Ordinary People, Extraordinary Returns

GDP revision shows recession winding down

2009-10-01T08:22:00.005+08:00

Enough said, it's time to take action. We had passed the pit of the business cycle, that's my analysis/prediction/gut feel whatever you put it and I had said it during recent a dinners with my ex-colleagues in SBS and SAF. They all believe otherwise. So I told them there is no point arguing, the result will be out soon and we can bet on it.

I had lately shared with 2 friends about an idiot-proof investment strategy which now is the right time to deploy. This strategy does not requires any analytical skill nor time to do close monitoring. I'll come to this strategy in my next sharing.

I never comment or pretend that I am a fortune teller based on hindsight, if you know me. All my blog sharing can testify that. The following is an excerpt from AFP:

===================

WASHINGTON (AFP) - – The US economy moved closer to emerging from recession in the second quarter, according to revised data Wednesday showing a smaller-than-expected 0.7 percent pace of output decline.
The figure for gross domestic product (GDP) was better than last month's estimate of a 1.0 percent drop, and stronger than the average estimate of private economists calling for a 1.2 percent annualized rate of decline.
The report appeared to confirm that the world's biggest economy was emerging from its long recession and rebounding from a hefty 6.4 percent tumble in the first quarter of 2009.
The latest data "sets the stage for an improved economic outlook for the rest of 2009 and throughout 2010," said Aaron Smith at Moody's Economy.com.
"The downturn appears to have concluded this summer, and the economy is on track to grow for the first time in more than year in the third quarter. The initial phase of growth is being driven by rapid recoveries in housing and manufacturing, diminishing drags from equipment spending and nonresidential construction, and government support."

2009 F1 Singtel Singapore Grand Prix (2)

2009-09-28T22:50:00.003+08:00

2009 F1 Singtel Singapore Grand Prix (1)

2009-09-28T22:38:00.002+08:00

Potential pennies - the cigarette butt strategy

2009-09-08T13:23:00.001+08:00

5 Common Warren Buffett Myths Debunked

2009-09-07T23:52:00.001+08:00

Somebody posted an interesting article on an investment website about Warren Buffett which I agree in part. Although Warren Buffett has been my role model in investment management, some years ago, I realized that he doesn’t really practise what he preached. For example, he invested in China oil company, junk bonds, currencies etc.

Nonetheless, value investment is still a sound investment approach that works for decades, valid today and for the years to come.
===============================

Berkshire Hathaway (BRKA) recently posted its worst loss ever and the media is buzzing again. This article attempts to clear up some of the most widely portrayed Warren Buffett myths.

Berkshire Hathaway stock, the most expensive stock in the world, peaked at $149.972 in December 2007 and has since fallen at one point over 50% hitting a multi-year low of $70,100 in early March, 2009. BRKA stock today closed at $81,690. Myths below.

1. He buys cheap stocks.

Probably the most common and widespread misconception of Warren Buffett is that he got so wealthy by buying cheap stocks. Though Warren Buffett advocates buying stocks at fair or even firesale prices if possible, it is not the only metric of his decisions. In fact, it may be a relatively minor factor in his considerations.

In his younger years, Buffett bought stocks he called “cigarette butt” stocks. Namely stocks that were selling for attractive prices (i.e. under book value, at a third of working capital etc). He did great but not very great. Buffett later acknowledged that he found out it was much better to buy good businesses instead of just cheap stocks. He later made the bulk of his fortune in American Express, Geico, Coca Cola, Gillette etc.

2. He’s ever wrong.

Yes, even Warren Buffett can be wrong! In the early 1980s, Buffett was worried that hyperinflation would make bonds unattractive investments. But inflation eventually ticked down and hasn’t raised its ugly head yet for nearly 30 years.

Buffett also made mistakes in his stock and bond investments. He bought preferred stocks in an airlines company that almost got wiped out and sold McDonald’s too early. He bought many stocks he later wished he didn’t buy. Most recently, he became the largest institutional shareholder of Conoco Phillips, an oil company, when oil prices were near their highs.

The lesson here is not knocking on Buffett. Instead, realizing that even the Oracle of Omaha can be wrong quite often tells you that losses and being wrong are an inevitable part of investing. The key issue is how we deal with risk and losses, and whether we make a lot more on our winners than we lose on our losers.

3. Buffett doesn’t trade.

Contrary to public opinion, Buffett doesn’t just invest in stocks. Though Buffett frowns on speculation, Buffett does not refrain from making investments in currencies, commodities or even the stock market of a speculative nature. In the early 2000s, Buffett actually shorted the Dollar, tidying up a handsome profit as he covered his positions a few years ago. Buffett has also been involved in silver, copper and oil (as can be seen from his letters to shareholders). Buffett also does arbitrage in the stock market. But he usually controls the sizes of his speculative positions. Perhaps the lesson to be learnt here is only to risk what you can afford to lose if you’re going to speculate.

4. Buffett doesn’t use financial leverage.

This may be one of the most persistent myths about Buffett. Buffett once wrote “Debt is a four letter word.” He strongly preaches against highly leveraged business/financial operations, but in fact, Buffett does use financial leverage. At the start of his investment career, he managed assets for other people. That’s leveraging his knowledge. Later on, Buffett bought insurance companies which generate lots of money from premiums known as “float”. Buffett could invest the float until there were claims from insurees. Though float is low cost compared to the profits Buffett generates from his investments, this is leverage nonetheless.

5. Buffett doesn’t diversify.

This is not true. Berkshire Hathaway owns dozens of companies and has investments in many sectors. True, Buffett says he like concentrating his investments in companies he fully understands. But he also recommends for the investor who doesn’t have much time for investment research that he “believes in extreme diversification”

The Oracle of Omaha is not a god, far from it, but he has many traits and his investment philosophy can be studied and learned from to aid our own personal investment decisions.

US consumer spending up 0.2%

2009-08-30T04:30:00.002+08:00

Excerpt from AFP (28 Aug 09):

WASHINGTON - US CONSUMER spending rose for the third consecutive month in July while incomes were virtually flat, government data showed on Friday in a report suggesting demand picking up amid the long recession.

The Commerce Department said consumer spending - which drives two-thirds of US economic activity - rose 0.2 per cent in July, in line with the average analyst forecast.

Personal income was up less than 0.10 per cent and disposable personal income - income less personal taxes - slipped less than 0.1 per cent.
The department said spending rose a revised 0.6 per cent in June, a hefty 0.2 percentage point higher than the initial estimate.......

Update on REITs' performance (1)

2009-08-30T04:16:00.000+08:00

During recent gathering, some of my friends were asking about investment opportunity in SGX-listed REITs. Hence I decided to do a bit of study in REITs. Although REIT index underperformed against the STI, there are still potential outlook for REITs consider the recovery in global economy. At least that’s my view on the direction of global economy. The following is an excerpt from Business Times (29 Aug 09) on REITs’ performance:

“The Straits Times Reit Index has underperformed the benchmark Straits Times Index almost every day in the past 12 months. Despite some recovery since March, Reit returns are still some 15 per cent behind the equity index. Unit prices have been driven down by concerns over refinancing and worries that commercial or industrial rentals will not get sprightly, and that hospitality rates will remain depressed. Yet they have not been doing all that badly, even if the market has not realised it yet. A Phillip Securities research report found that on a year-on-year basis, out of the 18 Reits that have announced their results, 12 reported revenue growth, one reported flat revenue growth while five reported negative revenue growth. Nine Reits saw an increase in distribution per unit (DPU); the other nine saw a decrease.”

Whilst many REIT-counters had surged by as much as 100% since their low in Mar 09, the valuation and outlook remains attractive for some. I’ll just pick a few REITs to share with all. These REITs may see lower returns for the year but has remained strong and struggled well in the midst of the recession.

===============================
Suntec REIT

Property owned: Suntec City Mall and certain office units in Suntec Towers One, Two and Three and the whole of Suntec Towers Four and Five, Park Mall, Chijmes and one-third interest in One Raffles Quay.

Reporting period: 1H2009

Rental revenue = $129.4m (up 12.4% year-on-year)
Returns after tax = $58.4m (down 10.3% year-on-year)
Overall occupancy rate = 94.8%
Distribution per unit = 5.895 cents (up 11% year-on-year)
NAV = $1.984
Current price = $1.01
Yield = 5.84%

Recent significant activities: Suntec REIT invests S$25m equity stake to gain strategic foothold in Suntec Singapore international convention & exhibition centre.

Analysts’ target = $1.07 (CIMB), $0.94 (hold – Phillip)

My view: Suntec REIT has huge growth potential considers the development in the area includes construction of Circle Line and Marina Bay Sands which will bring in more crowd and activities after completion. However, near term stock movement is highly uncertain considers the presumably economic recovery is still at infant stage. On 28 April 2009, Suntec REIT obtained a secured facility of S$825.0 million Term Loan Facility with a panel of 7 banks to refinance all borrowings maturing in FY 2009. This give us a breather on its refinancing needs.

My recommendation is to buy half of your target quantity for its yield and hold. Should there be a technical downturn, you should then accumulate to your target quantity.

=================================
Mapletree Logistics Trust

Invest in a diversified portfolio of quality income-producing logistics real estate and real estate-related assets in Asia. By 30 June 2009, this has grown to a portfolio of 81 properties, with a book value of approximately S$2,906 million spread across 6 countries: 47 are in Singapore, 11 in Malaysia, 8 each in Hong Kong and Japan, 6 in China, and 1 in South Korea.

Reporting period: 1H2009

Rental revenue = $105.2m (up 21.7% year-on-year)(2Q 2009 started and ended with 81 properties. 2Q 2008 started with 72 properties and ended with 76 properties)
Returns after tax = $57.3m (up 11.8% year-on-year)
Overall occupancy rate = 98.3%
Distribution per unit = 2.95 cents (down 25% year-on-year)(decrease in DPU y-o-y due to additional units arising from the rights issue in Aug 2008)
NAV = $0.88
Current price = $0.645
Yield = 4.57%

Recent significant activities: Rights issue of 3 units for every 4 units owned at a right price of $0.9285.

Analysts’ target = $0.70 (DBS)

My view: With low PE, low PB and reason yield, it is recommended to buy half of your target quantity. Should there be a technical downturn in the 2H2009, you can then complete your acquisition. I still hold the view that global economy has passed the pit of the business cycle.

To be continue……..

Global economic recovery 'has started'

2009-08-19T00:15:00.003+08:00

Isn't this what we have been waited for - global recovery. In fact, all the signs and symptoms suggested that we may have just passed the bottom of the business cycle - we are on the road to recovery. Well, that's what i reckon. But do not expect that thing will change overnight. Do not think that out of sudden businesses are reporting huge jump in revenue and profit, or consumer confidence and job creation skyrockted etc. Get real, it takes a bit of time to feel the positive impact - assuming no more big scandal or crisis. Trust me, many local companies still keep their "headcount freeze" policy intact.

==============================

WASHINGTON - The global recovery from recession has begun but countries will need to rebalance their economies to make sure it is sustainable, International Monetary Fund's chief economist, Olivier Blanchard, said Tuesday.
'The recovery has started. Sustaining it will require delicate rebalancing acts, both within and across countries,' he said in an IMF article, released in advance of publication on Wednesday.
Mr Blanchard cautioned that predictable models based on past recoveries from recessions would not apply to the worst global slump in seven decades.
'The world is not in a run-of-the mill recession. The turnaround will not be simple. The crisis has left deep scars, which will affect both supply and demand for many years to come,' he said. -- AFP

NLP with Mind Kinesis (3)

2009-08-10T16:31:00.004+08:00

Perceptual Positions

In NLP, perceptual position is a process (a mental technique) whereby you mentally review (or preview) a situation from a number of different positions (or point of views) in order to enrich your appreciation of what is involved. The use of perceptual position:

- Improves your understanding of other people.
- To take a step back and consider issues.
- Helps you appreciate the influence of your verbal and non-verbal behaviour on others, and the influence of their behaviour on you.

To do this, first identify a past event that you have a serious relationship problem. You are, and must, be willing to let it go. Then mark 3 positions on the floor - position 1 represent's client himself, position 2 represnt the third party and position 3 represent a coach/consultant. Let’s assume that you are the coach/consultant and you are doing perceptual position with a client.

Step 1:
- Briefly discuss on this issue with client and identify the third party involved in this situation.

Step 2:
- Get client into position 1 and fully associate with his/her own feeling, viewpoint, experience etc.
- Ask client questions like “how do you feel”, “what is your highest intention”, “what’s your opinion of the third party”, “why is he/she acting in this way” etc etc?

Step 3:
- Step out of position 1 and break state (ask any irrelevant question or remark).
- “What did you have for breakfast”.

Step 4:
- Get client into position 2 and fully associate into the other party’s feeling, viewpoint, experience etc.
- Ask client questions like “how do you feel”, “what is happening”, “what is your highest intention”, “what’s your opinion of the you in position 1”?

Step 5:
- Step out of position 2 and break state (ask any irrelevant question or remark).
- “Sorry I need a toilet break”.

Step 6:
- Get client into position 3 and fully associate into a consultant/coach.
- Ask client questions like “how do you feel the “you” in position 1 & 2”, “what are the differences in behaviours and intention”, “what are the values you can draw to address the problem”, “what more can be done to improve relationship”?

Step 7:
- Step out of position 3 and break state (ask any irrelevant question or remark).

Step 8:
- Get into position 1 again and ask how well can client handle the situation now.

Step 9:
- Get into position 2 again and ask how well can client handle the situation now.

Note again that NLP is more an art than science. So you actually can find other NLP coaches with slightly different procedure. Some come with position 4 whilst others recommend to go through the cycle 2 times.

What I am about to say next is a matter of my opinion. Firstly, the whole processes may look profound but is very simple – just try to put yourself into someone else’s shoe. And many of us could be actually doing it most of the time (without going through the steps above) by being understanding. In my opinion, perceptual positions can only be used under certain circumstances. E.g. you can’t do this to a lady who had been raped, or someone who had been cheated by his/her friend in a business deal or a wife been constantly abused by her husband. Also note that perceptual position requires you to “associate into the thinking/behaviour/intention” of the third party. A person simply cannot try to perceive the behaviour/intention of the third party through his/her own very brain especially when the third party has a downright ill intention.

Therefore, in my opinion, perceptual position is used in a normal situation of mis-understanding. And actually anyone can do it without going through the steps above – by taking a deep breathe and do self-reflection on the whole issue assuming that that person is open and willing to mend the relationship.

…….. to be continue

NLP with Mind Kinesis (2)

2009-08-06T23:37:00.003+08:00

Basically NLP’s communication model says that when we receive messages, our brain will process, filter and alter it. These messages become certain meaning to the recipient depending on many factors. And whatever this meaning might be, couple with the recipient’s physical posture, it ultimately determines the recipient’s BEHAVIOUR. And of course, the behaviour will have a direct impact on the result. That means to say, if a person wants to have solid result in things he/she is doing, he/she must change to a positive posture and do something such that whatever message the brain processes, the meaning to it is always positive. Hence, when the internal representation and the physical appearance both turned positive, the recipient would take massive and unstoppable actions to get what he/she wants.

The question is – how to make sure that our brain will always interpret messages positively? That’s why people pay a few thousand dollars for NLP programme. And if you think that I can share with you the course detail such that you can acquire the skill by just reading notes, you are dreaming. Can you learn driving or ballet by reading blogs? Not likely. Besides, there are quite a number of NLP tools to use and I’m not even competence in any of them. I mean get real; a person cannot be competent by attending a 6-day coaching.

My Second Struggle

When the programme started on 17 Jul, I had another problem and a serious one. Not many people knew that I had a medical condition – hearing problem. Sometime in May this year, my hearing started to deteriorate and doctors just simply gave me medicines and eardrop. And it got worst by the time I started the NLP programme. I totally have no mood to continue with the programme as I am worried that I might turn deaf. If that happens, I will lose my job and become a burden to my parents. In fact, my hearing problem was one of the factors that upset me in May and I’ve been running around clinics/polyclinic since then.

I told my NLP trainer on my personal problem and he advised me to focus on controllable things – to see specialists (he shared during 1st day training that highly effective people focus on controllable things). The final outcome is beyond my control. He wants me to think on the positive side. Finally I went to see the specialist and still continue with the NLP programme.

First 3 days

During the first 3 days, we gone through quite a number of tools such as NLP’s presuppositions which to-date, I still could not fully appreciate the concept. There are 14 presuppositions but some of them seems to be repeating especially those related to “behaviour” or “resources”.

And one thing very important to highlight here is that NLP tools do not provide solutions to clients’ problem. These tools are not designed to provide solution but to guide the client to get the solution from himself. Doctors seek to provide solution to client’s problem, but not NLP tools!

We also touched on how to use our senses to build rapport, to influence and improve communications. For example by taking note on client’s breathing, skin colour, by mirroring client’s habit/movement, by chunking up/down the messages, submodalities, swish patterns etc. I’ll just share one exercise here – sensory acuity (seeing, hearing, feeling, smelling and tasting). It is very important to “sense” what’s going around us (in Mandarin we call that as 知自知彼，百战百胜):

- Feedback /information that indicates the extent to which you are on or off target in achieving your outcomes.
- Other people’s actions and reactions to certain situations/stimuli.
- How you are reacting to certain situations/stimuli.

To practice your sensory acuity, you can do this simple exercise with someone. This exercise is a two-person exercise - A and B. B’s job is to observe A. To simplify the discussion, let us assume A is a male and B a female.

1. A clear his mind so as to be in neutral state, closes his eyes and thinks of someone he dislikes.

2. While A thinks about this person, B takes note of any physiological reaction on A such as tension around the eyes, changes in skin colour, heavy breathing etc.

3. Once step 2 is completed, ask A any irrelevant question or remarks such as “can I borrow $50 from you?” This is called a break state and it clears the mind of the internal representations of the person A dislikes.

4. A closes his eyes and thinks of someone he likes while B repeats step 2.

5. A break state by stretching and/or looking out the window.

6. Now B describe to A her observation when A was thinking of someone he likes and dislikes.

7. A chooses one of the two people he thought about earlier and does not tell B which person it is. He closes his eyes and thinks of this person again.

8. From what she observed earlier, B tells A who A is thinking about.

…… to be continue

NLP with Mind Kinesis (1)

2009-08-04T00:45:00.007+08:00

I have not been writing on my blog for more than a year despite surged in global market. I think it’s about time I start writing and sharing. But today I am not going to talk about stock market. Instead I like to share with you my encounter with NLP.

Now what the hell is NLP? NLP stands for Neuro-linguistic Programming. In a nutshell, NLP is about altering our thoughts and that of others in order to produce the intended results. This is achieved by using the tools of NLP to alter the way our brain process data/information in order to influence our actions. This is generally known as having a “positive mindset”. It was a model created by Richard Bandler and John Grinder plus a few others. Unfortunately these buggers fell out in the 80s and in 90s, Bandler filed a lawsuit against Grinder. The legal case came to an end 10 years later.

By the way, the above description of NLP is not found in dictionary or wikipedia. It’s my definition based on what I learn from Cayden, founder of Mind Kinesis. Hopefully I got it correct…..hahaha.

How I Got There?

How I got myself enrolled into the NLP programme in the first place? I am sure most of my friends in NLP course make a choice to sign up mainly to overcome obstacles in life. But not for me. I join the course because of one good buddy Bob – he paid up half of the course fee in my name after he attended the free seminar. Actually I had previously attended the seminar but didn’t have the intention to sign up because I don’t think I have any problem in life!!! When I said this in the class, somebody turned to me and said, “wow, no problem, then you got very serious problem!!!”

Knowing Bob for more than 10 years, IMHO, he is not as generous as one might think and certainly not a philanthropist.

“No offence brother if you are reading my blog now!!! Hahaha…….”

But yet for once in his lifetime (or perhaps many more to come), he done something extraordinary for me. He paid half of my course fee and gave me a choice to pay the other half to attend the programme. The root cause of his unprecedented action was because I was at super low mood in May this year. Was it mid-life crisis? Maybe but certainly stressful job is one of the contributing factors.

And there came my first struggle – should I pay half of it? It’s a thousand dollar mind you. Finally I chose to sign up the programme even though I struggled for a while. As to what’s going on deep inside, that’s for you to find out!!!

Whatever it is, I had finally completed the programme and certified. Seriously I never thought that I would finish the whole programme as I had other struggles, which I will share subsequently. All this would not take place without Bob and “thanks brother”!!! I promise you that one day I make my first million, I’ll compensate you back your one thousand dollar course fee.

……..to be continue

脚踏实地

2009-04-14T21:47:00.003+08:00

A good friend of mine send me a very meaningful article. There was no profound knowledge or new discovery in it. It was just a simple sharing call "being down to earth". Many of us would have heard this teaching many times during school days but after we step into the society, we want "fast track to success". While some are genuine skills, many fell into his own trap - greed.

And I always wonder, if there is really a sit-at-home-and-get-rich method, and everyone becomes millionaires, then what is the value of a millionaire?

From all the stories I heard from friends or in the paper, it seems that usually the teacher/trainer himself actually gets richer. As for the hundreds of students or followers.......

================================

（联合早报网讯）台湾中国时报报道，台湾第一夫人周美青最近疯棒球，连马英九都笑称「她本来只是个小球迷，已经快要变成大球迷了」。不过，周美青不只看棒球，还在部落格发表文章，以美国职棒年薪最高的打击名将A-Rod服用禁药的例子为教材，教育全国小朋友「脚踏实地胜过取巧」。

周美青在部落格撰文指出，美国职棒年薪最高、被视为最有希望超越邦兹七百六十二支全垒打纪录的打击名将A-Rod，承认自己曾因压力太大、力求表现而服用禁药，这个事件让所有棒球迷感到震惊与失望。　　美国总统奥巴马在记者会中被问到对这事件的反应，除了表示沮丧外，也希望所有的孩子在看到A-Rod承认违禁的转播时，了解到成功是无法取巧，没有捷径的。

周美青指出，功利主义社会下，人比较躁进而没有耐心，凡事追求迅速、快捷。看书要速读，学习要速成，吃饭有速食，行车要飙速，书店里充斥教人如何迅速致富、快速减肥、一分钟成为各种达人的书。　　但她认为，做事积极、讲求效率当然很好，人格的养成、知识的学习、技巧的磨练，是需要一定的过程、长时间的潜移默化、日以继夜反覆训练的，一味追求短时间内达到目标，往往揠苗助长；最坏的情形，是为了快速成功，不择手段，摒弃了道德良知。

「抄捷径也许短时间可以达成目标，但因未经磨练，所以经不起考验。」周美青强调，许多事情「过程」比「省时」重要，应该注重孩子学习的过程与品质，而不是学习的快慢与成绩；成功没有捷径，经济的复苏亦然，脚踏实地、安分守己的态度才是最重要的。周美青撰文：脚踏实地胜过取巧

What Time Is It?

2009-04-08T23:38:00.002+08:00

I’ve been hiding away from stock market for almost a year. I literally stopped updating on business/financial/economic news. It’s a total stop since early 2008. You only get to see some of my holiday pictures on my blog. But this is going to change now as I am back to business again! As you can see, this is my first article in 2009! But hold you horse!

Recently, a few friends had been asking me whether if “now is the time”? This is because, while some had made quick bucks from AIG or City Group, others were motivated with strengthening of indexes around the world.

The important question is – how to assess/predict whether now is the correct time? When is the correct time? Can any human being possibly know when is the correct time? Does holding an MBA in finance or CFA give you an edge in predicting the right time?

Answer is NO!

There is a way to predict the right time but unfortunately, this method is also not possible. That is to have the ability to read all investors’ mind. My point is indexes are just flashing numbers that reflects all investors’ action/decision. Unless you are able to read their mind, by looking at these numbers will not help you a lot unless you want to speculate. Furthermore, most of the time, the decision of these huge masses is wrong! I am not bragging. I always like to share with my personal friends one of my findings on stock investments – don’t follow the crowd, they make mistakes very frequently.

So if staring at the indexes is not advised, then what other better approaches? The answer, I would like to repeat again is the economic health especially of the world largest and most powerful country – the United States. Is U.S. economy on its road to recovery? Any convincing evidence? How about U.S. job market? Certainly high unemployment and low income will hit the manufacturing sector. And when U.S. manufacturers shrink their production output, Singapore manufacturers are going to suffer.

Recently a lady came to my company for an interview. She is an accounting professional currently working for a manufacturing company. Unfortunately, her company cut working days by a hefty 40%! That would mean a huge pay cut for her, temporarily. She has no choice but to find another company although she likes the working environment/culture in her present job.

The following are excerpts from the Business Times that hopefully will give you a feel of the economy.

==============================
“As Wall Street put to bed the first four-week run of gains for the US stock market in nearly a year and a half last Friday, market strategists were already debating whether the nascent bull run can stand up to the challenge of an especially grim first-quarter earnings reporting season.

……. On Friday, stocks continued to rally despite another awful, estimate-beating employment report. The Dow Jones Industrial Average gained almost 40 points, or 0.5 per cent, to end at 8,017.59, its first close above 8,000 since Feb 9. The S&P 500 climbed eight points or one per cent, reaching 842.50 at the closing bell. The Nasdaq composite added 19 points, or 1.2 per cent, to 1,621.87.

=============================
While a global recovery is possible in 2010, Mr Soros said the timing will ultimately depend on the depth of the recession. China, he said, will be the first country to emerge from recession, probably this year, and will spearhead global growth in 2010.

=============================
The report comes after government data on Friday showed that the US unemployment rate rose to a 26-year high of 8.5 per cent, as employers slashed 663,000 jobs under the strain of recession.

=============================
'The lead economic indicators have not shown any sign that there is a bottoming or a recovery, or there are no concrete signs of that,' said SIAS Research vice-president Roger Tan.

=============================
'It's a bear-market rally because we have not yet turned the economy around,' Mr Soros, 78, said in an interview on Monday with Bloomberg Television.

….. Mr Soros said the banking system is 'seriously under water' with banks on 'life support'. 'They are weighed down by a lot of bad assets, which are still declining in value,' he said in the interview. 'The amount is difficult to estimate, but I think it's in the region of maybe a trillion-and-a-half dollars.'

Amazing Vietnam - Day 8 & 9 (13-14 Dec 08)

2008-12-19T22:47:00.008+08:00

Day 8 – Rendezvous at HCM

Our stay at Danang was the shortest among all the destinations. Bob woke up early and went ahead to have breakfast at the hotel lobby with “last minute visitors”. A while later, I joined them for breakfast. As usual, we chatted, exchanged contacts with the visitors. After that we quickly pack up and check out.

Our flight was scheduled to depart to HCM at 12:05pm. After we checked in at the airport, we had another shocking news – Jetstar’s flight at 12:05pm will be delayed till 7pm due to blah blah blah! Now that’s a good way to test a person’s patient to the limit; that’s one good way to piss me off. This is the second time and it’s even ridiculous - delayed by 7 hours!!! And now we understand why people pay thousand dollars for SIA ticket.

Our problem is this - we will be flying back to Singapore from HCM tomorrow. So if we wait for Jetstar, and I’ve no idea what can we do for next donkey hours at the airport, we will arrive HCM at night. This means that we will check into our hotel, wash up and sleep. And then the next day we will fly back to Singapore. Tell me that sounds stupid to you also.

So Bob went to Jetstar’s service counter to investigate. And then we have similar option again – Vietnam Airlines will take off to HCM in about an hour’s time. Initially Bob told me that there are still economy seats available on that flight (we got to pay slightly more than S$100 per pax). I went to double check and then was told instead that economy class seats were fully booked but we can be on waiting list. I told Bob that why would we want to take back our luggage from Jetstar and still uncertain whether we can get to HCM as planned. Then Bob told Vietnam Airlines staff that we want a seat and we do not want to be on waiting list. The reply was “Business Class seats are available, sir”. That will costs us slightly more than S$200 per pax. Now this is getting better and better.

Concurrent Work

Then the “ang mohs” standing beside us clarified with Bob on business class seats availability. Immediately I wispiered to Bob “the ang mohs are asking and they are taking out their powerful Pounds, US$ or Euros”.

Bob immediately confirmed with Vietnam Airlines that we want two business class seats!!! Their flight will take off at 1:30pm and we left with about half an hour. So immediately, I demanded our luggage back from Jetstar while Bob went over to claim damages from Jetstar. After I got back our luggage, I quickly check in while Bob was filling up some claim forms.

