The first Little Pig built his house using straws and it was a nice house. But when the bad wolf came and blew it hard and the straw house collapsed and the first little pig ran away. When we first buy a particular stock, it is no difference from what the first little pig did - building his house with straw. The particular stock that we have just bought is in the weakest position and facing the highest. risk It is not sitting on any past realized profit except facing potential realized loss or already nursing the sorrow of paper losses.
The second Little Pig built his house using woods and it was a better and stronger house. But when the bad wolf came and blew it hard but the wolf blew very hard to blow the house down. When we buy back that particular stock again on pull back or correction, it is no difference from what the second little pig did - building his house with wood. Now, this particular stock that we have just bought is in a stronger position and facing lower risk as it is now sitting on some realized profit and it will take more downside for us to sit on any Nett unrealized losses.
The third Little Pig built his house using bricks and it was a very strong house. But when the bad wolf came and blew it hard, harder and hardest but the brick house remained steady. After a number of successful stock transactions, we may have acquired a new pillow stock and we will never lose our capital anymore. It is a strong and steady house for all the three little pigs to live happily ever after.
http://createwealth8888.blogspot.com/2009/05/investment-by-nature-is-risky.html
So are you the third Little Pig?
Tuesday, 10 November 2009
DOW - Dow Ends at New Highs for Year After G20 Pledge
http://createwealth8888.blogspot.com/2009/11/dow-clearing-last-major-resistance-soon.html
What are you seeing?
DOW is breaking the last resistance and at same time facing panic profit taking soon?
Monday, 9 November 2009
Wealth Or Financial Freedom Doesn't Just Happen!
Some 15 years ago, the official retirement age in Singapore was 55. One day at one of my former big boss’s farewell dinner, he said something and at that time I didn't really understand what he was preaching?
It was many years after that I realized the truth of what he had said.
He said at his farewell speech something like this if I could recall it correctly.
"I chose to retire at 50 as I think I have made enough to last me for my life time. I want to travel and see more of the world when I am still healthy and can move easily. I didn't decide to retire suddenly at 50, but actually I plan to retire at 50 many, many years back."
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I think I started to plan for early retirement a bit too late in 40s and I congratulate those in 30s and late 20s really start to plan for their early retirement. Well done!
It was many years after that I realized the truth of what he had said.
He said at his farewell speech something like this if I could recall it correctly.
"I chose to retire at 50 as I think I have made enough to last me for my life time. I want to travel and see more of the world when I am still healthy and can move easily. I didn't decide to retire suddenly at 50, but actually I plan to retire at 50 many, many years back."
Can you see the world when you become like this?
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I think I started to plan for early retirement a bit too late in 40s and I congratulate those in 30s and late 20s really start to plan for their early retirement. Well done!
Semb Corp: Contra $3.34, ROC 3.1%
Hope to gather more feathers for a bigger pillow soon ...
Round 50: ROC 3.1%, 6 days, B $3.22 S $3.34
Round 49: ROC 7.9%, 91 day, B $3.14 S $3.41
Round 50: ROC 3.1%, 6 days, B $3.22 S $3.34
Round 49: ROC 7.9%, 91 day, B $3.14 S $3.41
Sunday, 8 November 2009
All work sucks?
http://sgfinancialfreedom.blogspot.com/2009/10/conversation-with-millionaire.html
All work sucks. It is how much you are compensated for it in monetary terms that matters.
Work Sucks: That is the reason why we need Labor Day. One full day to relax away from work and count the hours until you’re forced to return to your joyless, monotonous job that sucks.
Another important day that you must stay away from work. It is your Birthday!
Who are the people likely to shout work sucks?
All work sucks. It is how much you are compensated for it in monetary terms that matters.
Work Sucks: That is the reason why we need Labor Day. One full day to relax away from work and count the hours until you’re forced to return to your joyless, monotonous job that sucks.
Another important day that you must stay away from work. It is your Birthday!
Who are the people likely to shout work sucks?
May be those people in the Left Quadrant are most likely to shout work sucks and it is not surprisely to include self-employed like taxi-drivers, hawkers, private tutors, dentists, etc. My ex-classmate who is self-employed dentist also say that his work sucks - working a 7-day week and long hours and he is hoping for an early retirement.
How often do you hear those people in the Right Quadrant shout work sucks? May be these people don't really use their own human labour intensively; but leverage on others and their capital to get works done so they don't really feel work sucks.
So follow Rich Dad Poor Dad's advice, try to spend less time and energy in the Left Quadrant and move more into the Right Quadrant, and then you don't need to look forward to the next Labour Day.
Becoming A Millionaire?
Three possible ways to become a Millionaire:
The Luckiest Way
The Nicest Way
Bad news is that not many of us are born lucky to have rich parents who can pass us.
The Luckiest Way
Bad news is that we can wait till the day we die and God of Fortune still never come like in the case of my parents and my father-in-law.
The Nicest Way
Gift from parents and becoming instant Millionaire
Bad news is that not many of us are born lucky to have rich parents who can pass us.Some of us already feel so lucky if parents don't leave behind debts for us to clear.
The Hardest Way
Making your millions from the market:
Unfortunately, this is the hardest, toughest, and longest journey to become millionaire.
Bad news is that if you make big investment mistakes, then this can happen:
I am trying to do either the Luckiest way or the Hardest Way. Wish me luck!
Portfolio Management - Asset Allocation, Diversification, and Rebalancing
http://createwealth8888.blogspot.com/2009/11/portfolio-management-measuring-success.html
http://createwealth8888.blogspot.com/2009/11/beginners-guide-to-asset-allocation.html
Let recall what were discussed in the earlier posts:
The Magic of Diversification.
The practice of spreading money among different investments to reduce risk is known as diversification. By picking the right group of investments, you may be able to limit your losses and reduce the fluctuations of investment returns without sacrificing too much potential gain.
Asset Allocation 101
Asset allocation involves dividing an investment portfolio among different asset categories, such as stocks, bonds, and cash. The process of determining which mix of assets to hold in your portfolio is a very personal one. The asset allocation that works best for you at any given point in your life will depend largely on your time horizon and your ability to tolerate risk.
In his classic book "The Intelligent Investor," Benjamin Graham -- Mr. Buffett's mentor -- advised splitting your money equally between stocks and bonds. Graham added that your stock proportion should never go below 25% (when you think stocks are expensive and bonds are cheap) or above 75% (when stocks seem cheap).
Graham's rule remains a good starting point even today. If time turns out to be your enemy instead of your friend, you will be very glad to have some of your money elsewhere.
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CreateWealth8888:
So my friend, asset allocation, diversification, and rebalancing can be very personal and you must find the right mix according to the size of your nett worth.
I just cannot follow Classic or Graham's advice into Stocks and Bonds as I don't have a Private Banker to advise me on the timely availability of good yield bonds that on private fire sale. But, I do have a "mini bond" approach (I know what you are thinking, it is definitely not the toxic Lehman Brothers MiniBonds. LOL).
Why Bonds?
Typically, bonds pay interest semiannually, which means they can provide a predictable income stream. Many people invest in bonds for that expected interest income and also to preserve their capital investment
My "MiniBond" Approach:
MiniBond = CPF Ordinary Account + Pillow Stocks+ Dividends From Pillow Stocks
So my "MiniBond" has the similar effect of expected interest income (2.5% interest rate from CPF OA account and average of more than 5% yield from pillow stocks) and capital preservation (pillow stocks are cost-free so there is no capital at risk)
Follow the Golden Rule:
Asset allocation involves dividing an investment portfolio among different asset categories, such as stocks, bonds, and cash
This is what I have done:
With the personal choice of mix of asset allocation, I will be able to limit losses in the stock market and reduce the fluctuations of stock investment returns without sacrificing too much potential gain and can still expect some regular passive income that will meet the minimum cost of living expenese.
http://createwealth8888.blogspot.com/2009/11/beginners-guide-to-asset-allocation.html
Let recall what were discussed in the earlier posts:
The Magic of Diversification.
The practice of spreading money among different investments to reduce risk is known as diversification. By picking the right group of investments, you may be able to limit your losses and reduce the fluctuations of investment returns without sacrificing too much potential gain.
Asset Allocation 101
Asset allocation involves dividing an investment portfolio among different asset categories, such as stocks, bonds, and cash. The process of determining which mix of assets to hold in your portfolio is a very personal one. The asset allocation that works best for you at any given point in your life will depend largely on your time horizon and your ability to tolerate risk.
