The Reit myth busted

Whatever Reits pay out in dividends, they will take back a few years later in the form of rights issues


By TEH HOOI LING

SENIOR CORRESPONDENT

THE high yields of real estate investment trusts (Reits) are tempting. And indeed, they have been touted as a relatively safe and stable instrument to own if one is looking for a steady stream of income. As such, many investors see Reits as a good asset class to have in one's retirement accounts.

But you know what? That Reits are good income-yielding instruments is but a myth. The thing is, whatever they pay out in dividends, they will take back - all and more - a few years later in the form of rights issues.

Here's what I found. Of the 17 Reits which have a listing history of at least four years on the Singapore Exchange, only three have not had any cash calls or secondary equity raising. The remaining 13 have had cash calls, and many had raised cash multiple times. One had a few rounds of private placement of new units which diluted the stake of existing unitholders somewhat.

For many of these Reits, the cash called back far exceeded the cash received. So, the myth of Reits as almost comparable to a fixed income instrument is really busted.

Take CapitaMall Trust (CMT) which was listed in July 2002. Assuming that Ms Retiree bought one lot or 1,000 units at the initial public offering (IPO) for a total sum of $960. For the whole of 2003, she received $57 in dividends. However in that year, CMT also had a one-for-10 rights issue. To subscribe for her entitlement, Ms Retiree would have to cough out $107.

In 2004, she would received $89 for the total number of CMT units she owned. That year, CMT had another rights issue, also one-for-10. The exercise price was higher at $1.62. To subscribe, Ms Retiree would have to fork out $178.

In 2005, CMT again had another fund raising exercise via rights issue. Ms R would pocket $124 in dividends but in that same year, had to return $282 back to the Reit.

In the next three years - 2006 to 2008 - Ms Retiree felt rich and happy. She merrily banked in her quarterly distributions which amounted to $404 for her holdings of CMT. Her one lot, after three rights issues, had grown to 1,331 units.

In the following year, another $175 was distributed. But CMT wasn't going to let Ms R be happy for long. It launched a big one - a 9-for10 rights issue. To fully subscribe for her entitlement, Ms R had to empty her bank account of a whopping $982.

And you know what, the cash call came in March 2009, when the Straits Times Index fell below 1,600 points, and many retirees were dismayed to see their investment portfolios plunge by half or more. Many fret if they would have enough left in the pot to sustain their lifestyle. Having to cough up more money for a Reit was the last thing that they wanted to do!

Negative cash flow

And here's the final tally. Since its IPO until today, a holder of one lot of CMT would have received $1,264 in cash distributions. However, in all, he or she had to return $1,549 back to the Reit so as to subscribe to their entitlement of new issues. That's a net outflow of $284 per lot.

It's the same story with K-Reit Asia, Capitacommercial Trust, Frasers Commercial Trust, Mapletree Logistics, First Reit, Lippo Malls Indo Retail Trust, AIMS AMP CAP and Saizen REIT in that what was taken back from investors was more than what was given out.

K-Reit has been one of the most aggressive fund raising Reits. Had you started with just one lot when it was listed in April 2006, you would have to dish out $8,399 to subscribe to your rights issue. Distributions amounted to $1,110, resulting in a net outflow of $7,289.

For Reits with at least four years of track record, only Fraser Centrepoint, Parkway Life and CapitaRetail China have not had any cash calls.

Instead of a rights issue, Suntec Reit raised funds by issuing new units to some institutional investors at a slight discount. Existing unitholders don't have to cough out additional cash, but they would have their share of earnings diluted somewhat.

Misalignment of interests

Reits are managed by managers, and managers are paid based on the size of the portfolio that they manage. So the incentive is for the managers to continue to raise money and expand the portfolio size. Sometimes this is not done in the best interest of unitholders.

The most recent controversy was over K-Reit's purchase of Ocean Financial Centre (OFC) from its sponsor Keppel Land. K-Reit has launched a 17-for-20 rights issue to pay for the purchase which was deemed by the market to be expensive at a time of uncertain outlook and when office rental is expected to ease.

BT reader Bobby Jayaraman argued that rather than be compensated based on factors such as the value of assets, net property income and acquisition fees, Reit managers should be paid based on a combination of growth in distribution per unit and market valuation of the Reit.

'If Reit managers were paid on the basis of distribution per unit and market valuation growth, would K-Reit have bulldozed its way through the OFC acquisition like they have done?

'The day K-Reit announced the OFC acquisition, its stock price fell close to 10 per cent and has continued sliding. Yet, its Reit manager will take home significantly increased management fees while shareholders would have lost a good chunk of their capital even as they bear significantly more risk in the form of higher leverage and potential property devaluations given the uncertain environment,' he wrote to BT.

Misalignment of interests aside, there

But while Reits may not be the perfect income yielding instrument that they are made out to be, they have proven their capacity for capital appreciation. Relative to the capital ploughed in, CapitaMall Trust has rewarded its unitholders with a return of 127 per cent. Most Reits have yielded positive total returns.

Instead of buying Reits for yields, some savvy investors only buy them when they see those with good quality assets trade at sharp discounts to their book value. For example in the first half of 2009, CMT was trading at 50 per cent its book value. Today, it is not as cheap. At $1.755, CMT is now trading at 13 per cent premium to its net asset value of $1.55.

Hence, valuation metrics which apply to a typical asset heavy stock would apply to Reits as well.

Read? Right issue back again (6)

Createwealth8888:

The only issue is the right issues and make sure you fully understand the right issue especially when you are very firm in your mind that you are investing for long-term e.g. more than 10 years for dividends.

When you made money from trading the Reits due to market sentiment arising from the right issue announcement that is trading gain. It has nothing to do with dilutive factor of right issues.  Get it?

You can only hear success stories loud and clear!

Just for Laugh ....

I have been crawling the cyber space day and night for more than 10 years for investment ideas and reading postings and articles from  investors and traders. We can only hear their success stories loud and clear. It is nothing wrong to boast your success stories as it is human nature to feel good. If you don't feel good then you need to seek an appointment with Research Department in IMH. Your brain is a good research material for the researchers there.

We can only hear whispers of failures. Why? Losers are too depressed to talk about it so we don't get to learn from them.

The latest example is shorting of CDL by a local Guru. Win money eats Bread. Lose money drinks Kopi.

Whenever you read in the cyber space, your mind must open up like a parachute. The parchute may ensure you safety down to Earth only it is wide open; anything else you are likely to be dead! Get it?

Why Bread? Why Kopi?

???
???
???


BreadTalk. KopiTiam.

Kids are expensive liabilities! (2)

Read? Kids are expensive liabilities!

Do you like this post by LP? Starting a new friendship with an old friend

If you like this post by LP and fully agree that this friendship is great. Walk your talk! Have your future friend or friends writing similar post in another new technology in 30 years time. hee hee.

I have cash but I don't like to pay up!

Just for Laugh ...

You have plenty of cash rotting in the bank and still don't like to pay up. Why? Common reason for doing so as you want to maintain maximum liquidity for investment opportunity. You like to think that you are savvy investor who knows how to spot good investment opportunity when it arises.

BTW, is your invertible cash rotting in the bank in 2009? So you are still waiting for more opportunities in 2012/13? NATO again?

Cash rotting in the bank and at the same time helping to pay banker's salary and bonus is worth waiting for? The idea of investing is simple but never easy!

We don't like to strongly believe that we will drop dead suddenly

Just for Thinking ....

We don't like to strongly believe that we will drop dead suddenly. But, if we do; then our thinking over saving, spending, insurance, investment, debts and work-life balance may significantly change direction going forward in our life.

