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

Tuesday 30 November 2010

Work Less and Gone Fishing Planning Room (4)

Read? Work Less and Gone Fishing Planning Room (3)

More ideas from the book: "What Color Is Your Parachute? For Retirement."

Three Levels Of Retirement Happiness

  1. Pleasure - Level 1
  2. Engagement - Level 2
  3. Meaning - Level 3
Engagement - Level 2

This level introduces a new element: challenge. But why would you want challenge in your retirement?

Here 's what Csikszentmihalyi's research discovered. When the challenges in your life are to far above your level of skill, they create anxiety. You've probably had a job like that at one time or another. But when the challenges in your life are too far below level of skill, they create  boredom. You probably wouldn't want a retirement like that. Perhaps you'd like more of a middle ground. That's what engaged retirement is about.

The secret is regularly finding interesting challenges that are a good match for your favourite skills and strengths. When you find these interesting challenges and become actively involved in them, you get a sense of accomplishment from doing them well.

Createwealth8888 thinks aloud

Exploring, gambling, trading or investing in the stock market may have presented interesting challenges to many retirees; otherwise where can we find such activities where there are so many retirees are participating them.  Don't believe me? Just go to any AGM, you will see many retirees there.

Probably, another reason is that retirees may think that trading or investing is another form of continuous "working" but at leisure pace to earn some retirement income as they generally will have much smaller profit target and once they hit it they may feel a sense of accomplishment.

So will trading in the stock market becomes my version of engaged retirement?

Compare Your Annual Income 2010 against others in Singapore?

Try it yourself? Compare Your Annual Income 2010

See how well you rank against all resident taxpayers in Singapore?

(***** Someone's comment: There are 2 segments not included – those who don’t earn enough to be taxed and those who are too rich to work for an income (they are only taxed on their rental and dividend incomes, so it’s not particularly representative).

So are you happy with your ranking?

If you are already rank very high up there, perhaps

Median income of Singaporeans rose 4.2% in 2010: MOM

SINGAPORE: The Manpower Ministry (MOM) said the median monthly income of resident Singaporeans in full-time employment rose by 4.2 per cent over the year to S$2,710 in June, boosted by the strong economic recovery.

That is higher than the marginal growth of just half a per cent in 2009.

MOM said even after adjusting for the higher inflation this year, the median income rose by 1.8 per cent, recovering from a slight dip of 0.1 per cent in 2009.

Part-timers also saw a significant increase of 13 per cent in their median income to S$700 this year.

Overall, the nominal median income for all employed residents rose by 3.3 per cent to S$2,500, after falling by 1.2 per cent last year.

MOM said the growth in income this year came earlier and stronger than in the previous recovery, when the median income hardly moved from 2001 to 2006, before rising significantly in 2007.

The Ministry also said that the strong economic recovery has boosted the employment rate.

The increase in employment rate was broad-based across both prime and older age groups, especially among women. A record 71.7 per cent of women in the prime-working ages of 25 to 54 were working this year, up from 69.4 per cent in 2009.

Nevertheless, MOM said their employment rate was still below the 92.4 per cent for prime-working age men, which increased from 91.6 per cent in 2009.

The proportion of residents aged 25 to 64 in employment rebounded to a new high of 77.1 per cent from 75.8 per cent in 2009, after falling by 1.2 percentage-points from the preceding year due to the economic downturn.

The employment rate for older residents aged 55 to 64 rose to a new high of 59.0 per cent in 2010, after holding steady at 57.2 per cent over the past two years.

The rise was largely contributed by a marked increase in proportion of older women in employment from 40.1 per cent in 2009 to 43.4 per cent in 2010.

The employment rate for older men was also at a record high of 75.0 per cent in 2010.

Supported by the economic recovery, the resident unemployment rate and number improved significantly from 4.5 per cent in June 2009 to 3.2 per cent in June 2010.


Understanding Debt, Risk and Leverage (Re-visit)

Read? Understanding Debt, Risk and Leverage

"debt-free and that, to me, is richness enough" - Tabitha Wang

Read? debt-free — and that, to me, is richness enough

Tabitha's life story is a good reminder to us that in the current low-interests rate environment it doesn't mean rosy long-term investment returns ahead. It may also unexpectedly trap us if we are too highly leverage in our investment at the next deep recession. Who knows it could be just a few years down the road from 2011 as economics and market cycles seem to be shorter now.

Monday 29 November 2010

Work Less and Gone Fishing Planning Room (3)

Read? Work Less and Gone Fishing Planning Room (2)

More ideas from the book: "What Color Is Your Parachute? For Retirement."

Three Levels Of Retirement Happiness

  1. Pleasure - Level 1
  2. Engagement - Level 2
  3. Meaning - Level 3

Level 1 - Pleasure

It's usually based on your interests in the world outside of work. It's the same kind of stuff that you pursue whenever you have free time: hobbies, entertainment, spectator events, travel, socializing. these things are enjoyable partly just because they're work. And they are enjoyable partly because there's something about the subject or pastime that you find interesting.

During your working life, these low-involvement activities bring a welcome counterbalance to your work. In retirement, though, these activities are no longer counterbalancing work and they may not have enough weight to stand on their own. They may not be rich enough to bring the amount of happiness that you expect from them. They were up to the task of filling your all-too-short weekends and a week or two of vacation. And it helps if you can choose from a wide range of pleasureable activities that you've already lined up and experienced. But they may not be up to the task of filling weeks and months and years and decades of retirement.

Createwealth8888 thinks aloud

I think it is far better to find a hobby that you can still DIY without the help or need of a partner to derive that little pleasure.  My goodness! What are you thinking? Masturbating? LOL.

No lah. I am talking about fishing.

Fishing is not just pleasure and it is also a source of FRESH food supply especially when I love to eat seafood. When I go fishing, I don't just limit to fish. There are blur sotongs for me to jig. Crabs for me to trap and may even hook up sea mantis.

Read? Want Happiness? Invest in Relationships, Not Just Markets

To be continue ....

Want Happiness? Invest in Relationships, Not Just Markets

By: Darren Connell
Senior Producer,

We’ve all heard that money can’t by you love. Now comes the news that once you reach a certain level, it can’t even buy you happiness.

Australian Unity and Deakin University released the results from Australia’s most comprehensive study ever into happiness and wellbeing last week. The report spanned ten years of research, 24 surveys, with responses from more than 80,000 participants. Some of the findings were enough to make you throw in the suit and tie.

Most importantly for investors, the report revealed that once you reach a certain level, money does not really bring happiness. In Australia, this happens once gross annual household income reaches between A$101,000 to A$150,000 per year. After that, the report’s author, Professor Bob Cummins of Deakin University’s school of psychology, said you’re better off investing in relationships, not shares.

“Our research shows that having an intimate relationship is the most important thing. If you’ve got one solid intimate, emotional relationship, then you’re very well off,” said Cummins.

But the report did show that money brings happiness to those on lower incomes. For a household earning A$15,000 per annum it would take just A$6,000 to increase their wellbeing level by a single point. For households earning between A$151,000 and A$250,000 per annum, it would take an extra A$147,000 to boost wellbeing levels by the same margin.

"What is the key to a happy life? According to the report, the answer is to invest in your relationships and community, just as much as you invest in the markets. Plus, don’t forget to have a drink while you do it."

“If you can’t afford the basics, it leads to a great deal of unhappiness. On average in Australia, people need about A$100,000 of gross household income. That will pretty much maximize the happiness you can get from money. Beyond that, money doesn’t matter. If you’re living with unhappy children what can you do? There are some things where money is not an inadequate defense,” Cummins said.

So what does bring us happiness? Well the results are surprising.

According to Professor Cummins disasters like September 11, the Bali Bombings and the Black Saturday bushfires in Victoria were all healthy for the nation’s sense of wellbeing.