To all my dear friends, this holiday was indeed amazing. I had never tried business class before. There was special check in counter; special transport bus to the aircraft and the seat plus service was excellent. I boarded the plane first while Bob catch up after he got some money from Jetstar. We were compensated about 500,000 Dong each - goodwill of Jetstar. I expect to see negative goodwill on Jetstar's balance sheet. There is one interesting incident inside the plane that I would like to share with you. Being in business class, drinks, papers, and warm towels were provided. After I finished my drink, I signaled to an air stewardess to clear my glass. She came to me with a tray and immediately I took the glass and empty bottle and place it on her tray. She was shock and waved at me that I should not do that; she will do it for me! Cute but I am a yuppie, and I don’t like formality.

And of course, we will claim against our insurance AIG, if they still around for flight delay when we are back to Singapore.

Final Stop at HCM

So in the afternoon, we are back to the starting point of our journey – HCM. We check into the same hotel while Bob went to his business office to meet his client. I stayed in the hotel to do some work and…. sleep! In the evening, we went out with another lady for dinner. The traffic at HCM continued to be massive. Take a look at some of my photos and try to imagine how you going to cross the road if you were there. After our dinner, we went to the popular Highland Coffee for…… coffee of course.

Then Tien and Xuan came to meet us one last time before we fly back to Singapore the following day. Remember the two ladies that we met during Day 1? And with that, we ended our last night at HCM.

Day 9 – Back to Singapore

After our breakfast, Bob left to meet his client again while I pack up my luggage. We wanted to buy Xuan a last breakfast treat as she had spent quite a bit of time with us while we were at HCM. Unfortunately, she was busy that morning. At 17:25pm, we were on Tiger Airway to Singapore.

Well, with that, I ended my amazing journey at Vietnam. I hope I had quantified and illustrated my statement that Vietnamese are really, truly and very friendly. I suppose that’s their culture. They may not be as strong as Singapore economically, in infrastructure or technology, but they have something that you won't find in Singapore. But to be fair to us, that's our trade off as we advanced ourselves in many areas. This journey totally changed my perception on the Vietnamese.

I like to take this opportunity to thank Bob for allowing me to tag along with him. But of course, he also benefited from me – I paid for quite a few meals. Nonetheless, money is not the issue. The chance and the experience is immeasurable. And to Xuan, Tien, Son, the group of accountants, Van Anh, Minh Anh, Anna etc many thanks for your hospitality. If you ever come to Singapore, please allow me to payback.

And Vietnam, I’ll be back, soon!

Amazing Vietnam - Day 7 (12 Dec 08)

2008-12-19T21:07:00.001+08:00

Day 7 – Marble Mountain

There is nothing much to share for Day 7. Our original plan was to visit Hoi An but was cancelled, thanks to Bob’s accident. So we went to one of the shopping centres and had lunch there. After our lunch, we proceed to a place call the “marble mountain”. As the name implied, it’s all about marble.

Anna was extremely photogenic and so we were like doing an album for her at the marble mountain.

At night Bob had an appointment with his clients. So I went to the hotel lobby and had a amazing dinner – all by myself. I was the restaurant’s one and only customer. Can you believe it? Or should I say, am I cool or what?

Amazing Vietnam - Day 6 (11 Dec 08)

2008-12-19T00:07:00.003+08:00

Day 6 – Amazing Race to Danang

This morning, we continued with our amazing race – to Danang. At the reception, Van Anh was there to send us off. Our flight was scheduled to take off at 12:05pm. So reluctantly, we hired a cab to the airport and bit farewell to the wonderful city. But remember, “I’ll Be Back”!

At the airport after we checked in, the damn Jetstar counter announced flight delayed to 4:30pm. Delayed by 4 hours! What the *&%#@(*D=^#+!!!!! Bob went to the counter to “bang their table” and we were compensated with a token of 50,000 Dong each (around S$5), goodwill from Jetstar. But there was alternatively. Vietnam Airline is departing in an hour's time. The ticket will cost us S$100 each. And Bob has the cheek to ask me to cover his costs should I choose to take Vietnam Airline. So we decided to stay grounded in the airport. Many thanks to Jetstar, we will feedback and claim damages.

Danang – City Where Dream Comes True

Finally we disembarked at Danang in the evening. Firstly on the weather – Danang has ideal weather. It is not as hot as HCM and not as cold as Ha Noi. From the map, Danang is located in between these two main cities and that explain the wonderful weather. Secondly, there was no currency exchange service at the airport. So I was running out of Dongs.

We hop into a meter-taxi and reached our 3-star hotel (Saigon Tourane Hotel, 5 Dong Da St., Danang City) in about 15min time. Danang’s traffic is also less massive as compared to HCM and Ha Noi. In sum, this town is really a peaceful town. Our friend Anna had already booked a hotel room for us. The hotel room was fantastic, the best so far. We washed up and send in our laundry. An hour later, Anna and her friend Sullie (if I remember correctly) were waiting for us with their bikes outside the hotel. So we rode off to a stretch of restaurants located beside the sea.

Bob told me that Danang being located along the coastal area is famous for cheap seafood. Singaporeans love seafood, don’t we? So Anna selected a restaurant and we ordered a few dishes of good seafood food such as big prawns, fried fish, cutter fish, chilli crabs, fried rice and Larue beer. The weather was perfect and the wave was strong. We really enjoy the dinner. To all Singaporeans friends out there, the restaurant setting there is definitely better than our East Coast seafood centre. The dinner cost us 1,300,000 Dong (around $S120) for four. Not expensive but not as cheap as I expected.

Unexpected Accident

After our dinner, we decided to go around the town area. Unfortunately, my dear friend Bob met with an accident – a motorbike accident right after we stepped out of the restaurant. I will skip the detail as it is unpleasant to share. There was blood all over his nose and mouth and abrasions on his hands. We have no choice but to send him to nearby hospital immediately. We need to determine if there is any internal injury. Cut the long story short, the doctor cleaned up his wound, gave him a jab and assessed no internal injury. So I paid 70,000 Dong for the consultation.

So Bob ended the day with pain all over whilst I ended with…. what we say in Chinese “哭笑不得” (cry also cannot, laugh also cannot). To make thing worst, because of his injury, Anna decided to cancel our next day’s trip to Hoi An. It was part of our itinerary. Sigh!

Amazing Vietnam - Day 5 (10 Dec 08)

2008-12-17T22:08:00.001+08:00

Day 5 – West Lake

This morning, at about 9am, Bob’s friends Minh Anh and Fuong (hope I spelt correctly) came to pick us up. They waited for us outside the hotel on their bikes. We came out to greet them and then rode off to the West Lake. Like I say, there are many lakes in Ha Noi. West Lake is much bigger then Hoan Kiem Lake. The weather was really cold especially when you are on the bike. We visited the Tran Quoc Pagoda (镇国寺), the oldest pagoda in Ha Noi. Minh Anh was super friendly and when talking to her, you don’t feel any distant. Very different as compare to Singapore context (sorry ladies, but read on and I’ll prove my point). Then we proceed to a restaurant nearby to have our breakfast and coffee. Some intro here - Minh Anh is working for NGO on HIV prevention. As for Fuong, she is working for a Malaysia milk distribution company. During the coffee, Fuong tell us that she needs to return to office after the breakfast. We told her not to worry about us; we could hire a cab.

After the breakfast, Fuong rode off and Minh Anh said that she'll hire a motor cab for me. Yes, she said motor cab!!! I told her that I rather take a car but she kept saying that taking a car is expensive. But what the hack. Since I wanted to understand Vietnamese lifestyle and culture, I should not be stubborn. Minh Anh hired a motor cab for me while Bob shared her bike. We went to a big museum and Minh Anh told us not to take out our camera until we are inside the museum. This is because, besides the entrance fees, there is extra charges for photo taking. This is determined at the point of entry when you hold a camera on your hand. It is quite a big place inside and we took lots of pictures. We saw many newly wed inside as December is a good time for marriage. There was also wedding dinner preparation in the museum compound.

Lunch at Minh Anh’s Place

Minh Anh told us that we are invited to have (late) lunch at her place. Her mom is preparing a meal for us. I was like “huh, really ah”? I felt rather shocked and uneasy at first because this is not a common practice in Singapore. Bob was teasing me “丈母娘看女婿”. So again Minh Anh hired a motor cab for me and we went to her place. It was a small narrow street, a bit run down with uneven road. There were minor construction work here and there, and dirty water along the street. Minh Anh stays at level four if I remember correctly and so we need to climb up. There is no lift and the steps of the staircase are totally uneven. It is difficult to explain here. I did not take any photo as I think it’s rude to do that especially when we were invited guest. We are not short of manners even as we were in foreign country. Inside Minh Anh’s house, the small living room is just slightly bigger than my bedroom in Singapore. Her bedroom and kitchen are linked and totally open concept – no door.

Minh Anh stays with her mom and sister. Apparently, Minh Anh’s mom was at her grandfather’s place that afternoon while her sister was attending class. I look at Bob and whispered to him “she brought two men back to her house”!!! I bet with you to my last cent that most Singapore girls will never do this. That’s why I kept saying that Vietnamese are super duper friendly. Although she knows Bob, but they are still considers an acquaintance. And Minh Anh starts to prepare for the lunch!!! I tried to stop her and persuade her to have lunch at a restaurant (Singaporean mindset) instead but she insisted.

The cooking was quite fast actually and Minh Anh prepared for us traditional Vietnamese food meant for special occasion such as a function or for invited guests. Altogether, she prepared five dishes for three of us. And really it makes us feel like VVIP. I can’t help but to request for photo taking. I told Minh Anh that I want to show my Singapore friends on her hospitality and traditional Vietnamese food. It was totally amazing!

During our lunch, I asked Minh Anh a few questions:

James: Is it ok to invite (male) friends to your house especially when your mom is not around?
Minh Anh: No problem, both of you are my friends.

James: You invited other foreign friends to your house also?
Minh Anh: Yes, I have many other foreign friends from Spain to Australia, businessmen and non-businessmen. Some of them had meal with my family more than once.

From the pictures I taken, you can see that Vietnamese love spring rolls and to eat raw vegetable. I was deeply thankful for her hospitality. After our late lunch, Bob shared with her on his business trip and offered her the opportunity. And in appreciation of her time and food, I actually offered to cover part of her costs of doing business with Bob. Bob was shocked when I volunteered. I told her that since she treated us as personal friends, I would also like to see her living a better life, providing the best for her mom and sis. Subsequently, Bob brought her to his business office for further discussion while I make my way back to hotel to rest.

Ultimately and unfortunately, Minh Anh did not accept our offer. It was a rare and attractive offer (especially from me) but she didn’t take it. We were disappointed. Such opportunity comes and goes. Nonetheless, I still wish her good health and all the best in her career.

Amazing Vietnam - Day 4 (9 Dec 08)

2008-12-17T20:21:00.003+08:00

Day 4 – Taking A Break

Today, Bob is meeting his client and I do not wish to follow. So I decided to stay in the hotel to take a break and do my work. Yes, I have lots of work to do ranging from my own study, office work, blogging etc. Actual there is one “most go” place in Ha Noi – the Halong Bay. Unfortunately we need at least two days to visit Halong Bay but we are flying off Ha Noi in 2 days time. Plus the fact that Bob still has business appointments, so we have to give it a miss. But mark my word – “I’ll Be Back”!

After Bob left, I climbed down the stairs to the reception to send in my laundry. The friendly receptionist Van Anh was at the counter. I chatted with her and asked if I can order for lunch. It is a budget hotel so there is no room service. Van Anh replied that she could help me to order for lunch. I asked her whether if she is ordering from a restaurant. She nodded. I was a bit puzzled as I don’t recall any decent restaurant nearby except those located along Hoan Kiem Lake. But those restaurants are not cheap. Apparently, the hotel staffs also order their meal from the same source. Then I asked whether if it is ok for me to dine with the hotel staff. I mean come on, what’s the point of eating in my room alone. I should mingle around, networking and understand people’s culture. Van Anh invited me to join them with delight. I was in the mood and so I told Van Anh to order for more food like fish, pork, chicken and everything and it’s on the house.

At around 12:20pm, I got a call from the reception “sir, your lunch is ready”. I walked down the stairs again and jokingly reminded Van Anh that my name is "James", not “sir”. There is a table in font of the hotel reception and I saw three lunch boxes. When Van Anh opens it up, oh gosh it was just three simple lunch boxes – rice with meat plus vegetable. That’s all. Each box came with different selection of meat. And you can tell that the food was prepared by certain “household” and it was very cheap - 15,000 Dong per box, equivalent to around S$1.50. Actually my intention was to order for many dishes and we (hotel staff and myself) can all share the dishes together. Then came in another young and humble chap by the name of Yog (I don’t know the exact spelling). I invited him to sit down to eat together. A bit of intro – Van Anh speaks good English, the best I encountered so far in Vietnam. That probably explain why she is hotel line. She attends the language class after work. She joined the hotel for couple of months whilst Yog had joined for at least a year. Of course they asked about my job, my holiday here, my feedback and all the usual stuff.

After the lunch, Van Anh said that she wish to give me a treat for the lunch. I rejected the offer. I replied that I am on holiday and she is working so I can’t possibly let her buy me lunch. Instead I paid for all the lunch boxes.

Meeting The Accountants

In the evening, Bob’s group of friends came to invite us for dinner. All these people are accounts professional including a senior management accountant. One thing about Vietnam hotel you need to know is that Vietnamese girls are not allow to enter into the hotel room. This is especially so for 3-stars and above hotels. Foreign girls are ok but not Vietnamese girls. I’m sure you know why. Prostitution is strongly prohibited in most hotels, if not all. Vietnamese government spare no effort in fighting against HIV. If you brought along a Vietnamese wife, then I suppose you need to produce your marriage cert. Vietnamese girls know the rules; they hardly enter into the hotel room unless there is very good reason to do so. So Bob’s friends waited for us at the reception. As usual, we always let the local friends decide the venue since we were still new to this place. We hired a cab and so the ladies brought us to a famous place to eat. It was the same place (quan an ngon) that we had our dinner the night before (with Son). But we have no problem going into the same restaurant since there are many other dishes that we have yet to try. When I look around, there were indeed many foreigners dining inside the restaurant. And many of them look like some big shots to me. I chatted with one of the lady (Lan) who is a senior management accountant. She does budget/forecast for her company and managed a group of accounts personnel. And guess what! I am also doing budget/forecast for my company! But, I don’t do accounts and I don’t have any accounts staff. I felt so small!!!!

And so we ended the night early as we (or Bob) have an early appointment next morning.

Amazing Vietnam - Day 3 (8 Dec 08)

2008-12-17T02:15:00.006+08:00

Day 3 – Ha Noi

We woke up early in the morning and booked a cab to the domestic airport. Similarly, the traffic in the morning was hectic – massive bikes and thunderous honking. Fortunately we were inside a cab. And indeed you must take heavy traffic into consideration while planning your travel in Vietnam. Inside the airport, after we checked in, we were waiting for the bus to transport us to Jetstar. We asked the airport staff at the holding area whether if we could take pictures. She obliged. We were surprised and delighted as this is not allowed in Singapore. So we took lots of pictures during boarding and alighting at every Vietnam airport. After we boarded, again I asked an air stewardess if I could take picture of her. She replied that it’s ok to take picture but not on her. Well, I had been naughty and discreetly took pictures of her…. heehee!

When we disembarked at Ha Noi airport, the temperature was totally different from Ho Chi Minh. It was cold with temperature of around 24 degree but still bearable to us. We were still able to walk around in our T-shirt without coat/jacket. I went to ANZ Bank counter in the airport to change for more Dongs. The rate wasn’t that fantastic as compared to HCM and they charged me 3% commission in US$!!! Crap! Ended up I got about 980,000 Dong for S$100; slightly lesser then what I got at HCM airport. Then we approached the airport staff to get us a meter taxi. But after we boarded, damn the meter wasn’t running. Bob asked the taxi driver to turn on the meter but the driver uttered some craps that we don’t understand. Or should I say we actually understand – he intends to crop us like carrot cake. And indeed, he charged me 350,000 Dong when it should be 250,000 Dong (Bob checked with the tourist information centre subsequently). Bob requested for receipt but on the receipt, the driver dare not write down 350,000 Dong. But I decided to rest the matter.

Our hotel (Hanoi Lucky Hotel, No.47, Ngo Huyen Hoan Kiem) is located along a narrow street, so narrow that our taxi couldn’t go in. The hotel was quite cosy and we were allotted the highest floor – level four! There is no lift so we need to climb the stairs. After we unpacked and sent in our laundry, we decided to roam around the nearby area. Along the street of Ha Noi, there are numerous hawkers beside the road. Locals just sit around on small stools to have their meal. I bet no Singaporean dare to try the food due to (presumbly) undesirable hygiene. But surprisingly, the “ang mohs” dare to eat along the roadside. The traffic of Ha Noi is similar to that of HCM except that the road is narrower. IMHO, it’s just as bad. But there again, people drive slowly, honk frequently, and will give way. There is no vulgarity or road-bully.

We visited a big old church before we reach “Hoan Kiem” lake (还剑湖). From the street directory, it seems that Ha Noi has many lakes. Hoan Kiem lake is beautiful and I just love walking along the lake under cold weather…. It would be perfect if my companion is a lady. We went into a few banks to enquire on money changing service but were told that they only accept US$. Damn, should have change for more Dongs at HCM! Then we had our late lunch at a restaurant beside the lake. The scenery was fantastic with cool weather. There are two unique things about Vietnamese food:

1) Vietnamese love to eat vegetable uncooked.
2) Vietnamese love to eat spring roll. They have various types of spring roll, not just the fried one.

After our late lunch, we continued to walk along the lake and visited the Ngoc Son Temple. Nothing impressive to the two men and after that, we decided to bash through the streets. We dare not buy anything as we were supposed to be “carrot” in the eyes of locals. Many mobile hawkers were trying to sell goods such as lighters, wallet and food to us. Then came a smart girl selling a few bananas and pineapples. She let us take pictures of her. We were interested as she was wearing Vietnamese hat (I don’t know what they call in Vietnam). It was fun and so we were obliged to buy bananas and pineapple from her. Good marketing approach and I granted her wish.

Ha Noi’s Night

After we wash up in our hotel, Bob’s friend Son came to pick us up in his big Honda. Not many people in Vietnam can own a car, let along a big car. This man is a CFO of a company. The usual corporate rank in Singapore context should be a Vice President. He brought us to a popular restaurant in Ha Noi – “Quan An Ngon”. And indeed, the place was cosy and there were many foreigners eating inside. Again, we had different spring rolls and our rice or noodles came with raw vegetables.

After our dinner, Son drove us around before bringing us to the Ho Chi Minh museum. There were soldiers guarding the whole compound. Son told us that Ho Chi Minh’s body is still lying inside museum for public viewing but only during daytime. The weather then was very cold, below 20 degree I think. Initially we wanted to wait for the last parade (flag lowering) at 9pm but we still have half an hour to go. No choice we gave up the idea and proceed to a pub for a drink to warm ourselves. One last thing to mention, Vietnamese really love to honk while driving, with or without traffic. IMHO, it’s more of a habit than safety consciousness. Son honk at least once every minute even at late night (clear road) while sending us back to our hotel. I kept quiet for courtesy. Anyway, I did not give Son my blog address so it’s ok I share here. Also CFO has no time to read my crap.

Amazing Vietnam - Day 2 (7 Dec 08)

2008-12-16T01:07:00.003+08:00

Day 2

Xuan and Tien scheduled to pick me up for breakfast at 9am while Bob has meeting with his client. The ladies were late and coincidentally, Bob’s morning appointment with his client was also cancelled last minute. So four of us rode off to a popular restaurant named “Pho 24” for our breakfast. Another thing to highlight on Vietnamese restaurants is that they are usually “heavily staffed”. You can see many waiters or waitresses standing by to assist anytime. And many of them are really really polite. It’s like as if they had attended special training on customer service.

During the breakfast, Tien tell us that she needs to rush for her part time job in the afternoon. She works part time as Master of Ceremony (impressive!). She added that she is an MC for a wedding ceremony around noon. I casually asked if I could observe her performance. I mean excuse me, you think it’s easy to be an MC? Surprisingly, she obliged. So we rode off again to Tien’s workplace. I didn't expect that this ultimately ended up to be one of the most memorable event. It took us quite a while on the bike to reach the location. The temperature then was rather hot and the traffic was magnificent. It was heavy flooded with bikes and honk. Unlike Singapore where traffic is well regulated, traffic in Vietnam is very challenging and “lively”. Vietnamese drive slowly at an average speed of around 40km/h. A driver must really find opportunity and take initiative if he/she wants to make a turn. Waiting for traffic clearance is not the way to drive on Vietnam road. It was a bit scary initially but after a while, I get use to it because of:

1) confidence on my driver
2) people driving at slow speed and do give way to each other
3) There is no road-bullies, no vulgarity

In addition, you need a mask when you drive as the pollution level is quite bad. There are lots of uneven ground, still water and sands along the roadside. So if you ride your bike behind a big vehicle, your nose will have to work hard to filter out dirt.

Four Weddings

And finally we reached Tien’s workplace. It was a stretch of restaurants that looks more like a community centre in Singapore. And lucky us, there were altogether four wedding ceremonies that afternoon. Tien was MCing for one of the ceremonies. Outside the main entrance to the building, there were two rows of beautiful young ladies in pink welcoming the guests. It was unique and special and I was very tempted to take pictures of them. As Tien had left us to prepare herself for the event, I asked one of the guys in smart attire whether if I could take pictures. I am not familiar with the country’s culture and certainly I don’t want to get wallop or arrested by communists police for “undesirable character”. He nodded. We took a few pictures and many people were looking at us as if we were “star searching” (or maybe we look like clown). But there again, Vietnamese are really friendly. And since we really look like tourists, I guess they understand.

I also took pictures on the poster of one of the couples. It caught my attention because the bride is very pretty and the groom was smarting handsome (resembles the late Leslie Cheung). Then we saw Tien again outside one of the restaurant entrance briefing the groom on the process. She was on traditional Vietnamese costume and, oh man, she was gorgeous. I asked her whether if I could stay in the restaurant to observe the ceremony. She made the arrangement and so Bob, Xuan and myself entered and stood near the entrance to video the event. And oh my god, they had fantastic performance before the ceremony. I’ll put it on You-Tube to share with all. The performance was excellent, sweet and the song was really romantic.

And Vietnamese toasting method is also different from Singapore Chinese style also. We usually shout “yam seng” but Vietnamese will shout “mot-hai-ba-yo!” (1-2-3-cheers!).

(Subsequently Bob and myself frequently use Vietnamese toasting style when drinking with Vietnamese friends. They were delighted.)

I asked Xuan whether I if can bless the couple with an “ang bao”. I felt that it’s rude for us to just went in and video cam. I mean so what if we were tourists. This is not a zoo! Xuan replied that it’s ok if I felt obliged and 200,000 Dong will do since I am just an outsider. Usually friends and relative will bless with at least 300,000 Dong per head. As I was a bit shy so Bob helped me to explain, delivered the “ang bao” and blessed the newly wedded. The groom was honoured and invited us to dine with them. But that would be a problem as we will need to prepare more “ang baos” for another three headcounts. In any case we have itinerary to follow so we excused ourselves.

We walked back to the public "bike-park" to get the bikes. I felt so good and proud that I asked to observe the ceremony. That’s the way to go for holiday; understanding local culture and tradition. We then rode off to Chinatown to buy souvenirs. I’ll skip the boring shopping details. We also went to Windsor Hotel to change currency. There were beautiful x’mas décor everywhere and the ladies spare no effort to photo down everything. After our shopping, we departed and Bob continued with his business appointment.

Around 9pm, the ladies pick us up again for a drink. And my dear friend Bob selected the Sheraton Hotel. It was a high-class hotel including the bill but still affordable to us. We went to the highest level for a drink. There was live band and the drink was expensive. The price is about the same if you drink in Singapore. Bob pulled Tien into the dance floor and let their hair down. Me? I’m shy, remember?

Amazing Vietnam - Day 1 (6 Dec 08)

2008-12-15T16:41:00.010+08:00

Truly Amazing Vietnam (6 – 14 Dec 2008)

If you ask me to summarise my impression on the Vietnamese with one word, then it has to be that the Vietnamese are very, very, very friendly. Why repeated adverbs? I’m sure that Singaporeans are friendly too, well at least most of them, and the Americans, and the Australians, Chinese etc. But IMHO, comparatively, the Vietnamese are really super duper friendly. Perhaps you will understand better after I shared my amazing experience each day at various Vietnam cities. Actually two friends invited me to tag along for holiday this December. One is going to L.A., US and the other one (Bob) to Vietnam. I chose the latter and I think I made the right choice.

Itinerary

Bob is going to Vietnam for his business trip while I tagged along for holiday. He promised to make time for my holiday purpose. And this trip will cover two main cities (Ho Chi Minh and Ha Noi) and another town (Da Nang) located just around the centre of the vertical land. Just for your info, Ho Chi Minh is the economic capital whereas Ha Noi is the country’s capital. Altogether, we need to fly five times in order to cover all these locations. We decided to plan for a budget trip since we are going to many locations but I’ll skip the finance details. Our itinerary as follow:

6 – 8 Dec – Ho Chi Minh

8 – 11 Dec – Ha Noi

11 – 13 Dec – Da Nang

13 – 14 Dec – Ho Chi Minh

14 Dec – back to Singapore

奇妙越南旅就此开始

D-Day

On 6 Dec 2008, we flew to Ho Chi Minh (HCM) by Tiger Airway. We reached the city in the evening. The weather is similar to Singapore. At HCM international airport, Bob told me to ignore any cab driver offering us a service. This is because these cab drivers wanted to negotiate and fix a (high) price. We should look for a meter-cab. The best carrot is none other than the tourists isn’t it? It is the same situation in any country. We don’t blame them. We hired a meter cab and it took us about half an hour to reach our hotel. The traffic was massive and messy. When I got out of the cab, the kind driver carried our luggage, crossed the road and put it at the hotel entrance (hotel is on the other side of the road). I was like “how the hell am I going to cross?”. Then the hotel staff, apparently understand their customers’ concerns, came to help us to cross the massive traffic.

After checking into our hotel (Spring House Hotel, 221 Pham Ngu Lao street, District 1), we decide to walk around and ended in a restaurant for coffee. The restaurant’s staffs were very polite and humble. We ordered french fries and Vietnamese “drip coffee”. This is very common in Vietnam. What they do is that they have some sort of coffee container on top of the cup to drip down the coffee. The taste or the fragrance is a bit different from the usual coffee in Singapore. The only thing is Vietnamese coffee is very thick and concentrated. I don’t think Singaporeans can get used to it so Bob and myself always ask for extra cup of hot water - to add onto the coffee. They sell Tiger beer too. APB has been very aggressive in expanding their position and fight for bigger market share in Vietnam. Within a few years, you can see Tiger beer and its poster almost everywhere.

Another interesting thing to highlight is the Vietnamese building. Most of the buildings are quite narrow and usually built up to level four. Take a look at some of my pictures and you’ll understand what I mean. Perhaps it is expensive to expand a building horizontally. So the alternative is to build it tall. However, the local authority controls the height of their buildings so usually people built it up to four levels. Anyway, we are not very sure.

My First Motor Bike Ride

After the coffee, we proceed to Bob’s business office. I will not talk about his business in my blog. After that, Bob’s ex-colleague, Xuan came with her roommate Tien to pick us up – with their bikes. Most of my friends and colleagues know that I don’t ride bike and that applies to many Singaporeans. But in Vietnam, this is just the other way round. Most Vietnamese own a bike as not many can afford a car. Well, I don’t have much choice then since I need to behave like a man in front of two young ladies. I told Tien that I had never ride a bike before so to pardon me if I look stupid. The traffic was massive even at night. We proceed to a restaurant for dinner but along way, we met with heavy downpour. Bob was lucky as there was extra raincoat for him. Tien took out her one and only raincoat and wanted me to “hide inside her rain coat” behind her. It’s like hiding inside Superman’s cape. I was extremely uneasy because:

1) that is rude to do that to a lady and can amounts to molest
2) it is dangerous as I will be blind to the traffic

So I got out of the bike and found a shelter. Tien was polite and she understands. She drove off to buy a raincoat for me.

(Later after the end of our holiday, then I realized that in Vietnam, it is always man driving and lady sitting behind. And only lady covers herself inside the man’s raincoat from the back seat. I was given special treatment as I am a foreigner and do not understand their culture).

A little bit of intro here - Tien is an undergrad doing her last year marketing degree. Both ladies are able to communicate in English although we need to speak slowly in order to understand each other. In fact, when you converse with Vietnamese, try not to “sing” or slang like “ang mohs”. It makes communication difficult. Xuan was previously working for APB (Tiger Beer) in Vietnam and that’s where she gets to know Bob. Bob was the internal auditor then. Both ladies are staying in a rented unit and must be back before 11:30pm otherwise they will be lockout.

