Based on my memory, in year 2007-8, Ho bee directors buy ho bee at $1.40 -$1.80. The financial crisis was beginning to hit.
Directors continued to buy ho bee at 70-80 cts, after it dropped more than half.
In september -oct 2008, The crisis really hit hard, and the newspapers headlines were filled everyday with negative news of" great recession", financial crisis".
Ho Bee share price fell further to 30-40 cts. At this price, Ho bee nav is at 70-80cts. The market cap was about $210 M. (700 M shares x30 cts.)
I once read that in the year 2009, Ho bee has many projects fully sold going TOP. When the projects TOP, Ho bee will receive the balance of the 80% of the project sales. How much is this? The jewel in the crown was The Coast at Sentosa. 300 units (land size about 2000 psf) fully sold at $1800 psf . That means each unit cost about $4M. The expected revenue based on the Coast = $4m x 300 = $1.2B. However, we must net off the 20% downpayment which has been included. Therefore, the revenue will be reduced to $1B.
How much is the expected profit? As ho bee usually has a profit margin of 30%. I expect the profit from The Coast to be $1B x 0.3 = $300M. If a company market cap is $200 M, the net profit is $200 M, then the PE =1. If the Coast can provide this much profit, the rest of the projects( also mostly sold) will add more profit to it. This make ho bee a terrific buy at 30 cts.
As expected the projects TOP and provided huge cash flow for ho bee. The share price rose from 30 cts to $1.60. The earnings per share rose to 30 cts. which make this stock at 30 cts a PE of 1. This lesson highlights the importance of PE. At $1.60, the pe is now 5-6. If next year, the profit fall, the share price may not be sustained at this level. (note that there are not many projects top next year)
A few points to note is that if the projects are mostly not sold, i will be concerned and not buy as well even if ho bee fell from $2 to 20 cts. But as we have read in year 2007-8, the projects were mainly sold and at high prices. Thus, the shareholders who sold Ho bee must have forgotten what is the Ho bee story. It is important to Stay tuned to the stock and the story in the business.
Thursday, June 24, 2010
Tuesday, June 22, 2010
Stock trading volume
During the world cup, I noted that stock trading volume hit a year low of 1 Billion. If this situation persists for the rest of the year after the world cup fever, we must be prepared for a second economy dip. This is a sure sign of smart money withdrawing from the market. Without smart money interest, the market is likely to fall when bad news hit again. I read in a book that predicted the economy is likely to dip again from last year 2009 to this year. The question is when? So far, the prediction in the book is unerringly right. It is scary to know someone can predict the economy with such accuracy.
My gut feel is as long as we hold good stocks with low PE ratio, high cash per share, low or zero debt and good prospects, we are likely to be delighted with our investment in the next 3 to 5 years. It is time to ignore the noise in the market and reinvest our funds into good stocks when the market falls again.
My gut feel is as long as we hold good stocks with low PE ratio, high cash per share, low or zero debt and good prospects, we are likely to be delighted with our investment in the next 3 to 5 years. It is time to ignore the noise in the market and reinvest our funds into good stocks when the market falls again.
Wednesday, June 16, 2010
Citigroup
Recently, I noted that Citigroup which is traded in the USA (symbol = C) has many insiders selling. One of the officer has just sold 100,000 shares worth $400,000. This insider still has another 2 Million shares remaining which is worth $8 Million at market price. Something in Peter Lynch book came to my mind. Peter mentioned that if you can’t imagine an officer being so rich, then most likely the share prices is unsustainable.
Since I cannot imagine an officer can be so rich, I suspect the share price is over-valued. As many insiders are selling almost at once, I suspect they know something that we don’t know. They are preparing to exit now. More bad news on the financial market may come. Please be prepared.
Since I cannot imagine an officer can be so rich, I suspect the share price is over-valued. As many insiders are selling almost at once, I suspect they know something that we don’t know. They are preparing to exit now. More bad news on the financial market may come. Please be prepared.
Who can help them?
Many people have complained that the government has forsaken the people and do not help them. I pray that the people will unite and believe in their own family. If our own government cannot even believe and help singaporean, who will help them. If their own parents or family do not even help or even support them, who will help them. Myself, if my family do not help and believe in me, I wondered where will I be. Will I be searching for rubbish at nite collecting cardboards or I will be a security guard for the rest of my life. As I write these, my tears swelled in my eyes, cos of the difficulties facing the average middle class family. I hope GOD, their family, the community and the government will help them and bless them.
Older workers
I understand that those people in their 30s to 40s who were retrenched have difficulty to find a job. I hope that their family, the community, the government, and employers will continue to believe in them and give them a second chance. To employ young people is good but employers must weigh the pros and cons of their loyalty, attitude and their reliability compared to the older workers. If not many of my friends will continue to be disappointed with their job prospects and their future in Singapore.
