The “in” thing to invest now is 1) bonds 2) gold 3) US distressed real estate. Many seminars have sprung up touting gold, bond and USA distressed real estate as safe or alternative investments. These alternative investments seemed to me like the DBS bank “Minibonds” which was highly touted to conservative investors 6 years ago. I find it strange that people prefer to buy something new like gold after losing money in stocks. Perhaps it is a case of the grass is greener on the other side.
These are exactly the investments I m wary investing right now when it is touted highly to the retail investors. Maybe the bubble will go on for a year or two before bursting. But I prefer to buy something of value. Patience is the key here. Let us monitor the situation and await our opportunities.
Tuesday, January 31, 2012
Tuesday, December 27, 2011
My best guess for year 2012-2013
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$. As interest rates are hiked, bond prices and stock prices will plummet. That will be an ideal time to buy back stocks or bonds. If bond yields at 10%, it will be a tremendous buy. Stock PE will be at 3-4, that will be a wonderful buy too.
I am dreaming. Will this day come?
As more people realize the crisis in USA is deeper than Europe, the US dollar may weaken further against the asian currencies and we may see S$ 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?
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.
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