There are many factors that make up a rich life.
This blog will contain my journey to live a rich and fulfilling life. The main focus will be on money management, wealth and investments. However experiences and thoughts on travel, relationships, charity, and anything else that enriches my life will also be added.
A journey of a thousand miles begins with a single step. ~ Confucius
You know what I always find hardest when it comes to writing? The introduction. It seems that whenever I have an idea to write about something, I encounter the most trouble in that section - the introduction. It’s the starting that’s the most difficult and the deciding factor if the piece makes it to keeps or is discarded with a touch of the delete icon. Maybe that’s because I place a lot of emphasis on it – the introduction. And why not? Introductions are of utmost importance yet are often overlooked. They have the power to make or break a piece and even put people off totally from reading what you have to say. But this doesn’t just apply to writing. A good introduction affects just about anything and leaves a lasting impression. Observe.
First dates
Dialogue: “Hi, really glad to meet you. You look great.”
Gestures: [winning smile]
Versus
Dialogue: “Hey. Glad to meet you.”
Gestures: [yawning] [scratching]
Job Interviews
Dialogue: “It’s a pleasure to meet you.”
Gestures: [confident smile and handshake]
Versus
Dialogue: “Pleasure to meet you.”
Gestures: [stammering] [timid handshake]
Meeting Your Future-in-Laws For the First Time Over Dinner
Dialogue: “Hello Auntie, Uncle. It’s nice to meet you. Thank you for inviting me to dinner.”
Gestures: [winning smile]
Versus
Dialogue: “Hello Auntie, Uncle. It’s nice to meet you.”
Gestures: [nervous smile]
Now while I only focused on only two aspects in a physical introduction – dialogue and gesticulations, it’s obviously apparent just how a bad introduction could drastically affect a good message.
And so it is with writing. Dive straight into a topic and some people may get lost and click the back or close icon of their browser. Write too long an introduction and risk people zoning out. Close browser. Write a weak introduction and have people label the article “boring” while skimming over the words, trying to absorb without understanding. Click back. No, that simply doesn’t work. If you’ve something to say and you want people to hear you, a good introduction is key. Click back and close browser must not be an option.
It’s said that impressions are made in the first 5 seconds from the time two people meet each other. I believe that also applies in writing. Note to self: Click back and close browser must not be an option.
Repeat: Click back and close browser must not be an option.
Here's wishing everyone a happy and prosperous Chinese New Year. Also, this happens to be my 100th post so it's a double celebration for me. =)
While we're celebrating, I thought it would be good to incorporate some social responsibility as elaborated by the posters below. A picture does say a thousand words anyway.
And while some of you may have objections on shark fin soup. Perhaps the videos below may enlighten you on the importance of their roles in maintaining our environment and life and the danger that they are seriously in.
Rob Steward's Sharkwater received numerous awards, 33 at current count, and positive reviews, in recognition for all the effort Steward put into making this movie, even putting his own life on the line to capture the truth. In my opinion, it is one of the best shark documentaries I've ever watched.
I hope you check it out. And give us a chance.
Cheers,
~K
Highly Recommended Videos on the Importance of Sharks
Starhub has been stubbornly clinging on to its downtrend for more than two months now. Closing three in fact. Twice I blogged about a breakout in the making and twice it didn't materialize. Good news didn't seem to matter to the public who were already set in their negative sentiment (see Starhub: Breakout in the Making?). Even the 100 day moving average support, which I had hope in to hold the fort, so to speak, fell apart (see Starhub: Opportunity to Buy In May Be Near at Hand) resulting in prices crumbling quickly thereafter.
To make matters worst, candlesticks in the last three days show strong pressure from above determined to push prices down further, with 2 gravestone dojis forming in succession, one longer than the other. However, prices were unable to penetrate $2.53 for the two consecutive days before that perhaps forming a floor beneath. In fact if we look back at the charts, we would see that $2.53 did provide some support in October last year.
Also, prices, at the moment, seem resilient and intent on holding firm. However we didn't see a lot of buyers a day after that long ugly black candle day back in Dec, so I'm not so sure about the reliability of the support despite driving prices back up.
And since all looks quite ill, now I'm just toying with this idea, but doesn't that formation remind you of a heads and shoulder, albeit lopsided? Or would this just be a manifestation of seeing what wants to see to fit the scenario, in this case negativity?
Well if that's the case, we should worry if prices break the neckline at where the current support lies. If that happens, we could see prices plummet to $2.48 or even to its 200dma. Just something to take note of.
But that said, prices seem to be withstanding the hammer blows from above for now and as such a triangle may form and it could be really soon before prices breakout from its downtrend and head upwards especially since price lows are higher and since the triangle really has not much space to run anymore. This seems the more likely of the two formations. Plus when you have to force a formation into the chart, like I did with the heads and shoulders, it usually is wrong. So my opinion is that things could head this direction rather than the other. But I could be mistaken yet again for the third time and strike out.
