There are many predictions by experts in the internet and media. After reading so many reports and listening to many experts, I would like to share my best guess here.
As more people realize the crisis in USA is deeper than Europe, the US dollar may weaken further against the asian currencies and we may see S$ to US$ at 1 to 1. That will be my plan to change my S$ to US$. At that point, US central bank may be forced to hike interest rates and asian property market bubble may burst. This weaken most asian currencies and US$ to S$ can go up to 1.7. It is a good timing to change back to S$. As interest rates are hiked, bond prices and stock prices will plummet. That will be an ideal time to buy back stocks or bonds. If bond yields at 10%, it will be a tremendous buy. Stock PE will be at 3-4, that will be a wonderful buy too.
I am dreaming. Will this day come?
Tuesday, December 27, 2011
Thursday, December 22, 2011
Top 10 feel good feelings
Let me sumarise my top 10 feel good feeling:
1) After a run that tested my endurance
2) A bath or swim after a run
3) A good meal after a good run
4) Having a great conversation with a person of same frequency
5) Drinking cold milo with milk after a bath at nite
6) Reading a good book
7) Writing my feelings down in my diary after a day
8) Deep breathing fresh air in the morning
9) Researching on stock, understanding the real economy and gaining insight on the quiet facts of life
10) Completing the tasks i set out the day before and striking them out at nite.
1) After a run that tested my endurance
2) A bath or swim after a run
3) A good meal after a good run
4) Having a great conversation with a person of same frequency
5) Drinking cold milo with milk after a bath at nite
6) Reading a good book
7) Writing my feelings down in my diary after a day
8) Deep breathing fresh air in the morning
9) Researching on stock, understanding the real economy and gaining insight on the quiet facts of life
10) Completing the tasks i set out the day before and striking them out at nite.
Tuesday, December 6, 2011
cash level of mutual funds
A search on the internet shows an interesting article:
As investors pull back, stock fund cash levels hit record low
Mutual Funds
August 14, 2011|By Mark Jewell, Associated Press
Stock mutual funds held an average 3.4 percent in cash as of June 30, the latest data available, according to the Investment Company Institute, an industry trade organization. That’s down from 3.7 percent a year earlier. But it’s the lowest percentage in ICI records dating to 1984.
With relatively little spare cash to put to work, stock fund managers “probably will not be the driving force behind any market rebound now,’’ says Matthew Lemieux, an analyst with fund tracker Lipper Inc.
Stock funds maintained their largest percentage of cash in 1990, when the average stood at more than 11 percent.
Based on the current low level of cash level in the average mutual funds, I suspect more downside in the economy is coming. Why do I say this? Based on historical records, most of the funds cannot beat the market average return (9%) over a 10 year period. It is likely that most mutual fund managers will be caught unaware when the market plummet. And just before the market recover sharply after a crisis, the fund managers will be caught by having too much cash level.
To prove this theory, look at year 1990, United States went through a savings and loan crisis and war in Iraq. Because of worries on the economy and countless redemption, fund managers keep more cash in the fund (see above report at 11%). In 1990, a bad year for market, this is exactly when an astute fund manager needs to buy more stocks, not hold higher cash level, but they could not do it due to many redemption and worries on the economy.
As investors pull back, stock fund cash levels hit record low
Mutual Funds
August 14, 2011|By Mark Jewell, Associated Press
Stock mutual funds held an average 3.4 percent in cash as of June 30, the latest data available, according to the Investment Company Institute, an industry trade organization. That’s down from 3.7 percent a year earlier. But it’s the lowest percentage in ICI records dating to 1984.
With relatively little spare cash to put to work, stock fund managers “probably will not be the driving force behind any market rebound now,’’ says Matthew Lemieux, an analyst with fund tracker Lipper Inc.
Stock funds maintained their largest percentage of cash in 1990, when the average stood at more than 11 percent.
Based on the current low level of cash level in the average mutual funds, I suspect more downside in the economy is coming. Why do I say this? Based on historical records, most of the funds cannot beat the market average return (9%) over a 10 year period. It is likely that most mutual fund managers will be caught unaware when the market plummet. And just before the market recover sharply after a crisis, the fund managers will be caught by having too much cash level.
To prove this theory, look at year 1990, United States went through a savings and loan crisis and war in Iraq. Because of worries on the economy and countless redemption, fund managers keep more cash in the fund (see above report at 11%). In 1990, a bad year for market, this is exactly when an astute fund manager needs to buy more stocks, not hold higher cash level, but they could not do it due to many redemption and worries on the economy.
Wednesday, November 30, 2011
Has the US housing market hit a bottom?
