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.
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