Noble - next entry?

Noble - Sold @ 0.895 ROC 7.1%

Noble provided the weekly allowance again. For month of Nov, Noble has provided three weekly allowances.

Round 1: ROC 16.3%, 28 days
Round 2: ROC 31.6%, 20 days
Round 3: ROC 7.1%, 8 days

Looking forward for Round 4. This is what I call the true Margin of Safety for my next trade on Noble.

A series of successful short term trading is a strategy that provides true Margin of Safety for long term investing on that counter.

Your First Million Is the Toughest

by Chuck Saletta

The old saying that the rich get richer is very true. As long as you manage your money well, it's far easier to make money if you've already got some cash socked away than it is to start from scratch. The reason is simple: compounding.
When you've already got money working on your behalf, each percentage point of return simply adds that many more dollars to your account balances. After all, if a stock you own goes up in value, it's far better to own 10,000 shares than it is to own 100.

Start small

Fortunately, anyone with even a little cash to invest can take advantage of the power of compounding. It just takes a little while longer for the rest of us to get to the point where it can really work its magic.

To show how it works, here are a few charts that showcase how many years it takes to reach each $1 million threshold given that you regularly invest and earn a decent rate of return.

To go from $0 to $1 million:

Monthly
Contribution 8% Return 9% Return 10% Return 11% Return
$100 52.9 years 48.3 years 44.5 years 41.4 years
$250 41.6 38.3 35.5 33.1
$500 33.4 30.9 28.8 27.0
$1,000 25.5 23.9 22.4 21.2
$1,291.66 22.8 21.4 20.2 19.1

To go from $1 million to $2 million:
Monthly
Contribution 8% Return 9% Return 10% Return 11% Return
$100 8.6 years 7.7 years 6.9 years 6.3 years
$250 8.5 7.5 6.8 6.2
$500 8.2 7.4 6.7 6.1
$1,000 7.8 7.1 6.4 5.9
$1,291.66 7.6 6.9 6.3 5.7

To go from $2 million to $3 million:
Monthly
Contribution 8% Return 9% Return 10% Return 11% Return
$100 5.1 years 4.5 years 4.1 years 3.7 years
$250 5.0 4.5 4.0 3.7
$500 4.9 4.4 4.0 3.6
$1,000 4.8 4.3 3.9 3.5
$1,291.66 4.7 4.2 3.8 3.5

That $1,291.66 number didn't come out of thin air -- it represents the current maximum monthly contributions available in a 401(k) or 403(b) account for most people. What these charts mean is that you can go from $0 to $3 million in as few as 28 years with a little bit of determination to take advantage of the opportunities you have available. Most of that time is spent getting to that first million. Once you hit that milestone, compounding really takes over to help you reach your ultimate goal.

Get from here to there

The most difficult part is getting started. After all, if you're not already saving money now, going from $0 to nearly $1,300 a month may seem an impossible task.

Fortunately, though, you can get some major assistance in your quest to invest.
For instance, any money you contribute to your traditional 401(k) or 403(b) plan to help you earn your millions will most likely come with an immediate tax reduction. Thanks to that tax break, it's as if Uncle Sam will kick in a significant chunk of that cash on your behalf, reducing the total out-of-pocket cost of your contribution. For folks in the 25% tax bracket, it works out to an out-of-pocket cost of only $75 per $100 of contributions -- a significant savings.

You really can get rich

Once you get started investing, though, the rest is largely a matter of owning solid companies and letting compounding work its magic. Over the past 20 years, for instance, the following companies have all produced decent returns:
Company Price on
8/10/1987 Price on
8/10/2007 Dividends/
Spin-offs Annualized
Return
Boeing (NYSE: BA)
$11.36 $98.44 $12.54 12.1%
United Technologies (NYSE: UTX)
$7.35 $73.08 $8.22 12.8%
Fannie Mae (NYSE: FNM)
$2.73 $66.46 $17.12 18.7%
Wendy's (NYSE: WEN)
$11.25 $30.80 $42.23 9.8%
PepsiCo $6.58 $67.95 $13.31 13.4%
General Mills (NYSE: GIS)
$10.24 $55.34 $18.70 10.4%
Automatic Data Processing (NYSE: ADP)
$6.31 $48.42 $10.98 11.9%
All values split-adjusted.

Those solid returns came from companies that were already fairly well known, even 20 years ago. Better yet, owners of those stocks earned those returns in spite of short-term problems like Fannie Mae's accounting issues and the effect that September 11 had on air travel.

This goes to show that you don't have to buy the perfect companies to receive solid returns and build your wealth over time. What matters most is freeing up the cash to make those regular investments.

The two most important parts of getting to -- and past -- your first $1 million in investments are a bit of time and regular contributions of cash.

Stuck in long term investing - What is the Opportunity cost in investing?

I would define Opportunity cost in Investing as the loss of chance of compounding your available investing capital and gain of the next best alternative stocks foregone as the result of staying invested in a losing position held for many years; whether it is due to silly stubborness and cannular conviction.

As the Market changes, and very often sectors are rotated into favour or out of favour. Likewise, we should also be flexible and evaluate the Opportunity cost and continously adjusting the portfolio to the flow of the Market and allowing the effect of compounding to work for us and then accumulating profit to offset against losses.

BTW, it is your money. Who care!

Tales of fortunes made and lost in recessions

Tales of fortunes made and lost in recessions
Success can be one of life's worst enemies. It engenders overconfidence and, as a result, one tends to let one's guard down - in some instances, to the extent of recklessness


By TEH HOOI LING
SENIOR CORRESPONDENT

MARKET crashes are the greatest redistributor of wealth. This has been true of previous crashes. But in the current turmoil, there are few beneficiaries, a friend noted. It is more a great destruction of wealth on a global scale so far.

A recession is a good time to start a business as costs are low. Disney, Microsoft, Hewlett-Packard, Oracle and Cisco are some of the companies that were founded in downturns.
Well, okay, some short-sellers may have profited from some of their trades. But many get wiped out in their next trade. Perhaps it is those who are not invested at all and who have the cash to pick through the carnage in the next few years who will really come out ahead. Who knows? Nobody is certain of anything anymore.

A lot of people have been hit hard this time around. There are a few reasons for this. One, prior to this, we've had four years of a bull market where prices had gone in only one direction. Success, notes a friend, is one of life's worst enemies. It engenders overconfidence and, as a result, one tends to let down one's guard - in some instances, to the extent of recklessness. Economist Hyman Minsky sees the cycle of risk-taking in the economy as following a pattern: stability and absence of crises encourage risk-taking, complacency, and lowered awareness of the possibility of problems.

But even for those who are conservative and have their heads centred and feet firmly planted on the ground, the economics just a few months back suggested that being invested was the right course of action. Then, inflation was running at 5 or 6 per cent and banks' interest rates were at less than one per cent.

For someone who didn't want to have his or her purchasing power eroded, keeping the money in the bank wasn't the most logical of options. Which was why a lot of people are invested - and, worse, a lot took loans to invest. If the borrowing cost was so low, and one was expecting to make a return higher than that cost of borrowing, it made sense to borrow.

If one were to assume risk, let it be with capital that one will not need for at least 3-5 years. In the meantime, be grateful for what you have - be it your health or time with your family.

Of course, we know now that a lot of people had underestimated or even ignored the risk of trying to earn those extra percentage points of returns.

A friend shared with me some of the horrendous stories of how an enormous amount of wealth was destroyed in the last few months.

Up till last year, one man had $100 million of his worth in only one stock. Towards the end of last year, that stock started to decline. By early this year, the stock was down more than 50 per cent from its peak just a few months before. The man picked up quite a few additional shares - on margin - thinking that the stock had bottomed and would eventually rebound. Since then, the stock has plunged by another 80 per cent. The $100 million is more than wiped out! The stock is Cosco Corp, which went from 10 cents in March 2003 to $8.20 in October last year - an 82 times jump. It is now trading at less than 70 cents.

Another guy had relatively much more modest means. His net worth was estimated at $2-3 million. He heard from 'reliable' sources that a particular company would be taken over by another at a significantly higher price than the stock's then market price. He bet all he had and, if I remember correctly, also took margin financing to buy that stock. The stock was FerroChina, which has since been suspended because it had run out of money to pay its suppliers and debtors.