Recently, I chanced upon a newspaper advertisement touting to Singaporeans “how to buy US distressed properties?” Reading this advertisement makes me wonder if the US property market is a bargain. My guts feel the US property market may fall further. This was confirmed further on a simple search in google. I search for “ buy US distressed properties” and one of the result came out confirmed my suspicion. The article is below:
Beijing Expo shows massive interest in overseas property
02/08/2011
The number of overseas property schemes on show at last week’s Beijing Real Estate Expo doubled to more than 80, when compared with last year’s event, and international agents from more than 20 countries took part including the United States, Australia, Canada, Britain, Singapore, Thailand and Hong Kong. “The whole event was really, really positive with huge crowds and massive media interest,” says Fortune Real Estate partner Steve Dawkins.
Speaking exclusively to OPP from the Far East this week, Dawkins said that “the Beijing Real Estate Expo more than met our expectations as an exhibitor allowing us to generate more than 200 leads over the four days of the show.” “There were lots of local, domestic Chinese stands on the ground floor and overseas property exhibitors upstairs, and the place was packed. The organisers estimate between 100,000 and 120,000 visitors attended and we met a huge number of serious buyers.” Dawkins told OPP “clearly there is a passion for buying more domestic property in China at the moment, but the overseas market is growing very fast indeed.
It is early days for Chinese property buyers who want to look abroad, but we found a lot of wealthy middle class buyers coming to talk to us about investing overseas, especially in an English language country where they can invest close to a good school or university.” Fortune RE’s stand found that many of the potential buyers were self-employed entrepreneurs and that the UK was their favourite destination followed by Australia then the USA. “Distressed American properties appeal,” says Dawkins, “but London and the UK is their favourite option. And Thailand for holiday homes and Istanbul for good investment yields also came up as popular targets.”
This showed that US distressed properties are being market to faraway buyers like Chinese in China. I questioned if the properties are undervalued, why didn’t people like Robert Kiyosaki and real estate investors buy it? I suspect a major decline is in the cards for the naïve Chinese buyers. Let us await our opportunities ahead.
Beijing Expo shows massive interest in overseas property
02/08/2011
The number of overseas property schemes on show at last week’s Beijing Real Estate Expo doubled to more than 80, when compared with last year’s event, and international agents from more than 20 countries took part including the United States, Australia, Canada, Britain, Singapore, Thailand and Hong Kong. “The whole event was really, really positive with huge crowds and massive media interest,” says Fortune Real Estate partner Steve Dawkins.
Speaking exclusively to OPP from the Far East this week, Dawkins said that “the Beijing Real Estate Expo more than met our expectations as an exhibitor allowing us to generate more than 200 leads over the four days of the show.” “There were lots of local, domestic Chinese stands on the ground floor and overseas property exhibitors upstairs, and the place was packed. The organisers estimate between 100,000 and 120,000 visitors attended and we met a huge number of serious buyers.” Dawkins told OPP “clearly there is a passion for buying more domestic property in China at the moment, but the overseas market is growing very fast indeed.
It is early days for Chinese property buyers who want to look abroad, but we found a lot of wealthy middle class buyers coming to talk to us about investing overseas, especially in an English language country where they can invest close to a good school or university.” Fortune RE’s stand found that many of the potential buyers were self-employed entrepreneurs and that the UK was their favourite destination followed by Australia then the USA. “Distressed American properties appeal,” says Dawkins, “but London and the UK is their favourite option. And Thailand for holiday homes and Istanbul for good investment yields also came up as popular targets.”
This showed that US distressed properties are being market to faraway buyers like Chinese in China. I questioned if the properties are undervalued, why didn’t people like Robert Kiyosaki and real estate investors buy it? I suspect a major decline is in the cards for the naïve Chinese buyers. Let us await our opportunities ahead.
Monday, October 31, 2011
When not to buy a cyclical?
From Mr Peter Lynch’s book Beating the street page 234, he stated that buying a cyclical after several years of record earnings and when the P/E ratio has hit a low point is a proven method for losing half your money in a short period of time.
I took a look at the P/E ratio of property counters like Ho Bee, SC Global and Keppel Land and noted that the P/E ratio of all three stocks are at 3. Furthermore, they reported record earnings in their recent results. It is a no-buy for me now in property counters now.
If the property stocks will not do well, then related industries like electronics goods, furniture, cement, tiles will be affected.
The next 2-3 years will be good for stock pickers. Let us await our opportunities. Thank you god.
I took a look at the P/E ratio of property counters like Ho Bee, SC Global and Keppel Land and noted that the P/E ratio of all three stocks are at 3. Furthermore, they reported record earnings in their recent results. It is a no-buy for me now in property counters now.
If the property stocks will not do well, then related industries like electronics goods, furniture, cement, tiles will be affected.
The next 2-3 years will be good for stock pickers. Let us await our opportunities. Thank you god.
Thursday, October 27, 2011
Invest in bonds and Reits now?
What a coincidence! Just when Jim Rogers declare there is a bubble in the bond market, advertisement on investing in Asian bond funds appears in SMRT trains. I believe it is risky to invest in bonds right now. If interest rate is hiked due to inflation, then bond prices will plummet and the investment will lose money.
