As from April 2013 my Journey in Investing is to create Retirement Income for Life till 80 years old for two over market cycles of Bull and Bear.

Welcome to Ministry of Wealth!

This blog is authored by an old multi-bagger blue chips stock picker uncle from HDB heartland!

"The market is not your mother. It consists of tough men and women who look for ways to take money away from you instead of pouring milk into your mouth." - Dr. Alexander Elder

"For the things we have to learn before we can do them, we learn by doing them." - Aristotle

It is here where I share with you how I did it! FREE Education in stock market wisdom.

Think Investing as Tug of War - Read more? Click and scroll down



Important Notice and Attention: If you are looking for such ideas; here is the wrong blog to visit.

Value Investing
Dividend/Income Investing
Technical Analysis and Charting
Stock Tips

Thursday, 30 September 2010

5 Retirement Savings Ideas For Young People

by Amy E. Buttell

When you're just starting out in the workforce, retirement seems like a million years away. Besides, you likely have student loans to pay off and maybe a car loan. And odds are, you aren't making a great salary in your first job, if you've even got a job following graduation.

Still, compounding is your ally in retirement savings, so the earlier you start saving, the better. When you begin retirement planning in your 20s and 30s, those dollars have years to grow and are potentially much more valuable than dollars you save in your 50s and 60s -- though any savings helps.

It's important to establish good savings habits when you're young, even though you're likely on a tight budget, says Joe Jennings, investment director for PNC Wealth Management in Baltimore.

1. Budget Carefully When Looking For Work

It's not really possible to start a retirement savings fund when you're going out on interviews and looking for a job. But there are ways to cultivate a low-spending mindset to prepare for saving for retirement once you do get a job.

"Living with your parents while you look for a job, and even after you get one, can help you save money, more than if you were living on your own," says John Corn, CPA, a financial planner with Buckingham Asset Management in St. Louis. You can save up for a deposit on an apartment or begin to accumulate an emergency fund to see you through unexpected expenses like car repairs.

Even if living with your parents isn't an option, you can minimize your expenses by living with roommates, deferring any student loan payments for as long as possible and choosing inexpensive entertainment options.

2. New Jobs Bring Income, More Expenses

Once you've landed your first job, you may need to move, buy some new clothes for work and reorganize your finances. One key aspect of moving into this new phase of life is budgeting, Corn says.

"Every young person needs a budget," he says. "You need to understand what's coming in, net of taxes each month, and what's going out to pay your benefits. Then you have rent, utilities and all the other expenses, like student loan payments."

You can use free budget software at websites such as Mint.com to help you track your income and expenses and set goals. "Your first expense should be to pay yourself, especially to establish an emergency fund in case you lose your job," he says. "You can also save for short- or intermediate-term goals like a new car."

Retirement planning should also be a priority.

3. Invest in Company Retirement Plan

When you start your new job, you'll be given materials about your company's retirement plan, if it offers one. Most companies offer a 401(k) or 403(b) plan where you contribute a percentage of your earnings and, in many cases, the company matches a percentage of those earnings.

"Make sure you aren't just investing your money, that you are also investing your time," Jennings says. "Do some research on your investing options. If there is a match to the 401(k) plan, you want to invest enough so that you get the company match. It's free money; don't leave that on the table."

4. Family Life Brings Financial Opportunities, Challenges

When you get married, you need to reach some common ground with your new spouse about saving and spending. With more income, you have the opportunity to save more for retirement by contributing to two retirement plans.

You also need to know what financial issues and baggage you and your spouse may bring into the marriage. "You want to understand what that person's credit history has been like and what their credit score is," says Corn. "You want to get a picture of what each of your assets and debts are, too, so you know where you stand in terms of your ability as a couple to buy a new car or a house."

As your family grows with the addition of a child or two, the challenges increase. You need to balance the need to continue to save for retirement with establishing and building a college fund. No matter how important it is for you to help your child out with college, don't skimp on your retirement savings. You can't borrow to pay for your retirement, but your child can borrow to pay for college.

5. Boost Savings as Earnings Increase

As you move up the career ladder, it's important to continue to boost your retirement savings with your salary increases. "If you've maxed out your 401(k) plan, you can contribute to a Roth IRA or open a brokerage account and dollar cost average into a diversified mutual fund with $100 a month," Corn says.

And don't ignore that emergency fund. As your family grows and your expenses increase, you'll need to keep adding to your emergency fund. "Generally, we recommend that you keep six months of living expenses in an emergency fund, but with unemployment still pretty high, it makes sense to save from nine months to a year's (worth) of expenses," says Jennings.

9M FY 10 Quarterly Performance Report

Year Goal Hit Rate


Year Goal Hit Rate improved by +9.0% from 39.1% in 9M FY09 to 48.1% in 9M FY10.


(In 2003, I set some bullish progressive year goals from 2003 to 2011.
2010 Year Goal is 74.9% of 2009 Total Salary including all CPF contributions. Quite a big goal!)


Finding Back The Stolen Wealth By The 2008 Greater Bear

Thank to 2010 Bulls for pushing my portfolio value to just -10.8% away from 2007 Bulls while STI is -20.1% away from its Oct 2007 Peak.


More bulls please come and help to push STI up!



Keppel FELS wins US$101 mln contracts for drilling rigs

SINGAPORE : Keppel Corp on Thursday said its wholly-owned subsidiary Keppel FELS has secured new contracts worth S$134 million to complete and refurbish two semi-submersible drilling rigs.


The first contract was awarded by Italian oil and gas contractor Saipem for the commissioning of the technologically advanced semi-submersible rig called Scarabeo 9.

The work scope involves the commissioning of all marine and drilling sub-systems onboard the rig, which will be able to operate at a water depth of 3,600 metres.

Scarabeo 9 is slated to depart from a Chinese yard and arrive in Keppel FELS towards the end of October this year.

The second contract was awarded by a subsidiary of US oil and gas company, Ensco, for the upgrade, repair and refurbishment of its proprietary semi-submersible rig.

The major work scope includes significant life extension work, renewing steel and pipes, operational enhancements, overhauling machinery and expanding and updating the living quarters.

This rig has arrived at Keppel FELS, after fulfilling its drilling contract with Chevron in Perth, Western Australia.

The contracts are not expected to have a material impact on Keppel's earnings in the current financial year. - CNA/ms

Wednesday, 29 September 2010

Spot the Sucker – It Might Be You

Source: Jesse-Livermore.com

In his 1987 letter to shareholders, the masterfully quotable Warren Buffett said, “If you’ve been in the [poker] game 30 minutes and you don’t know who the patsy is, you’re the patsy.”


In the same letter, he said, “If you aren’t certain that you understand and can value your business far better than Mr. Market, you don’t belong in the game.”

Four Grades of Sucker

The equally masterful quote-smith, Jesse Livermore, categorized four grades of sucker:

The Beginning Sucker: has read little and knows little.

The Semi-Sucker: has read books about trading – usually written by higher-grade suckers. He can recite wise stock market sayings. He does not realize that reading books is not the same as trading experience. He loses money more slowly than the beginning sucker because he has learned some basic trading rules.

The Wall Street Fool: knows enough to make a profit if he sticks faithfully to his trading rules. The excitement of the market overpowers the fool; he trades more often than he should and loses his advantage over the market.

The Higher Grade Sucker: makes his money from selling trading books because he can’t make money in the markets.

Although Buffett and Livermore are at opposite ends of the financial spectrum in terms of buy and sell criteria, they wholeheartedly agree that if you don’t have some advantage over average market participants, you’ll lose money.

There are a lot of intelligent players in the markets and plenty of fools too. Unfortunately, too many stock market books try to persuade their readers that fools predominate, lulling the semi-sucker into a false sense of security. If only you will do what it says in the book (often with too little detail to put together a truly effective trading strategy) you’ll be successful.

Before you trade, you should have some idea of where your advantage is coming from. You should paper trade to verify your advantage.

Then you need to trade for real – this is hardest of all because once you have your own money in the markets, your emotional involvement increases. The emotions – greed and fear start kicking in – cause difficulties for many traders. Some find the advantage they thought they had evaporates.

So, do you call yourself a beginning sucker, a semi-sucker, a Wall Street fool, a higher-grade sucker or a successful trader? The best test is the direction of your trading account balance over several years

Cambridge- Sold $0.545, ROC 19.5%

Use the money to buy Cambridge Diet?

Round 1: ROC 19.5%, 362 days, B $0.455 S $0.545

Analysts say STI could hit record 4,000 points by end 2012

Createwealth8888: Do you believe it or not?
---------------------------------------------------
By Rachel Kelly

Posted: 28 September 2010 2249 hrs

SINGAPORE : The benchmark Straits Times Index (STI) could hit a record high of 4,000 points by the end of 2012.

Experts said that is because companies earnings in Asia are trending upward and this will propel markets higher.

Corporates within Asia are expected to report record earnings in the next two years on the back of economic growth.

Some experts expect earnings growth in Singapore to hit 8.9 per cent in 2011, and 9.8 per cent in 2012.

