Tuesday, April 28, 2009

Google Maps - Swine Flu Update


Interesting application of google map to track swine flu outbreak.

Wednesday, April 22, 2009

MAD TV .. Crazy stuff and damn Hilarious!!

Saturday, April 11, 2009

Portfolio Update March 2009

Cumulative Return since Inception: -12.80%

Dividend/Coupon YTD : $8,000

P/S: I have included a new row to track my passive income as I have been in Cash for most of last year. I hope to increase the passive income this year significantly as I allocate out of cash into the portfolio. Hopefully, it will get back to the 6 figure passive income I expected.

I have also changed my Return to track from inception. Let's see whether the cumulative return after 3 years can be at least 200% ? :P This is clearer at a glance how much the value of the portfolio have grown rather than using compounded annualized return. Compounded Annualized Return is good for tracking if you have beaten the indexes or the long run average and should be more applicable to the equity portion of the portfolio instead of mine which consists of different asset classes esp since I do a bond ladder for a steady income stream that scales with inflation.

How to invest $30k?

For the $30k, I would buy the following :-
$5k - HK Tracker Fund , 2800.HK
$5K - iShares STI ETF
$2.5k - SingPost
$2.5k - SPH
$2.5K - Boustead
$2.5k - Rotary Engineering
$2.5k - ComfortDelgro
$2.5k - Wheelock
$2.5k - NOL
$2.5k - SAT Svc

Average Dividend Yield should be around 5%.

Then, whenever you get the dividends, you decide where you want to average down/up or diversify into other ETFs. 'coz your amount is really too small to buy individual stocks, Better buy ETF.

But I design it that you get dividends from those companies to fund your purchase of ETFs.

But the capital gain will come 3-5yrs later.. with your $30k easily doubling to $60k. I am very confident that none of the stocks I mentioned above will go BANKRUPT or will stay at the price you see now in 3 years time!

Yes, it is very Asean-centric and only in the 2 Financial hubs of asia (Ex Japan). But you are doing it for capital appreciation and in a very very conservative way. When you have enough, then you think about other regions. You are in the market to make money , not to follow some theory that you must die die get exposure to all countries. If indeed you want that, then go and speak to your qualified financial professional.

This is solely my way of DIY a $30k portfolio. For your own , please give it some thought and if you are unsure, do speak to a qualified financial professional.

Wednesday, April 8, 2009


Soros Says Fed in a Bind Beware Stagflation Bursting of Bond Bubble: Tech Ticker, Yahoo! Finance
After the financial market collapsed last fall, the Fed responded with a massive injection of liquidity and expansion of the monetary base.

Eventually, Ben Bernanke & Co. will face the challenge of having to remove that liquidity from the system. "That's a big and difficult task and probably the authorities will not be able to do it well," says legendary financier George Soros, chairman of Soros Fund Management. "That's the fear that drives people into gold."

Soros wouldn't say whether he's actively trading gold but certainly implied it's a good bet; more explicitly, he agreed with the view there's a "bubble" in Treasuries that's likely to burst sooner rather than later.

"The moment this fear of deflation turns into a fear of inflation, you'll find interest rates rise in the long end which is going to choke off the recovery," he says. "If we are successful [in reviving the economy] we are heading from the prospect of deflation to stagflation."

Tuesday, April 7, 2009

The Perfect Business - Dow Theory Letters

The Perfect Business
AH PERFECTION: Strange, but the most popular, the most widely-requested, and the most widely quoted piece I've ever written was not about the stock market -- it was about business, and specifically about what I call the theoretical "ideal business." I first published this piece in the early-1970s. I repeated it in Letter 881 and then again in Letter 982. I've added a few thoughts in each successive edition. But seldom does a month go by when I don't get requests from subscribers or from some publication or corporation to republish "the ideal business." So here it is again -- with a few added comments.

I once asked a friend, a prominent New York corporate lawyer, "Dave, in all your years of experience, what was the single best business you've ever come across?" Without hesitation, Dave answered, "I have a client whose sole business is manufacturing a chemical that is critical in making synthetic rubber. This chemical is used in very small quantities in rubber manufacturing, but it is absolutely essential and can be used in only super-refined form.

"My client is the only one who manufactures this chemical. He therefore owns a virtual monopoly since this chemical is extremely difficult to manufacture and not enough of it is used to warrant another company competing with him. Furthermore, since the rubber companies need only small quantities of this chemical, they don't particularly care what they pay for it -- as long as it meets their very demanding specifications. My client is a millionaire many times over, and his business is the best I've ever come across." I was fascinated by the lawyer's story, and I never forgot it.

