I started serious Investing Journey in Jan 2000 to create wealth through long-term investing and short-term trading; but as from April 2013 my Journey in Investing has changed to create Retirement Income for Life till 85 years old in 2041 for two persons over market cycles of Bull and Bear.

Since 2017 after retiring from full-time job as employee; I am moving towards Investing Nirvana - Freehold Investment Income for Life investing strategy where 100% of investment income from portfolio investment is cashed out to support household expenses i.e. not a single cent of re-investing!

It is 57% (2017 to Aug 2022) to the Land of Investing Nirvana - Freehold Income for Life!

Click to email CW8888 or Email ID : jacobng1@gmail.com

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

Saturday 31 January 2009

Successful Investing

Successful investing in any asset class (stocks, bonds, commodities, gold, or property) does not come overnight, but through years of painful experiences, emotional stress, and could even involve huge losses or sitting on unrealized losses.

But, the investors can continuously learn from their mistakes, seeking new knowledge and revising strategies to attempt for a comeback and be successful again. You can't stick to the same strategies if it is not producing the result that was expected in that asset class. Usually it is not the asset class that is the problem, it is usually YOU and YOUR STRATEGY is the PROBLEM or you got caught in the middle of wrong CYCLE.

Look inwards for the PROBLEM. Hang your EGO at the doorway and really think through it. If really there is NO PROBLEM, then it is better to have the COURAGE to ride through the wrong CYCLE for this asset class.

However, there is one asset class called PROPERTY, where it typically very TRICKY and may not offer under-capitalized investors more chances for learning from mistakes, seek new knowledge and revising strategies.

It is more likely to be a MAKE or BREAK strategy for those under-capitalized. Got it right, you are on your way to an early retirement. Got it wrong, you are likely to work as slave for a long, long time. So you jolly well make sure you got what it takes to get it right. So is there a MIDDLE ground? Think about it. Don't PRAY, PRAY!

Property is about location, location, location. Really good ones are really hard to come by and the supply is definitely limited. So it can be really much harder to find than to look for the next multi-bagger stock.

Predicting the Bottom?

We will always hear this in a bear market or down turn: Don't try to pick a market bottom. No one can.

Actually, trying to pick a bottom for stock speculators or value investors is not really that serious if they got it wrong. It is not too difficult to recapitalize and try again to pick another bottom. Wrong again, save hard, recapitalize, and then one more try.

But, there is one group of investors or speculators who think they can PICK the bottom with one try. Who are they? The small capitalized property investors or speculators who think that they are good enough to pick the housing bottom and going in with just ONE BANG. Some even go in highly leveraged with a NOOSE round their neck.

Market wisdom: Don't try to pick a market bottom. No one can. For this worst recession, the path to recovery could be many years. Best is to plan for the worst scenarios.

Property is unlike stock. Stock price is naturally upward bias as the Management and Board is tasked with the roles and responsibilities to take the company continuously to a greater height. For property, there is a natural limit to stop its climb as government will intervene. For property price to drastically increase, a Greater Fool must come to push it up or a Greater Lover to come and fell deeply in love with it and pay at all costs.

If you do not have huge capital, then picking Bottom for stocks may be a better option. If you still can't thinking clearly. Hmm... go to the top of Bukit Timah and sit there, and don't come down if you haven't got an answer.

Friday 30 January 2009

Active Stock Investing, Property Investing - Alice in the Wonderland

Alice in the Wonderland - she asked: which way, Sir?

Can Active Stock Investing as good as Property Investing?

My view:

Could anyone tell me what is nett ROC over 5-8 years time frame for property investment? Most of the property investors are just giving Gross Profit and not Nett Profit after deducting expenses, repair and maintenance costs.

I am suspecting that it required too much effort to diligently track the nett profit of any property investment and most of them will probably tell us that they bought at $X and sold $Y, and the Gross Profit ($Y-$X).

Sample of what active stock investing can give:

What I am lacking is nett ROC on property? Anyone has? Pls help to share.

I think the biggest advantage of Property Investing over Active Stock Investing is your size of capital. It is extremely emotional to invest huge sum of capital in the stock market, and so much relaxing to invest in the Property market. As property investors will never see any unrealized losses throughout their holding period.

For much smaller capital, ROC on value stocks is not too bad either. Another advantage is active capital recycling for compounding effect, which is not possible for property investing unless you are flipper.

If you do not know what you are doing, no asset can make you wealthy. Assets do not necessary make you wealthy. Assets through leveraging can actually make you poorer if you cannot make it through.

Ultimately, what makes you wealthy is your financial intelligence. Your greatest asset is your brain -- so take care of it and protect it from "not for you" influences.


Wow, the nett cost of holding property for investment is pretty high if what this guy said is true. Then the nett ROC for property is really overstated. Can anyone share what is the typical all-in-expenses for 2 room condo?

Wednesday 28 January 2009

The Beautiful Wedding at any costs?

Sometimes, we do read about some couples that spent tens of thousands of dollars on their wedding, which when you boil down to it, is just one day.

Take it as experience from those have married themselves, it's not worth overspending on weddings just to have a 'perfect, once-in-a-lifetime' memory.

Because after all, when the wine is drunk and the guests have gone home, that's when your true marriage starts. How happy a marriage you will have depends on what you and your spouse do after the wedding day, not during

Of course, you need to spend for your grand wedding, the question is about no OVERSPENDING, period.

Do you want to read a book where Chapter 1 is very exciting and grand, and then followed by chapters after chapters full of struggling and missing opportunity of active or passive investing due to much smaller capital?

Your Marriage could be like climbing SwissĂ´tel The Stamford hotel at 226 metres with 73 floors after your wedding night unless you are fortunate enough to take a LIFT (rich parents) up. But, not everyone is so fortunate to take a LIFT, and likely many will have to climb the staircases.

So do you want to load up your haversack with more loads to carry up with this climb?

Some indicators to consider whether one is overspending? Like any indicators, only you know it better.

Ratio 1: Total Wedding Expenses/Nett Annual Earning after Tax

Ratio 2: Total Wedding Expenses/Nett Annual Saving

Congralutions to anyone getting married in the Year of OX. This is a good year to get married as likely to get value for money but unfortunately, the hongbao you get from relatives and friends might also shrink.

Saturday 24 January 2009

Active and Passive Investing

There are 2 types of Investing.

Passive Investing and Active Investing. One requires frequent time and effort in seeking opportunity, while the other requires less frequent time and effort.

Passive Investing could be thought of as a stock account that pays high interest (dividends). You add the stock, and passively it grows. Hopefully, You can look back in 10 years and find that constant addition made you a nice growing wealth. However, it can be very disheartening, instead of growing wealth, you are staring at diminishing wealth and made you feel poorer.

Passive investor can be thought as a farmer planting Winter crops and waiting for Spring to come, and when crops are ripe, he may harvest them. However, even the corps are ripe, he may feel that the crops can grow further.

Active Investing can be thought of as something that needs your attention. More attention, the more likely the interest (nett profit and dividends) you receive. Yes a high yielding stock account needs your attention when adding stock, so require more time and effort from you. Maybe more mental and emotional stress.

Active investor can be thought as a farmer planting crops round the seasons, sometime the harvest come really quick and good, at times, he may accidentally plant a Winter crop, and too bad he will have to wait for Spring, and hopefully Robins will come. The biggest advantage is that he don't need to wait for 10 years to realize he is going to be poorer and farming is not his cup of tea, when the seeds are gone. He may next try be a fisherman and become Kelong owner. Life of a Kelong owner is simple, he just need to be very patient, indeed lots of patience, and wait for high tide; and hopefully the fish will come.

Active investor is often mistaken as trader. Trader is not a farmer, he is a hunter. He will shoot any weak animal that crosses his path, and he will run quickly when pounded by a Tiger.

Investing - Game of Strategy

Strategy without tactics is the slowest route to victory. Tactics without strategy is the noise before defeat." - Sun Tzu, The Art of War

Find your own Strategy or revise other's Strategy to fit into your emotion, your values, your risks level, your time frame, your commitment to your family, your size of investing capital, your size of contingency fund, and lastly do you have an Angel to hold you if you ever fall.

If you have $50K capital, it is not wise to revise the Strategy of someone who has $1M bucks. Wearing a size 12 shoe will be loose no matter how you stuff cotton into the shoe to fit your size 7 feet.

So what are your tactics to implement those Strategy?