For the same period across Asia ex-Japan, earnings growth is expected to go up in the region of 11 per cent.

And experts said that this will give the market a boost.

Wong Sui Jau, GM of Fundsupermart.com said: "Within the next two years, several Asian markets will see record earnings growth by 2010, Singapore by 2012, and then other countries by 2011.

"The last time we had record earnings growth was in 2007, and... that was also the time that markets hit record highs. So the question will be, if in the next two years, we see (record) earnings again, then will we see Asian markets, Singapore markets hit an all-time high? We believe yes, this is what is going to happen."

In the last three months, the STI has climbed around 8 per cent, and reasonable valuations could contribute to the index moving even higher.

And during this period of earnings growth, experts said small cap companies, as well as sectors such as leisure and technology, offer potential.

Terence Wong, co-head of Research at DMG & Partners said: "If you look at the small cap space right now, a lot of them have risen considerably. I'd be a little bit cautious, but not too much because I think most of these small caps that have gone up over the last few months, a lot of them are fundamentally sound. It is very unlike 2007.

"So coming back to 2010, many of these stocks, despite them having risen quite a fair bit, I think the valuations still justify a buy position."

In the short term however, market watchers noted that investors continue to trade with caution under concerns of a double-dip recession in the US.

But some said that such dark clouds will eventually subside. - CNA /ls

Tuesday, 28 September 2010

Noble to expand into supplies of nuclear fuel

NOBLE Group Ltd, which counts China's sovereign wealth fund as a shareholder, plans to expand into supplies of nuclear fuel to meet rising demand from China and India, its executive chairman said.

The company bought a 5.1 per cent stake in USEC Inc, a US provider of enriched uranium producing 50 per cent of the fuel in the world, Tobias Brown said in Singapore yesterday. Of all the nuclear plants being built, about half are in China, he said. 'We are looking carefully at the provision of nuclear fuel to Asia,' he noted. 'There's no doubt that one cornerstone of energy production in Asia will be the use of nuclear power generation.'

China's demand for uranium may rise to 20,000 metric tonnes a year by 2020, more than a third of the 50,572 tonnes mined globally last year, according to the World Nuclear Association. India's needs will grow 10-fold to 8,000 tonnes as it quadruples nuclear-power capacity to 20 gigawatts, according to Jagdeep Ghai, finance director at state-owned Nuclear Power Corp. -- Bloomberg

Sembcorp Marine's yard wins two FPSO deals worth S$75 mln

By ANGELA TAN


Sembcorp Marine said on Tuesday that its yard, Sembawang Shipyard, has secured two FPSO contracts worth $75 million (US$57 million).

One contract was awarded by BW Offshore, while the other was by Bluewater Energy Services BV in the Netherlands

A Sound Strategy for an Uncertain Time

by James B. Stewart

Monday, September 27, 2010

Is the stock market losing its predictive powers?

We know the market anticipates economic activity, which is why it's pointless to buy stocks only after good news has been published. Stock prices are one of the leading economic indicators used by the government to forecast economic activity. The rule of thumb has always been that stocks anticipate the broad economy by about six months.

But now that it's official, and we know from the National Bureau of Economic Research that the Great Recession began in December 2007 and ended in June 2009, the market's crystal ball is looking a little cloudy
The S&P 500 peaked at 1565 in October 2007. By late November it had dropped nearly 8%, but not the bear market drop of 20% or more that traditionally signals recession. And then, as the recession actually started, the market rallied, with the S&P reaching 1427 in May 2008. The market gave investors little or no warning of the grave crisis to come.

The S&P hit a bottom of 677 in March 2009, nearly three months before the recession ended, and rose a sharp 30% by May. That was a pretty clear signal, although the forecast came three months late.

Given that they reflect the collective wisdom of millions of investors, the markets may be the best prognosticator we have. But it's just not good enough. These recent results reinforce my belief -- and a fundamental premise of this column -- that no one can predict the future. It is not only futile but counterproductive to invest based on our feelings about where the market is headed next. Sadly, for most investors that approach leads to buying high and selling low, which is anathema to the Common Sense approach.

I believe in a disciplined approach to personal investing that minimizes emotions in decision-making, respects the past, which is knowable, and never tries to predict the future, which is not. I share my decisions in this column and the results are on display for all to see.

By following the Common Sense system, I never buy stocks at a market peak, and I never sell at a bottom. My aim -- successful so far -- is to buy lower and sell higher. I don't claim to have perfect timing. No one can identify markets tops and bottoms with any consistency. But my goal is to earn a profit, and over the long-term, beat the market averages. So far it's worked. (A hypothetical portfolio using the strategy would have outperformed the S&P 500 even during the most volatile stretch of the financial crisis.)

The Common Sense system is also simple to execute. It requires no computers or high speed trading capacity. Indeed, it doesn't require much trading at all, which is why you won't find a stock tip in this column every week. It's designed for average investors, not professionals. I'm a working journalist, not a stockbroker or hedge fund manager. But I firmly believe everyone can manage their own investment portfolios and outperform a simple buy-and-hold index approach.

Here's how the system works: When the market is dropping, I buy stocks at intervals of 10% declines from the most recent peak. When it's rising, I sell at intervals of 25% gains from the most recent low. (Createwealth8888: Quite similar to my investing strategy of buy slowly and sell slowly) These figures are roughly one-half the historical average losses of 20% in bear markets and gains of 50% in bull markets since 1979. They are round numbers and the math is easy to do in your head. I use the NASDAQ composite average as my benchmark, partly because I had mostly NASDAQ-listed stocks when I began the system, and also because the NASDAQ is a little more volatile than the S&P 500 or Dow Jones, which provides more trading opportunities. Investors who want to buy and sell a little less often might prefer another index, but the NASDAQ has worked well for me.

I always alert readers when a new threshold is reached and share my decision to buy or sell. The current targets are about 2025 and 2600.

Easy as this system sounds -- and it is simple in concept -- it's amazing how it difficult it sometimes feels. I remember vividly being at a cocktail party in October 2008. Everyone was boasting about their recent decisions to bail out of the stock market. When my turn came, and I said I had bought stocks that very morning, they looked at me like I was from Mars. The S&P 500 was trading at about 840 that day. On Thursday, it closed at 1125.

Of course there's much more to this column than reacting to broad moves in the market averages. As a journalist, I'm constantly translating news into investment strategies that I both implement myself and share with readers.

My overall exposure to the market may be constant, but I often substitute stocks and sectors. (Createwealth8888: Similar to my Noah Ark strategy, a pair of each kind is nice - sector rotation in buying and selling) Most of all, I find investing and thinking about markets to be both stimulating and fun. It's an adventure and a learning experience, as well as financially rewarding. I hope you'll continue to share it with me.

Understanding Stock Market Risks - Financial Fraud Risk is real! (2)

Read? Understanding Stock Market Risks - Financial Fraud Risk is real!

Another one! This type of risk can never be discovered through by any sort of TA or FA.

-------------------------------------------------------------------------------
SLA staff member charged with fraud of $11.8m


SINGAPORE: A senior staff member of the Singapore Land Authority (SLA) is facing 249 charges of cheating the Authority $11.8 million.

40-year-old Koh Seah Wee was charged on June 25 and is alleged to have conspired with two others, Lim Chai Meng and Ho Yen Teck to cheat the Authority.

He did so by awarding network maintenance contracts to various companies.

Koh was a deputy director with SLA's Technology and Infrastructure Department. His level of approval allowed payments to be made to these shell companies and no work was done to fulfil the contracts.

According to some charge sheets, payments were made in amounts ranging from $25,000 to $60,000.

Koh also faced several charges of using the ill-gotten gains of his cheating scheme to buy cars and properties.

The charges spelt out that Koh had used the money to pay for a Lamborghini, Mercedes Benz cars, acquire property at Axis@Siglap along East Coast Terrace, and purchase various unit trusts.

Koh is being defended by Lawyer Ravinderpal Singh and his case will be mentioned again on October 19.

Koh has been remanded and his bail stands at $1.5 million

Monday, 27 September 2010

Buy Gold/Silver as insurance or hedge against inflation?

Here is the Maths and decide for yourself how wrong can you be by ignoring hedging?


Let simply assume your  wealth is $100K and you hedge 7% of it with Gold/Silver and SGD depreciated by -30% and Gold/Silver appreciated by 300%.

So what is difference between hedge and No-hedge?

This is just 23%.  Is 23% that significant for 7% hedge?

Novel Polymer-Free Drug-Coated Stent Demonstrates Comparable Safety and Efficacy to Conventional Drug-Eluting Stent with Durable Polymer at 12 Months

Washington DC, USA, 25 September 2010 – Biosensors International Group, Ltd (“Biosensors”, “Company”, BIG:SP) today announced 12-month results from the First-In-Man (“FIM”) trial of BioFreedom™, a novel polymer-free drug-coated stent (“DCS”) which showed a similar reduction in in-stent late lumen loss to Boston Scientific’s Taxus® Liberté® drug-eluting stent (DES), with no evidence of stent thrombosis. These results were presented by the Principal Investigator, Professor Eberhard Grube, International Heart Center Essen, Germany, as part of the First Report Investigations III session at the 22nd annual Transcatheter Cardiovascular Therapeutics (“TCT”) scientific symposium, sponsored by the Cardiovascular Research Foundation.


