Stop Loss Hit!

Personally I have hit all my trailing stop losses and have exited with quite a good profit.

Even though this time round, it seems like a healthy correction but my gut tells me that it will last longer than the mini corrections that we have seen in the past few months. ( It's just a gut feeling, so I will just be buying with greater caution)

However, these stocks are nearing or at their support lines. (Not very speculative stocks, so rather good for trading if your are low to medium risk takers) So I might actually be buying in soon for trading purpose, depending on the market conditions next week.

• Jardine C&C
• Keppel Land
• Suntec REIT
• Parkway REIT
• STI ETF
• DBS STI ETF

SPDR Gold Shares

This share caught my eye recently after watching a certain Youtube video about how bad the USD is going to devalue in a few years time.

With the expected depreciation in the USD, many countries are switching to gold as their reserves (besides switching away from USD as their foreign reserves), hence with a limited supply of gold in the world, and increasing demand, price of gold will have to go up!)

This has the same theory as land prices in Singapore will eventually go up over the years. With a limited supply of land, and more people, land prices can only go upwards!

This SPDR Gold Shares is trade on the Singapore stock exchange, under the name GLD 10US$.

One stock is approximately 1/10 ounce of gold. This is because, at the start of this gold fund, it is exactly 1/10 ounce of gold per stock. However over the years, with the management fee of around 0.4% per year, they have to sell some gold to pay for it, so the total amount of gold gets lesser though the number of stock stays the same. Hence the value of stock drops slightly every year, around 0.4%.

Main Advantages:

• It is more cost effective to most investors (due to the small amount that we buy) to buy these shares, instead of buying the actual gold, and finding storage and getting insurance

• This stock is liquid, meaning that there is always a buyer on the stock market, so that you can dispose of it quickly

• Because of the high price of the stock, around USD110 per stock, it is not trade in denominations of 1000, but rather in 10.
  

Disadvantages :

• It is traded in USD. Hence when u see the stock listed on the market as '110' it means 110 USD and you are subjected to the currency conversion of the brokerage firms, unless you have a foreign exchange account. Good thing is that, I have checked, their rates are better than the banks.

Here is the link to the site : SPDR Gold Shares

Some thoughts of mine....

Since gold is denominated in USD.

1. With the depreciation in USD, and the 'worth' of the gold staying the same, the numerical USD value of the gold will go up.
   
2. However, even with the numerical USD going up, say you want to change it back to SGD, you will actually get back the same amount, due to a bad exchange rate.
3. Aren't we back to square one?

But I would think the most important thing is that gold has a limited supply and an every increasing demand. Unless someone happens to be able to 'make' gold, gold being scarce commodity that is readily used in commercial and retail industry, will continue to have a strong demand, leading to an increase in price.

Attended an Auction by GoIndustry Dovebid

Today is the first time I attended an auction of a textile company's assets. ( I happened to see a notice of this auction in yesterday's classified ads, in the 'Notice' section). I must say that, I felt really really young at the auction. The average age of the people must be at least 45 years old. Most of the people there looks like old uncles who are into the trading business, where they buy and sell stuff 2nd hand clothes.

This auction is done by an auctioneer, from GoIndustry DoveBid, on behalf of a textile company. I would think that the company has closed down, because they are selling everything, from all their clothes, accessories, to the computers, desks,whiteboard and such, and even their van.

Frankly, the goods that you can get here are really cheap. It starts off with a period of time for your to look at the goods and value it. The auction is rather informal, with one man standing on a stool with a mic and shouting out people's bid, and encouraging people to bid higher. (this is because they get a cut of 10% of the bid). I.e if a person bids $1000, he has to pay $1100 in the end, whereby $100 goes to the person auctioning on behalf of the company.

Things there are really cheap, For example a full size white board with rollers went for $10, and few hundred shirts together with cuff-links, bow ties, few hundred ties in a lot that went for like $2000. If I actually had a shop, I would definitely buy the stuff!

Also, people who are at the auction are goods specific. This means that the moment all the clothes are sold, you can see 'clothes' people starting to leave, leaving behind all the electronics stuff to people who are interested in electronics.

One interesting thing to note is that, you can actually 'advise' the auctioneer to bundle items. For example, you can advise the person to bundle together the table and chair and maybe all the furniture, instead of auctioning them separately, thus creating a better deal!

In all, this has been an eye opener for me, and for those of you out there who are looking for cheap 2nd stuff, this is really worth a visit. However, most of the things are sold in bulk, and hence it will put off many people. But I believe at the end of the auction, you can negotiate with the people who won bids on individual stuff that you might want to purchase. And most likely, this will still be cheaper than buying the stuff from a bazaar and cash converters.


An upcoming auction is by Knight Frank Pte Ltd, on behalf of the Singapore Police Force. It is stated to be selling various goods like confiscated and unclaimed items, jewelery, digital cameras motor vehicles etc. I believe the goods should be relevant enough for most of the public.