Read? Regrets of Dying

You Will Never Know It May Make A Difference In Someone's Life or Thinking (3)

You may like to know what is the most lesson learnt from this blog by other blog readers.

Read? You Will Never Know It May Make A Difference In Someone's Life or Thinking (2)

One blog reader, CH said that he has learned the most important lesson here: Performance measurement. It is this measurement that should matter most.

Read more? Measure your investment performance

Why do you want to spend some of your time (the most precious commodity in your life)  to invest your hard-earned money?

There is only one reason to do it that is to grow your money and the rate of growing this money cannot be ignored. It must be diligently tracked to give you periodic and consistent feedback on your investing performance. With this feedback, you can then objectively review and revise your 3M - Method, Mind, and Money to meet your investing goals. Without measuring CAGR or XIRR on your investment portfolio, you may be drifting along your investing journey by feeling good and positive about it.

CapitaLand sets up US$180m China real estate development unit

By CARINE LEE


CapitaLand Limited on Thursday announced the incorporation of CapitaLand Xinye (Hangzhou) Real Estate Development Co Ltd.


The wholly-owned subsidiary domiciled in China has a registered capital of US$180 million, and is principally involved in real estate development and management.

Health is Wealth???

Just for Thinking ....

Is heath = wealth???

May be not exactly true.

Good health may not significantly increase our wealth; but deteriorating health will significantly reduce our wealth and no amount of wealth spent can restore back our health. So we must take good care of our health to prevent losing too much of our wealth.

You Will Never Know It May Make A Difference In Someone's Life or Thinking (2)

Read? You Will Never Know It May Make A Difference In Someone's Life or Thinking


I have spend my past five years since Sunday, 19 November 2006 writing blog post after blog post related to investment, finance, insurance, and life.
 
If any of my blog posts has made a difference in someone's life or thinking; it willl be enough reward to me for spending some of the most precious commodity in my life in this blog. Cheers!

Singapore's inflation rate holds above 5%

SINGAPORE: Singapore's inflation rate held above 5 per cent for the fifth straight month in October.


The Consumer Price Index (CPI) rose by 5.4 per cent from a year ago, easing from the previous month's gain of 5.5 per cent.

The October reading is above market expectations of a rise of 5.2 per cent.

The CPI rose 0.4 per cent in October 2011 from the previous month.

The Department of Statistics said the CPI reading reflected mainly higher costs of accommodation, private road transport and food.

The higher cost of accommodation was due to higher imputed rentals of owner-occupied homes.

Private road transport costs were driven by a significant increase in Certificate of Entitlement, or COE premiums and higher petrol prices.


Excluding accommodation costs, the consumer price index rose by 4.1 per cent compared to the same month last year.

The Monetary Authority of Singapore's core inflation measure for October (which excludes the costs of accommodation and private road transport) rose by 2.3 per cent from a year earlier, and increased by 0.3 per cent from September.

The central bank has raised its inflation forecast twice this year, and predicts an annual gain of around 5 per cent for 2011.

The MAS expects inflationary pressures to taper off next year, and forecasts headline inflation of 2.5 to 3.5 per cent.

- CNA/ck

Four Pillars in our life to support our happiness index



Read? Catching the moments of happiness!

Read? Value has a value only if its value is valued

To support our happiness index from falling or crashing

We must be mindful and always seek ways and means to strengthen our four Pillars in our life to support our happiness index from falling or crashing.

1. Personal Health and family members health
2. Money
3. Family (more than one member and companion is counted)
4. Community (including spiritual)

Any weakness in any of these four pillars in our life may cause our happiness index to start falling soon so we should always seek ways and means to strengthen these four pillars and watch for cracks in these pillars too.

Remember we sow what we reap in life!

MAS weighs in on Reit sector debate

By JAMIE LEE


(SINGAPORE) The Monetary Authority of Singapore (MAS) may offer more regulatory guidance to the real estate investment trust (Reit) industry in efforts to boost corporate governance standards, it said yesterday.

MAS did not highlight specific companies but was responding to criticism that current rules governing the Reit sector fail to protect the interests of minority shareholders.

Central to this brewing debate is the $1.57 billion sale of Keppel Land's entire stake in Ocean Financial Centre to K-Reit Asia - a plan that was criticised by shareholders for both the timing and price. The deal was approved but through a show of hands at the shareholders' meeting - a voting system that the Singapore Exchange (SGX) is proposing to ban.

Under a show-of-hands system, each person gets a single vote regardless of the number of shares he holds. The alternative of poll voting gives each shareholder voting rights according to the size of his shareholding.

'The current code on collective investment schemes under MAS, which regulates Reits, is not robust enough to prevent unscrupulous Reits from taking advantage of minority shareholders,' said reader Bobby Jayaraman in a letter to The Business Times on Nov 16.

'The major culprit is the incentive system for Reits, which does not always align with shareholder interests,' he added.

Rather that be compensated based on factors such as the value of assets, net property income and acquisition fees, Reit managers should be paid based on a combination of growth in distribution per unit and market valuation of the Reit, said Mr Jayaraman.

In response, MAS director of communications Angelina Fernandez said in a letter: 'MAS will consider issuing further guidance to the industry as part of our ongoing effort to enhance corporate governance in Reits and other listed entities.'

The regulator reminded companies and boards to uphold high corporate governance standards. 'Corporate governance rules and guidelines cannot envisage all possible circumstances,' Ms Fernandez said.

'When observing such rules and guidelines, companies and their boards must always bear in mind the interests of shareholders or unitholders; and not take an overly technical approach,' she added.

MAS highlighted current rules that are in place to safeguard investor interest when it comes to interested party transactions. For example, transactions that represent at least 5 per cent of the Reit's net asset value are subject to voting by independent unitholders, and two independent valuations have to be obtained - one for the Reit manager, and another for the sponsor.

Limits are also set on the sale and purchase prices, and acquisition fees paid to the manager are in the form of units that can be sold only after a year.

Cambridge Industrial Trust to acquire warehouse for S$35.5m

By CARINE LEE


Cambridge Industrial Trust on Monday announced that it will purchase an industrial building on Toh Guan Road East for a purchase consideration of S$35.5 million.

The property, a five-storey warehouse building with an ancillary office, has a gross floor area of approximately 17,917 sqm. It is a JTC leasehold estate of 30+30 years tenure commencing from February 16, 1991.

Cambridge Industrial said it believes the property will enhance its overall portfolio and further reduce its reliance of income stream on any single asset and tenant.

The Trust intends to fund the acquisition through a combination of 60 per cent cash and 40 per cent debt, and expects to use part of the proceeds from previous equity fund-raising exercises to fund the purchase.

The acquisition is expected to be completed by the first quarter of 2012.

Know thyself. Be true to it and avoid the pain within.

• STI has been dropping!
• More and more bad news coming out!
• Your portfolio also drops 20%

How are you feeling now?

1. Feel like selling away everything and keep cash and then wait for more good news to come before going back to the market.
2. Continue to be concerned; but won't put in any more money. Enough of this stock investing. It is just too difficult.
3. Put in more money as this is a great and rare opportunity presented by the market.

If your answer is 1 or 2, you may be better off in investing in low price volality, low volume and dividend paying stocks or bonds may be a good choice too. Low volume means less market speculators coming into your stocks to play your emotional roller coaster ride.

How to spot ponzi or scam investment scheme?

Just for Thinking ....

Guaranteed Return of e.g above 5% on your investment in 3 or 6 month time

The key word is Guaranteed Return.

