Smart Money Grabbers over dummy investors - IV

Read? Smart Money Grabbers over dummy investors - III

SINGAPORE: The head of the now-defunct multi-level marketing firm, Sunshine Empire, 49-year old Phang Wah has been sentenced to nine years' jail and fined $60,000.


He was convicted earlier this month on July 16 for several offences, including running a fraudulent trading company and falsifying accounts.

Phang's 46-year-old wife, Neo Kuon Huay was also fined $60,000 for her involvement in what is believed to be the biggest Ponzi-like scheme in Singapore.

The ex-company director, 29-year old Jackie Hoo Choon Cheat was sentenced to seven years' jail.


Phang and Hoo are each guilty of eight charges related to criminal breach of trust involving nearly a million dollars.
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Createwealth8888:

This type of scam is so bloody evil as it sucked in family members, relatives and friends into it and all of them die together and who else left to help them?

No matter how good the investment product including so-called solid blue chips, husband and wife, parents and children should avoid investing all together in the same investment product or stocks as part of family risk management.

Stop thinking "your money is your money" and "my money is my money" and "I want to make money for myself" and especially for husband and wife ...

Harder to beat last year realized profits from trading?

Seven months into 2010, I start hearing whispers from some - "harder to beat last year realized profits from trading."

Of course, there are good reasons for it. The days of easy profit taking is over. It is getting emotionally difficult to make money from the stock market without worry of investing capital getting stuck.

Look at STI weekly chart. You will know why?

Market has changed.

Strategies that worked well last year may not work in 2010.

Start thinking hard how to move forward and still survive in this ranging market?

Any ideas?

STI - Aug 10 where to?

Breaking resistance in Aug 10?

DOW - Stocks end July with big gain; Dow gains 7.1 pct

Dow 10,465.94 -1.22 -0.01%

NEW YORK (AP) -- Stocks had a fitting end to a choppy July as prices seesawed their way to a narrowly mixed finish. The market still had its best month in a year.


Investors had an ambivalent response Friday to the government's gross domestic product report, which showed that economic growth slowed in the April-June quarter. The Dow Jones industrial average fell almost 120 points in early trading, then ratcheted up and down until the close. The Dow ended down just a point, and the other big indexes had similarly small moves.

The day was much like the rest of July, which saw investors alternately buying on strong earnings reports and selling on weak economic numbers. The Dow rose 7.1 percent for the month. The Dow and the Standard & Poor's 500 index both had their best months since July 2009 and their first winning months since this past April.

A repeat performance in August seemed unlikely due to the market's current pessimism, especially since the bulk of second-quarter earnings reports are in. Many investors, uncertain about the where the market is heading, stayed on the sidelines for much of July or moved money into safer investments. Even on days when the Dow was up 100 or 300 points, trading volume was unusually low.

"It's a very cautious environment today," said Rob Lutts, president, CIO at Cabot Money Management. That caution, he said, is what leads investors to sell.

The Commerce Department's GDP report was troubling for the market, and followed recent reports on housing and unemployment that showed the recovery has slowed. GDP grew at an annual pace of 2.4 percent in the second quarter, less than the 2.5 percent forecast of economists polled by Thomson Reuters.

Analysts said that as investors read deeper into the report, it didn't look as bad as they initially thought. They found some good news in the consumer savings rate.

Business spending on equipment and software also jumped in the second quarter by the biggest amount in 13 years. That was encouraging because it means companies could be getting ready to start hiring.

"We had a little bit for the bulls and a little bit for the bears," Lutts said, "and ultimately no one is really happy."

The Dow fell 1.22, or 0.01 percent, to 10,465.94. Its July gain was its best monthly advance since it rose 7.8 percent in July 2009.

STI - Testing support soon?

Straits Times 2,987.70 -9.95 -0.33%

By JOANNAH PEREZ

SINGAPORE - Singapore shares closed weaker on Friday with the blue-chip Straits Times Index down 9.95 points to 2,987.70.

Volume was 1.41 billion shares worth $2.08 billion.

Losers led gainers 276 to 172.

DBS Group records Q2 net earnings of S$718m, highest in its history

SINGAPORE: DBS Group Holdings recorded second-quarter net earnings of S$718 million, before a goodwill impairment charge of S$1.02 billion for DBS Hong Kong Limited.


In a statement, the banking group said the quarterly earnings were the highest in DBS' history.

The earnings before the one-time charge were up 30 percent from a year ago and 35 percent from the previous quarter.

DBS CEO Piyush Gupta said, "DBS' core earnings reached a record high this quarter, reflecting the strong growth in underlying drivers in line with our strategic direction. In addition, notwithstanding the goodwill impairment, we remain structurally bullish on prospects for Hong Kong and China, which are integral to the Asia growth story. Hong Kong is the anchor for our Greater China operations, and we will continue to build the business." - CNA

Warren Buffett, Growth Investor?

ByPrem C. Jain,


NEW YORK (TheStreet) -- Most people consider Warren Buffett a value investor, but his methods aren't so simple.

His style has evolved over the years and incorporated strategies of growth investing. For this reason -- having taught his principles for 20 years and benefited from them personally, and as author of an exploration of his investing principles called "Buffett Beyond Value" -- I call him a "value + growth" investor rather than a value investor alone.

To earn high returns as Buffett has, an investor needs to go beyond price-to-earnings ratios or other metrics commonly followed by value investors.

If he were simply a value investor, it would be difficult to understand his recent $36 billion acquisition of Burlington Northern Santa Fe. The acquisition's price-to-earnings ratio of 18 was high. Earlier large stock purchases in Coca-Cola, American Express and Wells Fargo were also not at low multiples. As a matter of fact, most of his buys are at reasonable, not low, valuations.

Also, following the adage of "buy low, sell high," a value investor would sell investments when the stock price goes up. Buffett holds his investments for a long time.

Buffett's Berkshire Hathaway has grown 20% a year -- difficult to accomplish even for most successful growth companies. Buffett clearly invests in common stocks or acquires companies that grow fast. Is he a misunderstood growth investor, then?

Kind of. The most important principle of value investing is to avoid the downside risk, and by investing only in well-established companies, Buffett continues to adhere to this core principle. Beyond that, he is really a growth investor.

Investors don't characterize him as one because he doesn't invest in high-tech companies. This is because he is aware of the downside risk in such investments. The most important aspect of growth investing, on the other hand, is to find companies that will grow for many years to come. His investment style is to find companies that will grow for many years to come (growth investing) with low downside risk (value investing).

Buffett's secret to finding growth companies in traditional industries: people. Buffett looks for managers who have demonstrated outstanding success. On several occasions, he has mentioned that he would not invest in a company unless he admires, trusts and likes its management. And unlike most other acquirers, he does not replace current management. In essence, growth is accomplished through high-quality management and not through high-tech investments.

The main lesson from Buffett that I have learned is that it is possible for an average investor to find simple-to-understand good growth companies such as Wells Fargo and Wal-Mart Stores in traditional industries. Buffett found them and so can you -- by focusing on avoiding the downside risk and searching for high-quality management.

DOW - 2nd day of fall!

Are the bears coming back in big way?

Dow 10,467.16 -30.72 -0.29%

By: Cindy Perman, JeeYeon Park

Stocks ended lower for a second day Thursday, led by tech, consumer and utility shares, after some disappointing outlooks. Financials and materials rose slightly.

The Dow Jones Industrial Average lost 30.72, or 0.3 percent, to close at 10,467.16, after a rocky session that saw the Dow trade in a nearly 200-point range. Still, the Dow has gained more than 7 percent in July, putting it on track to post the biggest monthly percentage increase and best July gain since July 2009, when it rose 8.6 percent.