Friday 23 January 2009

Investing - Game of Strategy

Probably, I think this is what some people might be doing.

Did badly in trading. Let switch to Value Investing (or UT)

Wow, doing badly in Value Investing.

OK, let speculate in Property. Heard that property investing are very safe during downturn, and wait for a few years, then got good return.

The right way is to re-think your strategies and not switching from one instrument to another. Look deep inside you, and analyse where, and how things are doing not right. I believe most investors have big failures, and few will confess them. Probably, after big failures, they did not give up but change strategy, and manage to get back on track and be successful again.

Before investing in Property, one better do a SWOT analysis and how you can mitigate those Threats. Property investing is one BIG BET. Better get it right or one will work for FREE for a number of years.

If you lose $50K, it is not difficult to recover it back through hard saving. If you lost few hundred K, you are going to eat Roti Prata for lunch for many years to come.

Thursday 22 January 2009

Passive Income from Stock Dividends?

Passive Income from stock dividends? Yes, We can.

Keppel Corp declared dividend of 21 cts.

I started investing and trading Keppel Corp since 2001 so it is possible to collect dividend and trade at the same time. Keppel Corp is one of my biggest Pillow Stock.

Results as follows:

Dividend ROC (on last capital invested) = 90%
Nett ROC on 89 trades (on last capital invested) = 41%
Win/Loss ($) on 89 trades = 1.6 (mainly contra losses came from 2008 due to GREED and overconfidence of beating Mr Market wiping off 61% of past profit)

Painful lessons learnt - years of gains wiped off in just a few months!

Wednesday 21 January 2009

Noble - What's up?

Wow, high volume 40.8M, up +4.1% despites STI down -1.09%

Did the Market knew something? Holding Noble to see what's up?

Active Income and Passive Income

1) What is Passive Income?

Passive income is money received on a regular basis, with little effort required to maintain it.

Some examples of passive income are:

Repeated regular income, earned by a sales person, generated from the payment of a product or service that must be renewed on a regular basis, in order to continue receiving its benefits - also called residual income.

Rental from property;

Royalties from publishing a book or from licensing a patent or other form of intellectual property;

Earnings from internet advertisement on your websites;

Earnings from a business that does not require direct involvement from the owner or merchant;

Dividend and interest income from owning securities, such as stocks and bonds, are usually referred to as portfolio income, which can be considered a form of passive income;


2) What Does Active Income Mean?

Active Income will require significant effort and time to acquire with services performed.

This includes wages, tips, salaries, commissions and income from businesses in which there is material participation.

3) Why do we need to grow Passive Income?

Most people will one day get burnt out in the RAT RACE to acquire Active Income, and sooner the ability to acquire more Active Income will be significantly reduced or just end.

Look at your options, and diligently work on your possible sources of Passive Income and keep to increase it, and that will certainly help you to reduce your dependancy on Active Income, the sooner the better.

Monday 19 January 2009

SML - panic selling triggered by CS tgt 0.95?

Wow, very high vol selldown, did CS scare the shit out of those profit takers and stop losses? On positive note, many old buyers were probably flushed out.

Private residential properties mortgage loans

What are they?

Private residential properties mortgage loans typically refers to loans offered to finance the purchase of private residential properties. Typically, the same properties purchased are used as collateral to secure such loans.

In Singapore, financial institutions are permitted to lend up to 80% of the value of a private residential property. Of the balance, 10% must be paid in cash with the other 10% either in cash or CPF. A valuation of the property-in-question by an independent surveyor is normally required.

In addition, financial institutions also require that monthly repayments on all loans including housing loans should not be more than 40% of the borrower’s monthly gross income.

Housing loans comes in different forms, some with fixed rates while others are based on floating rates that are pegged to the bank's board rates.

How do they work?

Interest calculations: Banks normally adopt one of two methods for calculating interest.

Monthly Rest: Interest is computed based on the loan balance on a specific date each month. So there is no advantage to be gained if a borrower repays an instalment before the prescribed date.

Daily Rest: Interest is calculated based on daily loan balances. This means that if payment is made earlier, the outstanding balance in the account is reduced which in turn results in less interest charged.

Bridging loans: Most banks provide bridging loans to help borrowers meet temporary financing needs arising from the sale of an existing property and buying a new property. This helps the borrower pay for the new property while waiting to receive payment from the sale of the existing property. To qualify for a bridging loan, banks normally require assurances that the borrower has successfully sold his property and is awaiting the receipt of proceeds from the sale. Banks will also usually require at least a lodgement of a caveat on the private residential property to be purchased. The interest on bridging loans is commonly calculated daily and payable at the end of each month. A borrower is usually given up to a maximum of six months to complete the sale and repay the bridging loan in full.

Default: Housing loans are in default when payments there under are outstanding beyond the relevant due date(s). Banks will step in to attempt to bring repayments back in line and in very serious cases they will initiate the forced sale of the property.

How do I find the best deal?

When shopping for the right housing loan, you may wish to keep the following in mind:

Match duration: Find out what is the maximum loan period that you can secure.
Generally maximum loan period differs among banks and ranges between 30 to 35 years, or dependant on when the borrower turns 65 years of age. In the case of leasehold properties, it is important that you also check the remaining lease on the property.

Monthly payment projections: Compare the monthly repayment patterns of different interest rate from various providers to decide which of these better match your requirements.

Interest rate comparison: Find out if the mortgage is on fixed or floating rate loans and in the case of fixed rates how long these rates are fixed for.

Fees: Find out if the bank charges a fee for processing such loans. These typically include fees for legal, valuation or insurance. Sometimes bank offers free fire insurance and free valuation on the property. Some banks even provide legal subsidies.

Penalties: Find out if there are any penalty fees for partial or full redemption of the loan.

Sunday 18 January 2009

common property-related myths

1. Prime properties never fall in price.

During the last property market correction in Singapore from 2001 to 2005, property across the entire spectrum of the market was affected, regardless of whether it was high or low-end. Remember, there is a difference between high prices and increasing prices. Prices may be high, but they may not be increasing.

2. House prices do not fall to zero like stock prices, so it is safer to invest in real estate.

It is true that house prices do not fall to zero, but your equity in a house can easily fall to zero and even below that. It just takes a fall of 30 per cent to completely wipe out people who only have 25 per cent equity in their house. This means that house price crashes may actually be worse than stock crashes.

Singaporeans should take note especially since most of their retirement funds are locked in their property, and the money may be leveraged. Over-leveraged may kill you unexpectedly so never under-estimate this risk and over-confidence of future earning. Your future earning can be unexpectedly affected by personal, family or financial crisis

Understanding Debt, Risk and Leverage



I don’t understand all the dominoes in the financial crisis. In situations like this, it’s helpful to step away and look at general principles: never mind the pieces, what’s the “gravity” that makes them fall? And fall so hard?


Leverage is debt used for investment purposes, and is extremely important. Why?

Debt, when invested, multiplies return (profits and losses)

Leverage is a multiplier, a super-power. Super-strength is great when times are good, and horrific when you accidentally “bite your tongue” (it’s super-strength, not invulnerability). Concepts like leverage are casually mentioned, but let’s see why the dominoes fall.

Get Rich Quick

I’ve got a great investment plan for you. Ready?

Step 1: Withdraw all your money
Step 2: Go to Las Vegas
Step 3: Bet it all on red in roulette (Get it right and double your money — get it wrong and lose it all)

It’s perfect! We’ll double our money in one step.

Sure, there’s a “chance” that things go wrong. But even then it’s no so bad — we’ll be at zero, like the day we were born. Presumably naked and crying as well.

Double My Money? But I Want More!

The plan sounds interesting, but there’s a problem — what if I only have $100? Doubling to $200 is nice, but not life-changing.

A few wild thoughts later, and we’re onto a better idea: let’s borrow money! The plan becomes exciting:

Take our $100 and borrow $1,000,000 from friends, families, banks, and unsavory characters. (How? Well, show different people our $100 and ask to borrow another $100, with our original cash as collateral).

Go to Vegas

Bet the $1M dollars on black! I mean, red!

What happens now?

If we win: we get $2M, pay back our $1M loan, and are sitting pretty with our profit of $1M.

And if we lose? Uh oh. Now we’re worse than naked: we’ve lost our shirts and everyone else’s too! Because we took debt, our worst case scenario is no longer going broke — it’s going negative.