There is no such investment in the market that can guarantee Return over 3 or 6 month and not even one year. It is certain. It is a ponzi or scam investment scheme. They either take part of your investment and return it back to you as 5% return on your investment or take part of other newer investors investment and give it to you.

How the scheme works?

You invest $10K. After 3 month, the scheme takes your $500 and return it back to you as 5% gain. When you received your own $500, you jump through the roof. You go round telling your friends and relatives how good is your investment. 5% return in 3 month. OMG! Soon your friends and relatives will get sucked into it.

If you seriously think that you have found such investment scheme that offers guaranteed good return on investment. Don't be selfish. Let me know. I want to join in too!

Lenders of stocks. You are screwed!

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




Just For Laugh ....
 
You lend out your your stocks to shortists to short your stocks down just to earn a few % interests per annum and happily get paid for pennies by borrowers for that period for being screwed. When a stock gets shorted; the only way is down. When the stock price is down; momentary you either widen your unrealized paper losses or reduce your unrealized paper gains. Either way you are screwed. You don't feel the pain doesn't mean you are not screwed! So are you stock prostitute?
 

Legg Mason's Bill Miller Exits: Last Mutual Fund Rock Star?

Just for Thinking ...

Read? Bolton's china fund takes a beating

Createwealth8888: Veteran experts in investing are losing their money so can we still survive in this new investing climate?

CNBC – Thu, Nov 17

The end of Bill Miller's 30-year run managing the Legg Mason Value Trust (NYSE: LM - News) may mark the end of investment rock stars to emerge from the mutual fund industry as more versatile and higher-paying hedge funds attract the best talent and exchange traded funds offer a lower cost alternative to retail investors.


Bill Miller became a household name and his fund, a member of many 401k plans, amid a 15-year streak of beating the S&P 500 (INDEX: ^GSPC - News) beginning in the early 1990s. The mutual fund star mantle was passed to Miller from Peter Lynch, who was famous for his stewardship of the Fidelity Magellan Fund and his book, "One Up on Wall Street," in the 1980s.

As the focus faded on the likes of Miller and Lynch, as well Mario Gabelli, Marty Whitman, Charles Royce and David Dreman, the new stars of the investing world emerged from the hedge fund industry. Names like Bill Ackman, David Einhorn and John Paulson are now the most-followed stock pickers.

"Mutual funds remind me of AOL (NYSE: AOL - News) dial-up: a dwindling collection of old people who don't know better, contributing monthly to a comically inferior product," said Phil Pearlman, investor and executive editor of StockTwits.com. "And Miller was the symbolic figurehead of this beta minus fees charade."

Equity mutual funds, which tend to have a long-only style and a mandate to be mostly fully invested, have been a victim of a low return, high correlation world, leaving little room for the outperformance and separation that makes stars. The S&P 500 is trading around the same levels the index was at in 1999, a victim of the Internet and housing bubbles popping.

"Stars depend on market cycles and investor appetites," said Michael Farr of Farr, Miller & Washington, a high net worth investment management firm. "In the last decade, only higher risk (often with leverage) has produced returns."

Hedge funds have been raking in assets at an explosive pace over the last decade because of their ability to lever up and their versatility to bet against stocks, as well as the use of more exotic instruments such as currencies and credit default swaps .

Assets in hedge funds, closed to people without a minimum of $1 million to invest, grew to $1.7 trillion as of the end of the third quarter, according to BarclayHedge, an alternative investment database. Mutual fund assets were at $11 trillion as of September, down from their high of $12 trillion at the end of 2007, according to the Investment Company Institute.

Greenlight Capital's Einhorn, Pershing Square's Bill Ackman and John Paulson all gained notoriety for their bets against the housing crisis. Einhorn was famously short Lehman long before its 2008 bankruptcy. Bill Miller, to the detriment of his fund's holders, infamously kept buying Bear Stearns before it collapsed and was sold to JPMorgan (NYSE: JPM - News).

Meanwhile, the popularity of exchange-traded funds among retail investors have shined a light on the fee structure of actively-managed stock mutual funds, the majority of which have been underperforming the S&P 500 the last decade. Assets in ETFs, which blindly mimic whole sectors and indexes are currently at around $1 trillion, up from $608 billion at the end of 2007, according to ICI.

For example, Miller's Value Trust has an expense ratio of 1.76 percent, while the PowerShares Nasdaq 100 (NASDAQ: QQQ - News), among the most actively-traded ETF, has a ratio of 0.2 percent.

"Stock-picking managers haven't been able to become stars in the last five to 10 years because stock picking itself has not been a rewarding endeavor," said Josh Brown, money manager and author of The Reformed Broker blog. "Record high correlations and ETFization has meant that knowing which asset classes to weight more heavily and lightly has produced superior returns for fund managers who know how to do it - not choosing Coke (NYSE: KO - News) over Pepsi (NYSE: PEP - News)."

Bolton again!

I wrote in Nov 2009 Cash Is King?

Bolton's china fund takes a beating

Lost -29% of NAV in six months to Sep 30.

Bolton said:

"It  was a real lesson for me. I was wrong. In this business of probabilities, they are many times I'm wrong. But, it's darkest before dawn."

"The most difficult thing about investment is not about what the future looks like but what future is discounted in today prices. If future looks bad and everyone becomes risk averse, that's a far less risky world."

"This is the time to be optimistic and go against the trend. The most dangerous times are opposite, when everyone's happy."

For how long can we control our mind? Don't need to talk about investment!

Just for Thinking ....

Dementia is a loss of brain function that occurs with certain diseases. It affects memory, thinking, language, judgment, and behavior.



Read? Dementia

I saw what can really happen to a person who has dementia; and for older folks like me should include it as part of financial planning. How can a family member take over my portfolio when sign of dementia is showing up.

This is what happened today.

My mother-in-law tapped her ezlink card at MRT gate and went out first. I followed closely behind her. As she was slow in walking through the gate but I was quick to tap my ezlink card and caused the card to fail. I tapped again but still failed. So I went to the control room but the staff was busy on the phone and I have to wait for him.

I could see my mother-in-law looking quite lost from a distance when she realized that I was not behind her. She nervously looked around and searched for me. At last she realized that I was inside the MRT station. She tapped her ezlink card and came in again.

Dementia can happen to any old folks so we need to consider it as part of financial planning.

Dragon Mansion sold for S$130m

By CARINE LEE


Dragon Mansion, a 68-unit residential development located within walking distance to the Tanjong Pagar and Outram Park MRT stations, has been sold for S$130 million.

The price translates to $1,093 per square feet per plot ratio.

The 38,618 sq ft site was sold to Spottiswoode Development Pte Ltd, a 50:50 joint-venture company owned by Lian Beng Group and Centurion Properties Pte Ltd.

Each owner of Dragon Mansion will receive sale proceeds of about $1.91 million.

Spanish, French Debt Auctions Disappoint; Yields Rise

By: CNBC.com with Reuters Twitter


The spread between French 10-year government bonds and their German equivalents rose to a fresh euro-era high of 200 basis points on Thursday on fears that the debt crisis engulfing the euro zone is spreading to its larger economies, with disappointing auctions of French and Spanish debt.

France offered 6 to 7 billion euros of Treasury notes (also called BTANs ) at an auction , with the 5-year French treasury bond's average yield reaching 2.82 percent on a 1.675 bid/cover ratio.

The Spanish/German 10-year yield spread rose 16 basis points on the day to 477 basis points, while the yield on its 10-year bond also hit the highest since the inception of the euro at 6.57 percent.