Details as follows:

Venue: Presidential Room, Hotel Royal (level 15) 36 Newton Road S 307962

Date and time: 13 Jan 2010, wed, starts at 10am

Viewing dates and time: 11 & 12 Jan 2010, mon/tue 10am-12noon and 2pm-4pm

General Economy Stuff in my Head

It's been a while since I did a hardcore financial/economic blog post. So I will just pen down some stuffs that I have in my head.

1. The Chinese Yuan

• China is determined not to let the Yuan rise as this will make their exports expensive to other countries, thus reducing their competitiveness. This will be disadvantages for many manufacturing countries. Reiterating that eventually China will not lose its grip as the 'factory of the whole' in the years to come.
• In addition, it also means that large scare manufacturing company will eventually have to move over to China.
• They can afford to suppress the valuation of the Yuan because of the large amount of foreign reserve which they have, which actually comes from the large sales of their goods to other countries, which in turn increases their foreign reserves. So as you can see, it is a vicious cycle, and China will have the upper hand
• On a side note,t I noticed while watching the movie 2012, it tells about how the currency to buy a place on the 'Ark' is in Euros and not in USD, and the building of the Arks were also done in China. Interesting...
  

2. STI

The STI has been inching up,slowly but steadily. However it appears to me that it will be reaching a 'stationay point' (like in math) soon. I.e. the curve is smoothing off to a peak that looks like it's going to be the fibonnaci line of 61.8% at index value around 2949.(Seen from the graph below)

Also, small caps are running like crazy, and IPOs are having big one day jumps in prices. The last time that we saw this occurrence was just before the financial crisis in Oct 2007. This is making we worry. I am currently quite heavily invested in stocks. So I am still contemplating whether to back away from the market soon..maybe in January after the Capricorn effect.

Go and pursue a business!

I am sure many of you out there must have thought about achieving financial freedom, if not why invest?

In my opinion, another way to achieve freedom (in addition to financial freedom) is to set up your own business.

Frankly, many big business start from really small start ups. For example in today's Life section, it talks about Mr Eldwin Chua, 32, a former Zi Char cook who now owns 8 restaurants including the $4 million taste Paradise at Ion Orchard. But we must also remember that route to success is never easy, and statistically, the odds are against us as 80% of companies will fail within 5 years of start up.

However, this should not deter us from trying. If solely based on this statistics, it means that if you own 5 business, at least one will continue after the 5 years! And like investing, a multi-bagger stock can potentially recoup all the losses from other stocks and give you a massive returns! The upward potential is limitless. (Not an accurate way of reading the statistics, but we should always be optimistic)

Therefore I am urging all those who have ideas and would like to pursue it to drop me an email at NTUchartist@hotmail.com .We can discuss it through and see how it goes from there. But I can assure you that you will have 100% of my commitment, but I also expect the same from you.

Back from Hong Kong

Above are some photos from my trip.


Some interesting observations that I made in Hong Kong are

• People there are VERY interested in finance. You see people looking at stocks everywhere, a bunch of old people can be gathering near a small screen near an ATM machine looking at the jumping of the prices in the Hang Seng Index. Also, they have countless magazines talking about investment/money etc. The most amazing thing is that I saw an episode of a lecture on Technical Analysis from the Hong Kong University broadcasting on a Sunday Morning!

• They have property rental shops everywhere! I believe this can be viable in Singapore. A physical presence will be very useful for expats who are coming to Singapore in search of a flat. The unique thing about these shops is that the company holds onto the keys of the flats, hence the customer can actually view all the flats immediately! This is similar to those in the UK.

• People there trade car park lots like houses. A carpark lot actually comes with a title deed!

• I am sure most of you who have been to Hong Kong have seen the dessert shop Xue Liu Shan. It is a dessert shop specializing in selling deserts that are made up of mangoes. I heard that there was a branch in Singapore a few years back, but it failed. I wondered what happened. But frankly, I do see a possible market for this dessert shop in Singapore. Only problem is the high price of the desserts.
  

Off to Hong Kong

I will flying over to Hong Kong for a short holiday and will give some insights and observations of the country.

Anyway, those of you who realized, the china penny stocks are surging like crazy over the last 2 days while the STI index is relatively stagnant...this is causing me to worry a little.

This is because, the last time this happened over a consistent period of time, i.e penny stocks surged while the blue chips are relatively stagnant, a major correction followed after it. This might be a signal that the market might correct soon. So set your stop losses!

I also believe that stop losses are important, even in 'long term investment', this is because I had a bad experience when I did not set my stop losses. (The reason is simple. A stock that drop 50%, needs to gain back 100% in order for you to break even. That's tough!)

Also, if you want to trade China stocks, I have a good stock in mind, ChinaMilk. This is researched by a friend of mine, BT. Just last week, it was trading at around 27 cents which I really wanted to buy in, because the company is actually holding around the equivilant of cash on hand. (meaning, if you can take over the company and liquidate it, you can get back around the same amount of $$, excluding their fixed assets and other stuff) The only thing that I worry is that their core business is doing REALLY badly, with revenue of some businesses dropping over 90%!

But frankly their cash on hand is really enticing. However the stock has started to run. In my opinion, just wait and not rush in. The stock might still run up, like all the other China stocks, but unless there is good reason to back it up, it is pure speculation and thus will definitely correct itself!