In his classic book "The Intelligent Investor," Benjamin Graham -- Mr. Buffett's mentor -- advised splitting your money equally between stocks and bonds. Graham added that your stock proportion should never go below 25% (when you think stocks are expensive and bonds are cheap) or above 75% (when stocks seem cheap).
Graham's rule remains a good starting point even today. If time turns out to be your enemy instead of your friend, you will be very glad to have some of your money elsewhere.
---------------------------------------------------------------------
CreateWealth8888:
So my friend, asset allocation, diversification, and rebalancing can be very personal and you must find the right mix according to the size of your nett worth.
I just cannot follow Classic or Graham's advice into Stocks and Bonds as I don't have a Private Banker to advise me on the timely availability of good yield bonds that on private fire sale. But, I do have a "mini bond" approach (I know what you are thinking, it is definitely not the toxic Lehman Brothers MiniBonds. LOL).
Why Bonds?
Typically, bonds pay interest semiannually, which means they can provide a predictable income stream. Many people invest in bonds for that expected interest income and also to preserve their capital investment
My "MiniBond" Approach:
MiniBond = CPF Ordinary Account + Pillow Stocks+ Dividends From Pillow Stocks
So my "MiniBond" has the similar effect of expected interest income (2.5% interest rate from CPF OA account and average of more than 5% yield from pillow stocks) and capital preservation (pillow stocks are cost-free so there is no capital at risk)
Follow the Golden Rule:
Asset allocation involves dividing an investment portfolio among different asset categories, such as stocks, bonds, and cash
This is what I have done:
Saturday, 7 November 2009
I Know You Love Your Job
I know you love your job; but, for how long will you keep working hard on it and then slowly, slowly and slowly you will turn into ......... http://www.beerorkid.com/avatars/love_your_job.gif
Oh my goodness!
Oh my goodness!
How Long Will It Take For the Job Market To Fully Recover?
Posted by davemanuel.com
With the unemployment rate in the United States currently ticking upwards towards the 10% mark, many people are starting to ask the question - how long will it take for the jobless rate to fall back to pre-recession levels?
There is no easy way to predict this - there are so many different variables involved that trying to answer this question becomes a futile exercise.
However, one thing that we CAN do is look at past recessions in the United States and see how long it took the jobless rate to recover to pre-recession levels.
In this article, we'll be looking at four different recessions. They are:
2001-02 Recession (post 9/11)
1990-91 Recession (Gulf War era)
1981-82 Recession (Stagflation)
The Great Depression
1. 2001-02 Recession. This recession (technically) lasted from March '01 until November '01.
The United States went through a tremendous period of upheaval during this time (dot-com bust, 9/11, war in Afghanistan).
However, in terms of jobless rates in the United States, this recession was as weak as they come.
Prior to the recession starting in March of '01, the unemployment rate in the United States was around 4.3-4.4%.
The rate ticked as high as 6.3% in June of 2003, and then proceeded to steadily trend lower over the following years.
By late 2006 (October of 2006 to be precise), the unemployment rate in the United States had returned to pre-recession levels.
So, from start to finish, the unemployment rate took approximately 6 1/2 years to recover.
2. 1990-91 Recession. This recession lasted from July of 1990 until March of 1991.
Prior to the recession starting, the jobless rate in the United States was around 5.2%.
The jobless rate ended up hitting a high of 7.8% in June of 1992 before starting to trend lower.
The unemployment rate in the United States didn't fully recover until August of 1996 (5.1%).
Total Recovery Time: Just over six years.
3. 1981-82 Recession. This recession lasted from July 1981 until November of 1982.
In terms of overall severity, this recession is much more comparable to what we are currently going through.
Prior to this recession taking place, the US economy already had its share of problems (namely, the 1979 energy crisis that caused inflation and jobless rates in the United States to spike higher).
Before the recession technically got underway in July of 1981, the jobless rate in the United States was already up to 7.6%.
This helps to create a bit of an unfair comparison since unemployment rates in the country were already so high.
Because of that, we'll take the rate from April of 1979 (5.8%) and examine how long it took to fall back to this rate from July 1981 onwards.
The unemployment rate in the United States spiked to 10.8% in late 1982. The economy was in shambles at the time due to high inflation which was brought on by high energy prices.
The economy did recover though, helping Ronald Reagan to sweep to victory for a second term.
The unemployment rate in the United States dropped to 5.8% in November of 1987, meaning that it took just over 6 1/2 years to fully recover.
4. The Great Depression. Some people feel as though the Great Depression lasted from 1929 until 1932-33, however most feel as though it extended right through until the onset of WWII in 1939.
Prior to the "Great Depression", the unemployment rate in the United States was 3.14% (1929).
Just a few short years later, the unemployment rate in the US had topped 20% (23.6% in 1932, 24.9% in 1933).
The entry of United States into WWII really helped to dramatically decrease the unemployment rate in the country, and by 1943, the jobless rate was under 2%.
The "Great Recession" started in December of 2007.
In November of 2007, the unemployment rate in the United States was 4.7%.
Economists expect that the rate will top 10% in early 2010 before starting to trend lower.
How long will it take until the unemployment rate in the United States is below 5% again? It's tough to say, but based on past recessions, we could be in for a bit of a wait.
Will we see a full recovery by mid-2014? Earlier than that? Later?
Source: Historical Unemployment Rates in the United States
Wikipedia.org - List of Recessions in the United States
------------------------------------------------------------------------------------------------
Createwealth8888:
Hmm... Look like Bulls don't depend on better employment rate to charge up.
With the unemployment rate in the United States currently ticking upwards towards the 10% mark, many people are starting to ask the question - how long will it take for the jobless rate to fall back to pre-recession levels?
There is no easy way to predict this - there are so many different variables involved that trying to answer this question becomes a futile exercise.
However, one thing that we CAN do is look at past recessions in the United States and see how long it took the jobless rate to recover to pre-recession levels.
In this article, we'll be looking at four different recessions. They are:
2001-02 Recession (post 9/11)
1990-91 Recession (Gulf War era)
1981-82 Recession (Stagflation)
The Great Depression
1. 2001-02 Recession. This recession (technically) lasted from March '01 until November '01.
The United States went through a tremendous period of upheaval during this time (dot-com bust, 9/11, war in Afghanistan).
However, in terms of jobless rates in the United States, this recession was as weak as they come.
Prior to the recession starting in March of '01, the unemployment rate in the United States was around 4.3-4.4%.
The rate ticked as high as 6.3% in June of 2003, and then proceeded to steadily trend lower over the following years.
By late 2006 (October of 2006 to be precise), the unemployment rate in the United States had returned to pre-recession levels.
So, from start to finish, the unemployment rate took approximately 6 1/2 years to recover.
2. 1990-91 Recession. This recession lasted from July of 1990 until March of 1991.
Prior to the recession starting, the jobless rate in the United States was around 5.2%.
The jobless rate ended up hitting a high of 7.8% in June of 1992 before starting to trend lower.
The unemployment rate in the United States didn't fully recover until August of 1996 (5.1%).
Total Recovery Time: Just over six years.
3. 1981-82 Recession. This recession lasted from July 1981 until November of 1982.
In terms of overall severity, this recession is much more comparable to what we are currently going through.
Prior to this recession taking place, the US economy already had its share of problems (namely, the 1979 energy crisis that caused inflation and jobless rates in the United States to spike higher).
Before the recession technically got underway in July of 1981, the jobless rate in the United States was already up to 7.6%.
This helps to create a bit of an unfair comparison since unemployment rates in the country were already so high.
Because of that, we'll take the rate from April of 1979 (5.8%) and examine how long it took to fall back to this rate from July 1981 onwards.
The unemployment rate in the United States spiked to 10.8% in late 1982. The economy was in shambles at the time due to high inflation which was brought on by high energy prices.
The economy did recover though, helping Ronald Reagan to sweep to victory for a second term.
The unemployment rate in the United States dropped to 5.8% in November of 1987, meaning that it took just over 6 1/2 years to fully recover.
4. The Great Depression. Some people feel as though the Great Depression lasted from 1929 until 1932-33, however most feel as though it extended right through until the onset of WWII in 1939.
Prior to the "Great Depression", the unemployment rate in the United States was 3.14% (1929).
