Change is constant.

The only things that never change in this world is change. Change is constant. Especially in today's world where 3 years might equal to 30 years in the past. Company that see other change but do nothing will fail. company that follow the trend, will struggle to survive because of competition. Only company that make changes or lead changes will thrive.

Doing business is like sailing in a sea. There are huge wave and danger hiding all around. I use this example because we can easily see the things that we need to sail safely across.
We need a big and solid ship and complete equipments. Those are our business model and our business core competency.
We need great leader that is focus who can to steer us through in calm and danger situation.
We need a team of sailers and people that have the same goal as the leader.

Always,
Equip yourself, plan ahead, if anything happen beyond your expectation, make changes and build on strength.
Be persevere and focus. don't give up easily.
Prudent and know what you are doing.

Although change is constant, we need to be calm to be able to see the changes.

Macao and gambling

Been to Macao, I feel very uneasy with gambling business.
I really feel it's a sinful place. There are so many casinos and every hotels has it. They give promotion paper to tourist like crazy. A lot of tourists just throw to dustbin. 1st is the very waste of paper. How many trees has to be chopped down because of these casino promotion materials encouraging gambling activities. 2nd, each casino provides free bus shuttle transports you to their casino for gambling. How many petroleum reserve has to be used to promote gambling.

Every casino built up into very high class feeling for those gamblers to feel that they are very rich. They use a lot of gold color, crystal, metallic silver color. Each building design is extensively spectacular. You can even see vienna inside the casino. I feel the every casino design is monster, purposely making you cannot leave the casino. It's easily lost inside. It's so beautiful as you will not notice what time it is now. 24 hours operating.

When you manage to leave casino, there are so many luxurious shops around casino. If you are not lose in casino, Macao will make sure you lose it whether in luxurious shop, or for night services outside.

Although I can see that gambling is a very profitable business, but from now on, I will not invest in gambling business.

I personally feel genuinely Macao culture is ruined by casino, don't talk about their economy is mainly supported by casino.
I don't like Macao.....

Property price

Property price is related to supply and demand. People rushing to buy because
1st the economy is good or people expect it to be getting better.
2nd is the demography, local or lots of foreigner come and live here.
3rd is the low interest rate, low rate tends to boast economy growth but too low tends to invite speculation and cause volatility in property price.

But long term, it's the opportunities that count. Opportunity will invite investment and draw in foreigner, as more money circulate in the country, people become richer. Here we don't count the disparity of income. But ultimately, demand will boast up all price, from salary to property.

I suggest that for long terms, property price will continue to rise in those cities like shanghai, Beijing, hongkong, Penang too.

The sequence

If you are employed by others, you have to pay tax to government before you can pay yourself.
If you have your own company, you can pay yourself first before paying tax to government.
This is a major factor why the rich get richer and the poor remain or worse.

After getting salary,
You can spend first before saving, or, Save first before spending.
First one either you end up no saving, or become to stingy and scare to spend.
Second one you will know at least how much you can save, and the extra that left after spend is bonus.

Yup, I am interested...

今早醒时一直觉得今天是星期一。因为我好害怕last day 的到来。梦中有人问：will you be movie script writer or director? I answer I like to do creative thing. I like to day dreaming, those common thing I like to do it differently. They all laugh at me. But ......"Ya, I am interested." 

If people are willing to give me chance, and it is an opportunity, I want to try.

Ya, I am interested.

Social unrest globalization

Social unrest will be exaggerated in western develop countries if unemployment rate remain high. Stagnant economy in those countries will make people loss patience. "The problem need to be solved!" The emotion spread to the whole world through social network. The world is getting disorder, inequality is getting higher, watch out of riot globalization, because this is the new normal and I don't see develop country economy will recover in another 3, 5years. Emerging countries, 加油！gambateh!