BioFreedom represents the latest development in Biosensors stent technology, featuring a micro-structured abluminal surface which permits the controlled release of Biolimus A9™ without the use of a polymer. Two versions of the stent were studied in this trial – one with a drug dosage of 15.6 μg/ per mm of stent length (standard dose) and the other with a drug dosage of 7.8 μg/ per mm of stent length (low dose).

In this second cohort of the FIM trial, 107 patients were equally randomized to each of three treatment groups: BioFreedom standard dose (SD); BioFreedom low dose (LD); or Taxus Liberté. Median in-stent late lumen loss in patients receiving BioFreedom SD was 0.17 mm and in those receiving BioFreedom LD 0.22 mm, compared with a median in-stent late lumen loss of 0.35 mm in the Taxus Liberté group. BioFreedom SD demonstrated equivalent efficacy, measured by late lumen loss, compared with Taxus Liberté (P = 0.001), with a trend towards superiority (P = 0.11).

Both BioFreedom SD and BioFreedom LD demonstrated sustained safety up to 12 months, including absence of stent thrombosis.

“The results from this study are very significant as they demonstrate for the first time that a polymer free drug-coated stent is as safe and effective as a conventional drug-eluting stent with a durable polymer coating over a twelve-month period”, commented Professor Grube. “I am excited about the concept of a polymer-free stent, as the rapid drug clearance and absence of a polymer drug carrier could promote more rapid vessel healing and ultimately reduce the need for longer term dual anti-platelet therapy. However, additional clinical data is required to confirm these initial encouraging results.”
 
“These latest results confirm that we continue to lead the industry in stent innovation, first in terms of biodegradable polymer technology and now polymer-free technology”, added Jeffrey B. Jump, President & CEO of Biosensors. “We are now in the process of planning larger studies with longer-term follow-up to further investigate this exciting development”.


BioFreedom FIM is a prospective, multi-centre study involving 182 patients with symptomatic ischemic heart disease. It consists of a first cohort of 75 patients, with a secondary endpoint of in-stent late lumen loss at 4 months, and a second cohort of 107 patients, with a primary endpoint of in-stent late lumen loss at 12 months. In each cohort patients were randomized into three groups: those treated with BioFreedom SD; those treated with BioFreedom LD; and those treated with Taxus Liberté. Results from the first cohort, showing equivalence between BioFreedom and Taxus Liberté, were presented at TCT in 2009. The clinical status of the patients in the trial is being reported annually for five years from the date of stent implant.
 

Sunday, 26 September 2010

SIA to sell five-year bonds worth S$300m dollars (2)

Read? SIA to sell five-year bonds worth S$300m dollars

Read older post? Measure, Measure, Measure - Part 2

Three colleagues, a friend and a relative have asked me good to invest in SIA bond at 2.15% or not?

My responses to them:

  • Do you want to lock in for 5-year for a mere 2.15% returns?
  • Note that at such a low rate of 2.15% it may be easy to buy now but hard to sell in the market as the future buyers for this bond will have little meat left. Unlike buying preference bank shares at 4-5% yield it will still have some meat left for the future buyers e.g 3-4% is still not bad.
  • Since it is lower than CPF OA risk-free rate at 2.5% so is it wise to take a non risk-free investment for a lower return?
I ask them to decide for themselves.

Trading Courses – Does it work?

Borrow the idea from La Papillion


** "BIAS" is a special feature in my blog where I get to say whatever I want with scant regards for your feelings. I'm not politically correct in this feature, so go ahead, judge me."

Read older post? Why the guy was so talented, he has to give seminars?

Read? Trading Courses – Does it work?

Many so-called Gurus may not be that excellent in their own trading skills but have excellent marketing, selling, and presentation skills and able to continue to sell courses to gullible customers.

Read the following articles on the greatest Gann course and Gann Software and you may open up your mind

W.D. Gann is one of the most famous traders of all time, and has a huge devoted following - however the fact is, Gann never made the huge profits many of his disciples claim.


He did not have a success rate of 90%, as is often claimed - the logic his methods are based upon are unsound, and his predictive methods don't predict - they leave everything to subjective opinion!

Many sources quote Gann's trading profits at $50 million dollars, however this is not true.

An interview that Alexander Elder had with his son tells the truth.

Firstly, his son confirmed that when his father died in the 1950s his estate was valued at just $100,000 - and that included his house.

Secondly, his son confirmed that Gann was unable to make enough money from trading, and therefore supplemented his income by writing and selling courses.

Which Theory of Market Behaviours to believe?

Source: The Universal Principles of Successful Trading - Brent Penfold.


I will briefly summarise it here.

Three Broad Groups:

1. The Predictors

They are:
  • astrology
  • cycle analysis
  • Elliot wave theory
  • fractual analysis
  • fundamental analysis
  • geometry
  • W.D. Gann
Practitioners of these schools of analysis believe they can determine where the markets or stocks are heading.

They hold out the appealing notion that you can know the market or stock's future direction and there control your own trading or investing destiny.

They project an appearance of certainty for the future. The predictors present an illusion of knowledge, which in turn presents an illusion of control. These illusions lead to surplus of optimism and confidence and then fall into intellectual trap.

2. The Dreamers

Dreamers are those use indicators, just some examples of indicators and there are too many of them

  • ADX
  • DMI
  • enevelopes
  • ratio analysis
  • MACD
  • moving averages
  • ROC
  • RSI
  • Oscillators
These practitioners are dreamers because most of these indicators are derivatives of the price and contain adjustable parameters. Consequently, they represent second-hand curve-fitted information. Dreamers believe they will make money trading this type of second-hand adjustable data. (Createwealth8888: the key word is adjustable, the promoters of these indicators will always win their case. If you haven't been making money using these indicators, you haven't learn to adjust it correctly. Not a big joke meh?)

3. The Pragmatists

They are those use some of the following:
  • breakout analysis
  • chart analysis
  • DOW theory
  • intermarket analysis
  • market profile
  • pattern analysis
  • pivot point analysis
  • seasonals
  • spread analysis
  • statistical analysis
  • tape reading
  • volume analysis
The pragmatists focus on raw price and raw volume. They have no interests in looking into the future. They prefers not to deal with substitutes such as indicators but focus on the real thing - price.

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

Now, I realize I more inclined towards the Pragmatist camp.

Read? Fundamental or Technical Analysis? - Revisit 3

Read? Technical Indicators? - Part 2

Will You Try To Pay Off Your Housing Loan ASAP If You Have One? - 3rd revisit

Read older post? Will You Try To Pay Off Your Housing Loan ASAP If You Have One? - 2nd revisit

Heard another round of discussions. Should I pay off my housing loan asap if I am able to?

Actually, you should be asking yourself how do you want to feel in the next few recessions when you become an older and matured employee and will have higher chance of being seen as a cost-cutting element to help the company to survive the recession.

I have witnessed more than enough cases to believe so. Sometime, life can be that cruel, those are desperate and worry of being letting off during recessions will somehow have the axes fall on them first.

A September Bear Looks to October

by David Callaway

Friday, September 24, 2010

Earnings warnings in the tech and banking industries. A two-day crack in the dollar. Gold nearing $1,300 an ounce. And the Obama Administration imploding faster than the Chicago Cubs in April.

I admit it. I was one of the bears on September, telling everybody that the traditional bad month for stocks was shaping up to be a doozy this year. And through three weeks, the market has proved me wrong.

Of course, it's the second half of September that earns the month its poor reputation, so we've still got a few days left. But you can't argue with a 7% gain in stocks in such a short time. It's been a good run. More from MarketWatch.com:

Which makes me all the more worried about the next few weeks as earnings warning season hits. The S&P 500 Index (NYSE: ^GSPC - News) is stuck at the 1,130 level that many technical analysts say it has to clear before we can have another meaningful move higher.

Even though the European debt situation appears to have faded, for now, it's hard to see stocks extending their gains all the way through the election and then beyond to the end of the year, without some sort of pullback. If one is to come, earnings warning season might be the time.

Step forward to October, a month of notorious market meltdowns, as well as a month known for marking the bottom of big stock declines. Now that the Fed is out of the way for another six weeks or so, it's all about earnings for U.S. markets.

Adobe Systems Inc.'s (Nasdaq: ADBE - News) weaker-than-expected outlook really wasn't that weak, but investors wasted no time reacting on Wednesday, pummeling the shares for a 20% loss to a new 52-week low at one point in trading.

A hair-trigger reaction like that shows a nervous market, with investors poised to move quickly to protect the gift given to them by the markets in the past few weeks.

Likewise the sudden move by the euro against the dollar, springing from $1.30 to above $1.34 in just two days of trading. Yes, sighs of relief from Irish and Greek debt investors after successful bond auctions helped, but that was still an extraordinary move.