After we departed, Bob and myself went to a pub for a drink. It was a very small pub with a couple of tables. There are many such small pubs at HCM. And lucky for the lady boss that I was in the mood that night so I ordered lot of drinks. I spent about 500,000 VND (equivalent to S$50).

S'pore PMI shrinks in Nov

2008-12-02T23:18:00.000+08:00

Singapore's manufacturing industry shrank for the third consecutive month in November as new export orders slipped and the tech sector contracted on the back of a worsening global economy.

The Singapore Institute of Purchasing & Materials Management said on Tuesday its purchasing managers' index - a leading indicator for the manufacturing industry - stood at 44.3 in November, down from 45.8 in October.

A reading below 50 points indicates that the manufacturing sector is contracting.

The contraction was due to a fall in overall new orders and new export orders, as well as declining levels in production output, imports and employment.
.
(Source: BT 2 Dec 08)

US manufacturing index falls in Nov

2008-12-02T23:14:00.001+08:00

US factory activity fell in November to its weakest since 1982, according to an industry report released on Monday.

The Institute for Supply Management said its index of national factory activity fell to 36.2 in November from 38.9 in October, below economists' median forecast for a reading of 37.0.
A reading below 50 indicates contraction in the sector.

(Source: BT 1 Dec 08)

NLP Workshop

2008-11-26T00:36:00.008+08:00

Last evening, I attended a workshop on “Roadmap to Success” with a friend. My ex-manager Cayden Chang that I had shared before in my blog, conducted the workshop. He is the founder of the company Mind Kinesis. Today, I would like to share with all what the workshop is all about and highlight something important that we all should take note of.

Firstly, the training programme that Mind Kinesis offering is a NLP tools - Neuro-linguistic Programming. In layman’s term, it’s about giving you tools such that you will achieve your intended results. This is nothing new to me as I had been trained by Cayden in someway when he was my manager. I benefited from his training while working under him. Ever since being trained/influenced by Cayden, including reading books on positive mindset, I becomes demanding on myself and somewhat affecting (or pissing off) people around me. For myself, I set targets and I will “cheong” to get it. Although I’ve yet to reach Cayden’s level of mind focusing, I do behave in that manner. Let me illustrate. Again, if you are my colleague and you are reading my blog, please keep it to yourself. Nonetheless, I’ll still try to “restrain” myself on my sharing.

I was posted to a new job in mid-2007. For that new post, I had zero experience although the manager (not Cayden) was willing to give me a chance to try. This is because he knows me as a colleague and also my experience in our company’s operations is an added advantage. It was a huge challenge because the new post required totally different set of skills. But I never doubt that I will make it. I set targets for myself - within half a year, I will learn and complete everything that the new post required me to do; and I’ll take another half a year to learn my peer’s area of responsibility. This means to say that in one year’s time, I will learn EVERYTHING there is to learn in that (new) office. If you feel that I’m bragging, then I’m sorry. But like it or not, I met my targets although there is still room for improvement.

Well, since I behave in this manner, I becomes…. somewhat demanding.... to others. I will not elaborate on this since some colleagues may be reading my blog. Now back to Cayden’s workshop. He is offering something rather different as compared to his competitors. For example, he gave attractive discount and guarantees 100% satisfactory, i.e. if you don’t get your intended result after the programme, you’ll get full refund! This is what I want to talk about today. My friend who attended the workshop with me was thinking about the programme fee. I thought he was contemplating whether if the programme is expensive.

In my opinion, offering a lower fees was unnecessary other than encouraging more people to try it. Or perhaps there may be other reasons that I’m not aware of. I told my friend that I felt sorry for those who signed up or didn’t sign up merely because of the fee. This is because he/she had been myopic and failed to see the bigger picture. Think again. If your intended result is to earn a passive income of at least $2,000 a month, or to move up the corporate ladder to be Assistant Vice-President and the programme guarantees to help you to reach it otherwise money back, then it doesn’t matter whether the programme costs $2,000 or $5,000. Your target or objective worth many times more than that.

During my recent ICT, many ex-colleagues asked for my help in portfolio management and they are willing to entrust their money with me. I told them that I charge a 2% commission on the gains and only when there is a gain. Straight away they responded, “no problem, 5% also can”. Do you know why they are so generous? This is because they only pay when there is a positive result or else I will do it for free. The only difference here between these two situations is that for Cayden’s training, you need to pay first and he will help you to get your intended result. For my fund management service, you only pay after I produced the result. The sequence is different but the idea is the same. You only incurred a cost when you get your intended result. And this applies even when you are buying self-enrichment books. I said in my blog before, don’t buy self-enrichment books so that you “feel better”. Whenever you pay for a book, you’re helping the author to reach financial freedom – passive income. You should only help him if the author is going to help you in return. For example, if you buy a book written about Warren Buffett, then you must expect better investment returns. And if your learning curves taper off, you should stop buying these kind of books.

So my friend, do not be shortsighted and focused on the returns. You must expect results. In this case, you achieve win-win situation.

“You walk and talk but did you sign up for the programme?”

I did not! I didn’t not because of the fee but because I don’t have a “desperate” target currently. If I attend the training now it will be a waste. Once my desperate and difficult target arises, I will sign up and seek Cayden’s help. His programme is supposed to help me to get what I want. And I want to make it challenging for him.

My Weight Reduction Secret

2008-11-12T12:16:00.009+08:00

Today I will not talk about investment or economy but a topic that interest all women – slimming (瘦身男女). I started to put on weight while I was in the Army. Funny isn’t it, putting on weight while in the military organization! Don’t laugh, it least I still physically fit and I passed my physical fitness test.

And my weight has been maintained at 72kg (with std deviation of 1kg) for a decade. I tried many methods to reduce it but was unsuccessful. Methods I tried previously includes:

1) Regular exercise
2) Products that increase metabolism rate.
3) Products that prevent food from breaking down completely for body to absorb.
4) Any of the above combination.

They all never work. Go on diet? I also know that lah, don’t need you to teach! But to go on hunger strike might as well ask me to die. Somewhere in Jul this year, during our usual lunch gathering, one of the senior colleagues shared with me a cheap-and-easy method to slim down. He witnessed how it works on his Pastor. That is:

Eat fruit lunch (even without strenuous exercise)

His Pastor used to be quite fat but after fruit lunch plus regular exercise, he slims down completely. Actually we all know about eating more fruits and vege but my question is, does it really work. In fact, one of my ex-colleagues Ms Jenny mentioned this method before. Now let’s stay focus; we want to see result, don’t we? Everybody tries to come up with his/her own monkey secret that will help a person to reduce weight. You just get disappointed many times. But my colleague’s statement is very strong – fruit lunch, don’t need exercise (though his Pastor exercise regularly). And he GUARANTEES that it will work and I will see result in 3 months time.

The Challenge

I don’t believe but I am ready for the test. On 19 Jul 08, I declared to a few close colleagues that I will start fruit lunch challenge for 3 months. And these are my plan to be followed closely:

1) Only eat 3 times a day, including the fruit lunch.
2) Ban snacks and supper completely. Actually I don’t usually eat supper.
3) No exercise (otherwise don’t know the cause of the result)
4) Target weight: 65kg

And as you know, whenever you want to try to achieve something difficult, you’ll find more friends/colleagues trying to pull you down rather than encouraging you.

“Aiya, you just had a lunch at Fish and Co. so all your effort wasted liao”
(one lunch at Fish and Co. and all the effort will be wasted, can you imagine such motherhood statement?)

“No lah, the key lies in your fruit combination. Your current combination is not good so it won’t work”
(I didn’t know that only certain fruits have fibre while the rest has zero fibre)

“no lah, without exercise no way you can reduce weight”

Remember the movie Pursuit of Happyness staring Will Smith? He said this in the movie, “when people can’t do something, they want to tell you you can’t do it”. That’s human nature. Anyway, I followed through my plan exactly for the 1st month. Come to the second month, I got a problem – I was recalled back by the Army for training. So I could not follow my plan anymore. It’s the Army, not your grandfather’s organization that you can do as you like. Also due to the stress level plus ample of tidbits from my comrades, my slimming programme was totally disrupted. After I completed my ICT, I continued with my plan, only that I changed from fruit lunch to fruit dinner. The reason:

1) It is difficult to have fruit lunch with my colleagues. They are enjoying good food and so it was very tempting.
2) It is cheaper and easier for me to eat fruit dinner than lunch.
3) If you stop taking food after lunch (other than fruits for dinner), your body has very long hours without fatty/oily foods – from lunch to next morning. Imagine the impact!

The Result

Recently I bought an electronic weighing machine but dare not try it. I dare not face the result although somehow I felt that my pants are loosened! But you know, it could be just psychological. It was only a week later that I think I must know the answer. So I jumped on the weighing machine and voila it shows my weight to be 68.8kg!!!!!!!!!!!!!!!!! I kept trying and it still shows the same result.

I am not convinced. So I went to the gym to use their machine. Their result shows that my weight is 69.7kg. Ok, so now I know that at least my weight has indeed dropped by at least 2kg. Yesterday, a few ex-colleagues from the Army called me out for a gathering. When I arrived, one of them immediately shouted out “eh, you slim down ah!”

Oh my goodness!!! Another view from someone I’ve not met for more than half a year, cannot be wrong. Thus I declare to the whole world that:

“I had tried fruit dinner method to reduce weight without strenuous exercise. It works!”

No doubt there is still a distant away from my target, but since there is initial result, I will press on. Below is my photo taken a few days back. Other then my face, still like a balloon, look at my waist or tummy. Therefore, from this day onwards, fruit dinner will stay with me till deaths do us apart!

“Whose that girl on your right?”

Well, for me to know, for you to find out…. along New Tiew road.

What's The Weather Outside

2008-11-09T23:36:00.004+08:00

I’ve not been contributing anything to my blog for weeks due to extremely poor market sentiment. Global stock markets are in very bad shape especially the Dow Jones. The economic outlook is still as gloomy and there seems to be no light at the end of the tunnel. US elected its first black President but could Obama really get US out of the recession threat? If you are sensible in your analysis, you should know that the Frederal Reserve has really done a lot to avoid a recession. I mean they used people’s money to bail out banks and financial companies and dropped interest rate to 1%. What else can be done? I think Obama may protect local industries and jobs. If this happens, in my opinion, the first victim will be China – China’s cheap import. Of course, China is not going to keep quiet. They will complaint to WTO and then bilateral relation will turn soar etc etc.

The following are some worrisome headlines in Business Times this week:

- DBS chops 900 jobs.

- The US unemployment rate bolted to a 14-year high of 6.5 per cent in October as another 240,000 jobs were cut, the government said yesterday. Unemployment has now surpassed the high seen after the last recession in 2001. The jobless rate peaked at 6.3 per cent in June 2003.

- Shares of Las Vegas Sands Corp fell 29 per cent yesterday after the casino operator's auditor said in a regulatory filing that there are doubts about the company's ability to continue as a going concern.

- Planned layoffs at US firms surged to their highest in nearly five years during October, with cuts in the financial and auto sectors leading the charge as the economic outlook worsened, a report by outplacement firm Challenger, Gray & Christmas said on Wednesday.

- Australia's central bank cut its benchmark interest rate yesterday by a bigger-than-expected three- quarters of a percentage point as the global financial meltdown threatens to drag the country into recession.

I don’t intend to write a long story. But to my friends and colleagues reading my blog, my advice remains the same:

1) Avoid investment during this highly uncertain period. If you place your money with the bank, the value will be eroded due to inflation. Unfortunately, you don’t have a choice. If you invest it, chances are, you may make tremendous losses. I repeat again, you have to study the economy if you want to invest successfully. Monitor the US economy and its impact on Singapore. My bet, as of today, is we are heading to a global recession and hopefully not a DEPRESSION.

2) If you really want your money to work hard, you can consider our lovely CPF. CPF offers very attractive risk-free returns, which I had repeated many times in my blog. For more info, you can visit CPF website for updates.

3) As for job wise, stick to company with strong fundamental. Avoid joining company whose business has a strong correlation to the economy such the manufacturing sector and construction sector. Also avoid joining SMEs, sorry to my fellow countrymen. Let’s face it, we had heard of stories during previous economic downturn on how smaller companies “control cost” - cut in performance bonus, freeze annual increment, deferring the AWS, retrenchment etc. Also smaller companies may fold up.

Sentiment and confidence around the world is quite bad now. Employers' are holding back recruitment and now with retrenchment on the headline. And I bet that household are controlling their expenditures. Therefore you must understand that this may cause recession to become a self-fulfil prophesy. Not even Warren Buffett can stop it. Although Singapore will not be spared if US enters into recession, I strongly believe that we have great leaders governing the country, strong fundamental and solid reserve. We are certainly capable of surviving next recession.

中國毒奶粉的事件

2008-10-12T22:23:00.022+08:00

Lately a friend sends me an article on China’s milk poisoning issue. Not sure how accurate but still decided to share it with all. At least good as a warning.

================================

中國毒奶粉的事件讓大家都很害怕,每天看新聞報導,說法卻變來變去。沒有人清楚告訴我們到底什麼可以吃？什麼不能吃!!! 這時候該怎麼辦呢？

1.毒奶粉到底是什麼？

就是「三聚氰胺」。這是化工實驗室裡的「三聚氰胺」

「三聚氰胺」原本是做什麼用的呢？它是一種工業原料主要是用來製作「美耐皿」碗盤

還有家裡裝潢一定會用到的「美耐板」

「三聚氰胺」是一種工業原料,根本就不能吃!

2.為什麼「三聚氰胺」會出現在奶粉裡？

奶粉是由牛奶製成的,牛奶最重要的營養成份就是蛋白質。「三聚氰胺」跟蛋白質一樣含有「氮」

偷加「三聚氰胺」,製造廠商可以省下牛奶的用量、降低成本。下面都是「三聚氰胺」,是不是跟奶粉很像？它沒有味道,所以不容易發現。

3.是怎麼發現的？

2007年美國貓、狗暴斃,在中國製的寵物食品裡發現「三聚氰胺」2008年開始中國嬰兒腎結石病例異常增多

2008年8月中國三鹿奶粉被檢驗出「三聚氰胺」

2008年9月紐西蘭總理要求中國政府處理2008年9月21日台灣爆發多種食品含有「三聚氰胺」

4.吃/喝了會怎麼樣？

「三聚氰胺」結晶會留在腎裡面,形成結石,堵塞腎小管。結石很痛很痛,結石的人尿不出來,腎臟會水腫。

雖然結石可以動手術拿掉,卻會對腎臟造成不可恢復的傷害,到最後腎臟失去功能,就必須洗腎,否則很快就會因為尿毒症死亡。

洗腎是什麼呢？其實正確來說,應該叫做「洗血」就是把身體全部血液,抽到外面繞一圈,經過機器過濾再送回去。

整個過程大約4個小時。嚴重的人,三天就要洗腎一次,一直到死亡。

必須先在手臂上開這樣大小的洞,才能夠插管子洗腎

為什麼嬰兒最嚴重呢？因為腎臟很小,此外,嬰兒只喝奶粉,所以腎壞掉的速度是最快的。

中國目前已經有1萬3千個受害的嬰兒住院

「三聚氰胺」吃多會急性腎衰竭死亡,吃少會慢慢腎結石、腎病變它會在人體內累積。並不是吃多少的問題,而是一點點都不能吃!

5.哪些東西不能吃/喝？

只要是奶精或奶粉做成的,都可能含有毒奶。包括這些

大家只要記住:有「奶精」、「奶粉」的,都不能吃/喝。

6.毒奶事件影響到哪些廠商？

下面這些都是跟毒奶事件有關的廠商、產品

另外,這些公司也受到影響:

亞信、佳美、上田、特順香、老大房、台威食品公司、高育生物科技公司、雲林北港宗泰食品、尚效、品高、久津、維益食品公司、真口味、維士比、盛發興實業、華盛食品、鴻寶食品、雀實食品、奕瑪國際行銷、寶佳宏企業、三錦企業、魏氏國際實業、國際儲貿、萬記貿易、力遠貿易、丞泰企業、昱彰公司、麒林公司、同興實業、英時公司、菲仕蘭、開元

如果你有親友在中國大陸,必須注意的廠商有:

河北三鹿集團、上海熊貓可寶牌、青島聖元牌、山西古城牌、江西光明英雄牌、陝西寶雞惠明牌、內蒙古蒙牛牌、天津多加多可淇牌、廣東雅士利牌、湖南南山倍益牌、黑龍江齊寧牌、山西雅士利牌、深圳金必氏牌、廣州施恩牌、廣州金鼎牌、內蒙古伊利牌、山東煙台澳美多p‰Œ、青島愛可丁牌、陝西西安御寶牌、山東煙台磊磊牌、上海寶安力牌、福建福鼎市晨冠牌

7.以後該怎麼辦？

至少半年不要吃/喝上面的產品。

如果你的家人是開早餐店、小吃店、餐廳,請告訴他們,暫時停止使用、販賣奶製品。如果你家有嬰兒,請改喝母奶、或尋找其他代替品。

Stock Market Review - Oct 08 (Part 3)

2008-10-09T22:02:00.006+08:00

5) HupSteel. This is yet another wonderful company and I am still one of its shareholders. I make capital gain out of it before and bought it again when it retreated. Only that now I stuck with this counter but without regret. This is because HupSteel is still a wonderful company earning some decent return. I remember one of ex-colleagues bought HupSteel in 90s at around $0.70. Back then, HupSteel was known as Hup Seng Huat and my friend got stuck with the company for a very very long time. However, things changed after global economy started to recover in 2004. There was huge demand for metal and HupSteel was riding on solid growth. Its share price went up to $0.60 even after the company issues bonus, rights and giving out good dividend. But today, its share price dropped to $0.215. Let’s take a look on its financial performance and position.

Business: dealer in steel products, hardware and property investment holding company.

Report: FY2008
Revenue: surged to S$433.7m (53% variance)
Net profit: surged to S$45.1m (45% variance)
NP margin: 10.4%

Cash: S$27.4m
Working capital: 2.34
LT debt to total capital: 1.8% (very little)
Basic EPS: 7.33 cents
PE: 2.93
NTA: S$0.3298
Yield: 9.3% (excl special dividend)

Director’s remark: demand for steel product to remain strong and full orderbooks from offshore and marine customers.

My remarks: In my opinion, current price does not reflect on the company financial performance and position – it’s under-priced. But then again, we still need to take cue from US economy. So hold on, stay tune and follow this company closely.

6) Pan United. Pan United just another wonderful company and I made a few buck out of it during recent bull run. In fact, I made money out of its subsidiary, Pan United Marine too. Both are wonderful company with strong profit growth and high dividend yield. Pan United is currently traded at $0.44. Let’s take a look at its financial performance and position.

Report: 1H2008
Revenue: surged to S$135.9m (25% variance)
Net profit: surged to S$14.5m (37% variance)
NP margin: 10.7%

Cash: S$53.3m
Working capital: 1.79
LT debt to total capital: 26.5%
Basic EPS: 4.53 cents
PE: 9.71
NTA: S$0.445
Yield: 4.1% (interim excl special dividend)

Director’s remark: positive outlook for FY2008.

My remarks: Pan United’s business is quite diverse and it’s not easy to analyse. However, the company is still profitable and trading at reasonable price. Worth a second look but no hurry.

..........To be continue

Pubs Updates

2008-10-07T21:43:00.004+08:00

1) Lifebrandz closes Ministry of Sound

Many Singaporeans may have heard and/or been to Ministry of Sound (MOS in short). Me? Never! You always get long queue and I hate long queue. Reported in Business Times today, club operator Lifebrandz closed its Ministry of Sound outlet at Clarke Quay on 6 Sep, less than three years after operations. Lifebrandz said that it has terminated a licence agreement with Ministry of Sound International, which owns the franchise. It said that it plans to redevelop the 40,000 square foot dance club premises into an entertainment centre 'which will be different in concept from the Ministry of Sound outlet'.

2) St. James

Without MOS, we still have St. James. And do you know that St. James is listed! Actually St. James was not listed through an IPO but it was bought over by then listed company JK Technology. I’ve been joking with my friends by inviting them to “my pub” to drink. I don’t own ST. James of course. But since it is listed now, I will get a chance to own it…. very soon.

let’s take a quick look at St. James' performance for the year ended 30 Jun 2008.

Revenue: S$35m (39% variance)
NP: S$4.3m (127% variance)
Margin: 12.3%

Working capital: 1.03 (low but is acceptable since the business deals maintain in cash or equivalent)
Gearing: 0%

The group currently also own Bar None and The Living Room at Marriot Hotel. The group also announced that it has acquired the assets of former Crazy Horse cabaret and turning it into a restaurant with live music – The Bellini Grande. The restaurant is expected to open in late Sep 2008.

Dow Jones Crashed To New Low

2008-10-07T20:32:00.007+08:00

From Nasdaq website, DJIA plunged another 508 points (5.1%) to 9,447. Nasdaq and S&P500 also plunged by 5.8% and 5.7% respectively.

There you see.... how you define "low"?

STI Crashed To New Low

2008-10-06T21:04:00.004+08:00

STI plunged 128.8 points to 2,168.32 - lowest since June 2005. This is a complete reversal of the bull market few years ago.

Patience Is A Virtue

2008-10-03T20:18:00.002+08:00

The following article from Business Times is an excellent report and I shared the same view. When you walk around city area or onboard a train, you will see adverts saying something like stock prices are low, hidden opportunity, this and that has strong fundamentals etc. I always laugh at it. It was all crap to me but I don’t blame the fund managers. This is because if people stop buying the funds and pull out their money, then the fund managers and analysts will be out of job soon.

The following is a good article especially to those with the idea of rushing into the market to buy while it is cheap. As always, how do you define “cheap”? Remember; always to take cue from global/local economy for your investment decision. The economic indicators are the leading indicators.

===================================

Business Times - 02 Oct 2008

Time to buy? No - patience is a virtue

By R SIVANITHY

WHENEVER stock markets behave as they are now, it's tempting to ask whether it's time to 'bargain hunt'. Indeed, as each passing day brings a new low - be it 24, 25 or 26 months for the Straits Times Index - the temptation to buy probably grows stronger, aided no doubt by a steady stream of 'buy' calls from brokers, all and sundry.

So will it soon be time to buy? Maybe it will? And perhaps for the Straits Times Index, the fact that the 2,300 level has held twice in the past fortnight suggests this may be where there is strong support?

Our take, though, is that there is no need to rush and that patience is a virtue. Brokers and independent researchers have consistently under-estimated risks to the downside for the past year, so their 'buy' calls should be taken not with a pinch of salt but a bucket.

Analyst credibility aside, a major reason for saying this is that despite America's woes, and despite it triggering the biggest financial meltdown ever, US stocks have not capitulated yet. Even after Monday's 7 per cent collapse, the Dow Jones Industrial Average was down only 22 per cent this year and the S&P 500 down 25 per cent - much less than the 35-50 per cent falls suffered by other markets.

From its all-time high, the Dow's loss to 10,365 was 27 per cent and the S&P's loss 28 per cent - over almost a year, compared with the 20 per cent crash in one day on 'Black Monday' Oct 19, 1987.

Seen in this light, the current losses on Wall Street could justifiably be taken to be part and parcel of a normal bear market and not really that much cause for concern.

Why has Wall Street not fallen as much as other markets? One possibility is the huge amount of liquidity the US Federal Reserve has pumped into the system. But more likely, it's the still-lingering hope of a government-led bailout, despite the initial proposal being rejected.

If a modified proposal is cobbled together before the end of this week and if this is again rejected, the full-scale removal of a 'bailout premium' will see US stocks start to reflect their true fundamental values.

Furthermore, it is debatable whether any US Treasury-led bailout would have any effect at all. Recall that on Monday, markets went into a tailspin many hours before the US Congress voted on the plan. So, even if a second plan is pushed through and even if this does push stocks up, it can only be a matter of time before reality sets in with regard to the US market and its fundamentals. And once this happens, investors might just cotton on to the fact that US stocks are grossly over-valued.

Bloomberg's analytic service gives the S&P 500 as trading at a historic earnings per share consensus analyst estimate of US$51 and a forecast figure of US$83. With banks disappearing, unemployment rising, consumer spending shrinking, no growth to look forward to, no bottom yet in housing and a possibly vicious recession just around the corner, how likely is it that US corporations will report such a big jump in earnings?

As for the local market, Citi Investment Research warned last week that it is possible for the STI to fall to 1,800 - a warning many investors reckon is too pessimistic. But if the index were to drop to 1,800, that would only take it to a four-year low which, given the huge risks to growth posed by America's problems and the unpre-cedented nature of the present bank failures, is arguably within reason.

The upshot of all this is that risks are still tremendously high and that Wall Street is still heavily exposed to the downside.

Investors should also realise that even if the STI's bottom does lie at 2,300, this does not automatically mean the start of a new bull market - stocks can drift for years within narrow bands before embarking on any uptrend. As such, it is clearly not time to buy yet.

Stock Market Review - Oct 08 (Part 2)

2008-10-02T00:09:00.001+08:00

3) China Sunshine Chemical. Actually I don’t really want to discuss on “red” stocks in this series of stock market review. This is because my confident on China companies has always been low due to their corporate governance and internal control. Now before you jump to conclusion, I must let you know that I have nothing against China nationals. In fact I have close friends from China, I have colleagues from China and I love to visit China. But comes to business, I am really worried. I have friends importing goods from China sharing with me the Chinese’s mindset, attitude and method when dealing with business. I don’t think you want to know or perhaps you already knew. So when these red stocks found their way to the SGX, I seldom apply for their IPOs, let alone talking about investment. Yes I know many have made good money out of it, but that’s not my point. My point is with doubt on their corporate governance and internal control, I dare not invest in China companies.

“How come you have doubt? Can you quantify?”

Read the paper lah, brother! Even if you don’t read Business Times, at least read LianHeWanBao right? And I’m not only talking about current milk powder issue. Notwithstanding my negative thoughts, I am still willing to take some risk on a few really good ones. So here I am going to share with you on China Sunshine Chemical.

Firstly, I did not make any profit from this counter. In fact since the day I invested in it, it did not perform as expected. And right now I am sitting on significant losses instead. Then did I make a mistake in my investment decision? I don’t think so. Besides, there are also other professional analysts drawing the same conclusion. Then what’s the basis of my recommendation back then? Firstly, the company is producing a type of chemical that is essential to make rubber into something like a car tyre. The company is one of the world largest producer supporting many world-renowned tyre manufacturers such as Bridgestone, Michelin, Goodyear, Pirelli etc. Most importantly, this chemical only takes up a small percent of a tyre’s manufacturing costs. And in my opinion, recession or economic boom, people still own car, F1 continue to race, buses and airplanes continue to roll out. China Sunshine Chemical is currently priced at $0.205. What about its recent financial performance and position?

Business: one of the largest rubber accelerator manufacturers in the world and in China in terms of production capacity.

Report: 1H2008
Revenue: surged to Rmb402m (41% variance)
Net profit: surged to Rmb61m (37.3% variance)
NP margin:13.3%

Cash: Rmb37.4m
Working capital: 3.84 (healthy)
LT debt to total capital: 0% (wow!!!)
Basic EPS: Rmb10.89 cents
PE: 9.41
NTA: Rmb1.01
Yield: N.A.

Director’s remark: expect to continue its growth for FY2008.

My remarks: I believe the business, to certain extent, is immune to economic downturn. There may be some impact but should not be severe. The company is currently reasonably priced.

4) Courage Marine. Courage Marine was really one of the last marine companies to perform in terms of share price. This was partly due to the fact that it was a new IPO. But what really caught my attention on this company was its high profit margin. And honestly, I don’t understand why its profit margin is so high. So early last year (2007), in the midst of the bull run, I bought Courage Marine at a very cheap price - $0.19. One year later, I sold it at 100% capital gain, excluding dividends! Actually the dividend payout can be very high if not of its high quantity of outstanding shares. Courage Marine, after recent blood bath, is currently trading at $0.215. What about its recent financial performance and position?

Business: ownership and operation of dry bulk carriers and the provision of marine transportation services.

Report: 1H2008
Revenue: surged to US$50m (43% variance)
Net profit: surged to US$30.3m (51% variance)
NP margin: 60.6%!!!!!!!!

Cash: US$68.6m (fat)
Working capital: 16.5 (OMG! Super healthy)
LT debt to total capital: 0% (OMG!!!)
Basic EPS: US$1.67 cents
PE: 9.19
NTA: US$11.75 cents
Yield: 4.65% (for half year)

Director’s remark: BDI collapsing to 5,600 level (I got no clue what’s a BDI). Company expects demand from China to remain strong and the group to continue to do well in second half.