信念

不要为钱，不要为权，这些会让我迷失自己，迷失方向。
于人方便，就是于自己方便。
做对的事，其他的，随缘就好。

An unusually fluid global economy

http://www.youtube.com/watch?v=V2nXZZZOiK8&feature=youtube_gdata_player

Check this out in YouTube, it explain the world today and where we are going in just 10minutes short time so effectively and whole.

Investing in people, not business!

Good company is always lead by visionary leader surrounded by strong management team. They understand that the pie is very big and they can always find growth. They are not limit by the size of the company, they can find new direction of growth even the company is very big. Those companies see very far. They build their company rock solid that can withstand economy stress for long period. They change their course and make changes during difficult time. They adapt and take advantages of political change. You will never fail investing long term in those company as long as you have time, patient, strong trust, faith. Faith is the most important, we usually lost faith during economy bad time when there are so many bad rumors, and we don't know which is true, then we become risk adverse that we switch to "safety first" rule (sell all!!!)

Recently I find those big companies want to control asset that usually controlled by government or target government big project, big contract (electricity, energy, water, telecommunications spectrum, oil and gas). They know those are the sectors that have very high entry barrier and have a very high chances create monopoly or oligopoly situation. In that situation, sure demand, sure sales, high profit margin, sure profit. Who don't want?

是非

我必須用心聆聽當有人在背後說別人的是非，這樣我就可以查明這是否是個是非。如果的確是個是非，那我必須遠離說是非之人；如果是事實，那我必須提防被說是非的人。這幾年的錯誤就是不願去聽人講是非，認為所有在被後說是非的便是是非人。書面的教導引領我犯下概括性的錯誤，讓我錯失了學習看人，封閉在自己自以為是的框框。也一直認為不問天下事，做好分內事就可以避免被捲入是非。原來不是，因為任何人都可以是是非人。在是非地，就會惹是非，你不去惹是非，是非也找上你。甚麼都不知道，就無法應對，還是知道好，至少可以想辦法應對，應付不了不了，也死得瞑目。

Tip of an iceberg.

I remember my teacher told me in 2008 that when bad news started to surface, don't expect them to be solved quickly, because most of the time, it is just the tip of an iceberg. May be many bad news still in the pipeline that we don't know.

Apple stock may be a good buy?

Every time a star die, the star's related product sales jump to sky. Everybody crazy about them. A lot more products will be developed around apple products to memory him. Perhaps apples products sales will hit record again.

Confuse....Helpless....

When we are helpless, we grab on whatever others say, we grab on whatever information. We are so easily influenced by them and loss our mind.
When this happen, why not make a long term plan, whatever happen, just follow. Then shut down all the information and go for vacation.

Can You Stomach The Risk?

Time like this, it's either loss another 20, 30 percent or gain 50 to 100 percent per annum. Although I just simply come out with the figure, what I want to say is we are at the high risk junction now. How Europe going to resolve their problem and gain back confidence.

I feel may be our stock market was in the stage when Bear Stern collapse, when US bail out Fannie and Fredie Mae. The uncertainties are huge but not yet trigger the panic button like the collapse of Lehman Brother that spread all over the world. I think this time the trigger button will be unproper plan of default of Greece's debt that trigger collapse of big banks in Europe.

High risk always come with higher reward.

Idea Wall

In my office, recently set up an idea wall where people can write their idea on the wall. Because of the tightly control organization structure, busy personal work schedule that not encourage idea free flow generating, this create a platform for people to express their long compressed mind. The respond is very good indeed.

Most of the idea I feel is very good. With careful planning, those can really streamline the design, create new demand and transform the company.
Some idea is physical where we can know what is the product, some are concept, some are just plain desire.

Connecting dot is what the great leader need to do. How to consolidate ideas to create products that fit into company value? What the leader see in the future? Where are the demand? How can this improve people life? How can this product change the world? In order to change the world, how to market the product to create demand?