The French/German 10-year yield spread hit a euro-era high of 197 bps. Yields in a Spanish auction of 10-year bonds rose to an euro lifetime high of 6.975 percent and the country sold 3.56 billion euros ($4.8 billion) worth of debt. Credit default swaps on French and Spanish sovereign debt hit a record high on Thursday

CPFIS-included funds fall 10% in Q3

SINGAPORE: The worsening conditions in Europe and the US have hit the performance of funds under the Central Provident Fund Investment Scheme (CPFIS) for the third quarter.


Overall performance of CPFIS-included funds fell 10.08 per cent in the three months ended 30 September, according to Lipper, a unit of Thomson Reuters (which tracks the performance of Singapore's retirement fund.)

It added that CPFIS-included unit trusts averaged losses of 11.19 per cent while CPFIS-included investment-linked insurance products (ILP) declined 9.26 per cent.

Equity and mixed asset products among CPFIS-included funds declined 13.99 and 5.97 per cent respectively.

However, Lipper noted that bond products did manage to ride the downturn with average gains of 2.78 per cent for the quarter.

For the twelve-month period ended 30 September, CPFIS-included funds were 9.15 per cent lower on average, while CPFIS-included unit trusts fell 9.47 per cent. CPFIS-included ILPs declined 8.92 per cent on average.

"Volatility looks set to remain the order of the day, with all the uncertainty surrounding the European debt crisis and global economic outlook," said Koo Chung Chang, a representative from Life Insurance Association of Singapore (LIAS).

He added: "The better approach might be to invest for the long term and to believe that markets will recover in the long run as they have historically and perhaps maintaining a disciplined approach of diversification and regular savings through dollar cost averaging."

There were 128 unit trusts and 182 investment-linked insurance products (ILPs) included under the CPFIS as at end September.


- CNA/ck

Keppel Singmarine secures newbuild contracts for S$47 million

Singapore, 16 November 2011 - Keppel Singmarine, a wholly-owned subsidiary of Keppel Offshore & Marine (Keppel O&M), has secured two contracts from Indonesian customers worth a total of about S$47 million.

The first contract is for a Coal Transshipment Barge for repeat customer PT Indo Straits Tbk, through its subsidiary company PT Pelayaran Straits Perdana and the second is for the construction of three tugboats for a new customer, an international shipping company.

Mr Hoe Eng Hock, Executive Director of Keppel Singmarine said, “We are pleased with these orders from our valued customers. It is a testament to Keppel Singmarine’s reputation for on time, and on budget deliveries as well as the proven track records of our project execution and technical designs.”

Keppel Singmarine’s contract with PT Pelayaran Straits Perdana is a repeat order of the Coal Transshipment Barge, Straits Venture, which was delivered earlier this year.

Why many will fail even after taking courses in trading or investing?

Read? Why course in forex, trading or investing will continue to sell?

Why many will fail even after taking courses in trading or investing?

Like it or not. Making money from the stock market is still a Game of Strategy. It is all on 3M's - Method, Mind, and Money. Read? More on 3M's

                        Cart in front of Horse

The Gurus are more interested in selling their carts than understanding the horses who will be pulling the carts. They will tell you that all horses are born to pull carts. Their carts are the easier to pull than other carts in the market. You will easily reach your destination with their carts and not other carts that are too heavy.

Yes, their cart may be easier to pull. There may be no doubts about it; but, the issue is the Cart is before the Horse. Seriously think over it. Can a horse easily pull a cart in front of it?

However, in the real world, there will be some smarter horses who will soon find out on their own the right way is to place the cart behind them and pull while many other horses will continue to pull the carts in front of them. They will fail!

Cart in front of Horse

Cart is the Method from the Gurus

Horse is your Mind and Money

A better learning approach for you to succeed in your investing journey is that you must have good understanding of the Horse and find the right Cart to match the Horse so that it can safely reach its destination.

This is how it should be:

Think it over. Can Cart before Horse work?

Saving, Lending and Investing (2)

Read? Saving, Lending and Investing

Know thy enemies!

When you save, you have only one enemy that is inflation. Every year, your enemy will grow stronger and made you weaker until one day you have become so weak that you can't even enough to feed yourself with your saving.

When you lend, you will have two enemies. One of them is inflation. Every year, this enemy will grow stronger and can make you weak. You are not worry as you think that you may have enough energy to fight it back. But, beware! You may unexpectedly encounter your second worse enemy who easily caused you serious damage. Your borrower has defaulted!

When you invest, you will have three enemies. One is inflation. Second is company goes bankrupt and the ugly third one will everyday come to play with your emotions. One day can make you laugh. Another day can make you cry.

Conclusion

How many enemies do you want? Can you handle more enemies?

Airline industry is crazy!

Just for Laugh ...

SIA is premium airline and going towards new budget carriers.

AirAsia is budget airline and going for new premium carriers.

Who is smart? Who is foolish?

Swiber's Q3 net profit up 94.1% to US$13.52m

By YEO AIQI


Swiber Holdings Limited on Monday announced that its net profit for third quarter ended Sept 30, 2011 jumped 94.1 per cent year-on-year to US$13.52 million.

Revenue increased by 12.5 per cent to US$137.73 million from a year ago.

For the nine months ended Sept 30, 2011, Swiber's net profit increased by 6.4 per cent to US$30.6 million from a year ago and revenue jumped 49.5 per cent to US$468.94 million year-on-year.

Strong growth in revenue for Swiber was due to progressive revenue recognition from various contracts awarded to the company in year 2010 and 2011 as works progressed, concentrated in South Asia and Southeast Asia regions.

As of November 2011, the company has an order book of approximately US$1 billion and it is expected to contribute to its results over the next two years. Swiber is equipped with the right resources, a strong fleet of vessels and experienced management team and hence is well positioned to bid for major contracts and continue to focus on winning new contracts.

Olam 1Q net profit increases by 15.1%, outlook positive

By YEO AIQI


Olam International Limited on Monday announced that its net profit for first quarter ended Sept 30, 2011 increased by 15.1 per cent to S$34.22 million from a year ago.

Revenue increased by 31.6 per cent from a year ago to S$3.23 billion.

Its edible nuts, spice and beans segment registered volume growth of 11.7 per cent and revenue growth of 22.1 per cent. The spices and vegetable ingredients business continues to perform well with the seasons in the US, China and Vietnam progressing well. Confectionary and beverage ingredients segment registered volume growth of 23.5 per cent. Food staples and packaged foods segment achieved volume growth of 22.1 per cent, led by the rice and grains business, with strong market share growth in the african markets.

Olam remains positive about its prospects for the remaining part of FY2012. It constantly reviews corporate development opportunities which are in line with its corporate growth strategy.

Saving, Lending and Investing

Just for Thinking ....

Read? Saving, Life Insurance and Investing - 2nd Revist

Saving

When you put your saving with a bank and that money is still yours. You can take it back anytime if you wish too and the local banking law also offers you full protection up to a certain level.

Lending

When you buy bonds; you are actually lending to some institutions or corporations for a certain period of time. The money is no longer yours and not within your control. You are acting on good faith that the borrower will not default and return you your money when the loan period is up.

Investing

When you invest; you surrender your money to the market and the money is not yours anymore. The market will now decide how much money it can return to you if you want it back. But, there may be small consolation from time to time when the corporation has decided to return you some money out of their own pocket.

(1) Good quaility stock with high yield or (2) Low risk and high yield.

Just for Laugh ....

It is so common in forums and cboxes to hear people saying they are looking to buy:

1. Good quality stocks with high yield
2. Low risk and high yield

Don't tell me these people are Immortals of the Investing world!

"Immortals" fought off the competition at the box office this weekend, emerging victorious with the No. 1 title.