My remarks: Similarly, if not because of uncertain global economy, I would have started buying Courage Marine.

…….To be continue

Stock Market Review - Oct 08 (Part I)

2008-10-01T13:13:00.003+08:00

It’s about time we review SGX-listed stocks. We’ll take a look on their current status and look back on its performance few years back. I had spend a few days reviewing all the listed stocks and truth be told, most of them are currently cheaply priced. What do I mean by “cheap”? In 2004, local economy and stock market started to recover. I remember that in mid 2003, I saw the indicators and believed that we are going to bottom up. Before I quit the Army, I told my ex-colleagues that “I think it’s about time”. I launched my first wave on the tech stock/funds. And from 2004 – 2005, many stocks were lagging behind because Ms. Market was shaky; she wasn’t sure. Index was fluctuating without clear direction. As such, I spend considerable amount of time finding gems rather than following “road-runners”. I found quite a lot of it and I’ll share a few with you today. Some of my readers may have followed my recommendation and benefited from it. Appreciate if you can testify here.

In my opinion, right now most of the counters are priced at a level similar to 2005. No doubt still has room to plunge further, but really quite cheap comparatively.

The Index

As expected, STI could not hold its ground since late last year. When sub-prime woes were exposed, STI took a hit in around July 2007. However, in around September 2007, global market under-estimated the damaging power of US financial crisis, it continued to move up. And in around Dec 2007, with surging oil price, global market started to loss steam and it was “neither here or there”. And then I’m sure it’s GAME OVER. Thereafter I started to advise my friend to either hold or sell BUT do not give a single cent to Ms. Market – she is breaking down soon.

(Note: some of you may know that “Mr. Market” is a term used by Warren Buffet and his teacher Benjamin Graham to describe market behaviour. But I used “Ms. Market” instead as I find the market behaved like a girl – temperamental!)

In early January this year, STI was around 3,400 points. As at today, STI stands at 2,361.34. Approximately 1,000 points had been wiped out. So this proves my points that although there will be fluctuations along the way, ups and downs but overall it’s coming down. And unless you speculate, you will not make it if you invest along the way.

This is the downtrend of the business cycle.

Selected Stocks

1) AusGroup. Now this is really one of mine favourite stocks. I (and my all-time favourite analyst, BT Snr Correspondence, CFA Charterholder - Ms Teh Hooi Ling) found the gems before it skyrocketed. Hooi Ling visited AusGroup’s management in Australia and wrote an excellent report published on the paper. The stock was initially priced around $0.30 in 2006. And then it became a rocket surged all the way to around $2 almost non-stopped. And what is its price now? Unbelievable $0.265! What about its recent financial performance and position?

Business: supporting oil & gas industry.

Report: FY2008
Revenue: increased to A378.9m (34.8% variance)
Operating profit: dropped to A21.7m (23.9% variance)
NP: dropped to A14.4m (27.8% variance)
NP margin: 3.8%

Cash: A18.7m
Working capital: 1.61
LT debt to total capital: 28%
Basic EPS: A3.6 cents
PE: 7.36
NTA: A22.5 cents
Yield: 2.3%

Director’s remark: secured higher orders; expected FY2009 to be profitable.

My remarks: margin and yield is unimpressive. Profit may soften further but likely to remain positive. I do not expect oil price to stay below $1 next year. Overall performance and position looks fine.

2) Bonvest Holdings. This is yet another company which make me proud; make me scream. In 2005, Bonvest was a lager and I found this gems. I studied its businesses and strongly believed that it worth more than $0.55. However, Ms. Market has different opinion. So I bought in the share and within that year, I disposed it at $0.905 – too early!!! You must be shocked when I say “too early”. Yes, after I locked in my profit, Bonvest continued to surge to around $1.70!!!!!

“Wow, then you must have regretted and jump!”

No, remember that in investment, your greatest weakness is greed and fear. I’ve earned my money, I moved on. Bonvest is currently priced at $0.72. What about its recent financial performance and position?

Business: property development and investment, food and beverage, hotel ownership and waste management.

Report: 1H2008
Revenue: dropped to S$119.7m (28.1% variance)
Operating profit: surged to S$100m (238.8% variance) due to revaluation gain of $70.3m. Without it, operating profit should be around $30m (about the same as previous identical period)
NP: surged to S$86m for the same reason (266.2% variance)

Cash: S$89.5m (fat)
Working capital: 2.15 (healthy)
LT debt to total capital: 0.26% (extremely low)
Basic EPS: S$20.7 cents
PE: 3.4
NTA: S$1.65
Yield: N.A.

Director’s remark: challenging and competitive market. Minimal contribution expected from most of its business segments.

My remarks: You want to know how I feel now? I feel that there is a very beautiful lady standing right before me, single and available. And luckily you’ve stopped me otherwise I would have jump onto it like right now! I mean if you buy Bonvest now, you are paying S$0.70 for a company that worth S$1.65! Bonvest’s financial position and performance is very impressive although it may not be able to hold its ground in view of intense market competition and uncertain global economy. And that’s exactly why I’m not calling a buy but close monitoring. US economy is highly uncertain couple with high oil and food prices; we are really not sure where this is leading to.

…… To be continue

Buffett's Battery Bet

2008-09-29T21:35:00.000+08:00

Forbes.com

Buffett's Battery Bet
Paul Maidment 09.28.08, 10:02 AM ET

Warren Buffett is buying batteries.

Through MidAmerican Energy Holdings Co. he is paying $230 million for a 10% stake in BYD, China's largest maker of rechargeable batteries.

BYD batteries are principally used in mobile phones, for which it also makes handset components. But it has aspirations to use its rechargeable lithium battery technology to become a green car company.

BYD plans to start selling its first all-electric car in China next year and to start selling gasoline-electric hybrids in the U.S. and Europe by 2010. BYD short circuited the difficult process of getting government permission to build cars by buying bankrupt state-owned automaker Qinchuan in 2003 to be the basis of its car-making division, BYD Auto.

The deal with MidAmerican will be unveiled in Hong Kong, where BYD is listed, on Monday. Details became known late Friday.

BYD is based in Shenzhen and has 130,000 employees worldwide. It had sales of $1.8 billion in the six months to June, up 44% for the same period a year earlier. Profit after tax was up 15% at $108 million, as raw material costs surged for both its battery and handset components businesses.

Two-thirds of BYD's sales are in China. The company's chairman, Wang Chuanfu, said in a statement that the investment from MidAmerican will help give BYD further access to global markets, particularly for its new electric vehicles and environmental protection products.

Buffett is getting his BYD stake at a tiny discount to Friday's closing price of HK$8.40. The stock hit a 52-week low of HK$6 on July 24 in the wake of Hong Kong's High Court dismissing in late June a request to halt a lawsuit filed by Foxconn International Holdings, the world's biggest contract maker of mobile phones, for allegedly stealing trade secrets.

Buffett's BYD stake isn't on the scale of the $5 billion he invested in Goldman Sachs earlier in the week, but he has a record of savvy China deals. He invested $488 million in PetroChina stock in 2002 and 2003. In 2007, he sold his stake for $4 billion.

Speculation - Two Edge Sword

2008-09-29T21:08:00.006+08:00

In a turbulent market, you can make big money. But by the same token, you can also get yourself into deep trouble if the market turned against you.

The following is an extract from Business Times on what will happen if you short and failed to cover your position.

=====================================
Business Times - 23 Sep 2008

Unknown short-seller hit by $1m loss

SGX initiates buy-in for shares against short-seller who fails to cover his position
By VEN SREENIVASAN

Someone out there is licking his wounds after taking an almost $1 million hit after a naked short-selling adventure that went badly wrong.

The Singapore Exchange (SGX) yesterday initiated a buy-in for a huge chunk of China Hongxing shares against a short-seller who had dumped the stock last Friday but failed to cover his position before the close of the session.

In all, the SGX yesterday bought-in some 13 million shares of the mainboard-listed Chinese sports shoes and accessories maker at around 35.5 cents per share.

This was to cover the short sale of an equal amount of shares at around 25 to 27 cents per share during last Friday's session.

Besides taking a loss on the price difference, the short-seller also took a hit on the transaction fee of $40 per block transacted, and a higher brokerage rate of 0.75 per cent on the deal.

Market insiders reckon the loss could stack up to around $1 million.

================================================

And what if you still stubbornly short the market without covering your position? Well in that case, this is what’s going to happen to you. The following is an extract from Business Times.

================================================

Business Times - 27 Sep 2008

SGX will not penalise naked shorts caused by 'honest mistakes'

By LYNETTE KHOO

…….Starting Thursday, SGX imposed a penalty of 5 per cent of the value of a failed trade subject to a minimum of $1,000, on top of the current processing fee of $30 per contract. A broker who fails to deliver the shares in the buying-in market may also be liable to a penalty of $50,000 and/or barred from participating in the buying-in market.

The penalty is to be paid within five business days of notification. But SGX clarified that there are provisions to appeal against penalties. While a decision on an appeal is pending, the dealer does not have to pay a fine. The result of the appeal will be known within 10 business days of the date of notification. 'We will consider factors such as the intent of the investor who opens the sale, profile of the investor and trades, and whether the trade has any potential adverse impact on the integrity of the settlement system,' said SGX head of markets Gan Seow Ann.

The fines will go towards investor education initiatives.

Mr Gan also said that the primary intent of the new rules is not to curb short-selling per se but to deter failed share delivery - which threatens to compromise the settlement system. 'It was never meant to be a response similar to what you see in other environments, where regulators have banned short-selling,' he said, though it was easy to make such an association as the measures came just after regulators imposed short-selling curbs elsewhere. Mr Gan stressed that the measures are largely pre-emptive. 'Despite the market turbulence and all these uncertainties, trading continues to be orderly and there was no pressure on the system as far as settlement is concerned.'

On the Hong Kong bourse, naked short-selling is illegal and subject to jail terms and/or fines. The Hong Kong stock exchange (HKEx) said yesterday it also plans to increase the penalty fee for securities settlement failure……

Changing Mindset, Changing Life

2008-09-27T22:39:00.020+08:00

Since I started blogging, I’ve been sharing on investment strategy, financial planning, market/company updates etc. There is one other thing that I talked about frequently in my blog – positive mindset. Today, I will share with you living testimonies.

My career, since the day I quited the Army has been rough and bumpy. Although I am not a scholar or scorer in my grades, my career development at this age has been less than satisfactory. I used to say that it was the fault of the economy, the timing, god and many more. But about five years ago, I was fortunate to meet this man in my job. He was the one who changed my perception, introduced to me a new approach to life and success, altered the way I look at things and helped me to overcome many difficulties. I think it’s about time I give full credit to him and give good account of what he had done for himself.

A Living Testimony

Now, if you are my colleague and are reading this article, please keep it to yourself. Having said that, I will try to be diplomatic and political in my words.

Cayden Chang, an extraordinary man with a passion for success, a man of action, highly focus and highly motivated. Most importantly, he always expects result and nothing less. You must be thinking that naturally everybody wants to be successful. If that’s what you are thinking now, you missed the whole point. Everybody wants to be successful; you can hear that especially when people start talking about it. But when comes to action, most people (probably including myself) are not determined. In other words, to many people success is not a MUST, it’s just a WANT, i.e. success is optional. You must be thinking that I am talking shit. Let me illustrate:

About two years ago, I had a chat with one of my ex-colleagues who was unhappy with his work and pay, as usual. He wanted more; he wanted to be successful. We were having a coffee break, just two of us. So I tried to be “kaypoh” and shared with him that our greatest obstacle is not chance, it’s our mindset or determination. He replied that he is very determined. So I told him that I have friend who is a very successful property agent. He is my secondary school classmate and only has GCE “O-Level” but he is doing very well in property line. So I offer this ex-colleague a chance to be trained by this successful agent. He replied that he also heard of successful property agent earning more than $10k per month. However, he doesn’t really like to be a property agent (see what I mean?). I just return with a smile.

My First Encounter

I came to know Cayden when he was posted to my office as my Manager (Executive rank). We worked for a listed company. I was also new in the office then, joining the company for less than four months. So I had the chance to learn from him from scratch. I remember that Cayden reviewed all our work and procedures and was shocked to know that everything wasn’t done properly before. He then personally trained us and put everything in order again. It was already a tough job just to put the foundation right again.

After working with him for few months, I started to understand his style and felt the pressure. In short, he spend lots of time training us up, making sure we are fully competence and then he went on to take up projects at highly level. He always volunteered for challenging task at higher management when many will keep their head low. He was not scheming, in case you are thinking on the negative side. The price - we worked together for long hour daily and I was always back to office during weekends. To most employees, and perhaps including yourself as you are reading, this must be a typical “suck up” superior. But this is how Cayden convinced me: “James, how you want me to fight for your promotion and highest bonus? By telling management that you work hard, reported to office on time, completed your job diligently? But who aren’t? Or by telling management that you can run the whole office yourself without my supervision and completed additional task that everybody shunned away? Your peers, there are so many of them but only a few will move up. And as a new staff, you already loss out compare to the rest. If you want to excel, you must achieve positive result in black and white. Do you want to be successful?”

Recently there is a movie (Singapore Production) – Kallang Roar. I didn’t watch it but I remember a part of the script which says something like “if you are not a winner, you are nothing”.

Anyway, that was the first time someone say this kind of things to me. None of my ex-highly-paid-officer has ever says this to me. And honestly, although I understood Cayden’s teaching, but it wasn’t easy to absorb initially. He took his time to continue to change my mindset. He reviewed our work frequently, goes through with us on how to achieve the target he set for us and explained to us why he has done that. Together we groomed and motivated subordinates and “chopped off” the incorrigible one. It was hugely difficult when comes to managing people. And believe or not, our office’s KPI for that year shot up from bottom to top three! Come to think of it now, it was a little bit like Romance of Three Kingdoms, when Liu Bei led small troops against enemy in huge numbers.

Before I move on, let me clarify that the above is a summary of the things he told me, not exactly word-for-word but something along the lines. Moving on, Cayden was promoted that year to Senior Executive. Unfortunately, before I get the chance to harvest my fruit, I resigned to pursue higher studies. Cayden persuaded me to stay but I have different plan. Knowing that he couldn’t change my mind, he bought a book for me. Initially I thought it was another book on Management and so I put it on my bookshelf. We still keep in touch after I left. About half a year later, something happened.

Another Living Testimony

Half year later, I came to know a man (a Warrant Officer) in the Army during my in-camp training (ICT). This man had achieved so much in many areas (career, studies, physical fitness etc) although he is just a specialist. The most amazing thing is that at age of 40 plus, he continues to maintain below 9min record for 2.4km run and had been training young officers and specialists for marathon. I couldn’t run below 9min at the age of 22 as a Guardsman (vocation just below Commando). On the last day of our ICT, many of us met at the Mess for a drink. And when he shared with us on his “secret to success”, he gave all credit to “changing mindset”. He specially recommended a book titled “Master Your Mind, Design Your Destiny”. None of my Army friends heard of this book but I got one right on my bookshelf, a gift from Cayden! Back home, I immediately picked up the book to read and also wrote an email to Cayden to express my most sincere appreciation.

Few months later, I rejoined Cayden’s company again but in different department. By now, I had been equipped with different mindset and Cayden was already a Manager by corporate rank. And one year later, he was further promoted to Assistant Vice President. This is really amasing. He started low and humble, but he was simply “2 Fast, 2 Furious”.

Cayden didn’t stop pursuing for his happiness. He resigned and moved on to coach people on positive mindset. He set up his own training company known as Mind Kinesis.

Conclusion

Cayden’s road to success didn’t come easy. He started from scratch but skyrocketed. In his pursue for happiness, he met more extraordinary leaders but also adversaries. I had heard of other colleagues criticising him as “market spoiler”. But in my heart, I can see clearly and objectively who is the real champion. So did you ever claim someone as spoiling market? If yes, then you are very guilty. And Cayden has also influenced many. By adopting his teaching, I am also earmarked as market spoiler by others now. I didn’t bother to explain but take it as a complement instead. And now that I had a new colleague, I used the same mindset while training her in her work. My only worry is that I am not sure if she is ready for this powerful teaching.

Lastly, about that Warrant Officer, he probably forgotten about me since we met two years ago. In fact, I also couldn’t even remember his name. We are just acquaintance. During recent ICT, I met him again along the corridor. I recognized him and called out for him:“Encik, thank you for your sharing on positive mindset two years ago”. He stunned for a second but immediately recalled the incident.

As for me, the story continues…….

What To Do With My AIA Policy Now?

2008-09-23T22:36:00.007+08:00

Lately I bumped into two friends in a shopping mall. We chat a bit and the next question they asked me was about their AIA insurance policy. They wanted to know my opinion on next course of action - cancel or otherwise. I don't really want to share my opinion as I don't want to be responsible of negative outcome. In fact, some of my ex-colleagues in the Army were asking me what to do with their policies. Should they follow the crowd?

So before I share my opinion, I would like to disclaim my liability (like all funds or investment products). Make no mistake please, that I'm not a professional, qualified or track-recorded financial expert. Yes I may have experience in equity investment, studied investment management but that's about all. But I have addition skill - commonsense. Like my ACCA lecture used to say: "commonsense is the least common human attirbutes".

Anyway, if you want to cancel your policy, there are a few things you must understand. Firstly, does your policy comes with cash value? Does it comes with returns? For example, a living policy carries cash value at the end of the policy assuming the policyholder never claims it. It therefore, form part of that policyholder's retirement plan. If you cancel by monkey-see-monkey-do, most probably you'll incur a loss as the policy takes a long time to breakeven and to eventually make a positive returns. Usually it takes more than 10 years. In addition, if you want to switch to another insurance company, you'll also suffer one or both of these:

1) Due to age and medical history, you may not be able to get the same protection with the same costs.

2) Investment in insurance products such as a living policy requires considerable amount of time to breakeven and to turn into positive contribution. The benefit of a living policy is the protection for critical illnesses and that it form part of a policyholder's retirement, if the policyholder never make a claim on it. And time is needed for it to grow into a big retirement savings. This is the power of compound interest - time is of essence. Well, if you're already 40 or 50 plus.... you certainly running out of time to see your new living policy turned into significant retirement savings at the same costs.

AIA recently publish in the paper to calm all policyholders by assuring that they have sufficient assets to meet their obligations. Under normal circumstances, I would not take their words and will cancel the policy right away, if I have one. Simply because I don't trust the management's statement. BUT, MAS has also assured Singaporean on AIA's asset to meet obligation. I trust our government. I trust our financial system, and all the rules and regulations governing the financial industry.

So my ultimate conclusion? Don't cancel your policy with AIA - this is what I told my friends (with disclaimers, as usual). In any case, the damage will be bad if a policyholder cancel it right away - may not get much out of many years of premiums. In that case, might as well trust the MAS and bet on it, that everything will be fine. Lastly, of course if your policy doesn't carry a cash value (no return) such as the term policy, then it doesn't matter if you want to cancel, assuming you are as healthy as before.

At The Verge of Recession

2008-09-17T00:43:00.002+08:00

As the financial crisis dominates the headline, my friends have been asking for my opinion on stock investment. One of my colleagues asked me the same question two weeks ago. She told me that her ex-colleague encouraged her to “anyhow whack” since “stocks are really cheap now". This was my reply to her:

“How do you define cheap or low?”

I told her that if she buys, her savings would be gone. That was my opinion. In fact, that was my opinion since the start of this year. Checking through my blog you’ll find plenty of it. I don’t have to brag about it.

I was servicing my in-camp training lately. A few ex-colleagues in the forces are also interested in making money. I told them to wait for that opportunity; to wait for my call. Frankly speaking, I have totally lost track of the stock market. In fact, I hardly log into my trading account to check my portfolio. I’m sure I’m sitting on huge losses at this time but my life hasn’t change a bit. The main reason is because I never gamble, and that’s my first principal in investment. I have stop reading financial news, browsing SGX website. So during my in-camp training, I brought Business Times to read and truth be told, all penny stock and mid-cap stock plunged severely from its peak in end 2007.

Following the news on the collapse of Lehman Brothers and takeover of Merrill Lynch, global stock took another plunge. This just to prove my view early this year that US financial crisis has not ended yet. And until US solved their financial crisis, stock market will continue to be highly volatile. In addition, I still strongly believe that we have already crossed the peak of the business cycle somewhere end of last year. We are on the downturn now. There will still be fluctuation and many more “bear traps”, but in the longer term, it’s still going down. Therefore, no matter what you do, if you try to invest now, you’ll have to kiss your money away. Unless you speculate, which I will never encourage, you will never make it. What we need now is to wait for all dust to settle, whether there is going to be a recession or not, and then re-assess the economic movement.

In sum, do not follow amateur’s motherhood statement like “stock price is low”. Keep your money in the bank at this point, although bank will give you peanut rate. What goes up must come down. By the same token, what comes down must go up. The only challenge is – when is the right time. And that is a million dollar question.

Crisis Surrounding Fannie Mae and Freddie Mac

2008-07-14T22:26:00.004+08:00

Last Year afte the exposure of US financial crisis, while everyone were talking about this bank and that financial companies, I was asking around the impact on Gennie Mae and Fannie Mae. I know of these great mortage issuers in my study, although I don't really understand the detail. And especially the Gennie Mae, which is gauranteed by full faith and credit of the US Government, what if it also suffers huge losses?

I was asking some of my friends who are in the financial sector, none got the answer. Well, that's because we are not knowledgeable enough. But now, it seems that my worries are not unfound.

========================

Business Times - 14 Jul 2008

Collapse of US mortgage bank piles on jitters for markets

(An excerpt)

By ANDREW MARKS
NEW YORK CORRESPONDENT

IT looks like even Wall Street's usually unflappable equities traders may have become unnerved.

But who can blame them after the week that they have been through. There was a run on and near melt-down of mortgage giants Fannie Mae and Freddie Mac, new record highs for oil prices, and most shocking of all, the collapse of IndyMac Bancorp, a mortgage bank based in California.

On Friday, US banking regulators took control of the assets of IndyMac after a run on the bank by panicked depositors forced it to the wall, precipitating one of the biggest bank failures in US history.

IndyMac, which is due to reopen today under federal supervision, specialised in mortgages that often required minimal documents from borrowers. It is the fifth US bank to fail this year as a housing slump and credit crunch strain the financial system.

'It's very difficult to remain calm and reasoned when you get into this cycle of constant shocks to the system, of getting hit in the gut with just how bad the credit market is just when you start thinking that maybe the worst is over,' says Mark Nolan, an equity trader and sales analyst at Garvin & Company, in a reference to the crisis at Fannie Mae and Freddie Mac. 'The sense of doom people are sunk in right now makes me think back to my high-school Shakespeare: 'These are the times that try men's souls.' It makes it tough to go to work in the morning,' he says.

Indeed, the huge losses at Fannie Mae and Freddie Mac - the nation's two largest mortgage issuers responsible for a combined US$6 trillion of mortgages - have sparked fears of an outright government takeover. Such a move would protect the mortgages, but would wipe out shareholder equity. Thus the massive sell-off on the two companies, which both saw their share prices plunge by more than 75 per cent in three days.

US Is Still World Largest Economy

2008-06-21T21:50:00.001+08:00

There is a good article in Business Times last week. I had frequently shared my opinion on global economy, particularly US and China with personal friends. The common question that people usually asked are projection on US economy and strength of China’s economy.

Make no mistake. I’m not an economist although I studied economy during my previous study and read financial news (almost) daily. But I’m still not an economic consultant. However, with basic economic knowledge, commonsense and reading of analysts’ report, I’m able to draw reasonably accurate conclusion. My ACCA lecturer Mr Fred Keer used to say “commonsense is the least common human attributes”. He is an extraordinary lecturer. I think he is back to UK.

My projection for US economy remains the same. Besides sub-prime issue, which was recently removed from the centrestage, inflation and skyrocketed oil price may soon lead US into a recession. So it is very uncertain now and stock market should be avoided at all costs. As for the China market, even if we add in India’s market, both of them still cannot replace our export to US and Europe. Not to forget that China herself is also a net exporter to US. This means that she will also be hit should there be a downturn in US economy. If China is affected, certain their demand for Singapore product/services will drop. I think that’s pretty commonsense. Don’t need an MBA to understand this.

There is an article on Business Times that concurs with my analysis, or the other way round.

==============================

Growth in China, India can't offset US downturn

Advanced countries' weakness will hit growth in emerging markets: Fitch

By CONRAD TAN

(SINGAPORE) Emerging economies such as China and India are not big enough to offset a likely recession in the US and weakening growth in other advanced economies, the head of Asia-Pacific sovereign ratings at Fitch Ratings warned yesterday.

Since most developing economies are net exporters to the US and Europe, continued growth in emerging economies will not provide support for the developed economies that are still the dominant sources of world demand, said James McCormack, who is responsible for analysis and ratings of sovereigns in Asia.

While Fitch expects growth in emerging markets to continue to outpace that of developed economies, 'the fact that China and India are growing quickly doesn't mean the US is going to grow any faster', he said. 'It's not really going to help offset weakness in advanced economies. The trade flows suggest quite the opposite.'

Mr McCormack, who is usually based in Hong Kong, was speaking at a structured finance conference in Singapore organised by Fitch.

India accounted for just 2 per cent of global economic output last year as measured by gross domestic product at market exchange rates, according to the International Monetary Fund's April World Economic Outlook.

'And it's not a very open economy - imports are only 13 per cent of its GDP. So it doesn't really matter how fast India grows - it is not going to contribute to stronger growth in other markets,' said Mr McCormack. 'It doesn't import that much and it's just too small.'

China's contribution was six times larger, at 6 per cent of world GDP in 2007, he said. 'And it's a much more open economy as well.' Imports accounted for more than a quarter of China's GDP last year at market exchange rates, so faster growth in China should benefit those economies it imports from.

'But China is running very large trade surpluses with the US and the European Union. And that would suggest that China is a net supplier to those markets - it doesn't really demand very much from the US and the EU,' said Mr McCormack.

Collectively, the four so-called BRIC countries - Brazil, Russia, India and China - are running trade surpluses with the US and EU to the tune of more than US$500 billion, he said. 'What that tells us is that the trade flows are going from exports from the emerging markets to the advanced economies.

'So if there's weakness in the advanced economies, you're going to see weakness in the emerging markets. It's not the other way around, where you see strength in the emerging markets followed by strength in the advanced economies.'

If purchasing-power- parity exchange rates - the amount of currency needed to buy the same common basket of goods and services as one US dollar - are used rather than market exchange rates to measure GDP, China's share of world output in 2007 jumps to 10.8 per cent, while India's rises to 4.6 per cent.

But even by this revised measure, the 23 developing economies in Asia - excluding Japan, Hong Kong, Singapore and Taiwan - account for just 20.1 per cent of world output, less than the 21.4 per cent contributed by the US alone, according to the IMF report.

The UK and the 15 euro-area countries make up another 19.4 per cent of the world economy, while Japan accounts for 6.6 per cent of the total.

You Seen This Before?

2008-06-20T06:57:00.006+08:00

Modern Management Theory: Lesson 6

2008-06-20T06:54:00.001+08:00

A little bird was flying south for the winter. It was so cold the bird froze and fell to the ground into a large field.

While he was lying there, a cow came by and dropped some dung on him.

As the frozen bird lay there in the pile of cow dung, he began to realize how warm he was.

The dung was actually thawing him out!

He lay there all warm and happy, and soon began to sing for joy.

A passing cat heard the bird singing and came to investigate.

Following the sound, the cat discovered the bird under the pile of cow dung, and promptly dug him out and ate him.

Morals of the story:

(1) Not everyone who shits on you is your enemy.

(2) Not everyone who gets you out of shit is your friend.

(3) And when you're in deep shit, it's best to keep your mouth shut!

THUS ENDS THE MANAGEMENT COURSE

Modern Management Theory: Lesson 5

2008-06-18T23:15:00.001+08:00

A turkey was chatting with a bull.

'I would love to be able to get to the top of that tree' sighed the turkey, 'but I haven't got the energy.'

'Well, why don't you nibble on some of my droppings?' replied the bull. They're packed with nutrients.'

The turkey pecked at a lump of dung, and found it actually gave him enough strength to reach the lowest branch of the tree.

The next day, after eating some more dung, he reached the second branch.

Finally after a fourth night, the turkey was proudly perched at the top of the tree.

He was promptly spotted by a farmer, who shot him out of the tree.

Moral of the story:

Bull Shit might get you to the top, but it won't keep you there.

Modern Management Theory: Lesson 4

2008-06-17T21:22:00.001+08:00

An eagle was sitting on a tree resting, doing nothing.

A small rabbit saw the eagle and asked him, 'Can I also sit like you and do nothing?'

The eagle answered: 'Sure, why not.'