Idea is a lot easier when say than done. It require leader to spend time thinking, collaboratiing with staff, taking risk. We might fail and lost opportunity time and opportunity cost, but I think what we gain is unity, strong spirit among all involved staff, and most importantly, learning from mistakes.

Taking risk

When market risk is heightening, when we do not have confident to predict future, it is no point to risk our saving.

I do not take blind risk. It's better to do nothing when I know nothing. I do something only when I foresee something and have strong faith about it.

How this crisis unfold 2

I think US is going into recession. Fiscal spending is limited by politician and by country debt level, business spending is not growing because of pessimism, consumer spending is not growing due to high inflation, therefore, aggregate demand is not there. Monetary policies already being used till limit.

Europe is worse in terms of fiscal spending as their country debt is higher and more complicated. They still can play with monetary policy to generate demand by lowering interest rate.

Are we on the right path? Making USD stronger will let American to feel rich, consume, encourage people invest in US, generate job, and American can pay down debt? Can politician convince investor this is long term solution that they can be persevere about it?

But in this way economy between china and US will be more unbalance, thus create bigger future problem. But making USD depreciate neither can solve problem as we experienced in last 2 to 3 years. Cosumer and Business just won't spend and money piled up in inflating asset price in stock equity, commodity and property.

Or this strengthening of USD is just temporary? Until US economy gain foot, money will flow back to china and emerging market, push up china and emerging market currency again. If long term depreciation of USD is undeniable, I think this process will continue rentlessly, until china is on par with US. Every time crisis happen in advanced country, they will request china for help, and in return, china get something advantage from them. China buy more raw material when the prices come down significantly during crisis time. China is a high growth country, they are still very flexible and can always expand when others face difficulties. Until when china reach a size where growth is limited domestically and their growth is significantly depend on those big advance economy, China is more or less on par with US.

What will happen then? I think we need to find another China......

How this crisis unfold

I have no idea about how the crisis will unfold. But I know as USD become stronger, the american feel richer and they can start spending. Asia country currency depreciate will again provide a platform for exporter to earn in good profit and generate wealth. Another good things will be the getting lower price of raw material and commodities, reducing the burden of all people.

How about US huge debt, I don't know. But if no solution seen along the time, the problem will surely continue to haunt back threatening the economy.

How about Europe, I have no idea how to connect the dots yet.

What do you think?

Let it be.

When Mr Bernanke said the fed will sell short term treasury and buy long term treasury bond with the same amount, he means the fed is not going to print money, which is good long term wise. Short term interest rate will rise and long term interest rate will fall. The yield curve is flattening, can even inverted, which the curve reflect negative outlook for economy.

As short term interest rate go up,Investor will have no interest to borrow short term to invest in stock market or risky asset anymore. If they want to borrow, they have to commit long term. In this environment, most speculators will be filtered out.

Stock market will fall greatly, 1st selling by speculator, 2nd, selling by general public that need cash and not so wealthy, lastly follow by panic selling. You can imagine when they sell at whatever price, means they can sell at 40, 50 or even more than 50% discount. Other risky asset prices played by speculator is at risk as well, like property? Commodity? Etc.....

You have a plan for bottom fishing?

Thought of bottom fishing?
A lot of us accumulate cash but have no idea which counter to bet into. We sometimes aim this counter and sometimes aim that counter. No matter how much cash we have, soon we will be out of it. More worse, we will be out of it long before bottom.

You need to have a long term plan for bottom fishing. We need to make sure we can continue to fish for a long time in this shallow sea. We don't aim at fishing when the sea is so shallow that almost no water left, we target shallow sea.

For those who is lack of patience, lack of discipline, lack of cash, lack of time, lack of investment know how, buying mutual fund is always a good idea in uncertain time like this. We can build discipline by buying into it monthly or quarterly. It is easier to plan long term for your bullet in mutual fund than in stock market.