Just a few short years later, the unemployment rate in the US had topped 20% (23.6% in 1932, 24.9% in 1933).
The entry of United States into WWII really helped to dramatically decrease the unemployment rate in the country, and by 1943, the jobless rate was under 2%.
The "Great Recession" started in December of 2007.
In November of 2007, the unemployment rate in the United States was 4.7%.
Economists expect that the rate will top 10% in early 2010 before starting to trend lower.
How long will it take until the unemployment rate in the United States is below 5% again? It's tough to say, but based on past recessions, we could be in for a bit of a wait.
Will we see a full recovery by mid-2014? Earlier than that? Later?
Source: Historical Unemployment Rates in the United States
Wikipedia.org - List of Recessions in the United States
------------------------------------------------------------------------------------------------
Createwealth8888:
Hmm... Look like Bulls don't depend on better employment rate to charge up.
DBS Q3 profit up 49%
Net interest income - revenue from borrowers after interest is paid to depositors - rose 6 per cent to $1.1 billion as net interest margins rose to 2.03 per cent from 1.99 per cent.
Deposits increased 1 per cent to $180.2 billion, with the mix shifting towards current and savings accounts.
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Did you see the huge amount of cash hoarding in the bank? Sooner or later these loss-averse savers are going to get out and move into the stock market in big way to become the next Greater Fools.
Deposits increased 1 per cent to $180.2 billion, with the mix shifting towards current and savings accounts.
-------------------------------------------------------------------------------------
Did you see the huge amount of cash hoarding in the bank? Sooner or later these loss-averse savers are going to get out and move into the stock market in big way to become the next Greater Fools.
DOW - Clearing The Last Major Resistance Soon?
U.S. stocks rose 3 percent for the week after ending Friday's session slightly higher, shrugging off government data showing the unemployment rate hit 10.2 percent -- the highest in 26-1/2 years.
---------------------------------------------------------------------------------
DOW has three positive days and two days closing above 10,000 mark, the job data was really bad but it didn't cause fearful panic selling??? So what does it mean? BUY?
Friday, 6 November 2009
Risky Rio rig business
International drilling contractors invited to bid in a Petrobras tender for up to 28 ultra-deepwater rigs have expressed concern about the economics of building the units in Brazilian shipyards.
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Another positive news for Kep Corp and SML as they already have yards in Brazil and harder for their competitors.
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Another positive news for Kep Corp and SML as they already have yards in Brazil and harder for their competitors.
Who Moves My Market? - Part 5
http://createwealth8888.blogspot.com/2009/11/who-moves-my-market-part-4.html
Price and Volume Action -The Importance of Volume
Why do we buy and sell?
There are only two reasons to buy:
1. Price will stop falling
2. Short covering
There are four reasons to sell:
1. Profit taking
2. Force selling
3. Cut losses
4. Short selling
Price of the stock is telling us what is happening to the stock, but volume tells us how it is happening. Volume reflects the sentiment of buyers and sellers and it then drives the price up or down.
A price rises on heavy volume means buyers exhaust the sellers and buyers are pushing the price higher as they fear of missing out. Likewise, a price declines on heavy volume means sellers exhaust the buyers and the sellers are pushing the price lower as they fear of further losses or fear of losing profit.
Why heavy selling or heavy buying? That is our job to think over it and decide whether we want to join in the action or not?
Another important reason is that technical analysis on charts on low volume stock may be unreliable and so don't try to analyse too much and mislead yourself.
Price and Volume Action -The Importance of Volume
Why do we buy and sell?
There are only two reasons to buy:
1. Price will stop falling
2. Short covering
There are four reasons to sell:
1. Profit taking
2. Force selling
3. Cut losses
4. Short selling
Price of the stock is telling us what is happening to the stock, but volume tells us how it is happening. Volume reflects the sentiment of buyers and sellers and it then drives the price up or down.
A price rises on heavy volume means buyers exhaust the sellers and buyers are pushing the price higher as they fear of missing out. Likewise, a price declines on heavy volume means sellers exhaust the buyers and the sellers are pushing the price lower as they fear of further losses or fear of losing profit.
Why heavy selling or heavy buying? That is our job to think over it and decide whether we want to join in the action or not?
Another important reason is that technical analysis on charts on low volume stock may be unreliable and so don't try to analyse too much and mislead yourself.
Is Your Company Hoarding Too Much Cash For You? - Part 2
Someone said this in his blog:
Are my initial reasons for holding on to these stocks like: Huge cash reserves?
There is a saying: An Idiot and his money will soon part. Similarly, I will say: A Dumb CEO and the Company's huge cash reserves will soon part.
We may need to understand the perspective of CASH in a corporate environment. Cash is a just an instrument for the company for the purpose to:
• fund day-to-day expenses or in another word to manage a healthy cash flow.
• serve as cushion during bad times
• deploy excess cash as capital efficiently and effectively to fund future growth and to generate more cash.
Can investing be made so simple by just looking at a company's huge cash reserve? I wish too.
http://createwealth8888.blogspot.com/2009/10/is-your-company-hoarding-too-much-cash.html
Do you still see huge cash hoarding as a buy signal?
Are my initial reasons for holding on to these stocks like: Huge cash reserves?
There is a saying: An Idiot and his money will soon part. Similarly, I will say: A Dumb CEO and the Company's huge cash reserves will soon part.
We may need to understand the perspective of CASH in a corporate environment. Cash is a just an instrument for the company for the purpose to:
• fund day-to-day expenses or in another word to manage a healthy cash flow.
• serve as cushion during bad times
• deploy excess cash as capital efficiently and effectively to fund future growth and to generate more cash.
Can investing be made so simple by just looking at a company's huge cash reserve? I wish too.
http://createwealth8888.blogspot.com/2009/10/is-your-company-hoarding-too-much-cash.html
Do you still see huge cash hoarding as a buy signal?
DOW - Back to 10,000 level! Dow Rises Most Since July
The Bulls Never Give Up Actually!
Upward Trend continue....
Thursday, 5 November 2009
Olam - Desperately sold down by BBs again!
Not surprising Olam got sold down again! Classic works by BB?
Who Moves My Market? - Part 4
http://createwealth8888.blogspot.com/2009/11/who-moves-my-market-part-3.html
Support and Resistance
I like the simplicity of support and resistance. It can work because it is based on simple crowd psychology; but, sophisticated traders don’t like to admit it that it can work. Many Gurus have developed so many technical indicators, and every Guru claims their indicators work best. Who should we believe?
If you could predict where the market is heading, you would be a millionaire many times. Unfortunately, no one has developed an indicator that will predict the future. Many indicators have been created that will give you a probable direction of the market. But, the concept of support and resistance have not been claimed to be developed by any Gurus and it can also be predictive and even allow you to queue to buy or sell your stocks well ahead of any other indicators.
Support is a price level where the market has difficulty dipping below it because the demand is sufficiently high at that level. Support levels are always on or below the current price. In other words, the support line is where the price stops falling. But, support can be broken and there can be few more supports when the stock price starts crashing down. It will only stop due to lack of sellers or more willing buyers step in.
Resistance is the opposite of support. It is a price level where the market has difficulty surpassing that price level because the selling forces are strong at that price. Resistance levels are always on or above the current price. Same as support, resistance can be broken and there can be more than one resistance for you to take partial or full profit.
It is surprisingly simple, and can be effective way to trade. Buy near the support lines, and sell near the resistance lines. The only problem is which support or resistance line as there can be more than one? Train hard to see one. Cheers!
Support and Resistance
I like the simplicity of support and resistance. It can work because it is based on simple crowd psychology; but, sophisticated traders don’t like to admit it that it can work. Many Gurus have developed so many technical indicators, and every Guru claims their indicators work best. Who should we believe?
If you could predict where the market is heading, you would be a millionaire many times. Unfortunately, no one has developed an indicator that will predict the future. Many indicators have been created that will give you a probable direction of the market. But, the concept of support and resistance have not been claimed to be developed by any Gurus and it can also be predictive and even allow you to queue to buy or sell your stocks well ahead of any other indicators.
Support is a price level where the market has difficulty dipping below it because the demand is sufficiently high at that level. Support levels are always on or below the current price. In other words, the support line is where the price stops falling. But, support can be broken and there can be few more supports when the stock price starts crashing down. It will only stop due to lack of sellers or more willing buyers step in.