How about investing in Shopping Mall Reits now? I suspect it is risky too because if the economy takes a dive, then the shoppers will stay at home and shun shopping malls. Retails sales will be impacted and rental rates may even be reduced. This will reduce the dividend yields of Shopping Mall Reits like Suntec Reits.
It is a No-buy for me in both investments.
How about investing in Shopping Mall Reits now? I suspect it is risky too because if the economy takes a dive, then the shoppers will stay at home and shun shopping malls. Retails sales will be impacted and rental rates may even be reduced. This will reduce the dividend yields of Shopping Mall Reits like Suntec Reits.
It is a No-buy for me in both investments.
Wednesday, October 26, 2011
There is a bubble everywhere the retail investor turn.
1) Stock market bubble. SGX at PE ratio of 24, Singtel at PE ratio of 12, OCBC and UOB bank both trade at 30 percent premium over their Net asset value. I believe that blue chips have 30-50% to fall from this price. For example, OCBC bank recent last trade is at $8.50 with a net asset value of $5.80. when the economy worsened, it may fall 50% to $4.25. At this price, it is a bargain for value investor if the net asset value still remain at $5.80. this is inline with Ben Graham theory to buy stock that is at 70-80% of net asset value. Buyers who bought blue chips for their dividend will be disappointed to find that in bad times blue chips can omit their dividends.
2) Property bubble. For example, Sunglade at serangoon ave 2 was transacted at 1100 PSF and this means that I can sell it for $1Million. However, the risk is a downturn in economy will shed jobs in Singapore. Without a job, foreigners will move back to their home country. This will depress rental yields for property buyers. A loan 80% of $1Million is $800,000. Even with interest rate at 1%, the monthly installment is $3,000 . This monthly installment is high even for a high family income of say $10,000 per month because 30% of their monthly income is sucked away by the housing installment. Besides this, there is also CPF deductions and an interest rate hike risk. If interest rate increases, then the monthly installment may rise to $4,000-$5,000 per month. Couple with a job loss in one party, the loan will turn bad.
3) Commodity bubble. In the internet, buy silver and gold ads appears everywhere. If the economy worsen, the demand for silver may reduce and prices of silver and gold will dive.
4) Bond market bubble. Why is there a bubble in the bond market? The prices of bond in the United States is at all time high. While interest rate is at 30 year all time low. Once interest rate rises, the price of bonds will plummet.
I believe the best bet now is to put my money in fixed deposit. At least, the value will not plunge and I can take advantage of any golden opportunity that comes along every 5 to 10 years.
1) Stock market bubble. SGX at PE ratio of 24, Singtel at PE ratio of 12, OCBC and UOB bank both trade at 30 percent premium over their Net asset value. I believe that blue chips have 30-50% to fall from this price. For example, OCBC bank recent last trade is at $8.50 with a net asset value of $5.80. when the economy worsened, it may fall 50% to $4.25. At this price, it is a bargain for value investor if the net asset value still remain at $5.80. this is inline with Ben Graham theory to buy stock that is at 70-80% of net asset value. Buyers who bought blue chips for their dividend will be disappointed to find that in bad times blue chips can omit their dividends.
2) Property bubble. For example, Sunglade at serangoon ave 2 was transacted at 1100 PSF and this means that I can sell it for $1Million. However, the risk is a downturn in economy will shed jobs in Singapore. Without a job, foreigners will move back to their home country. This will depress rental yields for property buyers. A loan 80% of $1Million is $800,000. Even with interest rate at 1%, the monthly installment is $3,000 . This monthly installment is high even for a high family income of say $10,000 per month because 30% of their monthly income is sucked away by the housing installment. Besides this, there is also CPF deductions and an interest rate hike risk. If interest rate increases, then the monthly installment may rise to $4,000-$5,000 per month. Couple with a job loss in one party, the loan will turn bad.
3) Commodity bubble. In the internet, buy silver and gold ads appears everywhere. If the economy worsen, the demand for silver may reduce and prices of silver and gold will dive.
4) Bond market bubble. Why is there a bubble in the bond market? The prices of bond in the United States is at all time high. While interest rate is at 30 year all time low. Once interest rate rises, the price of bonds will plummet.
I believe the best bet now is to put my money in fixed deposit. At least, the value will not plunge and I can take advantage of any golden opportunity that comes along every 5 to 10 years.
Sunday, August 28, 2011
Insights from Rich Dad’s Retire Young Retire Rich Book
I can identify with Robert tips on how to retire young and rich: in this book page 500, he mentioned that a person must decide to be rich daily and find a loved ones who wants to go on the journey with you. In year 2000, I decided to be rich and that is the reason I went into selling life insurance. If not for that, I doubt I will meet the Citibank banker who advised me to read Peter Lynch’s book. Without reading Peter Lynch book, I doubt I will ever learn about fundamental investing. Without this, I believe I will miss the stock rally in year 2004-07. In year 2001-05, I have life partner and friends who does not want to go on the journey of retiring rich with me. Today, I found my loved one who wanted to be on this journey with me. Without my loved ones, I wondered what and where will I be today. Somehow, friend and loved ones who does not want to be on this journey drifted away one reason or another. Life is uncanny.