Choose the big solid ship

Those companies that promise you the moon, they not only dream big, but dream too big, the companies' size do not match their dream, too small. You better sell faster at whatever cost. Those companies most probably borrow too much to fulfill their dream. They will be easily being caught up when economy is down for a considerate period of time. Less business, less cash flow but still have to pay down debt. When interest rate increase, they prepare to go bankrupt.

Choose company that have cash, low leverage, conservative and solid business. Those companies are big solid ship that can weather whatever big turbulence, big chance that they come out stronger.

All Bearish signs

Mostly all economy indicators all pointing down. Going forwards economy will be turning bad again. It reminds me of year 2008 where equity market coming down for slightly more than a year long bottom up in early 2009. I think equity market will keep going down for a while. So, I prefer sitting at the sideline watching while accumulating cash for crazy shopping spree when market become dirt cheap!!!

Quote of the day

"if you're not able to work on your dreams, if you're only work on work, you're not in the right place."
Quoted from Howard Behar, former president of Starbuck International

Instinct or sense need to be developed

Do you believe in your instinct? I believe.
I believe idea is generated through instinct. But how the hell those successful investor, businessman, song composer, leader that choose the path by solving tons of problems, inventor, have so much idea, non stop? Got so much instinct, non stop? Do they just lucky? Do they borned with instinct gift?

I believe not. Instinct, luck can be developed. If we prepared ourselves, focus on the problem, consistently, I believe one day, may be in 1 year, 3 years, 5 years, luck will surely come. Practice, practice, practice, failed, get up,, failed, get up, failed, get up, luck will surely come. By that time, instinct will keep on finding you.

But before that, we need to be patience.

Books nowadays

I kind of feel that book is only as good as changing our mind. The more you read, the more you know.

But reading is a passive thing. It does not lead you anywhere. You can't understand how to invest until you invest; you can't understand how to build a business until you do it; you can't understand people until you take effort to go into people's heart. Most of the book is just bullshit because they are just a mind game tempting us to keep buying book to fulfill our mind needs. They are simple, they are summary to make the commonly known difficult topic look simple.

Reading is just a guideline to guide us, and for us to avoid some mistake made by other people.
To know, we need to go through the hard way.

Ego trap

We need to keep reminding ourselves what we know is just a drop of water in the ocean. Otherwise we are prone to fall into ego trap, especially when the years go by.

We started from zero. Everyone in our society is expert to us. We were humble. We learned everything from the society and our learning curve was steep initially. As years go by, our learning curve started to flatten. New things for us to learn become lesser and lesser. Our job slowly switch to teaching the fresh entrant. Because there is nothing new to learn and no meaningful exposure, we tend to think that we know a lot, but not ego until we thought we know everything, until..........

We found another society. Their level is so much higher that makes us feel that what we know is just like a baby started to crawl.
The lucky one found out in the early year of their carreer; the unlucky one never found out until near their retirement age. The really unlucky one never ever realize that.

It is ashamed when we found out, but at least we know what we don't know. Then we become humble. Then we keep learning. Keep looking up and never give up.

Bubbles creation in progress

The only way to come out from this global economy difficulty is to create jobs, reduce the unemployment and therefore keep people spending. Only in that way the economy engine can restart again.

The problem now is we keep lowering interest rate, printing money, and all the money iis either pile up in equities or pile up in treasury bond, or pile up in gold, or property. If the economy still not running, the inflation of those asset price will eventually become bubbles that waiting to burst.

Success and failure of democracy

The success of democracy is depending on it's people. Low knowledgable people produce failure democracy. They can't regconized and retain the best leader. Even their leaders are extremely knowledgable, they eventually fail because they do not get the support from their people. Knowledgable nation's democracy is definitely successful. Their people can choose the best among the best to lead them.

The Ultimate Race

Staying too long in the comfort zone will make people lose competitiveness. They are pampered and they are losing the feeling of hunger; thus they are losing the sense of danger. This is the problem with the developed world. They will soon be catched up by those who are hunger, those who are hunger for so long.

Are you living in a comfort zone, and thought that your job will be safe forever?