Smart governement
I do highly respect our government in their business dealings. They took a piece of land (free to them of course) and build a HDB flat to sell to 100 families. Next they charge property tax for 99 year lease and then charge them $65-$90 per month for car park space. This is one of the best cash flow plans. 99 years later, they took back the land and re-package it again and sell it to another 100 families. In short, they collected one lump sum of money when they sell 100 units. Next, they collect monthly cash flow in terms of property tax and car park charges.
To summarize, they got all their money back when they sell 100 units to the people, and they still own the asset and enjoy the benefits of cash flowing from the asset. Really, we must hand it to the government. For the car park and flat, they got low-cost foreign workers to take care of the maintenance, like lift, grass cutting, and etc.
To summarize, they got all their money back when they sell 100 units to the people, and they still own the asset and enjoy the benefits of cash flowing from the asset. Really, we must hand it to the government. For the car park and flat, they got low-cost foreign workers to take care of the maintenance, like lift, grass cutting, and etc.
How to help the US to get back on its feet?
Why do I want to help the US?
Because I am indebted to the US people in learning from investing guru Warren Buffet, Peter Lynch, Sales guru Brian Tracy, Frank Bettger, and Rich Dad Poor Dad Author Robert Kiyosaki.
This is only a suggestion because I am not a person specialize in public administration and a turnaround specialist. Besides, the US people has the wisdom and resources to get through anything like the great depression and world war 2.
On energy, the US must learn from France to ensure energy independence. The US must build more nuclear plants to ensure 80% of energy sources came from nuclear. Safety issues can be tackled on.
For education and health care, the US must learn from Singapore where high standards are maintained and health care is compulsory unless opted out.
For R&D, the US must learn from Israel and Japan in developing best practices and also new areas of collaboration.
On infrastructure, the US can learn from Singapore and Japan and China. It can also weigh the pros and cons of developing more roads or new technology such as a flying car, water submersible car and water vehicle. This made roads, highways and railroads less relevant.
Because I am indebted to the US people in learning from investing guru Warren Buffet, Peter Lynch, Sales guru Brian Tracy, Frank Bettger, and Rich Dad Poor Dad Author Robert Kiyosaki.
This is only a suggestion because I am not a person specialize in public administration and a turnaround specialist. Besides, the US people has the wisdom and resources to get through anything like the great depression and world war 2.
On energy, the US must learn from France to ensure energy independence. The US must build more nuclear plants to ensure 80% of energy sources came from nuclear. Safety issues can be tackled on.
For education and health care, the US must learn from Singapore where high standards are maintained and health care is compulsory unless opted out.
For R&D, the US must learn from Israel and Japan in developing best practices and also new areas of collaboration.
On infrastructure, the US can learn from Singapore and Japan and China. It can also weigh the pros and cons of developing more roads or new technology such as a flying car, water submersible car and water vehicle. This made roads, highways and railroads less relevant.
US trade deficit
Thousands years ago, we have kings and Queens, the nobles and rich who are served by thousands or millions of people. Now we have economy and the rich, famous and powerful who are served by service staff (modern slaves) paid $1,500 per month, just enough to survive and have a little savings.
500 years ago, China was powerful and many countries paid tribute to China to seek protection or paid respect to the King. Now US trade deficit is a form of tribute countries paid to seek protection or paid respect to US.
I believe that the US economy is strong as long as the economy continues to grow, companies continue to increase profit at 10-15%, new products being developed, new immigrants move to US and R&D remains high. Then the US is doing well. Most importantly, huge amounts of funds are donated by the super rich towards worthy causes, these will benefits and helps millions of average US citizen.
Let us take a look at the US companies and people. First of all, net profit margin and return on equity are key performance indicators. US companies. US companies profit margin has an average of 6 to 13% and their ROE is about 12 to 20%. To conclude their companies are still decent and the profit and return on equity is healthy and respectable. I remain optimistic on the financial health of US companies and their ability to generate a return on their capital.
US largest company Mobil earns US $ 40 Billion in net profit. That alone is more than the combined profit of all Singapore listed companies. It is a good sign and points to more good news in US.
500 years ago, China was powerful and many countries paid tribute to China to seek protection or paid respect to the King. Now US trade deficit is a form of tribute countries paid to seek protection or paid respect to US.
I believe that the US economy is strong as long as the economy continues to grow, companies continue to increase profit at 10-15%, new products being developed, new immigrants move to US and R&D remains high. Then the US is doing well. Most importantly, huge amounts of funds are donated by the super rich towards worthy causes, these will benefits and helps millions of average US citizen.
