Best Financial Advice

Gary Belsky, co-author of "Why Smart People Make Big Money Mistakes and How to Correct Them: Lessons from the New Science of Behavioral Economics":

"Be afraid when people are greedy, and greedy when people are afraid. It's basically, 'Buy low and sell high.' In general, I've been doing better than market averages when I've been handling my investments. I've basically done that by being conservative when the market is frothing and aggressive when the market is down."

Wayne W. Dyer, Ph.D., author of "Your Erroneous Zones" and "It's Not What You've Got: Lessons for Kids on Money and Abundance":
The lesson "for me was, first, pay yourself," Dyer says.
While in the Navy stationed in Guam, Dyer saved 90 percent of his pay over the last 18 months he was there. "So I came home with enough money to pay tuition for four years of school and a car. Even today I pay myself first. If you want to be financially independent by the time you're 30 years old, pay yourself first.
"When you get your paycheck, take a percentage -- between 10 percent and 30 percent -- and put that away," Dyer says. "You'll be rich enough to be financially independent within a short period of time."

Neale S. Godfrey, author of "Money Doesn't Grow on Trees: A Parent's Guide to Raising Financially Responsible Children," and chair of the Children's Financial Network:
"Step away from the television and the magazines. All they serve to do is show you how stupid you are because you've missed whatever they're talking about. It's old news. It's already happened."
The advice came from her financial adviser, she recalls. "I used to call him and say, 'Why didn't we ...?' He'd say, 'Stop it. Step away from the television. It's done.'"
She realized that he was right. "By the time you see it or read it, it's done; it's happened," Godfrey says. And if you listen and follow the hot news, she says, "You will buy at the top and sell at the bottom -- exactly what you're not supposed to do."

George Kinder, Certified Financial Planner, author of "The Seven Stages of Money Maturity: Understanding the Spirit and Value of Money in Your Life," and founder of The Kinder Institute:
"It's about the meaning, not the money. If my investing is not really deeply tied to what I think is most important in my life," he says, then, "the asset allocation, the estate plan, the retirement plan might as well be thrown out the window."
His best advice: "Hire a Registered Life Planner (a financial planner with additional training in helping clients identify and reach life goals) to help you through this," Kinder says. "Nobody can do this themselves."
A life trainer, he says, "is trained in how to elicit from a client what is meaningful and how to keep their eyes on the prize."

Robert Kiyosaki, co-author of "Rich Dad, Poor Dad: What the Rich Teach Their Kids About Money -- That the Poor and Middle Class Do Not!":
"My rich dad gave me lots of advice. One of the better ones: There's good debt and bad debt. Bad debt is debt you have to pay for and makes you poor. If I use credit cards to buy new shoes it makes me poor. Good debt makes me rich and someone else pays for it."
One example: "I'm closing on a $17 million property and financing $14 million. That $14 million is good debt. It makes me richer every month by putting $20,000 in my pocket."
Rieva Lesonsky, co-author of "Start Your Own Business," and senior vice president and editorial director at Entrepreneur magazine:

Lesonsky's best advice "was from the owner of our magazine, Peter Shea," she recalls. "He said, 'Housing prices have gone up -- get a second mortgage and pay off your debt.' I did, and I'm debt-free."

Peter Navarro, Ph.D., author of "The Coming China Wars: Where They Will Be Fought and How They Can Be Won," and associate professor of economics and public policy at the University of California, Irvine:
"Take every piece of advice you get from any investment adviser with a barrel of salt. Most are trying to sell you things that you probably don't need or want. Think for yourself."
Navarro says he learned that lesson after a bad experience with a financial adviser. "I lost some money, then took control and never looked back," he says.

Dave Ramsey, author of "The Total Money Makeover: A Proven Plan for Financial Fitness" and host of a nationally syndicated radio show focusing on personal finance:
"A friend of mine who is a billionaire told me that he reads a book to his grandkids and I should read that book. The book is 'The Tortoise and the Hare.' Every time he reads the book, the tortoise wins. Slow and steady wins the race, and consistency matters. Get-rich-quick never wins.
"If you try to impress other people, you'll lose the wealth race, as well," Ramsey says. "It sure did give me a nice metaphor. It's a good reminder to somebody like me to keep me in check. It has implications for debt, for mutual funds, for budgets -- an overlay for everything."

Lonely

I am so lonely, standing aside when the party is going on.
STI has moved up another 15 % when I decide to leave the party. Sigh....
It seems that the stock market has disregarded any problems which ever exist.
Are things better ? I don't think so. Will things get worse, likely so. Watch ... the USD is crumpling.

YTD portfolio 39%.

There are only 1-2 counters worth accumulating.

What am I optimistic on... commodoties.

Fed cuts 50 basis points to 4.75%

Berneke saves the day!

Urgg...As I expected Helicopter Ben pays scant regard to the inflation topics and saves the stock market. I should have known that to protect his reputation (he will not want to be the first Fed on watch with a crash in the market), and being handpicked by Bush, he will resort to more drastic measures.

Sigh... I was more or less out of the market, so in the morning I put some orders for the banks. They are quite beaten up, and the Fed move will benefit the emerging markets better. The banks will be definetly be a good short term play.

I learnt my lesson prevously, and entered the blue chips this time. (Small cap do not impact my bottom line)

Went in UOB 21, exit 21.3. (yest close 20.5, down 0.3)
Went in DBS 19.7 exit 19.9. (yest close 19.3, down 0.2)

New lesson learnt, 1) do not overpay (~2% premium). 2) UOB with share buy back is a better play. 3) have to lift my credit limit in account.