Wednesday, August 10, 2011
1995 Desaru investors
I did a search in google using “1995 investors in desaru condo” and the two stark contrast results came out. One was a story on Desaru bright future multi-billion ringgit plans in year 2011. Another was the sad story of Desaru investors who lost money in 1995. The path to financial freedom is littered with poor and rotten investments. If one is not careful, he will likely lose his pants and hopefully not his heart. Please heed the lesson behind these two posts. Anything that is highly touted and well-advertised to the retail investor is unlikely to be a great investment. Look at the investors who paid in full to purchase a condominium that was half completed. They never get their money back. This was sold in Suntec city to the working professionals. I wondered whether the people behind it are being served justice.
Mega multi-billion ringgit development project for Desaru
________________________________________
The 1.7km single-plane cable-styled bridge across Sungai Johor.
JOHOR BARU: The Government’s investment arm, Khazanah Nasional Bhd, will unveil a multi-billion ringgit development plan for Desaru this year.
Sources told StarBiz Prime Minister Datuk Seri Najib Tun Razak is expected to launch the project in Desaru either in the third or fourth quarter.
The project will be undertaken by Khazanah’s wholly-owned subsidiary Desaru Development Corp Sdn Bhd (DDC) which it acquired in 2010, inclusive of the latter’s 1,618ha.
In the pipeline for the development is the building of two international class hotels to be managed by two of the world’s renowned hotel management companies and a world-class golf course.
At the same time, another search result for desaru 1995 came out in a forum:
Just got this from archive news report in 2000, about Impian Desaru now Lotus Desaru. Must be trying for the 200 singaporean investor. Dont know what happen to their investment?
200 Singaporeans are among 793 home-buyers who might lose their investments after the Malaysian project's developer wound up
MORE than 200 Singaporeans who bought units in a Desaru condominium, hoping it would be a sound investment, are left in the lurch after its developer wound up last week.
They are among 793 owners who may lose their units if a Malaysian court rules next month that the homes have to be auctioned to pay off the developer's creditors.
Each unit in the condominium, named Desaru Impian Resort and owned by Ghahas (M) Sdn Bhd, cost between RM215,000 ($93,000) and RM615,000 ($267,000).
Besides the Singaporeans, the remaining owners are Malaysians. Ninety per cent of the owners paid up full in cash, said businessman James Chang who represents a group of owners here.
About 160 owners from the two countries have got together to hire a lawyer to retain their units, he said.
The developer is believed to owe at least $20 million to the bank, contractors and buyers, he said.
Touted as the first beach-front condominium built like a theme park in Desaru, the resort-like property's launch here - held at Suntec City in 1995 - attracted many professionals.
It had looked a highly-attractive buy, said Mr Chang. "It was to come with facilities and it was close to Singapore."
But the developer failed to keep his promise. It was supposed to have been completed in 1998, but half of it has not been built.
A computer analyst, who bought a two-bedroom unit for $338,000, said he was promised a guaranteed return of about $34,000 every year for five years if he leased it back to Ghahas to be used as a tourist hotel.
He did that, but until now, he has not been given the key to the unit or the promised cheques. His unit is also not furnished as promised.
The theme park, which was to come with slides, carousels and river rides in front of his block, is nowhere to be seen.
He said: "They are not paying us rent, they have not given us the key, but they are still renting out the units to tourists."
Mr Chang, who bought two units, has pictures of the condominium.
Some units are without air-conditioners. Besides some built-in cabinets, his apartment is also not furnished.
He said while the group is trying to hold on to the units, it also hopes to be compensated for the rent promised by the developer but never paid to the owners.
"But the theme park, I doubt we can get it," he said.
Mega multi-billion ringgit development project for Desaru
________________________________________
The 1.7km single-plane cable-styled bridge across Sungai Johor.
JOHOR BARU: The Government’s investment arm, Khazanah Nasional Bhd, will unveil a multi-billion ringgit development plan for Desaru this year.
Sources told StarBiz Prime Minister Datuk Seri Najib Tun Razak is expected to launch the project in Desaru either in the third or fourth quarter.
The project will be undertaken by Khazanah’s wholly-owned subsidiary Desaru Development Corp Sdn Bhd (DDC) which it acquired in 2010, inclusive of the latter’s 1,618ha.
In the pipeline for the development is the building of two international class hotels to be managed by two of the world’s renowned hotel management companies and a world-class golf course.
At the same time, another search result for desaru 1995 came out in a forum:
Just got this from archive news report in 2000, about Impian Desaru now Lotus Desaru. Must be trying for the 200 singaporean investor. Dont know what happen to their investment?