One value investor thought Thailand was cheap a few years back. One particular company, a very big one, was trading at 1.2 baht - significantly below its book value. The investor concentrated his bet on that company. And, indeed, the market began to recognise the value of the company and the stock tripled to over 3 baht. The value investor's portfolio grew to $26 million. In the last year or so, the stock has plunged to below 0.7 baht. The investor is now down some 50 per cent on his original capital.

Another man was shrewd enough to think that the market was overvalued towards the end of 2007. So he got out of the market, and even shorted it. He was happy that the market went the way he predicted. He was the smartest guy in town.

By June or July, thinking that the market had fallen enough, he loaded up on shares. Like the guys above, he too used margin financing to pick up the shares. As we know, the market took an even more severe turn in September and October. He too was dealt a severe blow.

A friend was also bearish about the market towards the end of last year. He had put in some shorts. Then last October, the market went on to hit record highs. He lost his resolve, and reversed his trades and got hit as well.

Another made quite a bit of money in the Singapore market. His confidence grew. He wanted a bigger stage. He bought US shares on margin. US stocks took a precipitous plunge a few months back. He has had a few rounds of margin calls.

A young banker in his late 20s made $2-3 million from the property market in the last few years. He ploughed all the profits into a $10 million property, and took loans of some $7 million. He's now saddled with a mortgage payment of some $30,000 a month.

Many of the real-life examples above show just how lethal leverage can be. In a rising market, leverage is your friend; in a down market, the blow dealt by leverage can knock one out for good.

Perhaps another lesson is to always take some profit off the table. Today, the valuations of stocks are at levels unseen in years, if not decades. 'It is at times like these, when there is a lot of fear, that one can make three or four times return on your capital,' a friend said.

Yes, we all know that. But so far this year, every time one thinks that fear is at its maximum, it moves up another level. And another problem is that a lot of investors have run out of money to buy. A lot of the 'liquidity in the system' before the crisis was from loans; now, that has dried up.

In any case, whether a stock is cheap or not is still debatable. According to State Street Global Markets, its global Investor Confidence Index® for November fell another 1.4 points to a historic low of 57 points. Commenting on the index, Andrew Capon of State Street said: 'Investors face a difficult dilemma. On the one hand, equities are cheap. Using earnings adjusted for leverage and cyclicality, the equity strategy team at State Street Global Markets estimates that the US price-earnings multiple is 26 per cent below its 147-year average.

'These are levels seen only in periods of extreme dislocation such as the Great Depression, World War II and the 1870s. On the other hand, nobody can be confident that this current economic slowdown will not turn out to be just such a period rather than a more typical recession. 'So far, during this crisis, it is the bleakest forecasters who have been proved right.'

Indeed, we are in unprecedented times now. The euro area and Japan are now officially in recession. Even without the US officially joining this unhappy club, countries representing close to 50 per cent of global GDP are now seeing growth contract, noted Mr Capon. Consensus economic forecasts for GDP growth in the developed world have been falling for 16 months and are at 20-year lows.

Growth in the last seven years or so was propped up by debt-financed consumption from the US. And Asia has built up tremendous capacities to cater to that growth. Now, that consumption has contracted because the enormous financial leverage has to be unwound. That deleveraging process and contraction of consumption will drag on for some time because income has also diminished - if not totally disappeared, given the waves of job losses.

In Asia, companies have to deal with all the excess capacities and the vanishing demand. Many companies will go bust. Jobs will be lost, pay cut. In China, the hardship could trigger social unrest. It could be apocalyptic. We just don't know what will happen in the future.

But the fact is that we are now in the throes of a crisis and that itself may colour our judgment. 'Last year, it felt like the sky was the limit; now, it's like we are sinking into a bottomless pit,' said a friend.

Back to what economist Hyman Minsky says about the cycle of risk-taking: stability encourages risk-taking and complacency. But when a crisis strikes, people become shell-shocked and scared of investing their resources. People also often overestimate the probability of the worst-case scenario after a crisis has occurred.

So, for the optimists out there (if there are still any left), here's an inspiring story.

In 1939, with Hitler's Germany ravaging Europe, John Templeton - who believed in buying into companies at points of what he called 'maximum pessimism' - bought US$100 of every stock trading below US$1 on the New York and American stock exchanges.

Templeton's trade got him a junk pile of some 104 companies, 34 of which were bankrupt, for a total investment of roughly US$10,400. Four years later, he sold these stocks for more than US$40,000! Only four out of the 104 became worthless.

Yet another positive spin. A recession is also a good time to start a business. Costs are low. But it is not a good time to do financial deals - that's for a bull market, an investment banker told me recently.

Indeed, in a downturn, established firms tend to cut back on their growth investments to focus on defending their established core activities. That will create niches to be served by smaller companies. And once the start-ups develop to a certain size and the general economy picks up, there will be no lack of big company buyers that are willing to absorb these start-ups into their fold. That fits into the theory of starting a business in a recession and selling it in a bull market.

Well, here are some of the companies that were founded in downturns: Disney, Microsoft, Hewlett-Packard, Oracle and Cisco. There is no lack of examples in the local context as well. The first Sakae Sushi outlet was set up in September 1997. Financial PR, one of the largest investor relations firms in Singapore, was founded in August 2001.

Over the next year, there will certainly be more people forced to work for themselves because they will lose their jobs and not be able to find other suitable employment. And it will be no surprise if some of the talented people now unable to find work in an investment bank or other big company direct their energies towards creating a new generation of successful start- ups, said The Economist in a recent article.

I'm sure we all know of friends who created businesses which are now worth millions of dollars because they decided to venture out on their own after being retrenched. Retrenchment can be a blessing in disguise for some.

The key, I guess, is not to lose hope - despite how bleak the outlook may seem now. And if one were to assume risk, let it be with capital that one will not need for at least 3-5 years. In the meantime, be grateful for what you have - be it your health or time with your family.

The writer is a CFA charterholder

HOLDING POWER AND GUTS

Temporary putting aside FA and TA, it is all about holding power and guts. Easy money can be made or lost in hours if not days. Amazing market. Full of fearful and the fear-not.

Why I go fishing?

Fishing and the Stock Market

1. Be on the lake when the fish are feeding. (Know what sectors the market likes.)

Opportunity

2. Don't go fishing when the lake is packed with tourists. You probably won't be able to get near your favorite fishing hole, and even if you do, all those churning propellers will scare the fish away. (If everyone is playing the same stock idea, the easy money has already been made.)

Risk is higher when buyers already push up the share.

3. Come prepared with well-maintained fishing equipment, an adequate supply of bait, lures and sharp hooks, and an extra supply of patience. (Give your best ideas time to work, but don't use margin to see them out.)

Do your homework, i.e. have some profit target and action plan.

4. Don't make noise; you will scare the fish away. (Fidelity never speaks; why should you?)


Buy before others rushing in.

5. Don't fish where there are no fish. Know the structure of the lake and the habits of the fish you are trying to catch. Electronic fish finders can help you locate fish, but it won't make them bite. (If no one else is buying, why should you? Catching falling daggers can kill a dip-buyer.)


Don't waste time on those share that Big Boys are not interested.

6. Despite your best preparations, sometimes the fish just won't bite. (Don't be discouraged; go back to shore and enjoy the day, then come back another time.)

Be patient

Even the best traders are only 60% right. (Just make the winners big ones.)

7. Sometimes you find yourself in the middle of a school of feeding fish. Keep your hook baited and in the water. Correct equipment problems quickly, and get the bait back in the water. (When your stocks are running up, stay with the trend.)

8. When a big one takes your bait or hits the lure, set the hook firmly, keep tension on the line at all times and play the fish until it tires. Keep the landing net out of sight. (Don't sell winners too soon.)

Sell 50% first and let the stock run than sell others later.

9. When a really big one breaks your line, take it in stride. He may still be in the area, so always have a backup fishing outfit aboard. (If a market decline washes out a group, get ready when the group takes off again.)


10. Know when to come back to shore, particularly when whitecaps start to appear or there are storm clouds in the distance. (If the market gets crazy, go to cash while you figure things out.)

Noble - Got @ 0.83

Wow, heavy selling!!!

Noble - Will it break support tmr?

A Little Investment Secret ... It's All About YOU

This post is from Michael Yoshikami, President and Chief Investment Strategist of YCMNET Advisors, a wealth management firm:
Kathy Willens / AP
--------------------------------------------------------------------------------


The rollercoaster ride continues. We shriek as the market pitches and heels – but the ride’s not over yet. This rollercoaster ride isn't fun anymore. While my kids might like the thrill of fear, I'm no fan of it. And I’m guessing the average investor’s not liking it either.