“There’s a phenomena called the rally index, as in people rally to the flag. People turn to each other and the government in times of need for support. People connect with others and get a sense of being part of a community. This is good for wellbeing because it gives people a sense of belonging to a larger group."

Giving both your money and time to charity is also good for wellbeing. The study found that volunteers are amongst the happiest people in Australia. Professor Cummins puts this down to the fact that as human beings, we need to feel like we are part of a community.

“Volunteering brings people into contact with other people in a positive environment, it gives us a sense of we’re in this together to make the world a better place. It’s a very positive thing.”

So what then is the key to a happy life? According to the report, the answer is to invest in your relationships and community, just as much as you invest in the markets. Plus, don’t forget to have a drink while you do it. The study found that people who drink every day have a very high rate of wellbeing, while those that don’t drink at all, came last in the category.

Keppel Corp (BN4.SG) in sweeter spot after Petrobras tender bids revealed,

0714 GMT [Dow Jones] DBS Vickers says Keppel Corp (BN4.SG) in sweeter spot after Petrobras tender bids revealed, could win 4-11 contracts worth US$3.5 billion-US$8 billion, while SembCorp Marine (S51.SG) could end up with 0-7 drillship contracts. Keeps Keppel at buy, raises FY11/FY12F earnings by 2.0%-3.0% on shortened recognition period for newbuild orders to 24-27 months vs up to 36 months previously, raises target to S$12.20 vs S$11.30, raises valuation peg on O&M division to 18.5X vs 16.7X. For SMM, says competitive edge weakened by higher pricing. "However, given the Alusa consortium''s absence of track record, Petrobras may choose to award contracts to SMM, to diversify its risk exposure." No change to estimates, target of $5.48, keeps Buy. "In the event SMM loses the Petrobras bid, the impact on its FY12F earnings could be up to 5.0%." Keppel +1.1% at S$10.92, SMM down 1.7% at S$4.76. (matthew.allen@dowjones.com)

Sunday 28 November 2010

Will You Try To Pay Off Your Housing Loan ASAP If You Have One? (5)

Read? Will You Try To Pay Off Your Housing Loan ASAP If You Have One? (4)

"When I told some colleagues that I dumped all available CPF money to pay up and took up only 5-year housing loan. I believe some of them might think that I was stupid not to take advantage of the cheapest loan available." - Createwealth8888

I know that the housing loan is the cheapest loan in town and I also heard many times from Mr Property Guru and Mr Banker that housing loan is GOOD DEBT if you are a savvy investor. Really ah?

But I also know that debts will cost me interests payment ..

You need to remember that as long you have debts, any money you invest elsewhere is costing you interests payment since you are not paying off that money towards your debts so actually there is a net effect between Returns on investment and interests payment.

A Simple Case Study

Let assume ...

Investor A and Investor B are both savvy investors. Both have $300K cash to purchase their home and $10K per year to invest for the next 30 years.

Investor A chooses to pay off $300K upfront and starts off investing at Year 1 with only $10K while Investor B takes up a 30-years term housing loan at 1% fixed interest mortgage rate and starts investing at Year 1 with $310K and both investors can generate compounded ROC at 2% for their accumulated investing capital for the next 30 years.

[I use this Mortgage Calculator to get the yearly loan payment for $300K loan at 1% for 30 years term. (Property tax, PMI = 0%)]

Here is the Maths:

At the end of 30 years, Investor B made 17.8% more than Investor A or annualized of 0.6% better than Investor A. However, for 30 years, Investor A can sleep soundly at nights during multiple recessions that can be expected since this is the way economics cycles work.

I also learnt that Every Bull and Bear market may impact you differently. Beware!

In this case, Investor B is exposed to higher capital loss risk since Year 1 while Investor B is exposed to capital loss risk gradually every year.

Seriously, do you want to be Investor A or Investor B?

Kep Corp and Semb Marine

Pg 36, invest, thesundaytimes Nov 28, 2010

5 Building your stocks war chest
.....  DBS Vickers strategist Yeo Kee Yan ...

Mr Yeo recommends ....

Firstly, rig builders Keppel Corp and Sembcorp Marine stand to win new orders next year.

It could be a record year for SembMarine if it clinches Brazilian oil company Petrobras' contract for seven drill ships, with aprojected total order of $11.4B

Likewise, Keppel Corp stands to win total new orders of $11B, including $6.5B from Petrobras.


I believe many retail investors will read and pay close attention to "invest" section's articles and may act with good faiths.

Will Kep Corp and SML be well supported by retail investors on any pullback?

Kep Corp Weekly - Still have room to move up.

SML Weekly - Went up too fast. Probably limited upside with more profit taking likely.

What does the Govt thinks of Singaporeans?

1. Regarding their investment skills and market savvy

The following CPF rules related to CPF investment:

From 1 May 2009, only monies in excess of $20,000 in your Ordinary Account and $30,000 in your Special Account can be invested.

Up to 35% of investible savings can be invested in Shares, Property Funds (or real estate investment trusts) and Corporate Bonds.

You should always check the CPF website www.cpf.gov.sg for any updates in the rules for CPF investment.

2. Regarding their retirement fund

SINGAPORE--Singapore will raise the retirement age for its citizens to 65 from 62 by 2012 and eventually to 67 to account for the higher life expectancy of its ageing population, its prime minister said on Sunday.

"The best way to be all right in old age and to have enough savings is to stay employed and to work longer. Because with longer lifespans you cannot retire at 55 and live until 80 or 85 or 90," Singapore's Prime Minister Lee Hsien Loong said in a speech on state television to mark the city-state's national day.

SINGAPORE: Singapore's Minister in the Prime Minister's Office Lim Boon Heng has indicated that the country may need to raise its retirement age to 68.

Mr Lim, who's in Finland accompanying President S R Nathan on his state visit there said Singaporeans need to work longer as their life span increases.

That is because they need to accumulate more for their old age.

Mr Lim who is also the minister in charge of issues on ageing in Singapore, cited Finland as an example, and will use this trip as an opportunity to study how the Finnish are dealing with their ageing population.

Mr Lim added there are areas that Singapore can emulate. One of which is to mobilise the elderly to organise themselves and form retirement communities that can provide mutual support and friendship.

A law that will make it mandatory for employers to offer re-employment to workers beyond the age of 62 will be in place by 2012.

"We are raising the retirement age, through the process of re-employment from the current 62 to 65 in January 2012. Beyond that we would have to examine how we can further raise the retirement age. In Finland, they have raised it to 68, so it gives us an indication about where we should be heading.Because the Finns are not living longer than us, we have a life expectancy of about 80, I think the finns are little less than us," said Mr Lim.


The Government needs to step in to help and protect the average CPF members on their investment by setting investing limit and investment guidelines. It also help to enable average Singaporeans to work longer as their life span increases by raising official retirement age so that they can accumulate more and may have enough for their retirement.

In another word, if we want to retire well and early before the latest official retirement age, we must rise above the Average Singaporean by earning more, saving more, and investing well to build up enough retirement fund to see us through longer life expectancy of about 80 or more.
More importantly, we may have to start thinking of retirement much earlier than our parents' generation.
Have you started thinking of your own retirement or still worrying about your kids education fund. BTW, your kids can borrow from banks for their university education but you can't borrow from the banks for your retirement.

Saturday 27 November 2010

Work Less and Gone Fishing Planning Room (2)

Read? Work Less and Gone Fishing Planning Room (1)

Some understanding from the book: "What Color Is Your Parachute? For Retirement."

Why "Enough Money" Isn't Enough?

If life is a journey and retirement is a journey too.

First, a true journey always has an element of the unknown.

Second, there is a need to maintain well-being in this journey.


It has three distinct dimensions:

  1. Prosperity (material abundance)
  2. Health (a sound body)
  3. Happiness (a positive subjective experience)
We need all three dimensions in our retirement journey.