200 Singaporeans are among 793 home-buyers who might lose their investments after the Malaysian project's developer wound up
MORE than 200 Singaporeans who bought units in a Desaru condominium, hoping it would be a sound investment, are left in the lurch after its developer wound up last week.
They are among 793 owners who may lose their units if a Malaysian court rules next month that the homes have to be auctioned to pay off the developer's creditors.
Each unit in the condominium, named Desaru Impian Resort and owned by Ghahas (M) Sdn Bhd, cost between RM215,000 ($93,000) and RM615,000 ($267,000).
Besides the Singaporeans, the remaining owners are Malaysians. Ninety per cent of the owners paid up full in cash, said businessman James Chang who represents a group of owners here.
About 160 owners from the two countries have got together to hire a lawyer to retain their units, he said.
The developer is believed to owe at least $20 million to the bank, contractors and buyers, he said.
Touted as the first beach-front condominium built like a theme park in Desaru, the resort-like property's launch here - held at Suntec City in 1995 - attracted many professionals.
It had looked a highly-attractive buy, said Mr Chang. "It was to come with facilities and it was close to Singapore."
But the developer failed to keep his promise. It was supposed to have been completed in 1998, but half of it has not been built.
A computer analyst, who bought a two-bedroom unit for $338,000, said he was promised a guaranteed return of about $34,000 every year for five years if he leased it back to Ghahas to be used as a tourist hotel.
He did that, but until now, he has not been given the key to the unit or the promised cheques. His unit is also not furnished as promised.
The theme park, which was to come with slides, carousels and river rides in front of his block, is nowhere to be seen.
He said: "They are not paying us rent, they have not given us the key, but they are still renting out the units to tourists."
Mr Chang, who bought two units, has pictures of the condominium.
Some units are without air-conditioners. Besides some built-in cabinets, his apartment is also not furnished.
He said while the group is trying to hold on to the units, it also hopes to be compensated for the rent promised by the developer but never paid to the owners.
"But the theme park, I doubt we can get it," he said.
How not to catch a falling knife?
I read an interesting post in forum today on how to avoid catching a falling knife. Please allow me to share my experience. In year October 2008, I read Warren Buffet’s advice that it is time to buy stocks because he noted that seasoned investors are afraid that the economy is going to collapse.
Heeding his valuable advice, I immediately researched a stock that I knew is going to do extremely well in year 2009. This stock is Ho Bee. In a quick summary, the important numbers are Net asset value, 80 cents, share price 38 cents, market value about $200 Million, company has a few projects fully sold like The Coast in Sentosa expecting to TOP in year 2009. That is when I got excited because the projects will generate estimated $900 Million in revenue. Based on net profit of 30%, Ho Bee will likely generate a profit of $250 Million for year 2009. The next figure is what keeps me excited. That gives Ho Bee a PE of 1. What can I lose if the PE is 1 and I m buying at 38 cents at 80 cents net asset value? I decided to buy in December.
In addition, I urged my brother and mother to buy Ho Bee as well. But they commented that it is too risky to buy when the economy is collapsing. After I purchased at 38 cents in December 2008, I thought the share price will rebound in January. My god! More bad news followed, and the stock market tanked further. Ho bee was not spared and it fell 30% to 29 cents. That is when I should buy more. I hold on to my stocks and was actually worried that my brother prediction could be right. I also chided myself as I have utilized most of my funds with a couple of thousands left.
In February, I looked at US regional banks in an attempt to emulate Peter Lynch performance in buying Savings and Loans in year 1990. Some of the banks like Fifth third Bank and Huntington Bank have insiders buying at $2 or $3 and the share price fell to $1. I was excited about this banks. What can I lose when I buy at half the price of insiders? Due to lack of funds, I spent two thousands dollars to buy US banks. In March, the economy suddenly rebounded due to the QE measures by the FED. I was vindicated. What a relief. For a moment, I thought, my brother is right in the economy going to fail and all stocks will fall to zero. Thank god, things eventually turned out right. Ho Bee rose from 29 cents to $1.80 in year 2010. The US banks like Fifth Third rose from $1 to $12 in a year or so. Wow!
Peter Lynch is right. He mentioned that it is best to wait 2-3 years (sometimes even longer) and let things fall and then hit the ground and vibrate for a while before picking it up. It is great advice.
Heeding his valuable advice, I immediately researched a stock that I knew is going to do extremely well in year 2009. This stock is Ho Bee. In a quick summary, the important numbers are Net asset value, 80 cents, share price 38 cents, market value about $200 Million, company has a few projects fully sold like The Coast in Sentosa expecting to TOP in year 2009. That is when I got excited because the projects will generate estimated $900 Million in revenue. Based on net profit of 30%, Ho Bee will likely generate a profit of $250 Million for year 2009. The next figure is what keeps me excited. That gives Ho Bee a PE of 1. What can I lose if the PE is 1 and I m buying at 38 cents at 80 cents net asset value? I decided to buy in December.