With a dividend yield of 7.4% and p/e of 13.65, Starhub could be quite attractive as an income stock. However as mentioned before, maintaining its current dividend is something that has analysts concerned.
Perhaps this is a view shared by many and is the reason why share price seems intent on falling lower - to make up for the coming "falling dividend" yet maintaining the yield? The warning bells are chiming. Or are they?
Senior Guru blogger Drizzt has done a terrific job at analyzing the telcos. You can read more at his blog, Investment Moats on Starhub's yield maintenance (see here), its debt (see here) as well as on how prices adjust due to people determine to upkeep their yield (see here). I guess his blog was voted the Top Stock Market Blog in 2010 for good reason. =)
On other news, Starhub has teamed up in a venture with Japan's Nippon Telegraph and Telephone Corp to jointly build and operate submarine cables that will connect East Asia's business hubs. (You can read the news here.) Though revenues are expected to rise, we can all expect costs will as well. Will this venture increase their free cash flows that will allow Starhub to maintain its dividends yet still leave ample capital to grow is a question I can't answer. Earnings announcement on the 11th of Feb by the way. Stay tune!
Cheers,
~K
P.S. What started out as a quick post turned out to get dragged as I realized there was more news to consolidate. Apologies and thanks for reading to the end. Vested interest btw.
Singapore Post (SingPost) reported a 6.3% YoY rise in revenue to S$148.5m and a 0.7% drop in net profit to S$43.8m in 3QFY11, such that 9MFY11 net profit accounted for 74.7% of our full year estimates and 78.5% of Bloomberg’s mean consensus. Excluding one-off items such as amortization of deferred gain on intellectual property rights and benefits from the Jobs Credit Scheme (in 3QFY10), underlying net profit increased 5.1% YoY to S$40.9m.
Growth in mail and logistics businesses.
Mail revenue grew 7.5% YoY on the back of strong growth in the direct mail business and better economic conditions, while international mail was underpinned by growth in e-commerce activities. More transshipment and vPOST shipping activities contributed to the 10.2% YoY increase in logistics revenue, but operating profit from this division declined as transshipment generally has lower margins.
Diversifying its businesses and markets.
Management reiterated that it continues to face “formidable challenges” in the postal industry, driven by factors such as e-substitution. With the global trend of declining mail volumes, the group wants to reduce its reliance on mail revenue and diversify its revenue base. Indeed, the mail division’s contribution to total revenue has fallen steadily from 77% in FY08 to 68% in 9MFY11. However, being Singapore’s dominant postal operator, SingPost will still focus on the mail business to meet the changing and growing needs of its customers, while expanding its logistics and retail divisions. The group is also exploring acquisition opportunities to grow its businesses in the region.
Maintain HOLD.
To accelerate the group’s transformation and growth, SingPost has announced an organizational restructuring in which there will be a CEO in charge of Postal and Corporate Services while another CEO will focus on the international business. We are positive on this latest development as the segregation of duties should result in a sharper focus on both the mail business (faces own challenges in the industry) and the group’s international expansion efforts (essential to seek new growth drivers). Meanwhile, we continue to await news on the M&A front. An interim dividend of S$0.0125/share has been declared, in line with the group’s usual practice. Though the stock has an estimated dividend yield of 5.3%, there is limited upside potential to our DCFbased fair value estimate of S$1.16. Hence we maintain our HOLD rating.
DBSV
New CEO (International) for Regional Expansion
At a Glance
Net profit of S$43.8m (-0.7% yoy, +10.0% qoq) and quarterly DPS of 1.25 Scents were in line.
The appointment of new CEO for international business shows regional focus. Regional M&A and share buybacks cannot be ruled out.
Maintain HOLD with DDM-based S$1.17 TP (cost of equity 7.7%, growth rate 2%). We have assumed that dividends can grow by 2% p.a. in the long term.
Comment on results
Net profit of S$43.8m (-0.7% yoy, +10.0% qoq) was in line. Mail segment grew strongly by 7.5% yoy on the back of direct and international mail, benefiting from higher business activities. This offset the impact of higher terminal dues (about S$2-3m impact in FY11F) and absence of benefits from job credit scheme (S$5m adverse impact in FY11F), which expired in June 2010. 9M11 earnings constitute 77% of our FY11F forecast. 3Q is typically the strongest quarter due to higher mail traffic during the festive season.