Notice how the loan changed the outcomes — neither wild riches nor debtor’s prison were possible without the loan.

The Risk Multiplier

What just happened? Debt multiplies our risk and reward. The good times get great, and the bad times become awful. In our example, we went from winning or losing $100 to winning or losing $1M — a 10,000x difference in profit and loss!

This effect from investing debt is called “leverage”. Why?

I suppose it’s because a lever lets you move one end a tiny bit (one inch) and have the other side move a large amount (1 foot). It’s also called a leverage or gearing ratio — move the big gear one cycle and move the small gear many cycles.

My inner geek cringes, since the sides of a lever move in opposite directions (one side up, one side down) and same with the gears (one side clockwise, the other counter-clockwise). Remember that with financial leverage, both sides move the same way.

I imagine leverage as a game of follow-the-leader: I push my money in one direction (making a bet), and the huge pile of money I borrowed does the same.

Use whatever analogy works for you — the key is if your money wiggles up or down, the borrowed money does the same.

The Risk and Benefit of Leverage

Why does leverage work? At its heart, you are borrowing someone’s assets and reaping the benefits. It’s like borrowing a cow and selling the milk! What a great idea!

It’s great until the cow runs off. Now you’re stuck — you owe a cow and don’t have one to return. The risk of leverage is investing that debt and losing what you borrowed, which can wipe out any profits.

Let’s try a more realistic example then roulette: investing in a house. Suppose you have 10k and borrow 90k, to purchase a $100k house. You have a leverage ratio of 10:1 — for every 10 dollars of the asset, you’ve put in 1 dollar of equity (your own money).

If house prices rise by 10%, how much did you make? At first blush we’d say 10%, which is true — but you made 10% on the entire 100k! The house is now worth 110k, and after paying your 90k debt you’re left with 20k. That 10% growth became 100% profit on your initial investment!

leverage ratio = asset / equity

return = leverage ratio * percent change

Again, with 10x leverage, 10% growth becomes 100% return on our initial equity. From our analogy, we were in “control” of 10 dollars for every 1 we put in. So, we gained 10x the profit.

Now what about the reverse — when the house falls 10% to 90k?

Well, we can sell the house for 90k, pay off our loan (90k) and are left with… zero! Similarly, a 10% dip in prices becomes a 100% loss of equity — we’re wiped out! We get 10x the loss when prices go south.

And if the house price falls 20% (impossible! improbable! unlikely!), we suffer a 200% loss — we’ve lost our initial 10k and owe 10k beyond that (sell the house for 80k, but the loan is still 90k).

Hopefully the magnifying effect of borrowed money is becoming clear. You lose your equity when the investment drops 1/leverage ratio — in this case, 1/10 or 10%. With a 25x leverage ratio, the investment only needs to drop 4% in order to be wiped out. One way to think about it: you’re paying for losses out of your own pocket, not the borrowed money (you always have to pay it back). Your pocket is only 1 dollar of the 10, so once you lose it (1 dollar out of 10, or 10%) you are wiped out. Any more, and you’re in debt.

Real-world Examples

Leverage appears all over finance, but sometimes in disguise. Let’s take a look:

Getting a mortgage: As we saw, borrowing money to buy a house is a form of leverage. With 5% down (a 20x gearing ratio), your house only needs to drop by 5% to lose money. With 0% down, your house has to drop… wait for it… any amount for you to lose! And after your house is worth less than your mortgage, there’s little incentive to pay it off (better to go bankrupt, depending on the debt).

Lending money for a mortgage: Even banks are levered. When they offer money, where do you think they get it? From deposits! They borrow your deposits to loan it out to other people. If they have 10k of deposits they might loan out 100k (there’s some magic that happens here, how banks loan more money than they have; that’s for another time). If they loaned money for a house, and the house drops 10% in value and the debtor doesn’t pay, the bank has lost all if its deposits.

Offering mortgage insurance: Insurance companies might have 10k worth of cash, and offer 100k worth of insurance coverage to banks (C’mon, did you really think the insurance company had enough to pay off everyone’s claims?). Of course they don’t expect everyone to file a claim, but if even 10% of people do, they are wiped out. There isn’t an explicit loan, but the insurance company has created an obligation to pay (called the insurance leverage ratio).

See the set up? When prices are rising:

Owners are making a lot of money (they leveraged the house)

Banks are making a lot of money (they leveraged their loans, and earn a lot of interest on the borrowed money)

Insurance companies are making a lot of money (they’re offer more coverage, which means more premiums)

If the music stops and house prices fall, problems arise:

Borrowers lose equity — a 5% drop when 20x levered means the borrower is wiped out. Any more and the loan is worth more than the house.

Banks lose loans — if 5% of loans go bad, or if they can only recover 95% of the house’s value, the bank lost all the money it put in!

Insurance companies lose money — if 5% of claims are called in, when the insurance company is 20x levered, it means the company has lost all of its assets!

For 20x leverage, a 5% drop would wipe you out to zero equity. Any more and you’re going negative — you’re at zero equity and still owe money!

The Lessons

I don’t understand the crisis, but I’m getting a grasp on leverage: it’s the gravity that pulls down the dominoes. In fact, it can multiply the dominoes as they fall! Here are the key points:

Leverage multiplies profits and losses: You can make a “regular” investment swing as wildly as you like by borrowing money.

Return = leverage ratio * percent change: A meager 10x gearing ratio can double your money with a 10% gain, or wipe you out with a 10% loss. By the end of a crisis, some banks increased their leverage ratio to 30:1 — if prices fell even 3% they would be wiped out!

Leverage appears everywhere: Companies have debt/equity ratios (how levered they are) and stock portfolios have beta (riskiness beyond the market average, which is increased by debt). Whenever you see debt or investment, look to see if it’s leveraged in some way.

Leverage make the boom times better and the busts harsher. The financial crisis has many other effects in play (such as the liquidity crisis, which makes it difficult to sell the assets you have to pay off your debts), but let’s take one idea at a time. A good friend found some podcasts on the crisis — if you’ve found a resource that helps you get the crisis, feel free to share it below.


Add on by Createwealth8888 ..

Some will think that they will have no problems in repaying the debts, and they are likely to under-estimate the risks and tend to be over-confident.

This is NEVER one hole that sinks the SHIP, it is always started with a small hole, and as seawater rushes in, the hole gets bigger, and sooner, building the pressure to cause another hole, and then few more holes.

One hole is unlikely sink a SHIP, it is always one hole escalating to a few more holes here and there that finally sink the SHIP.

When one sees a COCKROACH in the kitchen during daytime, and don't be foolish to believe that there is only ONLY one cockroach lurking around, for sure there are usually more cockroaches hiding somewhere, and waiting for the darkness to fall before they come out to haunt you.

Under estimating risks <--- further reading

The power of compounding in investing

Time could help regular-savings-plan investors chalk up a considerable sum of returns.

Clearly, the initial investment sum plays an important role in the sum of returns. Let's say you invest $100,000, assuming an investment return of 20%, you would get $120,000 in total. The sum would diminish to $12,000 if you had invested only $10,000 at the same rate of return. So some people may have an illusion that investment only work well for people who invest large sums of money.

Well, not exactly. Even if you invest a relatively smaller amount, you could make a very good return by utilising the power of compounding. What you need to have on your side is TIME; or simply to invest early. Let's illustrate how much $100,000 would grow at steady rates of return over different periods as shown in Table 1.

Assuming a long term rate of 2% per annum, the initial amount of $100,000 would grow to $ 122,000 in 10 years, and $181,000 in 30 years' time. However, if you chose to just invest into fixed deposits at this point of time, you would probably expect a lower rate to be used for compounding. The current fixed deposit rates from three largest local bank ranges from 1.4% to 1.5% per annum as at 20 February 2008. If you chose to invest in a diversified balanced portfolio with a 40% weighting in fixed income funds and 60% weighting in global equity funds, you would probably expect returns from 5% to 7% per annum over the longer term.

Thus, if an investor chose to invest in a diversified portfolio with an average rate of return of 7%, the investment could grow at a faster pace. Assuming a rate of return of 7%, in 10 years, the investment will grow to $197,000 and to $761,100 in 30 years' time.

You may wonder, "What if I am good at building an aggressive equity portfolio and I invest early?" Assuming an annualised return of 12% - in 10-year's time you would have made $311,000, which is 3.1 times of the original investment amount. The sum balloons to almost 30 times the original amount in the span of 30 years. A great value investor like Warren Buffet generated annualised returns of 21.4% in the past 42 years (since 1966). With the power of compounding, the investment grew tremendously to 336 times the original amount in 30 years.