Let us take a look at the US companies and people. First of all, net profit margin and return on equity are key performance indicators. US companies. US companies profit margin has an average of 6 to 13% and their ROE is about 12 to 20%. To conclude their companies are still decent and the profit and return on equity is healthy and respectable. I remain optimistic on the financial health of US companies and their ability to generate a return on their capital.
US largest company Mobil earns US $ 40 Billion in net profit. That alone is more than the combined profit of all Singapore listed companies. It is a good sign and points to more good news in US.
Tuesday, June 15, 2010
Shall I give to charity?
Sometimes I hesitate to give to charity? I worry that People will call me a miser for not helping or donating.
In Australia, I read a report that every $10 donated only 2 dollars will be given to help the cause they promoted due to administration or other cost. I was disappointed by the statistic. It was only when I went to work in Melbourne then I understand how it works. The manager of the charity told me to go to the street and solicit for donations. Of the $100 collected in a day, 30-40% will belong to me, another 40% will be kept by them for salary and rental. Another 20% will then be used to help the cause. Oh god!
After seeing bad news in NKF and Renci hospital, I hesitiate to give more even though I knew something must be done. However I am encouraged by what Bill Gates and Warren Buffet are doing in the world. I will question more and demand more transparency in giving huge sums of money.
At the moment, the best thing I can do for the poor is not to be poor. I will help people around me more by non monetary means rather than pure money.
In Australia, I read a report that every $10 donated only 2 dollars will be given to help the cause they promoted due to administration or other cost. I was disappointed by the statistic. It was only when I went to work in Melbourne then I understand how it works. The manager of the charity told me to go to the street and solicit for donations. Of the $100 collected in a day, 30-40% will belong to me, another 40% will be kept by them for salary and rental. Another 20% will then be used to help the cause. Oh god!
After seeing bad news in NKF and Renci hospital, I hesitiate to give more even though I knew something must be done. However I am encouraged by what Bill Gates and Warren Buffet are doing in the world. I will question more and demand more transparency in giving huge sums of money.
At the moment, the best thing I can do for the poor is not to be poor. I will help people around me more by non monetary means rather than pure money.
Bond and cash holders versus stock holders
The difference between them is huge. Conservative investors view cash and bonds as safe and secure assets. Stock holders are deemed to be risk takers. In this financial crisis, many countries central banks and people who hold cash and bonds, paying 1-3% are going to be short changed.
China, Japan, Korea, Singapore are all going to face losing purchasing power in their value of US Treasury bonds and cash. This is because we are likely to face with high rates of inflation (may be as high as 8-10%) for many years as major countries including Singapore printed huge amount of dollars. Sophisticated investors are already holding real assets like gold, silver and stocks of great companies that can increase prices of their products.
China, Japan, Korea, Singapore are all going to face losing purchasing power in their value of US Treasury bonds and cash. This is because we are likely to face with high rates of inflation (may be as high as 8-10%) for many years as major countries including Singapore printed huge amount of dollars. Sophisticated investors are already holding real assets like gold, silver and stocks of great companies that can increase prices of their products.
Quality stuff
A few days ago, my girlfriend bought 3 shorts for $10 in Toa payoh. In fact she needed only one short for her camp in pulau ubin but she bought 3. Before this, she had been to world of sports to see nike and branded shorts selling at $50. After buying the 3 shorts, she regretted cos it was too ugly for her and the quality is poor. For her shoes, she found that buying cheap shoes at $20 is penny wise and pound foolish. No doubt she save a little money at first, but the shoe will give her problem like broken heels and discomfort later on. She changed a few pair of shoes till she is convinced that she will buy branded goods with quality.
For myself, the experience is similar. The shoes I bought from China were really cheap but the discomfort and the sight of the shoes made me feel that I am cheap. It is the same as my luggage. I bought one from China, thinking that it is a good bargain. But after using it for only one trip, the handle broke. My hush puppies shoes was durable, comfortable and very stylish. I had wore it for 4 years before giving to my brother.
Countries like China and India producing ultra low cost stuff must realize there is no short cut to success. Their low cost goods might at first attract customers but eventually the customer will realize that they are taken for a ride.
In the next few years, the economic crisis in the US and the world will widen the gap between companies with quality, branded stuff and those with poorer quality and non branded stuff. Who are the expected winners and losers? I suspect the main winners will be US, Japanese and European companies. The losers will mainly be China and Indian companies who are exporting poor quality goods.
Currenly US is losing the economic race because of the subprime crisis. Let us hope new technologies and products developed in US will helped the US to remain a leader.