My shortest trip out of Singapore

Left Singapore at 08:32 hrs and back to Singapore at 15:10 hrs.

To Sungai Rengit, Pengerang , South Johore.

Good news for Singapore cyclists. Many kakis there.

Bad news for Singapore fishermen as I didn't see any passenger carrying fishing rod. My taxi driver said seldom got Singaporean goes there for fishing. He said : "Here, no fish!"

Seafood Lunch

As expected, full of Singaporean attacking lobster at every table and photo taking of lobster dish. There are few seafood restaurants along the street. Finally, I picked the one where my ex-MP George Yeo went there before for his lobster attack. That is Jade Garden.

Price of lobster

Per 100 gm

1. Deep sea: RM19
2. Extra big: RM14
3. Big: RM12
4. Medium: RM10
5. Small: RM8

I believe 2-5 are farmed lobsters.

I picked one extra big lobster about 750 gm and charged to the stomach at RM105 or S$43. Total lunch cost for 2 = RM160

Small town but big walk

I walked down all the streets and circle round town a few times in less than 2 hours and I wonder how come got so many budget hotels like those in Singapore there?

Immigration & control security loophole???

My biggest wonder ever???

Does immigration and control big boss brain working or not? Bicycles bought there and back no need to be scanned as bicycle is too big to go through the security scanner; but everything else smaller are scanned. This is real dumb!

Margin Account for leveraging - Unexpected risks and losses! (2)

Createwealth8888:

 "Under Singapore law, customers’ monies and assets cannot be co-mingled with the firm’s assets."

So what? Can the law really protect us when the crooks don't follow the law?

The moral of the story: Money in our own pocket is still safer.

Again, it reminded me of CAO. Because of financial fraud, ex-CEO went to jail. So what? Did it really matter to me? No. My money still gone.

Read? Margin Account for leveraging - Unexpected risks and losses!

Nearly half of MF Global Singapore client monies held abroad


November 12, 2011

SINGAPORE, Nov 12 ― The Singapore unit of bankrupt US brokerage MF Global said late yesterday that nearly half the US$309 million (RM973.35 million) held in its segregated client accounts are with financial institutions outside the city-state, indicating the difficulty faced by liquidators in retrieving customers’ money.

Under Singapore law, customers’ monies and assets cannot be co-mingled with the firm’s assets, giving clients of financial institutions than run into difficulty some measure of protection.

MF Global Singapore said US$160 million in client assets are with financial institutions in Singapore, while the remaining US$149 million is held in Malaysia, Hong Kong, United Kingdom, Dubai, Indonesia, and Taiwan.

“The provisional liquidators have written to relevant third parties to ask for a full account and the immediate return of such monies and assets,” MF Global Singapore said in a statement.

It added that all its customers’ open positions on the Singapore Exchange (SGX) have been closed out or transferred.

“Based on the records of the company, excess margins amounting to about US$40 million in respect of customers of the company are currently maintained with and held by SGX,” it added.

MF Global filed for bankruptcy in the United States after risky bets on debt from troubled euro zone nations scared away clients and investors.

The liquidators in Asia are trying to sell its operations in the region as one concern but struggling to do so because of problems unwinding trading positions, so they may now sell the various country units separately. ― Reuters

Will you dump more than 50% of your capital at one go into your investment?

Read? Average Down or Average Up. Know Your Maths!

Will you dump more than 50% of your capital at one go into you investment?

Generally, what is your expected answer from those retail investors around you?

Investing in one property???

It is likely to be yes for investing in property as most people will agree that property over long term will not crash to zero and people dare to invest a large sum of their capital at one go.

Investing in one stock when it is already low???

Likely the answer is No as nobody is gullible enough to dump more than 50% of their capital into one stock at one go even when they believe the stock price is at its low. It is just too risky to do that. However, when a stock price starts coming down and become cheaper. It can give an illusion of "safety of margin"??? in that one stock. Investors can have no problem in accumulating it to more than 50% by averaging it down.

This is how an investor's mind works? Quite amazing. Right?

Understanding Stock Market Risks - Financial Fraud Risk is real! (4)

Read? Understanding Stock Market Risks - Financial Fraud Risk is real! (3)

Honesty???

We will never know someone is honest or not until until his/her death; then only we can say this man or woman is truly honest. (or at least they were not publicly caught for dishonest acts if any during their life time).

Createwealth8888 is an honest person till the time of writing this post as he has not been caught red-handed publicly for cheating on several occasions.

Financial Fraud Risk is Real

Like honesty, we cannot assume that there is no financial fraud risk in our invested companies. All investment by nature are risky and financial fraud risk is real. This risk can never be analyzed by anyone and not even by world-class analysts or board members. So it is wise for us to protect ourselves against this risk through good portfolio management.

Crisis at Olympus

Read that headline news: GIC's exposure to Olympus 'minimimal'. Investment firm says almost all of its stake in troubled Japanese company disposed of; not known if any losses incurred.

Olympus is a 92-year-old company and Japanese are still leaders in camera technology, and Olympus is one of the top manufacturers in Japanese.

When the top management has intentionally hide all these losses, and no one will be able find them, not even their board members if the top management has carefully hidden them.

Createwealth8888's Risk Management

I don't have big balls to build up to more than 10% of my total capital in any one counter and no matter how safe the counter may look like e.g. SPH, SGX, SMRT, etc those that can't fail in Singapore context. I saluted those can put more than 50% of their capital into one counter. They really have big balls or they don't think that financial fraud risk is real.

Most S'pore workers stay late and bring work home with them

By CARINE LEE


Half of Singapore workers spend well over eight hours a day at the office and 50 per cent regularly take work home to finish in the evening, showed a Regus survey released on Friday.

The survey found that Singapore workers worked longer hours than the global average, with 19 per cent regularly working more than 11 hours a day, whereas the global average is 10 per cent.

Fifty per cent of workers take tasks home to finish at the end of the day more than three times a week compared to the 43 per cent global average.

However, 31 per cent of workers in Singapore work between nine and 11 hours a day, compared to an average of 38 per cent elsewhere in the world.

More than 12,000 respondents from 85 countries participated in the survey.

Update: Noble tries to calm market after share plunge

SINGAPORE - Noble Group founder Richard Elman moved to calm investors, who suffered a US$2 billion hit after a sharp drop in its stock a day earlier, buying shares in the company and saying that the departure of its CEO was not due to a quarterly loss.

The Singapore-listed commodities trader saw its shares plunging by more than a quarter on Thursday, hit by the surprise resignation of Ricardo Leiman and its first quarterly loss in more than a decade.

The shares recouped some of the losses on Friday, rising as much as 4 per cent in early trade, after the firm said late on Thursday that a vehicle linked to Mr Elman's family bought 10 million shares, raising its interest in the firm to 21.53 per cent from 21.37 per cent.

Mr Elman, who is now acting CEO and chairman, told Reuters in a phone interview on Friday that the company thought it would be better to announce the departure of Mr Leiman before the planned listing of its agricultural unit.

'It was planned for some time and we thought it would be better to get this out of the way since he will not be on the board of the new company (Noble Agri),' Mr Elman said, adding 'it was coincidence of timing' that the announcement came a few hours after Noble reported its poor quarterly results.

Mr Elman, who is already in his 70s and has been cutting back on his role at the company over the past two years, did not elaborate on why the former CEO wanted to leave .

The company said late on Wednesday Mr Leiman was leaving for personal reasons. Mr Leiman had been in the job for less than two years.

'If this was long planned and not connected to the results, the company should have disclosed the succession plan earlier rather than two hours after a negative results announcement,'said Mak Yuen Teen, a professor at the National University of Singapore's business school who specializes in corporate governance.