Table 1: Investment returns of $100,000 at different annualised rates

The table above illustrates that fixed deposit may look safe but would entail substantial "opportunity cost" of giving up investment. As long as you invest early and pick the right asset class or portfolio, even a decent annualised return of 7% would bring you a long way. Investing for the long term also helps investors to tide over short-term volatility in equity markets. Long-term value investors are less-likely to exhibit too much fear during volatile times unlike many ordinary stock investors who just look into momentum investing.

Other than investing a lump sum for the long term, investors may also choose to invest regularly by using the Regular Savings Plan. This investment strategy is suitable for long-term investors to make use of the power of compounding.

Kelvin Yip (Assistant Research Manager & Financial Adviser Representative) is part of the Research and Editorial team at Fundsupermart.com, a division of iFAST Financial Pte Ltd.

Saturday 17 January 2009

Endowment plan as investment - really suck!!!

My endowment plan will be at 12th year anniversary in mar 09, guess what?, the cash value including the accumulated past bonuses is 78.9% of the total premium paid. After 12 years, it still can't breakeven. It is really suck as a form of investment. Thank to the "great" advice from the FA.

SML - will the game continue ?

Thursday 15 January 2009

SML - another new toy in the making?

Tuesday 13 January 2009

Investor danger: psychology of loss is worse than the pain

by Philippa Huckle, Sunday Morning Post, January 23rd, 2005

We all suffer from loss aversion - the psychology of giving more weight to losses than to gains. And we are hard-wired against danger in the form of a genetic phenomenon, otherwise known as the fight or flight response. For investors, this survival instinct has important consequences.

The investment universe operates entirely in the realm of uncertainty. To be a successful investor you have to get a handle on risk. Webster's dictionary defines risk as "the possibility of loss or injury; peril". We've survived as a species because our ancestors were psychologically programmed to avoid risk. As a result, our emotional safety mechanism is wired to instinctively shy away from a potential loss.

In simple terms, this means we find it hard to remain invested for the long term. Given the chance, as investors we'd rather bolt for the exits in down markets.

Studies in Behavioral Finance reveal that we feel the pain of loss twice as much as the pleasure of a corresponding gain. For example, $10,000 will upset you about twice as much as gaining $10,000 will make you happy - but this isn't the end of the story. Loss aversion has some unexpected implications for investors.

Imagine you owned a sound investment which delivered good long-term returns of 15 per cent per annum with a low volatility of 10 per cent standard deviation. Using these figures we can calculate the probability of this investment delivering positive returns over various timeframes.

There's a 54 per cent chance it will be up on any given day; a 67 per cent probability of positive returns over any one month; and a 93 per cent chance of positive returns in any one year. We can see that the longer we're invested, the more likely we are to get positive returns. We can also see that it's perfectly normal for investment returns to be negative for a certain percentage of the

In this case you can expect a positive return in about 67 months out of a 100, and a negative return in the other 33 months. These down periods are perfectly normal even while the investment is busy delivering its 15 percent annualised return over the course of time.

When we look at this on a daily timeframe, our calculations tell us to expect a positive result 54 days out of 100, or just over half the time. So we'll feel good half the time, when the investment is up. The problem is that, being loss averse human beings, we'll feel twice as bad the other half of the time, when the investment is down.

So as a result of this, if you're checking the price daily, you will quickly become emotionally overwhelmed. You will feel twice as much pain as pleasure, and your survival instinct will scream at you to avoid this situation at all costs. You will be very tempted to end the pain by selling - even though the investment is behaving exactly as expected, and the long term returns are on track. Overwhelmed by the psychological pain of short term loss, we find it hard to remain invested for the long term.

In 1883 Chancellor Bismarck set 65 as the retirement age for the world's first governmentsponsored retirement scheme. Back then, before the discovery of antibiotics, and when life expectancy was far shorter than today, only a few percent of the population lived past this age. So people received salaries that lasted for practically their whole lifetime. But thanks to advances in modern medicine and better living conditions, today's average life expectancy is 80 years - leaving us with about 20 plus years of retirement to finance. As a result, we are all forced to be long term investors.

Coping psychologically with investment risk is a bit like visiting the dentist: we do it because the consequences of not doing so are far more painful. We must face the pain and grudgingly accept risk, because if we don't, the consequences are far worse - like running out of money in our old age, being forced to downgrade our lifestyles, or being unable to finance our children's education.

A better understanding of our investor psychology will help us to manage our instinctive genetic response to risk. Each of us needs to set clear financial goals; diversify our capital into an asset allocation properly formulated across uncorrelated market cycles; and commit to a rebalancing strategy. We then need to overcome our inherited, knee-jerk reaction to temporary short-termloss.

Lessen the pain; check your statements less frequently, and give long term market probabilities the opportunity to work to your advantage.

Philippa Huckle is founder and CEO of The Philippa Huckle Group, an independent advisory firm.

Increasing your FQ - some words for the lost investor who knocks here

Think for a moment about IQ. Most of us associate the concept of IQ — the intelligence quotient — as a measure of intelligence in terms of a capacity to solve problems. So too with the concept of ‘FQ’ — the financial quotient. It is a measure of financial intelligence. It embraces intelligence in the same way as IQ, obviously with a narrower focus. However, it does represent a whole way of thinking made up of a number of parts such as overall fitness, credit intelligence and budgeting intelligence.

Unlike IQ, you born with it, don't think you do much about it. However, you can definitely over time increase your FQ to transform yourself from being a Lost Investor to an Informed Investor. It is ONLY you and yourself can make it happen.

Start with reading Financial books, slowly over time develop that habits. The next time you visit NLB, stop at Finance section, pick up 4 books to read and set yourself a target to read at least 20 books by end of 2009.

After achieving high FQ, next you will build up emotional strength and your Game of Strategy in building your financial road map to success or even your final goal of financial independence.

Isaac Newton once commented that if he had seen farther than others, it was because he stood on the shoulders of giants.

So where are the shoulders of giants? They are hidden in the pages of books, and in the minds of other Informed Investors. Seek, and you may find.

SML - Got in a sinking Rig @ 1.61

Semb Marine sink really fast and got in @ 1.61 and will it become semi-sub soon?

Monday 12 January 2009

If you do not know what you are doing, no asset can make you rich!

If you do not know what you are doing, no asset can make you rich.

Assets do not necessary make you rich. Assets through leveraging can actually make you poor if you are not careful.

Ultimately, what makes you rich is your financial intelligence. Your greatest asset is your brain -- so take care of it and protect it from bad advice.

How do you know it is bad? Read more, ask more, visit more personal financial blogs (not those commercial ones), and think more...

Sunday 11 January 2009

Property Investing: doing the Math (Part 4)

The fact is most wealthy people in Singapore made their money from this market segment. (one of the super friends actually make a fortune out of it)

To invest in property, you must have a substantial amount of capital. At least 50% of the property price so that you are not highly leverage. Leverage is a double-edged sword and can kill. So if you have that kind of capital, it is not a bad idea to invest in property.

What if capital not enough? Then gang up for Tenancy-in-common.

This is where each co-owner holds a separate and definite share in the property.

This arrangement is more common where the owners are not related to each other, eg. friends buying a property together for investment.

There is no right of survivorship in a tenancy-in-common. In other words, unlike a joint-tenancy, the deceased's interest does not pass automatically to the remaining co-owners.

Upon the death of a tenant-in-common, the deceased's interest can be distributed in accordance with his will (if any) or under the provisions of the Intestate Succession Act

Choice of like minded partners is important in any TIC agreement. The best is that everybody is in it purely for the money. Set clear financial goals and unwind on cue. Make sure that none of the TIC members occupy the key asset for any purpose eg residential or commercial use. Rent out to only independent tenants. Most important. Don’t fall in love with your investment.


What happens when a property is owned by two or more persons, and one person passes away? What’s the difference between “joint tenancy” and “tenancy-in-common”?

The law provides for two forms of ownership: “joint tenancy” and “tenancy-in-common”. The form of ownership is stated on the title document for the property.

Joint tenancy

This is where all the owners have an equal interest in the property regardless of the amount of money each co-owner had contributed towards the purchase of the property.
Married couples usually opt for joint tenancy when they buy a property. A joint tenancy overrides any will, and the survivor always gets the automatic right to assume ownership of the deceased’s share.