New CEO (international) to drive regionalization. As Partner at McKinsey, Dr Wolfgang Baier, has been working with Singpost for the last five years and has extensive experience in Asian and Western markets. He will be driving the logistics and retail business, which can expand further regionally. With S$200m raised through bond-issue in March 2010, Singpost has enough muscle to acquire small companies. Given that Singpost has a mandate to buy 10% of its shares, share buy backs cannot be ruled out either in our view.
Recommendation
We do not see any risk to its dividend payout and recommend HOLD with DDM-based TP of S$1.17.
Kim Eng
Still waiting for fresh catalysts
Event
SingPost did as well as can be expected. In other words, we expected its mail business to reflect the current economic strength, and it did. But the logistics and retail businesses did not do so well profit‐wise due to lower margin components coming to the fore. If this is the best it can do despite the economy firing on all cyclinders, then it needs to move faster on its regionalisation and diversification plans. Perhaps the recent management restructuring will speed things along. Meanwhile, HOLD for the yield of 5+%.
Our View
Net profit of $43.8m was flat YoY. Underlying net profit, excluding one‐off items such as the $2.9m amortisation of deferred gain on IP rights and benefits from the Jobs Credit scheme which ended in June 2010, was lower at $40.9m, though still 5% higher from a year ago. The usual quarterly dividend of 1.25 cents was also declared.
Mail business did the best on stronger domestic, international and hybrid mail volume, with EBIT growth outpacing revenue growth. However, Logistics margins were affected by lower margin activities such as transhipment as opposed to higher margin customized logistics, while Retail profit fell on lower agency and retail activities.
Perhaps sensing investors’ impatience with its long‐promised regionalisation and diversification, SingPost recently appointed two CEOs. An ex‐McKinsey consultant will now accelerate its expansion in the region and diversify into non‐postal businesses. Incumbent CEO Ng Hin Lee will lead postal services and strategic acquisitions.
Action & Recommendation
We maintain our HOLD recommendation, mainly for the yield of 5%. Our target price has been raised to $1.29 as we roll over to FY12, still on 15x target PE.
Linking the thought from the video in my previous post, The Real Truth About Fiat Money and the Banking System, I came across an article from the recent edition of theBusiness Times Weekend explaining how inflation occurs in Singapore. In it the author, Senior Correspondent Teh Hooi Ling, explains that it was through watching the video titled "Zeitgeist-Addendum" on YouTube that eventually lead her to think how money supply in Singapore is created despite the government running a budget surplus year after year.
By definition M2 is the money supply in Singapore consisting of currency in active circulation, demand deposits of the private sector, fixed deposits, Singdollar negotiable certificates of deposits, savings and other deposits. At the end of 2000, M2 stood at S$170.9 billion. By end Nov 2010, M2 had exploded, more than doubling to S$401.4 billion. That's an increase of 8.9% p.a. for the past 10 years. In comparison, the data given in article stated that GDP had grown only about 6.4% p.a. during the same period.
So how does money supply grow in Singapore?
For that I'll leave you to the author herself to explain, extracting a part of the article so you can read it verbatim, highlighting what I felt were the important bits to take note of.
"I came across a document entitled Monetary Policy Operations in Singapore on the Monetary Authority of Singapore (MAS) website. The 32-page document highlights the key aspects of MAS's monetary policy policy operations, and the various factors and considerations underlying them.
The four primary responsibilities of MAS are:
Implementation of exchange rate policy;
Conduct of money market operations for banking system liquidity management;
Management/issuance of Singapore Government Securities (SGS) in support of government initiatives in bond market development; and
Provision of banking and financial services to the government
MAS's balance sheet looks like this:
On the assets side, a big chunk is in foreign assets, i.e. the official foreign reserves of Singapore. MAS also holds an inventory of SGS. It also has domestic credits, that is lending to banks in the course of conducting money market operations for liquidity management in the banking system.
On its liability side, the biggest component is government deposits. These are surpluses that the Singapore government run year after year. Also in this pool are contributions of members to the Central Provident Fund (CPF). Also on the liability side is currency in circulation. Under the provisions of the Currency Act, each Singdollar must be fully backed by foreign assets. As we all know, Singapore's monetary policy targets neither the interest rate nor monetary aggregate. It is centred on the trade-weighted exchange rate. As such, the monetary base is also endogenous, and its level is based more on banks' demand for reserve and settlement balances.
So this is my understanding of how the money supply of Singapore has been growing all these years. Say a foreign company wants to set up factory in Singapore because of the good infrastructure here and the convincing marketing campaign by the Economic Development Board.
The foreign firm brings in US$100 million. It needs to convert that amount to Singapore dollars to pay for the construction cost of its building, to pay utilities bills and salaries of its staff. So demand for the Singdollar increases. If the aggregate demand for the Singdollar far exceeds the supply in the market, the local unit will appreciate too fast and make Singapore exporters uncompetitive. So since MAS's mandate is to manage the Singdollar's trade-weighted exchange rate, it will intervene by selling Singdollar to meet the demand and buy the US dollar.