A Recipe for Retirement

Here's an analogy for how the dimensions of well-being combine. Many dessert baking recipes call for four basic ingredients: flour, sugar, eggs, butter. It's amazing how many varied and delightful desserts you can create by using just these four ingredients in different amounts and proportions (plus different flavourings and spices). But no one of these ingredients can take the place of any of the others in the recipe.

Not only does each contribute a different sensory pleasure to the eating experience, but each also play an essential, irreplaceable chemical role in the transformation from dough or batter to baked dessert. If you don't have any eggs, you can't just add more butter and expect the recipe to work. If you're a bit short on sugar, you can't increase the amount of flour to compensate. When you choose your recipe, you must have the enough of these ingredients on hand - no substitutions.

When you're planning for well-being in retirement, think of the three dimensions of well-being - prosperity, health, and happiness - as essential baking ingredients. You can't just keep adding money and expect it to turn into health or happiness. In your life and in your retirement planning, don't waffle on this issue - demand your just desserts.

Work Less and Gone Fishing Planning Room (1)


Four Pre-Conditions for Retirement

You can retire only when you fulfill these 4 pre-conditions:

1. Your children are financially independent (e.g. they got jobs),
2. You have zero liability (all your borrowings are paid up),
3. You have enough savings to support your lifestyle for the rest of your life,
AND most importantly,
4. You know what you would be doing during your retirement.

DO NOT retire till you meet ALL 4 Pre-Conditions. And of course you should not retire if you enjoy working and are getting paid for it!

Countdown to Four Pre-Conditions for Retirement

Pre-condition 2 to 4 - No problems as condition 2-4 are already meet.

Pre-condition 1 - It will be fulfilled when my Endowment Life policy matured on Mar 2016. The amount should be more than enough to provide my youngest son for his university education and living expenses starting from Aug 2016 till he starts working in 2020/21.

If by taking the good advice from Mr. Cheng, I should only retire after Mar 2016 or probably the best time is at 60 (BTW, the official retirement age is 65 or 68 by the time I reach 60). In another word, it is still an early retirement for me.

But Expected the Unexpected

Ya. I am fully aware that starting from next year (55 lor), I will be in HR's name-list as part of the cost-cutting elements in the organisation to help the company to improve its bottom-line.

How do I know that I have Enough?

"The only thing money gives you is the freedom of not worrying about money." - Johnny Carson

Money Management - What to do with your year-end bonus?

Tomorrow, there will be an article in thesundaytimes on Money Management - What to do with your year-end bonus?

But for me it is a different question - What to do with my last year bonus?

After experiencing my first pay-cut and zero bonus during 1997/1998 Asian financial crisis, and thereafter I have decided upon on this strategy - keeping the full current year-end bonus as reserve and spending last year bonus till the next bonus. In this way, I may not under-spend my money and to avoid spending away future money and I will be in better position to face the next  pay-cut and zero bonus scenarios if it happens.

Firstly, part of last year-end bonus is reserved to pay income tax. LOL!

Friday 26 November 2010

Sabana REIT makes weak debut

Does it means game over for the Bulls?

SINGAPORE: The world's largest Shari'ah-compliant REIT by total assets opened to a sluggish start on its first day of trade in Singapore because of weak market sentiment.

Sabana Industrial Real Estate Investment Trust or Sabana REIT closed its first day of trade at S$1.02.

That's 2.8% lower than the IPO price of S$1.05.

While it may have been a tepid debut for Sabana REIT, some analysts said they expect strong appetite for such products in the future.

Sabana REIT's portfolio includes 15 industrial properties which are located in Singapore, where the manager of the REIT believes there is sustained demand for industrial properties.

HSBC is the sole financial adviser to the REIT, and it says this could be the first of many such listings in the market here.

HSBC's managing director and head of real estate advisory for Asia Pacific, Jason Kern, said: "I do think it will be a bit of a trend. I think what we have demonstrated through the execution of this IPO is that there is incremental demand out there for investors who don't normally invest in Singapore REITs.

"We have roughly 30% of the demand for this deal (from) brand new sources of capital.....the Middle East, Malaysia, Shari'ah compliant investors. So I think that's very powerful."

- CNA/ir

Thursday 25 November 2010

Singaporeans continue to get richer: MAS


SINGAPORE - Singaporeans continue to get richer supported by buoyant property prices. Households balance sheets have on the whole remained strong, supported by the continued broad-based recovery of the Singapore economy, said the Monetary Authority of Singapore Financial Stability Review 2010 released on Thursday.

Property holdings have reached an estimated $651 billion in Q3 2010, up 21 per cent from $537 billion in Q3 2009

Household net wealth, defined as household assets less household debt, stood at an estimated $1,156 billion in Q3 2010. This represents a 29 per cent improvement from the trough in Q1 2009.

The gain was largely due to the higher value of property holdings as the property market continued its upward trajectory after bottoming out in Q1 2009.

Property holdings have reached an estimated $651 billion in Q3 2010, up 21 per cent from $537 billion in Q3 2009.

Another contributing factor to rising household net wealth was larger holdings of equity and managed funds, owing to the turnaround in global equity markets in Q3 2010.

CapitaLand, HPL unveil d'Leedon at average S$1,680 psf


CapitaLand, Hotel Properties Limited and their partners on Thursday unveiled d'Leedon, a residential development along Farrer Road on the site of the former Farrer Court.

d'Leedon, designed by internationally-renowned Pritzker Architecture Prize winner Zaha Hadid, is being developed by a CapitaLand-led consortium that includes Hotel Properties Limited, a fund managed by Morgan Stanley Real Estate and Wachovia Development Corporation (a unit of Wells Fargo & Company).

A total of 1,715 units - comprising 1,703 apartments and 12 exclusive semi-detached houses - will be built on the expansive 840,049 sq ft site. The apartments are spread over seven 36-storey residential towers.

The average price of the units is S$1,680 per square foot.

Keppel wins US$180 mil KFELS B Class jackup rig contract from Standard Drilling

The rig will be duilt to KFELS B Class design and will be able to operate in water depths of 400 feet and drilling depths of 30,000 feet.

Standard Drilling also has the option to build two more jackups, which if exercised,will bring th total contract value to about $550 million, said Keppel in a statement.

The first rig is due for delivery in the second half of 2012.

Standard Drilling is fully owned subsidiary of Norwegian investment company Ferncliff TIH.

"We are seeing activities and opportunities in the jackup market recovering quickly and are positive that this demand for newer, safer, high-specification jackups will be sustained, given the growing need worldwide for premium units with capabilities to operate safely in more challenging locations,” said chief executive of Ferncliff Martin Nes.

Time is the Cause, Volume is the Fuel and Price is the Result

By Benjamin Lee

There are many laws governing the financial markets just as there is gravity law to hold things together on the earth. One of the powerful financial market laws is summed up in this phrase "Time is the Cause, Volume is the Fuel and Price is the Result." There is a lot of market wisdom in this principle. If we could truly understand this, we could potentially unlock the mystery of the financial markets. In fact, if we look hard enough at the world that surrounded us, we could see patterns that conform to this universal law that works beautifully in the stock markets. In fact, I spent a lot of time researching into this phrase and would like to share some of my thoughts with you.

I will break down the whole phrase into three distinct parts and I will begin the exploration from the bottom up.

  1. Time is the Cause
  2. Volume is the Fuel
  3. Price is the Result

Let us begin with the topic of price analysis. Stock price is something that most people are interested in. Very simple as to why they do so. Stock prices determine their profits in stock trading or investment. If you purchased company equity at $5 per share and it goes up to $10, you practically double your investment portfolio. The first thing when we look at the stock ticker tape, we notice the market price of the shares traded in the stock exchange.

Naturally many people think that the ultimate thing about stock trading is about the price per share. How limited that understanding is because we are looking at the stock market thru one dimension only.