Thus, if a husband passes away first, then the wife as the survivor automatically takes over the husband’s share of the property. Even if the husband had made a will which stated how his share of the property should be distributed, his wife will automatically get to inherit his share.


This is where each co-owner holds a separate and definite share in the property.

This arrangement is more common where the owners are not related to each other, eg. friends buying a property together for investment.

There is no right of survivorship in a tenancy-in-common. In other words, unlike a joint-tenancy, the deceased's interest does not pass automatically to the remaining co-owners.

Upon the death of a tenant-in-common, the deceased's interest can be distributed in accordance with his will (if any) or under the provisions of the Intestate Succession Act.

investment property: What You’re Getting Yourself into?

As the prizes of goods swing and the stock market fluctuates, more and more people are finding investment property as a good business venture. This means that more and more people are buying land not to occupy it but for the purpose of securing capital gains or renting it out to others.

Why go this route? As any book will tell you, land is an asset that does not depreciate. And as foreign markets are putting up more businesses in Asia, it is not a wonder that land has become a very precious commodity. In Singapore alone, appreciation rose at 31% last year. However, reports are showing that this year, growth might be hindered by the downhill roll of the global market and by possible government interventions.

As more cities are becoming urbanized and as more urbanized cities are developing and getting more populated, several locations are being converted into single family homes, lofts, duplexes, apartments complexes, condominiums, townhouses and even vacation houses for the labor forces of these growing cities. These house rentals are not getting any cheaper either.

Do not limit yourself to residential areas though, as more residential areas are being overshadowed by commercial buildings.

Now, if you’re willing to take the risk. Here are few things to consider in investment property:

1. Make sure that the money you’re allotting for this project is in order. This is because investing on a property does not only mean paying for the land but also for repairs, maintenance, improvements and even surviving in between tenants.

2. Get your numbers straight. There are a lot of factors to consider in ensuring that you are making a sound investment. Your annual yield can help you analyze if the rent you collect in a year can make up for expenses. property value is always a good thing to know just in case you’re thinking of selling the said property. Your monthly cash flow could be an important gauge in this decision.

3. If you lack the experience, it might be a good idea to either hire a property manager who can help you take care of the details or pooling resources with known or trustworthy investment companies.

4. Even with help, do your own research. It’s always a good idea to build a network of contacts (Go to BullytheBear blog). They can give you a better thought on the value of the property in a particular area. The right friends (BullytheBear's superfriends) can alert you to coming foreclosures and sales. These people might even be able to help you acquire that elusive piece of fine real estate.

5. And just like the TV series, keep in mind that a sound investment relies mostly on “location, location, location”. Prime investment property, though, does not come cheap. It will take a sharp eye, patience and a lot of bargaining to find a good buy at a good price.

Private properties looking attractive

By Shila Naidu

THE recession has resulted in a 25-per-cent fall in private- property prices from their market peak, and with prices expected to dip further next year, there may be opportunities to pick up some bargains.

However, buyers of properties - whether for investment or occupancy - should do their homework before committing to such big-ticket items.

Here are 10 tips to keep firmly in mind.


The executive director of HSR Property Group, Mr Eric Cheng, feels that if buyers are willing to fork out $1.2 million to $1.3million for a condominium, they should consider buying landed property instead.

Due to land scarcity in Singapore, there is always more demand than supply for landed property, which is not the case with condos, said Mr Cheng.


Mr Cheng said it is important to invest within your means. Have a reserve of at least one year's worth of instalments in case of shocks, like a loss of income.


Mr Arvin Sylvester Lim, division director of Century 21 SHL Realty, said it is important to be sure if you plan to live in the property or rent it out.

If you are making it your home, the equation is simple: Find something that you like and can afford.

If you are looking to invest and rent out, do your research to see if there is good demand in an area, and if the rent will be enough to cover the instalment payment and still allow a profit.


While one should hold back until one finds something ideal, Mr Lim does not encourage overspeculating on trends.

"Buying a house is not like buying a car. The moment you drive the car...the value drops, but with property the value can go up or down," he said.

Even though prices are expected to fall further, "a home is a must", Mr Lim said. He advises against pegging buying one to unpredictable market movements.


Buyers who bought too many properties or can't afford to keep up with payments, given the weak economy, will be selling off their investments now, said Mr Shannan Govindarajoo, marketing manager at ERA.

He suggests you start looking and making reasonable offers as he thinks more buyers will be entering the market, which could mean prices for these "must-sell" properties may rise.


Look at the Urban Redevelopment Authority's master plan and invest where the Government is pumping in money, said Mr Govindarajoo.

For instance, he thinks those interested in the Marina area should strike now, as prices are down by 40 per cent, compared to last year's.

Mr Lim said investing in property in that area will reap great returns when the integrated resort is ready as "a lot of the management staff will be living there, so rentals will be high".


Banks are now becoming more cautious with making home loans and how much they are willing to lend, said Mr Govindarajoo.

He advised shopping around for a good home loan first, so that you do not commit yourself to a seller before knowing how much you have to work with.


Check the valuations of the property you are considering at different banks to make sure you?re getting a good deal, said Mr Govindarajoo.


Mr Parthiban Sadagopal, a Prop- Nex realtor, suggests buying a condo "between seven and 10 years old in the outskirts", like Pasir Ris or Tampines.

Judging from the trend seen after the 2003 recession, such condos are good buys for living in and investment, as you could hope to buy one at $400,000 to $500,000 now and sell it for up to $800,000 when the economy picks up.

Renting it out could fetch $3,000 a month as well.


Keep your sights on the East Coast area of District 15, said Mr Cheng, as prices there are unlikely to dip drastically.

Good schools, malls and eateries add value, making it a good option for those who feel prime locations are too expensive. Meyer Road, Ceylon Road, Telok Kurau and Crane Road are some of the best places to buy a house, according to him.

Mr Govindarajoo agrees, saying District 15 is "evergreen".

Saturday 10 January 2009

Under-estimating risks and over-confidence

One indicator that will tell us. Have you got a comprehensive WILL in place? If not, likely you have under-estimated risks and over-confidence. Wake up, my dear friends.

The ONLY THING I can guarantee you, 100%. It will CERTAINLY HAPPEN and it is matter of time, sooner or later. Either or both happening.

The day when doctor brings bad news, you about to DIE.


The day when police brings bad news, you have GONE.

What will happen next?

Emotional shock (certainly)

Financial shock (maybe)

We can't really mitigate emotional shock but for financial shock, we can by all means to mitigate or better to leave behind no debts.

So don't give shock, and better NOT to shock your dependents and by taking out the calculator now and compute the amount of the debts payable by them. Take care of the debts payable while you still can, if possible adequately covered by insurance.

Porperty Investing - can you swim? (Part 4)

One day , while I was fishing at the shore, a big guy came and asked me: "Brother, how is the catch?".

I replied: "Got few small fish".

He thought for a while and said: " Did you notice some big fish out there at the open sea jumping out of the seawater, why doN'T you fish there?"

"Sir, how to?", I asked

"Easy leh, I got a family boat, and I used to catch real big fish there". He said.

"Well, I got no boat ma", I answered.

"No boat arh, I know you can easily hire a sampan to fish there", he happily suggested.

"Sir, what will happen when suddenly the wind become very strong, and wave become very rough" I asked stupidly.

"No problem, my boat will be just shake wildly but will not overturn, but, your sampan may overturn. Can you swim to the shore?" he asked.

"Me, I can't eh"


Most swimmers under-estimate that they can swim safely to the shore under strong wind and rough sea. Swimmers don't drown easily in the swimming pool, but at the high sea, it is not uncommon that they might perish.

Coffee or Tea?

Sir/Madam, coffee or tea?

What will you order? coffee (stock) and tea (property)

If property sepculating or investing is your Cup of Tea, then go for Tea, or else, stay with coffee.

But, coffee drinker may sometime drink tea or convert to tea drinker.

Me. Coffee Black please.

Wednesday 7 January 2009

Noble - waiting for you @ 1.29 before CNY

For everything there is an appointed time, even a time for every affair under the heavens: ... a time to keep quiet and a time to speak and a time to take profit.

Wait 1 month to collect your pay.
Wait 3 month to collect interest from 3-month FD.
Wait 9 month to get a baby.