That's how money supply in Singapore grows over time. Among other reasons, demand for the currency also rises when Singapore exporters want to convert revenues in US dollars back to Singdollar, or when foreign investors are keen to invest, say, in real estate in the Lion City, given its safe haven status and its emergence as a global city.
I've charted how Singapore's GDP in current market prices and how Singapore's M2 money supply have grown since 1980. The ratio of M2 to GDP has been rising through the years. Prior to 1998, total M2 had always been lower than the aggregate GDP. But that changed in 1998, and by end of 2009, M2 is 140% that of Singapore's GDP. Is it a wonder then that real estate prices have been so bouyant in the last few years?"
Source: The Business Times Weekend
Title: How Money Grows in Singapore
Section: Show Me The Money
For the curious and those with lots of time to spare, I've linked the Zeitgeist-Addendum video as well as the follow up movie below.
Thanks to ffnow for bringing this great cartoon video to attention. I'm putting it here as a easier reference for myself as I feel it's a good simple way to explain the situation at the moment in the US and how it came to that. You can read more great posts at his blog, A Journey Towards Financial Freedom. He has a really nice uncluttered site with lots of good nuggets. Thanks again ffnow.
On another related news, this short review in the Business Times Weekend caught my attention as well. Do read it, it'll take less than 30 seconds to make you wonder about the truth about the video. In an even briefer briefing, the important point to note is that spending isn't slowing and the deficit is heading to a mind-blowing US$1.5 trillion! Just had to bold it for emphasis heh.
Cheers,
~K
US federal deficit heading for record US$1.5t
Far from slowing, the US government's deficit spending will surge to a record US$1.5 trillion this year, the Congressional Budget Office estimated, blaming the slow economic recovery and last month's tax-cut law. What is more daunting for President Barack Obama is that it estimates a nation-wide unemployment rate of 8.2% on Election Day in 2012.
The Real Truth About Fiat Money and the Banking System
Reading the Business Times this week, I came across an article within that had some pointers on creating an investment portfolio. While reading it though, it came across as quite generic and brief. As such, I pulled out the only section that I felt had some value - a section on knowing your fund managers investment style.
Why is this important?
The author, Mr. Edmund Teo, regional director, investment solutions, Asean, Hong Kong, Taiwan, and India at Russell Investment, says that "investors need to understand the style of different managers in their portfolio, and why they under or outperform in different market conditions. Employing manager and investment style diversification is critical for reduced volatility across market cycles." Perhaps, it may be good to give them a ring to find out their approach.
In the article, Mr. Teo listed 3 types of styles. I would like to add a fourth.
1) Growth managers
These managers focus on companies whose earnings are growing faster than average. Often, these fast-growing companies will reinvest their profits back into their business, so the dividend yield (if any) could be lower than market average. But note that if growth slows, their stock prices are more likely to fall harder than average.
2) Value managers
These managers look out for and invest in undervalued companies whose true value has yet to be recognized which therefore gives the share price potential to rise upon realization by the market. They believe in the saying, "buy low, sell high". Often these companies are solid, but not spectacular performers with good cash flows and at times with dividend yields above market average. The risk of investing in undervalued companies is that these companies may remain undervalued for extended periods of time with no indication when share prices may rise.
3) Market-oriented managers
These managers focus on themes within the market and the economy to decide on the companies to invest in that should outperform market averages. For example, if the manager feels that the Singapore dollar is about to rise, he or she might focus on increasing positions in companies that import goods while reducing holdings in companies heavily reliant on exports. The risk of this style is that themes can have short lives and catch investors unaware.
4) Momentum managers
These managers look out for hot stocks and for stocks that though have risen a fair amount still have fuel to rise even higher. They believe in the saying, "buy high, sell higher". They look for companies that have made new highs, and/or show strong upward trends based on technical analysis. Constant positive earning surprises is one other criteria these managers scan for. The obvious risk is that prices are constantly undergoing corrections when prices rise too drastically. As such, momentum investing could go against managers who mistime the entry of their purchase.
Hey, if any of you know of any more styles than is listed here, pls feel free to leave a comment below. And if you're willing, it'd be great to hear your investment style as well. =)
It's been awhile since I updated the ongoings with Ascott REIT with my last post being more than a month ago (see Ascott's Bounce Unsuccessful for the detailed discussion). In that analysis, I highlighted that "we might see hovering around its current support at $1.21 to $1.23 for the next few days." I also said that prices may "even breech $1.21 to its previous support at $1.20. As volume is still weak I doubt there'll be any testing of the $1.28 resistance any time soon." Here's how that played out.