Sometimes in life, you don always have to win. Sometimes, losing means winning and winning means losing. Losing an argument with a partner and winning a relationship. Losing an argument with a customer and winning a sale.
For myself, the experience is similar. The shoes I bought from China were really cheap but the discomfort and the sight of the shoes made me feel that I am cheap. It is the same as my luggage. I bought one from China, thinking that it is a good bargain. But after using it for only one trip, the handle broke. My hush puppies shoes was durable, comfortable and very stylish. I had wore it for 4 years before giving to my brother.
Countries like China and India producing ultra low cost stuff must realize there is no short cut to success. Their low cost goods might at first attract customers but eventually the customer will realize that they are taken for a ride.
In the next few years, the economic crisis in the US and the world will widen the gap between companies with quality, branded stuff and those with poorer quality and non branded stuff. Who are the expected winners and losers? I suspect the main winners will be US, Japanese and European companies. The losers will mainly be China and Indian companies who are exporting poor quality goods.
Currenly US is losing the economic race because of the subprime crisis. Let us hope new technologies and products developed in US will helped the US to remain a leader.
Sometimes in life, you don always have to win. Sometimes, losing means winning and winning means losing. Losing an argument with a partner and winning a relationship. Losing an argument with a customer and winning a sale.
Are Singaporean homely?
A walk around Bishan HDB flats on a lazy Sunday found most car parks brimming with cars. Are Singaporeans lying at home to make war with one another? Are Singaporean too homely compared to other countries like Australian? I found that my compatriots are too homely. In Australia, people will be out playing soccer, sitting by the park and chat.
I suspect our favourite past time is watching TV programme, air-con room napping and surfing internet. These are good ways to release stress or relax on a lazy Sunday after a long week of work in the workplace. However, these will not generate the creativity needed for business, great work in science, technology, arts and many other areas.
That may explain partly why Asia has over 2.5 Billion people which has more than half of the world population and yet only control less than 20 percent of the world wealth.
There are reasons why the US is today, the world largest economy and their population, though 3% of the world, their economy is 1/3 of the world’s economy and they control 50 percent of the world wealth.
We can emulate them in their activities in science, technology, business, engineering, and arts and the spirit of giving. I hope this article will spur more Singaporean will go out there and make an impact on others, no matter how small it is.
I suspect our favourite past time is watching TV programme, air-con room napping and surfing internet. These are good ways to release stress or relax on a lazy Sunday after a long week of work in the workplace. However, these will not generate the creativity needed for business, great work in science, technology, arts and many other areas.
That may explain partly why Asia has over 2.5 Billion people which has more than half of the world population and yet only control less than 20 percent of the world wealth.
There are reasons why the US is today, the world largest economy and their population, though 3% of the world, their economy is 1/3 of the world’s economy and they control 50 percent of the world wealth.
We can emulate them in their activities in science, technology, business, engineering, and arts and the spirit of giving. I hope this article will spur more Singaporean will go out there and make an impact on others, no matter how small it is.
Can you afford to retire?
Recently, I met up an army friend whom I have not seen for 15 years. He graduated from NTU and has an engineering degree. Now he is working in Maybank as an insurance sales executive. I thought he was doing well till he messaged me a few days later, asking to borrow $500. Even though I really wanted to help him, I say no for his own good. I worried for him and his family as he is married with kids and ask to borrow money from a friend whom he has not kept in touch for 15 years. I can only wonder am I his first option or his last option. I suspect i must be the last as he must have exhausted his contacts before asking from me.
Another friend is a senior sales agent with Prudential Assurance. She earned over $100,000 per year from selling life insurance. When I met her, I asked when she is retiring. To my surprise, her reply is that she can’t afford to retire as she is paying her home mortgage. I was shocked that even a high income earner like her is unable to achieve financial freedom. If people like a high income earner and a NTU graduate are unable to afford to retire, what hope does the GCE O’ level and ITE graduates have to retire?
Based on statistics on a group of graduates who met each other after 20 years, one third of them are dead, another one third of them are dead broke or bankrupt, and one third of them are just getting by. Only 10% of them have achieved financial freedom. This is a harsh, grim and gloomy reality.
Therefore, one must follow the principles inculcated by the rich to achieve financial freedom. One good option is to start reading books like “ think and grow rich”.
Another friend is a senior sales agent with Prudential Assurance. She earned over $100,000 per year from selling life insurance. When I met her, I asked when she is retiring. To my surprise, her reply is that she can’t afford to retire as she is paying her home mortgage. I was shocked that even a high income earner like her is unable to achieve financial freedom. If people like a high income earner and a NTU graduate are unable to afford to retire, what hope does the GCE O’ level and ITE graduates have to retire?
