks? And so he kind of like took a step outside from being a professional fund manager and then was like, oh yeah, that's a really good point. Like if you just observe what's going on around you, it just makes total sense.
Phil (8m 38s):
Yeah. I guess at this point we should date stamp this episode that we're recording on the 6th of April, 2022, depending on when you're actually listening to this, the next point that you made in this article. And I should've said there's six steps in this article and this is the second step we're looking at and that's to pick a sector that's growing. How can you ascertain that?
Jessica (8m 57s):
That's a very good question. So let's say, for example, if you watch the nightly news or you like to read the Australian or the AFR or the ABC, and you just start to see some trends emerging, let's say for example, last week, US president Biden announced that he would essentially be changing the legislation and he would be making sure that electric vehicle, key ingredients like lithium cobalt, nickel, et cetera, that they could be produced in the US. So that means that you'd think that more money will be going towards those key commodity sectors in the US so you'd think that sounds pretty hot or another growing sector example would be interest rates are rising.
Jessica (9m 49s):
Who's going to be making more money when rates rise. Well, it's probably the banks, so they're just two really simple examples, but it can be more complex. And
Phil (10m 1s):
I think it has to be a bit more complex than that, because I know when you have discussions with friends in the pub, they'll tell you something and they will see something like this and say, oh, this is a growing sector, but it's not really as simple as that is it, you know, you really have to
Jessica (10m 17s):
Phil (10m 17s):
Do your due diligence and really dig into things.
Jessica (10m 20s):
Yeah, totally. I think it's important to know that when an economy is either expanding, like we are now in Australia and the US or when an economy is slowing different sectors also behave differently as well. And I think that two great examples of that would be in August last year in August and November, we saw tech stocks basically tumble in the US and Australia. And that was because the us federal reserve signal that they will be rising rates. And so rising rates don't really help companies that are born off low interest rates. And they typically carry higher debt and say a bank or a mining company.
Phil (11m 2s):
I think this is the idea that growth companies and these are high-flying tech stocks obviously do get negatively affected by interest rates.
Jessica (11m 13s):
Perfect. Exactly. So that's an example of a company that it would see its growth squeezed or earning squeezed, and we know earnings growth, not earnings, earnings growth drive share price growth and profit and cashflow growth. Also drive share price growth. So because tech stocks predominantly born off low interest rates, are very debt heavy, their shares fell when the federal reserve said, yep, we're going to hike rates. You can kind of see that the market was forward-looking and thinking the tech sector is going to have a pretty tough time going forward. So for the next 10 years, we think tech will no longer be the hottest growth sector.
Jessica (11m 57s):
And it will be commodities because interest rates are rising. Yeah. Yeah.
Phil (12m 2s):
And, and you just made an interesting point. You said earnings growth drive share price, not earnings. What's that mean?
Jessica (12m 10s):
Yeah. So here's a great example. So Tesla, for example, their earnings. So the earnings before interest, tax depreciation
Phil (12m 19s):
Yeah, the money that's just coming through the front door.
Jessica (12m 20s):
That's it. Yep. Yep. Earnings and profit. The headline numbers will be higher than last year, but their growth is slowing. So, you know, instead of going up by say 20%, it's probably going to go up by 5%, for example. And so that means that earnings growth is slowing. And that typically, I guess, is a great example of how you would look at a company that's probably going to see a falling share price in the next year or so. Yeah. Tesla though, by example, their shares were trending higher on the short term, but over the long term, they're looking a bit squeezed because of that.
Jessica (13m 5s):
Yeah. Yeah. Because their earnings growth is, is slowing and the earnings growth is slowing. Not just because rates are rising, but the most expensive part of making an electric vehicle is lithium. So it's about a third of a percent of the cost of making an electric vehicle. And then you've got the nickel price, which is going down Copper price. So these electric vehicle makers are having a really tough time because there's a lack of supply of commodities or essentially rare earths and minerals. And there's rising demand like Tesla and Renault and BMW. They're all racing to be, you know, the biggest producers of EVs.