Well, here's a little secret that’s built investment empires through the years. Employ this piece of advice and you’ll find yourself in control rather than wandering aimlessly, listening to so-called experts telling you what to do.

YOU decide what to do.

Make investment decisions based on what's important to you. What do you believe? You decide. After all, it's only your financial future here at stake, right? And in the end, no one else will care more for your finances then YOU.

That's the secret. You decide.

Decide what’s important to you and then listen to yourself. And be skeptical. Understand that every voice you hear has a framework, which, may or may not suit your needs. Take for example, Warren Buffett.

Warren Buffett Watch
Oh, to be Warren Buffett. He has made and lost billions. One day's market move for Berkshire Hathaway often totals in the billions of dollars. When he says to buy, do you think he is concerned about what will happen next week or next year? Nope. He's looking at fundamental value, and he can afford to take a hit for a long time frame. He can afford to wait and simply stroll down to Dairy Queen for an ice cream.

What about you? How long can you wait? Warren Buffet says to be greedy when other people panic. Well that sounds great except that he lost $10 billion last month but still has $30 billion to fall back on. So let’s get to the real question -- Do you agree with the philosophy that says you can be patient and wait for value to emerge? Are you able to have a hot fudge sundae and let it pass?

Decide and follow your best judgment. Don't avoid making decisions -- that can be a disaster. Like a deer caught frozen in the headlights of an oncoming car, investing from this perspective makes little sense and will likely get you the same result -- trust me it doesn't work out well for the deer.

What is YOUR philosophy? It's been oftentimes said that if you don't stand for something, you will fall for anything. Psssssst ... this applies in investing as well. So pause and answer these questions:

Is the economic world coming to an end or is this a shorter-term challenge?

When do you need to pull out money?

How much pain (fluctuation down) can you take before you panic?

The last time you panicked, what did you do and how did that work for you?

Figure out what you believe, your time horizon, the direction of the economy and your willingness to endure pain/pleasure. This will unlock the key to an investment strategy that’s right for you. And really in the end, aren't you sick of listening to everyone telling you what to do especially when it changes every 15 minutes? Be free now. Read and listen with curiosity not desperation.

You'll sleep a whole lot better.

Leverage and Greed - Double edged sword

One has $200K investing capital to invest, but not enough to invest on an asset of $1M. One becomes greedy and want a multi-bagger ROC (return on $200K capital). This can only be achieved by taking excessive risks, through leveraging (i.e. borrowing several times of one's initial investing capital of $200K).

If one is overly greedy and is leveraged more than 10, 20 or 30 times their annual earning, (30 times is maddness) and thinking one has control over future earning like a man who has plenty of drinks and still thinking that he has control over his driving.

Assets in your portfolio

Make sure the assets in your portfolio suit your needs and your personality, just your furniture fit your living room and your own individual style.

If you have a large and fully air-con living room, by all means fit in a really big, leather sofa set, and a 60" wall mounted LCD TV and enjoy yourself.

If you have a small living room with no air-con, try to fit in a really big, leather sofa set, and a 60" wall mounted LCD TV. Are you really enjoying yourself? See how long you can sit in your sofa without getting heated up (credit squeeze happen, will happen again). Are you going to have a stiff neck and shoulder watching 60 " LCD TV from a short distance? (Investing in property is like putting your big eggs in one basket at one big bang, leveraged or some overleveraged to seek high debts for one big single return)

Choose your assets wisely, and do not follow others blindly because our living rooms are of different size.

Noble

Thinking of Risks before Profit

It is very important when investing to think of risks before profit, whether in stock or property investing. Do we need to learn through the painful way of losing huge sum of money before we learn how to think of risks before profit.

Also there is such no investment that is low risk, and moderate return; otherwise, this investment will definitely be overbought by the Market and return will be significantly reduced or out of stocks.

In another word, for better return, higher risk is expected, and chance of losing your invested capital is real, and can happen unexpectedly.

Think of risks before profit.

1) How much I could lose without hurting me financially, if not to reduce the investing capital to the level that is not hurting.

2)For smaller capital, one could take higher risk as one could have not much difficulty in restoring the lost capital through more aggressive saving or reduced expenses to rebuild the investing capital to resume investing. Investing is a marathon, once started, no matter how, one have to stay invested; otherwise, there is no chance to recover those losses through return on safe financial instrument like fixed deposits. For bigger capital, one will have to take lesser risk approach and diversify the risks, it will be harder and take longer time to rebuild capital back to this level again.

3) If one thinking of using leverage (borrowing or taking loan to buy property), it is better to consider the numer of times of leverage against your annual earned income. Do you want to be 20 or 30 times leveraged? Look at those bankruptcies, they all killed by overleveraged. Period.

4) Long term investing does not mean no risks. In the market, corporate raiders are constantly prowling the Street to take companies private. It is not wise to overweight one counter to more than 40% of your portfolio. Overweight is a double edge sword, it can boost profit signicantly but it can kill too.

The market is not your mother.

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

Noble - to buy back

Likely, tommorrow, it will break its support and trigger stop losses. See any chance to get some at 0.85 - 0.80?

Your Money or Your Life

There was a Wall Street analyst by the name of Joe Dominguez who saved enough money to retire at 31. He spent the rest of his life enjoying himself, doing volunteer work, and writing a book called “Your Money or Your Life”

We aren’t making a living, we are making a dying. Consider the average American worker. The alarm rings at 6.45 and our working man or woman is up and running. Shower. Dress in the professional uniform – suits or dresses for some, overalls for others, whites for the medical professions, jeans and flannel shirts for construction workers. Breakfast, if there’s time. Grab commuter mug and briefcase (or lunch box) and hop in the car for the daily punishment called rush hour.

On the job from nine to five. Deal with the boss. Deal with coworker sent by the devil to rub you the wrong way. Deal with suppliers. Deal with clients/customers/patients.

Act busy. Hide mistakes. Smile when handed impossible deadlines. Give a sigh of relief when the ax known as “restructuring” or “downsizing” – or just plain getting laid off – falls on other heads. Shoulder the added load. Watch the clock. Argue with your conscience but agree with the boss. Smile again. Five o’clock.

Back in the car and onto the freeway foe the evening commute. Home. Act human with mates, kids or roommates. Eat. Watch TV. Bed. Eight hours of oblivion.

And they called this making a living? Think about it. How many people have you seen who are alive at the end of the work day than they were at the beginning? … Aren’t we killing ourselves – our health, our relationships, our sense of joy and wonder – for our jobs? We are sacrificing our lives for money – but it’s happening so slowly that we barely notice.


You have enough for your survival, enough for your comforts, and even some special luxuries, with no excess to burden you unnecessarily. Enough is a powerful and free place. A confident and flexible place.

Become conscious of your expenditures. Stop trying to impress people with your possessions. They are not paying attention because they are too busy trying to impress you. Pay off all your debts, including your mortgage. That’s not too hard once you reduce your expenses.

Stock Picking: FA or TA or Both?

Stock picking is part science (FA), part art (TA), part luck, part intuition, and always uncertain - "not precisely knowing."

Because of these inherent subjective elements, success investing depends on understanding our emotional reactions to the market and its participants. Buried in these emotional reactions are both investment errors and investment strengths that remain mostly unconscious unless we devote substantial energy to unearthing them and then leveraging what we learn about ourselves into profitable decision-making.

Young Investors should be thankful to Mr Bear

Young investors should be thankful to meet Mr Bear while they are young and they may have not accumulated more investing fund from their income. If they were to meet Mr Bear 10 years later, they could have lost alot more in their portfolio.

SPC

Probably, some has missed Great SPC Sales. Got to wait for crude oil to crash again to buy SPC.

Can you wait that long?? 2020

-----------------
By 2020, China will produce more cars than the U.S. China is also buying its way into the oil infrastructure around the world. They are doing it in the open market and paying fair market prices, but millions of barrels of oil that would have gone to the U.S. are now going to China . China 's quest to assure it has the oil it needs to fuel its economy is a major factor in world politics and economics.