Based on statistics on a group of graduates who met each other after 20 years, one third of them are dead, another one third of them are dead broke or bankrupt, and one third of them are just getting by. Only 10% of them have achieved financial freedom. This is a harsh, grim and gloomy reality.
Therefore, one must follow the principles inculcated by the rich to achieve financial freedom. One good option is to start reading books like “ think and grow rich”.
Monday, June 14, 2010
Preschool education- is it a must for our children?
A look at the market today, we find many many schools like Modern Montessori Int’l, Morris Allen, Eton House and many others offering to turn our children into a gifted person through their various gifted programmes. Is it effective and a must for our children?
As my children and I have not gone through such a programme, I am unable to assess the effectiveness of this programme. What I know is children need lots of love and attention from parents.
When I was young, our parents coached and mentored us in subjects from English, Chinese, to maths and science. I really appreciate it and feel it is the key reason, I was able to do well today. This tutoring by my parents helped me gained confidence, faith and belief in myself. In addition, my relationship with my parents was strengthened further.
Therefore, I made a promise that I will shower my time, love, attention and tutor my own children. Even if I m poorly educated, there are values and principles in life that could be imparted to my children and it is a valuable time to bond with my children. My opinion is that this job is far too critical to be outsourced to any other reputable strangers. ( no matter how good they claim they are!!!)
As my children and I have not gone through such a programme, I am unable to assess the effectiveness of this programme. What I know is children need lots of love and attention from parents.
When I was young, our parents coached and mentored us in subjects from English, Chinese, to maths and science. I really appreciate it and feel it is the key reason, I was able to do well today. This tutoring by my parents helped me gained confidence, faith and belief in myself. In addition, my relationship with my parents was strengthened further.
Therefore, I made a promise that I will shower my time, love, attention and tutor my own children. Even if I m poorly educated, there are values and principles in life that could be imparted to my children and it is a valuable time to bond with my children. My opinion is that this job is far too critical to be outsourced to any other reputable strangers. ( no matter how good they claim they are!!!)
The Purpose of my blog
The purpose of my blog is to share with my valued readers about the things I see and hear in Singapore. Any opinion expressed is my 2 cents opinion(could be wrong as i m a human being!!!) and does not intentionally hurt or harm anybody or organization. The purpose of my blog is also to share with my loved ones and my future children about the Singapore seen through my eyes and heard through my ears. It is greatly hoped that through sharing this blog, my loved ones and many people may reflect and learn as much as me or even more.
Car market
The car market is in for a rough ride for the next 3- 5 years. As I travelled in Bishan and Toa Payoh at about 9am, there are plenty of cars idling in the HDB car parks. It accounted for at least 30% of the car park space. What this means is that most people would really want to pay road tax, car installments than save money. Why is this so?
It could be they are so used to travelling by car, that they cannot let go of their valued possession. It could be they would like to save their face than to tell their friends and relatives that they lost their job and car. It could be they are in a dilemma, unable to sell their car because of lower resales prices and lost their jobs. Could those idle car owners be shift work workers who sleep in the day time? It is not plausible as shift workers are mainly low-wage workers, which means they are unlikely to afford a car.
Rough estimate of the car population is about 450,000 vehicles. If 20% of this vehicles which is 90,000 are forced sold in the 2nd hand car market, then the car resale prices will hit an all time low. Then the COE bids will also reach an all time low.
I was surprised that my prognostication in year 2008 that COE prices is a good indicator of when to enter the stock market. In year 2009 February, COE prices fell to a few thousand dollars and that is a great time to buy stocks that a great investors dream of for years. Now that share market has rebounded, let us be patient and await the next golden opportunities that lies ahead of us.
It could be they are so used to travelling by car, that they cannot let go of their valued possession. It could be they would like to save their face than to tell their friends and relatives that they lost their job and car. It could be they are in a dilemma, unable to sell their car because of lower resales prices and lost their jobs. Could those idle car owners be shift work workers who sleep in the day time? It is not plausible as shift workers are mainly low-wage workers, which means they are unlikely to afford a car.
Rough estimate of the car population is about 450,000 vehicles. If 20% of this vehicles which is 90,000 are forced sold in the 2nd hand car market, then the car resale prices will hit an all time low. Then the COE bids will also reach an all time low.
I was surprised that my prognostication in year 2008 that COE prices is a good indicator of when to enter the stock market. In year 2009 February, COE prices fell to a few thousand dollars and that is a great time to buy stocks that a great investors dream of for years. Now that share market has rebounded, let us be patient and await the next golden opportunities that lies ahead of us.
Is it overpriced?