Resistance is the opposite of support. It is a price level where the market has difficulty surpassing that price level because the selling forces are strong at that price. Resistance levels are always on or above the current price. Same as support, resistance can be broken and there can be more than one resistance for you to take partial or full profit.
It is surprisingly simple, and can be effective way to trade. Buy near the support lines, and sell near the resistance lines. The only problem is which support or resistance line as there can be more than one? Train hard to see one. Cheers!
Wednesday, 4 November 2009
Kep Corp: DnB NOR Markets1st Asian Investor Conference 2009
Securing Stable Income Stream
Createweath8888:
So the company is considering to divest assets into Keppel Green Trust to unlock shareholders' value? But, it may not happen any sooner.
- Acquisition of Senoko Incineration Plant
- Only private operator of incineration plants for municipal solid waste in Singapore
- Generates strong cash flow and recurring earnings
- Seed asset for Keppel Green Trust
Createweath8888:
So the company is considering to divest assets into Keppel Green Trust to unlock shareholders' value? But, it may not happen any sooner.
Who Moves My Market? - Part 3
http://createwealth8888.blogspot.com/2009/10/who-moves-my-market_24.html
Not really using technical indicators? Why?
I am a Simple Simon and have a simple Lizard Brain and cannot grasp complex relationships among indicators so I focus mainly on Price and Volume, Support & Resistance, and Trend lines.
Understanding Volume?
Increase in Volume
• Confirmation
• Exhaustion
Decrease in Volume
• Congestion
• Lack Of Interest
Support & Resistance:
http://www.investopedia.com/articles/technical/061801.asp
Trend Lines
http://en.wikipedia.org/wiki/Trend_lines_(technical_analysis)
Not really using technical indicators? Why?
I am a Simple Simon and have a simple Lizard Brain and cannot grasp complex relationships among indicators so I focus mainly on Price and Volume, Support & Resistance, and Trend lines.
Understanding Volume?
Increase in Volume
• Confirmation
• Exhaustion
Decrease in Volume
• Congestion
• Lack Of Interest
Support & Resistance:
http://www.investopedia.com/articles/technical/061801.asp
Trend Lines
http://en.wikipedia.org/wiki/Trend_lines_(technical_analysis)
The Cruel Math of Big Losses - Part 2
http://createwealth8888.blogspot.com/2009/11/cruel-math-of-big-losses.html
Now, you are aware of the potential pain and agony of cruel math of big losses. You really have to do some soul searching within your inner self and answer honestly how much losses you can really tolerate to lose.
In deciding what's best for you without losing your sleep at nights, you may want to consider the following data taken from The Intelligent Asset Allocator: How to Build Your Portfolio to Maximize Returns and Minimize Risk, written by William Bernstein:
Now, you are aware of the potential pain and agony of cruel math of big losses. You really have to do some soul searching within your inner self and answer honestly how much losses you can really tolerate to lose.
In deciding what's best for you without losing your sleep at nights, you may want to consider the following data taken from The Intelligent Asset Allocator: How to Build Your Portfolio to Maximize Returns and Minimize Risk, written by William Bernstein:
Tuesday, 3 November 2009
SCI - Got back @ $3.22
Got back it @ $3.22 during today market selldown. What's happening?
Last sold @ $3.41
http://createwealth8888.blogspot.com/2009/08/semb-corp-sold-341-roc-79.html
The Cruel Math of Big Losses
If your stock price declines 10%, it takes about an 11% gain in stock price to break even.
If the drop in stock price is 20%, you need a 25% gain to recover.
A fall of one-third requires a rebound of 50%.
And if your stock price falls by 50%, "you need a double," or a 100% rise.
Can you see how cruel Math of Big losses?
So ask yourself how often and how long will the stock price take to double?
You will feel the pain and agony of sitting on big losses even it is just paper losses. See the table below for how much gain in stock price will it take to recover?
If the drop in stock price is 20%, you need a 25% gain to recover.
A fall of one-third requires a rebound of 50%.
And if your stock price falls by 50%, "you need a double," or a 100% rise.
Can you see how cruel Math of Big losses?
So ask yourself how often and how long will the stock price take to double?
You will feel the pain and agony of sitting on big losses even it is just paper losses. See the table below for how much gain in stock price will it take to recover?
Monday, 2 November 2009
CapitaLand Malls Unit Seeks $2 Billion in Initial Stock Offer
By Philip Lagerkranser Nov. 2 (Bloomberg) — CapitaLand Ltd., Southeast Asia’s largest developer, is seeking S$2.78 billion ($1.98 billion) from the listing of its CapitaMalls Asia Ltd. unit. Some 1.165 billion shares were being offered at S$1.98 to S$2.39 apiece, according to e-mails sent to investors by sale arrangers Credit Suisse Group AG and Deutsche Bank AG.
Are you seeing CPL as half-empty or half-full?
Retirement Income - Risk Pyramid
by Mary Beth Franklin
This alternative model for retirement withdrawals delivers current income and future returns.
With a traditional risk-pyramid model, you use your safest investments -- such as bank accounts and certificates of deposit -- to build the foundation of your portfolio. Then you layer riskier investments on top, adding bonds, followed by various types of stock funds and alternative investments that might include commodities and real estate. Diversification spreads your risk, but it doesn't guarantee that you won't lose money.
By flipping the risk pyramid on its side, you can align your retirement timeline with your investment strategy. Fund your immediate income needs with risk-free investments, such as CDs or an immediate annuity, and gradually increase the risk (and potential return) of other investments. Every five years, use investment returns to replenish your guaranteed income.
CreateWealth8888's Retirement Income model:
Some ideas for retirement planning ..
You may be able to retire with $1M Retirement Fund at 55 if your yearly expenses is at 4% of your retirement fund i.e $40K with the following assumptions as follows:
1) Inflation Rate at 3%
2) CPF Life providing yearly income at $12K (assuming full minimum sum)
3) CPF OA balance at $300K to earn compound Interest Rate at 2.5%
4) $500K to invest in stocks with annual success rate at 40% of $500K providing 5% return (60% of the stocks under water and didn't provide any positive returns during the year)
5) $200K cash as liquidity earning compound interest rate at 1%
http://createwealth8888.blogspot.com/2009/09/9-in-10-sporeans-do-not-feel-well.html
This alternative model for retirement withdrawals delivers current income and future returns.
By flipping the risk pyramid on its side, you can align your retirement timeline with your investment strategy. Fund your immediate income needs with risk-free investments, such as CDs or an immediate annuity, and gradually increase the risk (and potential return) of other investments. Every five years, use investment returns to replenish your guaranteed income.
CreateWealth8888's Retirement Income model:
Some ideas for retirement planning ..
You may be able to retire with $1M Retirement Fund at 55 if your yearly expenses is at 4% of your retirement fund i.e $40K with the following assumptions as follows:
1) Inflation Rate at 3%
2) CPF Life providing yearly income at $12K (assuming full minimum sum)
3) CPF OA balance at $300K to earn compound Interest Rate at 2.5%
4) $500K to invest in stocks with annual success rate at 40% of $500K providing 5% return (60% of the stocks under water and didn't provide any positive returns during the year)
5) $200K cash as liquidity earning compound interest rate at 1%
http://createwealth8888.blogspot.com/2009/09/9-in-10-sporeans-do-not-feel-well.html
Inflation Risk and Sing Dollar Currency Risks - Part 2
http://createwealth8888.blogspot.com/2009/11/inflation-risk-and-sing-dollar-currency.html
If you are starting up a young family with kids, your family inflation rate will definitely be much higher. You can control maintain or may even reduce your personal inflation rate; but, you cannot maintain your kids inflation rate. Your expenses on your kids are growing each year. So beware and think of ways to fight the inflation rate of your kids.
Better returns from investment? But it can be a double edged sword if you failed in your investment strategies.
If you are starting up a young family with kids, your family inflation rate will definitely be much higher. You can control maintain or may even reduce your personal inflation rate; but, you cannot maintain your kids inflation rate. Your expenses on your kids are growing each year. So beware and think of ways to fight the inflation rate of your kids.
Better returns from investment? But it can be a double edged sword if you failed in your investment strategies.
Sunday, 1 November 2009
Inflation Risk and Sing Dollar Currency Risks
Inflation Risk and Sing Dollar Currency Risks have nothing to do with investing your money or not. It will always be there if you are still alive.