Value investor & Margin of Safety

Value investor diligently carries out fundamental analysis to determine the margin of safety for their entry level. But, I am thinking what if, the same value investor turns into a short term trader after the purchase, then sell into strength during this volatile bear market, and buy it back. Does this not significantly increase the margin of safety for the next purchase? What if he is successful for 15% gain, does not that increase the margin of safety by another 15% on top of the initial margin of saftety. Start thinking brothers... maybe I am talking nonsense leh

Noble

After selling off Noble, where is my entry now?

some news:

Company has purchased US$20,000,000 of its US$700,000,000 6.625% Senior Notes due 2015 ("Notes"), on 28 October 2008. Noble has instructed the Trustee to cancel the purchased Notes

Sold Noble at 1.05 ROC 28%

Next week allowance secured. Can relax a bit to catch the next fish. Cheers!

Sold some Noble ROC 17%

For past 4 weeks, no weekly allowances so jialiat. Cheers at last!

Get yourself financial educated to become savvy???

We can read, and read and then become very financially educated and will be successful in our investment. I don't think so. I believe that we will only be truly smarter, and financially wiser after going through at least one round of Baptism of Huge Losses, then we will become successful in investment.

So don't feel depressed in this Great 800 Pound Bear Market if you only previously encountered 1 Kg Teddy Bear.

Cold Winter will not last forever, Spring is nearer now and not farther. Cheers!

Noble - bloody hell! Punt more @ 0.80

Olam - Punted @ 1.37

Punting only. Will commodity be back in play due to weak USD?

Noble - Top volume today @ 75.8M

Tug of War, today. Probably, rotation to commodities play due to weak USD.

Commodities stocks did very well today. WMI, Olam, FRS, GAR, INDOAGRI

Noble - Got in at 0.91 during extreme market fear

Worst to come. Yes, probably. Snake catcher fear of snake bite. Maybe sometime

Extreme Cold Market testing your Fear Factors

This is going to be an extreme Cold Market that will be testing your Fear Factors again and again.

Be emotionally, mentally, and financially prepared to see yourself through for next three years, and don't get caught in the situation where you have to force sell some of holdings to fund your expenses or obligations.

Olam - Chew some nuts @ 1.68

Save for Tomorrow, Be Happy Today

Sponsored by
by Walter Updegrave,
Monday, September 29, 2008

Another reason to plan hard for retirement: It might cheer you up right now.

In a sense, retirement planning is all about deferred gratification. You live below your means while you work so you can save for a time when you can live however you want. In short, you give up something today so you can live better tomorrow.

But what if preparing for retirement had a more immediate payoff? Wouldn't it be neat if you could enjoy the fruits of your effort now?

Well, maybe you already do. That, at least, is the implication of a recent survey by insurer Northwestern Mutual and health education company LLuminari. The study didn't address retirement per se.

But as the charts below show, people who do the sorts of things that constitute good planning tend to feel happier than those who don't. It appears that the very act of preparing for retirement may deliver a reward now as well as later.

No one is suggesting that getting ready for your post-career days guarantees lifelong bliss or that there's a formula for achieving nirvana. (Save an extra $100 a month and be 50% more fulfilled!)

But the notion that taking steps toward a secure retirement can make you more content is hardly a stretch. Economists, psychologists and others who study happiness find that people who have a sense of control over their lives cope better with stress and live more happily, while those who feel powerless are more likely to be depressed.

Or as the playwright George Bernard Shaw put it: "To be in hell is to drift; to be in heaven is to steer."

So what can you do to make yourself feel better about feathering your nest? Apply these three happiness-linked actions to your retirement planning:

Set Goals

If you fail to set goals early on, you'll be drifting instead of steering. So think about the percentage of pre-retirement income you'll want to replace once you retire - say, 80% to 90%. Then use a calculator like our Retirement Planner to see how much you must save each year to have a shot at reaching that goal. Keep refining your savings target as you near retirement.

Take Steps to Achieve Your Goals

If the amount you're putting into your 401(k) falls short of your savings target, boost your contribution. If maxing out your 401(k) still leaves a gap, you can funnel additional savings into an IRA or tax-efficient options like index funds or tax-managed funds.

Control Debt

It's unrealistic to avoid borrowing altogether. But you can prevent debt from undermining your retirement security by not carrying a credit-card balance. Not only will you avoid onerous interest charges, but the Northwestern study shows that people who are most committed to paying off their cards are almost 20% more likely to describe themselves as cheerful.

So the next time you're trying to decide between a higher 401(k) contribution and a big-screen TV, you might want to go with the option that may make you feel good now and in the years ahead.

Retirement Drawdown and passive income investment plan

Can one retire comfortably at 55 if one has accumulated 25 years of overestimated expected annual expenses in one retirement fund; and taking inflation rate at 3%, and passive income coming from investment in 15-20 stocks of dividend yield of 7%. The spreadsheet has indicated it is possible. I believe as one grow older, it is likely to spend less on some areas but offset by higher spending in healthcare and medical.

One also must have some medical insurance, full medisave and special CPF account remain intact at 55 as contingency plan, and the final fallback will be selling of the residential home and staying in old age home or rental flat.

Singapore Past Inflation rate

We need to know what is the inflation rate for planning the retirement fund. Based on past historical inflation rate, average is 2.65%, probably using 3% is good estimate.

Freedom at 44

Freedom at 44

Last week, we discussed how retiring young and rich can be an attainable goal if one plans early and invests wisely. Today, we run a personal letter from RONALD HEE, who shows it is possible to become financially free as a hardworking salaryman, without needing to rob a bank or be a corporate high-flier

To the graduating class of 2008:

YOU are entering a world of amazing possibilities - possibilities that people of my generation barely believed would be possible. The world is, quite literally, your oyster. You also enter a world fraught with challenges and dangers, and ever rising costs of everything.

In our day, the options were limited, but inflation remained low most of the time, and there was job security. I still have friends who are in the same company since they graduated 20 years ago. For you today, inflation is roughly twice the interest the banks are giving you. You will probably change jobs every two to three years. And you can be fired from any of them at any time. Or, any company you work for could downsize or close down just when you least expect it.

So, for middle-class working Joes like us, does it mean that just to survive, we will be chained to our desks until the day we die - if we're lucky and not get replaced or downsized? Is financial freedom at the tender age of 44 - for you, 20 years of earning - an impossible dream? It really boils down to one simple formula. Earn more than you spend; invest what you save.

The first thing, of course, is to find a good job. There will be many, here and around the world. But don't rely on your company or your boss to take care of you. You have to take care of yourself, regardless of the profession you choose. Assuming you are not in the lucky handful who will inherit a fortune or get a job that pays you in the six figures, or win the lottery, the career you choose is what makes your path to financial freedom possible. But you have to plan that path.

Let's first look at the cost side of the equation. Buy what you need and some of what you want and know the difference. Do you really need a 200-inch high-definition plasma TV, complete with state-of-the-art home theatre system? And how many hours per day are you going to enjoy that system? Instead of spending tens of thousands on something you will use for a few hours a week, consider instead how that money could work for you.

One thing that surprises me about the younger generation is your propensity to spend on credit. Why buy things you don't need, with money you don't have? To impress people you don't like? Here's a crazy idea: Have the bank pay you interest for your money, rather than you pay the bank interest for their money. Twenty-four per cent interest? That's approaching loan shark rates.

Always, always, pay your credit card bills in full. Can't afford to pay? Simple solution. Spend less. Be low maintenance.

At some point, you'd probably want to buy a car. With an excellent MRT and bus system, and taxis when you need them, is it worth getting a car? Unless you have a real need - you're a salesman, you have a family to ferry around, your child is sick all the time, your mum is old, your girlfriend will leave you otherwise - the reality is that a car is simply not worth it. Over 10 years, a $50,000 car will cost you about $130,000, once you factor in petrol, road tax, repairs, car payments and interest on the payments, parking tickets, a few minor accidents... Again, it's better for that money to work for you.

Like most people, your biggest purchase will probably be a home. For most of us, our first home will be a government flat. Whether you buy public or private, consider buying something that you can continue to pay for, for at least six months, should you be suddenly out of work. If you don't mind the loss of privacy, consider renting out any spare rooms. It's not impossible for your rental income to match your mortgage payments.

Now let's look at the income side. Your basic fallback is your CPF account. Let's assume that by age 44, you've worked 20 years. Assuming an average of $1,000 a month, you will accumulate $240,000, not including interest. Invest it if you wish, but the main use of CPF should be to pay for your home, so your cash outlay is minimised. In 20 years, with $240,000, you could quite easily pay off your flat. With your spouse also chipping in 50 per cent for the flat, you should have more than enough.