Many a times, we find similar goods and services with a huge price gap. A coffee shop breakfast with 2 half-boiled eggs, kaya toast and tea cost $2.50. A MacDonald breakfast cost around $6 compared to a Four Seasons Hotel Buffet breakfast that cost ten times more at $55++. Are these luxuries worth it? Well personally, my humble opinion is that they are generally not worth the price.
A simple lunch at a hawker centre like chicken rice cost $3. It jumps to $50 for a buffet lunch at Carousel, a café at Hotel Royal Scotts. Though they have huge varieties of salad, western and local food, desert and seafood, my take is can you overload your stomach in one sitting with the huge varieties of food?
Similar for a 3-room HDB flat in Ang Mo Kio that cost $200,000 versus a $2 Million condominium with 2 bedroom in Sentosa. It is sheer madness to buy one house in Sentosa, just because one loves the sea and enjoy the sound of waves. The loan repayment will take at least 30 years and the interest payment will easily amount to millions of dollars. The bankers and agents marketing the properties must be laughing all the way to the banks. The same goes for a car like Toyota versus Bentley. The specifications and quality is similar for travel and the difference is hardly noticeable except to the pundits. The only difference is one is for the flashy and showy people with huge egos and another is for the person with common sense. I hope I have the common sense to do the right thing.
Is it worth paying 10 times the price of a house, a car, a country club membership, an education programme, seminar programme of anther similar product just because you want to impress people?
I hope your answer is no as mine is. Many a times, my girlfriend and I are impressed with low cost food in Malaysia, Singapore hawker centre and utterly disappointed in the expensive 5-star hotel food quality. Go and try it and see if it is true in your situation.
A simple lunch at a hawker centre like chicken rice cost $3. It jumps to $50 for a buffet lunch at Carousel, a café at Hotel Royal Scotts. Though they have huge varieties of salad, western and local food, desert and seafood, my take is can you overload your stomach in one sitting with the huge varieties of food?
Similar for a 3-room HDB flat in Ang Mo Kio that cost $200,000 versus a $2 Million condominium with 2 bedroom in Sentosa. It is sheer madness to buy one house in Sentosa, just because one loves the sea and enjoy the sound of waves. The loan repayment will take at least 30 years and the interest payment will easily amount to millions of dollars. The bankers and agents marketing the properties must be laughing all the way to the banks. The same goes for a car like Toyota versus Bentley. The specifications and quality is similar for travel and the difference is hardly noticeable except to the pundits. The only difference is one is for the flashy and showy people with huge egos and another is for the person with common sense. I hope I have the common sense to do the right thing.
Is it worth paying 10 times the price of a house, a car, a country club membership, an education programme, seminar programme of anther similar product just because you want to impress people?
I hope your answer is no as mine is. Many a times, my girlfriend and I are impressed with low cost food in Malaysia, Singapore hawker centre and utterly disappointed in the expensive 5-star hotel food quality. Go and try it and see if it is true in your situation.
Inflation- The silent killer
Despite many economists predicting a modest inflation figure, I have seen signs that inflation has arrived and is running easily at 25%. The first sign, my brother’s wife bought a Ramly burger from the street market. What used to cost $2.50 has jumped to $3. A 25% increase in prices. Another sign is the fish porridge at the coffeshop near my place. Although there is no price increase, the quantity of the porridge has dropped from 2 and half bowls to 1 and half bowl. This is inflation without price increase. A third sign, is people were complaining about the popular fishball noodle at Kovan Hawker centre which hiked prices from $2.50 to $3. Lastly, Botak Jones has many feedback on forum that the quantity and quality has took a dive for the past 1 year.
Many poor people will be shortchanged by this silent tax- inflation. I m monitoring closely the situation of inflation. There are three indicators for this. One of them is the corner coffeeshop near Thomson Prata House, which sell Bak Chor Mee for $2.50, the open air coffeeshop at near Bishan Community centre and the coffeeshop above Bishan Bus interchange, both sell mixed rice at $2.50 for 2 vegetable and 1 meat.
Update u later.
Many poor people will be shortchanged by this silent tax- inflation. I m monitoring closely the situation of inflation. There are three indicators for this. One of them is the corner coffeeshop near Thomson Prata House, which sell Bak Chor Mee for $2.50, the open air coffeeshop at near Bishan Community centre and the coffeeshop above Bishan Bus interchange, both sell mixed rice at $2.50 for 2 vegetable and 1 meat.
Update u later.
A tale of 2 different stocks
At this time last year, January 2009, the stock market was gloomy. Even sophisticated investors like bankers, UOB chairman, Mr Wee was worried about the state of the economy. It proved what Warren Buffet had said about being greedy when others are fearful is right. However, the bargains were not in large cap or blue chips companies, it was in the small cap stocks.