It's been more than a month and prices have still yet to come close to its previous resistance. Also, although the $1.20 wasn't breeched or reached firmly, prices did briefly touch for two days in a row before leap-frogging upwards for another failed rally.
Prices however remain steadfast with support of the 50 day moving average despite what seems to be quite a bit of pressure from the last three days. Furthermore, a gravestone doji forming yesterday doesn't bode well. So turning to the indicators, it may be possible to get some clues as to what can we expect next.
%R and OBV has dipped downwards with %K looking to be doing likewise. Also, although volume bars for the MACD seemed to be turning up, the action yesterday brought it back down once more. RSI too, hasn't turned up decisively which doesn't contradict the negative sentiments displayed by the other indicators. Furthermore, volume is lacking so it looks like price will remain weak for awhile.
Looking at the other indicators, P&S shows that momentum is still down. ADX shows no strong trend developing with DI- and DI+ turning downwards. Confusing this is...However Bollinger bands and GMMA have entered a squeeze which could mean a sudden explosion of movement is arriving soon. But the million dollar question is...in which direction?
My take:
It is likely that prices are gonna be stuck in the range of $1.22 - $1.24 for awhile longer. However, as the pressure seems to be like a hammer on the 50dma, it wouldn't surprise me if support at the 50dma breaks and someone will sell out and release his/her shares at a lower price possibly causing prices to dip to their 100dma briefly. That's briefly because there are buyers waiting at $1.20. As such I remained undecided which direction the prices will take when the spurt occurs.
On one hand, if the spurt happens, as hinted by the Bollinger Bands and GMMA, we may see prices catapult upwards like it did previously as indicators are mostly in the oversold region or heading there so there's a good chance that it may spring up instead of down. But if volume is not there to back it up like before, it may just turn out to be another fake rally. On the other hand, pressure from above may see prices drop to the 200dma instead.
With a yield of 7.14%, gearing of 40% and a 5% discount to net asset value or a price to book of 95%, Ascott REIT may be better and more alluring as a dividend stock especially with backings from Temasek. However, in terms of growth, that remains a question.
Two weeks ago, in my last observation of ComfortDelgro (refer to Comfort Cab Speeding Up Too Fast?), I gave the opinion that "instead of...dropping back to its 14dma at $1.57, prices will continue hovering for the next couple of days while awaiting the 14dma to catch up with it" and prices would likely "bounce between $1.59 - $1.63" and that "I do not expect resistance to be taken out just yet." Here's the current chart to see how that turned out.
As we can see, prices bouncing around the mentioned range did occur and is still ongoing with resistance yet to be broken. On the downside, my estimate was short of 1 cent, with prices bouncing to $1.64 instead of $1.63. A mild underestimation I feel. However, upon experimenting with the moving averages, I realized that the 20 day moving average was more suitable as it seemed to provide more support compared to the 14dma. Here's the chart below:
That said, it leaves more room for prices to bounce while waiting for the 14dma and 20dma to catch up before breaking out. However, sometimes prices seem to just break without waiting for their moving averages. So to determine if a break out is nearing indicators would provide some clues.
As we can see, prices have moved into the overbought region in Stochastics and Williams%R, with RSI just bordering it for quite awhile now, showing good momentum in this stock. Furthermore OBV has yet to dip. MACD however, looks like it intends to intersect, which may led to some buying. However that said, the OBV and W%R has flattened out. Normally, when W%R flattens out, it is likely to head down.
A quick check with the chart below shows that the ADX indicates that the trend is very weak with neither buying and selling gaining any upper hand. Futhermore, the GMMA shows that there's some pressure ongoing in the short term moving averages as the lines have yet to separate proper. However, the lines do seem like they're beginning to spread indicating positive momentum starting up.
My take:
It is possible that resistance will be taken out. However, I expect prices to remain trapped by the $1.64 - $1.61 range a bit longer supported by first the 14dma and then the 20dma, perhaps till mid or end of next week before clearer signals present themselves if a break out will occur. But for now, I don't think that will happen yet.
Again as mentioned in the last post, with "a P/E of 15 and yield of 3.25%, anyone buying into this for dividend yield may find SBS Transit a more enticing buy at the moment with a lower P/E and a better yield." That said, it may be better to find yields outside the transport sector.
Not vested in either,
~K
P. S. I'm trying to decide is breakout one word or is it two? Does anyone know? =)
Thanks to stockcharts free charting software, I was able to come up with the two charts above.