Hungry investors work up an appetite for bonds

When to buy?

Region's debt market running hot and bankers are fighting to do deals


By SIOW LI SEN

(SINGAPORE) It's as if the floodgates have opened in Asia's debt market as billion-dollar deals are snapped up within hours. It's as if the European crisis of May and June never happened. Investors are clamouring for a slice of the action and many last week had to go away empty handed after bankers had to cut back on allocations .

Temasek Holdings' trailblazing S$1 billion 40-year bond was snapped up in less than two hours.

Heavy demand from insurance companies for longest-dated SGD bond opens a new window


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Createwealth8888:

Just only 4.2% returns for 40-year bond was snapped up in less than two hours. It is telling us that fund managers have plenty of money but no balls.  They are telling us that capital preservation is far more important than returns and 4.2% should be enough to pay for their salaries and cover operational expenses. 

Can we still be so bullish?


 

Keppel breaches new depths in the offshore wind energy sector

Seafox and Keppel Fels catch the wind

Keppel Fels' multi-purpose self-elevating platform (MPSEP) design as the basis for a new-generation, wind turbine installation vessel - Seafox 5 - destined for work in the North Sea.



Singapore, 29 July 2010 – Keppel FELS Limited’s (Keppel FELS) multi-purpose selfelevating platform (MPSEP) design has been chosen by the Seafox Group (Seafox) as the basis for a new-generation, wind turbine installation vessel that can withstand harsh offshore environmental conditions all year round in water depths of 65 metres in the North Sea.

Compared with existing wind turbine installation vessels, and the majority of those being constructed, this vessel can operate in some 45%-deeper waters, while reducing downtime even in extreme storm conditions, thus providing a potentially longer operational window. With a large carrying capacity of up to 12 turbines at a time, it enhances the efficiency of constructing offshore wind farms.

A 75/25 joint venture (JV) company has been formed between Keppel FELS and Seafox respectively, to build and own this US$220 million vessel. Seafox has the option of acquiring Keppel’s stake in the JV company.

The KFELS MPSEP, designed by Keppel’s R&D arm, Offshore Technology Development, has the distinctive ability over other existing vessels to install and maintain heavy wind turbine foundations, such as the jacket and tripod types, and especially in deeper waters. In addition to being well-suited for servicing offshore wind farms, it also meets all the stringent operating regulations of the offshore oil & gas industry and can support a wide range of related activities such as accommodation, well intervention, maintenance, construction and decommissioning.

Mr Wong Kok Seng, Executive Director of Keppel FELS, said, “The offshore wind energy market holds good potential for installation and maintenance vessels that can operate over long periods in deeper waters beyond 45 metres.

“The KFELS MPSEP will offer significant advantages in terms of safety, operations, time and cost to operators working in these harsh environments. By overcoming the typical limitations of the existing fleet in the market, this advanced vessel will redefine the way in which offshore wind farms are installed and maintained across the world.”

The KFELS MPSEP vessel is scheduled for delivery in the second half of 2012, and will be managed and operated by Workfox BV, a member of the Seafox Group.

Offshore wind energy industry potential


The European Wind Energy Association (EWEA) has set a target to achieve 40 gigawatts (GW) of offshore wind in the European Union by 2020, and 150 GW by 2030.

Offshore winds tend to flow at greater speeds than onshore winds, thus allowing turbines to produce more electricity. Although a good majority of existing offshore wind  farms are located in water depths less than 45 metres, those coming online ar expected to move further offshore and into harsher environments such as the Central North Sea, where wind speeds are higher, constant and thereby requiring more robust solutions. There is also an increasing trend towards wind turbines with larger capacities which are heavier.

The UK expects to install some 8,000 offshore wind turbines in the next decade, to achieve the Round 3 offshore wind energy goal of delivering 15% of the UK’s electricity needs by 2020. Of these, it is estimated that some 2,700 turbines would be required at water depths greater than 45 metres. The KFELS MPSEP vessel is among the first on order worldwide that is capable of fulfilling this water-depth requirement.

STI - Bulls are steady! So near to 3,000

Straits Times 2,997.65 +12.27 +0.41%

By JOANNAH PEREZ

SINGAPORE - Singapore shares closed higher on Thursday with the blue-chip Straits Times Index up 12.27 points to 2,997.65.

Volume was 1.40 billion shares worth $1.57 billion.

Gainers led losers 253 to 187.

DOW - Bulls failed again!

Dow 10,497.88 -39.81 -0.38%

By: Cindy Perman, JeeYeon Park

Stocks snapped their four-day winning streak Wednesday after the Fed’s latest "beige book" report pointed to a sluggish recovery and earnings from Boeing disappointed.

The Dow Jones Industrial Average fell 39.81, or 0.4 percent, to close at 10,497.88, after logging four straight gains.


The S&P 500 shed 0.7 percent but finished above the key 1,100 mark. The Nasdaq lost over 1 percent. The CBOE volatility index, widely considered the best gauge of fear in the market, was above 24 at the closing bell.

“We’re going to run into some headwinds here and we’ll see a bit of a pullback, which is good, and people can get back in on that pullback,” said Matt Cheslock, senior specialist at Cohen Capital Group. “People are going to protect profits going into the summer, and that’s the wise thing to do.”

STI - Still pretty stable. No panic profit taking yet!

Straits Times 2,989.42 +10.04 +0.34%

SINGAPORE - Singapore shares closed higher on Wednesday with the blue-chip Straits Times Index up 6.00 points to 2,985.38.

Volume was 1.63 billion shares worth $1.44 billion.

Gainers led losers 247 to 187.

DOW - 4th UP days

Dow 10,537.69 +12.26 +0.12%

By: Cindy Perman, JeeYeon Park

The Dow pulled off its fourth-straight gain, led by DuPont after better-than-expected earnings from the chemicals maker. But the gain was more modest than in recent sessions as a drop in consumer confidence tempered investors' enthusiasm.

Financials rose, while energy and consumer-discretionary stocks were among the weakest links.

High Dividend Yield Stocks? - Part 5

Read?  High Dividend Yield Stocks? - Part 4

Read? 6 Common Misconceptions About Dividends

In a later paper, Modigliani and Miller argued that a firm's value is not affected by its dividend policy (payment to stockholders) because increased return in the form of dividends is offset by the reduction in the firm's assets.


Modigliani-Miller theorem


Modigliani and Merton Miller published their famous The Cost of Capital, Corporate Finance and the Theory of Investment in 1958. The paper urged a fundamental objection to the traditional view of corporate finance, according to which a corporation can reduce its cost of capital by finding the right debt-to-equity ratio. According to Modigliani and Miller, however, there was no right ratio, so corporate managers should seek to minimize tax liability and maximize corporate net wealth, letting the debt ratio chips fall where they will. Modigliani and Miller also claimed that the real market value of a company depends mostly on investors' expectations of what the company will earn in the future, not the company's debt-to-equity ratio.

The way in which Modigliani and Miller arrived at their conclusion made use of the "no arbitrage" argument, that is the premise that any state of affairs that will allow traders of any market instrument to create a riskless money machine will almost immediately disappear. They set the pattern for many arguments in subsequent years based on that premise.

The Modigliani-Miller theorem forms the basis for modern thinking on capital structure. The basic theorem states that, in the absence of taxes, bankruptcy costs, and asymmetric information, and in an efficient market, the value of a firm is unaffected by how that firm is financed. It does not matter if the firm's capital is raised by issuing stock or selling debt. It does not matter what the firm's dividend policy is. Therefore, the Modigliani-Miller theorem is also often called the capital structure irrelevance principle.