At this time, buyers of stocks in DBS bank, SGX, must have looked with disbelief and incredulity as friends (who bought Ho Bee or Rotary) told them that their return is 6 times. DBS bank and SGX stock rose from $7 to $13 and $5 to $8 respectively. Ho Bee and Rotary rose from 30 cents to $1.90 and 22 cents to $1.20. $100k invested would return $600,000 in a year time.
Investors who sold Ho Bee and Rotary must have ignored the many right things Ho Bee and Rotary‘s management did. Ho Bee had a large number of fully sold projects TOP in year 2009 (which meant that it will receive large amount of cash inflow as most of the money is paid to developers when the projects TOP). Rotary story was that it had cash per share of 22 cents and that it had recently paid off $40 M of loan.
How can a company like Rotary with no debt go bankrupt? It also proved again that Peter Lynch advice is timeless as he advised that small cap companies have better growth potential than larger cap companies and it is important to stay tune to the story. If there is any lesson to be learn, it is to understand the story of the stock you are holding and stay tune every 6 months.
His advice on walking in when there is no crowd and walking out when a crowd forms is a strategy I have used from investing, shopping and travelling etc. I avoid the maddening crowd when people rush for work during the morning peak hour and retail peak hour on Saturday. We go shopping on weekdays and I go to work at about 9.00 am which is after peak hour. It has served us well.
At this time, buyers of stocks in DBS bank, SGX, must have looked with disbelief and incredulity as friends (who bought Ho Bee or Rotary) told them that their return is 6 times. DBS bank and SGX stock rose from $7 to $13 and $5 to $8 respectively. Ho Bee and Rotary rose from 30 cents to $1.90 and 22 cents to $1.20. $100k invested would return $600,000 in a year time.
Investors who sold Ho Bee and Rotary must have ignored the many right things Ho Bee and Rotary‘s management did. Ho Bee had a large number of fully sold projects TOP in year 2009 (which meant that it will receive large amount of cash inflow as most of the money is paid to developers when the projects TOP). Rotary story was that it had cash per share of 22 cents and that it had recently paid off $40 M of loan.
How can a company like Rotary with no debt go bankrupt? It also proved again that Peter Lynch advice is timeless as he advised that small cap companies have better growth potential than larger cap companies and it is important to stay tune to the story. If there is any lesson to be learn, it is to understand the story of the stock you are holding and stay tune every 6 months.
His advice on walking in when there is no crowd and walking out when a crowd forms is a strategy I have used from investing, shopping and travelling etc. I avoid the maddening crowd when people rush for work during the morning peak hour and retail peak hour on Saturday. We go shopping on weekdays and I go to work at about 9.00 am which is after peak hour. It has served us well.
Is the 5 Cs worth chasing?
Today Singaporean remain steadfast in chasing after the famous cliché 5Cs. Their condominium or landed properties, brand new continental cars, country clubs membership, credit cards and cash are their top priorities. I remained skeptical about these 5Cs. Why?
Chasing after them will only cause me to spend years of my life paying a big chunk of my income to someone else. Please see this real life example, which I saw in Sunday times, that an ex-banker in her thirties bought a house in east coast for $1.2 Million dollars. If there is not enough, she spent another $200,000 to renovate the house. A piano easily cost $15,000 in the living room. Wow, that is certainly a lot to spend just for one C. Assuming that her spouse and herself has $400,000 in cash and CPF combined, that is still a loan of $1Million for the two of them. Each of them will be paying at least $1,500 per month for 30 years.
I shook my head at this kind of hefty commitment. How about country club membership as an asset? Just ask the Raffles Town club, Singapore Swimming club members who were embroiled in numerous lawsuits and ask them if this is an asset. Most of them are paying for something which they hardly utilize except on weekends. This is something I rather avoid. If I must enjoy a luxury car like BMW, I would rather rent than buy. This will ensure my commitment is minimum and I get to enjoy the luxury car for a while.
Chasing after them will only cause me to spend years of my life paying a big chunk of my income to someone else. Please see this real life example, which I saw in Sunday times, that an ex-banker in her thirties bought a house in east coast for $1.2 Million dollars. If there is not enough, she spent another $200,000 to renovate the house. A piano easily cost $15,000 in the living room. Wow, that is certainly a lot to spend just for one C. Assuming that her spouse and herself has $400,000 in cash and CPF combined, that is still a loan of $1Million for the two of them. Each of them will be paying at least $1,500 per month for 30 years.