Improve yourselve, improve productivity, build up competitive edge, we are in the worldwide crazy race now!!!

Temporary relieve

People tend to forget. What Ben Bernanke said today will be meaningless tomorrow if the economy data isn't showing any improvement.
Long term growth is good? Forget about it. Investor are all short term.

Ben Bernanke have to show that he really have the tools to shore up economy when it is necessary, which is what? I believe printing money is the only effective tool he has.

Doubt about everything

Investor seems to be doubtful about everything. They doubt about US future; they doubt about the surge in gold price; they doubt about China economy; they doubt about whether Europe can solve their debt crisis; now they doubt about Germany, which is the strongest economy in Europe where people depend on Her to solve the Europe debt crisis problem, they doubt about whether their public finance is deteriorating.

There seems no certainty in the market now, whether it is gold, US dollar, Yen, commodities, bond, whatever. What is safe? May be cash.

End of Lybia war

End of Lybia war create peace. People return to their hometown and begin their country rebuilding.

Supply chain that has been disrupted will be back to normal. This not only mean that supply of oil and gas will somewhat recover, partially, due to major detroyed of facilities; all other economy activities will recover too.

This will help global economy recovery.

Sentiment contagion effect

Negative sentiment will spread among people, turning every bullish buyer to pessimism seller, which in turn exacerbate the bearish market.
Positive sentiment will also spread among people, turning every people in the street become "investor", which further drive the market upward.

Both are temporary market anomaly. We need to be exceptionally emotional savvy to be able to spot both of these times and grab this arbitrage opportunities.

Market will find support

A lot of companies who weathered the 2008/2009 crisis had become lean and operate efficiently. They accumulate a lot of cash. Recent increasing merger and aquisiton activities showed that they are finding opportunities to strenghten their position by increasing their economical scale. Smaller or less efficient company will be consolidated or taken by them.They will have greater purchasing power, greater selling power, higher barrier for other competitor to enter, and reduced competitor.

Market drop make deal cheaper to them.

Company politic 2

10 company politicking I hate the most!!!!


1) Although they don't know, they are able to create a story and keep telling themselves that they are correct. When they are confident, people trust them, because if you are so confident, people seldom spend their precious time dig into the truth.

2) They talk like expert and superior to all other people, making other people look useless.

3) They look busy all the time and make other people looks lazy, but the truth is their productivity is low. Even worse is they complain about their pressure to those other people. Those other people often don't know how to respond only to agree and sympathy to them.

4) They think they are the most important people and ignore other people's importance and work.

5) They like to order people

6) They like to search for people mistake and amplify it during appropriate time.

7) They forget about your contribution, even worse, claim your contribution under his name to show their "superior leadership".

8) They are searching opportunity for themselves in expense of yours

9) They create conflict between you and your co worker who have conflict of interest with theirs.

10) They treat you nicely and create beautiful story to pamper you when things go smoothly according to their plan or they need you, and change their face instantly when you make mistake and create trouble for them, pushing all the responsible to you!!!


I know I am not good, but I hate politicking!!!

Company politic

Company politic arise from conflict of interest among employee.

Today's highlight is decision making.

Everybody has their own role and responsibilities.
Manager manage, executive execute. Things should be clear and no overlapping, especially on decision making. Manager make broader decision; executive make decision base on their job scope. When you make decision on behalf of other people without other people knowledge, whether they are under your supervision, for whatever reason, creates conflict of interest.

Conflict of interest is the cause for hatred, suspicious, break of trust among employee.

Signs of next market rally

When?

When you see Japanese yen is depreciating against US dollar.
When you see euro is appreciating against US dollar.
When you see treasury bond yield normalizing from current super low rate.

That's means investor move from safety asset to risky asset again.
But when you notice that, can you catch the rally train?

Advise for full time employee (non investment)

For those working full time in non finance area, you have no time to monitor stock, even more no time to track the company progress. You basically have no idea what the company is going to do in future, even more no time to know the current status of the company.