So, the rabbit sat on the ground below the eagle and rested. All of a sudden, a fox appeared, jumped on the rabbit and ate it.

Moral of the story:

To be sitting and doing nothing, you must be sitting very, very high up.

Modern Management Theory: Lesson 3

2008-06-16T23:48:00.001+08:00

A sales rep, an administration clerk, and the manager are walking to lunch when they find an antique oil lamp.

They rub it and a Genie comes out.

The Genie says, 'I'll give each of you just one wish.'

'Me first! Me first!' says the admin clerk. 'I want to be in the Bahamas, driving a speedboat, without a care in the world.'

Puff! She's gone.

'Me next! Me next!' says the sales rep. 'I want to be in Hawaii , relaxing on the beach with my personal masseuse, an endless supply of Pina Coladas and the love of my life.'

Puff! He's gone.

'OK, you're up,' the Genie says to the manager.

The manager says, 'I want those two back in the office after lunch.'

Moral of the story:

Always let your boss have the first say.

Modern Management Theory: Lesson 2

2008-06-15T12:46:00.001+08:00

A priest offered a Nun a lift.

She got in and crossed her legs, forcing her gown to reveal a leg.

The priest nearly had an accident.

After controlling the car, he stealthily slid his hand up her leg.

The nun said, 'Father, remember Psalm 129?'

The priest removed his hand. But, changing gears, he let his hand slide up her leg again.
The nun once again said, 'Father, remember Psalm 129?'

The priest apologized 'Sorry sister but the flesh is weak.'

Arriving at the convent, the nun sighed heavily and went on her way.

On his arrival at the church, the priest rushed to look up Psalm 129. It said, 'Go forth and seek, further up, you will find glory.'

Moral of the story:

If you are not well informed in your job, you might miss a great opportunity.

Modern Management Theory: Lesson 1

2008-06-13T23:40:00.000+08:00

A man is getting into the shower just as his wife is finishing up her shower, when the doorbell rings.

The wife quickly wraps herself in a towel and runs downstairs.

When she opens the door, there stands Bob, the next-door neighbour.

Before she says a word, Bob says, 'I'll give you $800 to drop that towel.'

After thinking for a moment, the woman drops her towel and stands naked in front of Bob, after a few seconds, Bob hands her $800 and leaves.

The woman wraps back up in the towel and goes back upstairs.

When she gets to the bathroom, her husband asks, 'Who was that?'

'It was Bob the next door neighbour,' she replies.

'Great,' the husband says, 'did he say anything about the $800 he owes me?'

Moral of the story:

If you share critical information pertaining to credit and risk with your shareholders in time, you may be in a position to prevent avoidable exposure.

What Happen To Vietnam?

2008-06-09T21:15:00.004+08:00

I almost started a business with a brother in Vietnam. I almost pump money into a Vietnam fund. I almost married a Vietnam girl..... ok I'm just joking. But what happen to Vietnam now? Its stock and economy is in trouble.

Two years ago, many people were excited with Vietnam. Its huge and young population, untapped market, political stability, cultured locals, economic revamp all pointing to one conclusion..... 2nd China!!!

And seriously two years ago, there is no reason not to believe so. All these were supported with economic data, demographic data and many analysts' reports. But things are all different now. Vietnamese inflation is a whopping 25%!!! Here in Singapore, we already felt the pinch of 5% inflation. Yesterday I bypassed a shop selling BBQ pork and rice dumpling. I enquired on the price and the lady boss replied S$3.50 per dumpling. I was shock and apparently she noticed my expression. On a normal day, a dumpling cost around S$1.50. So I smile at her and turnaround to leave the shop. Then she explains (while I was walking away) that "everything is expensive now due to rising prices". I almost wanted to turn back to correct her motherhood statement. Inflation is 5%, not 100%. The 100% inflated price of her dumpling was seasonal. Don't cover up everything by blaming it on the inflation, “I not stupid too”.

Anyway, a year ago, Lion Capital launched the first Vietnam Fund available to all investors. Everyone was excited and I almost bought it. I didn't merely because most of my spare cash was in the stock market then. I even recommended the fund to my friends. Luckily, they didn't invest in it. Now the fund's price crashed like can tin.

The following is a report in Business Time on Vietnam's economy.

===========================

Business Times - 09 Jun 2008

Vietnam faces boom-and-bust cycle: analysts

(HANOI) Vietnam's economy, until recently a darling of foreign investors, has overheated and may be sliding into a boom-and-bust cycle that could require IMF-style assistance, analysts say.

The economy widely hailed last year as Asia's next tiger has been battered by double-digit inflation, a ballooning trade gap, a tanked stock market and worries about the currency and banking sector.

Credit rating agencies Standard & Poor's, Fitch and Moody's and several investment banks have revised downward their outlooks for Vietnam at a time when the spectre of a US recession could spell global trouble.

Aseambankers Research said that 'the worst-case scenario would be for Vietnam to suffer massive capital flight, triggering a balance of payment crisis and forcing the country to go to the International Monetary Fund (IMF) for help'. Analyst Adam Le Mesurier wrote for consultancy DSG Asia that 'an 'IMF programme' style policy response will be needed within six months', including monetary and fiscal tightening and a dong currency devaluation. Many investors and donors in Vietnam remain upbeat about the market of 86 million, pointing to strong exports - including that of food and oil - investment inflows, growing tourism, and the potential of its young workforce.

'It's too easy to get excited and claim that Vietnam has gone from poster child to problem child,' said EU chief country representative Sean Doyle. 'But I'm not sure it's very wise and very balanced . . . Vietnam, if it can keep steady, stick with the right policies, will be attractive.'

Nonetheless, the turnaround in investor perception has been stunning. Communist Vietnam's 2007 entry into the World Trade Organization (WTO) fuelled enthusiasm for the low-wage 'mini-China', bringing an influx of foreign cash.

Domestic investors gambled on a sky-rocketing stock exchange, the government went on a spending spree, and banks lent freely, fuelling rapid credit growth.

The wheels started to come off about half a year ago, when inflation hit double digits as the economy tried to digest US$6 billion in foreign direct investment (FDI) disbursed last year, or 8.4 per cent of gross domestic product (GDP).

Since the start of the year, prices have galloped - driven by global food and energy costs - to 25 per cent year-on-year inflation in May. Wage demands sparked 300 labour strikes in the first quarter alone.

'The wage-price spiral appears to be beginning. If it becomes embedded, it could make matters much worse,' said an HSBC report that predicted a rise to 30 per cent inflation amid hoarding of commodities.

Another alarm bell sounded when surging imports drove the trade deficit to US$14.4 billion in May, compared to US$12 billion for all of 2007.

The stock market has tumbled amid tighter credit and falling investor confidence, turning from the world's best to worst performing bourse. Last week, it crashed below 400 points, from its high of over 1,100 in March 2007.
Many investors have bought gold or offloaded their value-losing dong for greenbacks, briefly sending the black market rate in Vietnam to 18,500 to the US dollar last week, against the official rate of around 16,000.

Signs And Symptoms Of US Recession

2008-06-08T22:47:00.005+08:00

The world largest economy's growth depend largely on its consumer demand. What if its people go jobless?

==================

Business Times - 07 Jun 2008

US jobless rate in May hits 5.5% (Excerpt)

Employers, worried about a sharp slowdown, clamp down on hiring

(WASHINGTON) The US unemployment rate jumped to 5.5 per cent in May - the biggest monthly rise since 1986 - as nervous employers cut 49,000 jobs.

The latest snapshot of business conditions showed a deeply troubled economy, with dwindling job opportunities in a time of continuing hardship in the housing, credit and financial sectors.

'It was ugly,' said Richard Yamarone, an economist at Argus Research.

With employers worried about a sharp slowdown and their own prospects, they clamped down on hiring in May, said yesterday's report from the Labour Department. The unemployment rate soared from 5 per cent in April to 5.5 per cent in May. That was the biggest one-month jump in the rate since February 1986. The increase left the jobless rate at its highest since October 2004.

The big jump in the unemployment rate surprised economists who were forecasting a tick-up to 5.1 per cent. Payroll losses, however, weren't as deep as the 60,000 that analysts were bracing for. Still, job losses in both March and April turned out to be larger than the government previously reported. Employers now have cut payrolls for five straight months.

The White House expressed disappointment too.

'Certainly this isn't a report that we wanted to see today,' White House deputy press secretary Scott Stanzel said. He acknowledged that the increase was higher than experts expected.

'It is a number that is too high in our view but it is lower than the average of the last three decades.'

The 5.5 per cent rate is relatively moderate judged by historical standards. Yet, there was no question that employers last month sharply cut jobs.

The government said the number of unemployed people grew by 861,000 in May, rising to 8.5 million. The over-the-month jump reflected more workers losing their jobs as well as an increase in those coming into the job market - especially younger people - to look for work, the Bureau of Labour Statistics said.

Analyst's View on US Recession

2008-05-31T09:21:00.005+08:00

The following is an excerpt of Fundsupermart.com analyst's view on US recession. This is a clear and present danger.

===========================
Recession Still Looks Likely For The US

The US economy grew an annualized 0.6% quarter on quarter in the first quarter of 2008, in line with economists’ consensus estimates. However, we could still see a recession unfolding, with the next two consecutive quarters registering negative GDP growth. First quarter GDP data can be subjected to revisions at a later date, and a downward revision could see the economy contracting in the first quarter instead.

Moreover, the “official” arbiter of whether or not we are in a recession is the National Bureau of Economic Research (NBER), which does not use the GDP numbers. The first quarter GDP growth was better than our expectations which bring us to make some revisions to our forecasts. In this article, we will also touch briefly on the US financial sector.

US Economy Grew 0.6% but Consumption Weakens Substantially

Domestic demand excluding inventories contracted for the first time since 1991. Positive economic growth was supported by the change in inventories and net exports. Consumer spending decelerated significantly, rising by only an annualized 1.0% quarter on quarter, the weakest performance since 2001. This softening was expected, in the context of falling employment, high inflation, restricted credit conditions, falling home prices, and wobbly equity markets.

The strong decline in consumer confidence (with the University of Michigan index hitting a 26-year low of 62.6 in April 2008) points to a further deterioration in the following quarter. The recently published preliminary confidence index for May on 16 May 2008 shows further deterioration.
During times of economic growth, the rising inventories actually signify the optimism of the businesses to build up their inventories in preparation for the increased demand. However, the current rise in inventories could be viewed as a lack of consumption by the consumers, such that inventories remain unsold and piles up. In the next few quarters, if consumption is expected to remain subdued, businesses would probably not be adding on to their inventories and there would be a good chance that the recession would take place even if it does not follow the definition of a technical recession.

===================================

For full article, please check on Fundsupermart.com website.

US consumer confidence plunges to 16-year low

2008-05-30T00:57:00.000+08:00

Business Times - 27 May 2008

WASHINGTON - US consumer confidence plunged to a 16-year low in May amid a stuttering economy and as surging oil prices pushed inflation expectations to an all-time high, The Conference Board reported on Tuesday.

The business research firm said its index of consumer confidence, which has slid all year, fell to 57.2 from 62.8 in April.

Most analysts expected a reading of 61.

The April reading of the consumer confidence index was revised slightly higher to 62.8, from an initial estimate of 62.3.

The index is seen as a gauge of future consumer spending, the driver of two-thirds of US economic activity. The last time the index was lower was in October 1992, when it stood at 54.6.

'Weakening business and job conditions coupled with growing pessimism about the short-term future have further depleted consumers' confidence in the overall state of the economy,' said Lynn Franco, director of The Conference Board consumer research centre.

'Consumers' inflation expectations, fuelled by increasing (petrol) prices at the pump, are now at an all-time high and are likely to rise further in the months ahead,' she said.

Both major components of the index dropped sharply in May. The present situation index, which measures how consumers feel about current conditions, fell to 74.4 from 81.9, a new low for the cycle.

The expectations index, which measures consumers' outlook for the next six months, fell to 45.7 from 50.0, also a low for the cycle.

The expectations index suggests 'little likelihood of a turnaround in the immediate months ahead', Ms Franco said. -- AFP

Marine Sector to Ride on Rising Oil Price

2008-05-30T00:38:00.013+08:00

Business Times - 29 May 2008

Rising oil price boosts offshore marine sector
(Excerpt)

Soaring fuel price will benefit not just the big boys such as Keppel Corp and Sembcorp Marine, who have seen a surge in rig orders, but also many smaller suppliers and service providers of the offshore and marine exploration industry.

Market watchers say companies which will increasingly benefit from the high oil price environment include players such as offshore vessels specialists Swissco and Ezra; oilfield equipment services specialists Swiber and Ausgroup; exploration specialists such as China Oilfield Technology and even oil storage and distribution terminals builder Rotary Engineering.....

......Many investment houses, including Credit Suisse, see little relief from high oil prices on the horizon.

That being the case, companies playing the supporting cast in the rush for 'black gold' look set to ride an up-cycle for a while yet.

A combination of oil markets speculative activity, demand surge and supply crunch has seen oil price double from a year ago to new records at over US$130 pbl. This has spurred more intensive exploration activity globally, especially into more challenging offshore reserves which were previously considered unprofitable to tap.

Stock Updates

2008-05-28T21:03:00.002+08:00

I have not been looking at the stock market for about 4 months. This is because I believe that we had way passed the peak of the business cycle. A good friend of mine who just migrated to Australia wrote to me lately and asked for my opinion on stock investment now. Another ex-colleague also called me recently on the same issue. And my answer is always consistent – we had passed the peak of the business cycle, which was in 2007. And now we are trending downward, although there will be fluctuation in stock indexes. But we got to look at the bigger picture instead of those numbers (indexes) jumping up and down everyday. If you don't even understand this, you are not suitable for stock investment. Of course if you speculate, it is different ball game. If you speculate, you can make lots of money regardless of the market direction if you are accurate. And equally, you can loss everything, including your family..... and sometime even your life. And one of my principles of stock investment is never to gamble.

I continue to believe that unstoppable surge in oil price will soon bring down global economy badly. Keeping my fingers crossed, I hope that I'll never experience a depression in my lifetime. If you are reading my blog now, I have a question for you that not many people thought about it – what if there is really going to be a depression? Are you prepared? In fact, how are we going to prepare for it? And for that matter, do you know the consequence of a depression?

Yesterday evening, finally I decided to log on to my trading account and SGX website. My account indicates that the last time I logged on was on 25 Mar 08. Wow! It seems that there was a slight rebounds and my losses had been narrowed by a little bit. However, my paper loss is still significant. Out of more than 10 counters, only two make money. Immediately I keyed in my sell orders. Fortunately, I managed to dispose it today at a decent profit but not to forget that I am still sitting on significant losses. So I will not call for a celebration.

And then I spend two days re-orientate myself to all the corporate announcements. Here are some of the updates.

1) ASA Group. I bought this counter a few years ago due to its strong balance sheet. Unfortunately, since then the company's profit was on the downhill (don't blame me please) causing the stock price to plunge. Luckily, I was able to dispose it with minimum losses a year ago. Thanks for the bull. Whoever bought it from me obviously doesn't understand the fundamental of stock investment. He/she just enjoyed the bull ride. Lately, the auditor cast a doubt over the company's going concern. You can now invest in this company at 5 cents per share.

2) Industry performance and directors’ forward looking. I pick up a few company's results that were announced recently together with the director comment. Here are some of the pointers:

a) Marine, oil and gas companies are doing fine. Generally, we can expect these industries to continue paying fat bonuses.

b) Property had slowed down but local construction sector remains vibrant.

c) Consequently, steel companies are doing fine too.

d) Tech-stock looks very bad. I had already warned many since early this year not to touch tech stock no matter how attractive it is.

e) Weakening of US$, slow down in US economy and rising oil price is a main concern to many companies and may adversely affect their performance.

My Encounter with Positive Mindset

2008-05-15T20:47:00.007+08:00

A Movie to Share

I like to share a wonderful movie today. Yes there are numerous wonderful movies like Lord of the Rings (awesome), Transformer (two-thumbs up), Matrix (fantastic) etc. But today I would like to share one that will refresh your memory on "positive mindset". The word positive mindset should not be strange to all of us. We use it frequently but loosely and indiscriminately at times. Before I talk about this movie, I like to share with you my first encounter with Positive Mindset.

After years of survival on earth, I came to realize that on the topic of positive mindset, I could classify people into two types. The first type is those that require training or some sort of education so as to go into that state of mind. Many people fall under this category. How many times have you heard of friends and colleagues (and yourself) complaining about work load, or how difficult a job is, or how it is "humanly-impossible" to complete a task or "why this work must come to me and not you" etc. All too familiar isn't it. Unfortunately, I used to be one of them though I am not that bad. When I was in SAF, there was a time when our clerk was on maternity leave. Our superior instructed the junior specialists (people at my level) to take turns to cover clerical duty. One of my navy colleagues, a plump guy, was extremely unhappy about it. He argued that he was not paid to cover clerical work and so he protested. Unfortunately, nobody supported him so he was forced to do it.

Another type is the unconscious type, people who are born with it. This type of people tends to be more submissive, patient and not calculative. They weren't trained in positive mindset but subconsciously, they behave like one. One such candidate would be my ex-army colleague Mr Ng. Since I know him at the age of around 23, he never complains about workload, never reject challenges and never being calculative on work distribution. I bet with you to my last cent that he never heard of Neuro-linguistic Programme during those years. NLP was originated by Richard Bandler and John Grinder at the University of California at Santa Cruz in 70s.

The First Encounter

Someone trained me or jump-started my consciousness on positive mindset. He is my mentor in this field. Some of my colleagues might know who he is. If you know, keep it to yourself. If you don't, you'll never. To cut the long story short, he gave me a book written by Adam Khoo - Master Your Mind, Design Your Destiny. Initially I thought it was another book about finance or investment which is nothing new to me. He told me that it is not, and hopes that I can spend some time to read it. Unfortunately, that book ended up on my shelf. Then about a year later, during my in-camp training, I met a Senior Warrant Officer. He was about 40 plus and hold the highest rank in the Specialist Corp. At that age, he continues to maintain his 2.4km run at less than 9min – something "humanly-impossible" for me even when I was a teenage. He took up a degree course himself while in the army and completed it. He trained and MOTIVATES young officers for marathon. Yes he highlighted "changing mindset" to be the secret of success. Finally he shared with us on a book written by Adam Khoo – Master Your Mind, Design Your Destiny. None of my ex-colleagues heard about it except me. The book was still on my bookshelf, remember?

That night I wrote an email to my mentor to tell him that I saw a living example and I will read the book humbly.

“Orh, so you are here to sell this book lah”

Of course not! I don't earn a single cent and I am not associated with Adam. Why should I help him to earn passive income? I want passive income for myself! Many books had been written about positive mindset decades ago but I started with his.

“So anything changed after reading that book?”

To cut the long story short (again), from then onwards, I never shun away from additional workload. In fact, I always volunteer to do more so as to learn more. I place great emphasis on "value-creation". Basically, my mindset had changed.

The Pursuit of Happyness

This movie that I want to share with you is "The Pursuit of Happyness" starring Will Smith. It was released about a year ago. It is a fantastic show because it refreshed my awareness on positive mindset. To sum up the movie, it is about a salesman selling unwanted medical product and is in a financial crisis. His wife is frustrated with him and ditched him subsequently. His landlord is chase him out and he has a boy to feed. He only has a few bucks in his wallet and life is all screw up for him. It is a typical family man that screws up his work and family life.

The only different is – he is always positive. I'm going to quote a line from the movie even before you watch, if you have not. This line is extremely inspiring and I guess people in network marketing business would need it. Will Smith was talking to his boy.

"Don't let somebody tell you, you can't do something. Not even me. You got your dream, you gotta protect it. People can't do something themselves, they want to tell you, you can't do it. You want something, go get it. If you have a dream, protect it"

Then this man decided to do a career switch - stockbroking. I don't want to spoil your mood so I'll leave it to you to watch this movie. Now, this is a true story about Chris Gardner. You can read about him in Wikipedia. Chris Gardner is a millionaire today.

This is really a fantastic movie that refreshes my consciousness on positive mindset. You won't learn anything about investment in this movie, in case you got the wrong motive. So what are you waiting for? Go get the movie.

Blog Reconstruction

2008-05-14T18:28:00.005+08:00

I am currently reconstructing a few layouts such that pictures (of my friends and colleagues) cannot be download. At the same time, I am also trying to put my music back. It seems that the free music storage site "MediaMax" will no longer be free. You know the business game.

But I am sure there are other heroes around. I am working on it.

Kim Song & 碧玉

2008-05-06T23:04:00.012+08:00

These photographs came rather late. This is because my dear friend Kim Song took his own sweet time to send me his wedding photographs. The special day was on 8 Mar 2008 (三八妇女节). The reason I want to put his wedding photographs on my blog is not because Kim Song any big deal, but because I was told that I am over-dressed that night.

Just kidding! The main reason was because that night was also the gathering of the fellowship. People seated around that table are not only friends but we used to work together in the same office. To-date, many had either left or posted out – I am one of them. So it is a wonderful chance that we met again.

Looking at Kim Song and his 碧玉, don't you agree that both of them are like from the same mold? Certainly, this type of couple will live happily ever after. It's predestined.

The Ideal Working Life

2008-05-01T16:40:00.011+08:00

Ideal Working Life

What's your ideal working life? A company that make money consistently and managed by people with good management philosophy - value staff commitment and loyalty, willing to offer reasonable rewards etc. And we all live happily ever after. Two elements must exist at the same time to create such ideal working life.

Firstly, a company that "prints money". I don't mean exactly printing dollar notes but that the company has strong fundamental such that it can and it will survive forever.

"Impossible lah!"

Impossible, wanna bet? Then how did Warren Buffett earn his billion dollars? What about Coca Cola? Colgate? MacDonald? GE? Many of these companies exist before you were born. In fact, I believe that there are also such companies in Singapore. Perhaps Singpost, Tiger Balm, Tiger Beer, SPH etc. I call this types of companies as a "money-printing" company. They are able to survive in good times and in bad times. They are highly profitable though may not be as profitable as an oil company. But these companies are fundamentally strong and are good for long-term investment even in term of career-building. One of my friends from a local beer company told me that their Finance Executives like forever-never-leave. We call it "pa si bo zhao" (never leave no matter how you whack them) in Hokkein. Question is, why they "pa si bo zhao"?

After having such wonderful companies, you also need another important element – the management team with the kind of management philosophy. Sometime back, I read articles about Singpost and a medicated oil company (can't remember is Eagle Brand or Axe Brand) about their employees staying with the company for a very very long time and that management value such employees. They will train and re-train their employees so as to keep them, even as technology advances. What I mean is that you must get the "correct boss", "correct management team" etc. I will not elaborate on this since some of my colleagues may be reading my blog but you can use your imagination.

This week is a rather an emotional week in my office. A few of my colleagues resigned and we had a last gathering with one of them - Valerie. Val had been with the company for 6 years if I remembered correctly. I only joined their gang after an internal posting in mid-2007. Apparently, Val got her MBA lately and she believe (and me too) that she deserve a higher position in the company – well at least the minimum. Unfortunately, the management has different opinion. As a result, she was, in a sense, forced to leave this place to look for greener pasture. Sad isn't it? I believe that if she has been offered at least the minimum, she would stay as she is emotionally attached to this group of colleagues.

Well unfortunately, we are not living in an ideal world. In the real world, people without the intention to stay on were promoted, and people with intention to stay were forced to move on instead.

This is the world that exist today. Welcome to the real world. (familiar line? From the movie Matrix!)

Actually I had also worked for the SAF for ten years. But my departure was not that emotional perhaps it is because "We Were Soldiers". But I still keep in touch with my brothers. These are my brothers in need. To Val, if you are reading this article, as your friend, I strongly support you to move on. I have no doubt that you will excel in another territory.

Lastly, Val, I like to delicate this song to you – Goodbye!

I can see the pain living in your eyes
And I know how hard you try
You deserve to have so much more
I can feel your heart and I sympathize
And I'll never criticize.....

(the rest of the lyrics are not appropriate)

There's nothing left to try.....

(the rest of the lyrics are not appropriate)

There's no other way than to say good-bye

Business Simulation - Capitalism II

2008-04-07T23:50:00.015+08:00

Last Friday, while waiting for my friend (to pick me up), I had a little window-shopping in Popular Bookstore. As this particular outlet is exceptionally big, it has a comparatively greater variety of PC games. And then something caught my attention. I saw an old game selling at a very cheap price. It wasn’t the price that arouse my interest but the game itself.

This game titled “Capitalism II” is an old game launched sometime around 2003. When I flipped over to read the description on the packing, my interest grew. The description says that the game is about business strategy and building a corporate empire. There are also a few “testimonial” claiming credit of being the ultimate business simulation. Anyway, the price is about $10. So…what the hack…. I decided to buy it to try.

That night after I reached home, I was very curious about this game and decided to test it out immediately. There was no manual inside (what you expect with that kind of price) but the game itself comes with tutorial. Installation is straight forward and I started my tutorial. But even the tutorial is not that easy. For most of the tutorial, I could not meet each of the objectives. Fortunately, the game designed in such a way that even if a player failed to meet the objective, he can still proceed to next tutorial. But player cannot jump to next tutorial without completing current one (pass or fail). That night, I didn’t manage to finish all my tutorials and I finally call it a day.

Day 2 – wonderful Saturday. After I wash up, I quickly completed last few tutorial and voila, I am really for the actual campaign. Now briefly, this is what you can expect from this game.

1) Set your winning parameter. There are whole list of winning parameter but I will skip it (don’t waste everyone’s time here). Basically when I play, I didn’t set any parameter other than the period so that the game will carry on for as long as possible. For the period, I set it as 130 years.

2) I started with 30 million and I quickly build my departmental stores to sell my products. Note that there are whole list of products and many kinds of store a player can choose from. I will skip the detail. When I started my business, as real as it can be, I made a losses initially and my cash holding keep dropping. After a while, I finally breakeven with positive cash inflow. However, soon I started to be impatient. This is because my simulated-competitors are making tones of money like above $100 million a year but I am still earning around $10 million a year. I replayed the game and adopted aggressive expansion but only resulted instant bankruptcy. I suspected that I might have missed some points during the tutorial and so I re-visited the tutorial. And yes, I found certain “secret-to-success” which I didn’t pay attention to.

3) After a few more replaying, I finally get the hang of it and started to make decent money (around $50 million). Then I began building my R&D facility, adopted vertical integration to secure my primary resources and branded my products. The game offers three marketing strategy but I won’t go into the detail here. But still, I faced two problems - the AI-competitors are still much richer and one of the competitors was bought-over by another one. Then I got worried as I didn’t devise my strategy properly when I started the game. So, I have no choice but to re-play the game again!!! I will not tell you about this strategy here.

Day 3 – Sunny Sunday.

With all the strategies I had in mind, I re-started the game again. Cut the long story short, I made $100 – $200 million a year and no competitor can take over my company. I set up my HQ and employed (where necessary) a few Chiefs such as Chief Marketing Officer. Naturally, I am the CEO. I devised my financial (dividend %), marketing (branding) and business expansion strategy. Player can also borrow from the bank or issue IPO. Then I proceed to “play” the stock market – ultimately, that’s the rich men’s game in real life. Player can read financial information about all the competitors. This is where it gets very very exciting. I started to buy stock with the (real) investment knowledge I had and made tones of money out of it. Before I call it a day (again), my net worth was a few billion dollars ranked somewhere number 60 on the top 100 billionaires. My mentor Mr. Warren Buffett was ranked around top 10.

Other exciting characteristics:

1) Property investment.
2) Staff training and development

Conclusion

This is a fantastic business simulation game. Only shortcoming is that the animation is quite poor with today’s standard. But then that is not a bog issue. I think what’s really interest is the stock trading simulation. The buy or sell decision is nerve-wracking and resemble real-time stock trading situation. Most importantly, the teaching on business in the game is exactly what we learned in our (Business Administration) course at diploma level.

Imagine if we played it with a few friends. Just three will be enough and it will be very challenging. Computer AI may be fast and complex but at the end of the day, it is still programmed. There will be certain pattern. But human brain is forever complex and sophisticated. If you are interested, do give me a call. If you know of other business simulation game that is better than this, do let me know please.

One step at a time

2008-03-18T07:05:00.000+08:00

One day a farmer's donkey fell down into a well. The animal cried piteously for hours as
the farmer tried to figure out what to do.

Finally, he decided the animal was old, and the well needed to be covered up anyway. It just wasn't worth it to retrieve the donkey.

He invited all his neighbors to come over and help him. They all grabbed a shovel and began to shovel dirt into the well. At first, the donkey realized what was happening and cried horribly. Then, to everyone's amazement he quieted down.

