Trading Profits in relations to Time and Accuracy

The size of profits of a trading system, is related to time and accuracy. They are inter-related and it is not possible to get the best out of all 3 factors in any trading system. Before I elaborate further, I shall define what these 3 factors mean. Size of profits - I am referring to the average amount of profits the system will earn per trade. Time - The average length of time you held … [Read more...]

How high can the STI Index go on current analysts’ forecasts??!!

We all know that the STI is still overbought and based on technical indicators - the next major resistance to the index is at 2300. I was looking for a 10% correction to about the 1900-2000 level and am still waiting for this to occur. While waiting, I decided to use another approach see next para. Rather than use technical indicators to tell us where the STI Index is going, I have decided … [Read more...]

Eldershield Supplements

I had wrote about Eldershield several times in my blog but nothing mentioned about the supplements. A lot of people are already confused with Eldershield, not to say about the supplement. Even many advisers are confused about these plans. Today, I like to share a bit about it and the difference between 3 insurers providing this insurance. In my comparison, I'd used a few assumptions: a) … [Read more...]

Handling Mr. Market’s Mood Swings

With the recent volatility experienced by Mr. Market’s violent mood swings, investors may have been left in shell-shocked mode. These violent episodic mood swings can be likened to what occurred last October 2008 with the collapse of Lehman Brothers, and as the market digested the possibility of the collapse of the global financial system. Back then, the market had begun a nightmarish tailspin … [Read more...]

Endowment Plan with Guaranteed 3.77% IRR

I did not take note of this plan until an agent friend ask me about it when her client consulted her. She could not believe that such plans exist. Yes, such endowment plans do exist. Endowment, or for that matter, Participating (Par) or With-Profits plans, have bonuses that will be declared yearly. The bonuses are made up of 2 components, Guaranteed and Non-Guaranteed amounts. As the name … [Read more...]

Swiber – AGM and EGM FY 2008 Highlights

I attended the AGM cum EGM of Swiber Holdings Limited held on April 30, 2009 at 9 a.m. Due to the fact that there was quite a heavy torrential shower in the morning and also the presence of an accident near the AGM venue (which was the Company’s headquarters), several directors as well as shareholders arrived late. Due also to the fact that there was a lack of signs pointing to the location of the … [Read more...]

Time to let earnings and guidance catch up with share prices…

Global stock markets have had a huge rally since the first week of March 2009. It was liquidity driven and pre-emptive and after two months a new view that we are seeing a "V" shaped and not "U" shaped recovey is being factored in. Let's tackle these issues one at a time.....on the liquidity rally - I discussed yesterday that using technical indicators like the RSI - most stock markets and blue … [Read more...]

Stock Market Rally: First Stage Of A Primary Bull Trend?

"Sell in May and go away" may not be relevant this year. For a month commonly associated with disinterested stock market activity, we have seen a 36% jump in the benchmark S&P 500 from March’s 12-year low. Economic reports turn out better than expected, swine flu has been downgraded to a harmless entity, and US banks have passed the stress test. No wonder, investors are seeing green shoots … [Read more...]

Still in a bear:Dow Jones Index to Gold Ratio Historical Chart

In the early 1980’s, just before the mega-bull market was about to awaken, you only needed 1.5 ounces of gold. But at the top, in 1999, you needed almost 49 ounces of gold to afford the Dow. Over time, the two don’t always move opposite each other but during the past few years, not only has the stock market fallen, but gold has gone up. That has resulted in an unwinding of the ratio. While … [Read more...]

Stakeholder Influences on a Company

For want of a better title, this post is about how stakeholders affect a company even though the company itself may be fundamentally strong. The truth is this recession and sudden sharp downturn has revealed to me that companies which were once “strong” can quickly see their fortunes reversed due to many factors, some of which are beyond their control. As investors, even though we are unable to … [Read more...]

Minimize loss = Position Sizing and Stop Loss Limit

William O’Neil said that, “The whole secret to winning the stock market is to lose the least amount possible when you’re not right.” A successful trading system hence must be able to reduce losses in order to preserve the capital as much as possible. Losing 10% of your capital will need 11.1% to bring you back to your original capital. The problem about trading is that you can never be 100% … [Read more...]

Top-down approach in investing

I usually adopt a bottom up approach towards investing, so it's good to do a top down approach too, just to see the broader picture. I read this little book series (yes, finally completed everyone of them!) called Bull Moves in Bear Markets by Peter Schiff and in it, there are a very investment themes to take note of. Basically the author is very bias towards the near term future of US, notably … [Read more...]

Enjoy “free” Funds Transfer at 9%

I am sure you have come across like a million times those fund transfer “promotions” offers where you just need to pay a “low” 3%-5% processing fee and enjoy 12-24 months of interest free installments. Let’s do some maths with the help of financial calculator to see if it is really worth it. Consider a $1,000 loan with a 5% upfront processing fee, payable in 12 installments. How much annual … [Read more...]

Singapore market is technically oversold according to the RSI…..but will there be a meaningful correction in the coming weeks?

The Singapore market absorbed a number of meaningful intra-day corrections last week to post strong gains on the back of pent up buying of blue chips by investors and funds which had missed the rally. A number of comments made to me tell the tale - from a fellow golfer "the Singapore market is up 50% and I didnt make a cent - is there any stock I can buy now ?"; from a retail investor - "I … [Read more...]

Bolster Your Emergency Fund In A Prolonged Crisis

I hope everyone has an enjoyable May Day. For those who work day in, day out, this is usually a well deserved break. But of late, nobody seems to be keen on taking leave, given the rise in no pay leave, shorter work hours (no overtime), pay cuts, and retrenchments. In some countries, protests and demonstrations have broken out over job losses and poverty. In this moment of stress and … [Read more...]

Putting up a false front

She rented private properties and dressed to the nines to give the impression that she was a big-time player in the oil trading and shipping industries. writes the first paragraph of the article “$1.4m scam: Thrice-convicted cheat gets 12 years” in the May 9th issue of The straits Times. Yet another investment scam. Yet more people losing their life savings. Yet I am blogging about it. Despite … [Read more...]

First Ship Lease Trust’s Distribution Reinvestment Scheme (DRS)

DRS Summary In short, DRS is a scrip dividend scheme for FSLT to make payments through issuing new shares in place of cash. FSLT had 2 strategies to reduce cash payout in terms of dividend, one is via direct reduction in distribution (from almost 100% to 75%) and second is via DRS. While a 25% cut in direct distribution conserve about USD 4m, how much DRS can conserve depends on the take up … [Read more...]

Are bonuses declared fairly?

Dear Mr Tan, I have come to realise my folly in buying substantial insurance for myself and family ranging from endowments, whole life, etc. All along, I am told buying insurance is also saving for the future - how wrong I have been. Now I am aware that term life is still the best in terms of value. Now I have to consider how to handle the current policies that I have, especially those where I … [Read more...]

Career of last resort?

It was reported in an article on today’s issue of The Straits Times that “more job seekers are more willing to pursue a career in the sector during bad times”. While the bosses of the insurance firms welcome this as they build up their agency strength, I am not too optimistic on this development and think this will only give the industry more bad name. It is an open secret that many view … [Read more...]

What can we expect from the stress tests of 19 US banks?

...official leaks now suggesting that up to 10 may need more capital. US financials led the global sector rebound when Citibank and other banks said they were profitable.  Then came the change in FASB rules for mark to market for bank assets and finally the bank profits which reflected some creative accounting. For this "baby bull" - for want of a better term, rally to be sustained, the … [Read more...]