Then why not wait for another few days @ 1.29 for Ang Pow money. Mr Chart not that ugly after all. Cheers!

Does 3 strikes make a good bowler?

Success is your own worst enemy. Sometime, it is just 100% LUCK that you got it right. Like bowling, I am a damn lousy bowler, but sometime due to pure LUCK, I would have a strike every now and then, I have only ONE TURKEY (3 strikes) till now and never happen again. WHY LEH?

The difference between the REAL PRO and LUCKY PRO is the consistency, the real pro will have few strikes or even turkey in almost every game; while, the lucky pro may also have some strikes but often also ending the game with none.

Same like trading or investing, a few profitable ventures does not make me a real pro, made NO MISTAKES about it. PRINTED BOLD IN MY MIND!!!!

Monday 5 January 2009

Noble - First weekly allowance in 2009. Cheers!

Round 5:(2nd Half) ROC 12%, 27 days
Round 4:(1st Half) ROC 14%, 8 days
Round 3: ROC 7.1%, 8 days
Round 2: ROC 31.6%, 20 days
Round 1: ROC 16.3%, 28 days

Sunday 4 January 2009

Feeling of financial abundance?

How do I know I am ready for the one CARD BIG POKER GAME? Probably, one way is to look inside me, do I have the feeling of financial adundance?


Q1. When ordering food from the Menu indicating Market Price, do I check what is the Market Price before ordering? (i.e. not prepared or willingness to pay Market Price)

Q2. When shopping and came across something interesting, but after looking at the price tag, put it back IMMEDIATELY, and start looking at something else?

What is the answer to Q1, and Q2?

A1. Always. Probably, I am not ready for one CARD BIG POKER GAME.

A2. Not frequent. Congralutions. I am certainly READY lor.

As with any Indicator, there is no one right indicator. Cheers!

Property Investing - doing the Math (Part 3)

I have sensed that some of those superfriends are getting ready to invest in property. I presume investing in Sinagpore 99 years Leasehold property as investing in Freehold property would need huge capital and highly leveraged.

What is 99 years Leasehold?
A leasehold estate is an ownership interest in land in which a lessee or a tenant holds real property by some form of title from a lessor or landlord. Leasehold is a form of property tenure where one party buys the right to occupy land or a building for a given length of time i.e. 99 years.

What work against an investor?
Time decay. Yes, time decay works against any investor (value investing).The property will likely to go through a few property cycles, finally, the full impact of Time Decay will be signicifantly felt in the last cycle and will be rapidly priced in and its value will plummet without no futher recovery i.e. approaching End of Life.

Is putting money in 99 years Leasehold property Investment or Speculation?

I think Investing is the most abusive word used by Investors in Singapore 99 years Leasehold property.(You should never ever think you are an investor if what you are doing is in fact speculation)

Leasehold property is good for living and for those who could afford a luxury living. By all means, live well, enjoy it, and spent your natural wealth in your lifetime. Never heard of anyone who has successfuly bring their wealth with them after their lifetime, most likely their wealth will be stolen or lost after sometime.

So are you still INVESTING OR SPECULATING? Leave it for you to answer truthfully. Alternatively, loading property counters bringing you nearer to INVESTING as there is no TIME DECAY element. Cheers!

Speculation vs Investment

Investment or Value Investing is which I believe is the most abusive word in using money to make money.

A speculator is someone that buys something only because he/she thinks someone else will pay more for it in the near future, as opposed to an investor, who buys things because analysis confirms that the investment is of high quality and/or good value, and worth holding.

A speculator buys things because he/she believes a less informed person (A Greater Fool) will buy it off them later at a higher price, an investor buys things because they promise both a return on capital invested, as well as a return of capital invested..

To add on with some interesting extract from the Net...

Benjamin Graham, a famous investor in his own right and also notable because he is the man that taught Warren Buffett to invest, defined the difference between speculation and investment in this famous passage from his book The Intelligent Investor

Professional speculators are like professional gamblers. There are people out there who play blackjack or poker for a living, taking calculated risks with enormous amounts of money, seeking to maximise their edge with sophisticated techniques and a mind that is well tuned to probabilities and risks vs rewards. Some of them make millions, there is no doubt at all that by playing a game with statistical biases, and seeking over time to take profits from these biases, one can actually make a living from gambling.

On the other hand, the world is full of the social wreckage caused by gambling. The unwise and impatient litter the wayside, though there is no shortage of people willing to take their place. You can only profit from gambling when your probability of winning is greater than the probability of the other side winning, and casinos employ gifted mathematicians to make sure the rules of the game favour the house.

Professional speculators are as far above the public in terms of sheer talent, dedication and intelligence as professional gamblers are above the tipsy chain-smoking denizens of the casino floor.

To become a professional speculator you have to live and breathe the market you want to speculate in. All those people buying collectible china and antiques are up against the true connoisseurs. Those who know the market from the inside, and can spot a rare gem when it comes along, and have the cash needed to buy it, and the body of experience to know exactly what this item is worth (regardless of how aesthetically pleasing or otherwise that it may be).

Professional traders think of little else. Far from the 5-minute-a-day business that is advertised by the guru wannabes that advertise "systems", trading is a lifestyle that can be embraced by only a rare person. Traders become aware of all the pertinent fundamental information, including consensus estimates and bullish/bearish market sentiment.

Professional speculators in mining issues read all the trade journals in mining and probably know a thing or two about how to read the jargon of the analytical chemist in the labs and the geologist breaking rocks, or the meaning of the various exotic electronic sensing devices used today. A technology speculator needs to know a thing or two about science, engineering and electronics as well, so as to keep up with the state-of-the-art and separate the good ideas from the blue sky ideas.

A trader doesn't always try to forecast though. The blackjack player does not need a newsletter writer to tell him what card will be next so he just plays the probabilities and tries to control his risk, usually with some kind of mathematically based money management system. Similarly in stocks and futures, few traders know or care what the market is going to do next. They sit back, do their analysis and try to think in terms of possible upside potential and downside risk, determine where they might enter the market and where they will exit if the market should move the opposite way.

Can you do this? Well sure, there is nothing to stop someone from picking up these kinds of skills, but you won't do that by subscribing to any newsletter, or paying a thousand dollars for some kind of formula or indicator that some guy says will tell you when to buy and sell. Not that there aren't plenty of people who do sell such things though, in investment more than anything else there are plenty of people who demand such a service. Everyone wants to know what the experts think about the future direction of the market, while nothing like it appears in the newspapers, surely someone that works in an investment bank knows what is going on, or a fund manager, or some sort of pro?

To every demand there will rise a supply to meet it. Since there are no genuine and ethical people who can give an easy answer, the void can (and is) only filled with players that exploit the gullibility and ignorance of their customers.

A businessman does not seek advice on how to run his business, except in a general sense or perhaps get an expert with certain management talents who can fix a specific problem. You don't get anyone offering a service though where complete businesses are offered and you are told how to run them and it all takes only a few minutes of time per day once you pay them your money. (Except maybe for franchise businesses, but there is no parallel between a franchise and speculation, so forget it!) To those professional speculators, speculating is their business, their full time job. Most put in considerably more hours into their trading than the average person puts into their job, and unless you really love trading you certainly don't find yourself any better off as a trader.

The reality is that you can make money as a professional speculator, but it is not at all easy. No one can tell you how to do it specifically, they can only give a small amount of guidance while you have to do a huge amount of work. Traders work very hard at their trading, doing enormous amounts of research and keeping track of a huge amount of information. Don't even consider becoming a very serious trader unless that is all you want to do. Most newsletter gurus aren't traders at all, they advise on methods they have developed with only theoretical simulated testing. It is very time consuming writing a newsletter, and even more so trading. As gurus have just as many hours in their day as the rest of us, it is clear that the lifestyle they paint, with their luxury houses and heaps of free time, holidays in exotic locations and massive incomes is entirely incompatible with that of a professional trader. Not that traders haven't written books, there are a few good ones around, but one thing that is for sure is that no genuine trader would have the time to write, edit and publish a weekly newsletter.

Don't give up your day job if you aren't already a trader. You can start out with it by riding a few uptrends on some large cap stocks, despite what they say about trading being hard it doesn't take a genius to buy BHP when it has been steadily rising for a week or two on the back of improving commodity prices, and sell a week later at a 20% profit. If you did that and you really enjoyed it, and I mean REALLY enjoyed the market then maybe you might have the passion.