Because of no time, you probably only buying 2 or 3 stock, and you buy probably because people say it's good buy. The risk of lack of understanding of the company is high plus the risk of lack of diversification is high, total risk borne is extra high!!

If you fall into the category of people above, I suggest you to leave stock market and hand the investment job to the expert, to asset management company.

If you follow the economy, the most you can do is top down approach, which mean start from the economy, determine which industry will perform well, then determine which sector will perform well, then select blue chip that represent the sector.

Never never try to invest in small capital company because you will never understand them, and so the risk is extremely high for you.
Never try bottom up approach, which mean search for good company or good business to invest in, because most probably you don't understand financial report, you don't have time to do research, and you don't have time to sit down and learn.

Choose the best company to invest in

There are 2 strategies a company can adopt: cost leadership and product differentiation.
We should choose company to invest in base on which company can implement the 2 strategies most successfully among their peer group.

I am not interested in price war that who can sell the cheapest product, I am more interested in who has the cheapest cost structure, because it sure can provide the cheapest price among it's rival.
We can know who has the most cheapest cost structure by examine the company's annual report over long term.

We can know who implement product differentiation strategy most successfully by looking into market; which product is the most popular, which product can sell at higher price but still a lot people buying, what are the hot topic people are talking about. Those are the product difficult to be replaced, whether is the brand, the quality,the special feature or unique design. Normally company need to have continuously the most creative and innovative employee to ensure this strategy can be successfully implemented over long term. They need to maintain the best working culture.

If can find company that able to adopt the 2 strategies successfully, that's perfect. Please share with me. Personally also ok. My email is ta000236@yahoo.com

The next best job

Everyone knows industrilization is the path for a country to prosperity.
Every countries trains their citizen to become engineer, doctor, lawyer, scientist, etc. Every parents want their child become engineer, doctor, lawyer, scientist, etc higher paying job;
If that is the case, in the future, who will take up the currently low pay farmer job?

Soon, food supply will be down, and price will be up.
Farmer's pay will have to rise. A lot of people will return to farming.

Market volatility VS my emotion volatility

In a week, the volatility index of US S&P500 rose to 40, highest since the height of financial crisis in end of 2008 when the Dow swing over 1000 point in a day. Now it is less than half of it, market swing 4, 5 hundreds in a day.

Market was up a day and down a day, prompting more short seller to take opportunities in market that governed by uptick rule. If this is true, market may continue this pattern, up a day, down more the next day, keep going down until ..... I hope I am smart enough to know.

Obviously I am not immune to it. I am risk adverse too as my inner emotion swing follow the market, and couldn't found peace. The market is getting cheaper but obviously I am fearful to be caught up buying into perhaps only the start of bear market, because I don't have much bullet in hand. Therefore, I am not qualify for Warren Buffet strategies, Be fearful while others are greedy, be greedy while others are fearful.

US future

British, once the biggest creditor in the world before 20th century, became hugely laddened by debt after world war 1.
America, once biggest creditor in the world after world war became largest debtor in human history in 20th century.

However, US now is still very strong compare to British during early period of 1900 when the super power began shifting to US. US economy had then twice the size of British. British was then producing 4 times as many bicycles as the US did, but US manufactured 12 times as many cars. (quoted from "The PostAmerican World").

Some of interesting fact.
US has been maintaining their economy share of 25% since after world war 2.
US defense spending including defense R&D account for almost 50% of global spending, but it is only account for 4% of US GDP.
US still hold the highest shares of international patents in the world of 28%, although Asia is catching up in market share fast.
New technology like nanotechnology will likely be commercialized successfully in US than other part of the world mainly because of the more quality entrepreneur in US and better developed venture capital market that ensure adequate funding. Quality entrepreneurs are created by US unique education system to ours Asia that encourage creative thinking and independent thinking.