In addition, I urged my brother and mother to buy Ho Bee as well. But they commented that it is too risky to buy when the economy is collapsing. After I purchased at 38 cents in December 2008, I thought the share price will rebound in January. My god! More bad news followed, and the stock market tanked further. Ho bee was not spared and it fell 30% to 29 cents. That is when I should buy more. I hold on to my stocks and was actually worried that my brother prediction could be right. I also chided myself as I have utilized most of my funds with a couple of thousands left.
In February, I looked at US regional banks in an attempt to emulate Peter Lynch performance in buying Savings and Loans in year 1990. Some of the banks like Fifth third Bank and Huntington Bank have insiders buying at $2 or $3 and the share price fell to $1. I was excited about this banks. What can I lose when I buy at half the price of insiders? Due to lack of funds, I spent two thousands dollars to buy US banks. In March, the economy suddenly rebounded due to the QE measures by the FED. I was vindicated. What a relief. For a moment, I thought, my brother is right in the economy going to fail and all stocks will fall to zero. Thank god, things eventually turned out right. Ho Bee rose from 29 cents to $1.80 in year 2010. The US banks like Fifth Third rose from $1 to $12 in a year or so. Wow!
Peter Lynch is right. He mentioned that it is best to wait 2-3 years (sometimes even longer) and let things fall and then hit the ground and vibrate for a while before picking it up. It is great advice.
Monday, July 25, 2011
What a show!
I read the news that the US senators and government officials fight over the plan to raise the debt ceiling with amusement. To me this is acting at the highest level. They probably deserved the “best actor award”. It reminded me of a show I watched in China. My China cousin who wanted to setup a retail shop, had a meeting with a landlord. In this meeting, which I witnessed, the landlord’s sons and relatives were urging the decision maker that “someone had a better price”, etc…it was like they do not want to rent it out to my cousin. I find it strange because the shop was sitting there empty collecting dust. Why would they not rent it out? Eventually after some serious quarrels or acting, they decided to rent it out to my cousin. It was almost as if the landlord were doing us a favour by renting the shop to us. And my cousins are the so called buyers. What a show!
The US officials bickering with the debt ceiling plan is also a show. It was scripted and directed by someone. In this play, they have already decided to increase the debt ceiling. It is just that they wanted to show the world, how serious they wanted to reduce the deficit so they debt holders will continue to buy their debt. What a show to sell! Anyway, it was a good show for the US debt holders like Japan and China.
The US officials bickering with the debt ceiling plan is also a show. It was scripted and directed by someone. In this play, they have already decided to increase the debt ceiling. It is just that they wanted to show the world, how serious they wanted to reduce the deficit so they debt holders will continue to buy their debt. What a show to sell! Anyway, it was a good show for the US debt holders like Japan and China.
A simple world
Assume in this world there are only two persons. Mr rich and Mr Poor live happily in this world. One day Mr Poor needs money badly and borrow $1 from Mr Rich. The asset of loan $1 is with Mr Rich. Mr Poor is in debt of $1. The only way Mr poor can pay off the debt is when he works for Mr Rich and Get paid $1. Then they are equal in economic standing. Only when Mr Rich buy something from Mr Poor, does Mr Poor has a chance to be richer than Mr Rich. The USA reminded me of Mr poor and Mr rich is China. The existing economic standing of both man will change when Mr poor decide not to honour the debt or change the medium of transaction i.e. money. The game changes when the above happens. It is interesting because this is what may happen in the next 1-2 years. Mr rich also remind me of government and Mr poor is the average guy.
Assume in this world there are ten persons. 5 of them are saver and 5 of them are spenders. They each have $1 at first. Then the spenders spend their $1 and they are left with nothing. The savers got their money and they got $10. One of the good spender decide to borrow $1 to pay for wife medical bill. He promised to pay it back with his job income. True enough, after some time, he paid back the $1 to the spender. Another bad spender borrow $1 but did not pay back the $1 to the saver. He claimed he lost his job and has no money. This only impact the particular saver. But if the US is to claim he has no money to pay back the loan, then the creditworthiness of the nation will be in doubt and the value of the dollar will plummet. The whole world will be impacted because this bad spender has borrowed from too many people.
Assume in this world there are ten persons. 5 of them are saver and 5 of them are spenders. They each have $1 at first. Then the spenders spend their $1 and they are left with nothing. The savers got their money and they got $10. One of the good spender decide to borrow $1 to pay for wife medical bill. He promised to pay it back with his job income. True enough, after some time, he paid back the $1 to the spender. Another bad spender borrow $1 but did not pay back the $1 to the saver. He claimed he lost his job and has no money. This only impact the particular saver. But if the US is to claim he has no money to pay back the loan, then the creditworthiness of the nation will be in doubt and the value of the dollar will plummet. The whole world will be impacted because this bad spender has borrowed from too many people.