In fact, stock market operators use the stock prices as the bait for drawing the public to purchase their shares of which they are desperately want to dispose. How to fish if there isn’t any bait to feed the fishes? There are many technical indicators which are wonderful technical analysis tools available ranging from simple moving averages to the famous MACD indicator, use the stock price as the base variable for the formula calculation.

Price indeed is a powerful variable to study in the analysis of financial markets as it is the direct result which all of us are interested in. Fibonacci, one of my favorite technical analysis tools, could be used to project potential retracement levels of the stock prices in the pullback. Another powerful market analysis tool available to us is the study of chart patterns.

Volume is the driving force of the rising stock price. This is where many people miss the point. A stock rises from $5 to $10 does not mean much if the volume is only 100 shares transacted. That would be just a $500 – $1000 dollar value shares transaction. So, the public often get excited when they see some barely active shares jump up 50% in a single trading day. I would put much emphasis on the volume analysis in the light of price analysis to get a better glimpse on what is happening behind the scene.

Stock market operators put great emphasis on volume rather on the stock price. The main reason is because the volume determines how many shares they can dispose to the public or how many shares they can accumulate from the retail investors.

Stock market operators are very smart individuals or collective groups of people. They too can engineer public interests by stirring the calm water by increasing the transacted volume thru buying and selling using different trading accounts. When the retail investors saw that a buyer purchased the stock at $10 with a single transaction volume of 100,000 shares, they immediately thought some rich guy is behind the purchase and therefore the stock will be going up in price. Unknown to them, that the seller of those 100,000 shares was actually the same buyer.

The retail investors got tricked into chasing the rising stock price as the fear of missing the boat and the greed of profits grip them. Therefore, we must pay much attention to the volume analysis to know what is going on behind the scene. What we would want to derive from the volume analysis is to whether the smart money is accumulating the shares or disposing the shares.

Therefore, a healthy rising stock price must be fuel with "healthy" volume. However, a declining stock price can happen without much volume. Shares fall at their own weight as though there is some gravity inclination.

Looking at the volume in analyzing stocks is likening to looking at the market using two dimensional views.

Time analysis in stock market is even uncommon especially to the retail investors. Time analysis provides what I called it as three dimensional views to the stock market. Everything is about timing. There is even timing in the breath that we take in every single moment.

Time animates everything surrounding us including us. This laptop that I used to write this blog is also animated by some clocking mechanism that provides the pulse to parse the instructions stored in the microprocessor. Let me tell you something which you might not hear before. When the time comes for the stock market to move upwards, it will move up regardless of the news that we hear surrounding us. Even if there are wars going on or earthquakes happening somewhere, if it is time to move up, it will move up. I repeat, it will move up. How many time we short on bad news only to find that the stock soars higher regardless of the "outlook" as perceived by our own understanding.

WD Gann once said the Time is the most important variable among Price, Volume and Time. As mentioned, Gann tools are some of the powerful timing tools to analyze the stock market timing. However, if you delved deeper, you might find some of the methods are not so conventional. I can only say that if you want to disprove that market theory, then you have to study it first and see for yourself.

In conclusion to the above post, I have basically chart out the entire learning path that any stocks, commodities, futures, options or forex traders should embark in learning more of the financial markets. Each section itself has vast division to explore further.

  • Price Analysis
  • Volume Analysis
  • Time Analysis
"Time is the Cause, Volume is the Fuel, and Price is the Result. Over all these three, Time is the most important of all."

Read more? Volume and Price action?

Wednesday 24 November 2010

Utility of additonal wealth and investment choices

Read? What's wrong with REITs and NCPS?

Before you start borrowing big fat boys' investment strategy, you may want to understand the behaviour theory behind it.

Bernoulli (1738) popularised the concept of the utility of additional wealth is inversely related to the amount already processed. This may help to explain why many wealthier individuals (big fat boys) may be more inclined to choose fixed income investments over day-trading. Their unwillingness to assume greater risks is related to their perception that they have much to lose in the realm of personal possessions and not much to gain in the realm of personal needs.

Keppel & Nakilat launches premier marine & offshore facility in Qatar

New shipyard signs service arrangements with eight major fleet owners.

Nakilat-Keppel Offshore & Marine (N-KOM), Qatar's premier offshore and marine facility jointly developed by Keppel Offshore & Marine Limited (Keppel O&M) and Qatar Gas Transport Company Ltd (Nakilat), was launched yesterday by the Emir of Qatar, His Highness Sheikh Hamad bin Khalifa Al Thani, and Singapore's Minister for Trade and Industry, Mr Lim Hng Kiang.

On this occasion, N-KOM strengthened its credentials to be a leading shipyard in the Middle East with the signing of a three year fleet servicing agreement with Shell International Trading and Shipping Company Limited (STASCo) for ship repair services. N-KOM further signed a memorandum of understanding with Gulf Drilling International (QSC) and also entered into letters of intent with, Idemitsu Tanker, Mitsui O.S.K. Lines, NYK Line, Kawasaki Kisen Kaisha ("K" Line), Iino Kaiun Kaisha (Iino Lines) and Marine Contracting Association (MARCAS) to provide shipyard and drydocking services for their vessels.

Mr Choo Chiau Beng, CEO of Keppel Corporation and Chairman of Keppel O&M said, "When we embarked on this landmark collaboration with Nakilat in 2007, we had envisioned that it would be a best-in-class shipyard, and the preferred partner for marine and offshore solutions in the region.

"As N-KOM opens its doors to the world, we are on the journey to transform this vision into reality. We would like to thank our valued customers for their confidence in us with the signing of these fleet servicing arrangements. We look forward to delivering our projects safely, on time and within budget. This is Keppel's quality hallmark, which we bring close to our customers and markets, wherever they are."

Singapore Minister for Trade and Industry Lim Hng Kiang remarked, "The launch of N-KOM today is a result of the strong desire by Singapore and Qatar to forge greater collaboration, and the years of hard work between our countries and companies.

"This positive development reflects how Singaporean companies like Keppel can bring their successful operations into the Middle East. With Qatar's ambition and commitment to grow its energy sector, there are many opportunities for Singapore and Qatar companies to collaborate. I look forward to International Enterprise (IE) Singapore to continue its support of Singapore companies to take root in Qatar, as it did successfully for Keppel."

As part of the inauguration, N-KOM was also presented with certification from DNV (Det Norske Veritas) for its Integrated Management System covering ISO 9001 for Quality, OHSAS 18001 for Occupational Health & Safety and ISO 14001 for Environmental Management.

His Excellency Abdullah Bin Hamad Al-Attiyah, Deputy Premier and Minister of Energy and Industry for the State of Qatar and Chairman, Nakilat, said, "The Nakilat Shipyard combines world-class facilities with outstanding international partners which will establish Qatar as an internationally recognised centre of excellence in shipbuilding, repair and conversion along with new capabilities in industrial fabrication and construction".

Mr. Muhammad A. Ghannam, Managing Director of Nakilat and Chairman of N-KOM, added, "We chose to partner Keppel because they are the leaders in their field and with their proven experience, expertise, and the Can-Do spirit, N-KOM will grow from strength to strength. We are confident that with the leadership and endorsement of His Highness Sheikh Hamad bin Khalifa Al Thani, this landmark shipyard will establish Qatar as a centre of excellence in the marine and offshore industry."

As part of a global network of 20 yards, N-KOM replicates the Keppel's proven management systems, and will further leverage the Group's experience, expertise and the resources to provide value-added offshore & marine solutions to meet the needs of an international clientele.

The above mentioned agreement, memorandum of understanding and letters of intent are not expected to have any material impact on the net tangible assets and earnings per share of Keppel Corporation Limited for the current financial year.

What's wrong with REITs and NCPS?

Just for Laugh ....

Actually nothing wrong when you have a bigger and fatter account size to generate a large income stream.

May be it is not be so right when you have a smaller and thinner account size looking to grow your wealth at a faster rate.