The good news is that through prudent spending your personal inflation and Sing Dollar currency risk may be lower than the market or population level. Cheers!
The good news is that through prudent spending your personal inflation and Sing Dollar currency risk may be lower than the market or population level. Cheers!
Why Do We Still Need To Read Charts? - Part 2
http://createwealth8888.blogspot.com/2009/10/why-do-we-still-need-to-read-charts.html
I am hearing it again. Charts are irrelevant!
Who's Anthony Bolton?
In his book - Investing Against the tide.
Read chapter 12 - Technical analysis and the importance of charts.
"The truth is more important than facts" - Frank Lloyd Wright
This is what the chart is telling at the moment - the truth.
If you think you are wiser than the two gentlemen, forget about the book.
The largest companies are often the most complex and also the most difficult to analyze and, with these, the charts can be most useful in indicating something that is being missed.
--------------------------------------------------------------------------------
CreateWealth8888:
I believe only the likes of Warren Buffet may have the means to say that charts are irrelevant. Why?
http://createwealth8888.blogspot.com/2009/08/are-you-buying-into-business-or-just.html
Another thing that really puzzle me most - why do hard core value investors think that by reading charts turn them into traders? LOL
So are you ready to read charts?
I am hearing it again. Charts are irrelevant!
Who's Anthony Bolton?
From Wikipedia, the free encyclopedia
Anthony Bolton (born 7 March 1950) is one of the UK's best known investment fund managers and most successful investors, having managed the Fidelity Special Situations fund from December 1979 to December 2007. Over this 28-year period the fund achieved annualised growth of 19.5%, far in excess of the 13.5% growth of the wider stock exchange, turning a £1,000 investment into £147,000In his book - Investing Against the tide.
Read chapter 12 - Technical analysis and the importance of charts.
"The truth is more important than facts" - Frank Lloyd Wright
This is what the chart is telling at the moment - the truth.
If you think you are wiser than the two gentlemen, forget about the book.
Anthony said:
Although at heart I'm a fundamentalist I have definitely found that the combination of two approaches seems to work better than just one on its own. A few years ago I spoke at a technical analysis conference and said that if I was on a desert island and was only allowed one input for my investment decisions, it would be an updated chart book. I think today I would still be of the same opinion. The trouble with fundamental data is that I can't single out only one source that on its own would be sufficient. I could, if pushed, run a portfolio with just a chart book - although on a desert island, it wouldn't be high up on my list of survival items.
I look at technical situation as a summation of all the fundamental views available on a stock at that particular moment and it can sometimes be a warning signal of problems ahead. In the world where every professional fund managers knows that at least two out of five share picks will not work out as they hoped this is very useful.
--------------------------------------------------------------------------------
CreateWealth8888:
I believe only the likes of Warren Buffet may have the means to say that charts are irrelevant. Why?
http://createwealth8888.blogspot.com/2009/08/are-you-buying-into-business-or-just.html
Another thing that really puzzle me most - why do hard core value investors think that by reading charts turn them into traders? LOL
So are you ready to read charts?
Portfolio Management - Measuring Success
http://createwealth8888.blogspot.com/2009/10/portfolio-management-time-in-market.html
It is easy to measure your financial success in the stock market. You either measure it simply by calculating its Annualized ROC or simplified CAGR method. It is always the financial returns over your investing time units that really counts. Don't you want to be a better investor or you feel good that you are investing your money. That is a world of difference!
Investing can be very frustrating because hard work and long hours of detailed analysis may not necessarily result in good returns. In the stock market, it is not necessary be direct correlation between effort and returns. Unlike in your paid job, the harder you work, your bosses may see it and recognize your effort and may decide to compensate you with higher pay rise and better bonus than your peers. You may even progress faster in the corporate ladder. But, it is not the same for the stock market because stocks and companies do not know you and don't even know that you exist!
The solution is to simply be cognizant of the way the stock market works and to acknowledge that hard work with long hours of detailed analysis may not always result in better returns. But, it may offer you good consolations if you failed in meeting your investment goals. Then you may say to yourself: "Well, I have put in all my heart and effort into my investment. I have failed and I quit!"
I realize that those super investors who reap super returns from the market are those who watch the market with keen eyes and the market becomes part of them, and have the greatest guts to step up to the plates while many others are desperately getting out at all costs. See thesundaytimes, Nov 1, 2009 on invest
“When one door closes, another opens; but we often look so long and so regretfully upon the closed door that we do not see the one which has opened for us.” - Alexander Graham Bell
http://createwealth8888.blogspot.com/2009/10/open-mind-close-mind-open-door-close.html
It is easy to measure your financial success in the stock market. You either measure it simply by calculating its Annualized ROC or simplified CAGR method. It is always the financial returns over your investing time units that really counts. Don't you want to be a better investor or you feel good that you are investing your money. That is a world of difference!
Investing can be very frustrating because hard work and long hours of detailed analysis may not necessarily result in good returns. In the stock market, it is not necessary be direct correlation between effort and returns. Unlike in your paid job, the harder you work, your bosses may see it and recognize your effort and may decide to compensate you with higher pay rise and better bonus than your peers. You may even progress faster in the corporate ladder. But, it is not the same for the stock market because stocks and companies do not know you and don't even know that you exist!
The solution is to simply be cognizant of the way the stock market works and to acknowledge that hard work with long hours of detailed analysis may not always result in better returns. But, it may offer you good consolations if you failed in meeting your investment goals. Then you may say to yourself: "Well, I have put in all my heart and effort into my investment. I have failed and I quit!"
I realize that those super investors who reap super returns from the market are those who watch the market with keen eyes and the market becomes part of them, and have the greatest guts to step up to the plates while many others are desperately getting out at all costs. See thesundaytimes, Nov 1, 2009 on invest
- me and money - veteran investor Gabriel Yap
- small changes - Wee Cho Yaw
“When one door closes, another opens; but we often look so long and so regretfully upon the closed door that we do not see the one which has opened for us.” - Alexander Graham Bell
http://createwealth8888.blogspot.com/2009/10/open-mind-close-mind-open-door-close.html
Saturday, 31 October 2009
Olam Weekly- Will you be desperately sold down once more?
52 Wk High 2.82
52 Wk Low 0.88
52 Wk Avg Vol 6630.58
All Time High 4.1
All Time Low 0.74
Comments Near 52 wk high
Last Close: $2.75
The Market-oriented Economy with Church and the Market-oriented Economy without Church
Posted by ChinaSource Wednesday, 16 September 2009
From the Hebrew, God’s perspective, God is not the creator of truth, but Truth itself. One’s knowledge of Truth is only from God’s inspiration. Just like a radio, one cannot receive anything if there is no signal from God. Compared to Absolute Truth itself, human knowledge of truth is relative and limited.
The first place I landed in the U. S. was Boston. I could see churches with pinnacle roofs everywhere, more numerous than banks and rice stores in China. In fact, from the east coast to the west, from small towns to cities, one could easily see that most of the buildings were churches. Churches, and only churches, seemed to be the center of America. On Sundays, people on the streets were either going to church or coming back from church.
Americans are not nerds. There must be some reason for the large number of churches and Christian bookstores. The reason is there is a big difference between the market-oriented economy with church and the one without it.
The main goal of a market-oriented economy is to help people get ahead. A market-oriented economy does not take money from investors, but it cannot be responsible for those who choose to lie and harm others in the process. The existence of the market-oriented economy is dangerous because it can be tempting to some to lie and desire to do harm to others for the purpose of profiting by any and all means. This is the trend in China right now. Many Chinese think the market-oriented economy equals making money, and making money always justifies the means.
However, a market-oriented economy with church is different. Are you pursuing honesty? If so, you would know that a product of faith is honesty.
We cannot be sure of individual motive, but most businessmen who regularly attend church practice business with integrity. It is easier for those who have a respect for morality and desire to obey biblical principles than for those who do not. Why is this so? Max Webster, in his book, Ethics and Capitalism, has explained that even though the goal is to accumulate wealth, Christians pursue wealth not for their own benefit but for “God’s Glory” and for an eternal reward. A wealth ethic means that the object of making money is in agreement with its means. To gain wealth through lies or unethical methods is to disobey God and brings damnation upon oneself. Christians have understood the right way to become wealthy and in the process have become men and women of character and noble thinking. From this point of view, the market-oriented economy is most effective when it is combined with market ethics, just like good horses with good saddles.