'It would be difficult to convince the market that they are unconnected.'

Noble shares are trading up 1.3 per cent by mid-day on Friday.

Wild cotton

Noble is the latest casualty among commodity traders caught up in the defaults in the cotton business.


It blamed part of its US$17.5 million quarterly loss on cotton as farmers defaulted on their contracts following a gyration in cotton prices, which forced it to cover physical deliveries to its customers by purchasing cotton in the spot market at elevated prices.

Investors now turn their attention into another Singapore-listed rival, Olam International, which has a large cotton trading business, reports earnings on Monday.

Olam is among the world's top cotton traders, with a network of more than 100,000 farmers, ginners and suppliers, according to the company's website.

'Olam's Industrial segment, which constitutes 23 per cent of 2011 financial year gross contribution, is largely driven by its cotton business,' Goldman said in a research note.

'We believe investors may have concerns regarding these (cotton counterparty) risks and the stock price may see short-term weakness until there is more clarity provided by the company.'

Shares in Olam dropped 2.9 per cent on Friday after falling as much as 7.6 per cent a day earlier.

Noble's Mr Elman tried to calm investor jitters over volatile commodities market, which has forced global commodities giants from Cargill to Bunge to report steep decline in profits.

'Honestly, it was a minor loss, it's mark-to-market and probably some of it or all of it can come back in the next quarter or at some point in the future,' Mr Elman said referring to the possibility that the company can claw back the losses if commodity prices improved.

'It is not a major issue, markets made it a major issue. But that's fine, let the market do what they want,' he added.

Noble said its processing margins in agriculture remained under pressure, while below-average crop yields in the sugar business in Brazil and continuing counterparty defaults in the cotton industry had undermined the operating environment. -- REUTERS

Noble - Extreme fear and greed!

437m shares change hand in one day and made up 59% of total volume traded in SGX

No wonder Newton said: 'I can calculate the movement of the stars, but not the madness of men in the market.'

Oil Could Hit $150 a Barrel in Near Term: IEA

The price of oil could rise to as much as $150 per barrel in the near term if investment in the oil-producing countries of North Africa and the Middle East is lower than required to meet growth in demand from emerging economies, the International Energy Agency said on Wednesday.


"Growth, prosperity and rising population will inevitably push up energy needs over the coming decades. But we cannot continue to rely on insecure and environmentally unsustainable uses of energy," IEA Executive Director Maria van der Hoeven said in said the organization’s 2011 edition of the World Energy Outlook.

Under the report’s central scenario, energy demand will increase by one-third between 2010 and 2035, with 90 percent of the growth in non-OECD economies.

China will consume nearly 70 percent more energy than the United States by 2035, the report said, even though, by then, per capita demand in China will still be less than half the level in the United States.

Although short-term pressures on oil markets are easing with the economic slowdown and the expected return of Libyan supply, the average oil price [LCOCV1 113.19 -1.81 (-1.57%) ] will remain high approaching $120/barrel in 2035, according to the IEA.

“If, between 2011 and 2015, investment in the MENA (Middle Ease North Africa) region runs one-third lower than the $100 billion per year required, consumers could face a near-term rise in the oil price to $150/barrel,” it added.

The agency expects oil demand to rises from 87 million barrels per day (mb/d) in 2010 to 99 mb/d in 2035, with all the net growth coming from the transport sector in emerging economies.

Noble posts Q3 loss of US$17.5 mln

SINGAPORE - Singapore-listed commodities firm Noble Group on Wednesday reported a net loss of US$17.5 million, compared with a net profit of US$157 million a year earlier, hurt by volatile market conditions.

Noble said that it was reporting a quarterly net loss for the first time in over a decade since it began reporting results.

The company said last month that it was seeking to list its agriculture business on the Singapore Exchange, but warned that the process would be subject to market conditions.

'We announced some weeks ago that we are in the process of obtaining approval for an IPO of our agriculture business, Noble Agri,' said Noble chairman Richard Elman in a statement.

'Progress is good and we believe that the market will be receptive to this initiative. The market reaction from potential investors has been very encouraging. More about this later.'

Two sources told Reuters on Tuesday that Noble has added Citigroup and Goldman Sachs as bookrunners for the planned US$700 million IPO of its agriculture business next year alongside JPMorgan. -- REUTERS

Createwealth8888's Rules

Just For Laugh ...

1. Don't lose your capital.
2. No stop-loss.
3. Do or do not. No try.

Catching the moments of happiness!

"There is no happiness; there are only moments of happiness." - [anon; Spanish Proverb]

Createwealth8888 likes to extend it further.

There is no happiness; there are only moments of happiness. But unhappiness tends to last longer.

Fisherman's moments of happiness






 
 
 
 
 
 
 
 
 
 
 
 
 
All experienced fisherman will know that you can't catch a big fish when the tide is low so it is unlikely to find the moments of happiness during low tide.
 
When the tide is too high, the sea is too rough and the wind is too strong; fishermen may find moments of happiness; but unhappiness may also be near. There is high chance that the strong under-water current will soon sweep your line away and get caught by under-water obstacles and break your line and made you sad.
 
The best time to find happiness is when the sea is calm, water is steady and many fishes will come; then happiness may be near.
 
The Moral of the story
 
Low tide can't bring happiness. To have moments of happiness, we have learn to to avoid low tide. Low tide symbolises lacking. We can't really find happiness when we are lacking.
 
Common example of lacking:

• Lacking in money
• Lacking in health
• Lacking in love
• Lacking in family bonding
• Lacking in friendship
• Lacking in companionship
• Lacking in free time for leisure

The best time to catch moments of happiness is when our mind is calm and steady and we are not lacking in too many of these forms mentioned above.

When we are too highly leverages we will be like fishing for happiness in high tide, rough sea and strong wind; it may also break us down. When it is broken; unhappiness will last much longer and harder to repair.

When you are debt-free, your mind is calm and steady; you are ever ready to catch many moments of happiness as they are nearer like fishes will come when the sea is calm and steady.

Biosensors Weekly

Total contracts Maersk jack-up

The rig is one of two currently under construction in Singapore and is expected to commence work for Total by the third quarter of 2014 on the Hild field development in the Norwegian North Sea.


“This first assignment for one of our newbuilding XL Enhanced jack-up rigs only eight months after we placed the order confirms our strong belief in an increasing demand for modern, high capacity rigs for the Norwegian market,” Maersk Drilling chief executive Claus V Hemmingsen said.

Maersk awarded Singapore yard Keppel Fels a contract earlier this year to construct two rigs based an enhanced version of the Gusto MSC CJ-70-150MD design at a combined $1.2 billion, plus an option for one more.

The Danish company said the XL Enhance design was an enhanced version of its existing ultra harsh environment jack-ups Maersk Innovator and Maersk Inspirer which are capable of operating in water depths of up to 150 metres and drilling to a depth of 9144 metres.

How to be safe with your money in investing? Who can we trust?

Just For Laugh ....

How not to get AIDS?

Don't do unprotected sex with untrusted women/men? Really???

The only way to know it is safe is not to do it. Protection may be an illusion of safety.

Likewise, in investing your money. Are there any margin calls and counter party risk? If yes, you may be having protected sex and thinking it is safe.

In recent MF Global saga, not all are lucky and wise enough to get away unhurt.

To be really safe, don't do it!

Basic concept of Risks vs. Returns

Just For Thinking ....

Once we fully understand the basic concept of Risks vs. Returns and develop common sense in finance and investment matters we will not become victim of greed.

1. Low risk and low return

When the risk is low, the return is expected to be low.