A few shovel loads later, the farmer finally looked down the well. He was astonished at what he saw. With each shovel of dirt that hit his back, the donkey was doing something amazing. He would shake it off and take a step up. As the farmer's neighbors continued to shovel dirt on top of the animal, he would shake it off and take a step up.

Pretty soon, everyone was amazed as the donkey stepped up over the edge of the well and happily trotted off!

Lesson no.1 - Life is going to shovel dirt on you, all kinds of dirt. The trick to getting out of the well is to shake it off and take a step up. Each of our troubles is a steppingstone. We can get out of the deepest wells just by not stopping, never giving up! Shake it off and take a step up.

Remember the five simple rules to be happy:

1) Free your heart from hatred - Forgive.

2) Free your mind from worries - Most never happen.

3) Live simply and appreciate what you have.

4) Give more.

5) Expect less

NOW .......... !!

Enough of that crap . . . The donkey later came back and bit the farmer who had tried to bury him. The gash from the bite got infected and the farmer eventually died in agony from septic shock.

Lesson no.2 - When you do something wrong, and try to cover your ass, it always comes back to bite you. You have two choices...smile and close this page, or pass this along to someone else to spread the fun.

World Richest

2008-03-08T00:33:00.001+08:00

Ever heard someone saying that 90% of the wealth of the world is in the hand of 10% of the population…or something like that?

Forbes.com reported that Warren Buffett has finally climbed the ladder to be the richest man in the world, overtaking Bill Gates, the record holder for last 13 years. Thanks to the surge in Berkshire Hathaway’s share price. According to the report, Warren Buffett’s wealth swell to US$62 billion. With that kind of wealth, can you imagine how many generations need not have to work? You do the math. The following is an excerpt of the report:

Gates is now worth $58 billion and is ranked third in the world. He is up $2 billion from a year ago, but would have been perhaps as rich--or richer--than Buffett had Microsoft not made an unsolicited bid for Yahoo! (nasdaq: YHOO - news - people ) at the beginning of February.

Microsoft shares fell 15% between Jan. 31, the day before the company announced its bid for the search engine giant, and Feb. 11, the day we locked in stock prices for the 2008 World's Billionaires list.

According to the report, Berkshire Hathaway already soared 25% between July 2007 and 11 Feb 2008. The stock price hit an all-time high of $150,000 a share in December 2007. Berkshire Hathaway shares closed at US$137,100 on 12 Feb 2008. The report also gave a short account of the legendary investment guru:

Buffett delivered newspapers as a boy. He filed his first tax return at age 13, claiming a $35 deduction for his bicycle. He moved on to study under value investing guru Benjamin Graham at Columbia University. Buffett began buying shares in textile firm Berkshire Hathaway in 1962 and purchased a controlling stake in 1965. He began buying insurance companies and astutely investing those companies' cash reserves.

Last but not least, the report also listed down Berkshire Hathaway’s stop holdings. If you look at those companies carefully, you will notice certain similarity, which I had mentioned many times in my sharing.

The following are Berkshire Hathaway's 10 largest publicly traded holdings. We do not include any private company holdings. (Source: Form 13-F, Dec 31, 2007, except Wells Fargo because they had an amended filing. Stock prices as of Feb 27, 2008.)

American Express - 12.8% of the company, worth $71.5 billion.

Coca-Cola - 8.6% of the company, worth $12 billion.

Burlington Northern Santa Fe - 18.3% of the company, worth $5.7 billion.

Johnson & Johnson - 2% of the company, worth $3.9 billion.

Kraft Foods - 8.6% of the company, worth $4.2 billion.

Moody's - 17.2% of the company, worth $2.0 billion.

Procter & Gamble - 3.4% of the company, worth $7.1 billion.

US Bancorp - 3.9% of the company, worth $2.3 billion.

Wells Fargo - 9.4% of the company, worth $9.9 billion.

Wesco Financial - 80.1% of the company, worth $2.2 billion.

US Is In A Recession Now!!!

2008-03-04T22:46:00.004+08:00

I was supposed to continue my sharing titled “Should I Buy Stock Now”. And I did. I was about to finish my write-up (on MS Words) last Sunday and I was just halfway through in compiling basic data on REITs. However, I could not finish (and post) it because there is more bad news pounding all pointing towards US recession. Reported in Business Times on Monday:

“The market's fragility was on display last Friday, as the corporate news combined with more troubling economic data - the Chicago purchasing managers' index came in at 44.5, indicating the most severe contraction of the manufacturing sector in the Midwest since December 2001 - to send the Dow Jones Industrials down 315.79 points, or 2.5 per cent, to 12,266.39. The S&P 500 sank 37.05 points, or 2.7 per cent, to 1,330.63, while the Nasdaq shed 60.09 points, or 2.6 per cent, to 2,271.48………”

And we also have the oil price striking at historical high. The New York's oil futures for delivery in April surged to US$103.51 per barrel, above the previous record of US$103.05 on Friday. Is that all? No. The US dollar continued to weaken setting yet another historical low. Here in Singapore, current exchange rate with US dollar is something never seen before – S$1.393/US$1. The good news for us is that it is going to be cheaper to have a holiday in US. Weak US dollar and rising oil price propelled gold price closer to the US$1,000 an ounce mark on Monday

Is that all? No, damn!!! This morning, while I was onboard the bus to my office, I saw my mentor Mr. Warren Buffett delivering a message on the TV Mobile. He believed that the US is already in a recession. World-renowned investment guru delivering such a speech is just going to make the US recession becoming a self-fulfilled prophesy.

And the best thing is that I share the same view. Personally, I also believe that US recession had already started. The full impact will be felt soon, like in next quarter. As such, I really can’t continue writing on other possible (hidden) opportunities in equity investment. This is because if the US economy goes down, all the exporting countries will go down too and the relevant stock (or global) markets will crash like tin can. Thus no matter which company you buy during this period will only ensure that you sit on hefty unrealized losses.

To be fair to my friends reading my blog, I have to advise all to avoid the stock market for the short to medium term. And how long is this going to take? Unfortunately, nobody knows. Having said that, from now onwards, my sharing on stock investment or evaluation will be very limited until the situation turnaround. I will write more on economic issues and financial planning, which is more relevant during bad times.

Good luck!

Should I Buy Stock Now (Final)

2008-03-04T21:48:00.003+08:00

Recently one of my colleagues casually asked my opinion about current stock market climate. According to him, he did not buy any stock. SO he asked out of curiosity. I replied that it is high uncertain now. Then he said that stock market is dangerous. And this is how I reply:

“Firstly, if you ask me whether you should learn about stock trading, then my answer is no. In fact, it will be wonderful if you never touch the stock market for this life. There are many other ways to invest or you can get a fund manager to do it for you. Notwithstanding my negative statement, the idea that stock market is dangerous is not totally correct. There are many successful investors (besides Warren Buffett) today and they don’t find stock investment in any way dangerous. Think about it. Driving a car is dangerous unless you got a license. While flying, if you get any passenger to take over the cockpit, that is dangerous. But if that passenger also happens to be a pilot, then the danger has dropped to zero! The truth is it is always the human beings that are dangerous. The tools itself is always innocent.”

You may wonder why I discourage that friend from learning about stock investment. Did I slap my own face? No I did no. I discourage him is because I had witnessed so many friends who turned greedy after they earned big bucks from the stock market. The stock market, like any gambling den, brings out greed in us. And when greed and fear took over, logic becomes malfunctioned.

Stock Recommendation

In Part I, I offered 3 options. In this part, I will share some tips if you love option 3. You choose option 3 because there isn’t any decent fixed deposit (or product of similar nature) that offers a rate that is higher than the inflation rate. In addition, you still hope that, with fingers crossed, US will resolve its economic problem and maintain its growth. Actually I hope you won’t choose option 3. But never mind about that. Firstly, to choose option 3, you must be bear the following characteristics:

1) Market may clash when US’s economic problem crystallized. You may have to wait longer than expected.
2) Stock prices may slide further but you are indifferent or you can accept that.
3) Your focus is more on securing reasonable yield rather than capital gain. Should there be any, it is a bonus.

Having said that, this will also mean that you avoid all tech stocks. Browsing through the SGX, many tech stocks are in bad shape now. This will be rule no.1. However, fortunately, there are still fundamental stocks providing reasonable returns. Personally, I recommend REITs. The reasons:

1) REITs have a mandate to distribute income.
2) The rental incomes are pre-secured, i.e. the tenants are unable to back off without paying for default. If a tenant defaulted and paid for damages, the landlord is still able to get another tenant. Price may be different but it is still secured.

The following are the performance of REITs, REITs-related funds or funds announced lately..........................................................

Should I Buy Stock Now (Final)

2008-03-04T21:48:00.001+08:00

Recently one of my colleagues casually asked my opinion about current stock market climate. According to him, he did not buy any stock. SO he asked out of curiosity. I replied that it is high uncertain now. Then he said that stock market is dangerous. And this is how I reply:

“Firstly, if you ask me whether you should learn about stock trading, then my answer is no. In fact, it will be wonderful if you never touch the stock market for this life. There are many other ways to invest or you can get a fund manager to do it for you. Notwithstanding my negative statement, the idea that stock market is dangerous is not totally correct. There are many successful investors (besides Warren Buffett) today and they don’t find stock investment in any way dangerous. Think about it. Driving a car is dangerous unless you got a license. While flying, if you get any passenger to take over the cockpit, that is dangerous. But if that passenger also happens to be a pilot, then the danger has dropped to zero! The truth is it is always the human beings that are dangerous. The tools itself is always innocent.”

You may wonder why I discourage that friend from learning about stock investment. Did I slap my own face? No I did no. I discourage him is because I had witnessed so many friends who turned greedy after they earned big bucks from the stock market. The stock market, like any gambling den, brings out greed in us. And when greed and fear took over, logic becomes malfunctioned.

Stock Recommendation

In Part I, I offered 3 options. In this part, I will share some tips if you love option 3. You choose option 3 because there isn’t any decent fixed deposit (or product of similar nature) that offers a rate that is higher than the inflation rate. In addition, you still hope that, with fingers crossed, US will resolve its economic problem and maintain its growth. Actually I hope you won’t choose option 3. But never mind about that. Firstly, to choose option 3, you must be bear the following characteristics:

1) Market may clash when US’s economic problem crystallized. You may have to wait longer than expected.
2) Stock prices may slide further but you are indifferent or you can accept that.
3) Your focus is more on securing reasonable yield rather than capital gain. Should there be any, it is a bonus.

Having said that, this will also mean that you avoid all tech stocks. Browsing through the SGX, many tech stocks are in bad shape now. This will be rule no.1. However, fortunately, there are still fundamental stocks providing reasonable returns. Personally, I recommend REITs. The reasons:

1) REITs have a mandate to distribute income.
2) The rental incomes are pre-secured, i.e. the tenants are unable to back off without paying for default. If a tenant defaulted and paid for damages, the landlord is still able to get another tenant. Price may be different but it is still secured.

The following are the performance of REITs, REITs related funds or funds announced lately...................................................................................

九寨沟之旅

2008-03-01T09:05:00.011+08:00

Recently, one of my colleagues invited me to join his family to 九寨沟 (成都). This is one of the places in China that attracted many tourists around the world. It is also commonly talk about when people discuss abouy holiday to China. My colleague and his wife had already booked and paid for the trip; that depart right after school holiday - cheaper price. The tour will depart on 28 Mar. When I called up CTC to enquire on this holiday package, I was told that only two customers signed up so far.... and I happened to know these two customers.

It is a great opportunity to go for holiday again, after the traumetic expereince last year to Manila. But my good friend was not to be blame though. It just happen that I am not comfortable with the adverse situation (human and nature) there then. The total damage for default? S$1,200!!!

So this time, I better do proper research and plan carefully. According to CTC, 九寨沟 weather in March is between 10 - 20 degree. To have a better understanding of the temperature level, I asked the girl what's the weather at Genting as I am more familiar with Genting. She replied that it is also about 10 - 20 degree. Still not very sure, I checked the net for China's weather. Here's the bad news. The temperature actually ranges from minimum of about 8 degree to maximum of 17 degree. I can accept 17 degree BUT 8 degree is really really cold. At 17 degree, I can just put on a coat made of cotton. But at 8 degree, I may need something like fur - something meant for winter. I like light attire and hate thick fur.

From the weather forecast, it seems that the best time (with ideal temperature) to go to 成都 is in May. I have no choice but to give this trip a miss.

Should I Buy Stock Now? (Part I)

2008-02-27T23:20:00.010+08:00

Is This The Right Time?

God know! The obvious answer is god know! But yet this is the most frequently asked question from my friends and colleagues. The prices of most companies are quite cheap now as compared to end of last year. For one thing, I am currently sitting on an unrealized loss of approximately S$10,000!!!

“I thought you are a guru?”

Firstly, I never claim that I am a guru; I am still learning. Secondly, even the experts can also bankrupt let alone suffering losses. Let me share a part of the story from the Romance of Three Kingdom ( 三国志 ) with you. After retreating and avoiding Cao Cao’s (曹曹) attack, Zhuge Liang (诸葛亮) finally decided to defeat Cao Cao once and for all at Chang Jiang (长江) – with the help of Dong Wu (东吴). To persuade Sun Quan (孙权) to partner with Liu Bei (刘备) to repel Cao Cao’s forces, Zhuge Liang presented his strategy that guarantees success.

All the ministers contributed their fair share in trying to topple Zhuge Liang's plan. One of the ministers countered his proposal by asking Zhuge Liang – “if you are that good, can you explain why your forces were defeated and escape from Cao Cao’s forces until you reached Jing Zhou (荆州)". To this question, Zhuge Liang answered, “there is never an undefeatable army in this world. Being able to protect our people, to bring them along until we reached Jing Zhou is already a great success paving the road to greater victory. We won the heart of our people; this is the greatest victory".

In the War of Chi Bi (赤壁), Cao Cao lost nearly one million soldiers thus equalized the three forces in the Central. We called it 三国鼎立.

And lastly, my losses does not affect my daily life at all. In fact I am planning for a holiday next month. Yes I am upset but the loss will not upset my life. The reason is simple - I didn't gamble and the companies I invested in have reasonable fundamental plus yield.

The Threat

I will not beat around the bush. IMHO, the uncertainty in US economy is very real and probability of a recession seems to be getting higher. US consumer confidence is dropping and we just don’t know how deep this subprime problem is. So for anyone who claimed that US recession will not affect us is telling the biggest lie – our products exported mainly to US and Europe. China and India is not big enough (does not have a large stomach) to replace US demand. So how can someone say taht it will not affect us. Economic downturn will cause the stock market to clash which recent correction (since end of 2007) is already bad enough. And I think that it’s about time for the bear to sleep.

And not forgetting that oil price still hovers around $100 mark. One of my friends who is current working in a fund house believes that high oil price is “OK”, i.e. not a concern. I totally disagreed with his views even though he is working in a fund house and I am not. Why? Because I have commonsense. Like my lecture used to say, “commonsense is the least common human attributes. High oil price will increase production that will ultimately pass on to the end consumers. And so the workforce will demand high pay rise to cope with high living costs. And when labour costs went up, businesses will……. The whole chain effect, if uncheck, will finally explode. I mean it has to be.

Reported in Business Times dated 20 Feb 2008, MAS MD Heng Swee Kiat said that a sharp and deep recession in the United States will hit Asian economies. The following is an excerpt of the newspaper report.

"Wading into the debate on whether Asia has de-coupled from the US, Mr Heng said the region has significant links with the world's biggest economy through trade, investment and finance. Only if these linkages are significantly weakened can Asia be said to have de-coupled from the US, he said yesterday at a fund management conference.

Still, the short-term outlook for Asia remains generally positive barring any sharp deterioration in the global economy, he noted. The current forecast is for Asia ex-Japan to grow at a fairly healthy pace of around 7.8 per cent in 2008, one percentage point lower compared to last year."

So Is It The Right Time To Buy Share?

In my opinion, you should shun away from the stock market until the sky is clear. However, personally, I don’t think it is going to be cleared this year. There may be bull-trap but I have no faith that all this economic problems can be completely resolve this year. Having said that, and unfortunately, you also can’t place your spare cash in the bank. I strongly discouraged you from doing so. For many years, local banks have been giving out pathetic interested rates; rates that are below the inflation rate. And now this problem compounded with inflation rate at all time high. Putting large amount of spare cash in whatever bank account will ensure that you suffer a lost in money value.

“I’m still waiting for your recommendation.”

I propose three options to maximized your returns:

1) Pay up whatever debts you have as much as possible. In times of high inflation, where money value eroded, clear your debts with all your spare cash unless you know of alternative investments that yield even higher returns with calculated risk. For example, try to pay up your car loans or housing loan as much as possible if the financial company allows you to do so. Let your creditors deal with the high inflation problem.

2) Transfer your spare cash into the CPF. Thereafter, you can move some money from the Ordinary account to the Special account. The Special account gives out at least 4% rate currently and is meant for retirement planning. However, remember that by doing so, your spare cash will be locked up in the CPF.

3) Buy high yield and fundamental stocks but this requires strategy. Although the stock market is quite risky now, there are still a few fundamental stocks that give out good and presumably stable dividends yield. One such group of companies is the REITs.

In my next sharing, we will look at some of the REITs that look attractive. Before I close, just to give you a hind, Suntec REITs looks attractive to me.

When Inflation Is All Around Us

2008-02-26T23:47:00.002+08:00

Inflation! Inflation! Inflation!

If you’ve been following the news, you should know that we are in an age of inflation. Many countries including Singapore are facing the pressure of inflation and worst still on basic needs – food, transport, housing etc. And doubly worst still, the poor felt it more than the rich. Recently I went back to office during Saturday to do some work. And then I was having a breakfast with a driver. I ordered my usual Nasi Lemak (Malay’s coconut rice) but the driver was eating bread. And it was suppose to be his lunchtime, as according to his schedule, he needs to have early lunch. I advised him to have proper meal especially when he is a frontline operator. He replied that the Nasi Lemak price when up by 20% so he rather take bread. In any case, he will be off-duty after next trip and he can eat at home if he is still hungry. When I looked at the price again, then I realized that it was indeed inflated by 20%.

And if you think that I don’t bother with the price because I am rich, get real! I banned a few food stalls near my place for inflating their price ferociously. Fortunately for me, not every stall adjusted their price. So nowadays I tend to patronize those stall that maintained their selling price.

“Isn’t that stressful as you need to monitor food prices and ban this stall and that stall?”

No really. I don’t deliberately monitor food prices but if I happened to find out, then I will make necessary adjustment. And anyway, I am indifferent when it comes to choosing food in the hawker centre. Rice or noodles, duck or chicken makes no different to me as long as the quality and quantity is reasonable.

The following are excerpts from Business Times to you a feel of the inflation problem worldwide.

=================================
Business Times - 20 Feb 2008

Inflation in China hits 11-year high, set to rise further

(BEIJING) China's inflation rose to its highest level in more than 11 years in January after devastating snowstorms worsened food shortages, according to data reported yesterday, and analysts warned there might be sharper increases to come.

Consumer prices in January climbed 7.1 per cent from the same month last year, driven by an 18.2 per cent rise in costs, the National Bureau of Statistics reported.

Economists warned that despite efforts to ease food shortages, China faces pressure for prices to rise across the board due to higher wages and costs for coal, iron ore and other industrial materials………………

………….Surging food costs are a political concern for Chinese leaders because they hit the poor majority hard in a society where families spend up to half their incomes on food.

===================================
Business Times - 20 Feb 2008

Higher food costs push up US consumer prices

WASHINGTON - Rising food costs helped push US consumer prices up for a second straight month in January by 0.4 per cent, more than offsetting a moderation in energy price rises as inflation showed signs of gaining steam, according to a Labour Department report on Wednesday.

=====================================
Business Times - 25 Feb 2008

S'pore's Jan CPI jumps 6.6%

SINGAPORE - Singapore's consumer prices rose 6.6 per cent in January from a year earlier, government data showed on Monday, as high food, transport and housing costs kept annual inflation at a 25-year high.

From a month earlier, consumer prices rose 1.5 per cent on a seasonally adjusted basis, the Department of Statistics said in a statement.

The Rich Have Money Work For Them

2008-02-24T19:19:00.015+08:00

Lesson From "Rich Dad Poor Dad"

I was reading Robert K's "Rich Dad Poor Dad" again recently. Just like the Bible, we should frequently revisit these teachings to remind ourselves of things that we know but may have forgotten due to our “busy schedule”.

Some of my friends asked me if I have earned my first million after all these readings, sharing and philosophy. I told them I am still working on it. I don't even have a few hundred thousands in my bank account, talking about millionaire! But that does not means I suppose to be ignorant; that does not stop me from reaching that goal – financial freedom. I guess it's like watching TV. My all time favourite ACCA lecturer Mr Fred Keer used TV as an example to illustrate that not knowing how something was constructed does not stop you from using it.

……ok may be this is not a good example. Pardon me.

Solving Long Term Problem

Let me quote page 49 of “Rich Dad Poor Dad” to you – “Remember what I said before: a job is only a short-term solution to a long-term problem. Most people have only one problem in mind, and it's short term………”.

Recently, one of my colleagues mentioned that her husband intends to switch to another company for job security reasons. I overheard it and I kaypo (nosey) and asked her whether if her husband's decision will make any different. This is because job security problem occurs everywhere and everyday. Remember those days when we used to say that the SAF (the Army) offers iron rice bowl? Not any more. Today and most of my ex-SAF colleagues are in the commercial sector. I asked my colleagues again whether if she knows the bigger problem? I ask her why would she (and her husband) wants to earn a higher income? Is it for bigger house or car, or to maintain bigger monthly bills?

Fortunately, she replies that she is aware of the bigger problem – the long-term problem as described by Robert K. If you ask me why I work hard for promotion or seek other sources of income, I assure you that it is not because I need it to support my bills. In fact, my close friends know that I am debt-free. My living cost is extremely low and I can survive working in MacDonald – yes I'll be poor but I can survive.

I want higher income so that with extra money, I can use it to “create” more money. I want to use a short-term solution (higher pay) to solve a long-term problem –financial freedom. Unfortunately, fortune god has not been kind to me during recent S$10 million TOTO draw. I'll try harder next year. Having said that, you must also know how to make your money work hard for you. Otherwise, even if you are rich, you money will leave you someday, somehow.

“The Poor and the middle class work for money. The rich have money work for them” – Rich Dad Poor Dad.

Example Of My Uncles

This afternoon, my uncle came to my house to deliver his son's wedding invitation card. This uncle is my mother's 2nd elder brother. The wedding will be held at in a restaurant in Boon Lay Shopping Centre. For those who stay at western side should know that Boon Lay Shopping Centre is a rather old shopping centre and a little bit run down. It is definitely not like Jurong Point or Causeway Point. I don't mean that couples need to show off and hold their wedding dinner at Fullerton, although I had been encouraging my colleagues such as Kim Song and Valarie to do so. Anyway my point is that all my friends and colleagues will usually hold their wedding dinner either in a respectable hotel or at least a restaurant in town. Any place but a restaurant in Boon Lay Shopping Centre. And please do not think that I am despising them. Let's me share with you a little history on uncles and you'll understand what am I talking about.

When I was still a boy, my four uncles were relatively rich. I don't think they were millionaires but certainly, they were cash rich and had very strong purchasing power. They were able to spend on big car/house, visited big restaurant frequently, and gave bigger red packets during Lunar New Year etc. I understand from my mother that these uncles were doing construction work. I don't know the details but I presumed that they were sub-contractors. Before the slump of the construction sector (that recovers now), many people had earned big bucks by just bidding for a small portion of a construction work and then employed foreign workers to get it done. It was a highly lucrative work and as a result, all these sub-contractors were relatively rich. Big house, big cars, holidays and nightclub were common phenomenon.

Unfortunately, most of them didn't make it today. After the slump of the construction sector, many either bankrupted, or back to the “employee community”. In fact, many listed construction companies had either gone busted, delisted or re-structured. One of my company's drivers also used to be a sub-contractor. He shared with me that those years, his annual income topped $100,000. It was easy money and he spends more time in nightclubs. Today, he is a driver earning a humble income now.

Back to my uncles. Of the four brothers, the eldest passed away a few years ago. According to my mother, he was the ringleader and after he passed away, the rest could not survive. However, I think the slump is the main cause; the outcome is most likely to be the same even if my eldest uncle is still around. The remaining uncles now earn a humble income as a taxi driver. It will be very difficult to revert back to employee status after being a “boss” for many years.

Robert K's Lesson #1: The Rich Don't Work for Money

IMHO, my uncles used to be rich but they continued to work for money. When they are rich, they are not suppose to keep working for money; they should let their resources work hard for them. Instead, with more cash then, my uncles enlarged their spending power and enjoy life in the short term. They failed to divert extra cash into a “money-printing” machine. So even if you are a millionaire, without sound knowledge in financial planning, you can easily re-join the “employee community”. All it takes is a collapse of the stock market, property market, business prospects, economy etc. That's why it is hard to believe that today, the 2nd uncle's son is holding his wedding dinner in a small restuarant.

And please, nothing wrong with that restuarant, ok? It's perfectly fine to hold wedding dinner in that restuarant. My sharing focus on the lesson - financial planning to snowball your resources. Remember – knowledge equals to power. This is the mother of all truths.

Life Insurance

2008-02-20T23:36:00.003+08:00

Is Retiring In China The Solution?

Two years ago during our ICT, an ex-colleague in the SAF told me that he planned to migrate to China by the time he retired. He said that with his CPF money, he is able to convert it into lots of Chinese’s Yuan and retired comfortably (in a village). I find his mindset “ostrich” and I educate him. This is because the correct approach should be that he work hard (and smart) and improve his current income-earning situation. Hiding in China for the purpose of comfortable retirement due to favourable exchange rate is definitely not the secret to success.

Successful retirement plan takes more than that. I told him then that by the time we reached retirement age, China’s economy may have reached a state that the exchange rate is on par with the Sing$. And the living standard then in China could be so high that there may be no difference at all. What are you going to do then for the fact that you cannot “undo” or rewind” everything?

Recently, Business Times reported that China’s inflation up to 7.1% in Jan 2008. Food prices, which make up a third of the consumer basket, rose 18.2% cent in January from a year earlier. Non-food prices rose 1.5 per cent. However, authority attributed the acceleration in inflation to the timing of the Lunar New Year holidays this year and to fierce winter weather. Rising food price is a big topic here in Singapore; it is a bigger problem now in China especially in big cities.

Lifelong Income Scheme

Therefore, we should solve the fundamental problem instead of trying to get around it. Besides being personally responsible for one’s retirement plan, here in Singapore we are really fortunate to have capable government taking steps to help Singaporeans to be prepared for retirement. It is important for me to clarify here that I am not in politics, nor am I a glass-root leader or having any connection with any political party. But let’s be real and objective.

On 12 Feb 08, Manpower Minister Ng Eng Hen announced a Lifelong Income scheme that promises a regular income for as long as a member live. I will not go through the detail here. The feelings among our countrymen were mixed. While some cursed and swear, people like me praise the authority. I just had a chat with a friend and we talked about this issue. She said that some of her friends were unhappy about it as more CPF money were shifted away thus they will be getting lesser. I advised her not to be influenced by people who do not see the bigger picture. What’s the bigger picture? Well, if I am the government, managing a country, I could choose not to do anything to help the people to plan their retirement needs. I still get paid (large income) monthly.

Is it better with the new scheme then? Let’s do the following test.

Assumptions:
1) Retirement Account at 55 = $80,000
2) Life expectancy = age of 90
3) CPF RA rate = 4%
4) Any balances in Retirement account goes into estate.

According to my calculation, with the current scheme, you can withdraw $631 per month from 65 – 90, and that’s it. But with the new scheme, you will collect $652 per month (under refund option) as long as you still breath.

Therefore, IMHO, Singaporeans are better off with the new scheme. According to the National Longevity Insurance Committee, “CPF members are likely to receive higher income from their Minimum Sum account without more top-ups, thanks to the extra one percentage point interest on the first $60,000 which CPF is offering and the benefit of pooling”.

So if you target to have $2,000 per month for your retirement plan, about 35% of it has been settled and secured with Lifelong Income Scheme. The remaining will depends on your unclaimed living policy, endowment plan, cash balances, stocks and funds and lastly, your house.

Having said that, there are still some other details that I don’t really understand. I need to meet up with one of my friends who are very analytical. After we analyse the new scheme vigorously, I will update my blog again.

Your Eyes Test

2008-02-19T21:42:00.001+08:00

Try to read this:
If you can't, then follow the guidelines given below .
You won't believe it......it's really amazing.