When I was a young man and just out of college my father gave me a few words of advice. Dad had loads of experience; he had been in the paper manufacturing business; he had been assistant to Mr. Sam Bloomingdale (of Bloomingdale's Department store); he had been in construction (he was a civil engineer); and he was also an expert in real estate management.

Here's what my dad told me: "Richard, stay out of the retail business. The hours are too long, and you're dealing with every darn variable under the sun. Stay out of real estate; when hard times arrive real estate comes to a dead stop and then it collapses. Furthermore, real estate is illiquid. When the collapse comes, you can't unload. Get into manufacturing; make something people can use. And make something that you can sell to the world. But Richard, my boy, if you're really serious about making money, get into the money business. It's clean, you can use your brains, you can get rid of your inventory and your mistakes in 30 seconds, and your product, money, never goes out of fashion."

So much for my father's wisdom (which was obviously tainted by the Great Depression). But Dad was a very wise man. For my own part, I've been in a number of businesses -- from textile designing to advertising to book publishing to owning a night club to the investment advisory business.

It's said that every business needs (1) a dreamer, (2) a businessman, and (3) a S.O.B. Well, I don't know about number 3, but most successful businesses do have a number 3 or all too often they seem to have a combined number 2 and number 3.

Bill Gates is known as "America's richest man." Bully for Billy. But do you know what Gates' biggest coup was? When Gates was dealing with IBM, Big Blue needed an operating system for their computer. Gates didn't have one, but he knew where to find one. A little outfit in Seattle had one. Gates bought the system for a mere $50,000 and presented it to IBM. That was the beginning of Microsoft's rise to power. Lesson: It's not enough to have the product, you have to know and understand your market. Gates didn't have the product, but he knew the market -- and he knew where to acquire the product.

Apple had by far the best product in the Mac. But Apple made a monumental mistake. They refused to license ALL PC manufacturers to use the Mac operating system. If they had, Apple today could be Microsoft, and Gates would still be trying to come out with something useful (the fact is Microsoft has been a follower and a great marketer, not an innovator). "Find a need and fill it," runs the old adage. Maybe today they should change that to, "Dream up a need and fill it." That's what has happened in the world of computers. And it will happen again and again.

All right, let's return to that wonderful world of perfection. I spent a lot of time and thought in working up the criteria for what I've termed the IDEAL BUSINESS. Now obviously, the ideal business doesn't exist and probably never will. But if you're about to start a business or join someone else's business or if you want to buy a business, the following list may help you. The more of these criteria that you can apply to your new business or new job, the better off you'll be.

(1) The ideal business sells the world, rather than a single neighborhood or even a single city or state. In other words, it has an unlimited global market (and today this is more important than ever, since world markets have now opened up to an extent unparalleled in my lifetime). By the way, how many times have you seen a retail store that has been doing well for years -- then another bigger and better retail store moves nearby, and it's kaput for the first store.

(2) The ideal business offers a product which enjoys an "inelastic" demand. Inelastic refers to a product that people need or desire -- almost regardless of price.

(3) The ideal business sells a product which cannot be easily substituted or copied. This means that the product is an original or at least it's something that can be copyrighted or patented.

(4) The ideal business has minimal labor requirements (the fewer personnel, the better). Today's example of this is the much-talked about "virtual corporation." The virtual corporation may consist of an office with three executives, where literally all manufacturing and services are farmed out to other companies.

(5) The ideal business enjoys low overhead. It does not need an expensive location; it does not need large amounts of electricity, advertising, legal advice, high-priced employees, large inventory, etc.

(6) The ideal business does not require big cash outlays or major investments in equipment. In other words, it does not tie up your capital (incidentally, one of the major reasons for new-business failure is under-capitalization).

(7) The ideal business enjoys cash billings. In other words, it does not tie up your capital with lengthy or complex credit terms.

(8) The ideal business is relatively free of all kinds of government and industry regulations and strictures (and if you're now in your own business, you most definitely know what I mean with this one).

(9) The ideal business is portable or easily moveable. This means that you can take your business (and yourself) anywhere you want -- Nevada, Florida, Texas, Washington, S. Dakota (none have state income taxes) or hey, maybe even Monte Carlo or Switzerland or the south of France.