I will wait their further bad news. Lehmann Brothers results were good, posting a slight decline even after writing down 700mio in subprime mortages.

The other big investment bankers will be reporting soon. Somehow I think Goldman Sachs will show a slightly bigger decline. Beware, DBS is another time bomb, possibly writing off some value in its 3rd quarter earnings.

Portfolio and Sep07 Sentiments

Most of the stocks when further up when I sold.

I again sold off more of my stocks. I am almost 95% in cash. Portfolio YTD is around 37%.

Only thing I have left is QAF.

I guess I look like the lonely guy now who have left the party early. I have been rather conservative since late last year, thus reducing my performance.

I think the writing is already on the wall why I think there is a downturn.

Although I am bullish on the Singapore economy, being an export oriented economy and closely tighted to the fortunes of the US, I think it will go down with it.

The US housing has lots more to go down. People always mention subprime, but I believe it is as much as 30 % US housing which has a problem.

People will always save their house first, thus consumer spending will slow down tremendously.

Housing/Developers will be hit, Housing agents will be hit, Finanical Instituions will be hit, Retailors specialising in Housing/Furniture related stuff, Consumer slowdown, I believe it is the perfect storm coming. The lightning and thunder has flashed, it is just waiting for the storm to come....

Investment Strategy and Sentiment Sep07

Investment Strategy
After the recent rebound, I was not able to particpate fully in the recovery. On the following day after the Fed rate cut, I entered extra 13% in ASL Marine, CSC and Hiap Seng. Although it gave me decent returns, it was insignificant compared to my portfolio.

I discover that I have to refine my investment strategy due to my size of my portfolio. My past investment strategy on looking at small caps is not as effective as I cannot enter and exit as easily.

1) I cannot concentrate on small caps, but have to look at the mid and blue chips right now. The small cap volumn is too small to go in or out.
2) Each entry will have to have at least 13% to be effective.
3) With my bearish sentiment, I will have to have a hit and run strategy on the blue chips. What are interesting ? UOB (Share buyback) 18.2, OCBC (Ningbo IPO) 7.6, Keppel Corp 9.8 (Oil Rigs), Singtel (Bharti)

Investment Sentiment
With the elections coming in 2008, I believe Helicopter Berneke will pay lip service on the inflation topic, and flood easy money to the economy. He is handpick by Bush to take over Greenspan. Will he cut this sep18 ? Although that is the worst option, I believe he will.

I think the US economy will tailspin into stagflation, and while US Stock market may go higher, I prefer to stay in the sideline. Like what Warren Buffet mention,

...Orgies tend to be wildest toward the end. It's like being Cinderella at the ball. You know that at midnight everything's going to turn back to pumpkins & mice. But you look around and say, 'one more dance,' and so does everyone else. The party does get to be more fun -- and besides, there are no clocks on the wall. And then suddenly the clock strikes 12, and everything turns back to pumpkins and mice."

Portfolio Sep07

After the recent volatility and rebound, returns YTD is 36%. Although the STI in general rebounded, I had about 30% in equities, and did not enjoy the rebound.

The Fed cut the discount rate to the FI by 25 basis points on Friday (after 2-3 weeks of downturn) , causing Wall Street to boom almost 2%. I had wanted to go in the next week Monday, but the Fed disrupted all my plans.

Anyhow, I trim back on my portfolio even further to 15%.

I sold off SMRT, Darco, most of Techcomp. I sold of part of ASL Marine, CSC and Hiap Seng which I bought on Monday (The day STI rebounded after the Fed cut).

Not a good price, but right now I think it is time to be conservative.

This is my current portfolio

ASL Marine 4%
Metro 4%
QAF 4%
QAF Warrant
TechComp 1 %
Gen Mag 1 %
Cash 85%.

Portfolio Aug 07

The headlines the last 2-3 weeks was the sub-prime news in the US. While this was a known issue and my portfolio was conservative with 40% as cash, my portfolio declined about 7% from its peak.

Last month I sold off CSC (43 cents) and Genting (93 cents) which I considered my speculative counters. I was lucky as I sold them before the big sell off. Just last week, I sold off Ecowise (71 cents) and Kian Ann (41 cents) and then later China Milk (1.17) and some Metro (92).

I think CSC has made its run from 3 cents plus to 49+ cents. While it will continue to benefit from the construction boom, its main Shareholder Tat Hong will be eager to cash out after getting their shares at about 5 cents. They sold around 10% of outstanding shares at 45 cents.

With the UK changing their stance on super casinos, (Genting was a strong forerunner with its subsidary to clinch a casino contract), the returns on Genting looks less attractive. I believe Genting is artificially supported now as they are raising cash with rights issue. I think Genting may fall at least 20% after the rights issue.

Sold Ecowise as my investments were small and they spiked up from 62 cents upwards. My gains were about 120%. I also sold of Kian Ann as their PE was no more attractive.

Later in the week, I decide to be even more ultra conservative. I wanted to have some ammo when the recession hits. I sold off China Milk (I did not take into account their financial costs) and some Metro.

YTD Porfolio is now up 37 %.

My portfolio is now 70% cash and 30% equities.

Portfolio is now

SMRT
Metro
TechComp
Darco Environment
QAF
QAF Warrant
Gen Mag
Food Junction