Now try pulling the corner of your eyes as if you were Japanese...........................
It works n u can read it......Check it out! OR,
Close yor eyes almost 90% so that you can actually read it, & If you still can't read, than you really have bad eyes!
Go and see a good doctor if you fail to read.

When Market Clash, More Mental Illness Patients

2008-02-14T22:54:00.002+08:00

There is an interesting article on the Chinese paper. It was saying that more people seek medical help when market clashes during recent months. To put it correctly, the market hasn't clash yet. It merely softened and surfers a correct. When it clash, many people (punters) wouldn't need a doctor. Not anymore if you lost everything.

The Line Is Up Again!!!

2008-02-04T23:11:00.000+08:00

Finally! The god damn internet line is up again!

It has been three weeks of testing, repairs and retifications. Initially when my line was down, I thought that the modem broke down since I had such experience before. So, I went to Singnet service centre at Westmall to check if I can renew my contract. Contract renewal comes with free modem. Unfortunately, I was told that I can only re-contract after 21 Jan. So I waited. At the meantime, I asked my colleague to check my old modem to confirm that it is indeed spoilt. Unfortunately, after many checks, she was not 100% sure - no conclusion.

On 22 Jan, I visited the service centre again and asked the information counter (that distributes Q-number) to confirm my eligibility. It was a yes and I got my Q-number. The counter advised me to go for a coffee as my waiting time would be at least an hour. I was given a 50% discount coupon to Kopitiam and that they will call me on my mobile phone when it is about my turn.

Finally, I was called up and a gentleman was helping me to process my request. He told me that usually re-contract should be done online. I replied that my modem is down and that's why I was there. Then suddenly, he told me that I can only re-contract after 29 Jan based on the date of contract (29 Apr). Now I'm pissed. But before I retaliate, he smile and said that since the information counter guys made the mistake, he will help me to register for early re-contract. And I got my new modem free. But that's not all. Singnet was having a promotion then and I got 50% discount on my monthly bill for the first year. But that's not all!!! I also got $90 worth of New Moon abalone, birdnest, sharkfin etc.

Woww!!! Anyway I am more interested on getting my line up than the goodies which I gave it to my colleague. And guess what? I could not complete the installation process with the new modem - "unable to detect ethernet"!!! "Could it be some virus imbedded", I asked myself. So, I reformatted my harddisk. And I try again but got the same old shit - "cannot detect ethernet". After I cool down, I discovered a way to bypass ethernet card - the USB!!! I connect the modem to the USB and voila, I passed this stage of test. But the joy is short-lived. I got stuck again with the next test of DSL. the DSL led light on the modem kept blinking no matter how I check/change/swap the cable. Finally I gave up and call Singet technical support. They made an arrangement for technician to come to me place.

A few days later, a young chap came to do the necessary. He concluded that the ethernet card had spoilt and the new modem is also faulty. He gave me a service report and advised me to change a new one. And so I visited Singnet service centre again to change the new but spoilt modem. Interestingly, when I was at the customer counter, I was told that to change modem, I must go to the manufacturer - the information counter screw up again!!! But since I am sitting right in front of him, he will do it for me. Happily I went to home to install the new modem but I got the same shit again! The DSL still blinks! This time, I called an expert - a friend who is good in IT. His advise was simple - isolate the problem, cut all other nonsense and get Singnet to focus and resolve the phone line problem. So I did and another appointment was made to get technician to check the phone line.

At last, it was found that there was a short circuit. And after the repair, my internet is finally up. And now I can continue with my blog. I knew the market was in a mess lately, plunging like no tomorrow. However, since my internet was down, I see no evil, though heard evil.

Notice

2008-01-23T19:20:00.000+08:00

Internet connection problem. More blog update coming soon.......

Early Retirement Or Work Till You Die

2008-01-12T22:41:00.000+08:00

What do you believe?

When government increases the official retirement age, do you rejoice? I like to discuss this topic whenever I have coffee session with colleagues, friends and even subordinates. In Singapore, our official retirement age moved up from 55 previously to 62 now. The big question I always ask is whether you rejoice over this move? Do you see that as a blessings? Is that what you really want? Somehow, many aunties and uncles are happy about it. They wanted to work for as long as possible. But I am certainly upset when people choose to work forever. Don’t get me wrong. I am upset not because they chose to slog, but because they do know the truth.

So do you think longer retirement age is a blessing? Do not give yourself an answer yet, not until I tell you the truth. There are many people around the world today retired early. It is not isolated cases and certainly not a miracle. There are many people with the power of retiring early and enjoy wonderful life after retirement.

Retire with financial freedom?

For a start, let’s not discuss about early retirement but just to retire with financial freedom. While the former is a great challenge and a difficult task, the latter is easy. I had said many times that the ultimate objective of successful investment is not to buy big houses and cars so that one can show off. Instant gratification has a price to pay – your future. Investment, savings, climbing corporate ladder and buying tottery have only one ultimate objective. Along the way, we set up a family and provide for our family, but ultimately, we want to retire comfortably and preferably early. How often have we seen parents retired with very little savings thus depends heavily on their children?

“But aren’t the children suppose to take care of their retired parents?”

I fully agreed. But think it over again on the term “need” and “want”. Let me give you these two scenarios and you pick one.

1) Parent has very little savings and they seriously need monthly allowance from their children. Their survival depends on it. It is not optional. And this becomes a burden to their children as they also need to provide for their families. And financial hardship compounded on both sides when someone hospitalized.

2) Parents retired financially free. Their children want to give allowance out of love and not because their parents need it for their daily necessities. Parents accepted children’s love offering not because they need it. They take it to show that they accept their children’s love. If the children for whatever reasons have greater financial needs, the parents can choose not to receive monthly allowance from their children. There is always an option.

So which scenario do you prefer? Unless you are a total idiot, the answer is obvious. Is scenario 2) above a “mission impossible”? Definitely not. In fact with proper financial planning, it is very easy to achieve scenario 2). Again, I am not talking about early retirement here but about retiring financially free.

Scenario 1) usually occurs in previous generations or during our father’s time. It happens to many families and we had came across many unfortunate stories reported on newspaper. But with better economic growth/stability and education, scenario 2) is more prominent now.

Early retirement – correct your mindset

Back to the topic on early retirement. No doubt government has been helping people to work longer age. But let’s don’t get involved in political decision. Let’s just focus on personal well-being. To retire early, you and I only need one thing – financial freedom. One great teacher in area of financial freedom is Robert Kiyosaki. And I bet lots of aunties and uncles along the road never heard of him, and certain never heard of the term “financial freedom”. To gain financial freedom, you will need to accumulate passive income. Investment income is only one of it. If you want to know more about financial freedom and passive income, buy Robert Kiyosaki’s “Rich Dad Poor dad”. Today I want to share on the correct mindset on retirement. As to how, I leave it Robert Kiyosaki.

“You think so easy ah, early retirement!”

That is a wrong mindset. It is definitely difficult, but not impossible since many people around the world have made it. Besides Robert Kiyosaki, I know of people in (renowned) network marketing company earning hundreds of thousands and even millions yearly with very minimum effort – after he/she establish the foundation. Adam Khoo, at his mid-20 already earned his first million dollars. His training and books are selling good and I believe he is a potential candidate for early retirement.

“Retired early for what, waiting to die meh!”

That is a terrible mindset. It is an “older generation” mindset. Early retirement has no connection to “waiting to die (等死)”. It all depends on a person’s life style and again, mindset. During my army days, my branch head was a retired senior officer (Lt Col). He holds the appointment because the country needs his service, not because he needs the money. He owned a condo and two sport cars and his wife was then a director of a company. He was looking forward for the day. He shared with us that he hope to spend time meeting up old friends, golfing and going for holidays. His life style will remain the same and active. But he will sell his cars away since he has ample of time after retirement.

What about me? Well, my dream, should I retired early, is to spend my days at the stock exchange wearing jean, sandal and with my laptop. Alternatively I may also conduct my investment activities at the Sentosa while sipping coffee. And if possible, I would like to conduct training for people who want to know more about value investment. Not because I need the money, but I love to. And I waiting to die? Certainly not.

Conclusion

Early retirement is a blessing. Working until you are about to enter the coffin is not. The correct mindset is we should set early retirement as a personal goal and work towards it. Yes, it’s extremely difficult and not many will make it (including myself). But do not use that as an excuse not to try. Get the mindset correct.

Widespread Inflation Problem

2008-01-10T21:22:00.000+08:00

We have inflation problem in US, China and Singapore. I am sure some other countries are also experiencing this problem. For China, the government is stepping in to curb price rises of basic necessities like food and energy. According to a report in Forbes.com, China's CPI rose at an annualized rate of 6.9% in November 2007, the fastest pace in 11 years. In Singapore, we see inflationary pressure in basic necessities such as food, transport and housing. This evening, STI closed at 3,311.07 with another 33.46 points plunge. The following is an excerpt from Business Times (10 Jan 2008):

=====================================
Inflation rate could push past 6% in Q1

Upward revision of value of public housing cited

By CHEW XIANG

SINGAPORE'S inflation rate could soar past 6 per cent in the current quarter, beating previous estimates, as an upward revision of the value of public housing kicks in this month and food and oil prices continue to climb.

'We were previously looking at 3.9 per cent for this year, but I think it will be much higher,' United Overseas Bank economist Ho Woei Chen said yesterday.

'The revision (of annual values) will be quite significant, and we underestimated the extent of the taxi fare increase, the food price increase, oil price increase.'

The Inland Revenue Authority of Singapore has raised its assessment of values across all flat types by 18-25 per cent from Jan 1. Housing value has a significant weight in the consumer price index (CPI).

'(Inflation for the year) can potentially exceed the Monetary Authority of Singapore's forecast of 3.5 to 4.5 per cent for 2008,' Ms Ho said.

According to her, a lot will depend on the inflation figures for January. Core inflation, which excludes accommodation and private road transport costs, could also come in above the MAS forecast made in October of 1.5 to 2.5 per cent for the year, she reckons.

But 'given some expectation of lower global growth this year I think there could be some self-correcting mechanism later this year', she said.

'We could see oil prices coming in lower this year' which could bring down inflation closer to the end of the year, especially given the high base in November 2007.

The CPI that month surged 4.2 per cent year on year - a 25-year high.

China Sunsine - Fund House's Recommendation

2008-01-08T07:07:00.000+08:00

Yesterday received a daily report from GK. There is a portion on China Sunsine Chemical which the broking house shared positive outlook.

Challenges in 2008

2008-01-07T22:28:00.000+08:00

Take Your Profit While You Can

About a week ago, a finance manager of my company called me. Apart from generally enquiries, he asked for my opinion on the stock market. Naturally, I gave a gloomy picture. Since the exposure of US subprime problem, I have not been rosy on the stock market. He said that he is still holding to Singtel shares in his CPF and asked for my advice. Normally this is the kind of thing I don’t like to do as the situation may turn otherwise. He assured me no liability. I told him to sell and lock in the profit while he can. In fact, I had shared with some friends and colleagues to be watchful on the economy especially the US economy. And if they are sitting on some good profit, they should consider letting this profit materialize.

Your gains are only real when it becomes hot cash in your bank account. The investment account statement is still on paper.

What Are The Issues?

1) For a start, we have US subprime problems. People default on loan, and many financial companies write off tonnes of money from their accounts. And believe me, it hasn’t ended yet.

2) To battle subprime problem, Fed bring down interest rate. But unfortunately, they faced another set of problem – inflation. Actually many countries today are facing this problem. Singapore is not spared. To contain inflation, government needs to engage contractionary monetary policy. One way is to increase interest rate. Now you can see something is contradicting here. In Mandarin, I call it 骑虎难下. I think Fed is stuck in between.

3) Oil price at 100. Before Christmas last year, I had a dinner with two friends. One of them is currently working in a private fund house. While I was sharing the danger of rising oil price, this friend opined that rising oil price is not a concern. I totally disagree with his opinion. Although today’s rising oil price is backed by demand especially from emerging countries, high oil price will result in high business operations costs. I don’t have a PhD but I think this is really commonsense. (And my lecturer Mr. Fred Keer used to say that commonsense is the least common human attribute). This rising costs will be pass on to end consumer. The consequent is – inflation!!! Can we cope with high expenses? Can US citizens cope with high living costs especially energy and petrol? Well, since I don’t have a PhD, and that I am not working in a fund house, today I mark down my analysis. The answer should be out soon.

4) US employment. This is really something hot from the oven. Last Friday, DJIA plunged another 256.54 points to close at 12,800 due to unemployment in December rose to two-year high. Job creation in December almost came to a full stop. I remember reading somewhere that the US needs to create around 300,000 jobs every month. What will happen if unemployment rate goes up? What will happen to Singapore? With knowledge I acquired through years of reading financial news and analysing the market, this is my view:

> Singapore economy grow by non-oil domestic export.
> Singapore products mainly export to Europe and US.
> Europe and US will order if their economy is still growing.
> US economic growth largely depends on consumer spending.
> The “Ang Moh” (the Americans) will continue to spend if they got money in their pocket.
> They will only have money if they got a job. Well, if they didn’t, then work your math backward.

What To Do With Stock Now?

I am not saying that we are definitely in for a recession. Neither am I saying that you should dump all your shares at whatever losses. But in my opinion, we should really trim down the size of our portfolio at least by half. Hold more cash while we monitor the global economy. Prepare for the worst. You may start switching to bonds but may also stay sideline for a while.

On stocks, you only keep those companies that have a catalyst. For example, Koh Brothers with the potential of getting casino tower construction project, marine and oil-related companies with the potential to continue riding on high oil price etc. Certainly do not buy any tech stock. Last Friday, I dumped my last tech stock at a small loss. So now my portfolio does not have any tech stock. Take profit on companies that do not have any catalyst. Consider the possibility that you may be able to buy it back even cheaply.

This evening, STI plunged another 84.73 points to 3,353.06. The market will be very volatile this year, a good year for the speculators though. And god knows what will happen after the Olympic. So be prudent, overcome your greed and fear, use more commonsense and DON’T RETURN YOUR HARD-EARNED MONEY TO MS. MARKET. A perfect storm may be coming. And if it come, it’s going to have a deep impact.

Selected Funds' Performance In 2007

2008-01-05T22:14:00.000+08:00

The following are some of the funds I monitored in 2007. I seldom buy funds. the reason is quite obvious. if I can do it my self, why should I feed the fund managers? However, the exception is when I want to invest in certain countries or assets but not available on the SGX, then I had to go through a fund managers.

The global tech fund suffers massive losses since the collapse of dot.com era. Many was hoping that recent bull run could give these fund a hope of recovery. It seems that it is hopeless now. The performanace of Global Tech Fund was not impressive during recent bull run and with uncertain US economy now, there is little chance that these fund will surge. Japan fund also performed poorly in 2007. Japan funds closed lower than it started in 2007. Global property funds also plunged after the expose of US subprime problems. Asia equity funds has satisfactory performance but the best actually comes from India fund. Another outstanding fund is the resource fund. Naturally, with rising resources' price, these fund is able to sustain its performanace.

Update on Koh Brothers

2008-01-04T00:02:00.000+08:00

Reference to my previous blog sharing on Koh Brothers, there is an exciting article on Koh Brothers on the Business Times today. I guess I am about to hit the jackpot. Previously, I called a buy (even way before I wrote a blog on it) on Koh Brothers because of it reasonable, if not cheap valuation.

With its existing projects on hand, I strongly believe that $0.38 a share is undervalued. This is without taking into account my expectation/believe that Koh Brother has the potential to tender for the casino tower construction project. So any further good news is just a bonus. It seems that now I am one step closer to the bonus.

Today, Business Times reported that Koh Brother and Lian Beng’s JV is likely to get the casino deal. To any friends and colleagues who followed my advise, hold on to Koh Brothers to the very last minute.

What else?

On 2 Jan 2008, Koh Brothers announced that its prime freehold hotel site along Changi road is up for sale by public tender. According to a report on Business Times, the asking price for the site is $55 million.

"Show me my money!!!"

================================
January 3, 2008, 10.30 am (Singapore time)

Construction firms up on casino hopes

SINGAPORE - Shares of construction firms soared as expectations that Koh Brothers Group and Lian Beng Group would win a lucrative contract lifted sentiment for the whole sector, bucking the downward trend of the market.

A consortium of Koh Brothers and Lian Beng Group are running for contract worth around $500 million (US$348 million) for works related to one of the two casinos under construction in the city-state.

'The market expects that they will win the bid, it's quite a firm deal already,' said a local dealer.

Lian Beng rose as much as 5.1 per cent to an eight and a half year high of $0.82 and was the third most actively traded counter on the Singapore bourse with 18.8 million shares traded.

Koh Brothers jumped 6.5 per cent to $0.49 with 8.5 million shares changing hands.

Other construction plays such as Yongnam Holdings rose as much as 3.3 per cent to $0.31 with seven million shares traded. CSC Holdings was up 1.5 per cent to $0.33 with six million traded.

Economic data released on Wednesday showed Singapore's construction sector growing a healthy 24.4 per cent in the fourth-quarter. -- REUTERS

Oil Price Testing $100 Mark

2008-01-03T22:53:00.000+08:00

What a fantastic way to start the year with more bad news and poor sentiment. The oil future was threatening the $100 mark again causing DJIA to plunge 220.86 point on Wednesday (while Singaporeans were sleeping) to 13,043.96.

US crude oil prices rose more than US$4 to US$100 a barrel due to violence in Opec members Nigeria and Algeria. On other hand, spot gold surged to US$859.30 an ounce - its highest since January 1980 when gold prices were fixed at a record US$850.

STI close at 3,397.06 this evening, down by 64.16.

==========================

Forbes Market Briefing
Oil Supplies In Focus
Evelyn M. Rusli, 01.03.08, 9:18 AM ET

After briefly touching the $100 mark, the price of oil remained near triple-digit territory on Thursday.

Wall Street will be looking out for the government’s oil inventory report, due out later today, which could show another drop in U.S. crude supplies. Tightening supplies, a weak dollar and political unrest in oil-rich Nigeria could lift oil to new highs. Black gold was at $99.85 in early trading.

Jobs will be in focus today: payroll firm ADP said the U.S. gained 40,000 jobs in December, versus a gain of 173,000 in November, while the government said jobless claims fell 21,000 to 336,000 last week, which was far better than expectations. But the holiday report may not accurately reflect the jobs picture, because many unemployment offices were closed for two days for Christmas.

With oil at all-time highs and the U.S. economy slowing down, global stocks tumbled.

CPF Updates - Floating Rate For Special Account

2008-01-03T00:09:00.000+08:00

CPF Special Account As Part Of Retirement Planning

I kept telling friends and colleagues to make full use of the CPF Special Account (SA) for retirement planning. The special account gives 4% fixed rate which when compounded annually, it can snowball to a very big sum by the time you retire. With effect from 1 Jan 2008, there are some changes to the CPF rates.

1) The Special Account, Medisave Account and Retirement Account (SMRA) will be pegged to the 12-month average yield of the 10-year Singapore Government Security (10YSGS) plus 1%. Singapore Government Security is the Singapore Government issued bonds which I had covered quite a fair bit last year. The average yield of the 10YSGS over one year, from 1 December 2006 to 30 November 2007, plus 1% works out to be 3.9%.

To help CPF members adjust to the floating SMRA rate, the Government will maintain the 4% floor rate for two years if the 10YSGS yield plus 1% is below 4%. After two years, the 2.5% floor rate will apply for all CPF accounts. Computation illustration:

SMRA interest rates for January to March 2008
Average yield of 10-Year SGS from Dec 06 to Nov 07 --- 2.90%
Plus 1% ------------------------------------------------------------------- 1.00%
Computed SMRA Interest Rate for Jan 08 to Mar 08 ----- 3.90%
SMRA Interest Rate (Jan 08 to Mar 08) - floor -------------- 4.00%

2) An additional 1% interest will be paid on the first $60,000 of a member’s combined balances, with up to $20,000 from the Ordinary Account (OA). The additional interest received on the OA will go into the member’s Special or Retirement Account to enhance his retirement savings.

Therefore, we stand to gain on our OA (3.5%) but only up to $20,000. Not much of an impact but “no fish prawns also good”. As for the SMRA, you get to enjoy 5% rate for maximum of $60,000 (if you have $0 in your OA) since government maintained 4% floor rate for two years.

“So what happen two years later?”

This is really hard to quantify and predict. Even though government giving out 1% extra for OA and SMRA, it is only limited to $60,000 combine balances. While there is a very small gain on the OA, SMRA will be hard to forecast. It all depends on the 12-month average yield of 10YSGS. The actual result very much depends on the economic performance. It is difficult to use a financial calculator to project our retirement amount now because it is no longer fixed. Take a look on the following annual yield of 10YSGS since 1998.

1998 - 4.48%
1999 - 4.56%
2000 - 4.09%
2001 - 3.97%
2002 - 2.55%
2003 - 3.75%
2004 - 2.58%
2005 - 3.21%
2006 - 3.05%
2007 - 2.68%

From the above data, the yield fluctuates, of course. However, the yield has been quite good for most of the years except for 2002, 2004 and 2007. If we get this kind of yields again, we are actually better off 70% of the time (when you add another 1% to the yield) compare to what we are getting currently. Of course, history is not a guarantee of future performance.

STI Movement (Jul - Dec 07)

2008-01-02T00:18:00.000+08:00

STI Movement In Dec 07

2008-01-02T00:13:00.000+08:00

US Home Loan and Default

2008-01-01T14:11:00.000+08:00

According to an article on the Associated Press, mortgage insurers reported higher defaults in November 2007. As a result, the mortgage insurance companies are reporting hefty losses and share prices plunged.

The article gave a light on what we meant by “default” in US home mortgage. A default take place when a borrower failed to pay the loan for more than 60 days.

The home buyers are required to pay 20% of the house value. Otherwise, they need to take up an insurance. If a buyer missed a payment, the insurance payout will be triggered. A way get around it is to obtain another mortgage to pay for that 20%. It’s a mortgage over mortgage. With higher default risk, the financial companies are less willing to provide this second mortgage and therefore, more business for the insurance companies. With more default, these insurance companies will suffer.

Recap on 2007

2008-01-01T12:59:00.001+08:00

Forbes Market Briefing

Happy New Year ... We Hope

Steve Schaefer, 12.31.07, 5:05 PM ET

With the calendar set to turn the page on 2007, Wall Street closes the book on a tumultuous year.

The year started off on the right foot: private equity was still booming, financial firms were raking in cash from advisory fees and other operations, and investors were expecting a record-setting performance on the Street. Then the subprime mortgage meltdown hit and the stock market, and the U.S. economy, did an about-face. What looked like a record-setting year early on turned sour, limping to the finish, and the dreaded "R" word was on economists' tongues by the time fall turned to winter.

Three whacks at interest rates by the Federal Reserve was not enough to stem the tide of the credit crunch, as the collapse of the mortgage and housing markets pressured investors and consumers alike. To make matters worse, most recent inflation indicators have come in higher than expected, suggesting the Fed may have put itself between a rock and a hard place, having run out of room to take interest rates lower, and pushed the country to the brink of recession. (See: "Fed Trims Rates")

Despite the pressures on the economy and the bloodletting in the financial sector over the past two quarters, many remain optimistic. The Dow Jones industrial average still managed to post a 6.4% gain for the year, despite a 4.6% drop in the fourth quarter, and the tech-fueled Nasdaq finished with a strong 7.9% increase.

One of the Nasdaq's most high-profile success stories in 2007 was Apple (nasdaq: AAPL - news - people ). The consumer tech company rode the success of the iPhone and incredible demand for all its products to a 133% gain for the year, and shares finished the year just below the $200 threshold, at $198.08.

On the Dow, Citigroup (nyse: C - news - people ) may have been the biggest story of the year, as the financial giant was brought to its knees by massive writedowns related to subprime mortgages, resulting in the exit of former CEO Chuck Prince. Shares of the bank plunged 47% in 2007. (See: "Another Wall Street Chief Falls")

In the mortgage sector, the largest U.S. home lender, Countrywide Financial (nyse: CFC - news - people ), was hammered by the subprime meltdown, losing nearly 80% of its market value.

Meanwhile, big caps outpaced small caps, as the Standard & Poor's 500 posted a 3.5% gain to beat out the Russell 2000 index, which fell 2.8% for the year.

Crude oil is poised to finish off 2007 with its greatest yearly gain in nearly a decade. Down two cents Monday to settle at $95.98 a barrel, crude still posted its biggest jump since 1999 in what has been an extremely volatile year for energy prices.

Exxon Mobil (nyse: XOM - news - people ) posted a 22% gain for the year, following oil and gasoline prices on their wild ride higher. With crude near $96 a barrel and gasoline over $3 a gallon, oil companies are likely to continue reaping the benefits in 2008. (See: "Sneak Peak 2008: Energy")

After 2007 came in with a roar and went out with a whimper, investors will be hoping for a rebound in 2008, while monitoring several trends.

Chief among those trends will be the continuing flow of foreign capital into pillars of the U.S. financial community. Citigroup, Bear Stearns (nyse: BSC - news - people ), Morgan Stanley (nyse: MS - news - people ) and Merrill Lynch (nyse: MER - news - people ), among many others, have all sold stakes to sovereign wealth funds in the Middle East or Asia. (See: "Merrill Still Shopping")

Look for some semblance of a bottom for the financial sector to emerge early in 2008, as the major Wall Street players utilize their newfound foreign capital to rebound from the ill effects of the subprime crisis.

Many analysts are predicting continued growth in the stock market for 2008 despite a prolonged housing slump and overall economic slowdown. The Fed bears watching as it attempts to boost liquidity in financial markets while limiting inflation, particularly if credit continues to be tight.

Towards 2008

2007-12-31T23:09:00.000+08:00

So that's it for 2007, we have come to an end. Taking stock, this is a very good year, a very bullish year in fact. STI continue to set new record to nearly 4,000 points. This is something we never seen before. During previous decades, the highest point STI can go was just slightly above 2,500. But today, we make history again and again. However, in July 2007, US subprime problem triggered a correction and subsequently, market became very volatile. We have, unfortunately, to live with it even in 2008. And in case you asked how I fare this year in stock investment, I did quite well. My uncompounded absolute returns is above 20%. This is simply using the money I won over the initial investment. Existing portfolio gain/loss is not considered. My portfolio actually suffers a 8% losses when SGX closed for the year. Even if we use "holding periods return" to measure, my gain is still well above 10%.

I wish to take this opportunity to wish all my friends and readers Happy New Year, good health and "show us the money!!!".

Seven Traits Of Great Investors

2007-12-27T22:08:00.000+08:00

My all time favourite analyst, BT senior correspondence, CFA Charterholder Ms Teh Hooi Ling wrote another good article analysing traits of investment gurus. The article is so good that I ready have to paste it wholesale on my blog to share with you. In her article, Ms Teh listed down seven traits of greater investors which I share the same opinion. I had either previously in my article or through discussion with friends, highlighted about the same thing. For those who know me or had followed my blog should know what I mean. Quickly, I’ll summarise these seven traits and input my remarks.

1) Overcome greed and fear. I learned this from Warren Buffett and have emphasised over and over again in my blog.

2) Passion for investment. I often have friends/colleagues asking me why I am not tired of reading and analyzing stock (almost) everyday. Why I never breakdown? My answer is simply – by asking back “why didn’t you breakdown when you watch World Cup every midnight and then reporting to work in the morning?”

3) We must learn from our mistakes and make sure that we do not make the same mistake again. I didn’t emphasise this but I thought that is rather commonsense!

4) Commonsense is the least common human attribute. I pick up this quote from my ACCA lecturer Mr. Fred Keer, a very knowledgeable lecturer. And I use it many times in my blog. Let me illustrate how I use commonsense. A few years ago, there was a hot stock dealing with mobile phone repair. The company kept reporting profit growth and the share price kept moving up. I posted questions to my coursemate – “how come that company can continue to report profit growth when its trade (mobile phone repair) is simple and can be easily duplicated or has no barriers to entry? How come it can earn lucrative margin when it is purely an outsource company? Why didn’t its major client (Nokia) squeeze its margin?” My questions were basically a result of commonsense. What happen to the company later? I leave it to you to find out (or you can write to me for answer).

5) Believe in your study, analysis and philosophy. Do not compromise your principle. Do not follow the crowd. They always make mistake.

6) Good in math will not make you a successful investor. In every book written on Warren Buffet, you will find large portion on qualitative analysis.

7) And the most important one, which has always been a topic of discussion – can Warren Buffet be duplicated? I discussed it with my CFA coursemates before and we concluded that it couldn’t be duplicated. You can learn everything about ratio analysis, options, Black-scholes model, forward and futures etc. But there is one thing that you cannot learn – GUT FEEL.