As we can see, gold and silver are still in correction phase with no intention of lightening up. Williams %R, RSI, Stochastics and even the MACD and OBV (which I wasn't able to plot as the software only allows 3 indicators at a time) are all down and do not look to be turning up soon. Expect more selling in the coming days (maybe another week or two), possibly driving prices past its next support at US$1320 for gold, US$25 for silver. Gold could see price drop to its 200 day moving average if this occurs, with silver maybe heading to its next support at $23.50 thereabouts.
There is a lot of fear in the market as with any massive selldowns. However, the fundamentals has not changed. Printing money is still occurring, debts have not been resolved, inflation is kicking in, currency wars, yadayadayada. The list goes on. Anyone looking to be invested, would be wise to wait for the indicators to turn up proper. Catching a falling knife is no fun at all. In the event that prices do turn up, I expect silver to perform a lot better than gold as silver still has a long way to go to break its all-time high.
Despite the measures expected to curb inflation here in sunny, maybe too sunny, Singapore, it's apt to be mindful that some countries don't seem to be curbing inflation anytime soon, primarily U.S.. As precious metals, oil, and other commodities are traded in U.S. dollars, with rising prices due to rising inflation, perhaps investing in these may turn this "trend" into a friend.
The precious metals for example, have had a rather sharp fall last week and seem to be correcting still. However, to anyone thinking it's the end of the metals bull market, that's not true. Not yet at least. The major trend is still up. At a seminar I attended this evening, a professional trader who trades the silver markets as well, gave his opinion that prices were only correcting. Also, in the latest copy of the Edge, Jim Rogers comments that gold is long overdue for a correction. But we're still looking at a likely rise in prices in the coming decade. If we look at the charts for both gold and silver, I totally agree about the correction being long overdue. However, this correction may provide the ideal opportunity to finally get exposed to the precious metal.
Other ways would be to invest in either a precious metal ETF that tracks a basket of metals or to invest in precious metal-specific ETFs, like copper ETF, platinum ETF, or silver ETFs, or even the mining company ETFs, or the mining company shares directly. A final way to profit is to trade the metal futures itself.
Aside from precious metals, other commodities like rice, cotton, corn and any other agricultural produce will also rise if and when inflation kicks in. As such, one may profit by either looking into ETFs that track a basket of commodities and agricultural products, ETFs that are agricultural-specific, owning shares of agricultural companies or as mentioned above, trading agricultural futures.
Do note that like all investments, there are risks involved so I would ask you to seek more comprehensive advice from your brokers. Personally, I prefer investing in silver at UOB bank. However, on the downside, I do wish they sold physical silver instead of paper but I'll make do with what they have. It's just a nice feeling holding physical silver coins in your hand.
Slightly more than a week ago, I decided to try an experiment with myself. As I've never tried trading before, I wondered how I'd fare in the attempt so I decided to test out my ability.
This led me to scan a couple of stocks and "stock pick" so to speak, based on indicators. Each transaction is noted down in an excel sheet to allow as accurate a record as possible.
As to the names of the stocks I'm too bashful to say at this time. I've "added" another 2 counters over the last two days though. Suffice to say that in a week plus, the portfolio seems to be performing quite well. Well, better than I expected anyway. Nonetheless, It's just a personal test, with nothing to boast about. A personal challenge.
My aim in this private experiment is:
1) To see how well indicators work and which indicators work for each stock (and for me)
2) To experience what it's like to trade
3) To learn what is important to do for each trade
4) To build up some confidence in the trading area
Like most experiments, there are limitations. First of all, there is no actual money involved so my emotions are held in check without much trouble. I realize this. That said, even if I do do really well, I'm not going to plunge into it and bet the house. I also realize it's a gradual process of being able to handle each trade with a sum of cash that isn't going to cause me to lose sleep over. Secondly, I'm also not going to be able to learn to handle loses, which is more important than handling winnings, so I've read in many articles, blog posts and books. This is why if and when I do decide to trade on a month to month basis, I'll start in small amounts to further build up my confidence and competence.
I will be fine tuning this little experiment along the way the more I learn. So hopefully, in time, I'll be proficient at another way to generate income.
Wish me luck,
~K
P.S. By the way, any tips on how to start trading efficiently or trade in general would be most appreciated so feel free to leave as many comments as you please. Many thanks in advance. =)
Content makes poor men rich; discontent makes rich men poor.
~ Benjamin Franklin
There are people who have money and people who are rich.
~ Coco Chanel
This is rich. Sitting by the poolside, enjoying time to yourself, watching the children play with their blow-up ball splashing in the children's pool. No rush in getting to work, no pressure to meet a deadline. Nice clear sky in cool weather complementing the inviting waters. You just might jump in.
This is rich. Book in hand relaxing at the neighbourhood cafe at the start of the day. People watching. Scurrying citizens on their way to work, all dressed in their Sunday best which has become an every day best instead. Sunday is the time to wear slacks.