Jessica (13m 49s):
So demand is high and supply is limited of commodities. And so that's why we think it's probably more attractive if you want upside, you probably best place to look at commodity companies that essentially provide, you know, the feedstock or the nuts and bolts of an electric vehicle. So I think there's an ETF called ACDC. I know we're skipping a few steps, but they're listed on the ASX and they invest in about 33 of the world's biggest commodity companies and battery mineral companies that are needed for the electric vehicle transformation.
Jessica (14m 30s):
Yeah. So that's
Phil (14m 31s):
Shout out to Kanish who's been on the podcast a couple times.
Jessica (14m 35s):
Yeah. That's a pretty good ETF. Yeah. There are some others, but for
Phil (14m 39s):
Not recommending anything to buy
Jessica (14m 41s):
Phil (14m 42s):
Jessica (14m 43s):
Yeah, absolutely. There are some other ETFs, but I think for Aussie clients, given that that's listed on the ASX, that's probably the cheapest and the, to get access
Phil (14m 54s):
Exposure to that sector. Yeah. So this is access to commodities that will be driving the electric vehicle revolution. That's the way you're looking at it.
Jessica (15m 5s):
Totally. Yeah. So yeah, there's definitely more upside in the commodities that are essential to going into an electric vehicle than there is in an electric vehicle company like Tesla.
Phil (15m 19s):
Okay. Because that's a really interesting that you've got to have, you know, when you're thinking about investing that you've really got to focus on where you're going to get the best value for your money, you know, because a lot of people will just go, oh, there's a lot of the Teslas out there. You know, I'll invest in Tesla.
Jessica (15m 33s):
Totally. I mean maybe a year ago, that would have been pretty good, but because of the war in Ukraine and because of secondly, rising interest rates, the dynamics of shift and commodity prices have never been so high and they'll probably go higher over the next year, 10 years, et cetera. So that's why you're seeing more government support, which is another factor that I look out for a growing sector is the government support. So you'll probably see more government support go into these critical minerals to make sure that the world can be yeah. Carbon neutral by 2050
Phil (16m 16s):
So we're in post federal budget season. What's the information that you can get out of federal budgets that could possibly inform your investing.
Jessica (16m 24s):
Yeah. That's a really good question. I think with tip two with stock-picking we were saying, pick a sector that's growing. When you're looking at a budget, you can really easily see how much money is going to go to a certain sector and where the government's priorities are. So for example, we saw cybersecurity was going to get a record amount of spending. So we like cyber security. Low emissions technology, the Scomo budget highlighted record money would be put toward low emissions. So that means hydrogen rare, earths, et cetera.
Jessica (17m 4s):
And then the other sector that they highlighted was defence. They're putting more money to defence, agriculture, and infrastructure. And so these are growth sectors, they're all growth sectors. And then if you have a look at the performance of the sectors and stocks in their sectors and how they've performed over the past year, they've actually done pretty well and they've outperformed the market. So it really kind of is a really easy way to kind of pick a growth sector just by having a quick glance and say, I don't know, wherever you read, you digest the, the budget from ABC
Phil (17m 40s):
Jessica (17m 40s):
Phil (17m 40s):
Should post this on Twitter. Sorry.
Jessica (17m 48s):
They actually, the government website make it really easy. They literally like highlight the sectors how much money is going to this sector. Where's it actually going to great. You see water infrastructure, a new dam is going to be built in Queensland and that's going to create a new food ball in Queensland. So what does that mean? Maybe I'll look at a food ETF called F double O D or maybe I'll look at Australia's biggest agricultural companies, Elders, and GrainCorp for example. So it's kind of just like thinking about growing sectors and then stocks that could benefit
Phil (18m 23s):
I wouldn't I'm cement companies and those kinds of construction companies also benefit from infrastructure spending.
Jessica (18m 30s):
Totally. Yeah, definitely. Yeah. Yeah. You've got Adelaide Brighton, CSR, Brickworks and then the engineering companies as well, like Cimic and Lendlease, there's so many to choose from, but yeah, absolutely. So infrastructure and also with infrastructure, we need, the key ingredient of steel is iron ore. And then so the biggest iron ore producers in the world of BHP and Rio Tinto, and they're right here listed on the ASX. So there's just some easy ways to look at growth sectors.