Next time before you borrow someone's strategy, may be you should ask them. "Hey!, What is your account size?"

REITs. Simply explained! (6)

Read? Why REITs and Business Trust are not always good investments

Reproduced part of it here:

"Investors should not harbour any delusions that REITs are created primarily for their benefit. REITs are created first and foremost to help owners dispose of unwanted assets.

As a general rule, the best assets do not get sold into a REIT, they are held forever by the original owner. From a purely rational perspective, REITs are simply a convenient dumping ground to offload undesirable assets to a gullible public. An outright sale would be difficult since the buyer would likely do due diligence and negotiate a discount for lousy assets. But the public can be convinced to buy anything in a bull market. In fact very little convincing is needed – the public is happy to convince itself, especially in today’s low-interest rate environment.

Sponsored trusts are created to help owners divest unwanted assets. The management fees are just a bonus.

Non-sponsored trusts are created primarily for the management fees."

Read? REITs. Simply explained! (5)

Capitaland and its six REITs

At CPL Celebrating 10 Years Investors Day, someone asked the Horse: "Should I buy CPL or its REITs?"
The Horse replied: "Depending what you want. You want growth with some income buy CPL. If you want income only then buy REITs."
More understanding from the Horse's Mouth
"CPL is actively re-cycling its capital to maximize returns to its shareholders. When a piece of its properties has become MATURED it will then offload it into one of its REITS to recover its capital and to look for better investment yield by taking higher risks"
Why not simply ask any experienced private property investors, will they invest in matured properties just for their rental yield? What can you expect from their answers, good or bad?

Tuesday 23 November 2010

How Much Do You Need for Your Retirement?

Read? Uncomfortable With Draw-down Method? - 2nd Visit

I have revised the worksheet for Retirement Planning with simulation function for me to key in various parameters for CPF OA, CPF Life, Cash, Passive and Active Portfolio, etc...

I just need to play around with the various parameters till I get "Yeah!" and that is the amount that I need for my retirement or I need to "Try again".

For example:When ROC = 7% for Active Portfolio . Not yet ready for retirement. Try again!

For example:When ROC = 8.8% for Active Portfolio

If you like my revised worksheet and want one copy of it. Just email me.

S'pore Oct CPI up 3.5%


SINGAPORE - The consumer price index (CPI) increased by 3.5 per cent in October 2010 from a year ago due largely to higher costs of transport, housing, food as well as 'recreation & others', latest data from the Singapore Department of Statistics showed.

Higher holiday travel cost and salary for foreign maids raised the costs of 'recreation & others' by 2.4 per cent

The cost of transport advanced by 9.5 per cent as a result of higher prices of cars and petrol.

Housing cost moved up by 3.5 per cent, owing to higher accommodation costs and electricity tariffs.

Food items cost 1.7 per cent more, arising from dearer prepared meals, vegetables, rice & other cereals, fresh seafood as well as dairy products & eggs.

Higher holiday travel cost and salary for foreign maids raised the costs of 'recreation & others' by 2.4 per cent.

Excluding accommodation costs, the CPI rose by 3.5 per cent in October 2010 compared with a year ago.

On a monthly basis, October inflation edged up 0.5 per cent from September on account of higher costs of housing, transport as well as 'recreation & others'. Excluding accommodation costs, the CPI was 0.3 per cent higher.

In the first ten months of 2010, the CPI was 2.5 per cent higher compared with the same period in 2009. Excluding accommodation costs, the CPI rose by 3.2 per cent.

Live Simply? (3)

Read? Live Simply (2)

Live simply is never easy to do it especially for Goal No 1 and 2:

  1. Say No to car
  2. Say No to upgrade the primary residence at least once.
Especially when your spouse know that your current/near future earning can support it; then your main source of pressure may actually come from your spouse.

I can't remember how many times that I have managed to overcome this pressure.

Not easy, right? he he

Monday 22 November 2010

Live Simply? (2)

Read? Live Simply?

Read? Future planning: Investing for retirement is a non-negotiable financial goal.

"Families in Singapore typically have four main lifestyle goals: replace the family car every five years,  educate the children overseas, and achieve financial independence by age 60."

This is quite true as I look at peoples around me and realize that many have such goals.

But, I don't.
  1. No car to replace the family car every five years,
  2. Say No to upgrade the primary residence at least once,
  3. Say No to educate the children overseas,
  4. Say YES to achieve financial independence by age 60.
So I only have ONE GOAL that is same as them: to achieve financial independence by age 60. 

The outcome of my working life may be very different if I have included the similar four goals.

Sunday 21 November 2010

Punter takes stock and prospers after losing money

invest, thesundaytimes Nov 21, 2010

I can't help and notice that my investing strategy is quite close to that of Mr Brennen Pak.

  • Focusing on Singapore stocks.
  • Building portfolio mainly on Singapore blue chips.
  • My average yearly dividend income excluding realized P/L from short-term trading is 5.8% of total capital (based on total of long-term and short-term capital)
  • Holding a few multi-baggers.
  • During a market run-up, I may divest myself of stocks that I don't wish to keep for the long term and keep cash as a war chest for future market dip.
  • Investing in stocks using money that is not needed for the next 5 years or more.
  • Not investing in property but still prefer to invest in stocks as I love multi-baggers and made me feel so shiok!
  • Not owning a car.
Except I have no business. May be I should start thinking ...

S'pore rig builders poised to kick into higher gear


LOCAL rig builders are well-placed to feast on a lion's share of the sector's recovery as orderbooks for rigs and floating production, storage and offloading (FPSO) vessels are poised to get fatter.

An end to more than two years of subdued activity is in the wings, a report put out by Citi Investment Research & Analysis on Thursday said.

'A strong pickup in rig demand, strength in FPSOs and high margin rig upgrade suggests the orderbook has troughed and is poised for recovery,' the report said.

'Contract wins could double in 2011-2012 versus 2010 to reach $4.5-5 billion.'

In addition, the Petrobras factor means that surpassing the peaks of 2007 and 2008 could be within reach.

Even as the day rates for existing rigs are increasing, the ageing fleet means that the replacement cycle is due to pick up pace.

The report noted that more than 300 jack-ups and 100 semi-submersibles today are more than 25-years-old.

Strengthening the outlook for newbuild jack-ups is the prohibitive cost of reactivating a cold-stacked rig - one that has been shut down and stored at a harbour or shipyard.

The cost of reactivating a third of Transocean's cold-stacked jackup fleet is estimated to be as high as US$60-80 million, the report noted, which would be 30-40 per cent of what it costs to build a new high-spec rig.

'Recent strength in high-end jack-ups further differentiates the distinction between old and high performance rigs. This positions Singapore rig players well, as Singapore yards have 60 per cent global market share in jack-ups,' the report said.

Of the local rig-builders, Citi analysts favoured Keppel Corp, with the view that the conglomerate had the strongest positioning among global exploration and production (E&P) peers in Petrobras' E&P programme.

Keppel's 'buy' rating was maintained, while its target price was increased from $11.10 to $12.80 by Citi.

While Citi noted Sembcorp Marine's 'strong execution and growing footprint', the stock was downgraded from a 'buy' to a 'hold' because of valuations that were less attractive, post-rally.

According to the report, Sembcorp Marine's share price has risen 34 per cent year-to-date, compared to the Straits Times Index's 12 per cent gain.

The counter's target price was increased from $4.60 to $5.60 in the report.

Its parent company, Sembcorp Industries, kept its 'buy' rating and saw its target price raised from $4.73 to $5.60, boosted by its acquisition of water firm Cascal and growing demand for electricity in the region.

'We recommend accumulating (Sembcorp Industries) since it offers exposure to cyclical recovery in the oil and gas segment . . . and growing regional utilities footprint in US, UK, Middle East and China,' the report said.