I shook my head at this kind of hefty commitment. How about country club membership as an asset? Just ask the Raffles Town club, Singapore Swimming club members who were embroiled in numerous lawsuits and ask them if this is an asset. Most of them are paying for something which they hardly utilize except on weekends. This is something I rather avoid. If I must enjoy a luxury car like BMW, I would rather rent than buy. This will ensure my commitment is minimum and I get to enjoy the luxury car for a while.
Does Singaporean deserve a second chance?
As I am applying a job with People Association, one of the last section of the application requires disclosure of whether a person has broken the law, owe anyone money a lot or other serious offence. I am fortunate because I am a very obedient servant has not broken any serious law except traffic parking offence.
Sometimes I wonder about the people walking on the street, how many of them are perfect. As I understand, many companies and government association require a perfectionist to perfect the job and also a person with a very clean record. With these requirements, how many people with a poor record dare to apply for government sector? And even if they dare to apply, do they have the courage to come clean and be open to their employer?
If the government preaches about re employing the ex convicts, the question is do they practice what they preach? Will human resource manager put their career on the chopping board by taking in ex convicts? I know i will hesitate cos i have a family to feed.
Bill Gates of Microsoft once said he will not recruit any one who is perfect and has not make a mistake in life before. I am sure the USA will have the resilience to go through any crisis after I have seen Donald Trumph in his famous comeback; “The World is flat” author who rallied the Americans to go forward to meet the challenge in globalization and “ we want you to be rich” authors, who urged Americans to be more financially savvy.
The government has to believe and have faith in its own people who have erred on the wrong side of the road. It is only then we will have better social cohesion and a forgiving society. If not there will be always two sides, one the perfectionist who has the whole ice cream to themselves and the other a big majority who eye angrily and jealously at those eating the ice cream cos they were once on the wrong path. My heart goes to those people who are actively searching for drink cans in the rubbish bin near you.
Is everyone perfect? Just that they cover themselves better. As we forgive the people who err on the wrong side of the fence, and make them part of a stake holders. It is then we became a gracious society and a forgiving society. We then progress as one instead of having a big gap in the middle. Let us start first with ourselves and then our family and the community.
Sometimes I wonder about the people walking on the street, how many of them are perfect. As I understand, many companies and government association require a perfectionist to perfect the job and also a person with a very clean record. With these requirements, how many people with a poor record dare to apply for government sector? And even if they dare to apply, do they have the courage to come clean and be open to their employer?
If the government preaches about re employing the ex convicts, the question is do they practice what they preach? Will human resource manager put their career on the chopping board by taking in ex convicts? I know i will hesitate cos i have a family to feed.
Bill Gates of Microsoft once said he will not recruit any one who is perfect and has not make a mistake in life before. I am sure the USA will have the resilience to go through any crisis after I have seen Donald Trumph in his famous comeback; “The World is flat” author who rallied the Americans to go forward to meet the challenge in globalization and “ we want you to be rich” authors, who urged Americans to be more financially savvy.
The government has to believe and have faith in its own people who have erred on the wrong side of the road. It is only then we will have better social cohesion and a forgiving society. If not there will be always two sides, one the perfectionist who has the whole ice cream to themselves and the other a big majority who eye angrily and jealously at those eating the ice cream cos they were once on the wrong path. My heart goes to those people who are actively searching for drink cans in the rubbish bin near you.
Is everyone perfect? Just that they cover themselves better. As we forgive the people who err on the wrong side of the fence, and make them part of a stake holders. It is then we became a gracious society and a forgiving society. We then progress as one instead of having a big gap in the middle. Let us start first with ourselves and then our family and the community.
Investment seminars- are they worth our time?
So far, I have attended preview-only money-making seminar from Eonenet.com by Ms. Fiona Tan and seminars from Mr Richard who represent Rich Dad Poor Dad programme at Park Royal Hotel at Beach Road and others from Multi-level marketing companies like Amway, Usana, Bel-Air, Lamp-Berger, Cosway etc.
The only programme I have signed up is a 2-day programme that cost $3,800 from Eonenet. I have also heard of seminar programme from Mr Robert Kiyosaki and Mr Anthony Robbins that cost cost a few thousands dollars. I must confess that the programme I have attended is a waste of time and did not deliver as much as I wanted. I must add that through this money-losing and time-wasting experiences, I have learned much more in investing than from the programme and seminars themselves. I am glad that i paid my tuition fee because they awakened my business sense and make me a more astute investor.
These seminars also networked me with people who are hungry for success, money etc. Today in the papers, I saw many advertisements by Asia charts at Peninsula Plaza, T3B trading forex at Concorde Hotel, and many other companies who are touting a quick way to earn money. I wondered if they are as good as they have promised. Thankfully, I don’t need to attend anymore because I have learned much from them.
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