From a human perspective, the most successful business model in the market-oriented economy is one combined with church. The largest and sweetest fruit becomes the end product only when we do business in the market-oriented economy in an honest manner and not at the expense of others.
The other big difference between a market-oriented economy with church and one without is that the former abides by a set of common rules. Those who share the same faith have a tendency to trust each other. I found a paper which illustrates this on religion and economics in NBER which had done many case studies in over 100 countries. One discovery made was that in the religious countries the unwritten rules were much more common than in the non-religious countries. Law is the strongest support that churches offer behind the market rules. The fact that the market-oriented economy with church is more open has been proven by that NBER paper. The reason is that under God, the core spirit of equality and great love bring people openness, forgiveness and respect.
Whether there is a church or not can influence the outcome of history. Before the beginning Word, all we need to do is to choose. For example, to choose to believe in God is one response, but to choose not to believe in God is another response. To choose to believe in God and follow him enthusiastically is one response, and to choose to believe in God but not to follow him is the other response. How one views the development of life, the world, country and business affects many things. There is a story to explain what we have discussed above, told by one of my business friends.
During World War II, Japanese fighter pilots were able to fly their planes higher, faster and better than the American ones, but the Japanese were still beaten by the Americans. Of course, there are many reasons for this, but one important reason is often overlooked. Americans valued life more than the Japanese. The Japanese Air Force believed in “bushido” (the warrior spirit) where pilots would sacrifice their lives for their country. The Americans, under a Judeo-Christian influence, felt that life was very valuable and fragile. As the first-string Japanese pilots continued to die for the honor of the emperor of Japan, the American forces used their best pilots as instructors. While the Japanese focused on flight speed and height and encouraged pilots to fight to the death, the Americans spent large amounts of money to build heavy, slow but thick planes so that those planes could protect the pilots’ lives. As a result, the American pilots kept their lives, but the Japanese pilots were gradually defeated, allowing the Americans to win the war.
Another important impact widens the balance between the rich and poor. Max says it is more difficult for a rich man to enter heaven than for an elephant to go through the eye of a needle. Those who show off their wealth use their money improperly and that is not pleasing to God. For a sincere rich Christian, it is another case. His faith tells him that gaining wealth should only be for God’s glory. He is accountable to God and must use the money wisely. Remaining humble is what earns God’s praises. Therefore, in the U.S., we see wealthy people who have donated ten percent of their property to the church and have shared their money with other believers. We see those who are at the top of the wealth list and are also at the top of the donation list. The relationship between the poor and the rich is not incompatible.
Looking back, there was an old Chinese man who swung his hand and said China allowed a few people to gain wealth first. However, how did those few people use their money? First, they renovated their ancestors’ tombs, which was a typical event in the 1980s. Secondly, they entered into sexual relationships with other women which is still happening today. Thirdly, some of them built homes the size of the White House. Fourthly, we see some of this nouveau riche traveling all over the world with their money. However, we know God is not pleased by any of these ungodly behaviors. Without God’s restraint, all these phenomena would occur quite often. Such indulgence and lust inevitably cause others’ wrath and God’s punishment. What should we do about it? In my opinion, we all need to spend our time reading the Bible.
From Boston to Indiana, wandering throughout the grand land of North America, listening to the profound ringing of church bells, I could not help thinking of an old poem written by a passionate poet many years ago. It goes as follows:
Fear God’s power
Fear lightning
Also fear thunder in the sky
Only with a fearful heart, can one be saved. Only with faith, can the market-oriented economy retain its soul.
This author, Ph.D. is a professor of Economics at Beijing Science and Technology University. He is also Executive Director of Cypress Leadership Institute. He and his wife have two children and live in Beijing.
Used with permission from Esquire magazine.
------------------------------------------------------------------------------------------------
CreateWealth8888:
Capitalism without under the guidance of faith and fear of the everlasting after-life punishment will finally become EVIL as there is nothing to stop it to become one.
From the Hebrew, God’s perspective, God is not the creator of truth, but Truth itself. One’s knowledge of Truth is only from God’s inspiration. Just like a radio, one cannot receive anything if there is no signal from God. Compared to Absolute Truth itself, human knowledge of truth is relative and limited.
The first place I landed in the U. S. was Boston. I could see churches with pinnacle roofs everywhere, more numerous than banks and rice stores in China. In fact, from the east coast to the west, from small towns to cities, one could easily see that most of the buildings were churches. Churches, and only churches, seemed to be the center of America. On Sundays, people on the streets were either going to church or coming back from church.
Americans are not nerds. There must be some reason for the large number of churches and Christian bookstores. The reason is there is a big difference between the market-oriented economy with church and the one without it.
The main goal of a market-oriented economy is to help people get ahead. A market-oriented economy does not take money from investors, but it cannot be responsible for those who choose to lie and harm others in the process. The existence of the market-oriented economy is dangerous because it can be tempting to some to lie and desire to do harm to others for the purpose of profiting by any and all means. This is the trend in China right now. Many Chinese think the market-oriented economy equals making money, and making money always justifies the means.
However, a market-oriented economy with church is different. Are you pursuing honesty? If so, you would know that a product of faith is honesty.
We cannot be sure of individual motive, but most businessmen who regularly attend church practice business with integrity. It is easier for those who have a respect for morality and desire to obey biblical principles than for those who do not. Why is this so? Max Webster, in his book, Ethics and Capitalism, has explained that even though the goal is to accumulate wealth, Christians pursue wealth not for their own benefit but for “God’s Glory” and for an eternal reward. A wealth ethic means that the object of making money is in agreement with its means. To gain wealth through lies or unethical methods is to disobey God and brings damnation upon oneself. Christians have understood the right way to become wealthy and in the process have become men and women of character and noble thinking. From this point of view, the market-oriented economy is most effective when it is combined with market ethics, just like good horses with good saddles.
From a human perspective, the most successful business model in the market-oriented economy is one combined with church. The largest and sweetest fruit becomes the end product only when we do business in the market-oriented economy in an honest manner and not at the expense of others.
The other big difference between a market-oriented economy with church and one without is that the former abides by a set of common rules. Those who share the same faith have a tendency to trust each other. I found a paper which illustrates this on religion and economics in NBER which had done many case studies in over 100 countries. One discovery made was that in the religious countries the unwritten rules were much more common than in the non-religious countries. Law is the strongest support that churches offer behind the market rules. The fact that the market-oriented economy with church is more open has been proven by that NBER paper. The reason is that under God, the core spirit of equality and great love bring people openness, forgiveness and respect.
Whether there is a church or not can influence the outcome of history. Before the beginning Word, all we need to do is to choose. For example, to choose to believe in God is one response, but to choose not to believe in God is another response. To choose to believe in God and follow him enthusiastically is one response, and to choose to believe in God but not to follow him is the other response. How one views the development of life, the world, country and business affects many things. There is a story to explain what we have discussed above, told by one of my business friends.
During World War II, Japanese fighter pilots were able to fly their planes higher, faster and better than the American ones, but the Japanese were still beaten by the Americans. Of course, there are many reasons for this, but one important reason is often overlooked. Americans valued life more than the Japanese. The Japanese Air Force believed in “bushido” (the warrior spirit) where pilots would sacrifice their lives for their country. The Americans, under a Judeo-Christian influence, felt that life was very valuable and fragile. As the first-string Japanese pilots continued to die for the honor of the emperor of Japan, the American forces used their best pilots as instructors. While the Japanese focused on flight speed and height and encouraged pilots to fight to the death, the Americans spent large amounts of money to build heavy, slow but thick planes so that those planes could protect the pilots’ lives. As a result, the American pilots kept their lives, but the Japanese pilots were gradually defeated, allowing the Americans to win the war.
Another important impact widens the balance between the rich and poor. Max says it is more difficult for a rich man to enter heaven than for an elephant to go through the eye of a needle. Those who show off their wealth use their money improperly and that is not pleasing to God. For a sincere rich Christian, it is another case. His faith tells him that gaining wealth should only be for God’s glory. He is accountable to God and must use the money wisely. Remaining humble is what earns God’s praises. Therefore, in the U.S., we see wealthy people who have donated ten percent of their property to the church and have shared their money with other believers. We see those who are at the top of the wealth list and are also at the top of the donation list. The relationship between the poor and the rich is not incompatible.