Phil (19m 6s):
Okay. So the next point that we're coming to is looking for companies with a growing market share. Now this might be a little bit harder to ascertain. What tips do you give for that?
Jessica (19m 14s):
That's a really interesting question. So you'd think it'd be pretty hard to find, but a great place to start is to just think about the companies who are dominating their sectors. We spoke about BHP and we spoke about iron ore. So a company like BHP is only going to get bigger. So they've got opportunities of scale. They've got great relationships with China. They've got great relationships with India. I've actually met the CFO of BHP. And I kind of got to understand that he's got quite a really good relationship with China. So regardless of any potential political tension, it's safe to say Australia's biggest company.
Jessica (19m 60s):
BHP is probably only going to get bigger and that's because China wants to grow their economy about 5.5% this year, which means I need more infrastructure. And BHP is the biggest supplier of iron ore to China. So that's kind of an example of picking a company that's growing its market share in cybersecurity. We spoke about record spending, being put down on the table by the Aussie federal government. Yep. Over in the US, Joe Biden's also put down record spending for cybersecurity as well. So you can just do a quick Google search, who is the biggest cyber security company.
Jessica (20m 40s):
And then so probably up will come CrowdStrike. And so CrowdStrike the majority of their business, I think it's 98% of their business. They actually supply contracts to the US government or the various departments. So that is only going to grow. And then this company will probably be lent on by the private sector. And so that that's an example of a commodities and cybersecurity. So you're in the consumer discretionary sector, which I'm not keen on by the way, nor is our global team because interest rates are rising. But if you didn't
Phil (21m 20s):
Jessica (21m 21s):
Phil (21m 21s):
And wouldn't inflation presumably as well, the wave inflation's going, people are mail, prioritising food and petrol, consumer discretionary.
Jessica (21m 30s):
Yeah, totally, totally. So you'd expect consumer discretionary items like, you know, buying a new boat, speak for your home. It's not going to be front and centre inflation. The cost of buying your chicken for the family is, is only going to get higher. So that being said, we'll just jump to staples. So in staples, your chicken, so you've got Ingham's chicken on the shelf. So there's only a few leaders in the poultry space. So it's quite easy to do a quick Google search on that. So yeah, regardless of what sector, your looking at commodities, cybersecurity, defense, logistics, or staples, think of the biggest brands and then ask yourself, will they be around in 10 years time?
Jessica (22m 18s):
And that's probably a great way to really easily distinguish a leader from a laggard company.
Phil (22m 24s):
Okay. So the next thing to look for, and this is an interesting one is finding companies that are about to be added or removed from an index like the ASX 200 or the S&P 500. How do you find out this kind of information and what does it mean?
Jessica (22m 39s):
Yeah, it is really interesting and not many retailers look at it, but the fin twit space on Twitter, they lap
Phil (22m 47s):
Jessica (22m 47s):
They lap it up for breakfast, lunch, and dinner. So every quarter the S&P Dow Jones indices. So they're a global research organisation. They make the key indices. So they make the key indices that ETF providers that say VanEck or BetaShares or ETF Securities, they make all the indices or indexes, whatever you want to call it. However you sit on the grammar fence, but they make the indices that ETF providers copy and then sell ETFs. I don't know if is that too pie in the sky, but
Phil (23m 29s):
We've discussed it previously on the podcast. We'll know where we talked about what indices mean, but yeah, I nerd out and geek out on this kind of things, But that just means the, the weightings of the companies or which companies are actually included in these indices. Doesn't
Jessica (23m 45s):
It? Totally. Yeah. The S and P global organization will say at the end of the month, they'll put out an announcement and it will be published on the ASX and it will be also published on their website as well. And then they'll say reviewing quarterly rebalance, and then they'll have a list of the top 50 companies, the top 100, the top 200 and the top 500. And in that there'll be companies that are going to be added to the ASX 200 and removed. And then you can bet your bottom dollar, that investors will take this before it actually occurs. So they generally put it out a month before it will take effect, which means investors have got some lead time to look at the stocks, see what sectors they fit in are their growth sector before I guess the fund managers or ETF providers have to compulsorily buy stocks.