The theorem was originally proved under the assumption of no taxes, but can also be extended to a situation with taxes. Consider two firms that are identical except for their financial structures. The first (Firm U) is unlevered: that is, it is financed by equity only. The other (Firm L) is levered: it is financed partly by equity, and partly by debt. The Modigliani-Miller theorem states that the value of the two firms is the same.

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Createwealth8888's own words: "I also love dividend play stocks but I treat the dividend as safety net if the stock price falls temporary but not as a buying decision. Technically on chart-wise, I must see that the stock price has the probability of moving higher before considering it in the watch-list."
 
Read? Are High Ratio Dividend Payout Stocks Make A Low Risk Investment? - Part 2
 
Who want to argue with the Nobel Prize winner on "dividends are irrelevant to a company's value"?

STI - Bulls will try to break it again!

Straits Times 2,979.38 +12.39 +0.42%

By JOANNAH PEREZ

SINGAPORE - Singapore shares closed higher on Tuesday with the blue-chip Straits Times Index up 12.39 points to 2,979.38.

Volume was 1.59 billion shares worth $1.61 billion.

Gainers led losers 254 to 193.

6 Common Misconceptions About Dividends

Investopedia.com
Topics:Investing Ideas & Strategies
By Jason Whitby

During periods of low yields and market volatility, more than a few experts recommend dividend stocks and funds. This may sound like good advice, but unfortunately, it is often based on misconceptions and anecdotal evidence.


It is time to take a closer look at the six most common reasons why advisors and other experts recommend dividends and why, based on these reasons, such recommendations are often unsound advice.

Misconception No. 1: Dividends are a good income-producing alternative when money market yields are low.

Taking cash and buying dividend stocks isn't consistent with being a conservative investor, regardless of what money markets are yielding. Additionally, there is no evidence that money market yields signal the right time to invest in dividend-focused mutual funds. In fact, money market yields were anemic throughout 2009, a year that is also one of the worst periods for dividend-focused funds in history.

Many advisors also call dividends a good complement to other investments during times of high volatility and low bank yields. In an October 22, 2009 article, financial guru Suze Orman recommended the following dividend funds: iShares Dow Jones Select Dividend Index (NYSE:DVY), WisdomTree Total Dividend (NYSE:DTD) & Vanguard High Dividend Yield Index (NYSE:VYM).

Reality Check: The 12-month performance after Orman's recommendation was DVY (+7.86%), DTD (+21.91%), VYM (+17.72%). These returns seem pretty good - until you realize you could have just held on to the S&P 500, which was up +26.36% over the same period.

Misconception No.2: Dividend companies are more stable and better managed.

It is generally believed that companies that raise their dividends over a long period have solid market positions and strong cash flow. As a result, the stocks' total return is likely to outpace other stocks.

It's also common to hear the argument that dividends tend to hold companies to a certain standard of financial discipline and that, as a result, these companies budget more carefully and avoid wasteful projects out of fear that shareholders will punish the stock if it fails to return profits to its investors.

Reality Check: It's easy to pick a "solid" stock in retrospect but it is impossible to pick a company today that will meet this statement moving forward. Sure, if you had purchased Coke in 1962…but what about today? In 2007 we would have said that General Electric (NYSE:GE) and AIG (NYSE:AIG) were stable and well-managed dividend companies. Would we say the same in 2009? What about in the future?

The notion that dividend-paying companies are held to higher standards does not bear out. Look no further than the financial industry. In September 2008, AIG had a $4.40 dividend - almost a 4% dividend yield. By 2009, it was clear that AIG and others such as Freddie Mac, Fannie Mae, Bank of America, Bear Stearns and Citigroup were far from being financially disciplined companies, despite that fact that they were all long-time dividend-paying companies. As it turns out, dividends aren't much of an indicator of the financial discipline or the quality of a company's management.

Misconception No.3: You can count on dividends from solid companies.

Many people believe that it's rare for a solid company to suddenly reduce or rescind its dividend payment.

Reality Check: "Solid" companies like Bank of America (NYSE:BAC), General Motors, Pfizer (NYSE:PFE) and GE, have either suspended or cut their dividends. Unfortunately, it is a lot easier to identify companies that had a solid record than to identify companies that will have a solid record going forward. It is impossible to predict which "solid" companies today are going to be on shaky ground tomorrow. There is no certainty or stability in future dividends.

The idea that dividends allow you to get paid to wait doesn't make sense. It is the total return of your portfolio that matters, not the current yield. Throughout 2008 and 2009, companies were cutting or suspending their dividend payments at record levels, proving that there is no guarantee for those who buy in to these companies. Just ask anyone holding Freddie Mac since June 12, 2008, which was when Freddie Mac last distributed a dividend and traded at $23.01 a share. At that time, Freddie Mac had a dividend yield of 4.34%. By October of 2009, the stock was down over 90% and hope for future dividends had all but evaporated.

Misconception No.4: Dividend stocks provide upside potential and downside protection.

A 2009 SPDR University brochure states that "Dividends provide a stable source of income that can help partially offset market price depreciation that occurs in turbulent markets."

Reality Check: Dividends provide very little - if any - downside protection during market corrections. The S&P 500 was down -41.82% during the September 2008 to March 2009 crash. During the same time, the SPDR S&P 500 Dividend ETF was down -35.87%, which doesn't seem like much downside protection. Additionally, some well-known, dividend-focused funds provided no downside protection and performed worse than the S&P 500 over this period. For example, the Fidelity Dividend Growth Fund was down -46.94% and the iShares Dow Jones Select Dividend Index was down -43.07%.

Since 1926, dividends have provided about one-third of the total return for the S&P 500, while capital appreciation has provided the other two-thirds. Focusing on dividends, which provided less returns than capital appreciation, makes little sense, especially since the dividend focus is just as risky.

Misconception No.5: Preferential tax treatment makes dividend stocks more attractive.

This misconception seems to imply that dividend stocks are more attractive investments since they are taxed at a preferential rate. Obviously, the lower rate is better than the normal income rates but what does it really mean? Does it mean you should avoid dividends in tax-deferred accounts since they are less attractive?

Reality Check: Of course it doesn't. Then why should the tax treatment warrant dividend investments more attractive than capital gains? It doesn't, which is shown by the lack of any noticeable bounce in 2003 when the preferential tax law was implemented. We need to remember that the tail should not be wagging the dog. After-tax returns are important, but taxes should not drive your investment decisions.

Misconception No.6: Dividend-focused investing is ideal for retirees and conservative investors.

An October 5, 2009, article in the Wall Street Journal stated that "Most types of fixed-rate bonds don't provide any protection against inflation and can lose value when investors are worried inflation will flare. Rising dividends, along with any appreciation in the share price of the company paying them, offer a measure of insurance against inflation."

Reality Check: This statement is incredibly misleading. First, if you want a bond that protects against inflation, you can buy an I-bond instead of taking equity risk. Secondly, all equity investments provide a measure of protection against inflation, not just dividend stocks.

No one ever said you could only have one investment. If you are a conservative investor, you can simply create a portfolio of bond funds and a little bit in a stock fund. The idea is to create an investment portfolio, not an investment collection. Each investment in the portfolio should work with the others to achieve a goal. This works much like the ingredients in a recipe, which come together to create a great dish.

Why are dividends a better way to generate income than capital gains? Capital gains are not a sure thing, but neither are dividends. And there is simply no way to know which stocks will continue to be "solid" in the future.