Meanwhile, Deutsche Bank's (NYSE: DB - News) warning about third-quarter results from its corporate banking and securities business confirmed what we already knew about what a lousy summer it was on Wall Street. Big banks are already shedding jobs as a dull market with no volume hits their results.

Against this weak backdrop are the huge gains in gold and silver, which continue to defy gravity on the weak dollar and in anticipation of a spike in inflation that the Fed just can't see right now. Moves by the Obama Administration to conduct the traditional midterm housecleaning before the election can't help the dollar, so precious metals bulls are relishing the opportunity to push even higher in the next several days.

The key here is the trading volumes. They've started to pick up in the past few days. If we're going to see a jump in volatility it will likely come soon, before the traditional pre-election rally takes hold and fund managers begin prepping their portfolios for a fourth-quarter run.

If stocks do lurch lower, however, bulls will see that as a buying opportunity ahead of expectations for a better economic recovery after the election and early next year. And as noted before, there is a ton of cash on the sidelines looking for an appropriate entry point.

So while the next few weeks of earnings warnings could be a nightmare for some specific shareholders, particularly in tech and banking, any pickup in trading activity can only be a plus for investors looking past the quarterly earnings horror show.

Saturday, 25 September 2010

Week Ahead: Stocks Broke Out, but Can They Hold Gains?

By: Patti Domm

CNBC Executive Editor

Stocks broke out of their summertime trading range, and the question now is whether the market can hold on to September's record-setting gains.

"We're at some major market levels...1150 in the S&P, $1.35 in the euro and $1,300 for gold. We need to surpass those levels to see further immediate gains."

With the past week's 2.4 percent gain, the Dow Jones Industrial Average is now up 8.44 percent for the month and is on track for its best September since 1939.  

The Dow, at 10,860, is up 11.1 percent so far for the third quarter, which ends Thursday. The S&P 500, up 9.5 percent in September, closed above the tough, 1130 resistance level twice in the past week, a signal to some traders that the market may be set to trade in a new higher range.
"Ultimately, the big deal is going to be whether the economic growth rate is really accelerating in the fourth quarter or whether it doesn't," said James Paulsen, chief strategist at Wells Capital Management. "In the short run, these technical levels matter. There's no way to get to 1200 unless you break through what's been the overhead resistance to the trading range since May."

"If I'm worried about anything I am worried a little about the earnings season, only because you had a weak quarter...I'm watching the GDP revisions leading up to the earnings reports. If people are revising down their growth, you generally get a disappointing earnings season. If they're revising up, that's a good sign," he said.

There is a smattering of data in the coming week, including ISM manufacturing data, consumer sentiment readings and monthly auto sales.

Economists are watching the personal consumption expenditure data on Friday, since it is a gauge the Fed looks at as a measure of inflation.

The Fed, in the past week, was the biggest driver of markets, after it promised it would move on quantitative easing, or QE, if the economy warrants it.

The dollar went into a tail spin, losing 3.4 percent against the euro and nearly 2 percent against the yen. For the week, Treasurys were slightly higher, with the 10-year yielding 2.610 percent.

Gold rose 1.6 percent to a record $1,296 per troy ounce, and silver jumped 2.9 percent to $21.38 per ounce, a 30-year high. Oil rose 2.1 percent to $76.49 per barrel as the Fed's comments sent buyers into commodities. Some economists believe the Fed will use its Nov. 3 meeting to announce QE, which would likely be the purchase of a significant amount of Treasury securities by the Fed in an effort to push lending rates even lower.

Some of the economic data also was a bit better than expected in the past week, including Friday's durable goods, which had been disappointing last month. "It was the report that hit forecasting the hardest. Now everybody's wiping their foreheads," said Credit Suisse economist Jonathan Basile.

Basile said the durable goods report, which showed a 1.3 percent decline in August, was actually better than expected because it showed core capital goods orders gained 4.1 percent. "Firms went from major destocking to a little restocking. Then they wet to understocked, to just about right," he said.

September Surprise

September's strong market performance was a surprise to many strategists who had expected the usually tough month to be turbulent on the downside. The question in the next week is whether fund managers will sell to capture their September and third quarter gains, or ride it out into October.

"I think you're in for a period of the stock market working its way higher but at a very modest pace. I think you're going to see a lot of volatility between now and the end of the year, but it wouldn't surprise me to see a pull back here."

"Our target has been 1100 to 1140 (on the S&P), which would be a pretty flat market," said Scott Wren, of Wells Fargo Advisers. "I think you're in for a period of the stock market working its way higher but at a very modest pace. I think you're going to see a lot of volatility between now and the end of the year, but it wouldn't surprise me to see a pull back here. We're a little cautious in the near term."

Brian Dolan, strategist with Forex.com, said the final days of September could bring an even weaker dollar. (

"It's month-end. It's quarter-end, and it's going to get a little bit sloppy here. In terms of those kind of flows, in terms of the gains we've seen in U.S. shares, there's probably going to be a need for greater selling on the month end date. It'll probably lead up into that. Certainly the dollar is on its heels at the moment. It's not going to take much to push that," he said.

"We're at some major market levels...1150 in the S&P, $1.35 in the euro and it was $1,300 for gold. We need to surpass those levels to see further immediate gains. There is the risk of some consolidation in the next week," he said.

In the Treasury market, traders are watching the auction of $100 billion in 2-year, 5-year and 7-year notes Tuesday through Thursday.

Econorama

The week's data includes the S&P/Case Shiller home price index and consumer confidence, both released on Tuesday. Thursday's numbers include revisions to second quarter GDP, the Chicago Purchase Managers' index and weekly jobless claims. Friday's reports include consumer spending, ISM manufacturing, and construction spending. There are also personal income and spending numbers and the core PCE deflator Friday.

Other events this week include the first meeting of the Financial Stability Oversight Committee on Friday. That group is headed by Treasury Secretary Tim Geithner, and includes Fed Chairman Ben Bernanke; Securities and Exchange Commission Chair Mary Schapiro; FDIC Chair Sheila Bair, and Commodities Futures Trading Commission Chairman Gary Gensler, among others. The FDIC also has an open board meeting Monday. Its agenda includes discussion of how, under new financial regulatory rules, a large financial firm could be liquidated if it is a risk to the system.

Bernanke also speaks on Thursday at a town hall meeting with educators in Washington. Other Fed speakers include Atlanta Fed president Dennis Lockhart on Tuesday' Minneapolis Fed President Narayana Kocherlakota; Philadelphia Fed President Charles Plosser, and Boston Fed President Eric Rosengren, all speak Wednesday. The New York Fed's William Dudley speaks Friday morning at a journalism conference, and Dallas Fed President Richard Fischer speaks Friday on the economy.

Dolan said he is also watching Chinese purchasing managers' data Wednesday and Friday and the August leading index early in the week. The Japanese Tankan survey is released on Wednesday. European finance ministers meet at the beginning and European Central Bank President Jean-Claude Trichet is expected to speak.

Who are the Greater Fools now? Buyers or Sellers?

Everybody comes to the stock market with one objective - to make money?


Since everybody want to make money from the stock market; where does the money really come from?



Of course, there will be some money coming from companies paying out periodically as stock dividends; but that is not much money compare to the enormous size of the money changing hand in each stock market trading day.

So most of the money in the stock market will come from the Greater Fools distributing their hard earned money to the Better Fools.

It is foolish to expect to make money from the stock market where in fact there is so little money to make from stock dividends as most of the money gain or loss will come from the Greater Fools. In the stock market you are just another fool and don't ever think you are smarter than the rest of the market players.

It is either you are a Greater Fool

or a Better Fool.


Friday, 24 September 2010

Olam in merger talks with Louis Dreyfus, shares jump

SINGAPORE - Louis Dreyfus, one of the world's top commodity traders, is in merger talks with smaller rival Olam International valued at nearly US$5 billion, as the French group moves to expand its footprint in Asia and Africa.

The news, which drove Singapore-based Olam's shares up as much as 9.2 per cent to a three-year high, underscores the sector consolidation as global players seek to extend their reach in different commodities to take advantage of booming demand.

Louis Dreyfus Commodities, which generates US$35 billion in revenue for commodity trading, dominates the flow of agricultural commodities worldwide together with rivals Archer Daniels Midland, Bunge Ltd and Cargill Inc.

'If there is a merger, they could take advantage of economies of scale and geographical locations. Olam is strong in Africa, Dreyfus is strong in the United States,' DBS Vickers analyst Ben Santoso.

'If you have a merger between these two, then they could easily rival the bigger competitors such as Cargill, Bunge or Archer Daniels Midland,' he said.

Louis Dreyfus is the world's largest cotton and rice trader and ranks in the top three in orange juice, wheat, corn and sugar markets.

Bankers familiar with Olam's workings said while the talks are at an early stage, the two companies are likely to discuss a joint venture in areas they overlap. One analyst, who asked not to be named said a full-fledged merger was unlikely.

Olam confirmed the talks with Louis Dreyfus after France's Les Echos newspaper reported on Thursday the family-owned group was considering a merger and a listing of certain activities among possible options to expand.

'The company wishes to inform shareholders that it had engaged in preliminary confidential discussions with Louis Dreyfus Commodities in relation to a possible business collaboration which may take the form of, among others, a merger,' the Olam statement said.