To make money fight 'fleeing instinct'

Read? Stop loss or Cut loss?

By Philips Loh, invest, Nov 21, 2010, the sundaytimes

Some key points noted in the articles:

  • The urge to cut loss when stocks fall works against 'buy low, sell high' tactic
  • Qualities of a good investor - The most successful investors are those who are able to overcome their innate fear and greed during wild market gyrations, and discern real risks, as opposed to perceived ones. They have a keen awareness of their limitations and predictive powers.
  • Associating the wrong reasons with a profitable trade can be damaging to our investment quotient in the longer run.
  • We must not forget that the markets are full of predatory players who make a living out of having small investors for lunch. These professionals do so well because they are experts at tricking retail investors into reaching wrong conclusions. Therefore to do well in the investment game, investors must be keenly aware of their instinctive ability to detect a pattern and react accordingly, overcome this instinct. Only then can they raise the probability of scoring gains in the game.

Read more? Portfolio Management - Stop Losses?

Long-term investing and short-term trading? (3)

Read? Long-term investing and short-term trading? (3)

Read? Best Dividend Strategy?

What is dividend payout ratio?

By Stock Market Investors

Financial experts' opinions on the importance of dividend payout are mixed. Some say it is an important measurement, whereas others strongly disagree.

The meaning behind Dividend payout ratio (DPR) is the money that is paid out in the form of dividends by the company to its shareholders.

Dividend Payout Ratio Formula

In order to make the appropriate calculations for the dividend payout ratio you should use the following formula:

DPR = Dividends per Share / Earnings per Share

Consider the following example. Company ABC has paid its shareholders $1 per share in the form of annual dividends. Its earnings per share were $2.5. So, its dividend payout ratio will be 40%.

Now that you have got some percentage, you probably wonder how exactly you should interpret it and whether it is good for the company.

Low dividend paying or the absence of such may be explained by the fact that the company has decided to grow and as a result it needs money to fund its growth. These funds can come from dividends and the company may decide to retain some.

On the other hand, companies that pay high dividends to their shareholders may do this since they have reached their maturity and there is no room for growth. As a result, the most efficient and effective use of the profits will be to return them to the company's shareholders.

Therefore, when you interpret a DPR you should do it in light of the company itself and the industry in which it operates.

Secret to successful long-term investing?

'For most markets, the high-yield low-payout strategy was the best performing strategy followed by the non-dividend paying stocks for a few markets,' the analysts said.

In Singapore, stocks that paid no dividends showed the biggest returns over the period examined. But investing in high-yield, low-payout stocks was still the best-performing strategy over a longer period of 15 years examined in an earlier study, the Credit Suisse analysts said.

The secret has already been made known to you if you are a long-term investor who has more than 15 years ahead of you. You just need to be very patient and keep a watch-list of current stocks with medium dividend yield 4-6% and low dividend payout ratio of less 33% and wait for the day when Mr Market becomes so depressed and give them at  high-yield low-payout to you.

But, do you have that type of patience? If you don't have, you may want to train yourself to be one. Why not take up fishing as fishermen are known to be very patient.

Saturday 20 November 2010

Average CPF member is not stock market savvy?

Read? Resident wants ban on CPF cash for investments

"Allowing people to buy shares with their CPF money is like sending lambs to the slaughterhouse." 'The average CPF member is not stock market savvy." -  Ngiam Tong Dow

This is what Mr. Ngiam thinks; but how does an average CPF member thinks of his/her investing skills?

Probably like drivers on the road most of them will think that they are above-average.

Long-term investing and short-term trading? (2)

Read? Long-term investing and short-term trading?

What does the Market say about long-term investing?

Can long-term investing still be rewarding even with dividends accumulation?

Friday 19 November 2010

Long-term investing and short-term trading?

What do I mean by long-term investing and short-term trading?

The same counter can be for long-term investing and short-term trading. Why not?

Some examples:

Long-term investing

  • The oldest stock position that I am still holding since 2001 is Kep Corp. At today closing price, it is a 6.5 baggers.
  • The newest stock position that I am still holding since 2008 is Noble. At today closing price, it is a 2 baggers.
Short-term trading

      Portfolio Management - Returns and Risks of losing it back!

      Read? earlier articles related to the topics - Portfolio Management

      Don't be fooled into thinking that your success as a stock investor is measured by the increase in the value of your portfolio's holdings. It may be not. What you really want is to make the most returns with the least risk to your investing capital.

      In simple term, you may need to fully understand the wisdom of the ancient Chinese's saying in investing: 见好就收. (It means that if there is a reasonable profit for yourself, don’t be greedy to risk further by wanting more, one should take back one's capital and its returns and leave some on the table for others.)

      Don't ever let this happen to you!
      Read another related ancient wisdom? 3 Ms of Trading – Mind, Method and Money - Part 3

      Thursday 18 November 2010


      Offer attracts total applications amounting to more than SGD 1.8 billion; to cater to strong retail demand, DBS increases offer size from original SGD 500m to SGD 800m

      SINGAPORE, 18 November 2010 - DBS Bank announced today that its offer of SGD 500 million in aggregate liquidation preference of 4.70% non-cumulative, non-convertible and non-voting preference shares has closed. The offer attracted strong interest and was more than 3.5 times subscribed.

      As at the close of the offer at noon today, total applications amounting to more than SGD 1.8 billion had been received. Of this, retail subscriptions via ATMs and Internet banking alone amounted to more than SGD 1.4 billion, while the placement and reserve tranches meant for institutional investors and employees of DBS saw total demand of more than SGD 400 million.

      To accommodate the strong retail demand from the Singapore public, the bank exercised its upsize option in full, to increase the total size of the preference share offer from SGD 500 million to SGD 800 million. DBS has allocated the bulk of this, or SGD 550 million, to meet retail demand. The remaining SGD 250 million has been allocated to the placement and reserve tranches.

      Occam's Razor in TA and FA?

      Occam's Razor: "one should not increase, beyond what is necessary, the number of entities required to explain anything."

      The explanation requiring the fewest assumptions is most likely to be correct.” or "Simply put, the simpler one is generally correct."
      Yeah. To apply Occam's Razor in my stock analysis:

      • By simplifying my TA, I just look at support, resistance, price-volume actions, and trend lines.

      • By simplifying my FA, I just look at consistency in dividends and low dividend payout ratio. Dividends are real money paying out by a company, and can only be sustainable if company continues to have cold hard cash from its business. Probably, this is the only indicator in FA that really matters; anything else are just guess works by retail investors who have limited resources to do anything substantial.
      Read? Fundamental or Technical Analysis? - Revisit 3

      Read? Pareto Principle

      Wednesday 17 November 2010

      Best Dividend Strategy?

      Read?  High-yield, low-payout stocks stand out!

      Learn to look at TSR (Total Shareholder Returns) when investing in the stock market.

      High dividend High Payout = Good TSR
      High dividend High Payout + Capital Growth = Better TSR
      High dividend Low Payout + Capital Growth + Dividend Growth = Best TSR

      When investing, go for the Best TSR!

      HK: Shares fall 2%

      HONG KONG - Hong Kong shares fell 2.02 per cent on Wednesday on concerns about Chinese anti-inflation measures and the eurozone's debt worries, while Shanghai dropped 1.92 per cent.

      The benchmark Hang Seng Index lost 478.56 points to end at 23,214.46 on turnover of HK$103.04 billion (US$13.30 billion).

      Chinese shares closed down 1.92 per cent as investors continued to mull the possibility of more policy steps to curb inflation, dealers said.

      The Shanghai Composite Index, which covers both A and B shares, was down 55.68 points at 2,838.86 on turnover of 158.7 billion yuan (US$23.9 billion). -- AFP

      High-yield, low-payout stocks stand out!

