Author: Dr Wealth

5 Reasons to create inflation

Peter Schiff, author of “Crash Proof“, suggested 5 reasons why government would prefer to create inflation: Inflation makes the national debt more manageable because it can be repaid with cheaper dollars. In a democracy full of personally indebted voters, the government will pursue monetary policies hospitable to debtors even as it accommodates the special interests that lend to them. Inflation finances social programs that voters demand but avoids the politically unpopular alternative of higher taxes, allowing Uncle Sam to play Santa Claus. Inflationary spending is confused with economic growth, which is confused with economic health. (Of course, GDP numbers...

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Value Investing by Sebastian Chong

Sebastian Chong has 30 years of personal investing experience and he started his own financial training services, Financial Info Analysis Pte Ltd, and shareowl.com. He is a value investor and in this book written in 2003, “Value Investing”, he shared his insights and experience primarily in the Singapore market. One advantage of individual investor over the institutions The big advantage is retail investors can hold cash when the market is crashing as he rightfully pointed out, “The Straits Times Index peaked at the beginning of 2000. With hindsight, December 1999 may have been an excellent month to sell off...

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13 Attributes of a Great Stock

Peter Lynch, the most celebrated and successful fund manager, identified 13 attributes of a great stock to buy in his book, “One Up on Wall Street”. 1) Dull names The company should have a dull name. This is one of the weirdest criteria that Peter has, why does a name got to do with the stock? His point is that a boring name will gather little interest from analysts. It is not attractive or professional to recommend a stock with a stupid name to a rich clients. Hence, it is likely to be lower priced. Peter pays attention to stocks that...

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Is US heavily in debt?

The current perception is that US is taking on too much debt, an amount that it may not be able to repay. Kenneth Fisher suggested we should not blindly follow the general perception, and we should investigate to find the truth. Just like personal finance, we determine our debt level by comparing between liabilities and assets that we have. The standard debt to asset ratio is 35%. Likewise for businesses, we look at the debt to asset ratio and benchmark to the industry to determine any over-borrowing. As such, can we extend this evaluation to countries? This is what...

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CLSA Feng Shui Index for 2011

Click on the picture below to see the enlarged 2011 Feng Shui Index chart: The full copy of the Feng Shui Index for 2011 can be found in this link: https://www.clsa.com/assets/files/reports/CLSA-FSI-2011.pdf How did it fare in its prediction for 2010? Below is the 2010 Index: And here is the Hang Seng Index: And here is the small super-imposed version: Disclaimer: This is just for information and not to encourage you to rely on CLSA’s forecast to punt in the stock market. You should do your own research and analysis when investing. Personally, I do not use this as for...

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Trading Report Card – Jan 11

Markets were due for correction after a good run in end-2010. The Egypt’s uprising is just a convenient excuse for people to associate with the market’s correction. It could have been Australian flood or whatsoever. Humans just like to find reasons and make assumptions. I have been long the market and hence, ended up in losses for the month of Jan. No excuses from me. Actually, for the past few days, I have done something very different from the past. I saw opportunities in buying some stocks at the retracement, with the intention to hold them out longer so...

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2nd MasterYourFinance.com Gathering – 24 Jan 11

Dennis shared about the recent property measures implemented by the government as well as some of the impacts to the market during the 2nd MasterYourFinance.com gathering: Seller stamp duty has increased from 2% to 16% for first year, 12% within 2 years, 8% within 3 years, and 4% within 4 years. Compared to Hong Kong at 15%. This is worse than capital gain tax because for the latter, you pay tax only when you made money from the sale. Whereas, seller’s stamp duty forces you to pay as long as you made a sale, regardless is it is a...

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Buy Gold or Silver?

This is a chart taken from http://goldinfo.net/silver600.html. This shows a 600 years of historical price of silver (see Blue). The Orange chart shows the ratio between gold and silver. A rising orange chart means that the cost of gold is several times the cost of silver. [Click to enlarge] The apparent observation or should I say concern, is the decreasing value of silver over so many years. It was only in the recent years that the price rebounded fiercely from the low of 1992 ($4.73 per ounce), which the low I believe, was an aftermath caused by the Hunt...

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My Conspiracy Theory for Quantitative Easing 2

We have heard about the Quantitative Easing 2 and it is going to happen soon. What are the reasons that the US government would want to do that? I rarely share my opinions on economic affairs and this is one of the rare moments. To put things into the right perspective, I am not trying to argue that my point of view is correct. In fact, I am okay if I am wrong. And to make things interesting, I called it my own conspiracy theory. Enjoy: #1 – Boost liquidity to spur economic recovery This is what most people...

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You can buy these SGX-listed stocks with CPF funds

This list is updated as of 23 Jan 11. Latest update you can check on SGX website. Most importantly, check with your broker when you intend to use CPF to buy shares. A-SONIC AEROSPACE LIMITED SERVICES AA GROUP HOLDINGS LTD. MFG ABF SPORE BOND INDEX FUND ETF FINANCE ABR HOLDINGS LIMITED HOTELS/RST ABTERRA LTD MFG ACHIEVA LIMITED COMMERCE ACTION ASIA LIMITED MFG ADAMPAK LIMITED MFG ADDVALUE TECHNOLOGIES LTD SERVICES ADROIT INNOVATIONS LIMITED SERVICES ADV INTEGRATED MFG CORP LTD MFG ADVANCE SCT LIMITED SERVICES ADVANCED HOLDINGS LTD. SERVICES ADVANCED SYSTEMS AUTOMATION MFG ADVENTUS HOLDINGS LIMITED COMMERCE AEI CORPORATION LTD MFG...

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Should I buy Silver Now?

Commodities have a good run in recent months and it is indeed time for a pull back. It is nice to see the silver price dropping about 10% from high of US$30+. For those who intend to buy silver or add position, is it a good time to enter? It is a question I asked myself. I first bought silver around US$21 and now waiting for a point to add position. Looking at the iShares Silver Trust (SLV), the price has went below the 50-day moving average, but still very far away from the 200-day moving average. In my...

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Humans are not rational

Economic theory bases on a fundamental principle that humans make rational choices. A rational choice to my understanding, is to make a logical decision that would make you better off than your current situation. There is a famous game – “Ultimatum Game”, which displays the irrationality of humans. There are many versions but I shall use a simplified example here to let you know the essence of the game: Imagine you and I are playing the game. A banker will pass you $100 and share it with me. You can offer any amount to me, for example, $1 for...

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Why is it so hard to sell losing stocks?

Do you sell stocks that show profits and hold stocks that are losses? Have you held onto losing stocks for a long time? Quietly hoping for the stock price to rebound to your purchase price? This is just a human cognitive bias. It is known as loss aversion, which means that you would get more depressed by losses than receiving more joy from winning the same amount. This is also one of the reasons why people are interested in capital guaranteed investments. They fear loss and are willing to take much less profits, some times lower than the inflation...

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The Art of Non-conformity by Chris Guillebeau

I have always been a fan of Chris Guillebeau’s ideas. He is one inspiring globe traveller who shares his philosophy of life and tries to wake people up from sleepwalking. He published this book after his successful blog and it is an easy and provocative read for most people. Below would be some highlights and summary of the book. The problem with conformity He mentioned that most of us behave like the five monkeys in a cage – it is a story of a sadistic monkey hater who caged five monkeys. “Enough food and water is available at the...

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