This is rich. Enjoying a game of tennis to work up a sweat before heading for a nice simple English breakfast at the nearby restaurant. Laughing, teasing, applauding with every ill-timed return and with every fluke. It's all in good fun.
This is rich. Having a chat with a total stranger while in the queue in the supermarket. A curiosity question or remark started it all. Your conversation ends when your turn arrives but trade name cards to keep in contact. A year later, you two turn out to be good friends.
This is rich. Taking a plane ride to visit the place of your choice. You spend a week, two, maybe more, experiencing new food, practices, even picking up a new language (vaguely). Exploring cultures and its history. Stepping into the unknown. Perhaps making a friend or two. Your world becomes much larger than you expected.
This is rich. Volunteering to help out with some charity work. Peeking into the lives of total strangers. You see happy faces and troubled ones as well. You feel, you think, you realize life is precious and yet unfair. Perhaps you'll be a better person. Perhaps you'll see a troubled face smile.
This is rich. Your children jump into bed waking you up with their giggles and glee. You chase them out of the room so you can continue with your dream of winning the lottery. You go back to bed and the dream changes to you with the winnings in your arms. Your children being the prize.
Car sickness is the feeling you get when the monthly payment is due.
~ Author unknown
Owning a car in Singapore is expensive as it is without adding to the cost unnecessarily. Though I do not have a car of my own and don't plan on getting one any time soon, here are three tips which I found that could help all car owners save on these unnecessary expenses.
Tip 1: Follow the Trucks
In traffic jams, stick with the trucks, which tend to roll along at the same pace. It takes more fuel to get a vehicle moving than it does to keep it moving.
Tip 2: Check Your Air Filter
Hold your air filter up to the sun. If no light passes through, it's time to change it to a new one. Clogged filters prevents the right amount of air from entering the engine. This results in more petrol being burnt to achieve the same amount of power to propel the vehicle a certain distance.
Tip 3: Get the Right Tyres and Mind the Rims
Big tyres with fancy sports rims may look cool, but create more rolling resistance and weigh more thereby increasing the amount of petrol used.
In my previous post on OSIM, I pointed out that "In the near term, stock price should continue to trend higher. But with decreasing volume, there may be a correction at hand." Refer to Will OSIM Dual Listing Plans Cause Price to Continue Rising?. Sure enough, prices rose for another three days before undergoing the anticipated correction as we can see from the chart below where I indicated when I made that statement with the blue arrow.
Currently price looks to be rolling over and forming either one of two formations - a double top or an ascending triangle.
To note, volume is still lower than compared to the previous time it reached resistance. This in no way helps bouy prices up to prevent the double top breaking down and sending prices lower from becoming a reality. Furthermore, from the MACD and Stochastics, prices may head lower in the short term. We will only know if the ill-result of the double top formation materializes should prices break below the neckline at $1.47. If so, prices are expected to drop further. However, the 50 day moving average which stands at ~$1.53 should provide some support which I expect prices to dip to judging from price behaviour.
That said, there seems to be some support at $1.62 as well as the 14dma (albeit looking weak). If this holds, we could see the formation of an ascending triangle instead. However, price movement today managed to push through this support to $1.60 before closing three cents higher to $1.63. This gives me mixed feelings at present. The next couple of days should give a clearer picture. If the ascending triangle pattern does hold, then a breakout would probably see prices head higher. This could occur as the market sentiment still remains bullish.
As expected, BreadTalk has broke through its resistance at $0.65 and out of its ascending triangle formation albeit sooner than anticipated (refer to BreadTalk Challenging Resistance and the chart below).
This breakout has driven prices up. Prices are currently challenging the next resistance at $0.70 (refer to the chart below). When prices reached $0.70 previously, the 5-for-1 bonus shares issue caused prices to drop to $0.49 - an over-reaction by the market. Anyone who was braved enough then would have made a handsome profit by now. Also, anyone who entered at the 14 day moving average like I pointed out as a good entry point, would be sitting on some delightful paper profits now as well. Nonetheless, is there still room for the stock price to move up?
Well once again, we can see another ascending triangle formation. Any breakout would result most probably in another spurt. As mentioned in my last post on BreadTalk, volume is still very low. Previously I debated this low volume as either a weak push up or perhaps a lack of sellers as they hold the belief that the stock is more valuable than current prices. With the price breaking out of its formation and resistance, and with prices still continuing to slowly creep upwards, this is leading me to believe the latter. With this reasoning, I believe it is still possible for prices to climb further. From the chart below, we can see that prices have hovered at resistance for the last four days. However, will it continue to move higher just yet?