      Read? High-yield, low-payout stocks stand out

      (Re-post it under label for Education - Trading - Dividend Yield)

      Portfolio Management - The Importance Of Realized Profit (Part 2) - Revisit

      Portfolio Management - The Importance Of Realized Profit (Part 2)

      Tuesday 16 November 2010

      SKorean central bank raises rate to 2.5 percent

      Read? DBS to sell preference shares to retail investors. Really ah??? (2)

      SEOUL, South Korea (AP) -- South Korea's central bank raised its key interest rate Tuesday for the second time in four months amid persistent concerns about inflation.

      The Bank of Korea announced that it lifted the benchmark seven-day repurchase rate to 2.5 percent from 2.25 percent at a monthly monetary policy meeting.

      The decision was widely expected. A total of 11 economists at 13 financial institutions surveyed by Yonhap Infomax, the financial news arm of Yonhap news agency, predicted the bank would increase the rate to 2.5 percent.

      The central bank surprised economists last month by keeping the borrowing cost unchanged as concern about potential exchange rate risks to the global economy offset worries about domestic inflation.

      Still, the central bank warned last month that "upward pressures" on prices were unlikely to abate. Indeed, the country's consumer price index for October, announced earlier this month, rose 4.1 percent from the same month last year.

      Beginning in late 2008, the Bank of Korea steadily cut its interest rate to a record low 2 percent to combat the effects of the global financial crisis and ensuing economic downturn. It raised the borrowing cost to 2.25 percent in July amid solid growth prospects for the domestic economy and budding inflation worries.

      Tuesday's rate decision also comes as South Korea's economic expansion has weakened. Growth in the three months ended Sept. 30 slowed to a rate of 0.7 percent from 1.4 percent in the previous three months. It was the second straight quarter of slower growth in Asia's fourth-largest economy.

      Singapore's Sembcorp sells $195 mln rig to Transocean

      SINGAPORE, Nov 16 (Reuters) - The world's second largest rig-bulder, Sembcorp Marine , said on Tuesday it has signed a $195 million contract to sell a jack-up rig to drilling contractor Transocean .

      The company said in a statement that the contract was not expected to have any material impact on the consolidated net tangible assets per share and earnings per share of the company for the year ended December 2010. (Reporting by Harry Suhartono; Editing by Alex Richardson)

      DBS to sell preference shares to retail investors. Really ah??? (2)

      Read? DBS to sell preference shares to retail investors. Really ah???

      Yesterday, two colleagues asked  me can buy or not?

      This is what I told them?

      • It is dumb to compare the yield between a risk-free, short-term  instrument like fixed deposit and long-term capital-locking instrument like NCPS when you are very sure that you will be holding it for the next 10-20 years. Anything comparing with near zero returns will make you feel damn shiok! But why lock up your capital for 10 years when every 4-5 years a big bear will come?
      • The current low interest rate 0.X% has only ONE way to go that is UP i.e. 1%, 2%, 3%, 4% or even higher. Nobody know exactly when but the way UP is definitely certain when governments start increasing rate to fight inflation.
      • DBS (mother share) is currently trading at around 4% dividend yield so does DBS NCPS 4.7% still make interests-wise sense when you already have clear intention of holding it over the next 10 years.
      • When interest rate rises, probably stock price of DBS NCPS 4.7% may have to fall even below par to offset the rise in interest rate to attract new buyers. That is the way that risk-reward mechanism works in the market.
      Good or not, they decide themselves. LOL

      Warren Buffet actually buys and sells more often than some of his followers.

      Big Changes for Berkshire Hathaway Portfolio in Third Quarter

      Monday 15 November 2010

      Hyflux wins US$100m contract to build plant in Libya


      SINGAPORE - Singapore's biggest provider of water-treatment services, Hyflux, said on Monday, it has won a US$100 million contract to carry out engineering, procurement and construction works for a seawater desalination plant in Libya.

      The project at Tobruk in northeastern Libya is the first in the African country for Hyflux.

      The desalination plant, which will use reverse osmosis technology, will produce 40,000 m3 of desalinated water per day when fully operational.

      Hyflux stocks dropped 1.2 per cent to $3.25 on a volume of 117 million shares after announcement of the contract.

      Sunday 14 November 2010

      Pareto Principle

      By Albert Yang

      Read? Parkinson's Law

      Pareto Principle ~ “20% of the effort generates 80% of the results.”

      Background Blurb: (From Wikipedia)

      The Pareto principle (also known as the 80-20 rule, the law of the vital few and the principle of factor scarcity) states that, for many events, 80% of the effects come from 20% of the causes.

      Business management thinker Joseph M. Juran suggested the principle and named it after Italian economist Vilfredo Pareto, who observed that 80% of income in Italy went to 20% of the population. It is a common rule of thumb in business; e.g., "80% of your sales come from 20% of your clients."

      The Pareto principle is only tangentially related to Pareto efficiency, which was also introduced by the same economist, Vilfredo Pareto.

      Pareto developed both concepts in the context of the distribution of income and wealth among the population.

      Known to most of us as the 80-20 rule, it explains quite a bit about how our world is run. 20% of the clients make up 80% of the sales. 20% of the clients make up 80% of the headaches. 20% of the activities take up 80% of the time.

      The list is endless. There are even variations on the 80-20 principle, such as the 90-10, the 95-5, and the 1-99. Of course, if you take a Pareto of a Pareto (Pareto2) you get 80-20 of 80-20, yielding you 64-4 (80% of 80% = 64%; 20% of 20% = 4%).

      Like Parkinson's Law, Pareto Principle is another big law that engulfs your work life as well as your personal life. Given that your job is to optimize your life, spotting Parkinson's Law, and applying Pareto Principle to it, is really the basis of the optimization.

      Let me try to explain how it applies to most projects in the business world, and in combination with Parkinson's Law, you will begin to see how these two laws all but guarantee that a project will be delayed and over budget (even before you factor in Hofstadter’s Law.)

      Let us begin with a project we have been assigned. The project deadline is in two months. Regardless of what needs to be done, because of Parkinson's Law, we already know that we are going to cut it close, and it will fill all two months, regardless if we have ten tasks to accomplish in those two months, or one hundred tasks. Because traditional project management says, we go ahead and list out the tasks we have to do, and begin those which are on the critical path; or more than likely, the project will begin with those items that will take the longest.

      Given our timeline, we already know that according to Pareto Principle, the tasks that will take 80% of our time will only yield 20% of the results. But when we apply traditional project management; what tasks do we start off with first??

      That's right, those that will take 80% of the total project time to complete. So let's suppose that we have task A, and task B. Task A will take six weeks of our total eight weeks, and task B will take only two weeks. Because we feel that we'd like to have some buffer as a project manager (if you didn't notice it, the creation of a buffer has fallen us victim to Parkinson's Law, even with Hofstadter’s Law), we will start with task A first so that if we don't finish in the six weeks, we still have two weeks left as buffer.

      But because of Pareto Principle, we know that task B is: 1) Easier to do 2) Can be completed in two weeks 3) Will account for 80% of the entire project.

      But because traditional management says otherwise, we will start with task A, which is: 1) More difficult to do 2) More time consuming than we first estimated, regardless what the estimation is 3) Will take 80% of our time 4)

      Will account for probably less than 20% of the project. So by week 6, task A is not completed. “That's ok, because we have an added two weeks buffer!!” You will say to yourself; but Parkinson's Law of course, kicks in, and you will take all eight weeks of your entire project time to finish task A (and of course, task A WILL be finished by the eight weeks because of Parkinson's Law) but when you have finished with task A, you have only finished 20% of the project.

      Therefore, by Parkinson's Law, (and lack of Hofstadter’s Law) you will tell your boss that it wasn't your fault, and you need more people, even though you really only have 20% of the tasks left, you will now have more people working on smaller amounts of tasks than you did the previous eight weeks (Cope’s Law).

      The lack of understanding of these two rules, Parkinson's Law and Pareto Principle, is pretty much the reason that most projects are delayed and over budget.