Conclusion

Dividends are absolutely an important part of the investment equation. Yet there is no empirical evidence that focusing on dividends is a wise decision. Actually, Miller and Modigliani received the Nobel Memorial Prize in large part for their paper, "Dividend Policy, Growth, and Valuation of Shares," in which they found that dividends are irrelevant to a company's value ("irrelevant" is their word, not mine).

On one side the media is dishing out long-lived misconceptions about dividends. On the other side, the Nobel winners are saying dividends are "irrelevant" to stock values. I'm not sure about you, but I know which one of these two groups I'm going with.

Ten Stock-Market Myths That Just Won't Die

by Brett Arends


The Dow Jones Industrial Average last week ended up pretty much where it had been a little more than a week earlier. A rousing 200-point rally on Wednesday mostly made up for the distressing 200-point selloff of the previous Friday.


The Dow plummeted nearly 800 points a few weeks ago — and then just as dramatically rocketed back up again. The widely watched market indicator is down 7% from where it stood in April and up 59% from where it was at its 2009 nadir.

These kinds of stomach-churning swings are testing investors' nerves once again. You may already feel shattered from the events of 2008-2009. Since the Greek debt crisis in the spring, turmoil has been back in the markets.

At times like this, your broker or financial adviser may offer words of wisdom or advice. There are standard calming phrases you will hear over and over again. But how true are they? Here are 10 that need extra scrutiny.

1. "This is a good time to invest in the stock market."

Really? Ask your broker when he warned clients that it was a bad time to invest. October 2007? February 2000? A broken watch tells the right time twice a day, but that's no reason to wear one. Or as someone once said, asking a broker if this is a good time to invest in the stock market is like asking a barber if you need a haircut. "Certainly, sir — step this way!"

2 "Stocks on average make you about 10% a year."

Stop right there. This is based on some past history — stretching back to the 1800s — and it's full of holes.

About three of those percentage points were only from inflation. The other 7% may not be reliable either. The data from the 19th century are suspect; the global picture from the 20th century is complex. Experts suggest 5% may be more typical. And stocks only produce average returns if you buy them at average valuations. If you buy them when they're expensive, you do a lot worse.

3 "Our economists are forecasting..."

Hold it. Ask your broker if the firm's economist predicted the most recent recession — and if so, when.

The record for economic forecasts is not impressive. Even into 2008 many economists were still denying that a recession was on the way. The usual shtick is to predict "a slowdown, but not a recession." That way they have an escape clause, no matter what happens. Warren Buffett once said forecasters made fortune tellers look good.

4 "Investing in the stock market lets you participate in the growth of the economy."

Tell that to the Japanese. Since 1989 their economy has grown by more than a quarter, but the stock market is down more than three quarters. Or tell that to anyone who invested in Wall Street a decade ago. And such instances aren't as rare as you've been told. In 1969, the U.S. gross domestic product was about $1 trillion, and the Dow Jones Industrial Average was at about 1000. Thirteen years later, the U.S. economy had grown to $3.3 trillion. The Dow? About 1000.

5 "If you want to earn higher returns, you have to take more risk."

This must come as a surprise to Mr. Buffett, who prefers investing in boring companies and boring industries. Over the last quarter century, the FactSet Research utilities index has even outperformed the exciting, "risky" Nasdaq Composite index. The only way to earn higher returns is to buy stocks cheap in relation to their future cash flows. As for "risk," your broker probably thinks that's "volatility," which typically just means price ups and downs. But you and your Aunt Sally know that risk is really the possibility of losing principal.

6 "The market's really cheap right now. The P/E is only about 13."

The widely quoted price/earnings (PE) ratio, which compares share prices to annual after-tax earnings, can be misleading. That's because earnings are so volatile — they're elevated in a boom, and depressed in a bust.

Ask your broker about other valuation metrics, like the dividend yield, which looks at the dividends you get for each dollar of investment; or the cyclically adjusted PE ratio, which compares share prices to earnings over the past 10 years; or "Tobin's q," which compares share prices to the actual replacement cost of company assets. No metric is perfect, but these three have good track records. Right now all three say the stock market's pretty expensive, not cheap.

7 "You can't time the market."

This hoary old chestnut keeps the clients fully invested. Certainly it's a fool's errand to try to catch the market's twists and turns. But that doesn't mean you have to suspend judgment about overall valuations.

If you invest in shares when they're cheap compared to cash flows and assets — typically this happens when everyone else is gloomy — you will usually do very well.

If you invest when shares are very expensive — such as when everyone else is absurdly bullish — you will probably do badly.

8 "We recommend a diversified portfolio of mutual funds."

If your broker means you should diversify across things like cash, bonds, stocks, alternative strategies, commodities and precious metals, then that's good advice.

But too many brokers mean mutual funds with different names and "styles" like large-cap value, small-cap growth, midcap blend, international small-cap value, and so on. These are marketing gimmicks. There is, for example, no such thing as "midcap blend." These funds are typically 100% invested all the time, and all in stocks. In this global economy even "international" offers less diversification than it did, because everything's getting tied together.

9 "This is a stock picker's market."

What? Every market seems to be defined as a "stock picker's market," yet for most people the lion's share of investment returns — for good or ill — has typically come from the asset classes (see No. 8, above) they've chosen rather than the individual investments. And even if this does turn out to be a stock picker's market, what makes you think your broker is the stock picker in question?

10 "Stocks outperform over the long term."

Define the long term? If you can be down for 10 or more years, exactly how much help is that? As John Maynard Keynes, the economist, once said: "In the long run we are all dead."

Kep Corp - Sold $9.05, ROC 5.7%

Hope to gather more feathers for a bigger and thicker foldable mattress soon ...

In addition to collecting dividend in specie for KGT worth $0.23 per Kep Corp share

Round 93: ROC 5.7%, 67 days, B $8.50 S $9.05


Round 92: ROC 10.6%, 166 days, B $7.98 S $8.89

DOW - Steady bulls!

Dow 10,525.43 +100.81 +0.97%

The S&P 500 settled just above its 200-day moving average after FedEx raised its forecast and new home sales figures for June proved better than expected. Trading volume was light, though.

NEW YORK - US stocks extended gains Monday as sentiment was boosted by data showing a surge in new home sales and robust corporate earnings.

The Dow Jones Industrial Average jumped 100.81 points (0.97 percent) to a two-month high of 10,525.43, after surging 3.2 percent last week. The blue-chip index posted its first daily close above 10,500 since May 18.

The tech-rich Nasdaq composite index gained 26.96 points (1.19 percent) to 2,296.43 while the broader S&P 500 index added 12.35 points (1.12 percent) at 1,115.01.

The S&P 500 had finished 3.5 percent higher last week, breaching the 1,100 level for the first time since June 21.

"US stocks are extending the solid gains from last week as upbeat economic news is supporting economic recovery sentiment, with today's dose of data coming in the form of a sharp jump in new home sales," analysts at Charles Schwab & Co said in a client note.

Shares "spiked suddenly with the data's release," analysts at Briefing.com said, citing the strong rebound of new home sales in June after plunging to a record low the previous month.

The Commerce Department said sales increased 23.6 percent to 330,000 units from a revised May rate of 267,000, a record low.

But economists cautioned the market against reading too much into the large sales increase.

"Builders sold almost no new homes in May so the sharp rise in June shouldn't be taken as a sign the housing market is suddenly on fire," said analyst Joel Naroff with Naroff Economic Advisors.

"But the bulls were clearly in no mood to be picky," noted analyst Elizabeth Harrow of Schaeffer's Investment Research.