Thursday, May 5, 2011
My thoughts on the election
I was neutral to all parties before the election. Personally, I was worried too many cooks spoilt the kitchen. After hearing both sides verbal attacks, doubts began to form on the ruling party ability to lead. One of the famous phrase used was “ Despite knowing the perils in walking to a tiger filled mountain, I purposely walked forward”. When someone in an ordinary situation used this phrase, it meant that he or she is moving forward despite the danger ahead. This phrase represents courage. When the ruling elite heard this phrase, they assumed that it meant they were a tiger. Anger was written over their face and it seemed that they were highly irritated over a neutral remark. The wife of the ruling elite added that whoever kill my tiger will be deal with. Aren’t they over reacting on a neutral remark? Then there was the hype over co-driver or pilot. The underdog suggested that if the driver is sleeping on the wheel, the co-driver has to slap the driver awake. I do this all the time to my brother if he drives recklessly. The ruling elite assumed again that the co-driver wanted to tussle with the wheel with the driver. Again, the underdog(or I) never said they wanted to tussle with the wheel. They merely wanted the driver to wake up if they were on the wrong track.
If the analogy was wrong, then as a champion for thirty years, let it go. Why keep harping on such a little comment. It seemed that the ruling elite is unduly concerned with minor issues that the opposition made and claimed that it was a personal attack on their integrity, etc…… well in my humble opinion a true champion would have said “No comments” or ignore those minor comments completely. By responding excessively to such minor comments, it is clear to me that the ruling party is inconfident, unsure and perhaps shaking in fear that their empire is unravelling. Michael Phelps (8 gold medals Olympic winner) did not say the competitors have deeper ambition, lack a plan, do not have any substance or is a celebrity. Luckily he did not say if you support the competitor, you will have to repent. Before his competition, he mind his own business ( listen to his favourite song to perk him up) and relax his muscle. Before his swim, he chat or shake hand with competitors. This is a true champion behavior. Well this is truly a national disgrace to see this level of pettiness in a top management team. They are behaving like kids fighting over a “class chairman” award. HAHA. Amazing.
The ruling elite also accused the underdog that their accounts is messy. If the underdog had thrown similar accusations, they would have lost their pants (bankrupt). HAHA. What an unfair world!
The best part is this. There is a boy who wanted very much to be re-elected as a chairman again. In his term, he was supposed to guard a mad dog who will bite anyone. Due to some strange reasons, he let the dog escaped. Luckily the dog did not bite anyone. But the worst part is, he did not apologise and repent, instead he said “let us move on”. Amazingly, he was not sacked by the teacher. Now when his term expire and he wanted to be re-elected, he apologise to the whole class.
I guess we know who to vote now. Do u?
If the analogy was wrong, then as a champion for thirty years, let it go. Why keep harping on such a little comment. It seemed that the ruling elite is unduly concerned with minor issues that the opposition made and claimed that it was a personal attack on their integrity, etc…… well in my humble opinion a true champion would have said “No comments” or ignore those minor comments completely. By responding excessively to such minor comments, it is clear to me that the ruling party is inconfident, unsure and perhaps shaking in fear that their empire is unravelling. Michael Phelps (8 gold medals Olympic winner) did not say the competitors have deeper ambition, lack a plan, do not have any substance or is a celebrity. Luckily he did not say if you support the competitor, you will have to repent. Before his competition, he mind his own business ( listen to his favourite song to perk him up) and relax his muscle. Before his swim, he chat or shake hand with competitors. This is a true champion behavior. Well this is truly a national disgrace to see this level of pettiness in a top management team. They are behaving like kids fighting over a “class chairman” award. HAHA. Amazing.
The ruling elite also accused the underdog that their accounts is messy. If the underdog had thrown similar accusations, they would have lost their pants (bankrupt). HAHA. What an unfair world!
The best part is this. There is a boy who wanted very much to be re-elected as a chairman again. In his term, he was supposed to guard a mad dog who will bite anyone. Due to some strange reasons, he let the dog escaped. Luckily the dog did not bite anyone. But the worst part is, he did not apologise and repent, instead he said “let us move on”. Amazingly, he was not sacked by the teacher. Now when his term expire and he wanted to be re-elected, he apologise to the whole class.
I guess we know who to vote now. Do u?
Tuesday, March 8, 2011
Observations in march 2011
My recent trip to Bishan Junction 8 yielded many interesting points. One of them is at a coffeeshop above the bus interchange. This eating place is frequented by many low income retail workers from the mall. It has been chosen last year as an indicator of inflation. The stall I chosen is the popular mixed rice stall. 2 vegetables and 1 meat used to cost $2.50. From 1st march, price has increased by 10cents for each dish and now cost $2.80. This means a 12 percent increase in core food prices as mixed rice is a dishes favoured by hungry workers. I suspect the same thing is happening to the rest of the coffeeshops around Singapore and the rest of the world. I wondered if the financial experts like Mike Maloney (Rich dad adviser) are right that government around the world lie about inflation. I now believe that Mike is right on this issue.