If you've managed your expenses right, it's quite possible to save an average of $1,000 a month. This, of course, gets easier as you grow older and earn more. Put some away into a savings account as your rainy day fund, eventually building up enough to keep you going for six months or more. Put the rest in the hands of a good financial planner. This is someone who should be able to give you an average return of at least 10 per cent a year. The miracle of compound interest will yield you $756,030 at the end of 20 years, more than three times what you put in!

It's now 2028. Twenty years have passed and it's your 44th birthday. You are into your second or third home by now, or maybe even have a spare house, each time either breaking even or making a small profit. You have a healthy CPF balance that covers basic needs. You've taken care of some health risks by buying insurance policies when you were young and they were cheap. And your investment portfolio is chugging along very nicely, yielding around $70,000 a year, without depleting your capital, so it's sustainable for the long-term. $70,000 a year is equal to a tax-free monthly 'salary' of $5,800. Not too bad.

CPF + savings + especially your investments = financial freedom. Work part time. Start your own business. Do something else that pays a lot less but fulfils you more, such as church or charity work. Become a beach bum in Bali. Or travel round the world for six months. Financial freedom means the freedom to make these kinds of choices.

So, my young friends, my wish for you as you embark on the next stage of your life is that you will plan from the beginning to be financially free. May you have the discipline and luck to accomplish it!

Ronald Hee, 44, is a freelance writer, and just a little shy of financial freedom

It is selling that counts!

The market is made of buyers and sellers, and they have two different views from each other.

Two reasons to buy:

1) Right value, under value, or growth. The buyer is expecting the price to go up in the near, short or long term future, and depending whether you are traders or investors and also you are less worry that its price will crash.

2) Short covering

Fours reasons to sell:

1) Profit taking (no single reason why people take profits, it is just too complicated)

2) Cut losses

3) Forced selling (really painful, but ones have no choices under such circumstances)

4) Short selling

From the force of buyers and sellers, we know why market fall rapidly and climb slowly. There are potentially more sellers.

Then, why especially those hardcore value investors find it so hard to sell. Their common excuse is always: it is hard to time the market.

To accumulate wealth over time, we have to learn to sell and make profits. It does not matter who you are? Traders, investors, property owner, stall owners, business owner. It is selling that counts. Selling at profit, and take regular nett profit, sometime, we have to take losses to swap out really bad investment to a better ones. Without regular nett profit taking, we will not be able to witness the magic of compounding your gain. It is the magic of compounding that enable ones to reach your final goal of investing - your day of financial indpendence or freedom.

Why it is easier to buy than sell? Probably, buying is part of our nature. We buy, buy, buy as we consume. We always find reasons to justify to buy. Few of us are in the business of active selling so it is not in our nature to sell. Many of us are in the business of indirect selling of our time, energy, and talent.

So we can always justify our decision to buy a stock based on whatever methods we use. But, when it comes to selling a stock, it has become difficult. Why? Probably, it is not in our nature to sell. Selling a stock means we has made a conclusion to our easier buying decision. We want to avoid the seller remorse. Maybe we worry it can go up after selling, because it is difficult to time the market, the seller remorse will come to haunt us when it continue to climb higher, and higher.

When we buy, and hold, there is always hope, and it is this hope that keep us going. When we sell it, we terminate this hope and force us to look squarely at our easier buying decision. It can be really bad decision to sell and now we have lost the hope of making a fortune. Beat our heart and knock our head.

I think learning to sell and willing to give up hope is equally important to learning to buy and holding on to hope.

Selling can be as easy as buying. There will be chance to buy back and not necessary, we must buy at the last purchase price, but it can be higher too.

STI closed at new low at 2411

At 2411, it was down -37.8% from Oct 07 peak, duration 351 days.

The Capitulation has begun - Where is the bottom?


1996/1998 Down -68%, 941 days

2000/2001 Down -53%, 630 days

Full Time Trading QUESTIONS – HOW DO I START?

 Source: forgotten who is the author? Probably, I typed it out from a Trading Mazagine.

Protecting your capital, growing your capital and finding the best return. Where and how to start are common questions. Some people examine their current job with its heavy time demands and decide that the life of a share trader sounds easy in comparison. We look at some common questions about becoming a full time share trader.

Perhaps this is the wrong question. Like any skilled profession, full time share traders are relatively rare and they tend to work for institutions. Full time private traders are rarer still. It is a skilled profession, but unlike many professions, it also offers a part time component. The skill can be applied to a single trade, or to multiple trades.

Many people use trading as a part time occupation that delivers a full time income. I believe this is a useful approach. When I started trading I was working full time on a contract position. I was on call 24 hours a day, seven days a week, with formal office hours from 7am to 6 pm.

Time was at a premium, and I knew that I would prefer to work at a job that was not quite so time demanding. The shift from earning money to making money earn for you is important. Unless you accept that the objective is to make your money work for you, then your approach to the market is most likely to be a gamblers approach, looking for quick money. The trader develops a different view of the world, and the relationship between capital and income.

The typical example of this difference is between those who want to immediately develop a replacement income for their wages, and those who want to use trading to supplement their income. The latter group focus on the most effective use of capital. They are not after a big hit – the gamblers approach. They look for the best return on their capital rather than focus on the size of the dollar return.

When I first started, trading provided a very useful supplement to my income generated from my savings. Bank interest may have delivered an extra $2,000 a year. Active management of market investments may have delivered $10,000 a year, or more. Trading was clearly the best use I could make of my savings capital.

The chart shows some sample returns. The simple trading returns are those achieved by students in my recent 8 week trading course in Darwin. They made their selections in lesson 1 at a time when they knew little about trading the financial markets. We applied a simple trend trading strategy. It was their management of the trades, on a weekly basis, that delivered the results. It was an effective use of their capital.

Pursuing a part time occupation is not the same as turning it into a full time occupation. An extra $10,00 a year on top of my wages was a welcome bonus. It came from just a few hours a week, squeezed in between other job commitments. If I did not around to opening a new trade because I was too busy, it did not have a significant impact on my standard of living. If a trade took longer to develop than I expected then the lack of cash flow did not disrupt my weekly grocery shopping.

As a part time trader, I did not have to rely on the income generated from trading.Full time trading is an entirely different beast. There is no regular income from wages. Suddenly the pressure increases because many people feel the need to see a regular weekly income from their activity. They do not like dipping into their savings to meet the weekly food bills.

They believe they have to make a certain amount each week to at least match their old wage income. The tendency to gamble becomes much stronger as some trades are closed early simply to generate cash flow.

This pressure is even greater if you do not already have a substantial level of savings which you can draw on for living expenses when necessary.

In my case, when my three year contract finished I was making enough from part time trading to not have to worry about looking for traditional work. I took on full time trading only after I was able to prove that I could already make a living from it.
You become a full time trader by graduating from a part time trader when your trading income is equal to or greater than your current wage income. In this situation you will have already accumulated sufficient savings to make full time trading, with its irregular income flow, a real possibility of success.

But you do not need to become a full time trader to enjoy the benefits available from trading the market. Most people are able to very successfully use part time trading to provide an excellent supplement to their existing income. This may reduce the pressure to take on overtime, or make longer unpaid holidays are realistic option, or even hasten the drift towards part time work. These possibilities are all achievable when wage income is supplemented by part time trading income.

This approach is the most appropriate for most people, and for most readers of this newsletter. It is also a vital first step for those who aspire to full time trading.

Trading success is possible, but it is not for everyone. Treat it as a serious part time occupation first, and then make the transition based on success.

STI - What happen to you?

STI is becoming like London Bridge. London bridge is falling down, London bridge is falling down.

Why? Worry selling? Similar to people rushing to AIA office to quickly terminate their policies so they can sleep at night without further nightmare.


Summoning the Courage to Continue Investing
by James B. Stewart
Wednesday, September 24, 2008

As president, Franklin Roosevelt confronted far more dire circumstances than anything we've experienced in my lifetime, let alone last week, and yet he never succumbed to panic, desperation, greed or, most famously, fear.

In 1932, in the depths of the Depression, Roosevelt gave the commencement address at Oglethorpe University in Atlanta: "The country demands bold, persistent experimentation. It is common sense to take a method and try it. If it fails, admit it frankly and try another. But above all, try something."