Market optimism also came Monday from the US corporate earnings front.

As many companies lived up to expectations of higher-than-expected profits, FedEx, a top US package-shipping company and economic bellwether, boosted its first quarter and full-year earnings forecast.

Of the 175 S&P 500 companies that have reported their quarterly earnings, 78 percent came in better than expected, led by those in the technology, financials, and industrial sectors.

FedEx jumped 5.61 percent to 83.39 dollars, boosted by its upbeat earnings guidance.

BP shares on the New York Stock Exchange rose 4.86 percent to 38.65 dollars on reports that chief executive Tony Hayward is expected to quit imminently with a massive payoff after being lambasted over the Gulf of Mexico oil spill.

IBM rose 0.02 percent to 128.41 dollars even as European competition enforcers announced they were probing the computer giant on two separate cases relating to antitrust infringements.

Bonds were mostly flat. The yield on the 10-year US Treasury bond was unchanged at Friday's rate of 2.994 percent while that on the 30-year bond declined to 4.018 percent from 4.019 percent. Bond yields and prices move in opposite direction.

- AFP /ls

STI - Not that rosy

By JOANNAH PEREZ


SINGAPORE - Singapore shares closed lower on Monday with the blue-chip Straits Times Index down 6.48 points to 2,966.99.

Volume was 1.33 billion shares worth $1.21 billion.

Losers led gainers 224 to 216.

When to buy?

Read? When to buy?

I am going to do a "BIAS"

I think this is the most stupid question to ask: "When to buy?"

For every stock transaction, there is a buyer matching a seller/sellers or a seller matching a buyer/buyers.

There is absolutely no exception so the right time to buy is Now.

To buy or not doesn't really depend on the market timing. It depends on the depth of your pocket and/or the size of your balls. When you have deeper pocket and/or bigger ball, anytime is a good time to buy. 

Don't believe me then ask those buyers on Monday.

How often does STI bear market happen?

STI - Top 5 crashes since 1990

STI Bear Market does happen between 0.5 to 3.6 years interval 

so are you prepared for the next one and profit from it?

STI - Top 5 crashes since 1990

1. From 06-Feb-96 to 04-Sep-98:  Down -68.0%
2. From 11-Oct-07 to 09-Mar-09:  Down -62.4%
3. From 03-Jan-00 to 24-Sep-01:   Down -53.6%
4. From 05-Mar-02 to 11-Mar-03: Down -34.8%
5. From 27-Mar-90 to 11-Oct-90:  Down -32.8%

So are you financially ready for the next big STI crash?

STI - 2010 will be remembered as Year of Roller Coast Ride?

This market is not for the faint heart and those with weak heart to ride market roller coaster may wish to stay away from it.

GE Boosts Dividend 20%, Extends Buyback Plan

Createweath8888: Real sign of recovery as GE is on the path to return more cash back to its loyal shareholders.

-----------------------------

"GE is a company whose tentacles extend throughout large parts of the economy, and (the hike) clearly shows they're (having) a bit more visibility on their future cash flows," explains Adrian Cronje of wealth management firm Balentine.


By: CNBC.com

In a move signaling some recovery from the 2008-2009 financial crisis, General Electric said its board approved a 20 percent increase in its dividend and extended its stock repurchase plan.


The increase in GE's [GE 15.71 0.50 (+3.29%) ] dividend, which came earlier than many had anticipated, raises the quarterly payment to 12 cents per share from 10 cents per share.

The board said the next dividend would be paid on October 25 to shareholders of record at the close of business on Sept. 30.

Separately, the company said it will extend its existing stock buyback program, which would have expired on Dec. 31, through 2013.

Repurchases under the existing $15 billion repurchase plan were suspended on Sept. 25, 2008. The plan currently has about $11.6 billion in repurchases remaining under the current authorization.

GE, which is the parent of CNBC, said it will resume repurchases under the plan this quarter.

"We are able to restore the GE dividend at a historical payout level for 2010 earlier than previously anticipated and to extend our share buyback program because of continued strong cash generation, recovery at GE Capital, and solid underlying performance in our industrial businesses through the first half of 2010," GE Chief Jeff Immelt said, in a written statement.

GE has been working to make GE Capital a smaller specialty finance company, and said progress on this front provided the flexibility to boost he dividend and resume stock buybacks. GE said even with this move it still has the financial flexibility for "strategic and financially attractive inorganic growth opportunities."

Get Rich Courses or Coaching? - II

Get Rich Courses or Coaching? - I


Like those folks in the Rich Dad $500 course. Few year ago, I too have the similar experience with our local millionaire trader and author. I was then pissed off and lost my respect for this guy and stop visiting his blog too.

Few of my colleagues and myself paid $50 for his Candlesticks Technical Analysis Workshop and instead of spending the whole night do candlesticks analysis. He did something unexpectedly. We received more than just candlesticks analysis throughout the night.

In between every few slides he would put a few more slides to try to sell his more expensive Trading course at $X,XXX and wasted much of my precious time and made me damn pissed off.

He claimed to make millions from trading and even wrote a book to teach people how to make millions from trading and yet he was so hard up in trying to make a few thousand buck here and there by pushing his expensive Trading course during a totally unrelated event as we didn't come for a preview on his Trading course. We went to the Workshop to study more on Candlesticks technical analysis and not to waste our time listening to those rubbish Get Rich course.

Can you believe it or not? Someone who claim he made millions and yet so hard up in making thousands. I was dumb for words for these so-called Millionaire bums!

STI Major Data Points since 1990

Place your bet!

Who will win?

Get Rich Courses or Coaching?

Smart Money Grabbers over dummy investors - III

Another one exposed. This one is a Global Big Name: Rich Dad brand Marketplace: Rich Dad Seminars Deceptive

Money Not Enough

These Financial Gurus may have started off with good intentions to educate the people on financial wisdom and investing skills. But later they lost control of Money Not Enough and start finding other ways and means to make even more money.

Once they run out of decent ideas of making more money; they may move towards to some indecent ways of making more money. One day when they run of indecent ways of making more money; they may think that it is not evil to con other people’s hard-earn money to make even more money for themselves. Money Not Enough?

DOW - Think the Bulls will break the mighty resistance next week

Dow 10,424.62 +102.32 +0.99%

Stocks Hit 1-Month High; S&P Tops 1,100

By: Cindy Perman, JeeYeon Park

Stocks rallied to a one-month high Friday, led by industrials, as the latest batch of earnings reports gave another shot of confidence to recovery hopes.

There was also some relief after the results from the EU bank stress tests came out.

The Dow Jones Industrial Average gained 102.32, or 1 percent, to close at 10,424.62, led by Verizon, General Electric and American Express.


For the week, the Dow finished up over 300 points, or 3.2 percent. Boeing had the most positive impact on the Dow this week, up 10 percent, while Johnson & Johnson was the weakest link, down over 3 percent.

The S&P 500 gained 3.6 percent and the Nasdaq advanced 4.2 percent for the week. The CBOE volatility index, widely considered the best gauge of fear in the market, lost more than 10 percent, closing out the week below 24.


Seven out of the 91 European banks failed the test, including HRE in Germany, as well as a Greece's Atebank and Spain's Banca Civica. Fewer banks failed than expected but there was some question about the methodology — that it went too easy on sovereign debt.

Kep Corp

SML

Heavy demand from insurance companies for longest-dated SGD bond opens a new window

Temasek Holdings has pulled off another trailblazing fund raising exercise, bringing more depth to the local debt market. Yesterday, it sold $1 billion of bonds with a 40-year tenor, double the length of the longest dated Singapore government bond.