US dominates the world economy, dominates the world in science and technological progress, dominates military size. Entrepreneurship that create creativity and innovation remain strong.
For those reason, I think US will remain it's dominance position and leads the world in at least next few decades.

US Fed to keep interest rate low until 2013

US fed to keep interest rate low until 2013 is buying time for global economy recoveries.
I think US will only play on monetary tools, and no more fiscal stimulus as there is debt ceiling agreement there.

US people still on going deleveraging process, which means no increase in spending.
With the current high employment rate, i guess probably they hope that low interest rate will encourage business spending among US companies, subsequently hiring more people and reduce employment rate, which subsequently increase spending among US people.

There will be not much growth for US company to search for in US considering dire economy situation in US. They only can search for growth outside US. Many multinational company generate around half of their profit outside US.

Perhaps with low interest rate, US maintain slow growth while emerging market catch up on their domestic economy, then we will see whether 2 years is enough to buy sustainable global recovery or not.

What crisis? We are so tiny

There has been times when human kind enter into poverty for a long period of time and there has been time when human kind enter into long period of prosperity. To give you an idea about long period, it could be centuries of few hundred years.

For example, food was abundance during year 1300 to 1600 because of the new farming revolution in early 1300. Human population growth accelerated during this period. In the middle of 1700 to 1900, human population grew to a level where food production cannot support the surging demand. In mid of 1800, an English working household spend nearly half of their income on bread alone. Malnutrition was everywhere as evidence by the shrink of size of human skeleton whose lived through that period. Advanced in agricultural technology in 1900 saved us and lead us to prosperity again until today. (summarized from a chapter from "the end of food")

So, what will happen next? Oil? Energy? Food? Only those supply of basic living ingredient will determine our future. Please watch out for the factors that affect them, like changing of weather, supply of arable land, clean water supply, improvement of technology that boast supply, demand, increase of human population, etc.

Don't be suprise when all the basic living iingredient's price sky rocket because supply no longer meet demand. Crisis!!!
Follow up by human population shrink because of poverty, no food, no clean water. Bigger Crisis!!!
Follow by fundamentally change of human activities, society structure, etc. (All start over again, like aftermath of 2012)

But don't worry, human is the most adaptable creature. No end of the world, just end of wealth for almost all of human kind that are unprepared, not enough money to prepare, not enough time to prepare...... Currently, i am one of them for all.

Compare to this, how tiny is current market slump?


Of course, we also may found new technology that will hugely increase supply that lead us to greater prosperity in future.

Buy now?

For those want to bottom fishing and buy cheap in stock market, I suggest that please wait for a moment.
Why?

1) The market is panic now. If you buy, most probably your wallet will be cut by knife.
2) The market is anticipating a recession, for recession, I think the market should drop by around 15 percent from the recent peak. The Dow should be around 10000 and HK HangSeng should be around 18000 to 19000, Malaysia? May be around 1400.

if you are doing unit trust, please sign up dollar cost averaging and invest every month.

All the things I bet and suggest above is because even if we are heading into recession,
1) I believe the world is not going to end.
2) long term prospect is looking bright especially on emerging market like Asia market because of strong fiscal position they have built up over a decade.
3) value of the good company will look extremely attractive when the market drop to the level I suggest.

Let's wait and see. And be prepare!


NOTE: The above opinion is not an invitation to buy or sell. It serves as a blogging activity of my investing thoughts and ideas, this does not represent an investment advisory service as I charge no subscription or management fees (donations are welcomed though). The content on this site is provided as general information only and should not be taken as investment advice. All site content, shall not be construed as a recommendation to buy or sell any security or financial instrument. The ideas expressed are solely the opinions of the author. Any action that you take as a result of information, analysis, or commentary on this site is ultimately your responsibility. Consult your investment adviser before making any investment decisions.

MAS airline turn to Airasia.