Turning to the indicators for a clue, RSI shows BreadTalk stocks are pretty overbought at the moment while MFI and OBV suggests steady accumulation has been ongoing. Stochastics and MACD however, hint that some selling may be starting despite ADX indicating that the trend is currently relatively strong. Furthermore, ADX DI+ has dipped below ADX 14d supporting the view that selling may be occurring behind the scenes. Immediate support lies at $0.675. Next support lies at $0.66.
My take: Prices looks likely to hover between immediate support and resistance for the next couple of days since profit taking may be taking place while waiting for the 14dma to catch up. The 14dma also provides some support should prices dip below $0.675. That said, I expect prices to break through the $0.70 and head higher thereafter. When this will happen is anyone's guess. My guess is that it will happen by the end of the month. Only time will tell if I'm right.
To continue from the last post, here's an earlier interview (dated Sept '10) before the broadcast at King World News that I posted earlier. Though this is 4 months delayed news, you can still learn quite a bit from Robins Griffith.
In it, Robin Griffiths touches on several issues.
On the Best Sept and What's Keeping the U.S. Equity Market Afloat
00:30 : One of the things keeping markets afloat "is something called Permanent Open Market Operation ... (POMO) ... what happens is the Fed buys treasuries off the banks pushing the money into the banks. The bank pushes the money into the market. They do about US$6billion a day when they do this."
00:50 : "That amount of money turns the algorithms up. Then all the algorithmic trading hits the market. Real life human investment managers are not doing this buying. They know that after the rally that we've had, we're back to where we were first in 1998."
01:07 : "Equities are for losers and if you're priced in dollars, you're down 30% over that period."
01:12 : "So real life equity market [investors] still don't want to buy the S&P. Is still being affectively goosed up by what we used to call the Plunge Protection Team. Well they can keep doing this for a bit longer but I'd only be completely wrong if they do it so much that they take out the April high. According to me, that April high will not break and we are going to inevitably go down."
The U.S. Economy, the Recession and What's In Store
01:40 : "Last week we heard the president say in clear words that although we had ... an economic institution saying the recession was over 9 months ago he accepted that for many Americans the recession is still an ongoing reality. And secondly all of those Keynesian stimulus didn't work. We're changing the entire game plan and what's going to happen is the Fed is going to be printing money and pumping it into the economy to try and let it down slowly.
On Bonds and Bubbles
02:12 : On 30yr bonds, "the yield is going to go down. Now if you buy the 30yr treasury bonds as the yield goes down, you make money."
02:23 : "There's an old saying that goes don't fight the Fed. Well now the Fed is going to guarantee that your bonds go up."
02:42: "They've backed up. They had to back up. If you missed when the yield was approaching 4%, you aren't going to double your money as it approaches 2%. But even now you should be buying bonds and not equities. And it's not a bubble."
02:57 : "It will be a bubble when your viewers all write in and say we've all got bonds what do we do now?"
03:03 : "And the bubbles never burst when wise heads in media tell you its a bubble that's going to burst. It burst when they've given up on that and tell you ah this time it's different. So you should in fact be in bonds and not in Western equities."
On the Bovespa and Emerging Markets
03:29 : "These are the markets you should have been in. Where the American market has gone virtually nowhere for the last decade, the [Brazilian] Bovespa has been up 1000%."
03:37 : "Including China and India ... these are where you should be putting your money."
03:50 : "This is the real deal where people have been working hard to take themselves out of poverty, succeeding, and we can back them and we can invest in them. These are equity markets that are real bull markets and that are making all time highs where the ... Western markets aren't going to do that."
04:13: "The Bovespa "is rising at a rate of a 1000% per decade."
Check out the video below for the complete interview, most of which I've already transcribed here. =)
That said, this is the current chart of the S&P500:
I've marked the resistance back in April'10 and we can clearly see that stock prices have gone way beyond that. So was Mr. Griffiths "completely wrong" as he put it in his interview?
That remains to be seen.
I'm of the opinion that although he may have been wrong in his prediction about the stock market not breaking its April high, if his explanation on why the equity market is propped up is correct and with all the printing of currency, then this still is bad news for the future with the debasement of purchasing power. And to me, the way to protect that it is in physical assets. However, I'm not suggesting you to go all in into physical assets -- no no -- as the future is so unpredictable and we can never be certain who is right and who isn't until the event is over. However, it is recommended that one has about 5 - 10% of his/her portfolio in precious metals and to rebalance every yearly or two.
Having said that, this video below shows that some of the most well-renowned investors are still piling into gold - Jim Rogers being the most famous. It also explains why gold is still a viable investment asset and why it is still demanded in today's society. As Gold Core Limited is a company, they may have a bias to promote the metal. As such, it is best viewed with an open mind and like attempting a jigsaw puzzle, you have to piece the different parts together to make your own conclusion.