Mr Lee: Expects more corporates to issue longer date bonds now

Demand, especially from insurance companies, was strong and came in at $1.7 billion, said Clifford Lee, DBS managing director and head of fixed income, global financial markets.

The latest Temasek Bond which matures in August 2050 will pay 4.2 per cent interest. Investors will be paid every six months, at a coupon rate of 4.2 per cent per annum.

(Createwealth8888: 40-year long-term low-risk returns only at 4.2%)
'The 2050 maturity set a new SGD benchmark, being the longest dated SGD bond yet issued,' said Aaron Russell-Davison, head of Asian debt syndicate, Standard Chartered Bank

STI

Straits Times 2,977.73 +22.06 +0.75%

By JOANNAH PEREZ

SINGAPORE - Singapore shares closed higher on Friday with the blue-chip Straits Times Index up 17.80 points to 2,973.47.

Volume was 1.47 billion shares worth $1.61 billion.

Gainers led losers 287 to 194

7 Secrets to a Happy Retirement

by Sydney Lagier


Some folks transition seamlessly into a happy retirement and get right to the business of enjoying their new lives. But other people have a tougher time entering the retirement years. Some of these folks may wonder whether they are really cut out for retirement at all. Here are seven traits happy retirees share.

Good health.

Enjoying good health is the single most important factor impacting retiree happiness, according to a 2009 Watson Wyatt analysis. Retirees in poor health are nearly 50 percent less likely to report being happy, trumping all other factors including money and age.

A significant other.

The same study found that married or cohabiting couples are more likely than singles to be happy in retirement. The news gets even better for couples enjoying retirement together. Retirees whose partners are also retired report being happier than those with a working partner, according to research conducted earlier this year at the University of Greenwich.

A social network.

The Greenwich study also found that having friends was far more important to retirement bliss than having kids. Those who have strong social networks are 30 percent happier with their lives than those without a strong network of friends. Having kids or grandkids had no impact on a retiree's level of contentment.

They are not addicted to television.

After you retire you will have lots of time to fill. If you want to be happy in retirement, don't fill that time with endless hours of television. Heavy TV viewers report lower satisfaction with their lives, according to a 2005 study published by the Institute for Empirical Research in Economics in Zurich. The same results were found again in 2008 by researchers at the University of Maryland. In that study, a direct negative correlation was found between the amount of TV watching and happiness levels: unhappy people watched more TV and happy people watched less.

Intellectual curiosity.

Adults over 70 who choose brain-stimulating hobbies over TV watching are two and a half times less likely to suffer the effects of Alzheimer's disease, according to Richard Stim and Ralph Warner's book Retire Happy: What You Can Do Now to Guarantee a Great Retirement. Not only will shunning TV make you happier, it will make you healthier. Good health will in turn make you happier -- a not-so-vicious cycle.

They aren't addicted to achievement.

The more you are defined by your job, the harder it will be to adjust to life without it. According to Robert Delamontagne's book The Retiring Mind: How to Make the Psychological Transition to Retirement, achievement addicts have the most difficulty transitioning to retirement.

Enough money.

Of course you'll need enough money to support your chosen lifestyle in retirement. But beyond that, more money will not make you happier. The Watson Wyatt survey found that the absolute amount of money you have for retirement is less important than how your retirement income compares to your income before retirement. If you have enough to continue your pre-retirement lifestyle, you have enough.

If you don't have the traits necessary for a happy retirement, don't despair. There's good news for you, too. Consider a retirement that includes a little work. Researchers at the University of Maryland found that retirees who go back to work either full or part-time are healthier. The benefits don't depend on how many hours you work. Even temporary work has the same positive impact on health. If you can't find a paying job, don't worry. A growing body of research shows that retirees who volunteer reap the same benefits of health, happiness, and longevity. And since a happy retirement is a healthy retirement, you'll be set up to enjoy both.

DOW - Rebounding from a small pullback

Dow 10,322.30 +201.77 +1.99%

NEW YORK (AP) -- Stocks had their biggest rally in two weeks Thursday as earnings and economic reports reassured investors that the recovery, while uncertain, is continuing.

The Dow Jones industrial average rose 201 points after second-quarter earnings from Caterpillar Inc., UPS Inc. and other companies beat analysts' forecasts. A better than expected report on housing and encouraging signs of growth in Europe added to the upbeat mood.

But investors might be ready to sell again when trading resumes Friday. After the close of regular trading, Amazon.com Inc. issued a report that fell short of expectations. Its stock fell almost 14 percent in after-hours trading. If the market gives back gains Friday, it would follow its pattern of falling on disappointments in what so far has been a mixed earnings season.

Microsoft Corp. also released earnings after the close of trading and beat analyst estimates. Its stock fell slightly.

Investors had plenty of reasons to buy on Thursday. Caterpillar said its orders are growing and production will pick up in the second half of the year. UPS raised its outlook because of spending by businesses. Caterpillar's stock rose 1.7 percent, while UPS gained 5.2 percent.

STI - Bom pi pi and reverse gear!

Straits Times 2,955.67 +29.58 +1.01%

SINGAPORE - Singapore shares closed higher on Thursday with the blue-chip Straits Times Index up 29.58 points to 2,955.67.

Volume was 1.11 billion shares worth $1.28 billion.

Gainers led losers 234 to 187.

Kep Corp 1H 2010

• Net profit improved 11% to S$669 million compared to 1H 2009’s S$603 million.

• Earnings per share of 41.9 cents, up 11% from 1H 2009’s 37.8 cents.

• Annualised ROE remained above 20%.

• Economic Value Added before exceptional items increased from S$452 million to S$493 million.

• Cash outflow of S$859 million.

• Net gearing of 0.01x.

• Interim dividend increased 7% to 16.0 cents per share.

Consistently give good dividends

Countries with the most millionaires 2010

No. 18: Singapore


Population: 5.1 million

2009 number of millionaire households: 122,697

Percentage increase: 35.4 percent YOY

Share of country’s wealth held by millionaire households: 53 percent

The chances of running into a millionaire are high in Singapore, which had the world’s greatest density of millionaires, who represented 11.4 percent of total households in 2009. They controlled 53 percent of the country’s wealth. Singapore’s economy shrank 2.1 percent last year but has improved, growing 13.1 percent year-on-year in the first quarter of 2010.

--------------------------------------------------

On 23 Jul 2010, Singapore Pools may help to add 1 or more new millioniare into this list.

Smart Money Grabbers over dummy investors - III

Read? Smart Money Grabbers over dummy investors - II

Kishore M Gets Reprimand from MAS

Createwealth8888: Then we have Kelvin Han, now we have Kishore kena reprimand from MAS, and who's next? Sometime, some retail investors need to step back and ask why do these people want to share their Magic Stone or Magic Goose that lays golden eggs for a few thousand bucks? Does it make any moneysense? I don't really know.

Jailed for acting as fund manager without licence


By Khushwant Singh

ADDITIONAL CHARGES: Han could not repay the $718,000 he lost and was declared a bankrupt on Jan 19 last year. Even after that, he got involved in three firms. For this, he was jailed for another month.

TRAINING firm Zone Financial was set up to teach people how to trade futures contracts and indexes.

But it acted as a fund manager between May 2004 and August 2006, collecting nearly $4 million as personal loans from 32 people.

Its managing director, Kelvin Han How Yong, 28, was yesterday jailed for five months after pleading guilty to allowing the firm to engage in fund management without a capital markets services licence from the Monetary Authority of Singapore (MAS).

Han would persuade participants at his training sessions to invest in a fund - called Kelvin's Fund - for periods ranging from a few weeks to six months.