The proximate cause of last week's crisis in the financial markets, which evidently brought us to the brink of economic catastrophe, was paralysis: the refusal of banks to lend virtually anything, even overnight loans to their fellow bankers; the immediate demands for repayment of collateral and the refusal of investors to trust counterparties; the aversion to all forms of risk, real or perceived.


As paralysis seemed to grip our major financial institutions, I felt some of this myself. One day last week I returned to my desk to find Morgan Stanley (MS) trading at $18 as rumors swirled that it would be forced into a merger by week's end. Goldman Sachs (GS) (whose shares I own) had plunged to $100 as speculation mounted that it, too, couldn't survive as an independent institution. Had anyone told me even a week ago that two of the most venerable and respected names not just on Wall Street but throughout the world stood on the brink of extinction I would have said he or she was delusional.

I told a colleague that this was irrational; Goldman had just reported healthy earnings even under dire circumstances and was worth far more than $100 a share. At the same time, I said I couldn't bring myself to buy. "Who am I, one small investor, to stand before this tsunami?" I felt helpless in the face of forces far greater than myself.

Details of the Bush administration’s bold and costly plan to break this market psychology by providing up to $700 billion to buy the mountains of mortgage-backed debt and other toxic securities which are crushing the balance sheets of financial institutions remain unclear, perhaps by design. Congress can and should debate issues like excessive executive compensation and foreclosure relief, but these are not the issues that have caused today’s crisis. The government needs a bold, simple plan that offers maximum flexibility and jolts the financial heart into beating again.

So I am not going to dwell on the uncertainties and details, important though they are. There have been times in history when we as individuals have been summoned to a higher purpose than partisan ideology or what may seem to be our immediate self interest. This is one of those times.

In times of financial crisis, collective action can achieve what would be unacceptably hazardous for any one individual, J.P. Morgan's 1907 summoning of the country's major bankers to share information on the ongoing financial crisis being one famous example. Deploying principles of Keynesian economics for the first time, Roosevelt borrowed against the future productivity (and tax payments) of American workers to intervene massively in markets and the economy. This past week, we, as taxpayers, have again been asked to stand together in the face of crisis, to the tune of $2,000 for every man, woman and child in the country, the New York Times reported.

Put that way, $700 billion strikes me as a not unreasonable price to pay for the stability of the financial system on which our entire economy and collective well-being rest. I happened to speak late last week with high-ranking executives from three major industrial companies, Eli Lilly (LLY), Cummins (CMI), and General Mills (GIS). All said that thus far, the turmoil on Wall Street has not impaired their ability to finance their operations. At the same time they left little doubt that left unchecked, the contagion could have dire consequences for the broad economy, as opposed to the financial sector where thus far it has been contained.

The administration's proposal has not been accompanied by much high-minded rhetoric aimed at the American people. That is unfortunate. The plan, no matter how expensive or sweeping, will fail if all of us continue to be gripped by fear and risk aversion. Even if you managed to shift all your assets into gold and short-term Treasurys, it would surely be small consolation if nearly everyone else lost their life savings in collapsed money-market funds and bank failures and we faced another depression. It is time for all of us to summon the courage to invest calmly and rationally and in doing so demonstrate our confidence in the potential of the global economy and in our fellow man.

What, in practice, does this mean?

It means continuing to accept and even embrace a prudent degree of risk. No investment is entirely risk-free and the mindless quest for safety is damaging not only to your likely returns but the system as a whole.

It means to continue following a disciplined approach to asset allocation and investments such as the one I have long advocated in this column. Despite last week's wild swings, the market did not reach one of my buying thresholds, which is to buy on 10% dips. Had it done so, (2025 on the Nasdaq) I can assure you I would be buying.

It means to continue rebalancing your portfolio, taking profits when positions become overweighted, and adding to those that have fallen below your targets. I expect to continue my gradual additions of financial stocks in the belief that we will weather this crisis.

It means considering investment alternatives. I found myself this weekend looking at real estate listings. During the real estate crisis of the eary 1990s, I bought a Manhattan apartment which I rented to a sushi chef from Japan. People thought I was crazy. Not only did I eventually sell it at a handsome profit, but I received a Christmas card every year thanking me for the privilege of being my tenant. Based on my perusal this weekend, in some parts of the country we have reached the kind of opportunity to buy real estate that only comes along once a decade, if then.

I wish I had bought Goldman Sachs at $100 a share, not because with benefit of hindsight I know it is trading higher, but because my small action, magnified many times by countless other investors willing to act with the courage of their convictions, will withstand the force of a tsunami.

SML - Got in again @ 3.30, Punting only

Contra NOL ROC 5.2% and FRC ROC 4.4%

Quickly got out after seeing STI tumbling down! Some allowance for the week.

Hongguo

Hi financial freedom,

Hongguo is not in my watchlist so I don't research into this stock. I assume it must be paying good dividend since you like yield play.

This is low volume stock, and don't expect fast rebound. Watch out for resistance level and take some profit off the table.

Pls remember TA is just a guide; otherwise, all TA technicians are rich liao.

FRC - Punting @ 0.655

Punters at work. Joined them too late?

Punting this damned old news?

Why FRC dropped so much despites good earning?

The Board of Directors of FerroChina Limited (the “Company” or “Group”) is pleased to announce that Changshu Xingyu Advanced Building Material Co., Ltd (“Xingyu”) has completed the installation of its recrystallation annealing production line and tension levelling line. With these equipments, the Group will be able to sell additional product range, capture higher value add product value chain and improve the overall profitability going forward. The output of these equipments will be used as feedstock for other subsidiaries of the Group until the cold reversing mill of Xingyu is ready.

Further to the Announcement on 25 April 2008 and 20 August 2008 regarding the appointment of Merrill Lynch as our financial advisor to assist with a review of potential strategic alternatives, the Company wishes to update that the Company has identified a potential investor, which has signed a Confidentiality and Non-Disclosure Agreement with the Company and is currently carrying out its due diligence investigations on the Company and its subsidiaries.

The Company and potential investor had entered into several discussions and negotiations on the terms of investment, following which a draft Term Sheet has been drawn up for the parties’ review.

However, the parties have to date not signed nor concluded any Term Sheet or Memorandum of Understanding. Hence, the proposed investment by the potential investor is still under negotiations pending the latter’s completion of its due diligence investigations.

Meanwhile, Shareholders are advised to exercise caution in trading their shares. There is no certainty or assurance as at the date of this Announcement that the proposed investment by the potential investor will be concluded. The Company will release further announcement to update Shareholders should there be further development regarding the proposed investment by the potential investor

NOL - Hold? Got in @ 2.20

Set trailing stop at 2.24 (breakeven and preserve capital)and watch resistance levels

True or false?

Rajesh Joshi, New York - Friday 19 September 2008
IN THE face of a global financial market meltdown, a battery of shipping executives suggested in New York last week that their industry — and their companies’ shares — are a safe haven against the fickle glamour of Wall Street.

Positve or negative?

Berlin and NOL hold talks over Hapag takeover
Katrin Berkenkopf and Herbert Fromme, Cologne - Friday 19 September 2008


Ron Widdows
THE German government has held its first meeting with Singapore carrier NOL, which is seeking to take over Hapag-Lloyd against strong opposition from unions and politicians.

Memo to the uneasy investor

Be strong and stay diversified. That's the best way to weather the current economic storm, says RON LIEBER


IT'S pretty hard to stick with a long-term plan for your money when the financial world seems to be unravelling around you.



Don't lose your head: Resist the temptation to climb under the covers, money safely in the mattress, and hide from a world that has surely changed forever
You were probably already uneasy about home prices, job stability and inflation. Then the government took over Fannie Mae and Freddie Mac, the stock of Washington Mutual fell below US$3 amid concerns about its own shaky standing, and Lehman Brothers went under - and that's just within a couple of weeks.

The temptation is to climb under the covers, money safely in the mattress, and hide from a world that has surely changed forever. 'The big question that people ask during these things: 'Is it different this time?' ' says J Mark Joseph of Sentinel Wealth Management in Reston, Virginia.

And is it? Well, no, not really. And as with any market disruption, you need to start by staring down the volatility and putting it in context. Then, face up to whatever fears led you to stop investing money or to move everything into safer vehicles - or to seriously ponder those alternatives. Finally, resolve to be brave (and well diversified).

