25% in 5 days - Lafite Rothschild 2008 Stuns Once More

A sweetheart is a bottle of wine and a wife is a wine bottle. ~ Charles Baudelaire

Seems that QE2 is really driving up the price of everything. I'm not complaining. In my previous wine news, see Fantastic Wine News - Lafite Rothschild 2008, I said I was nervous yet excited about the new high that Lafite Rothschild 2008 made due to its announcement of the placement of the Chinese symbol for the figure eight on its bottles. But to add another 25% gain in five days...wow! That's unbelievable.

I'm crossing my fingers in hope that I get the receipt of acknowledgement that the warehouse received my wine by early next year so that I'll know I'm not dreaming, and of course, more importantly, that it's all not a scam.

Wish me luck!
~K

Fine-wine prices hit new high in October; Lafite 2008 jumps 25% in five days
by Kelvin Tan

Prices of the world's finest wines surged to a new high last month, according to the latest monthly market report of London-based online wine exchange Liv-ex.com. The Liv-ex 100 Fine Wine Index, which represents the price movement of 100 the most sought-after wines, rose 2.5% in October, spurring year-to-date gains to 32%. Over a one-year period, the index was up 33.5% (as at end-October).

Wines of Bordeaux first growth estate Château Lafite Rothschild from the 2008 and 2009 vintages saw the biggest gains last month. Buying sentiment in these clarets was lifted on the back of strong buying at the Oct 29 Lafite ex-cellars auction in Hong Kong as well as the recent announcement made by the first growth estate that a Chinese numeric eight figure would be featured on its 2008 bottles.

"The Chinese symbol for the figure eight, said to bring eternal blessing and good luck, caused a large spike in demand for the wine," according to the report, which highlighted that the value of Lafite 2008 jumped 25% in five days towards end-October, after the announcement was made.

Indeed a case of Lafite 2008 (12x750ml), which was trading at £8,800 (S$18,260) prior to the announcement, skyrocketed to £11,000 in five days by end-October. For the whole month, the price of this highly sought-after vintage increased 28.3%. At current levels, Lafite 2008 is trading at a "premium" to the 2005 and 2009 vintages, observes Liv-ex.

Source:
The Edge Singapore
Week of Nov 22 - Nov 28, 2010

STI - Heading for the Next Leg?

Success is how high you bounce when you hit bottom. ~ General George S. Patterson

Seems that most stocks on the SGX are bouncing off their 50day moving average. The STI is displaying similar traits. Although overshooting a little, it looks like the bounce back up is coming soon. Furthermore, Stochastics already seemed to be turning up as well from oversold territory and likely to intersect. 

A comparison to other countries show that most of them are displaying similar bouncing characteristics. For example:

US

S&P 500

Dow Jones

Nasdaq

Hong Kong

Hang Seng

China

Shanghai Stock Exchange

My take: With the upturn of all these countries, it does look like stocks here are likely to turn upwards soon, possibly by next week, and thereafter head higher. So if you're looking to buy stocks, you had better do so soon when the next entry price presents itself before the correction's over.

Good luck!

~K

STI gains 0.7% to 3,159.23 at closing
Thursday, 25 November 2010

© 2010 - The Edge Singapore

I Thinketh! - The Student and the Barometer

In physics, you don't have to go around making trouble for yourself - nature does it for you. ~ Frank Wilczek

Here's a story I read that I find extremely interesting for the relevance to our current education system. A laugh out loud punchline with a food for thought moral.

Enjoy peeps!

~K

The following concerns a question in a physics degree exam at the University of Copenhagen: 

"Describe how to determine the height of a skyscraper with a barometer." 

One student replied: 

"You tie a long piece of string to the neck of the barometer, then lower the barometer from the roof of the skyscraper to the ground. The length of the string plus the length of the barometer will equal the height of the building." 

This highly original answer so incensed the examiner that the student was failed. The student appealed on the grounds that his answer was indisputably correct, and the university appointed an independent arbiter to decide the case. The arbiter judged that the answer was indeed correct, but did not display any noticeable knowledge of physics. To resolve the problem it was decided to call the student in and allow him six minutes in which to provide a verbal answer which showed at least a minimal familiarity with the basic principles of physics. 