The money was used to trade futures contracts and indexes and he promised his clients returns of 1 per cent to 5 per cent per month, depending on the amount they put in.

By the time he resigned as managing director in August 2006, he had lost about $718,000.

Two months later, the Commercial Affairs Department began investigations after several people reported to the police that Han had cheated them into investing various sums of money.

Han could not repay the money lost and was declared a bankrupt on Jan 19 last year.

He has yet to make any restitution of the $718,000 he lost while the remainder of the sum invested has been returned to the investors.

Even as a bankrupt, Han was not done yet. Although bankrupts are not allowed to engage in the management of companies without the permission of the court or the Official Assignee, Han got involved in three firms almost immediately. For this, he was jailed for another month.

The court heard that Han had asked his father, Mr Han Koon Siong, to set up event management firm Cronwell in November 2006 with a paid-up capital of $1. Between January and August last year, he took charge of the firm and managed it.

Two other charges of acting as a director of AOL Capital and Rimson Investments last year were considered by the judge when deciding on the sentence.

Zone Financial was also fined $20,000 for offering fund management services without the appropriate licence. The firm has since become inactive.

The MAS said there are 110 firms holding capital markets services licences.

How well do investors understand CFD risks?

By R SIVANITHY


ANECDOTAL evidence suggests that the market for contracts for differences (CFDs) has grown strongly over the past few years and shows no signs of slowing down. No one knows just how big the local market is, since these instruments are traded over the counter (OTC).

But thanks to aggressive advertising and marketing by the big CFD players, an increasing number of retail investors are known to be trying their luck in the CFD arena, probably also encouraged by the fact that several local brokers have also jumped on the CFD bandwagon.

This is fine - the more financial instruments there are available to the investing public, the better. But CFDs are highly complex instruments with plenty of inherent risk.

With a currency CFD for example, it is possible to enjoy 100 times leverage, an attractively high number if the market moves in the investor's favour. But what is sometimes forgotten in sales pitches is that the knife cuts both ways.

So you have to wonder: Are retail players fully informed of all the risks? Or is the financial industry's approach the same as it was on the sale of the failed structured products such as Lehman Minibonds - that is, to focus almost exclusively on high potential returns and downplay the high risks?

You also have to ask, for example, why it is that CFDs are not allowed to be sold to retail investors in the US. And why it is that in the UK, retail investors have to take a suitability test before being allowed to trade CFDs?

Australia has, until now, had no major restrictions on CFDs. But last week, the Australian Securities and Investments Commission (ASIC) - the country's corporate regulator - said that it was looking to clamp down on the CFD industry because of widespread ignorance of the risks.

Ignorant of dangers

The Australian Financial Review, in its July 12 edition, quoted ASIC commissioner Greg Medcraft as saying: 'People just don't understand how dangerous (CFDs) are. There is a real lack of understanding about the impact of leveraging and how it can devastate them.

It's actually riskier than going to the bookies, because with bookies, if you put down $10,000 you only lose $10,000. Here, you put down $10,000 and you've lost your house and whole life savings.'

In the course of its investigations into the Aussie CFD market - estimated to be A$350 million last year but thought to be much larger today - ASIC found that investors were not only ignorant of the risks involved, but also were not being warned by those selling CFDs because the sellers themselves did not fully understand the risks.

It was also reported that two market makers or providers - CMC Markets and IG Markets - control around 70 per cent of the market.

Should the Monetary Authority of Singapore conduct a similar survey here to see if the burgeoning number of investors in CFDs really know what they are buying into? The answer, judging by the experience Down Under, is why not?

Questions to ask

If there was to be such a review - apart from the obvious questions about understanding how leverage works - investors should be asked if they understand the exact nature of the product. For instance, that when they take a CFD position, it is the market maker who is on the opposite side of the trade, which means the playing field is slightly tilted in favour of the market maker because it knows what its customers' positions are and can hedge itself accordingly - usually in the underlying cash market.
(Createwealth8888: What made you think that you as retail speculators can beat the Market Maker at their game? Where does all the free makan and pens that these Market Makers provide at their free CFD semniars come from?)
The investor has no such knowledge. Nor does he know what positions the house has taken, so even though some people may think this is insignificant, there is nevertheless asymmetric information in a CFD trade.

Similarly, do investors realise that unlike margin loans, CFD positions are not closed - or force-sold - when the market moves against them, which in theory could mean potentially large losses if the position is not constantly monitored and/or if no stop-loss is implemented?

Additionally, do investors realise that holders of CFDs on stocks are not entitled to dividends, because CFDs are not shares? Do they know that unless they have some form of deposit insurance, there is a chance - albeit small - that they could lose all their money if the market maker goes bust?

Also worth asking is if whether the deposit money collected from opening a CFD account is placed into a pooled segregated account and if so, how this money is to be used if very large customers incur big losses and cannot pay up?

As stated earlier, this is not to say that CFDs are unsuitable investments for retail players. But clearly, these instruments, given their risky nature, are not suitable for everyone. Going by the experience of other developed markets - the latest being Australia - it is worthwhile for local regulators to check if there is adequate disclosure in the marketing of CFDs here.

Help me! I am still losing money in my Investment Quadrant - Part 4

Read? Help me! I am still losing money in my Investment Quadrant - Part 3

Is stock investing also like gambling?

When some retail investors keep losing more and more of their hard earned in the stock investing, and soon they will feel like they are gambling and tell everybody else that SGX is the biggest Casino in Singapore.

So what is Gambling?

Read this Gambling - investment - speculation

When you come to the stock market, you have three options to play the game and you don't necessary have to gamble. It is unlike going to casino in Sentosa or Marina Bay where the only option is to play the game is to gamble.

But, in the stock market, you can choose to gamble, speculate (professional and specialized gambling) or invest.

You can avoid gambling or speculating by having an edge over others in order to survive in the stock market jungle that is full of predators and stop becoming their short-term preys.

When you gamble, you bet your capital and you either you lose your all or part of your capital or take back your capital plus gains.

But, you are not gambling when you put in your capital and not expecting to lose your capital during your expected investing time frame and also have more options to play the game. You can either do one or more of these options:

1. Leave your capital invested and focus on collecting stock dividends and likely over a long period you will finally recover all your capital plus more.
2. Periodically recover your capital plus some capital gains and re-invest when stock market presents another opportunity.
3. Periodically collect both stock dividends and some capital gains and re-invest when stock market presents another opportunity.

Edge

What is your edge? Are you doing these?

1. Investing in the stock market with the money that you are 99.9% sure that you don't need it for the next 5-7 years.
2. Mentally and physically separate this stock investing account from your other saving accounts to mitigate the emotional baggage drag-down during bear markets.  Read more? Two Bank Accounts? No, You may need Four! - Part 2
3. Choose only top tier blue chips that pay regular dividend yield of at least 4-5% and exclude any special dividend payment. These are companies that most likely to be able to borrow more money from the banks or raise more equities in the capital market to refinance their short-term maturing debts or to build up more working capital to survive in bad economy.
4. You don't worry over falling stock prices and still sleep peacefully at nights.

Stop Gambling but Invest!

DOW - Ben & Bear?

Ben & Bear

serving

Dow 10,120.53 109.43 (1.07%)

YF News

4:30 pm : A negative response to comments from Fed Chairman Bernanke sent the stock market to a sharp, broad-based loss after most of the session had been spent in choppy, sideways trade.