According to The Star paper, MAS is doing share swap with Airasia. Airasia will get 20% stake in MAS. Airasia is twice the size of MAS in terms of market capitalization. So, after the deal, MAS will own Airasia 10% and Airasia will own MAS 20%

Seeing the regular turn over of CEO in MAS, MAS still unable find firm solution to turn their business into rock solid profitable business. MAS again slip into massive loss after a reasonable profit in last quarter. Such a volatility of earning not only makes shareholders uneasy, but also government worry.

The deal with Airasia seems like MAS last resort, they seems to have no more capable candidate and have no choice but to 'humbly' ask their long time enemy or competitor for cooperation (or help?). With the back of government as usual, Airasia has to accept the deal. To the public, the deal is explained in a very beautiful story, but the real story behind, only Airasia know.

But with the brilliant of Airasia management teams and energy and charisma of Tony Fernandes, i think integration can be done and benefit of cooperation story will eventually come true, thus the future of Airasia still looks bright.

Although I am always poor at short term trading, I bet MAS is better for short term trading.

Market slump last week

I think the market should recovered. Those debt problems in US and sovereign debt problem is not new to the investment world. They are all accumulated problem. Just like in year 1987 when suddenly the Dow drop by 20%, and also like 2008 when the market slowly drop from beginning of the year until it become extremely volatile in the end of 2008. Now is the same, the market is reaching climax, and will recover and drop again and recover, until those problem found solution, or until we can find other hopes that promise to bring bright future, bringing us to the next level of prosperity.

This market correction might continue for a while because of program setting of certain fund that will trigger sell down when market drop by a certain percentage for cut loss purpose. Liquidity is there, world economy is recovering although in a slow pace, I believe we are not heading into 2008 crisis in near future. Money in Treasury will come back to stock market soon.

Between then, market is expected to be extremely volatile.
I reckon that for general public, the best strategy now is to do dollar cost averaging in the broad market like unit trust or ETF.

Role of investor

Investment is for our better future. Where you want the future to be is where you put money into. Bill Gates put money into renewable energy because he believe that there will be a better life for us if we rely more on renewable energy. Toyota, General Motor put money into electric car because they want to make it our future car and rely less on fossil fuel. Sony put money into 3D image because they want to make 3D our future needs. Food company put money into RnD to increase productivity to meet our future needs. Telecommunication company put money to lay down cable or satellite to improve connectivity among people in the world.

Money should be allocated appropriately, it should go where we want our future to be. We can use world leader's vision as a guideline, see where they want to lead us to. Follow their vision is good idea in the sense that they will make sure those related industry can continue to make profit and have a sustainable growth to forge our future, or our dream, but need to beware of regime change.

When you think of these, you become an investor and not speculator anymore.

Storm ahead?

There come storm again. Everybody talking about US economy is heading into stagnation, some say US might even heading into loss decade like experienced by Japan in 1990 until now. Yield curve is flattening as the 10 year interest rate hit 2.58, almost same level with interest rate during height of financial crisis in end of 2008. I think most importantly, market is down because of the deal of the debt ceiling. As predicted, US raise the debt ceiling to avoid default, but it also came up with spending cut plan for years ahead. Currently US GDP growth is supported by large amount of government spending and stimulus plan. Tax cut, Medicare, housing support, etc. Reduce spending will have chain effect as it will discourage consumer spending across US and thus economy in most other part of the world where their economy link heavily with US. Unless US company is willing to invest and hire, with their huge amount of reserve, there is a big possibilities all the bad news like double dip recession, economy stagnation will happen in US.

Racing for natural resources

Resources is main ingredient for growth. The world needs to growth especially those emerging countries where population keep increasing and they are desperately want to go out from poverty. Those countries and companies who understand it is aggressively buying into resources. The world is racing for resources because everybody knows that resources is limited and getting harder to extract. Controlling the resources means controlling the wealth of the world. What I mean here for resources is Oil, Natural gas, water, electricity, agriculture land. Those are the basic for living nowadays.