Let's take these steps point by point:


'Market corrections are just a foreshadowing of what death is going to feel like. We're all trying to avoid death. That's what we're wired to do as human beings.'

- Brent Kessel,
president of Abacus Wealth Partners



'Our skills aren't really that transferable to the challenges involved.'

- Milo M Benningfield of Benningfield Financial Advisors




Stare down the volatility

It's perfectly understandable if you feel as if you have whiplash right about now. Any single company or industry is increasingly susceptible to the forces of global competition, the rapid flow of information and the variety of ways in which sophisticated investors can place big bets.

On a macro level, too, the markets feel unstable, flying up one day with relief over the Fannie and Freddie rescue and then plummeting the next over broader concerns about the health of financial firms.

By certain measures, however, the stock market isn't bouncing around as much as it has at other times. So far this year, the Standard & Poor's 500-stock index has risen or fallen more than one per cent in a single day 42 per cent of the time. That's just the 11th-highest figure since 1928.

Or check the 'investor fear gauge', otherwise known as the VIX, shorthand for the Chicago Board Options Exchange's Volatility Index. It measures market expectations of near-term volatility as expressed through the prices that people pay for options on the S&P 500 index. At many points from 1997 to 2002, the VIX reached higher levels than where it is sitting now.

That said, for the last year, the VIX has hovered at levels higher than any point in the previous four years, and it has hit those levels for reasons that give everyday investors pause about the markets. Milo M Benningfield, of Benningfield Financial Advisors in San Francisco, rattled off a number of them last week, including increased hedge fund activity; lack of guidance on corporate earnings, leading to surprises and stock gyrations each quarter; and opaque company balance sheets, which the companies themselves seem to revalue every few months.

Accept fear

Your natural inclination is probably to sell everything and invest in certificates of deposit or throw the proceeds in a money market fund. In fact, evolution insists on these feelings. 'We had survival mechanisms built in to avoid sitting around debating whether we should run away from the sabre-toothed tiger,' Mr Benningfield said. 'That's the fundamental problem with long-term investing. Our skills aren't really that transferable to the challenges involved.'

These skills can be learned, however, and Brent Kessel, the president of Abacus Wealth Partners, thinks yoga offers some crucial lessons. Mr Kessel, a money manager and financial planner in Los Angeles who is a long-time yogi himself, noted that most people try to get rid of their fear of the markets through some kind of external action, like selling.

'This is where yoga comes in,' he said. 'It's the practice of breathing through discomfort. You intentionally put your body in postures that are right at the edge of discomfort and then cultivate the ability to stay there. You tend to find it passes if you give it time, but instead we rush to the Internet to trade on our portfolios.'

A more constructive move at this particular moment might be to redirect your worry towards other areas of risk in your life. Mr Kessel said that if he were an estate-planning lawyer, he'd be calling clients right now to get them to address any half-finished paperwork.

'Market corrections are just a foreshadowing of what death is going to feel like,' he said. 'We're all trying to avoid death. That's what we're wired to do as human beings.'

Be brave

Investing in the middle of market gyrations isn't just a question of controlling the urge to sell indiscriminately. It's also about taking a close look at the contents of your portfolio and then forcing yourself to fix an asset allocation that is out of whack and to buy in sectors of the markets that are out of favour.

At this moment, familiar names in your portfolio may make you feel comfortable. Perhaps it's a concentrated stockholding in your employer, whose business you know quite well. Or maybe you have some securities from a parent or grandparent, and you feel an almost familial obligation to collect the dividend and preserve the inheritance. Or you live in Cincinnati and are certain that Procter & Gamble can survive any calamity.

Yes, Fannie and Freddie and Lehman and WaMu can go to zero or close to it, but not your holding. 'It happened to them, but it's not going to happen to us,' is the argument that F John Deyeso of Financial Filosophy, a financial planning firm in New York City, hears frequently.

Maybe not. But consider how concentrated your risk is in other aspects of your life. Most of, if not all of, your income is from a single employer. If your spouse works for another one, then perhaps you're a bit more diversified, but not much. Your home, if you own one, may well be your largest asset. But it's a single property in a particular region. Your portfolio is the only place where it's even possible to diversify much.

Still tempted to cut off your 401(k) contributions, or funnel them all into cash? Well, how will you know when it's time to get back into stocks? Chances are, by the time you're comfortable with the markets you will have missed a good chunk of the rebound.

Better, then, to keep investing in a mix of stock and bond funds, international and domestic, large and small, with some alternative asset classes thrown in for good measure, which are appropriate for your goals and risk tolerance. Through index funds and various similar investments, Mr Kessel of Abacus Wealth Partners has his clients in more than 11,000 stocks around the world at any given moment.

Though no financial planners wish losses on anyone, plenty of them appreciate the way market calamities reinforce some fundamental truths. 'I think these things are great,' said Mr Joseph of Sentinel Wealth Management. 'It helps people get back to, as boring as it is, the fact that diversification works. And you never end up getting killed in something like this.' - NYT

Minds Over Money: How to Win the Retirement Game of Risk

Sponsored by
by Interview by Eric Schurenberg
Tuesday, September 16, 2008
provided by

The classic vision of retirement planning goes something like this: You start broke. You invest as best you can, and if nothing goes too terribly wrong, you finish with enough money to support yourself.

Retirement expert Moshe A. Milevsky, an associate professor at York University's business school in Toronto, sees it a bit differently. In his view, you start with all the wealth you need in the form of your lifetime earning power. Your job is to convert that personal asset as efficiently as possible into financial assets you can live off once your earning power runs out.

As for things going terribly wrong: Well, odds are that at some point in your life they will. So the key to retirement success, he says, is to identify and ensure against the risks that could knock you off track.

Milevsky's own life offers a prime lesson in how a chance event can derail the best-laid plans. He was studying graduate-level math and physics at Toronto's York University - envisioning a career "smashing atoms together," as he puts it - when his father died of cancer at age 50. The oldest of five children, Milevsky was forced to become a quick expert on his family's money.

The experience shifted his focus from academic physics to the practical math of personal finance and risk management. That unusual angle has defined his career and inspired the Individual Finance and Insurance Decisions Centre, the think tank that he founded eight years ago.

It's also the subject of the latest of his five books, "Are You a Stock or a Bond?", which lays out his views on retirement planning. In late August he spoke with managing editor Eric Schurenberg.

Q. Most advisers say the way to handle risk in retirement planning is to start out investing aggressively, with a lot of stocks in your portfolio, then gradually shift into safer assets like bonds as you get older. What's wrong with that?

A. It's an oversimplification. How long you have until retirement is one thing to consider when deciding how much risk to take. But there are many other variables.

Q. Like what?

A. The key is what economists call your human capital. Early in life, you tend to have very few financial assets - investments you can sell for money - but you do have a lot of time in the labor force in front of you, and that is your most valuable asset. As your career goes on, you earn a salary and devote some of it to acquiring investments. So the goal of investment management during your working life is to efficiently convert your human capital into financial capital.

Q. What does that mean other than saving adequately and investing wisely?

A. You also need to look at the risk inherent in your human capital: How stable is your job, how dependent is it on financial markets, how related is it to the economy as a whole? If you have a stable income that doesn't rise or fall with the stock market, you should have more money in stocks than the usual investment model for someone your age says you should. Otherwise - if, say, you work in the securities industry, where your income is likely to hinge a lot on the stock market - you need to invest more heavily than you might think in safe and secure bonds.

Q. Most advisers would say you also have to consider whether you have the nerve to handle a higher or lower level of risk.

A. I think advisers tend to take the mental aspect a little too far. People's risk tolerance changes every day. Yesterday the market is up: People are risk tolerant. Today the market plummets: They're no longer risk tolerant. You should build your retirement portfolios on something more stable than just your mood this morning.

Q. Have you designed your own portfolio built around your human capital?

A. Absolutely. As a tenured professor, with a very predictable income stream, I view my human capital as a bond. So to diversify, I have all my portfolio in stocks. In fact I've borrowed to invest more in stocks, so I'm actually 150% in equities.

Q. Must have been a tough year for you.

A. Yeah, the last few months have not been pretty. To take the sting out of the losses on my brokerage statement, every month or so I open a spreadsheet and recalculate all my capital, human and financial. As I said, my human capital is essentially a bond, so it has been rising in value as interest rates go down. That makes me feel better.

Q. That exercise would be less comforting, I'd imagine, to people who are close to retirement and have used up most of their human capital.