Enjoy the article.

=========================================
Business Times - 17 Nov 2007

Reading this won't make you great

Mark Sellers, founder of a Chicago-based hedge fund, argues that the best investors are born with particular psychological traits that others can never learn

By TEH HOOI LING
SENIOR CORRESPONDENT

WHAT makes someone a great investor? It's something you have to be born with, said Mark Sellers, founder and managing member of Sellers Capital LLC, a long/short equity hedge fund based in Chicago.

Apparently, it's not about your IQ, the education you've had, the books you've read, or the experience you've accumulated. 'If it's experience, then all the great money managers would have their best years in their 60s and 70s and 80s, and we know that's not true,' he said in a speech to a class of Harvard MBA students.

Intelligence and learning are obviously necessary too, and are sources of competitive advantage for an investor, but there are structural assets some possess that cannot be copied or learnt by others. 'They have to do with psychology and psychology is hard wired into your brain. It's part of you. You can't do much to change it even if you read a lot of books on the subject,' said Mr Sellers.

He said that there are seven traits great investors share that are true sources of advantage because they cannot be learned. You are either born with them or you aren't.

The seven traits are:

One, the ability to buy stocks while others are panicking, and the ability to sell at a time when other investors are euphoric. 'Everyone thinks they can do this, but then when October 19, 1987, comes around and the market is crashing all around you, almost no one has the stomach to buy,' Mr Sellers said.

'When the year 1999 comes around and the market is going up almost every day, you can't bring yourself to sell, because if you do, you may fall behind your peers.

'The vast majority of the people who manage money have MBAs and high IQs and have read a lot of books. By late 1999, all these people knew with great certainty that stocks were overvalued, and yet they couldn't bring themselves to take money off the table because of the 'institutional imperative', as Buffett calls it.'

Two, the great investor has to be obsessive about playing the game and wanting to win. 'These people don't just enjoy investing; they live it. They wake up in the morning and the first thing they think about, while they're still half asleep, is a stock they have been researching, or one of the stocks they are thinking about selling, or what the greatest risk to their portfolio is and how they're going to neutralise that risk.

'They often have a hard time with personal relationships because, though they may truly enjoy other people, they don't always give them much time. Their head is always in the clouds, dreaming about stocks. Unfortunately, you can't learn to be obsessive about something. You either are, or you aren't. And if you aren't, you can't be the next Bruce Berkowitz.'

(Berkowitz was a managing director of Smith Barney and set up his fund Fairholme Capital Management in 1999. Since inception, Fairholme Fund has returned 18.7 per cent annually on average.)

The third trait of a great investor is the willingness to learn from past mistakes. 'The thing that is so hard for people and what sets some investors apart is an intense desire to learn from their own mistakes so they can avoid repeating them. Most people would much rather just move on and ignore the dumb things they've done in the past.

'I believe the term for this is 'repression'. But if you ignore mistakes without fully analysing them, you will undoubtedly make a similar mistake later in your career. And in fact, even if you do analyse them it's tough to avoid repeating the same mistakes.'

A fourth trait is an inherent sense of risk based on common sense. 'Most people know the story of Long Term Capital Management, where a team of 60 or 70 PhDs with sophisticated risk models failed to realise what, in retrospect, seemed obvious: they were dramatically overleveraged. They never stepped back and said to themselves, 'Hey, even though the computer says this is OK, does it really make sense in real life?'

'The ability to do this is not as prevalent among human beings as you might think. I believe the greatest risk control is common sense, but people fall into the habit of sleeping well at night because the computer says they should. They ignore common sense, a mistake I see repeated over and over in the investment world.'

Five, great investors have confidence in their own convictions and stick with them, even when facing criticism. 'Buffett never get into the dotcom mania, though he was being criticised publicly for ignoring technology stocks. He stuck to his guns when everyone else was abandoning the value investing ship and Barron's was publishing a picture of him on the cover with the headline 'What's Wrong, Warren?'. Of course, it worked out brilliantly for him and made Barron's look like a perfect contrary indicator.'

Mr Sellers said that he is amazed at how little conviction most investors have in the stocks they buy. 'Instead of putting 20 per cent of their portfolio into a stock, as the Kelly Formula might say to do, they'll put 2 per cent into it. Mathematically, using the Kelly Formula, it can be shown that a 2 per cent position is the equivalent of betting on a stock which has only a 51 per cent chance of going up, and a 49 per cent chance of going down. Why would you waste your time even making that bet?'

The Kelly Formula arose from the work of John Kelly at AT&T's Bell Labs in 1956. His original formulas dealt with the signal noise of long-distance telephone transmission. It was then adapted to calculate the optimal amount to bet on something in order to maximise the growth of one's money over the long term.

Six, it is important to have both sides of your brain working, not just the left side - the side that's good at maths and organisation. 'In business school, I met a lot of people who were incredibly smart. But those who were majoring in finance couldn't write worth a damn and had a hard time coming up with inventive ways to look at a problem,' said Mr Sellers.

'I was a little shocked at this. I later learned that some really smart people have only one side of their brains working, and that is enough to do very well in the world but not enough to be an entrepreneurial investor who thinks differently from the masses.

'On the other hand, if the right side of your brain is dominant, you probably loathe math and therefore you don't often find these people in the world of finance to begin with.'

So finance people tend to be very left-brain oriented - and Mr Sellers said that that is a problem. A great investor needs to have both sides turned on, he said. 'As an investor, you need to perform calculations and have a logical investment thesis. This is your left brain working. But you also need to be able to do things such as judging a management team from subtle cues they give off.

'You need to be able to step back and take a big picture view of certain situations rather than analysing them to death. You need to have a sense of humour and humility and common sense. And most important, I believe you need to be a good writer.'

He cited Warren Buffett as one of the best writers ever in the business world. 'It's not a coincidence that he's also one of the best investors of all time. If you can't write clearly, it is my opinion that you don't think very clearly,' Mr Sellers said.

And finally the most important, and rarest, trait of all: the ability to live through volatility without changing your investment thought process.

This, said Mr Sellers, is almost impossible for most people to do; when the chips are down they have a terrible time not selling their stocks at a loss. They have a really hard time getting themselves to average down or to put any money into stocks at all when the market is going down.

'People don't like short-term pain even if it would result in better long-term results, he said. Very few investors can handle the volatility required for high portfolio returns. They equate short-term volatility with risk.

'This is irrational; risk means that if you are wrong about a bet you make, you lose money. A swing up or down over a relatively short time period is not a loss and therefore not risk, unless you are prone to panicking at the bottom and locking in the loss.

'But most people just can't see it that way; their brains won't let them. Their panic instinct steps in and shuts down the normal brain function.'

得不到, 已失去

2007-12-27T21:43:00.000+08:00

Economic Forecast - US Recession

2007-12-26T23:19:00.000+08:00

I decided to publish analysts' economic forecast (just an excerpt) frequently on my blog so as to increase awareness, to help us to monitor the situation and to make adjustment along the way. My advise to all - be defensive. Keep more cash or cash equivalent. For those who are still bullish, all the best and good luck.

=========================

Business Times - 22 Dec 2007
SUB-PRIME WORRIES

Defaults to pick up next year on US recession risk: S&P

(NEW YORK) US corporate defaults will increase next year as the worst housing slump in 16 years threatens to send the world's largest economy into recession, according to Standard & Poor's (S&P).

The rating assessor expects high-yield, high-risk borrowers in the US to default on 3.4 per cent of their bonds outstanding by November, from a record low of almost one per cent, New York-based Diane Vazza, head of global fixed income research group said in a report dated on Thursday. Defaults will rise more noticeably in the later half of next year and in 2009.

'Our projections are based on a decidedly gloomy economic outlook for 2008, underpinned by expectations that the world's largest economy will falter on the cliff of recession,' Ms Vazza said in the report.

'The housing decline will have its biggest impact during this period, and orders data suggest slower capital spending. A serious risk confronts the US consumer, as households feel the pinch of lower home prices and higher energy costs.'

High-yield bonds are rated below Baa3 by Moody's and BBB- by Standard & Poor's.

The 15 largest US homebuilders have lost 56 per cent of their market value this year as home prices declined for the first time since the Great Depression, according to the National Association of Realtors in Chicago.

Finding The Cheese Or Focus On The Present?

2007-12-25T15:20:00.000+08:00

Source Of Passive Income – Publishing Books

I trust that most of you would be familiar with Robert Kiyosaki’s “Rich Dad Poor Dad”. It is really a good book imparting knowledge on financial freedom. In fact, I first came to know and understand the term “passive income” from his book. From his cashflow quadrant, anything that give rise to constant stream of income without much time on it is a passive income. Writing and selling books is also a source of passive income. I had many friends who read a lot, frequently, but sometime indiscriminately helping the author to be rich. Should we be selective in buying books? The answer is definitely yes unless you have nothing better to do. To read a book, you must first spend money on it, and then spend time on it and finally a storage space. And every time when you pay for a book, you are helping the author to collect passive income; you are helping him to be rich!

No offence to those who write and sell books. But my point is that you shouldn’t buy a book for sake of buying it. For example, if you already know about investment, then no point keep buying more since they are about the same (change the soup but not the ingredients). Am I here to discourage you from reading? Definitely not! I am here to advise you to be selective and don’t help others to gain passive income unless that person really deserve the reward. Let me share with you how two books change my life. It’s a big joke of my life. While the author is certainly rich, I am still that poor. But I promise there is good lesson to earn.

The First Encounter – The Cheese

In 2002, I completed my ACCA (accounting) study. I was then an army regular earning very decent and stable income. I used to own a car then. As with most of my comrades, our promotion was quite smooth and prompt. It was a secured job (but not anymore today). However, like many others, we were not contented then. Many took up higher study and left after graduation – for green pastures. I too hope to be a professional accountant earning high income. Then someone recommended me to read a book titled “Who Moved My Cheese”. I can’t remember exactly the content now but it is about accepting change. It talks about rat in a maze enjoying its cheese but what if it finish that cheese? So one should move out to look for other cheese outside the maze, or something like that. Anyway, the moral of the story is to accept change and to take the challenge.

Back then; the SAF adopted a new system to retain qualified servicemen. They call it the Premium Plan. Only those who met certain criteria will be offered a lifetime career. In early 2002, I was offered and I accepted it. But after reading the book, and with encouragement from a few friends and colleagues, together with my newly acquired qualification, I tendered my resignation. I decided to find my cheese outside.

The Struggle

I left the service in 2003 in the midst of recession. The job market was tight and I was unable to join any accounting firm and became jobless for 9 months. Finally I join another company doing operational work. My accounting qualification was wasted. But I didn’t give up. I continued to search for my chance, took up higher study (again), tried to go into business with a friend but there was no result. While most of my ACCA coursemates were holding very senior appointments earning exceptionally high income, I am not even an Executive. I remember one coursemate got the post of Dy GM for Natsteel’s China business. And my operational job just ensures that my certificate will be useless and I’ll never climb.

When I was disheartened, my ex-manager gave me a book and insisted that I must read it. I didn’t read it immediately as I was not that keen initially. But when I read it, my mind opens up again. This book is Adman Khoo’s “Master Your Mind, Design Your Destiny”. The whole book was about having positive mindset to help you to overcome problems and to excel. I changed my mindset and it did make a different. That is a very good book.

The Present

Last week, my current boss lends me a book to read. The book titled “The Present”. Guess what? The same author who wrote “Who Moved My Cheese” wrote the book. Bascially, the book is about appreciating present and find ways to work it out no matter how discouraging it is. Let me quote a para in page 42 of the book:

“Focus on what is happening at the moment. Appreciate what is right about the situation, and build on it.”

Did you find something odd here? Five years ago, the author's book encouraged me to find my cheese outside - to change. But now, the book wants to me appreciate presence; appreciate what I have now!!! I was shocked and insulted. If not because of my boss, I would have torn the book into pieces. While the author continues to earn passive income, and I am one of the donors, his book got me into trouble (indirectly)!!!

What Have I learned?

We receive tonnes of information and advises from many sources – friends, colleagues, books, internet, pastors etc. But to make right decision, in my opinion, the very first thing that a person need is MATURITY and PATIENCE. I mean we just can’t always simply adopt new concepts other people shared indiscriminately. The intention may be good but may not be suitable for every reader. There is never right or wrong answer in each of these concepts. I am sure every book has its good purpose and will definitely benefit some readers but not all.

Do I blame the book? No, I made the decision and I shall bear the consequence. Certainly I am not that mature at that point in time (five years ago) and was rather impatient. Do I regret moving out (of SAF) to search for new cheese? Yes, to some extend but no point looking back. And what’s the lesson I learned so far?

1) Be selective in buying self-enrichment books. Do not help others to earn a passive income unnecessarily unless it justified. If you invest (pay) in a book, you must expect a POSITIVE RETURN, tangibly or intangibly.

2) When acquired new knowledge/teaching/concept, stay calm and think it over and over again. Consult some friends or seniors. Be patient.

3) Accept the fact that even if you apply a concept closely, it doesn’t mean that you will definitely get the same result. For some yes but not all. E.g. the author shares with you his secret to become millionaire. Do not expect that you will also become a millionaire if you apply exactly. Get real!

The Future

To be continue......if there is any.......

Is Koh Brothers Undervalued?

2007-12-23T21:50:00.000+08:00

Clarification And Reminder

Firstly, to all my readers, I must emphasise here that although I am gloomy on the global economy, I had never, ever advise any friend to damp all equity immediately. We must be very clear here that we can only monitor the situation and make minor adjustments along the way until concrete evident emerged. For example, currently I feel that US economy is shaky or to put it correctly, uncertain, I will hold my stocks and limit any further investment regardless of the price movement. Some of my friends told me that it is stocks are cheap after correction and we may average down. The question is that it can be even cheaper. So how you define “low” in the first place? But of course if you are trading, then that is a different story.

Before global economy really goes into recession, there are definitely growth stories in certain industries or companies. Many of us know that this year, oil and oil-related companies are giving out 6 months bonuses to their employees. The US economy may be uncertain, but that does not change the fact that oil-rig providers like Keppel currently has more than $1 billion oil rig contracts on hand keeping their employees busy for next few years. What else do we have besides oil?

Koh Brothers – Under-priced

Another lucrative, billion-dollar project is the Integrated Resort. This is nothing new to Singaporeans. The whole IR project is expected to cost some $5 billions (can’t remember is in US$ or S$). As of 21 Dec 2007, as far as I know, the casino construction contract has yet to be awarded. So who will be awarded has always been my question. Discounting foreign conglomerates, locally, only those with substantial size (manpower, finance) and with good track records stands a chance. And in my opinion, the following companies may stand a chance especially if they join hand:

- Lam Chang
- Koh Brothers
- Ho Bee
- Lian Beng

Among these four companies, one of them, in my opinion, is mis-priced – Koh Brothers. As at 21 Dec 2007, Koh Brothers’ share was last done at $0.38. This price, in my opinion, is undervalued. The following points are my justification:

1) In a Business Times report dated 5 July 2007 (titled - Heeton expects bonanza from prime project), analyst assessed that Koh Brothers’ JV project with Heeton (The Lumos) would fetch Koh Brother approximately $0.24 a share net profit from the sale of the condo. The following is an excerpt of the article:

“Property group Heeton Holdings could recoup its entire initial investment in its exclusive The Lumos condo by selling just two penthouses and a few mid-sized units during this weekend's pre-invitation launch.

The company is confident that over a third of the 53 units at the prime Leonie Hill site will be snapped up at this Saturday's 'by-invitation-only' event for special guests.

'We have not issued any price list,' said Danny Low Yee Khim, the Sesdaq-listed company's executive director and chief financial controller. 'But I expect property agents will have indicative prices benchmarked against neighbouring properties in the vicinity. Some are apparently coming with blank cheques from their invited clients.'

Key among these 'neighbouring properties' is SC Global's Marq On Paterson Hill, which set a new record last week when a unit was sold for $5,100 per square foot (psf). And all 21 apartments in the first phase of that 66-unit luxury development - just down the road from Lumos - have been taken up at an average selling price of $4,137 psf.

Market watchers reckon units at The Lumos could fetch well over $3,000 psf. At this price, Heeton and Koh Bros (each has a 50 per cent stake in the project) stand to make some $220 million - or $110 million each - in profit.

This works out to about 50 cents per share for Heeton, and 24 cents per share for Koh Brothers.

The two firms bought the site - previously Hilton Towers - in April 2006 for $79.2 million, or about $880 psf per plot ratio, including a development charge of about $3.9 million. Coupled with construction cost, the total cost is said to be well under $1,200 psf…..”

2) In Jun 2007, Koh Brothers announced that it has formed a consortium with a few big players including Heeton and acquired prime freehold site at Newton road.

3) In Nov 2007, Koh Brother announced that it has acquired freehold sites at prime Bukit Timah road and another one at Changi road.

4) In Dec 2007, Koh Brothers was awarded a project from MOE for the construction of River Valley High school and hostel.

The Integrated Resort (Casino in Singapore) Contract

In my opinion, current price of $0.38 a share is under-priced with existing contracts plus those newly awarded particularly The Lumos condo. Assuming that the analysts are correct, at $0.38 a share, you are actually paying $0.14 for Koh Brother’s business. Let’s not drift too far away from my most interested topic – the IR project. Among the four companies that has the potential of tendering and carry the IR project, I chose Koh Brothers. Ok, may be I should say I bet that Koh Brothers might get it and since I believe that its price is undervalued, I had a safety margin.

In Dec 2007, Koh Brothers announced that it has formed a JV with Lian Beng to tender for the casino tower. Its share price surged to a high of $0.49 but subsequently retreated to $0.38. I hold on to it. I wanted to continue the game until I see the last card.

Koh Brothers 1H2007

In Koh Brothers’ interim report, gross profit grew by 42% to $14 million. However, property revaluation caused Koh Brothers’ interim profit to jump 2,225% to $30 million. As such, I am expecting better performance and more good news especially with existing and new projects awarded. I will do detail analysis of Koh Brothers financial report separately.

In my opinion, Koh Brothers’ current price of $0.38 is cheap. And I am not even talking about IR project here. The IR project will be a great catalyst. Therefore, I don’t think investors are not paying a lot for $0.38 a share and thus offering good safety margin. How much is the safety margin I don’t know. And don’t ask me what’s my expected price of Koh Brothers. This is because I don’t know and I never set price target; never in any of my article. At $0.38 a share, I call a buy on Koh Brothers.

The Selling Strategy

2007-12-21T10:38:00.000+08:00

When To Sell?

If you read a book written by some experts covering buying strategies but never touched on selling strategy, your learning are not complete. A good investment gurus will definitely tells you (or teach you) on the importance of selling strategy. Yes, when to sell is just as important as when to buy. I am not an expert and certainly not a guru. But through years of reading and investment experience, I had developed my very own selling rules. So this is my own “when to sell” criteria:

1. When you need money. This should be self-explanatory. The first rule of investment is when you have spare cash that is not needed in the near future. If this assumption does not hold anymore, you should not invest; at least not in stocks.

2. When a counter has been heavily speculated, price surge aggressively not supported by any news. This is a common phenomenon whereby speculators switch their attention to a counter and trade aggressively. And usually you will see that particular company answering to the SGX’s queries with “we do not know any circumstances that could explain high trading volume”. Basically there is no change in the company’s fundamental. In this case, you should sell high and wait for Ms. Market to cool down. You can re-purchase again when the price retreated to a sensible level.

3. When the fundamental of the company you bought changed. This is really from the teaching of Warren Buffett. As a value investor, you invest in a company certainly due to a value in that company and that the price does not fully reflect that value. That’s why you buy its shares. But if the fundamental of that company changed, depending on the situation, usually you have to get out of the company ASAP. If Coca Cola no longer sell coke but hard disk, you got to get out immediately. A good example in Singapore context would be education provider – Informatics. For many years, Informatics enjoys reasonable growth and was well covered by analysts. It was investors’ favourite stock until the expose of its accounting scandal. The education provider’s brand was seriously damaged and student intake fell drastically. One of the mechanics in my company asked for my opinion in terms of investment and education (for his daughter) in this company. Objectively, I advised him to avoid this company whether it is for investment or education. The company’s brand name was the key reason for buying it. If the company losses its brand name, then you should sell immediately.

4. When the economy is on the downturn. If the generally economic, or the global economy is on the downturn (or recession), you must run like hell. With certain exception, if the economy is entering into a recession, you must make sure that you are one of the first to get out. I’ll discuss more on this point later.

5. When existing price fully valued a company. This means that the price reflects the value of a company. The obvious question would be what’s the value of a company, how to measure it. Well this is not easy and can be very academic. Generally people use discounting cashflow on dividends, free cashflow and other formula to assess a company’s value for whatever remaining life, today. This requires prediction of a company’s future growth and performance. It is a highly difficult task with many assumptions and even two analysts using the same formula may produce different answers. So usually I use other easy method that kill lesser brain cells. For example, I use PE ratio to determine if the company is over-priced. Another situation would be when you buy a company because of a catalyst, and when the price adjusted for that catalyst, generally you can sell it.

When The Economy Is On The Downturn

This is a more interesting topic and I like to talk more about it. My approach to investment is always to look at the generally economy, local and global. We like to invest long-term but not that kind like Warren Buffett because we are a bunch of poor little retail investors. So we must look at the business cycle. When the business cycle is on the recovery to its peak, generally, you will make money in most of the companies you purchased. Think about it again. You are sure to make money by mid-2007 if you buy in almost any company listed in SGX in 2005. You don’t need any analytical skill but just throw your dart on the list of listed companies. Even laggard stocks like the construction companies that hardly move until 2006, can create miracle. Most of them surged aggressively from end 2006 to mid-2007 ensuring that your average uncompounded annual returns is about 30% (I don’t have statistics here).

Now the same rule applies. If the economy is on the downturn, in the mid term, your portfolio will surfer a loss. Although a small group of companies can still outperform (I will cover in another write-up), the problem is that can you spot these and only these companies? Are you that good and lucky. I am afraid most of the time we are not. That is why if the economy is on the downturn, you really must run away from the equity.

“So what’s your opinion on the global economy now?”

Since November this year, or after the exposure of US subprime problem, I had been quite pessimistic about the generally economy. Together with rising oil prices, and that US is one of the highest consumers of oil; I think we have more bad news. It is extremely difficult to predict the future economy but if you ask me to place a bet with all my savings, I will bet that the US economy is on the downturn. This is simply the logic of probability. There is just more bad news than good ones. And we all know that if US economy goes down, she will drag everyone down especially Singapore (being an export country to mainly US and Europe). So if my assessment is true, which we will know very soon, then we are heading to a downturn or to put it clearly, a recession. When will that take place? God knows! But this is my assessment:

We had just passed the peak (or the tip) of the business cycle!

Conclusion

If you have been following my blog, you should recall that I mentioned that the stock market is a leading indicator of the economic movement. Yet it is highly difficult to predict the global economy. But we have to try. Based on what we know to-date, I am definitely not bullish. I believe that we had just crossed the peak and we must be prepared – for the worst. I had advised my friends to start looking at bonds which I had covered extensively in my blog. I don’t mean that you should damp everything away today and switch all your money to bonds. But certainly you should start getting defensive on equity and study the bond market. I am afraid that one of my selling rules has emerged. And I write this blog today to mark my analysis so that my judgment may be judged in the future.

STI Movement Nov 2007

2007-12-09T13:26:00.000+08:00

The Days After Tomorrow

2007-11-29T23:10:00.000+08:00

On 27 Nov, I returned to my office after a long weekend. If not because of the series of unfortunate events, I should be at Boracay Island now. But actually all my friends and colleagues were supportive instead of been sarcastic. I went out with ex-army friends during the weekend. He told me that, after reading my blog on “My Worst Holiday”, he would have make the same decision if he is in that situation. In my office, a few colleagues encouraged me that my friend in Manila would understand the agony I gone through; reconciliation would not be an issue.

And yesterday, TV Mobile on SBS bus reported that Typhoon Mitag killed 22 Filipinos. But if what Joshua told me is true, he will not be affected. According to him, Boracay Island is surrounded by islands thus having similar strategic location like Singapore. Based on the original schedule, we should be spending three days (26 – 28 Nov) in Boracay Island.

This evening, while I was on my way back home, the TV Mobile in SBS bus reported another shocking news – the army stormed a Manila hotel held by the rebels. Now this is really upsetting. The bad news from this country just keeps coming up none-stop. According to our original schedule, we should have leave Boracay Island on 28 Nov and spend two days at Sonya’s Garden. So I hope that Joshua and his family didn’t head back to Manila. But even if they did, most probably they are staying in another hotel not occupied by any rebels.

I actually thought of calling Joshua but I knew that he does not turn on his mobile phone during his holiday. Besides, I really don’t know what to say if I call him. This is because I might be perceived to be sarcastic because my instinct is, in a way, quite correct. I had emphasized many time that I don’t have the peace for this trip. In any case, I serious don’t think that anything could happen to Joshua and his family. This is because he is very familiar with The Philippines and he knows how to get help from our embassy if there is a need. We have a friend currently working in our embassy in Manila.

As for me, with this experience, I am not sure if I would ever visit Philippines unless the government is able to establish political stability. Notwithstanding the probability of future visit to Philippines, I still need to prepare a thousand dollar cheque for the damages when Joshua returns from his holiday. The damages can only be alleviated if he is able to change his hotel room. And I hope for the best.

Monkey-See-Monkey-Do Strategy

2007-11-27T22:50:00.000+08:00

Follow The Experts

Does following experts blindly yield lucrative returns, or even beat the index? I remember some time last year (or the year before), there was article in the Business Times reporting that local investors enjoy high returns by simply following behind Temasek Holding's investment actions. According to the report, whenever Temasek invested in a listed company, you just follow, no question asked. At the end you still make relatively high returns (I don’t have the figure with me, need to find that article). Some of you may be able to recall such article.

So is monkey-see-monkey-do strategy works? In my opinion, it definitely will as long as:

1) You do not speculate
2) You follow, even blindly but the correct experts

Point 1) above is important because if you speculates and try to follow blindly, in my opinion, you will end up contributing to the “experts” you followed. But for value investment, which takes time to yield the expected result, it’s ok if you follow the right experts.

On 17 Nov 2007, there was a wonderful article on the Business Times further reinforce that monkey-see-monkey-do strategy does work – if you follow Mr Warren Buffett. When Warren Buffett bought PetroChina in 2003, my course mates and myself were aware of it and wanted to follow him. So what’s stopping me?

1) After Warren Buffett’s investment in PetroChina, its share price surged a bit….I was unhappy about it.
2) To buy Hong Kong stock, which I am not really familiar with, I will incur custodian fees. I don’t really like the additional cost especially when I am not buying large quantity.

Unfortunately, I was wrong. Warren Buffett makes big bucks from PetroChina. And if I followed blindly behind him, I am sure I will also make that kind of money. So we can use monkey-see-monkey-do strategy but do intelligently; at least follow the right experts.

The following is an excerpt of the article in Business Times. Enjoy.

========================================
Business Times - 17 Nov 2007

Even a monkey can get 24% with this investment formula

Investors could beat the S&P 500 just by imitating Warren Buffett's trades

(NEW YORK) Buying whatever billionaire Warren Buffett bought, often months after his share purchases, delivered twice the return of the Standard & Poor's 500 Index during the past three decades.

Investors would have earned an annual return of 24.6 per cent by buying the same stocks as Mr Buffett after he disclosed his holdings in regulatory filings, sometimes four months later, according to a soon-to-be-released study by Gerald Martin of American University in Washington and John Puthenpurackal of the University of Nevada, Las Vegas.

The S&P 500 rose 12.8 per cent a year in the same period.

'A monkey would have beaten the pants off the S&P 500 by following Warren's buying and selling,' said Mohnish Pabrai, who manages US$600 million at Pabrai Investment Funds in Irvine, California.

Mr Pabrai and a friend paid US$650,100 this year in an annual charity auction to lunch with the 77-year-old Buffett.

Mr Buffett's stock picks outperformed his Omaha, Nebraska-based Berkshire Hathaway Inc from 2002 to 2006 when Berkshire shares advanced at a yearly rate of 7.8 per cent.

By comparison, Berkshire holding USG Corp, the biggest maker of gypsum wallboard in North America, increased about 1,140 per cent and PetroChina Co, China's largest oil producer, soared eight-fold.

Mr Buffett built Berkshire Hathaway during the past four decades into a US$200 billion company with businesses ranging from ice cream and bricks to insurance and corporate jet leasing.

Berkshire had US$77.9 billion invested in stocks at the end of September, according to a filing with the US Securities and Exchange Commission.

The company's shares closed on Thursday at US$135,300, the highest price on the New York Stock Exchange.