No benefits?

Andreas Bokkenheuser, a Singapore-based analyst at UBS, said a full merger was unlikely to benefit Olam because Louis Dreyfus was a significant trader of cyclical commodities so a combined entity would trade at similar multiples to rival Noble.

Olam trades at 22 times 2011 earnings, against Noble Group's 15 times earnings, UBS estimates.

'Olam already commands the largest market share within several of its product lines, so we question whether a merger would render any advantages in the form of increased pricing power and supply chain synergies,' Mr Bokkenheuser said.

Olam, a US$4.7 billion company which generated S$10.5 billion (US$7.9 billion) in revenue in the 2009/10 financial year, said the talks were still at an early stage and no definitive agreements have been entered into so far.

The company, about 14 per cent owned by Temasek Holdings, is headed by India-born Sunny Verghese.

A source familiar with CEO Verghese said the Louis Dreyfus family could be looking for professionals to run the business in emerging markets.

'Sunny can run a tight ship and can really give good direction, ' said the source.

Mr Verghese last year announced a three-year plan for the company to double net profit margins to more than four percent and boost the firm's intrinsic value by three to four times.

The company also operates rubber and palm oil plantation and plans to expand to expand further into sugar plantations in Indonesia and increase its oil palm plantation holdings in Africa.

The former chief executive of the 159-year old Louis Dreyfus, Robert Louis-Dreyfus, died in July last year and passed on his majority stake in the group to a special trust, with the remaining capital owned by other family members.

Kalai Pillay, an analyst at Fitch in Singapore, said the consolidation in the commodities business reflected the current low cost of capital and the increasing sophistication of such firms in areas such as risk management.

'It costs almost nothing to borrow money now. M&As are happening not just in commodities but across all industries.'

Earlier this month, Sempra Energy and The Royal Bank of Scotland agreed to sell the retail commodity marketing operations of their joint venture to Singapore-based Noble Group Ltd for US$317 million.

Wilmar International, the world's No1 listed palm oil firm, said it is in the process of acquiring Australia's Sucrogen, from CSR for US$1.5 billion. -- REUTERS

Thursday, 23 September 2010

SGX enhances Securities Borrowing and Lending service

 Createwealth8888: More and more shorting possible  and STI will then fall faster!

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SINGAPORE: The Singapore Exchange (SGX) is enhancing its Securities Borrowing and Lending service to bring additional benefits for investors and SGX central depository account holders.


With the enhanced service, over 80 per cent of the total listed stocks on the SGX Mainboard and Catalist are now eligible for lending or borrowing via The Central Depository (CDP).

The number of stocks eligible for lending increased from approximately 150 to over 600.

Investors now have expanded opportunity to lend out their stocks and institutional borrowers can have access to a larger pool of different stocks from the CDP.

"With access to a large pool of stocks, institutional investors can consider new trading strategies. This will also improve overall liquidity of the stocks," said Mr Lai Kok Leong, vice president, depository services of SGX.

The CDP, which currently safe keeps securities for retail investors and institutions, will be the counterparty for all lenders and borrowers.

SGX said this will provide a single point of processing for all activities including corporate actions as well as borrowing and lending of securities.

The exchange said stock lending activity could help CDP account holders to lend out their shares to earn lending fees and improve the total earnings on their assets. - CNA/fa

Can an ETF Collapse?

By: Herb Greenberg

CNBC Senior Stocks Commentator

The question of whether an ETF can collapse is the focus of a fascinating new report by Bogan Associates, an under-the-radar investment firm in Boston.

The concern of the Bogan report, as well as other market participants I’ve been talking to, is that the complexity of exchange-traded funds and their increased use as trading vehicles by hedge funds can be quietly but quickly creating serious market risk.

At the heart of the matter is what stock ETFs really are: Derivatives with unlimited share creation prospects. Unlike regular mutual funds, which buy and sell stocks with the cash from investors, ETFs buy so-called “creation units” from participating institutions. Each creation unit represents 50,000 shares owned by an “authorized participant.”

I can’t stress the complexity of the structure. If the very nature of these “creation units” is beyond the comprehension of most investors the actual mechanics of ETFs involve an even far more complex matrix of transactions.

Harold Bradley, chief investment officer of the Kauffman Foundation, goes so far as to say: “These are like unregulated futures contracts because of their unmitigated open interest.”

The “unmitigated open interest” he’s referring to a startling figure in the Bogan report: That while the SPDR S&P Retail ETF has about 17 million shares outstanding, it has around 97 million shares short. That’s right, more than 500 percent of the ETF is net short.

“This implies total gross ownership of XRT in the market of roughly 96 million shares,” says Andrew Bogan, who co-runs the firm with his father, Thomas, a former interim research director at State Street. “So the assets held by the ETF operator (State Street Research - no relation to State Street Global Partners) in this fund are about $680 million, while the implied ownership of all the long holders would be worth $3.9 billion.

“In this extreme example, the ETF operator holds only about 17 percent of the shares that people most likely believe they are buying when they buy XRT in their account. The remaining stock is implicitly promised by short-sellers though their prime brokers if authorized participants”—the institutions that own the shares behind the creation units—wanted to redeem more than 17 percent of the shares owned.”

In effect, he says, this amounts to a “fractional reserve stock ownership system” and a “shadow market caused by massive scale short-selling.”

The big question: Who will be left holding the bag? Retail investors? Prime brokers? Even Bogan and his co-authors can’t answer that; the data is that unavailable and the issue is that complex.

To repeat what I said in CNBC’s Man vs. Machine segment : Many critics are concerned that ETFs have grown well beyond their original intention and have become a monster that will wreak havoc.

Wednesday, 22 September 2010

LEADERS Three-Year Results Suggest Improved Safety and Efficacy of BioMatrix Flex™ over Cypher® Select™

Washington DC, USA, 21 September 2010 – Biosensors International Group, Ltd (“Biosensors”, “Company”, BIG:SP) today announced three-year results of the LEADERS trial, which showed a continuing positive trend towards a safety and efficacy benefit for BioMatrix Flex™, Biosensors’ Biolimus A9™-eluting stent system with abluminal biodegradable polymer, compared to Cypher® Select™, Johnson & Johnson’s sirolimus-eluting stent system with a durable polymer. Results were presented by Professor Patrick W. Serruys, Erasmus Medical Center, Netherlands, at the 22nd annual Transcatheter Cardiovascular Therapeutics (TCT) scientific symposium, sponsored by the Cardiovascular Research Foundation.


In the overall study population, there were similar outcomes for BioMatrix Flex and Cypher Select in respect of MACE (major adverse cardiac events) at three years. There was a diverging trend towards a lower rate of MACE (15.7% vs. 19.0%; P value for superiority = 0.09) in patients treated with BioMatrix Flex versus those treated with Cypher Select when compared to both one and two year results.

In the high risk sub-group of STEMI patients (ST Elevation Myocardial Infarction), a statistically significant reduction in MACE rate was demonstrated with BioMatrix Flex compared to Cypher Select (9.6% vs. 20.7%; P value for superiority = 0.01). In another high-risk group of patients, those with SYNTAX High scores (>16), there was a significant 57% reduction in risk of cardiac death for BioMatrix Flex compared to Cypher Select (4.6% vs. 10.4%; P value for superiority = 0.02).

Although this was an all-comers study, occurrence of very late stent thrombosis (VLST) events was very low: a cumulative 0.2% for BioMatrix Flex out to three years, compared with 0.9% for Cypher Select observed within the same period. No VLST events were observed in BioMatrix Flex patients between years two and three of the study. VLST events in the BioMatrix Flex group were limited to patients with Saphenous Vein Grafts (SVG), who are traditionally excluded from drug-eluting stent trials. It was also notable there were no VLST events in patients treated with the BioMatrix Flex stent after discontinuation of dual anti-platelet therapy (DAPT).

“These further follow-up results from LEADERS confirm that the BioMatrix Flex stent continues to be safe and effective three years after implantation in an all-comers population, reflecting patients treated in routine clinical practice”, commented Professor Serruys.
 
“We are very encouraged by these results, which demonstrate that BioMatrix Flex continues to offer superior patient benefits compared to the industry standard over the longer term”, added Jeffrey B. Jump, President & CEO of Biosensors. “Our innovative drug-eluting stent, with its unique combination of anti-restenotic drug and abluminal biodegradable polymer, is providing an increasingly attractive alternative to conventional drug-eluting stents with durable polymers.”


The nine-month results from LEADERS, presented at the European Society of Cardiology (“ESC”) congress in 2008 and simultaneously published in The Lancet, demonstrated the BioMatrix Flex stent to be non-inferior to the Cypher Select stent in respect of the primary endpoint, incidence of MACE at nine months. This non-inferiority was confirmed in the one and two year results, during which time an increasing trend towards a safety benefit for the BioMatrix Flex stent was observed.

Sponsored by Biosensors, LEADERS was independently designed, implemented and analyzed by the study investigators. Data management and analysis were performed by an independent academic institution.