Could the hyper inflation of the 1970s that financial experts warned in 2008 when government worldwide did a Quantitative Easing be coming? Now I suspect hyper inflation is on its way. Perhaps this may not be a big concern if wages increase at the same pace. But my mother-in-law recently found a job in Ang Mo Kio factory. Her wage is $4 per hour. This is even lower than the rate I work in 1992, which is $5.50-6 per hour if my memory did not fail me. Just in case, u think I m working at a high class place, No, it is at a factory in Ang Mo Kio too, though different company I suspect. That means, while prices of food has doubled from $1.50 in year 1992 ( char kwey teow) to $3 now, wages of lower income has stagnated or dropped. How can things be all right for the lower income people?
Besides this, I noted that Charles and Keith at ground floor of J8, an established ladies shoe retailer has closed. As Bishan is a high income housing estate and female residents coming of age in their teens and twenties will likely buy their shoes, I expect business in Charles to be booming. The opposite has happened. My conclusion is business conditions is tough in the next 3 years. This is what the Lee metal Management prognosticated that profit margin will get squeezed as competition intensifies.
I made a recent trip to Bangkok, Thailand and it was a fruitful trip. I noted that prices at street food stall, for eg, a chicken or pork, cost 10 Baht. This translates into 40 cents which is about the same as the price here (50 cents). Strange as I thought the price here in a third world country will be much lower. Although their fried noodle or rice is only 30-40 Baht, about S$1-$2, their quantity is low and hardly filling. I suspect their average wages to be only S$300-400. We concluded that things are not cheap at least for the middle income family in Thailand. My wife and I shopped at many places popular with local like MBK, Pratunam Market, Chatuchak Market, Siam Square, Platinum Fashion Mall, and we only found the biggest bargain at MBK and Platinum fashion mall which is a wholesale market centre for fashion clothes. Overall, we were disappointed with the bargains which our friends told us before the trip. Perhaps prices have increased as time goes.
Could Anthony Robbins predictions in year 2010 be correct? He forecast that the economy will nosedive in this year. He predicted that many who are prepared will be big winners and many more unprepared will be big losers. I hope to be the one prepared. A glance at the stock market, I noted that the volume or value was only $600 million for half day, which means $1.2 Billion for the whole day. This is a far cry from the bull market of 2006-7 when daily market turnover was $4-5 billion. Although the government claimed that the economy has turnaround, the stock market, which is a leading indicator says otherwise. SGX shareholders have better sell before the big sell down which is coming soon.
Could the hyper inflation of the 1970s that financial experts warned in 2008 when government worldwide did a Quantitative Easing be coming? Now I suspect hyper inflation is on its way. Perhaps this may not be a big concern if wages increase at the same pace. But my mother-in-law recently found a job in Ang Mo Kio factory. Her wage is $4 per hour. This is even lower than the rate I work in 1992, which is $5.50-6 per hour if my memory did not fail me. Just in case, u think I m working at a high class place, No, it is at a factory in Ang Mo Kio too, though different company I suspect. That means, while prices of food has doubled from $1.50 in year 1992 ( char kwey teow) to $3 now, wages of lower income has stagnated or dropped. How can things be all right for the lower income people?
Besides this, I noted that Charles and Keith at ground floor of J8, an established ladies shoe retailer has closed. As Bishan is a high income housing estate and female residents coming of age in their teens and twenties will likely buy their shoes, I expect business in Charles to be booming. The opposite has happened. My conclusion is business conditions is tough in the next 3 years. This is what the Lee metal Management prognosticated that profit margin will get squeezed as competition intensifies.
I made a recent trip to Bangkok, Thailand and it was a fruitful trip. I noted that prices at street food stall, for eg, a chicken or pork, cost 10 Baht. This translates into 40 cents which is about the same as the price here (50 cents). Strange as I thought the price here in a third world country will be much lower. Although their fried noodle or rice is only 30-40 Baht, about S$1-$2, their quantity is low and hardly filling. I suspect their average wages to be only S$300-400. We concluded that things are not cheap at least for the middle income family in Thailand. My wife and I shopped at many places popular with local like MBK, Pratunam Market, Chatuchak Market, Siam Square, Platinum Fashion Mall, and we only found the biggest bargain at MBK and Platinum fashion mall which is a wholesale market centre for fashion clothes. Overall, we were disappointed with the bargains which our friends told us before the trip. Perhaps prices have increased as time goes.
Could Anthony Robbins predictions in year 2010 be correct? He forecast that the economy will nosedive in this year. He predicted that many who are prepared will be big winners and many more unprepared will be big losers. I hope to be the one prepared. A glance at the stock market, I noted that the volume or value was only $600 million for half day, which means $1.2 Billion for the whole day. This is a far cry from the bull market of 2006-7 when daily market turnover was $4-5 billion. Although the government claimed that the economy has turnaround, the stock market, which is a leading indicator says otherwise. SGX shareholders have better sell before the big sell down which is coming soon.
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