Jessica (24m 44s):
So, so for example, I saw over 11 lithium companies added to the ASX 300, the biggest 300 stocks on the ASX. And then, so I dive down and I saw, okay, whereabouts are these lithium companies located that are listed on the ASX that have just grown in size to make them good enough to get into the ASX 300. And then, so that's kind of where you'd start your journey. So are these mining companies next to an electric vehicle maker? Because if they're in say Africa, for example, that's not very attractive because it means that Tesla will have to go and pay a whole lot of haulage to go and pick up lithium from Africa and then take it back to the, to the mothership, to make electric vehicles.
Jessica (25m 39s):
That's just an example. So just have a look at that, just do a quick Google search, say where the company's minds are, and then you can go from there, but bottom line, it's a great way to get ahead of the market. Number one. And secondly, it's a great way to get ahead of fund managers before they have to compulsorily buy these stocks that are in an index. So because ETF providers, they rebalance their portfolios every quarter. So they get this from the S&P Global Dow Jones Indices organization, and then they make their changes to their portfolios. So for example, ETF Securities, they might rebalance the ACDC battery minerals ETF based on what they see in S&P Global's announcement.
Phil (26m 26s):
Well, that's an interesting insight to have.
Jessica (26m 29s):
Yeah. Yeah. It's pretty cool. And it's publicly available. So if you don't know where to find it head to S&P Dow Jones Indices website, or let's say, for example, you know, the stock that was added to an index, you can find it on the ASX announcements page on that. And then you see the whole list of all the stocks that have been added and removed. Yeah.
Phil (26m 52s):
So the final point in this list is using technical analysis. Now, this is really interesting because a lot of people think of technical analysis as being a little bit like astrology. You're just looking at all the lines on the chart and the candle sticks and all of that as some sort of necromancy, but There's actually valuable information that you can get from looking at charts.
Jessica (27m 17s):
Totally, totally. So some fund managers believe it or not, Phil, they base their entire business on just looking at charts. Some fund managers just look at fundamentals as in, you know, the balance sheets. Yeah, But the really successful investment managers marry the two. And so Harvard and countless studies have found that when you combine fundamental research. So looking at the numbers with technical analysis, like the squiggles on the page, the charts, you'll have a better chance of outperforming the market. And so you don't really need to go too far into this. If you do want to take your stock picking to the next level.
Jessica (27m 59s):
So after you've picked a stock, you can sometimes look at a chart and see if it's in an uptrend or a downtrend, like if it's going lower, for example. So I don't know how to describe where you would start on a podcast, but
Phil (28m 13s):
It's a bit happy because it's a visual thing, isn't it. But someone once said to me, all you got to do is if you can just see the trend from across the room, like you don't even...
Jessica (28m 22s):
That's exactly right
Phil (28m 23s):
You look at price chart of a company and see where the price is going. And if it's going from the bottom left to the top, right. It's in an uptrend. If it's going in the other direction, it's in a downtrend, it's really simple as that.
Jessica (28m 34s):
Totally. And then, so just take that philosophy and then apply it to different time zones. So then look at the company that you're looking at on a weekly basis, on a monthly basis and on a yearly basis. And you can do that with any charting tool, any platform that you use, you just on the drop down click, you know, week, month, year, and then you can see the trends that are occurring because all markets, all stocks move in cycles. So whether they're trending higher and they have a little bit of a fall and then a little bit of an uptrend, but they're still trending higher, but it's important just so that you're not disappointed.
Jessica (29m 14s):
It's also an opportunity to look at the downturns for an opportunity to buy in as well. If you're really gung ho on a company and you know, it's going to grow it's earnings, are you think that they're going to make a big announcement? Yeah. So marry fundamentals with technicals, there's a couple of indicators that are to look at so three moving averages. So basically fund managers will use moving averages to sometimes buy in. So they're quant traders. So if you just add a moving average line, a 50 day moving average and a 200 day moving average.