Tuesday, 21 September 2010

SIA to sell five-year bonds worth S$300m dollars

Createwealth8888: It just tells me that many investors are still more risk-averse and capital protection is the most important than returns. 2.15 per cent for 5 years.

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SINGAPORE: Singapore Airlines (SIA) said it will sell five-year bonds worth S$300 million dollars.


The bonds will offer a return of 2.15 per cent and will comprise a Public Offer and a Placement.

The public offer will amount to S$50 million dollars.

Retail investors can subscribe to the bonds though DBS, OCBC and UOB ATMs.

This is the first time a corporate institution is making its bonds available to retail investors.

Bond issuances made in Singapore are usually offered to institutions and wealthy investors.

In a statement, one of the coordinating bookrunners, OCBC said this public offer will now offer retail investors an opportunity to put their money into an alternative instrument compared to areas like equities and structured deposits.

Nicholas Tan, OCBC Bank's Head of Global Wealth Management, said: "Retail bond offering is an attractive alternative for a retail investor looking for higher yield and a steady stream of income in the current low interest rate environment.

"Typically, a bond pays a higher coupon than a savings account. In addition, in a low interest rate environment where bond prices can potentially keep rising, an investor can also look towards potential capital gains.

"As more companies start to offer retail bonds, investors will be presented with more choices. However, investors must be aware that each bond may present different level of risk depending on the credit worthiness of the issuer.

"They must also be aware that the price of the bond will change in line with interest rates. Lastly, buying a bond at issue and holding it until maturity means investors must be prepared to commit their funds for that length of time." - CNA/fa

Monday, 20 September 2010

Noble to buy US energy firm for US$317 mln

SINGAPORE - Singapore-listed Hong Kong commodities firm Noble Group said on Monday it has agreed to acquire US-based energy retailer Sempra Energy Solutions for US$317 million.

Noble will also assume about US$265 million in debt after the proposed purchase of Sempra Energy Solutions from Sempra Energy and Royal Bank of Scotland.

Based in San Diego, Sempra Energy Solutions is the North American retail power, energy and electricity marketing arm of RBS Sempra Commodities.

The firm has approximately 200 employees and 1,400 customers, and its largest markets are Texas, Pennsylvania, New Jersey and Maryland. -- REUTERS


Earnings. Purely for illustrative purposes only and assuming that the Acquisition had been completed on 1 January 2009, the proforma financial effects on the consolidated earnings of the

Group for FY2009 are as follows:

Before the Acquisition

EPS (United States cents) 10.62
Diluted EPS (United States cents) 10.37

After the Acquisition

EPS (United States cents) 12.22

Diluted EPS (United States cents) 11.94

Olam holds 50.1% of NZFSU in unconditional takeover offer

SINGAPORE: Singapore-based Olam International said it now holds 50.1 per cent of NZ Farming Systems Uruguay (NZFSU).


It added its takeover offer was unconditional.

In a news release, Olam said shareholders who have already accepted the offer would receive S$0.68 (NZ$0.70) per share by this Friday, September 24.

It added that the strong support for the offer from NZFSU shareholders was a reflection of the full price being offered.

Earlier this month, NZ Farming Systems Uruguay recommended shareholders accept the offer, in respect of at least part of their shareholding.

It said the recommendation was based on the fact that Olam had increased its offer.

Olam also gave its assurances regarding capital raising and farming operations.

The takeover offer is presently open for acceptance, but will close at 5pm this Friday, September 24.

-CNA/wk

CPF to extend 4% interest in all accounts until 31 Dec 2011

SINGAPORE : The government has decided to further extend the 4 per cent floor or minimum rate for interest on CPF savings for the Special, Medisave and Retirement Accounts (SMRA) for another year until 31 December 2011 .


This is the second time that it has been extended.

Explaining the move in a statement, Manpower Minister Gan Kim Yong, said that despite Singapore's strong economic recovery, interest rates have remained low this year.

He added that the sharp drop in interest rates at the expiry of the 4 per cent floor rate may impact CPF members who may not have benefited fully from the economic recovery yet.

Since January 2008, SMRA savings have been invested in 10-year Government Securities plus 1%.

This is a market-based rate for instruments of comparable risk and duration, and will ensure that members receive fair and reasonable interest rates.

However, to help members cope with the transition, the government had committed to providing a 4 per cent floor rate for SMRA interest for two years up to December 2009.

This was extended to December 2010, in light of the global economic conditions and exceptionally low interest rate environment a year ago.

Beginning 2012, the interest rates will be subject to a minimum rate of 2.5 per cent per annum. - CNA /ls

Sunday, 19 September 2010

When to buy? (2)

Read? When to buy?

Save up and buy at the next market crash! Not that easy I think.

I still can't forget those retail investors who have congratulated themselves for staying 80-90% cash during Mar 09 low and were at that time still waiting for STI to reach 1200. 

When market drops, your ball also drops!

Saturday, 18 September 2010

Does Your Account Size Matter? - Part 3

Read? Does Your Account Size Matter? - Part 2

Sometime it is a big joke just to follow other people's investing strategies without seriously considering our own account size.

Let assume, if you only have $100K and choose an all dividend income (Passive Income) strategy.

How much can you really accumulate in the long run through market cycles of stock prices rising in the bull and falling back by the next bear.

At 10% dividend yield, you will earn $10K in Passive Income a year. Can that make you financially independence in 20-30 years?  Let be realistic!

However, if you pick a more aggressive growth strategy and focus on growing your $100K to $500K during first 10-20 years and finally settle down at all dividend income 10% yield strategy for the last 10 years and it will give you $50K Passive Income a year. See the BIG difference!

When you are small, focus big. When you are big, act small.

I can't really trade!

Those who think they can. They are in forex, futures, options and CFDs. They don't really care a heck. Market UP hoot. Market DOWN hoot.  UP or DOWN also hoot. This is real trading!

Your First $100K realized profit from the stock market? - (2)

Read? Your First $100K realized profit from the stock market? - Update


"For the things we have to learn before we can do them, we learn by doing them." - Aristotle


"If you believe you can't, you can't!" - Createwealth8888
 
 

You might be the Eagle but first stop behaving like a chicken!
 

Fable of the Eagle and the Chicken


A fable is told about an eagle who thought he was a chicken. When the eagle was very small, he fell from the safety of his nest. A chicken farmer found the eagle, brought him to the farm, and raised him in a chicken coop among his many chickens. The eagle grew up doing what chickens do, living like a chicken, and believing he was a chicken.


A naturalist came to the chicken farm to see if what he had heard about an eagle acting like a chicken was really true. He knew that an eagle is king of the sky. He was surprised to see the eagle strutting around the chicken coop, pecking at the ground, and acting very much like a chicken. The farmer explained to the naturalist that this bird was no longer an eagle. He was now a chicken because he had been trained to be a chicken and he believed that he was a chicken.

The naturalist knew there was more to this great bird than his actions showed as he "pretended" to be a chicken. He was born an eagle and had the heart of an eagle, and nothing could change that. The man lifted the eagle onto the fence surrounding the chicken coop and said, "Eagle, thou art an eagle. Stretch forth thy wings and fly." The eagle moved slightly, only to look at the man; then he glanced down at his home among the chickens in the chicken coop where he was comfortable. He jumped off the fence and continued doing what chickens do. The farmer was satisfied. "I told you it was a chicken," he said.

The naturalist returned the next day and tried again to convince the farmer and the eagle that the eagle was born for something greater. He took the eagle to the top of the farmhouse and spoke to him: "Eagle, thou art an eagle. Thou dost belong to the sky and not to the earth. Stretch forth thy wings and fly." The large bird looked at the man, then again down into the chicken coop. He jumped from the man's arm onto the roof of the farmhouse.

Knowing what eagles are really about, the naturalist asked the farmer to let him try one more time. He would return the next day and prove that this bird was an eagle. The farmer, convinced otherwise, said, "It is a chicken."

The naturalist returned the next morning to the chicken farm and took the eagle and the farmer some distance away to the foot of a high mountain. They could not see the farm nor the chicken coop from this new setting. (Createwealth8888: Is mixing with a bunch of chicken holding the Eagle back?) The man held the eagle on his arm and pointed high into the sky where the bright sun was beckoning above. He spoke: "Eagle, thou art an eagle! Thou dost belong to the sky and not to the earth. Stretch forth thy wings and fly." This time the eagle stared skyward into the bright sun, straightened his large body, and stretched his massive wings. His wings moved, slowly at first, then surely and powerfully. With the mighty screech of an eagle, he flew.

Friday, 17 September 2010

Biosensors +17.3%; Eyes on MicroPort HK IPO


Your First $100K realized profit from the stock market? - Update

Read? Your First $100K realized profit from the stock market?

Read? Value Investing Or Active Investing?

Super Mum took the $100K Challenge and has made $90K in 26 months and I believe she can make it to $100K between the mathematically calculated range of 17 - 32 months.



If you believe you can't, you can't!


Thursday, 16 September 2010

Understanding Stock Market Risks - Financial Fraud Risk is real!