2. Low risk and high return

Red alert! This is highly not possible in a free market environment. Don't ever let the Greed overcome you and become foolish. A fool and his money will soon part.

3. High risk and low return

Warning! Many of those financial instruments that are highly leverages are actually high risk and low return when you are lacking in knowledge and skills in executing these financial instruments by yourself and depending on your financial advisers to complete them for you. Your financial advisers will be eating into most of your returns and leaving you with high risk and low return after expenses and management fees.

4. High risk and high return

Be extra careful! Not necessary true so you have to be extra careful and seriously do your homework. You must have the financial strength, knowledge and skills to earn this type of high returns. Average investors are advised to stay away as these financial instruments may not be your cup of tea.

Conclusion

Get educated. Trained yourself to be more knowledgeable and skillful. Build up your financial strength so that one day high risk and high return may become your cup of tea.

Playing The Game of Leverage (11) - Win Big or Lose Big

Read? Playing The Game of Leverage (10) - Counterparty Risk in Trading CFDs

Leverage is a double-edged sword. You can win big or lose big. Win big? Really?

Win Big if you get it right? Not necessay. But, Lose Big if you get it wrong is definite.

People seldom like to talk about their losses as it is loss of face to admit their losses and look silly too. People will like to boost about their big winning and for some winning small also talk big.

The truth is that when we are highly leverages, we are more likely to exit our winning positions sooner than expected so we are more likely to miss winning really big. Another thing is that market rarely gap up a lots but more often it will gap down a lots. When we are caught with such huge market gap down, the damage is already done and it is too late to regret.

In 2006/2007 Bull Run, on 28 Feb 2007, STI suddenly fell -4% on that day in reaction DOW overnight -3.3% plunge. I have lost $21,126 on that fateful day by closing out all positions. I have suffered the biggest one day losses since active trading and I think it will be so as I no longer believe the idea of Win big or Lose big by using leverages.

Read? Trading Performance Review

Why course in forex, trading or investing will continue to sell?

Read? Why become Master Trainer in forex, trading or investing?

When retail traders/investors found themselves losing more and more money in the market after some time will like to believe that other people who are making money may have special knowledge or skill sets learned from some School of Kung Fu (TA or FA)

Some innocent losers in the market will soon begin to notice advertisements put by some Gurus who said that can easily transfer their Kung Fu to them if they are willing to give them Ang Pow of $X,XXX to become disciples.

Then one day, some innocent losers will become curious enough to find out more and attend their free course preview; but unfortunately they are won over by these sweet talkers who put up all sorts of testimonials to show you that anyone can do it easily. Why not you? You are not stupid. Right? So you can do it too. $X,XXX is peanut as compared to what you have lost and what you will be losing if you still refuse to become disciple.

It is our human nature that when we are not doing well in something, we will want to upgrade or educate themselves to improve and hopefully to do better with the new knowledge or skills gain. But, the only problem here is which Gurus we can trust since all these Gurus don't post their transactions online e.g. one transaction at a time with enough details for us to see and track them. So with this kind of transparency, it will be very hard for Gurus to hide their performance and the truth will be revealed. Why are these Gurus not doing it? Why???

Read more on TA or FA?

Olam

Want more money in our pocket?

Just For Laugh ....

How?

1. Work harder and longer
2. Take more risks and leverage up
3. Get luckier

Any other way?

SEMBCORP DELIVERS HEALTHY 9M2011 PERFORMANCE

Highlights from Sembcorp’s 9M2011 Financial Results


• Turnover at S$6.8 billion, up 2%

• Profit from Operations* at S$925.7 million, down 2%

• Net Profit before EI at S$557.4 million, up 5%

• Net Profit after EI at S$557.4 million, down 1%

• EPS at 31.2 cents

• ROE (annualised) at 18.1%

– Strong operating results from the Utilities business


– Utilities business achieves strong profit growth of 22%


SINGAPORE, November 4, 2011 – Sembcorp Industries (Sembcorp) achieved a healthy 5% increase in net profit (Net Profit) attributable to shareholders of the Company before exceptional items for the first nine months of 2011 (9M2011). Group Net Profit increased to S$557.4 million from 9M2010’s S$532.1 million. This excludes the Group’s share of Marine’s exceptional item of S$32.1 million in 9M2010. The Utilities business sustained its strong performance into 9M2011. Net Profit grew 22% and contribution to the Group’s Net Profit increased to 38% compared to 31% last year. The Marine business achieved a Net Profit of S$317.9 million compared to S$347.0 million in 9M2010.

Return on equity (annualised) for the Group was a healthy 18.1% and earnings per share amounted to 31.2 cents for the period. Economic value added was a positive S$456.6 million while cash and cash equivalents stood at S$2.7 billion.

In 3Q2011, Group Net Profit increased 5% to S$222.4 million. Utilities delivered a strong 33% increase in Net Profit to S$78.8 million, growing its contribution to the Group’s Net Profit to 35% from 27% in 3Q2010. Marine’s 3Q2011 Net Profit was S$135.2 million compared to S$148.4 million last year.

Mr Tang Kin Fei, Group President & CEO of Sembcorp Industries, said: “Over the years, the Utilities business has grown and increased its contribution to the Group’s Net Profit from less than S$50 million ten years ago to over S$200 million today. We intend to further grow and expand our Utilities business through the implementation and completion of projects under construction and securing new growth opportunities. Together, the Utilities and Marine businesses will form a strong solid base to deliver sustainable earnings to our shareholders."

Playing The Game of Leverage (10) - Counterparty Risk in Trading CFDs

Read? Playing The Game of Leverage (9) - CFD

Counterparty Risk in Trading CFDs

How many retail traders or "investors" bother to know or even aware of counterparty risk in trading CFDs. Most of the time bad thing happens so fast that we aren't aware of it or too late to react.

Read? Counterparty Risk in Trading CFDs

Any financial instruments that required margin call can cause you to lose more than you can safely handle and there is also counterparty risk. Unexpected bad event does not happen once but can happen in a row of bad events.

HYFLUX POSTS S$12.6 MILLION NET PROFIT FOR THIRD QUARTER

• Revenue comes in at S$87.7 million, with Asia contributing 70%

• Lower profit due to higher staff and finance costs for gearing up Tuaspring Desalination Plant project in Singapore

• Strong cash position at S$768m will allow the Group to capture future opportunities

Rotary Engineering reports net profit of S$22.7m on revenue of S$401.1m

As at 30 September 2011:


 Order book: S$758m

 Cash position: S$130m

 Net assets: S$301m
 
MAINBOARD-LISTED ROTARY Engineering


Limited (罗德里工程有限公司) (the Group or Rotary), a leading provider of engineering, procurement, construction and maintenance (EPCM) services to the oil and gas and petrochemical industries, today announced results for its nine months ended 30 September 2011. It turned in profit after tax attributable to parent of S$22.7 million compared to S$37.8 million a year ago, on the back of revenue of S$401.1 million relative to S$544.7 million previously.

Despite the decrease, the Group recorded a slight improvement in gross profit margin of 21 per cent. Earnings per share stood at 4.0 cents for the nine months to 30 September 2011.

With two significant EPC contracts in the Middle East, Saudi Arabia continued to be a major contributor to the Group’s revenue, accounting for 62 per cent, followed by Singapore at 28 per cent, and the rest from ASEAN and other markets. The two projects in the Middle East that Rotary is currently working on are: a US$745 million EPC contract from Saudi Aramco Total Refining and Petrochemical Company (SATORP) in Saudi Arabia, and a US$250 million contract for Fujairah Oil Terminal in the United Arab Emirates.