Jessica (29m 55s):
And then essentially when you look at the two lines, when they intersect, it'll tell you when fund managers will be forced to buy in or when they sell. So when the short term, their 50 day moving average falls below the 200 day moving average, and they cross it's called a desk cross. And it means that fund managers will essentially be selling. If you have the opposite. And the short term crosses the longterm pointing up, then it's called a golden cross. And then you'll see fund managers, quant traders, essentially their programs, whether they're at their desk or not, their programs will automatically buy.
Jessica (30m 36s):
So that's a great technical indicator to add. So it's moving averages 50 day and the 200 day the other one you don't have to do too much. You can just click add and you add RSI. And the other one is MACD. You don't have to do anything to those. Just add them on your chart. It's just really easy. So RSI is essentially, it gives you a squiggle and it's yeah. A bit of a wound. And then, so all we have to know is that buying is hot when the squiggle is at the top of the page. And if it starts to turn over, then that means
Phil (31m 14s):
Jessica (31m 15s):
Exactly. Then that the shares could call back. So that would be really valuable to look at that on a monthly chart, for example, and then the other one, the third one, Phil, the MACD this is also the strength of the buying or the selling. And then so similar, similar patterns. So you're looking for the squiggles going over. So the worms essentially are going down into the ground and then when it crosses the middle line, and then that means that then there's going to be a lot of selling. And then on the opposite side of the spectrum, you'll see a lot of professional investors buy in when the squiggle picks up off the bottom and then crosses above the middle MACD line for hope.
Jessica (32m 1s):
I haven't lost anyone. I think I lost myself.
Phil (32m 3s):
No, no, no. It's pretty clear. I've fiddled around with many of these as well. So we just got the two moving averages the 50 day and the 200 day moving average, the MACD and the RSI.
Jessica (32m 16s):
Phil (32m 16s):
So let's just bring this home and wrap it all up. And I think one of the points, and one of the things I enjoyed about reading your article is that if you want to invest directly in the share market, you've got to have a systematic approach. And a lot of people go in with no idea, and they just, you know, they have maybe one or two little ideas, and then they just jump in and often we'll be disappointed. What is the importance of having that systematic approach?
Jessica (32m 44s):
So you can step back and reflect on your successes or your failures. And then you can see a few either followed your system or a few shied away from it. And then why did you deviate from your, from your model or from your metrics? Sometimes it can be a bit of FOMO. So you hear something could have backyard barbecue. And everyone will say, you know, by this, for example, Twitter, so Twitter shares jumped up 27%, but a lot of people might not know, or their earnings are falling. So you've got to do your homework. And it's really not that hard if you don't have access to financial tools or a good platform, which will tell you if a company's earnings falling or rising, you could just have a look at some articles online, but yeah, ultimately you want to be a successful investor.
Jessica (33m 37s):
And so that's why having a systematic approach actually works. And it's been found and proven that you'd have a more successful trading journey.
Phil (33m 46s):
So tell us about where you work, Saxo. How can people find out more information and what can they get from Saxo?
Jessica (33m 52s):
At Saxo we, we provide access to all markets. So we're a global organization we're backed by a global bank and with Saxo clients can get access to some of these tools that we, that we spoke about. So I think a good platform will give you access to fundamental research and also technical research. And then also research from people like myself, just to give you a bigger picture, say, Hey, this is what's going on. This is probably what you should be aware of
Phil (34m 26s):
Thinking about in your investing. Yeah,
Jessica (34m 27s):
Totally. Cause sometimes I think we all just stick to what we know, but there's a lot to be said about, you know, removing, removing the glasses that we've got on. I don't know. I can't really think of a turn of phrase to say And not stepping outside
Phil (34m 44s):
Taking off rose coloured glasses
Jessica (34m 45s):
Taking off rose coloured glasses. Yeah. But there's a lot to be said about looking at big picture research and then also getting down to the nitty gritty and you want a platform that makes it really easy to do that.
Phil (34m 58s):
Jessica Amir, thank you very much for joining me today.
Jessica (34m 60s):
Thank you so much for having me, Phil.
Shares for Beginners is for information and educational purposes only. It isn’t financial advice, and you shouldn’t buy or sell any investments based on what you’ve heard here. Any opinion or commentary is the view of the speaker only not Shares for Beginners. This podcast doesn’t replace professional advice regarding your personal financial needs, circumstances or current situation