Traders get out of bed at 6am to see the close of a foreign market and the opening of another one, they read all the journals (not the tip sheets, I mean reputable financial newspapers) and track a number of markets. They watch out for opportunities and they are fast in taking them, and equally fast in getting out if they turn out to be wrong. They don't necessarily use the super-duper software or subscribe to a $1,000 a month data service for NASDAQ day traders, but they are in there anyway, around the newsgroups and reading all the commentary (sometimes so they can go contrarian when strong consensus is obvious).

Why do traders do this? Well of course there is the money, though not as many as you would think make a very high income, they do it because they love doing it. They find the vacillations of the market to be entirely fascinating and immersive, they gain pleasure from seeing the market move with them, but don't take it personally when it doesn't so they get out quickly. They don't trade to live, they live to trade. Far from the glamourous operator pulling up to the curb in a Maclaren F1 sports car to attend a society social event, many traders are reclusive, sometimes a little nutty and definitely obsessed. Trading is their favourite thing in the whole wide world, they would not want to take a yacht to the Bahamas, as that would drag them away from their trading.

Will you be able to buy that kind of intensity? Can a software package that scans the market for some sort of trigger signal provide you with the kind of skill and knowledge to keep up with those guys? Will a $10 a minute hotline to some guru really provide the insights you need? Bear in mind that a real trader would be too busy to talk to you during market hours, and would not welcome a bunch of whining beginners desperate for some tips. Can a few lessons turn you into a virtuoso?

At least with music you don't go broke if you don't play well at first, you have the chance to practice for many years before you get your night in the spotlight. Even paper trading isn't real practice, unless you have real money in the market you will always kid yourself, thinking as hindsight rolls in that in the real thing you would not have taken that trade at all because it was so obvious it wouldn't have worked. No!

On the other hand, investment isn't a particularly hard thing to do. Anyone, regardless of intrinsic talent can do it. The stock market has a certain long term return that beats inflation comfortably. Purchases of a conservative portfolio of leading stocks will provide returns along the same lines as the market, even better (sometimes) you could buy units in an index tracker fund. Purchasing ordinary real estate in an attractive area that has enjoyed consistent gains for decades is also a good investment, and again requires no special skill.

Is investment better than speculation? Well you won't make massive profits in a few days if you are investing, but you make respectable profits in time. Speculators don't always lose money, but the inept ones do. There is nothing inherently superior about either approach, though one thing that is for certain is that only a minute proportion of the population will ever (or could ever) be highly successful speculators, you rely on being much better than 99% of other people and you have to maintain that superiority for as long as you speculate. On the other hand, if every single person in the world was an investor, it would simply mean that wealth would be fairly and equitably shared, with all sharing in the prosperity that can be gained by living in a capitalist society.

I am not against speculation, but when I speculate I do so knowing the difference between speculation and investment. Trouble arises when people confuse the two and look for hot tips to invest.

You should never ever think you are an investor if what you are doing is in fact speculation. You can be both, but not at the same time (not with the same stock anyway, though you can have two portfolios if you want to).

There are of course differing definitions of speculation. An efficient market theorist will define investment as holding a large diversified (but otherwise randomly chosen) portfolio that will give returns commensurate with the market as a whole. It defines speculation as any attempt to beat this by analysis of any form, including technical, fundamental or otherwise.

Others define speculation by the knowledgability of the investor, but this is not a very useful definition really. The dictionary defines speculation as attempting to profit from market price appreciations, this is definitely the most useful definition.

You are probably an investor if:

You are buying a portfolio of quality issues at a reasonable price.

You either content yourself with returns that are average for the investment type, or focus on the best value issues of the type for superior returns. The portfolio is made up of issues with a strong track record, or is managed by people with a strong track record.

You can justify your purchase with reasonable projections of profits that are not out of line with historical returns for ventures of this type.

You buy something because the price has fallen so the yield (dividend, rent or otherwise) has risen to the point that it is superior to alternative investments, and you have substantial reason to believe that the investment won't completely go bust.

You buy because you notice the stock is trading at a price below fundamental valuations.

You sell because of deteriorating fundamentals in the investment, or you need the cash for something meeting your buy criteria even more closely. Market quotations are there only for your convenience, you may choose to sell if the investment looks absurdly expensive, or to buy when you see the opposite, but other than that you ignore volatility.

You keep a close eye on those who manage your investments (including managers of the company you hold shares in), looking for prudence, logical capital allocation and conservative expansion. You would rather not invest with a high profile celebrity CEO that promises huge growth with a series of rapid takeovers.

You are probably a good speculator if:

You understand the risk and are taking positive measures to limit that risk. In fact risk management is your bread and butter.

You are taking steps to bring about a higher return than average by keeping a close eye on your stocks and constantly riding the ups in price but selling out and waiting for the end to the downs.

Of the many issues you are watching this one seems to have the highest probability of doing well over the time frame of your trading style.

You anticipate a price increase but have a plan in place in case it doesn't.

You track a large amount of information that may have an effect on prices, and get ready to act if this information doesn't seem to be already reflected in the price.

You are well tuned with the pulse of the market you are in, and ready to leave before the herd does.

You buy at the early signs of upturn after the price has fallen, but are ready to close your position rapidly of you turn out to be wrong.

You are mindful of the overall trend in prices.

You buy the best value investment of its type during a boom.

You buy something with the strongest upward price momentum.

You sell because you notice a trend change.

Market quotations are your bread and butter, you want the very latest information and lots of it.

You don't trust anyone else with your money, the stupid cattle on the opposite side of the trade from you don't know what they are missing and all those gurus are just crooks.

You are probably a mug speculator if:

You verbally acknowledge risk but ignore it, allocating a large proportion of your money to this one venture.

Risk management simply amounts to nodding your head saying you realise that there is of course a risk, but doing absolutely nothing to take steps to limit, or even properly identify risk.

You are trying to bring about a very high return by buying something that looks exciting, but you aren't too sure how the business works.

You are buying something because someone you know told you it was good.

You have absolutely no idea what else is out there because you haven't really checked, but this one looks good.

You think it is a sure thing to go up.

You buy something that has fallen a lot because you don't think the price can go any lower.

You find out the price crashed a week after it happens in a conversation with your friend that "understands this sort of thing".

Rene Rivkin says on TV that he "likes it a lot" so you buy it.

You don't understand how people make money in the investment.

You are trying to pick the very bottom to buy, or the exact top to sell.

You will pay anything for an investment because prices are booming.

You buy because it has gone up a lot.

You sell because you want to take a profit.

Rises in the price excite you, but as terrifying as it is to you, you don't take any action during the dips because it is just a "paper loss" and you know it isn't really a loss unless you sell. If it gets back in the black though you'll rapidly sell out and pocket the cash so you won't lose face over it.

You want someone to tell you what to buy next, and even though the last 20 newsletters you subscribed to cost you lots of money, you haven't quite given up on newsletters just yet, you also own the latest and greatest automatic software to free you from all that dull boring analysis.

Saturday 3 January 2009

SUFFERING, NOT SMILING, The Truth About Captive Dolphins

SUFFERING, NOT SMILING, The Truth About Captive Employees who work for their daily bread. If not for this daily bread, they may have choose to do other jobs that close to their passion.

Thursday 1 January 2009


When a person enters the final stage of the dying process, two different dynamics are at work, which are closely interrelated and interdependent. On the physical plane, the body begins the final process of shutting down, which will end when all the physical systems cease to function. Usually this is an orderly and un-dramatic progressive series of physical changes which are not medical emergencies requiring invasive interventions.

These physical changes are a normal, natural way in which the body prepares itself to stop, and the most appropriate kinds of responses are comfort and enhancing measures.

The other dynamic of the dying process is a work on the emotional, spiritual, and mental planes and is a different kind of process. The “spirit” of the dying person begins the final process of release from the body, its immediate environment, and all attachments. This release from the body has its own priorities, which include the resolution of whatever is unfinished of a practical nature, reconciliation of close relationships, and reception of permission to “let go” from family members.

These “events” are the normal natural way in which the spirit prepares to move from this materialistically oriented realm of existence into the next dimension of life. The most appropriate kinds of response to the emotional, spiritual and mental changes are those which support and encourage this release and transition.

When a person’s body is ready and wanting to stop, but the person is still unresolved or un-reconciled over some important issue or with some significant relationship, he or she will tend to linger… even though very uncomfortable or debilitated… in order to finish whatever needs finishing.