Read? Understanding Stock Market Risks - Updated

Luckily, it is just a minor fraud. What if it is a bigger one, SPH stock price surely kena hit. Financial fraud risk is real and can be hard to prevent it from happening.

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SPH VP sacked for receiving illegal payments, misappropriating shopping vouchers


SINGAPORE: Singapore Press Holdings Ltd (SPH) said it has dismissed Mr Peter Khoo Chong Meng, a senior vice-president in the English & Malay Newspapers Division, after he voluntarily admitted to receiving illegal payments and misappropriating shopping vouchers handled by his Editorial Projects Unit.

These vouchers were intended for branding and promotion activities of The Straits Times, which his unit organises.

Mr Khoo, who has served 22 years in SPH, has made restitution of S$196,500 for the payments he admitted to receiving illegally and for the vouchers he misappropriated.

A police report has been made and investigations are ongoing.

Mr Khoo also chaired the organising committee which coordinates events and activities to raise funds for The Straits Times School Pocket Money Fund (STPMF). He has been replaced in this role with immediate effect by Ms Bertha Henson, Associate Editor of The Straits Times, who will also head the Editorial Projects Unit.

The Straits Times School Pocket Money Fund is administered by the National Council of Social Service (NCSS). SPH said in the statement that to the best of the company's knowledge, none of the donations made to the Fund has been misappropriated.

Mr Han Fook Kwang, Editor of The Straits Times, said: "This is a big setback for us. While we do not believe the STPMF was involved, I would like to assure our many donors and supporters that it is our top priority to maintain the integrity of the Straits Times School Pocket Money Fund."

Ms Ang Bee Lian, Chief Executive Officer of NCSS, said: "NCSS has in place administrative and audit processes including the engagement of external auditors to ensure that the STPMF has been appropriately disbursed to Voluntary Welfare Organisations for the clients."

- CNA/ir
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This one is the biggest one so far but someone, somewhere in Singapore will one day break his record

Singapore's largest commercial fraud case. APB's former finance manager Chia Teck Leng had swindled four foreign banks of $117 million between 1999 and 2003 by faking documents in APB's name and forging top executives' signatures. The banks were under the impression that they were lending money to APB when, in fact, it was being siphoned off by Chia.


Chia claimed he blew more than half of what he siphoned - $62 million - in casinos around the world, before being convicted and sentenced to 42 years' jail in 2004.

Singapore firm listed on "Forbes Asia's Fab 50"

SINGAPORE: Singapore firm, Olam International, has made to the "Forbes Asia's Fab 50" list.


The list by business magazine Forbes is an annual roster of the best 50 big-cap and profitable companies in the region.

Olam was cited for its 48 per cent rise in net earnings, on a 26 per cent increase in sales for its financial year ended in June.

Singapore-listed, Hong Kong-based commodities firm, Noble Group, also made it to the list.

The bulk of the top 50 firms in the list were those from Asia's economic powerhouses, China and India.

Both have tied for top place with the most number of firms, with 16 entries apiece.

Some of the Chinese firms in the list include Lenovo, Digital China and Tencent Holdings.

Indian companies lauded include Bharat Heavy Electricals, Larsen & Toubro as well as Axis Bank.

This year, Hong Kong and Taiwan tied for third place with four companies each.

Coming in fifth is South Korea with three entries: Glovis, NHN and Samsung Engineering.

Following behind are Australia and Japan with two entries each. - CNA/fa

Feeling regret or sorry?

Which emotional state would you like to be when come to stock investing?

With money in the pocket and feeling regret of not making more money or feeling sorry at staring at paper loss?

Do you want more of which one and that will become your strategy.

Biosensors Awarded CE Mark for Longer Lengths of BioMatrix Flex™

Singapore, 16 September 2010 – Biosensors International Group, Ltd. (“Biosensors” or the “Company”, Bloomberg: BIG SP) announced today that it has received CE Mark approval for both 33mm and 36mm lengths of its BioMatrix Flex™ drug-eluting stent (DES) system, further expanding the currently available range of 8mm to 28mm lengths. Both longer lengths of stent are available in diameters ranging from 2.50mm to 3.50mm.


These new additions to the BioMatrix Flex portfolio offer a significant opportunity to increase market penetration, as an estimated 15 percent of all DES usage involves long lengths.

“We have been very encouraged by the uptake of our latest addition to the BioMatrix stent family since its launch in May of this year”, commented President and CEO Jeffrey B. Jump. “We anticipate that the availability of BioMatrix Flex in these longer lengths will further enhance our penetration of the global DES market”.

The BioMatrix Flex drug-eluting stent received CE Mark approval in January 2010 and is currently available in major European, Middle East and African markets, as well as in selected Asian markets.

The BioMatrix Flex stent combines the proven combination of Biosensors’ unique biodegradable polymer technology with an improved mechanical platform for enhanced deliverability. The new stent platform combines a curved strut connector with the established Quadrature Link™ design of the existing BioMatrix platform, improving flexibility and trackability, while ensuring stent security and vessel scaffolding. A larger initial cell opening than the original also improves side branch accessibility

Wednesday, 15 September 2010

How valid is 'buy and hold' maxim today?

By R SIVANITHY


IS THERE really such a thing as a 'long-term' investor who buys stocks to hold them for years and years, riding out the inevitable volatility in the interim because he buys the conventional wisdom which says that over the long term, say 10 years or so, the returns from stocks will always be better than bonds?

For small investors, 'buy and hold' is getting to be an increasingly difficult strategy to justify in today's modern, computer-driven and volatile markets in which equities may be losing their original appeal.

Or is such a creature today nothing more than a romantic anachronism in a market where algorithmic or high-frequency trading (HFT) dominates everyday life and millions can be made in the blink of an eye?

For believers in the 'buy and hold' maxim, one of the more interesting broking reports released in the past fortnight was Citi Investment Research's 1 Sep Global Equity Strategist titled 'The End of a Cult'. Its thesis is that for Western investors, equities have lost a lot of their lustre over the past decade because of two debilitating bear markets (the dotcom bust of 2000 and the sub-prime scam of 2008) and this has resulted in large, disillusioned pension funds shifting their money into bonds.

Citi traced the start of the 'cult' of equities to the late 1950s, possibly because it was around this time that Harry Markowitz developed the idea of an 'efficient frontier' that led to the belief that a well-diversified portfolio could achieve superior returns while minimising risk and so laid the foundations for modern portfolio theory - and of course, the 'buy and hold' rule of thumb.

The broker also pointed out that the equity cult then benefited from a self-fulfilling prophecy - initial outperformance meant pension funds bought more and more stocks because they were outperforming and this in turn led to more outperformance.

However, although stocks lived up to expectations in the 1960s to the 1990s, since the end of 1999, Citi found that global equities have returned just 4 per cent in total.

On top of this weak showing, investors have had to cope with brutal volatility which has severely tested their patience (and undoubtedly, their nerve). The conclusion is that 'just as strong returns helped build the cult of the equity in the 1950s, so weak returns are tearing it down now'.

Local investors will probably find this has a familiar ring to it. Since 1998 they have had to endure not two large-scale bear markets but four - the 1997/98 Asian/Clob International crisis, the 2000 dot-com crash, the 2003 Sars/Gulf War and the 2008 sub-prime fiasco. In all cases, losses were at least 50 per cent (much more for the 1998 bear market).

Of related interest was a report that ran in a recent issue of International Economy magazine titled 'The Marginalising of the Individual Investor'. As the name implies, its authors, who were highly critical of HFT, argued that small investors will probably become more and more marginalised as HFT gains increasing importance in today's marketplace.

The report was also very critical of the means adopted by HFT players, implying that market manipulation could also be a worry as fundamentals are relegated to secondary importance.

Leaving aside a discussion of the pros and cons of HFT for now, the implication of all this as far as small investors are concerned has to be that 'buy and hold' is getting to be an increasingly difficult strategy to justify in today's modern, computer-driven and volatile markets in which equities may be losing their original appeal. How to adapt is of course the $64,000 question (as is the issue of how to regulate such trading) but maybe for now it's enough to recognise that the notions of an efficient market and investing for the long term have their appeal but both are probably nothing more that stylized ideals - just like the 'buy and hold' investor.

DOW - September rally falters on the stock market; Dow and S&P 500 break 4-day winning streak

Dow10,526.49-17.64-0.17%


NEW YORK (AP) -- A September rally faltered on the stock market Tuesday as worries returned about Europe's economy.


The Dow Jones industrial average and the Standard & Poor's 500 index both closed with slight losses, breaking a four-day winning streak. Stocks are still up strongly this September, a historically weak month for the market.

Stocks had edged higher for much of the day following positive reports on U.S. retail sales and business inventories, but retreated in the final 10 minutes of trading as investors' enthusiasm waned.

Disappointing news from overseas hung over the market all day. European markets struggled to end barely higher after reports that German investor confidence fell sharply in September and industrial production unexpectedly stagnated during July in the countries that use the euro. Stocks in Tokyo also fell after the yen touched another 15-year high against the dollar, which is bad news for Japanese exporters.