For five minutes the student sat in silence, forehead creased in thought. The arbiter reminded him that time was running out, to which the student replied that he had several extremely relevant answers, but couldn't make up his mind which to use. 

On being advised to hurry up the student replied as follows: 

"Firstly, you could take the barometer up to the roof of the skyscraper, drop it over the edge, and measure the time it takes to reach the ground. The height of the building can then be worked out from the formula H = 0.5g x t squared. But bad luck on the barometer." 

"Or if the sun is shining you could measure the height of the barometer, then set it on end and measure the length of its shadow. Then you measure the length of the skyscraper's shadow, and thereafter it is a simple matter of proportional arithmetic to work out the height of the skyscraper." 

"But if you wanted to be highly scientific about it, you could tie a short piece of string to the barometer and swing it like a pendulum, first at ground level and then on the roof of the skyscraper. The height is worked out by the difference in the gravitational restoring force T = 2 pi sqroot (l / g)." 

"Or if the skyscraper has an outside emergency staircase, it would be easier to walk up it and mark off the height of the skyscraper in barometer lengths, then add them up." 

"If you merely wanted to be boring and orthodox about it, of course, you could use the barometer to measure the air pressure on the roof of the skyscraper and on the ground, and convert the difference in millibars into feet to give the height of the building." 

"But since we are constantly being exhorted to exercise independence of mind and apply scientific methods, undoubtedly the best way would be to knock on the janitor's door and say to him 'If you would like a nice new barometer, I will give you this one if you tell me the height of this skyscraper'." 

It is told, that the student was Niels Bohr, who later received the Nobel prize for Physics.

Ways to Buy Silver

Silver is my preferred metal of investment. I'll elaborate more on the reasons in future posts. This post is just an introduction into the ways one can own silver as a way to diversify their investments.

There are quite a number of ways to start buying silver if one is interested.

Here's a quick list of them.

1) iShares Silver ETF (SLV)

Pros:
Very liquid; trades like a stock
Buy & Sell online
No storage cost & maintenance fee

Cons:
May not be backed by physical silver
Dependent on US timezone to buy or sell as the SLV is traded on the NYSE
Traded in US$

2) UOB Silver Savings Account

Pros:
Liquid
Bought & sold in S$
Singapore timing

Cons:
Must head to the bank to buy or sell
Bank does not store physical silver. It's all paper silver.

3) Physical Silver

Pros:
Security that you own the "real thing".

Cons:
Storage cost unless you store it at home
Illiquid
Risk of scams depending where and who you bought it from especially if 1) you can't sell it back or 2) are not holding and storing the physical metal yourself

4) Mining Companies

Pros:

Magnified price increase compared to the above 3 when price of silver increases.

Liquid

Cons:

Magnified price drops when price of silver drops.
Must research what percentage of revenue does silver make up

5) Silver Futures

Pros:
Liquid
Leverage - chance of making more money than the previously mentioned methods

Cons:
Leverage - Risk of losing more money than you have

For Singapore citizens, my suggestion would be to start a UOB Silver Savings Account. Though a little inconvenient to get to the banks, before 4pm (weekdays) or 12pm (weekends), and waiting in the queue to buy silver, this method eliminates the currency spread and brokerage fees per transaction. Especially useful if you're planning to do a monthly dollar-cost averaging investment for the long term and if you are investing in small amounts. Each transaction is subject to the minimum of 10oz, which at the current price is a total of S$361. (The daily price of gold and silver at UOB can be found here. This link can also be found at the bottom right of this blog under the Precious Metal section)

I also like the idea of owning physical silver. It's nice to admire a collection. =) But unfortunately, owning physical objects here seem to result in unbelievable premium prices above spot price. Also, there are a lack of sellers of physical silver. The only one I know of is Silver Bullion, which gets its silver from the Perth Mint, which also results in seriously huge price differences. GST also doesn't help, I'm sure you all would agree.

However, for non-Singapore citizens, my choice would be either the ETF or owning the physical. Your banks too, may have their own silver programs/products that you could invest in. But of course, I wouldn't know what other options are available in your country. Therefore, doing more research would be needed as the information here is probably incomplete.

Till next post,
~K