(10) Here's a crucial one that's often overlooked; the ideal business satisfies your intellectual (and often emotional) needs. There's nothing like being fascinated with what you're doing. When that happens, you're not working, you're having fun.

(11) The ideal business leaves you with free time. In other words, it doesn't require your labor and attention 12, 16 or 18 hours a day (my lawyer wife, who leaves the house at 6:30 AM and comes home at 6:30 PM and often later, has been well aware of this one).

(12) Super-important: the ideal business is one in which your income is not limited by your personal output (lawyers and doctors have this problem). No, in the ideal business you can sell 10,000 customers as easily as you sell one (publishing is an example).

That's it. If you use this list it may help you cut through a lot of nonsense and hypocrisy and wishes and dreams regarding what you are looking for in life and in your work. None of us own or work at the ideal business. But it's helpful knowing what we're looking for and dealing with. As a buddy of mine once put it, "I can't lay an egg and I can't cook, but I know what a great omelet looks like and tastes like."

Rich Man, Poor Man

Rich Man, Poor Man
RULE 3: RICH MAN, POOR MAN: In the investment world the wealthy investor has one major advantage over the little guy, the stock market amateur and the neophyte trader. The advantage that the wealthy investor enjoys is that HE DOESN'T NEED THE MARKETS. I can't begin to tell you what a difference that makes, both in one's mental attitude and in the way one actually handles one's money.

The wealthy investor doesn't need the markets, because he already has all the income he needs. He has money coming in via bonds, T-bills, money market funds, stocks and real estate. In other words, the wealthy investor never feels pressured to "make money" in the market.

The wealthy investor tends to be an expert on values. When bonds are cheap and bond yields are irresistibly high, he buys bonds. When stocks are on the bargain table and stock yields are attractive, he buys stocks. When real estate is a great value, he buys real estate. When great art or fine jewelry or gold is on the "give away" table, he buys art or diamonds or gold. In other words, the wealthy investor puts his money where the great values are.

And if no outstanding values are available, the wealthy investors waits. He can afford to wait. He has money coming in daily, weekly, monthly. The wealthy investor knows what he is looking for, and he doesn't mind waiting months or even years for his next investment (they call that patience).

But what about the little guy? This fellow always feels pressured to "make money." And in return he's always pressuring the market to "do something" for him. But sadly, the market isn't interested. When the little guy isn't buying stocks offering 1% or 2% yields, he's off to Las Vegas or Atlantic City trying to beat the house at roulette. Or he's spending 20 bucks a week on lottery tickets, or he's "investing" in some crackpot scheme that his neighbor told him about (in strictest confidence, of course).

Monday, April 6, 2009

Interesting Taiwanese Financial Programme

I watch a Taiwanese show on Cable last night and following is a recap :-
1) A head of institutional fund said stock market typically follow a pattern yearly :-
i) Feb-March - Consolidation
ii) Apr - May - Rally
iii) June - Increased Volume but sideway market
iv) July - Aug - Correction
v) Sept - Rally All the way till Jan.

2) They attribute the current Taiwan Market rally to the increase in MFG demand from China (mainly arising from demand for the China山寨products). However, some manufacturers have noted that orders for April till June have decreased significantly.

3) All are optimistic that the US Economy will survive this crisis but global growth will be driven by Asia from now on.

4) The Taiwan yield curve has turn positive and a contrarian indicator of investor risk appetite is the increase of insurance endowment that matures in a few years and pays pathetic interest spiked up sharply during Nov - Jan. The Contrarian means that most who want to leave the market have already left.. so from now on, it will be serious buyers ..

So, my conclusion is the same before I watch the programme, Buy When Dip or Buy when I spot undervalued stocks(according to my own estimation). Focus more on Bluechips for me.. and set aside a little for small caps.

Friday, April 3, 2009

Of Value and Cycles

I got this quote below from Howard Marks of OakTree Capital :-
"In my opinion, there are two key concepts that investors must master: Value and Cycles. For each asset you're considering, you must have a strongly held view of its intrinsic value. When its price is below that value, it's generally a buy. When it's price is higher, it's a sell. In a nutshell, that's value investing.

But values aren't fixed; they move in repsonse to changes in the economy. Thus, cyclical considerations influence an asset's current value. Value depends on earnings, for example, and earnings are shaped by the ecnomic cycle and the price being charged for liquidity"