Q2 FY12 Performance Highlights:

• Consecutive 12 quarters of high revenue growth with total revenue reaching US$62.2M (71% year-on-year growth)

• Sales of Interventional Cardiology Products (“IVP”) recorded robust year-on-year increase of 31% at US$38.4M, driven primarily by the strong sales of the Company’s flagship BioMatrix™ family of drug-eluting stents (“DES”)

• Net profit increased 171% year-on-year to US$22.9M

• Completed acquisition of the remaining 50% equity in JW Medical Systems Limited (“JWMS”) on 3 October 2011

• Terumo Corporation, the Company’s licensing partner, continues to record strong revenue growth after it commenced sales of the Nobori DES in Japan in May. This led to a five-fold increase in licensing revenue, year-on-year, for the Company

Margin Account for leveraging - Unexpected risks and losses!

Worried Singapore investors descend on MF Global office


SINGAPORE - Retail investors in Singapore trying to salvage their doomed investments from the local MF Global office were left frustrated and empty-handed on Wednesday after they were told their trading positions were closed and their funds were frozen.

Dozens of worried local investors lined up at the MF Global office throughout the day seeking to recoup their money, but all they received was a form to complete after being told no money would be disbursed until liquidators wound down the bankrupt US brokerage.

'Of course I'm afraid I may not get back anything, that is why I am here,' said Andre Chia, a 32-year-old pilot. 'I'm waiting for the liquidation, MAS (Monetary Authority of Singapore), maybe I'll end up at the Speakers' Corner,' he added, referring to the only place in Singapore where protesters can gather without a permit.

In the wake of the collapse of Lehman Brothers in 2008, hundred of Singaporeans gathered at Speakers' Corner to protest their losses from mini-bonds linked to the failed US bank.

Liquidators from KPMG have assured MF Global customers in Singapore that they are working to ensure all money in client accounts is returned to them.

However several investors vented their anger that they were closed out of trading positions at a loss, with no option to wait for the market to turn.

'I feel uneasy, I don't know how much I will lose. If I have to cut losses, I have to know how much I will lose,' said 57-year-old John Wong, who had invested around S$8,000 (US$6,259) with the brokerage.

Around 20 investors went to the office on Wednesday afternoon, while local media reported that at least 60 people converged on the premises that morning.

But the concerns were not confined just to MF Global clients in Singapore, where retail investing is hugely popular. Several other brokerages in the city-state used the US firm as a counterparty to their contract-for-difference (CFD) products, a popular retail investment product.

AMFraser said on its web site that from Nov 1, MF Global stopped all trading in CFDs.

'As such, we have no market access and clients will not be able to close out CFD positions for the time being,' it wrote in a note to clients.

Brokers Kim Eng and CIMB also had to freeze access to their CFD products, although Kim Eng said on its web site on Wednesday that it had restored limited access to allow positions to be unwound while CIMB told clients to contact them.

The Monetary Authority of Singapore said in a statement released on Tuesday that it will work with MF Global Singapore and the liquidators to achieve an 'equitable treatment of all stakeholders.' -- REUTERS

DBS' Q3 net profit up 6%

SINGAPORE: Singapore's biggest bank, DBS Group, reported better than expected earnings for last quarter and said it is well placed to ride out the economic storm.


Net profit rose six per cent in the three months to September 2011 from a year ago to S$762 million.

The bank benefited from strong loan growth which propelled a 13 per cent rise in net interest income.

Bad debt charges rose 18 per cent and the bank has more than doubled the funds set aside for under-performing loans, in a sign that it is expecting more customers to face difficulty in meeting their debt commitments.

DBS said it has no exposure to peripheral countries in Europe such as Greece which is battling a fiscal crisis, while its China loan portfolio is sound.

- CNA/fa

Playing The Game of Leverage (9) - CFD

Read? Playing The Game of Leverage (8)

MF Global S'pore to be wound down

"All investment or trading usng leverages by nature are high risk as you may lose more than expected." - Createwealth8888

ST, Wed, Nov 2

Mdm Tan said that her life savings of more than $100K are invested in CFD with MF Global.

Her worry now: "Now my worry is not just that I can't take back my money - I've also incurred debt," she said, adding that yesterday alone she had already chalked up $40K of debt from her open positions as the markets fell. " I play long so I did not place any stop loss orders .. right now my heart is bleeding."

Createwealth8888:

All of us like to make more money; but some will like to make money without losing sleep. It is better to lose what we can lose and not losing sleep than trying to make more money with nightmares. When bad things happen in a row; you will be losing your sleep and bleeding in your heart.

Master the Art of Formless Form - The Greatest of All Kung Fu in Investing (2)

Read? Master the Art of Formless Form - The Greatest of All Kung Fu in Investing

How do I master Formless Form?

From Wuxiapedia


Let us continue the story ...

Dugu Qiubai's Martial Arts Philosophy


In his Sword Tomb, it is stated:


"The Demonic Swordsman Dugu Qiubai has become the invincible and unchallenged warrior under Heaven, he therefore buried his swords here. Alas, the heroes of the realm bowed down before me, now my long sword is of no use anymore... the agony!"

"Fierce and aggressive, able to penetrate every obstacle. With it, I competed with the heroes of the Northern Plains during my teenage years."

"The Violet Flexible Sword, used it prior to the age of thirty. I accidentally wounded a righteous man with it, it turned out to be a Weapon of Doom. I felt great remorse and abandoned the sword in a deep valley."

"The Heavy, Blunt Sword, complexity is useless. Before I reached the age of forty, I used it to roam the entire Empire under Heaven."

"After the age of forty, I no longer relied on weaponry. Trees, bamboo and rock can all be my swords. From then on, the essence of my cultivation slowly reached the level of overcoming the sword without a sword."

Dugu Nine Swords favors formlessness so that it can assume all forms and, since it has no style, Dugu Nine Swords uses all ways and is bound by none and, likewise, uses any techniques or means which serves its end. In this art, efficiency is anything that scores. (Createwealth8888: Your XIRR or CAGR that matters the most and not the form i.e. your method. Efficiency and productivity of your capital)


Expression is not developed through the practice of form, yet form is a part of expression. The greater (expression) is not found in the lesser (expression) but the lesser is found within the greater. Having "no form", then, does not mean having no "form". Having "no form" evolves from having form. "No form" is the higher, individual expression.

In Dugu Nine Swords, all technique is to be forgotten and the unconscious is to be left alone to handle the situation. The technique will assert its wonders automatically or spontaneously. To float in totality, to have no technique, is to have all technique.

The Moral of the Story

Here the bad news!

There is no short cut to master Formless Form. You have to work on it for many years to transform from Form to Formless Form.

In my own personal experience, I have spent many years reading tons of TA books learning from Dr A, Mr B and Guru C and tested many TA indicators, ABC here and ABC there, double screen here and triple screen there all with real money and real trades. I realized all these Form doesn't work for me as I was still losing money. Finally, I gave up and forget all of them. Now I do it without any TA indicators. When I see. I like. I do it.

Why become Master Trainer in forex, trading or investing?

Read? Is it too easy to be a forex trainer?

Read? Can trader keep on winning?

Jesse Lauriston Livermore and Richard Dennis were two great traders and true to themselves. They were real life-long trader who lived by the sword and at the end the market was too smart and they finally were slaughtered by their sword.

Livermore and Dennis could have made tons and tons of money by conducting trading courses round the world; but they didn't.

Guess who become Master Trainer and shouting to you that you can trade for a living or trade or invest into financial freedom. Wake up, my friend. Real life-long traders don't teach for a fee!