Stocks opened with solid gains as market participants initially showed a more positive response to the latest round of earnings than they had in recent sessions. Strength was broad in the early going, but some of the best gains came from financials, which were up as much as 1.5% on the back of better-than-expected results from Morgan Stanley (MS 26.80, +1.58), Wells Fargo (WFC 26.06, +0.15), and US Bancorp (USB 23.07, -0.08) ahead of the adoption of new financial regulation into law. Despite the sector's early strength, it succumbed to broader market pressure and settled with a 1.8% loss. That put it among the worst performing sectors of the session.

The broader market spent the middle of the session chopping along the neutral line, but then made a sharp pullback in response to comments from Fed Chairman Bernanke, who made his semiannual monetary policy report to the Senate Banking Committee this afternoon. Bernanke spoke of continued uncertainty in the economy and made note of the Fed's preparations to take more policy actions as needed. The comments generally reflected the downgraded economic outlook that was communicated in the FOMC Minutes, but the stock market's negative response seemed to reflect its relatively nervous state, which was further underscored by the drop in the yield of the 10-year Treasury Note below 2.90% to its lowest level since April 2009.

Keppel wins S$170 mln worth of Brazilian projects

By ANGELA TAN


Keppel Offshore & Marine Ltd (Keppel O&M), through Keppel Shipyard Limited and Keppel FELS Brasil SA, has secured two contracts totalling S$170 million.

The contracts were clinched from repeat customers for the conversion of a Floating Production Storage and Offloading (FPSO) vessel and repair of a semisubmersible (semi) drilling rig respectively.

The first contract is for the conversion of the Very Large Crude Carrier (VLCC), M/T Theseus, into an FPSO facility for Single Buoy Moorings Inc (SBM).

Work is expected to commence in the third quarter of 2010. Scheduled to leave Keppel Shipyard in the first quarter 2012, the vessel will head to Brazil where the installation and integration of topsides will be completed.

The second contract is by Keppel FELS Brasil with Queiroz Galvao Oleo e Gas (QGOG) for the repair and maintenance of their semi drilling rig, Alaskan Star.

Expected to be completed in October 2010, the rig will be chartered to Petrobras for deployment in the Campos Basin, Rio De Janeiro, offshore Brazil.

STI - Starting of a bad bear?

Straits Times 2,926.09 -22.52 -0.76%

By JOANNAH PEREZ

SINGAPORE - Singapore shares closed weaker on Wednesday with the blue-chip Straits Times Index down 22.52 points to 2,926.09.

Volume was 1.32 billion shares worth $1.59 billion.

Losers led gainers 276 to 189.

DOW - Bulls are fighting back!

Dow 10,229.96 +75.53 +0.74%

4:30 pm : The stock market turned a 1% loss into a 1% gain Tuesday. The swing wasn't inspired by any particular piece of news, but came gradually as sellers slowed their efforts in the face of technical support, which eventually gave way to short covering.

STI - Can still hold up?

SINGAPORE - Singapore shares closed higher on Tuesday with the blue-chip Straits Times Index up 3.19 points to 2,948.61.

Volume was 1.22 billion shares worth $1.30 billion.

Gainers led losers 283 to 172.

Is The Stock Market Rigged?

Investopedia.com
By Stephan Abraham

During the financial crisis that started in 2008 we constantly heard and read about corruption and scandal on Wall Street. We became familiar with terms such as overleveraged, mortgage backed securities, recession and liquidity crisis. We also are reminded of the more recent scandals when we hear names such as Bernie Madoff. Madoff scammed billions from innocent investors by using fictitious financial transactions. There was without a doubt a strong dislike toward Wall Street during those days from Main Street. Many would-be first time investors in the stock market do not believe it is a fair playing field. Likewise, many market veterans have been burned once too many by the greedy few at the expense of the general population.


So investors rightfully wonder whether the stock market is rigged. Technically, the answer is of course, no, the stock market is not rigged but there are some real disadvantages that you will need to overcome to be a successful small investors. Let's examine some of them here which in turn may help you navigate thru future market turmoil.

Information

Despite the seemingly endless financial and stock data found online, as an individual investor you do not have access to in-house technical experts or research analysts. Most investors also do not have sophisticated automated trading programs to provide trading suggestions. Nor are most average investors skilled in technical analysis. Perhaps an overlooked nuance in this informational imbalance is the actual timing or dissemination of information that is crucial. Yes, the internet is somewhat of an equalizing factor, but the reality is that many institutional clients know the outcome of information before the investing public does. Brokerage firms typically have a research department as well as a team of traders.

Capital

Perhaps the biggest disadvantage small investors face is capital. If you aren't at all familiar with the inner workings of the stock market, imagine you own a small convenience store and you want to buy a large order of cigarette lighters for resale. You call up your distributor and ask for a price. On the other hand, Wal-Mart calls this same distributor and says they want the same exact cigarette lighters for their thousands of stores worldwide. At the end of the day, Wal-Mart has more pricing power than the mom-and-pop convenient store and will get a better price.

Perhaps to a lesser extent, the same is true when buying or selling stock. At the transaction level, similar to Wal-Mart, a larger client will be able to negotiate lower prices on commissions and fees compared to the average investor. In addition, the average investor does not get the same opportunity to subscribe for an IPO that an institution does. The hot IPOs are generally reserved for the preferred clients: hedge funds and pension funds, and extremely high net worth individuals. Only when all the preferred clients have been offered to subscribe to the IPO would the average investor get a chance to invest. But at the point, you would have to question an investment in an IPO that all the major clients have rejected.

Political Influence

How many individual investors have direct access to elected government officials or have paid lobbyists to look after their interests? Despite the apparent vitriol for financial institutions by the government during the financial crisis, these financial companies still exercise tremendous influence over our political process. Of course, drug, tobacco and technology companies also exert political prowess in Washington. Many former government officials end up landing big corporate jobs and vice versa. Most of us do not have a seat at the table when new laws are being considered or written. We rely on our elected officials to do this for us who are the very same people that are influenced by big investors.

Mitigation Strategies

Don't fret, there are ways to work the system or at least raise your awareness of it, but it requires effort. Information, although not always timely enough to matter, is at your disposal. The internet has become an equalizer for the small investor. Financial-based websites can help small investors make heads or tails out of the financial markets. Set aside an hour a week to review business news and trends and read the readily available research reports and profiles on sites such as Yahoo! Finance and CBS Market watch. Furthermore, it is important to keep a watchful eye over your investments and set a stop loss regardless of how much you like the company you own. Many people get wiped out of the stock market because they do not set stop losses on their investments. Of course, many investors use diversified index funds an investment strategy and are considered to be more "passive" investors. Regardless of your style, monitoring your investments is good risk management.

Some things are not going to be overcome no matter how much homework you do or discipline you display. Huge investment capital and political influence are examples. But one can review publications and align or at least be aware of where institutional money is going. Many publications such as Investor's Business Daily designate institutional sponsorship as a critical investing indicator. Chances are in your favor if you are buying a stock that has a rising institutional presence. It is also important to realize that markets go up and down and experience what economists refer to as exogenous shocks. These are events that no one, including the privileged few, could have predicted.

Conclusion

The stock market is technically not rigged for the average investor. Laws and governing bodies such as the Securities and Exchange Commission (SEC) exist to "level the playing field" for everyday investors. However, there are undeniable advantages money managers on Wall Street have over us: timely access to privileged information, huge amounts of capital, political influence and greater experience. Although intimidating, these apparent disadvantages should not dissuade you from reaching your investment goals. By carefully monitoring your investments and taking risk mitigation steps such as stop losses, as well as keeping informed of general investment themes or trends, you can overcome these imbalances and still be successful in your investing endeavors.