Looking back, there was an old Chinese man who swung his hand and said China allowed a few people to gain wealth first. However, how did those few people use their money? First, they renovated their ancestors’ tombs, which was a typical event in the 1980s. Secondly, they entered into sexual relationships with other women which is still happening today. Thirdly, some of them built homes the size of the White House. Fourthly, we see some of this nouveau riche traveling all over the world with their money. However, we know God is not pleased by any of these ungodly behaviors. Without God’s restraint, all these phenomena would occur quite often. Such indulgence and lust inevitably cause others’ wrath and God’s punishment. What should we do about it? In my opinion, we all need to spend our time reading the Bible.
From Boston to Indiana, wandering throughout the grand land of North America, listening to the profound ringing of church bells, I could not help thinking of an old poem written by a passionate poet many years ago. It goes as follows:
Fear God’s power
Fear lightning
Also fear thunder in the sky
Only with a fearful heart, can one be saved. Only with faith, can the market-oriented economy retain its soul.
This author, Ph.D. is a professor of Economics at Beijing Science and Technology University. He is also Executive Director of Cypress Leadership Institute. He and his wife have two children and live in Beijing.
Used with permission from Esquire magazine.
------------------------------------------------------------------------------------------------
CreateWealth8888:
Capitalism without under the guidance of faith and fear of the everlasting after-life punishment will finally become EVIL as there is nothing to stop it to become one.
Mdm. Market Beast (Bull or Bear) - A Formidable Challenge!
Mood Swings during Menopause
Menopause can be a rollercoaster ride for many women - up one day, down the next! You may find your children more annoying than usual or you might fall apart if your coffee's not prepared the right way. Television shows can seem particularly heart wrenching and co-workers especially frustrating. Sometimes the slightest thing will make you fly off the handle, into a fit of rage! Though you may feel out of control, you actually are experiencing one of the most common symptoms of menopause mood swings.
Many writers and people refer to the market as Mr. Market and as He.
No! Market is not a Man.
It is more likely to be a Woman during her Menopause. She is Mdm Market.
She presents a formidable challenge with a rollercoast ride mood swing without obvious symptoms. When you got hit hard by her then only you know why? She swings her mood pretty fast.
Women, if you are approaching mid 40s, do encourage your hubby and kids to read up more on http://www.epigee.org/menopause/mood_swings.html and how I understand my madam?
Market players must also understand that Mdm Market is always in her Menopause and never end. OMG!
Menopause can be a rollercoaster ride for many women - up one day, down the next! You may find your children more annoying than usual or you might fall apart if your coffee's not prepared the right way. Television shows can seem particularly heart wrenching and co-workers especially frustrating. Sometimes the slightest thing will make you fly off the handle, into a fit of rage! Though you may feel out of control, you actually are experiencing one of the most common symptoms of menopause mood swings.
Many writers and people refer to the market as Mr. Market and as He.
No! Market is not a Man.
It is more likely to be a Woman during her Menopause. She is Mdm Market.
She presents a formidable challenge with a rollercoast ride mood swing without obvious symptoms. When you got hit hard by her then only you know why? She swings her mood pretty fast.
Women, if you are approaching mid 40s, do encourage your hubby and kids to read up more on http://www.epigee.org/menopause/mood_swings.html and how I understand my madam?
Market players must also understand that Mdm Market is always in her Menopause and never end. OMG!
2009 October Bear Finally Attacked At The Last Hour! More blood next week?
Shark Attack: Is It Safe to Go Back in the Water?
U.S. Stocks Drop as S&P 500 Ends Streak of Seven Monthly Gains
This is ugly and the magnitude of the drop is scary and now threatens to break the upward momentum. Bad Bear!
Will we see blood at Robinson Road next week? Margin calls??
Friday, 30 October 2009
Is Your Company Hoarding Too Much Cash For You?
Is your company hoarding too much surplus cash and even at good times is also hoarding surplus cash? Good or bad?
I don't think this type of company is any good. Shareholders provide capital to the company and expect the Management and Board to efficiently deploy their capital into businesses to generate better returns for the shareholders and not to save their money in the banks on their behalf.
It is prudent for the company to hoard surplus cash to cushion the company during bad times. But, if the company has been habitually hoarding cash even in pretty good times, it telling us that Management is clueless on how to better deploy the excess capital and the company may have no real growth prospects and can only hoard cash in the banks. Or the company is deemed weak by the Capital markets and the Management knows that they have difficulties to tap into the Capital markets or to raise Equities from the potential investors so they have no choices but to hoard excess capital as cash cushions.
Strong companies with real growth prospects have no problems to tap into the Capital markets or raise Equities from the potential investors to build up cash reserve for strong balance sheet during bad times or to grow the company. The Management of strong companies with real growth prospects will never see the need to hoard excess capital as cash cushions.
So what have you been thinking if your company is helping you to save excess money in the bank? Still a good company? Hmm...
I don't think this type of company is any good. Shareholders provide capital to the company and expect the Management and Board to efficiently deploy their capital into businesses to generate better returns for the shareholders and not to save their money in the banks on their behalf.
It is prudent for the company to hoard surplus cash to cushion the company during bad times. But, if the company has been habitually hoarding cash even in pretty good times, it telling us that Management is clueless on how to better deploy the excess capital and the company may have no real growth prospects and can only hoard cash in the banks. Or the company is deemed weak by the Capital markets and the Management knows that they have difficulties to tap into the Capital markets or to raise Equities from the potential investors so they have no choices but to hoard excess capital as cash cushions.
Strong companies with real growth prospects have no problems to tap into the Capital markets or raise Equities from the potential investors to build up cash reserve for strong balance sheet during bad times or to grow the company. The Management of strong companies with real growth prospects will never see the need to hoard excess capital as cash cushions.
So what have you been thinking if your company is helping you to save excess money in the bank? Still a good company? Hmm...
Why do stock markets exist?
By Richard Field
When a business is started it may run for some time as a private organization. It might be a partnership, a proprietorship, or even incorporated. There are many large and small privately owned organizations in the world today. Sometimes the founders and owners of these organizations want to raise capital for expansion of their business. They would then go to a venture capitalist for an investment. Later on an Initial Public Offering (IPO) could be made in a stock market. In essence, shares of ownership in the company are being offered to the general public.
Why do people buy shares in organizations? Again, the easy answer would be to say "to make money", but that still isn't true. The primary answer is that you buy shares in a company as a way to provide your capital (money you have) for that company to use in pursuit of its objectives. You might buy shares in a hospital because you support their values of taking care of the sick. You might buy shares in a beer distillery because you enjoy their products. Now, in return for providing your money you would like some return. That might be a dividend, a payment for every share you own, let's say $.25. It's like getting interest on a loan. Or, maybe the stock appreciates in value because of underlying inflation in the economy (everything is worth more so your company and its assets are worth more too) or because the management of the company is doing well. For example, sales of beer might be so good that income is higher than expenses and there is a profit being saved or reinvested in the company.
Now it is true that people buy shares in an organization with the hope that they can sell those shares and make a profit. They might care nothing about what the organization does, what business it is in, and how it relates to its community. People who day-trade stocks would fall into this category. They buy now and sell a few minutes to a few hours later. They never expect to actually hold onto stock or become part of the company. This activity is possible given the way stock markets work, and nowadays is easy because of the Internet. But it is not why stock markets were created. The underlying reason for a stock market is to provide a place for you as an individual to invest in organizations and to divest (or sell) that investment should you change your mind.