In other signs that investors remain cautious, gold climbed to another record and Treasury prices rose, sending interest rates lower.

The Dow fell 17.64, or 0.2 percent, to close at 10,526.49 and the S&P 500 lost 0.8 point, or 0.1 percent, to end at 1,121.10.

The Nasdaq edged up 4.06, or 0.2 percent, at 2,289.77.

Signs of modest growth have been enough to get traders to put more money into stocks in September and shake off malaise about the economy that dogged the market for most of August.

However analysts caution that the gains have come amid very light volume, a sign that many investors aren't participating in the market and may still be skeptical about how well the economy is doing.



The losses Tuesday for the Dow and S&P 500 were only the second so far this month. The earlier loss on Sept. 7 was also triggered about renewed worries over Europe after news reports questioned the health of European banks.

Tuesday, 14 September 2010

Protecting Our Portfolio From The Next Bear - Timely Reminder!


Read old posting? Protecting Our Portfolio From The Next Bear

Buffett, Ballmer Predicting Bright Economic Future

By: AP


Some of the biggest names in business said Monday that they see a bright future for the economy, with famed investor Warren Buffett declaring the country and world will not fall back into the grips of the recession.

Warren Buffett says he does not see the country having a double dip recession

"I am a huge bull on this country. We are not going to have a double-dip recession at all," said Buffett, chairman of Berkshire Hathaway [BRK.A 125000.0 1023.00 (+0.83%) ] . "I see our businesses coming back across the board."

Buffett said the same things that worked for the country through a century of two world wars, a depression and more—all while increasing the standard of living—will work again. He said banks are lending money again, businesses are hiring employees and he expects the economy to come back stronger than ever.

"This country works," Buffett said during a question-and-answer session via video at the Montana Economic Development Summit. "The best is yet to come."

The likes of Buffett, Microsoft [MSFT 25.11 1.26 (+5.28%) ] CEO Steve Ballmer and General Electric [GE 16.25 0.27 (+1.69%) ] Chairman Jeff Immelt told the nearly 2,000 business leaders, government officials, aspiring entrepreneurs and others at the summit that things are getting better. They also offered some ideas for what needs to be done. (GE is the parent company of CNBC)

Ballmer said there soon will be more technological advancement and invention than there was during the Internet era. That will help drive business growth, he said.

"I am very enthusiastic what the future holds for our industry and what our industry will mean for growth in other industries," Ballmer said.

He envisions new technologies that move beyond the Internet to tie together computers, phones, televisions and data centers to create amazing new products. And the pace of innovation will increase as technology makes workers more productive.

"All areas of science today are moving forward more quickly," Ballmer said. "The speed of scientific breakthrough is accelerating."

GE Chief Executive Jeff Immelt said business at the company is improving

The conference was organized by U.S. Sen. Max Baucus. The Montana Democrat said it leaves "bickering and name-calling" back in Washington, D.C., so leaders can find good ideas.

Immelt said angry political rhetoric is not helpful and headlines are too focused on finding negative indicators. He said business at GE, one of the world's largest companies, is improving.

Immelt said the country is going to need to adjust, though. The economy since the 1970s has been driven by consumer credit and a misguided notion in building a "lazy" service economy, he said, and manufacturing, with an aim to reduce the trade deficit, is the key.

"It was just wrong. It was stupid. It was insane," Immelt said of the push for a service-based economy. "The future of our economy has to be as an exporter."

He said GE is now finding it profitable to build manufacturing and service centers in the United States rather than overseas, because it is finding it more competitive to do so.

More investment is needed in technology innovation, exports need to be rejuvenated, and clean energy and affordable health care need to be given top billing for policymakers, Immelt said.

But the corporate leader said he recognizes a polarizing environment in Washington makes it unlikely a national energy policy and other helpful guidance will ever take hold. Instead, he urged local business leaders and government officials in the audience to come up with their own local solutions.

"Anger is not a strategy. Anger does not create growth. Only optimism creates growth," he said. "Be the contrarian. Everyone is mad today. Be happy."

Monday, 13 September 2010

Noble to acquire 35.8m shares in Matilda Minerals

SINGAPORE : Commodities firm Noble on Monday said that it will subscribe in the shares of an Australian associate, Matilda Minerals.

Matilda Minerals is issuing new shares as part of its plans to recapitalise and relist on the Australian Securities Exchange.

Noble, which currently has a 32 per cent stake in Matilda, has agreed to support the capital raising exercise.

It is acquiring some 35.8 million Matilda shares through its wholly-owned subsidiary Osendo.

Osendo and Matilda will also execute a technical services agreement under which Osendo will provide Matilda with technical services and strategic advice

In return, Osendo will be issued some 24.7 million shares in Matilda

Based on an issue price of 20 Aussie cents per share in Matilda, Noble will fork out some A$7.16 million for the acquisition.

The aggregate consideration will be satisfied through internal cash resources of Osendo.

On completion of the acquisition, Noble will have a relevant interest of about 51.22 per cent in Matilda. - CNA/ms

Olam - Sold $2.89, ROC 15.8%

Last sold Olam in 13 Oct 09 @ $2.65. Bought back in 6 Nov 09 @ $2.48 and waited till neck long long to sell today.
Stuffing more feathers for a bigger pillow!

Round 7: ROC 15.8%, 311 days, B $2.48 S $2.89


Round 6: ROC 10.2%, 8 days, B $2.39 S $2.65
Round 5: ROC 6.3%, 3 days, B $2.45 S $2.62 (Bought back higher)
Round 4: ROC 5.9%, 15 days, B $2.26 S $2.41
Round 3: ROC 9.6%, 8 days, B $2.18 S $2.40
Round 2: ROC 7.0%, 8 days, B $2.18 S $2.35 (Bought back higher)
Round 1: ROC 9.8%, 161 days, B $1.37 S $1.52

Sunday, 12 September 2010

Doomsday warnings of US economic apocalypse gain ground

WASHINGTON - Economists peddling dire warnings that the world's number one economy is on the brink of collapse, amid high rates of unemployment and a spiralling public deficit, are flourishing here.


The guru of this doomsday line of thinking may be economist Nouriel Roubini, thrust into the forefront after predicting the chaos wrought by the sub-prime mortgage crisis and the collapse of the housing bubble.

"The US has run out of bullets," Roubini told an economic forum in Italy earlier this month. "Any shock at this point can tip you back into recession."

But other economists, who have so far stayed out of the media limelight, are also proselytizing nightmarish visions of the future.

Boston University professor Laurence Kotlikoff, who warned as far back as the 1980s of the dangers of a public deficit, lent credence to such dark predictions in an International Monetary Fund publication last week.

He unveiled a doomsday scenario -- which many dismiss as pure fantasy -- of an economic clash between superpowers the United States and China, which holds more than 843 billion dollars of US Treasury bonds.

"A minor trade dispute between the United States and China could make some people think that other people are going to sell US treasury bonds," he wrote in the IMF's Finance & Development review.

"That belief, coupled with major concern about inflation, could lead to a sell-off of government bonds that causes the public to withdraw their bank deposits and buy durable goods."

Kotlikoff warned such a move would spark a run on banks and money market funds as well as insurance companies as policy holders cash in their surrender values.

"In a short period of time, the Federal Reserve would have to print trillions of dollars to cover its explicit and implicit guarantees. All that new money could produce strong inflation, perhaps hyperinflation," he said.

"There are other less apocalyptic, perhaps more plausible, but still quite unpleasant, scenarios that could result from multiple equilibria."

According to a poll by the StrategyOne Institute published Friday, some 65 percent of Americans believe there will be a new recession.

And the view that America is on a decline seems rather well ingrained in many people's minds supported by 65 percent of people questioned in a Wall Street Journal/NBC poll published last week.

"It is true: Today's economic problems are structural, not cyclical," argued New York Times editorial writer David Brooks.

He said the United Sates is losing its world dominance much in the same way the British Empire began to crumble more than a century ago.

"We are in the middle of yet another jobless recovery. Wages have been lagging for decades. Our labor market woes are deep and intractable," Brooks said.

Nobel Economics Prize winner Paul Krugman also voiced concern about the fate of the fragile economic recovery if voters return the Republicans to political power.

"It's hard to overstate how destructive the economic ideas offered earlier this week by John Boehner, the House minority leader, would be if put into practice," he wrote in a recent editorial.

"Fewer jobs and bigger deficits -- the perfect combination."

The Wall Street Journal, usually more favourable to Boehner's call for tax cuts, ran a commentary from another Nobel Prize-winning economist -- Vernon Smith -- that failed to provide much comfort for readers.

"This fact needs to be confronted: We are almost surely in for a long slog," Smith wrote.

And it seems such pessimism has even filtered into the IMF, which warned on Friday that high levels of national debt and a still shaky financial sector threaten to derail the global economic recovery.

"The foreclosure backlog in US property markets is large and growing, in part due to the recent expiration of the home buyer's tax credit. When realized, this could further depress real estate prices."

This could lead to "disproportionate losses" for small and medium-sized banks, which could in turn "precipitate a loss of market confidence in the recovery," the IMF warned.

- AFP/ir
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