On the other hand, when a person is emotionally, spiritually, and mentally resolved and ready for this release, but his / her body has not completed its final physical process, the person will continue to live until the physical shut down is completed.

The experience we call death occurs when the body completes its natural process of
shutting down and the “spirit” completes its natural process of reconciling and finishing.

These two processes need to happen in a way appropriate for the values, beliefs, and lifestyle of the dying person so the death can occur as a peaceful release.

CARE July / August 1992.
Revised 12/01/98

Preparing for Death

To think of and prepare for death is not surrender, but victory over fear
If you are like most, you may be a bit squeamish when it comes to the subject of death. Most likely, it is something you would rather not think about. However, blocking the thought of death from one's mind is a mistake. Those who choose to suppress thoughts of death can never realize their full potential. For it is only when we admit that death is an arrow in flight coming our way that we are motivated to act now. When we pretend to ourselves that death couldn't possibly come today, but must be lurking at a distant point in the future, we falsely believe there is no need to act immediately. Who do you suppose are the great achievers: those who are ever aware of the nearness of death or those with their heads in the sand?

Because of death, life has value. When you realize that those you love can be taken from you at any moment, you cherish them all the more. It is death that makes life such a valuable gift. When one offers their own life to protect their country or family, there's no greater gift. Those who work as volunteers, helping others, are offering part of their lives. And because life is limited, the time they spend serving others is a precious gift.

When we face death, rather than hide from it, we develop the courage to accomplish anything. After all, if we don't fear death, what remains to frighten us? That's why Paul Tillich writes, "It is man only who is able to face his death consciously; that belongs to his greatness and dignity." Also, our problems are easier to accept when we realize the only people without difficulties are those in the cemetery. Contemplating death is like bungee jumping, it makes life exhilarating and leads to a heightened sense of aliveness. Since we will all die, it makes sense to make our final moments as peaceful as possible. How do we do this? Let Leonardo Da Vinci explain: "As a well-spent day brings happy sleep, so life well used brings happy death." And it is only by constantly being aware of death that we will have a life well used.

Don't misunderstand. When I suggest we should be constantly aware of death, I'm not referring to a morbid fascination or obsession with death. The focus of our attention is not on death, but on living. However, while living, we maintain an awareness of death in the background, and use it to guide us in doing good. For example, a friend does something stupid and hurtful. How should I react? Should I get angry with him? An awareness of death allows me to marvel at the miracle of life, understand its frailty, and realize my friend or I may die at any moment. So, shouldn't I cherish our relationship and overlook his flaws? Should I get angry with him? No, of course not! Maybe what he did today was stupid, but he'll learn. Besides, tomorrow I may be the one doing something stupid.

But how can we practice being aware of death when the mere thought of the subject sends a chill down our spine? The secret is to become aware of and analyze our fears, for they melt under the bright light of scrutiny. One reason we fear death is because of our instinct for self-preservation. If you are afraid of crossing a dangerous intersection, your fear makes you more alert and cautious, which is good. This fear only crops up when you are exposed to danger, so it shouldn't interfere when contemplating death. However, the following examples do prevent some people from practicing an awareness of death.

1) Perhaps our biggest fear is annihilation, extinction, or disappearance of our identity. Isn't life all we have? So, its loss is the greatest loss we can suffer. But it only appears that way because we are too caught up in ourselves, too much in love with ourselves. If we step back, we will realize the universe doesn't revolve around us, but we revolve with it. Enjoy the ride! Redirect your love from yourself to the universe. Do this and you won't be disappointed. For even though you and I will go, the universe will still be here. Does any one rose, snowflake, or cherry blossom have more value, significance, or meaning than another? What makes you think we are any different? Each one of us is just another wave in the ocean of life. Relax. Don't take things so seriously. For as Norman Cousins wrote, "Death is not the greatest loss in life. The greatest loss is what dies inside us while we live."
2) Many of us were taught about life after death, but are uncertain about the outcome, so we're afraid. This is simply fear of the unknown. If you believe in life after death, the solution is simple. Lead the good life and you'll receive your reward. If it turns out you were wrong and there is no afterlife, you won't know about your mistake, so there's no point in worrying about it.

3) A common concern is fear of suffering. However, this is not fear of death, but fear of the dying process. We are dying now; it's just a little more obvious near the end of our lives. There is no need to fear death since you will never experience it. As long as you are dying, you are still living. That's the paradox. As far as fear of suffering at the end, instead of wasting your energy with useless fear and worry, apply that energy to maintaining a healthy physical, mental, and spiritual life. At least that will make the end easier to bear.

4) Some fear that death proves all our efforts were meaningless. Don't believe it! Don't I often quote the words of wise men who lived 2,500 years ago? Imagine, they've been dead so long and their words are still being quoted. Their lives were not meaningless! Believe it or not, even the lives of ordinary folk, such as you and I, have impact on the world. During our lifetimes, our words and actions directly and indirectly affect thousands of people. Our actions produce ripples that stretch out to eternity. Are our lives meaningless? Not a chance!

"Perhaps the whole root of our trouble," James Baldwin wrote, "the human trouble, is that we will sacrifice all the beauty of our lives, will imprison ourselves in totems, taboos, crosses, blood sacrifices, steeples, mosques, races, armies, flags, nations, in order to deny the fact of death, which is the only fact we have." Well, life may be a candle in the wind, but, oh, it gives such a lovely light!

© Chuck Gallozzi
For more articles and contact information,
Visit http://www.personal-development.com/chuck

Noble - Getting harder to play lor??

Wealth and Happiness

Some taking from an article from Gary Hayden in MIND Your Body, Jan 1, 2009

Learning from one of history's great teacher on wealth and happiness - St Thomas Aquinas (125-1274), a Dominican monk blessed with an extra ordinary brilliant mind and remembered everything he had read, so that his mind was like a huge library.

He believed that happiness is man's ultimate goal, the one thing we seek entirely for its own sake. Happiness is about more than just feeling good. It is about living a good and meaningful life. We all seek happiness. However, Aquinas warned us that we need to be clear about this involves for we may otherwise seek in vain. Everyday, we are presented with conflicting goods from which we must choose. However, which lead to happiness and which lead to frustration and disappointment. Some people pursue what Aquinas termed "external goods" like wealth, power or fame. (ho ho, create wealth, this is what I pursue)

Whether man's happiness consists in wealth?

It is impossible for man's happiness to consist in wealth. For wealth is twofold, as the Philosopher says (Polit. i, 3), viz. natural and artificial.

Natural wealth is that which serves man as a remedy for his natural wants: such as food, drink, clothing, cars, dwellings, and such like, while artificial wealth is that which is not a direct help to nature, as money, but is invented by the art of man, for the convenience of exchange, and as a measure of things salable.

Now it is evident that man's happiness cannot consist in natural wealth. For wealth of this kind is sought for the sake of something else, viz. as a support of human nature: consequently it cannot be man's last end, rather is it ordained to man as to its end. Wherefore in the order of nature, all such things are below man, and made for him, according to Psalm 8:8: "Thou hast subjected all things under his feet."

And as to artificial wealth, it is not sought save for the sake of natural wealth; since man would not seek it except because, by its means, he procures for himself the necessaries of life. Consequently much less can it be considered in the light of the last end. Therefore it is impossible for happiness, which is the last end of man, to consist in wealth.

In addition, those hinger after riches are never satisfied. They quickly come to despise what they posses and yearn instead for other things. So happiness cannot consist in wealth.

The problem, as Aquinas saw it, is desire. We humans can never be truly happy until all our appetities are fulfilled. So long as there is something left for us to desire, we will never be completely satisfied.

Aquinas concluded that no created goods can satisfy our desire since all created goods are necessarily imperfect. Therefore, perfect happiness is unattainable in this life.


Adding my thoughts...

To reduce the level of desires by living as simply as possible, and bringing us nearer to lesser imperfect happiness. Sometime, we do see some people causing themselves unhappiness by seeking perfection in man created goods e.g. music, wines, food, houses, car, woman, etc. Never seems to be satisfy with the finest wine, the best music, the most tasty food, house and car are never big enough, and woman never prettier and more sexy. Look at newspaper's ads everyday, they are shouting at some ladies and even men, never seem to be satisfy and happy with your natural head, face, hair, body and parts.

So be happy and won't worry. Cheers!
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