A common misconception about the stock market is that a rise in the market, let's say of 5%, has "created wealth". This is in the newspapers and on TV all the time. When the stock market drops 5%, analysts will say that there has been a "loss of wealth". It just isn't true. To make this example more particular, analysts love looking at Bill Gates' wealth. They take the number of shares that he owns in Microsoft, and it's a large number because he co-founded the company, and multiply that number by that day's price of Microsoft stock. The answer is in the billions of dollars. Now let's say that Microsoft stock goes up $2 a share. Does that mean that Bill is that much wealthier? No it doesn't ... because Bill isn't selling! Bill Gates started Microsoft in order to provide programming for micro-computers, not to make money on the stock. Yes, it's nice to make money, and it's nice that Microsoft stock has risen, but I don't think that's the fundamental and underlying reason he and Paul Allen started the business. Or when Microsoft stock goes down $2 a share, Bill hasn't lost money either. Think of your house. Let's say it's worth $200,000 today and next year you read in the newspaper that in your neighborhood houses are worth on average $230,000. You haven't made $30,000. You still want to live in your house don't you? Yes you do, just like Bill Gates doesn't sell his shares in Microsoft because they went up $2. He still wants to own his company, to work for it, to make a difference in the world of microcomputers. You could make the $30,000 on your house if you sold, but then you'd need to buy another house and you would have the transaction costs to think about -- realtor fees, lawyer fees, and moving expenses. Two years from now house prices have dropped back to $200,000. Did you lose $30,000? No you didn't. It was all on paper! You're still in your house. Nothing has changed. It's the same with the stock market. It goes up and down but the only losses and gains are from the people who actually bought and sold. And that, compared to the total value of stock, like the total value of houses in a neighborhood, isn't a lot.
Now you would think that the price of a stock would rise when the company was doing well, when they were "making money", when income was greater than expenses. But this isn't always true. Take any one of the many dot com companies formed around the year 2000. Hardly any had more resources flowing in from sales than they had flowing out. The logic of that time, and it is still true in a few cases today, was that there was an Internet land rush going on and companies had to get out there and stake out their claims. If you wanted to claim the .com market for, let's say, selling toys over the web, then you had to spend a lot of money to buy programming staff and equipment to get your .com site up and running. You weren't expected to actually make more money than you spent. And stock prices rose as people who wanted to buy some of that .com stock bid up the price. The price rose not because of underlying fundamentals (the product or service was worth more than it cost to provide). Of course, many of these companies had a burn rate (how fast they went through money) that was so high that they spent all of their venture capital investments before they had any significant revenue stream to speak of. But they didn't actually go bankrupt until the dot com crash hit and it became difficult or impossible to get the next round of funding. The venture capitalists and the stock market simply stopped the flow of money into the organization. People who bought into the .coms were betting that there would be lots of potential in the future. The dot com crash came when it became more clear how hard it would be to realize that potential -- that the costs of doing business on the web are so high that it isn't easy to bring in more revenue than you spend.
When a business is started it may run for some time as a private organization. It might be a partnership, a proprietorship, or even incorporated. There are many large and small privately owned organizations in the world today. Sometimes the founders and owners of these organizations want to raise capital for expansion of their business. They would then go to a venture capitalist for an investment. Later on an Initial Public Offering (IPO) could be made in a stock market. In essence, shares of ownership in the company are being offered to the general public.
Why do people buy shares in organizations? Again, the easy answer would be to say "to make money", but that still isn't true. The primary answer is that you buy shares in a company as a way to provide your capital (money you have) for that company to use in pursuit of its objectives. You might buy shares in a hospital because you support their values of taking care of the sick. You might buy shares in a beer distillery because you enjoy their products. Now, in return for providing your money you would like some return. That might be a dividend, a payment for every share you own, let's say $.25. It's like getting interest on a loan. Or, maybe the stock appreciates in value because of underlying inflation in the economy (everything is worth more so your company and its assets are worth more too) or because the management of the company is doing well. For example, sales of beer might be so good that income is higher than expenses and there is a profit being saved or reinvested in the company.
Now it is true that people buy shares in an organization with the hope that they can sell those shares and make a profit. They might care nothing about what the organization does, what business it is in, and how it relates to its community. People who day-trade stocks would fall into this category. They buy now and sell a few minutes to a few hours later. They never expect to actually hold onto stock or become part of the company. This activity is possible given the way stock markets work, and nowadays is easy because of the Internet. But it is not why stock markets were created. The underlying reason for a stock market is to provide a place for you as an individual to invest in organizations and to divest (or sell) that investment should you change your mind.
A common misconception about the stock market is that a rise in the market, let's say of 5%, has "created wealth". This is in the newspapers and on TV all the time. When the stock market drops 5%, analysts will say that there has been a "loss of wealth". It just isn't true. To make this example more particular, analysts love looking at Bill Gates' wealth. They take the number of shares that he owns in Microsoft, and it's a large number because he co-founded the company, and multiply that number by that day's price of Microsoft stock. The answer is in the billions of dollars. Now let's say that Microsoft stock goes up $2 a share. Does that mean that Bill is that much wealthier? No it doesn't ... because Bill isn't selling! Bill Gates started Microsoft in order to provide programming for micro-computers, not to make money on the stock. Yes, it's nice to make money, and it's nice that Microsoft stock has risen, but I don't think that's the fundamental and underlying reason he and Paul Allen started the business. Or when Microsoft stock goes down $2 a share, Bill hasn't lost money either. Think of your house. Let's say it's worth $200,000 today and next year you read in the newspaper that in your neighborhood houses are worth on average $230,000. You haven't made $30,000. You still want to live in your house don't you? Yes you do, just like Bill Gates doesn't sell his shares in Microsoft because they went up $2. He still wants to own his company, to work for it, to make a difference in the world of microcomputers. You could make the $30,000 on your house if you sold, but then you'd need to buy another house and you would have the transaction costs to think about -- realtor fees, lawyer fees, and moving expenses. Two years from now house prices have dropped back to $200,000. Did you lose $30,000? No you didn't. It was all on paper! You're still in your house. Nothing has changed. It's the same with the stock market. It goes up and down but the only losses and gains are from the people who actually bought and sold. And that, compared to the total value of stock, like the total value of houses in a neighborhood, isn't a lot.
Now you would think that the price of a stock would rise when the company was doing well, when they were "making money", when income was greater than expenses. But this isn't always true. Take any one of the many dot com companies formed around the year 2000. Hardly any had more resources flowing in from sales than they had flowing out. The logic of that time, and it is still true in a few cases today, was that there was an Internet land rush going on and companies had to get out there and stake out their claims. If you wanted to claim the .com market for, let's say, selling toys over the web, then you had to spend a lot of money to buy programming staff and equipment to get your .com site up and running. You weren't expected to actually make more money than you spent. And stock prices rose as people who wanted to buy some of that .com stock bid up the price. The price rose not because of underlying fundamentals (the product or service was worth more than it cost to provide). Of course, many of these companies had a burn rate (how fast they went through money) that was so high that they spent all of their venture capital investments before they had any significant revenue stream to speak of. But they didn't actually go bankrupt until the dot com crash hit and it became difficult or impossible to get the next round of funding. The venture capitalists and the stock market simply stopped the flow of money into the organization. People who bought into the .coms were betting that there would be lots of potential in the future. The dot com crash came when it became more clear how hard it would be to realize that potential -- that the costs of doing business on the web are so high that it isn't easy to bring in more revenue than you spend.
DOW - Nicely Rebound off the trendline to the US GDP +3.5% in Q3
News drive Market Sentiment and Institutions drive stock prices. Period.
Thursday, 29 October 2009
Can Blue Chips Be Dividend Yield Play Stocks?
http://createwealth8888.blogspot.com/2009/10/portfolio-management-passive-income.html
Sometime, I am quite puzzle why some dividend yield play retail investors don't really think of blue chips as dividend yield play stocks for passive income. When Market crashes in big time, it is a great opportunity to load up blue chips for dividend yield.
It is possible to collect good dividends for blue chips at distress time. You can definitely sleep better with blue chips as dividend yield play than those so-called under-valued stocks.
See what I am getting for passive income from the dividend yield Blue Chips:
Blue Chip Dividend Yield Per Annum
Kep Corp 12.3%
Semb Corp 10.6%
DBS 7.2%
Noble 4.8%
So if the Market really crashes in BIG Way and in Big Time. Load up blue chips as dividend yield play. Why not?
Sometime, I am quite puzzle why some dividend yield play retail investors don't really think of blue chips as dividend yield play stocks for passive income. When Market crashes in big time, it is a great opportunity to load up blue chips for dividend yield.
It is possible to collect good dividends for blue chips at distress time. You can definitely sleep better with blue chips as dividend yield play than those so-called under-valued stocks.
See what I am getting for passive income from the dividend yield Blue Chips:
Blue Chip Dividend Yield Per Annum
Kep Corp 12.3%
Semb Corp 10.6%
DBS 7.2%
Noble 4.8%
So if the Market really crashes in BIG Way and in Big Time. Load up blue chips as dividend yield play. Why not?
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