      If you are a student, in your student life, if you had to clean your room before you did your homework, you will of course spend 80% of your time on cleaning your room to avoid the homework, and in fact, you will take longer than that because of Parkinson's Law. When you are done with cleaning your room, you will have spent 80% of your time, doing less than 20% of what you needed to do.

      If you are in sales, you will spend 80% of your time rearranging and alphabetizing your business cards, and only spend 20% of your time making cold calls, which is what yields you clients, not the rearrangement of business cards.

      When you understand this however, you will be able to spot it and thus be able to defeat it. I will show you later on, how by reversing the two laws, Parkinson's Law and Pareto Principle, you can do most tasks and do the more efficiently. You can spend as little as 20% of the effort, and 50% of the time, and yield a better
      product all at the same time!



      How to spot Parkinson's Law and applying Pareto Principle to our investment strategies?

      We should be more productive in our investment and avoid expanding our time and effort for more and more stock/company analysis which may take away too much time from other aspects of life even though we personally may enjoy it; but not sure our other family members can really agree to it.

      Over time when we become more skillful and with the right strategies we should be able to spend 20% to get 80% .

      Read? My money works harder for me (3)

      Read? Is this worth my time and effort to trade? (3)

      Will You Try To Pay Off Your Housing Loan ASAP If You Have One? (4)

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

      Good debt and bad debt?

      If you take out a loan for consumption e.g. car loan, or even housing loan; you are really mortgaging your future for current gratification. Don't mistaken the idea that your residual home is an investment. The house you live in is actually a consumption item. You can't really make any returns on your house unless you sell it and then either downgrade or rent another home to stay. But, do remember you only live once, are you sure you want to really downgrade your current lifestyle for the sake of having returns on investment?

      In simple terms, any loans taken for purpose of consumption cannot be considered as good debts. Right?

      Why housing loan is so cheap?

      Housing loan is a secured loan and the bank has nothing to lose except you and so that is reason why it is so cheap.

      Expect the Unexpected

      Don't believe me? Ask those people who file for bankruptcy how they have ended in such a sorry state. Many would say they have taken calculated risks but didn't expect things can happen so badly and left with no alternatives except bankruptcy.

      Anchoring your residual home

      Pay off your housing loan for living in is like anchoring your residual home to the sea-bed. Once your boat (residual home) is strongly secured to where it is and it will no longer be affected by drifting currents.

      Parkinson's Generalized Law

      Read? Parkinson's Law

      Parkinson's Generalized Law ~ “You will always get the lowest item of which you deem acceptable.”

      Is this Law true to me?

      So far it is a yes for my profit taking targets.

      I have specified that my profit taking target for short-term trading is at least $500 or 3%. So far since Nov 08, I didn't get anything lower as it is deem not acceptable.

      During last Friday regular monthly lunch meeting with two friends (actually it is my friend's friend who became very serious in doing short-term trading and long-term investing and not my friend) to talk on investing and trading.

      She has expressed interested in applying for some DBS NCPS 4.7%; but I advised her to forget it if she aspires to be a successful active investor. She must know what exactly she really wants from the stock market and keep training her mind to focus on her investing goals while improving her method and money management. That is the way to go.

      Read? 3 Ms of Trading – Mind, Method and Money - Part 3

      I believe any successful ACTIVE investors or traders will doubt their abilities to make an average of 4.7% returns on their investment in their respective investing/trading time frame.

      So remember Parkinson's Generalized Law ~ “You will always get the lowest item of which you deem acceptable.”

      Parkinson's Law

      By Albert Yang

      Parkinson's Law ~ “Work expands so as to fill the time available for its completion.”

      Parkinson's Law of Finance ~ “Expense expands so as to fill available budget.”

      Parkinson's Generalized Law ~ “You will always get the lowest item of which you deem acceptable.”

      Background Blurb: (From Wikipedia)

      “It was first articulated by C. Northcote Parkinson in an article published in The Economist in 1955, later reprinted together with other essays in the book Parkinson's Law: The Pursuit of Progress (London, John Murray, 1958), based on extensive experience in the British Civil Service. The scientific observations which contributed to the law's development included noting that as Britain's overseas empire declined in importance, the number of employees at the Colonial Office increased.”

      While I have listed quite a few laws, just as according to Pareto Principle, Parkinson's Law will make up the bulk of this book, and it IS the 20% that will make up 80% of your daily battles. Understanding Parkinson's Law will probably be the single most important knowledge you have in your life. (No, I'm not kidding nor exaggerating). This law and its sole understanding will determine if you have a good marriage, if you have a great retirement, if your country is clean, if your life is happy, if you get a promotion. Singularly, it will so engross and encompass every aspect of your life you won't believe it.

      Parkinson's Law, and its subsequent corollaries; are almost magical in its profoundness when you understand them. If you have a project, and you are given a month to complete it, you will complete it in a month. If you have the same project and are given two months to complete it, then you will complete itin two months.

      Anybody who has ever been a college student understands this. While a paper is due in two weeks, most of us will do the paper the night before. If the paper were assigned and we were only given one day to finish it, we would all revolt against the professor, yet when you take a look at the reality of the fact, most of us actually do it in less than 24 hours all the time. So Parkinson's Law, as it applies to school and business, is fairly easy to understand and there are dozens of examples that could be sited. These however, are fairly clear and straight forward.

      It is however, the subtle underlining forms of Parkinson's Law, those that we don't notice, that really ruin our lives.

      Let me give you a few examples. Does your alarm clock have a “snooze” button? If so, and you use it, you are a victim of Parkinson's Law. If your alarm is set at 7:00am, and when it rings, you press the snooze button and “sneak” 10 more minutes of sleep in, you are now a victim of Parkinson's Law. You can almost call it the Parkinson's Law of sleep, “Sleep will expand to fill time available.” So even before you actually get out of bed, you are a victim to Parkinson's Law already, and it goes downhill from there.

      Because you woke up 10 minutes later, you try to sooth your nerves by telling yourself that you have plenty of time; which of course according to Parkinson's Law, is another lie in and of itself. You say you have plenty of time, and so you slow down your morning routine, and bam! Parkinson's Law applies again, and your morning routine expands to fill (and then overfill) your available time.

      Once you finally get to work, you sit down to answer ONE email, and then one email becomes ten emails, and soon, what you were suppose to do Monday morning is not done. So you say to yourself, “That's ok, I'll just put in a little overtime tonight, no problem.” But what you didn't understand was of course, that Parkinson's Law applies to overtime, and so by giving yourself overtime, Parkinson's Law kicks in once again, and the amount of work you do because you allowed yourself to do overtime is actually the same or LESS than if you didn't have overtime.

      This all seems ridiculous, but it's true. If you are the boss of a company, take heed. In a survey of employees who worked 6 hours a day, 8 hours a day, and 10 hours a day. The SAME PERSON, working 6 hours a day, is MORE efficient and got MORE work done than working 8 or 10 hours a day!

      How can this be?? It's a mixture of Parkinson's Law and Pareto Principle actually. Even if they had 6 hours of work only, if given 10 hours, they will automagically expand the work to fill 10 hours. So productivity goes down as does efficiency. This is further witnessed by the increased productivity of company CEO's who only go into the office three times a week; or even as little as one time a week compared to those who are at the office all the time.

      I will talk more about this when I introduce Pareto Principle, and its combination with Parkinson's Law.

      Understand one critical thing though, Parkinson's Law of time, does not shrink, it only grows. That means, when you have a project that is one week long, and later on, you find out you have two weeks instead of one week to finish it, then you will take two weeks. BUT, if you had a project that was two weeks long before, and you then are given only one week to finish it, your project WILL BECOME DELAYED.

      So Parkinson's Law only expands, it doesn't shrink. I teach you later on though, how to make it shrink.

      Read? Parkinson's Law of Finance
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