A. True. In the years right before and right after retirement, your financial security is very sensitive to market fluctuations and other risks that were not such an issue before. You need to change your mind-set from wealth accumulation to risk management.

Q. What are the risks?

A. I've run thousands of simulations of hypothetical retirements and ranked what can go wrong. Far and away the biggest causes of failure are longevity risk, inflation and a sour market early in retirement.

Q. Take us through them.

A. Longevity risk - the chance that you'll live too long for your savings - is particularly hard to plan around. Your retirement can literally last anywhere from 10 to 40 years. That wasn't a problem when you could count on a traditional "check a month for life" pension. But odds are, your employer doesn't offer one anymore.

Inflation is something you don't need to worry about in early or mid-career, when most of your wealth is in the form of human capital. That's because wages tend to keep up with inflation. But once you retire and your wealth has been transformed into financial capital, you are completely exposed to inflation risk. Over a 25-year retirement - typical for a married couple - inflation at 4% will cut the value of a $1,000 pension check to just $375.

The third big risk is a bear market. Over a few decades, you'll always have a few down markets, of course. When you're working, it doesn't matter whether the down markets occur early in your life or later. As long as you buy and hold, you'll end up with the same amount of money.

But once you retire, it matters a lot when the bear markets hit. If one occurs early in your retirement, your money won't last nearly as long as if it occurs a few years later. That's because if you start making withdrawals on top of market losses, it's hard to ever make up the lost ground.

Q. How do you hedge those risks?

A. No one kind of investment works against all three. So you need to diversify among investment products, just as you need to diversify among stocks and bonds and so on. This matters more than most people think.

Q. What investment products are we talking about?

A. One category is pensions or annuities, typically a fixed monthly check that an insurance company or pension fund guarantees to keep sending you as long as you live. That's a great solution to longevity risk.

But it's not much help against inflation, which will erode the value of any fixed payment over time. So you also need the traditional mutual fund portfolio that you manage and from which you withdraw funds over an extended period. You can choose high-returning assets like stock funds, which you'd expect to stay ahead of inflation over time.

On the other hand, those are exactly the assets that leave you vulnerable to a market downturn early in your retirement. That's where the third category comes in: the new generation of variable annuities with living benefits. They essentially promise you some upside linked to the stock market but at the same time guarantee you a minimum income for the rest of your life, regardless of when a bear market lands during your retirement.

Q. Your own research years ago showed variable annuities to be way overpriced for the benefits they provided. What changed your mind?

A. If today's variable annuities looked like the product of the same name 10 years ago, I'd still be opposed to them. They used to promise to make up losses only if you died while the market was down.

But the new ones deliver benefits you can claim while you're still alive. And the protection they provide against market losses would be very expensive if you tried to buy it some other way - say, in the options market.

So I used to be something of a crusader against variable annuities, but now I fall back on what the economist John Maynard Keynes said when someone challenged him for supposedly flip-flopping. "When the facts change," he said, "I change my mind. What do you do, sir?"

STI today closed at 2,633. A new low

How low and how many days more to go before hitting bottom?

Let look at STI history

Asian Financial crisis: STI down from 2,504 to 800 (-68%) and lasted 941 days

Dot.com crisis: STI down from 2,582 to 1,197 (-54%) and lasted 680 days

Sub-prime crisis: STI down from 3,875 to today closing 2,633 (-32%) in 329 days

So we are only half-way through ... more pain to come.

Die Poor is our mistake

Portfolio update - Punished by Mr Market!!!!

An article: Your Money or Your Life

There was a Wall Street analyst by the name of Joe Dominguez who saved enough money to retire at 31. He spent the rest of his life enjoying himself, doing volunteer work, and writing a book called “Your Money or Your Life”

We aren’t making a living, we are making a dying. Consider the average American worker. The alarm rings at 6.45 and our working man or woman is up and running. Shower. Dress in the professional uniform – suits or dresses for some, overalls for others, whites for the medical professions, jeans and flannel shirts for construction workers.

Breakfast, if there’s time. Grab commuter mug and briefcase (or lunch box) and hop in the car for the daily punishment called rush hour. On the job from nine to five. Deal with the boss. Deal with coworker sent by the devil to rub you the wrong way. Deal with suppliers. Deal with clients/customers/patients. Act busy. Hide mistakes. Smile when handed impossible deadlines. Give a sigh of relief when the ax known as “restructuring” or “downsizing” – or just plain getting laid off – falls on other heads. Shoulder the added load. Watch the clock. Argue with your conscience but agree with the boss. Smile again. Five o’clock.

Back in the car and onto the freeway foe the evening commute. Home. Act human with mates, kids or roommates. Eat. Watch TV. Bed. Eight hours of oblivion.

And they called this making a living? Think about it. How many people have you seen who are alive at the end of the work day than they were at the beginning? … Aren’t we killing ourselves – our health, our relationships, our sense of joy and wonder – for our jobs? We are sacrificing our lives for money – but it’s happening so slowly that we barely notice.

You have enough for your survival, enough for your comforts, and even some special luxuries, with no excess to burden you unnecessarily. Enough is a powerful and free place. A confident and flexible place.

Become conscious of your expenditures. Stop trying to impress people with your possessions. They are not paying attention because they are too busy trying to impress you. Pay off all your debts, including your mortgage. That’s not too hard once you reduce your expenses.

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

Previously, I mentioned about it. How much is enough? I estimate one with no debts and after setting aside your children education fund , 25 times your over-estimated annual expenses will be enough. With yearly drawdown and modest 3-5% return, it will be able to last a lifetime.

I am looking forward to acummulate this amount in 3 years time. Mr Market please do not be nasty to me, and do not crash another big time. Thank you Mr Market.

Trading Performance

Portfolio update - Bought GAR 0.69

NOL will wipe off most of the gain in JUL 08 on Monday.

Portfolio update - contra Noble and offset LBG, nett ROC 1.2%

Cut off LBG. Volume is too low.

Portfolio update - Bought GAR 0.715 and Noble 2.12

Dividend Growth Points the Way to Prosperity

Dividend Growth Points the Way to Prosperity
Monday July 28, 12:00 pm ET
ByJonathan Heller,

In the midst of another earnings season, we are yet again reminded of the many ways to measure a company's recent success (or lack thereof). It's all about earnings, at least that's what's typically reported first.

I'm not trying to denigrate earnings as a metric, but the variety of methods used (basic EPS, diluted EPS, EPS from continuing operations, the list goes on), can be confusing to investors. Even the analysts don't always agree what the most appropriate measure is.

Beyond that, it is clear that earnings can lie -- and I'm not even referring to fraud, but rather legal methods company's can use to make the results look better, at least in the short term.

Dividends, however, don't lie. I do acknowledge however, that David Einhorn has made a compelling case that this may not be true in the case of Allied Capital , but that's another story.

Dividends must be paid in cash, and cannot be manipulated the way earnings can. What you see is what you get. A company cannot declare a $.25 dividend and pay out $.15, nor can it decide to pay it out in the form of excess inventory instead of cash.

The downside, however, is that companies that run into performance trouble can cut their dividend, or eliminate it altogether. In some of these cases, the punishment (i.e. a declining stock price) is severe, and it might have been better had the company never committed to a dividend policy in the first place.

With that as a backdrop, I am a big believer that dividend growth can be an excellent indicator of true company health, performance and a confident management team. This is not about yield, but rather rapid and perennial growth in what a company is willing to return to its shareholders.

In a way, this is self-policing as companies must keep their payout ratios low enough to allow for reinvested capital, and room for further growth.
The intent here is not to suggest this is the only way to truly measure company health or growth, but rather one method that can be applied to dividend-paying companies. We recently screened for dividend growers meeting the following criteria.

(As always, with any stock screen, further research on each individual company is paramount):

• Market cap between $500 million and $10 billion. (This is intended to identify smaller companies which might have room for further growth.)
• A payout ratio less than 30%. (Payout ratios that are too high are not sustainable, and may lead to dividend cuts or eliminations.)
• Total debt-to-equity less than 30%. (Too much debt can constrain a company's ability to pay dividends.)
• Consecutive increases in dividends for at least seven years. (This demonstrates both a strong track record, and management's intent.)
• Five-year dividend growth rate at least 10%. (This indicates rapid increases in dividends paid.)
• All industries except financials. (I am skittish on financials at this point.)