Recently I wrote an article for a women's magazine - Citta Bella. Perhaps some of the questions addressed here are your concerns as well. Here's the article:
Q & A For Citta Bella
Case: 30-year old Single Office Lady
1. I have 20K, how do I invest my money?
According to your risk preference, you may invest in fixed deposit, shares or unit trust. Fixed deposit is the safest investment however it generates only 2-3% per year return. As for shares and unit trusts there is certain investment risk involved but the potential returns are much higher than the fixed deposit, in general the gains are usually around 7-12% per year.
For a 30 year old single office lady, you can tolerate much higher risk than those who are married with children and those who are nearing retirement age, hence I would advice a 25:75 asset allocation for you, which means you may put aside RM5000 (25%) in the fixed deposit and invest RM15,000 (75%)in blue chip stocks.
Asset allocation is how much money you put into different asset classes—the percentage of your assets that are in stocks, bonds, cash, real estate, and commodities. Believe it or not, the choices you make in this regard are the most important part of your investing. A good mix of asset allocation will enable you to achieve sustainable profits from the stock market over the long run.
I usually recommend people to invest in blue chip stocks as blue chip stocks are good investment, not only you can gain capital appreciation, every year you’ll receive attractive dividends from these companies. Some examples of the blue chip stocks are: Maybank, CIMB, Genting, and Public Bank. However, if you are not comfortable investing directly in the share market, you may choose to invest in unit trust from a reputable fund management company.
2. How much savings do I need? I’m a 30 yr old single OL (office lady).
Assuming your retirement age is 55 and you live until 75 years old, you should set aside minimum RM500 every month into your retirement fund preferably in stocks or unit trust which will give you RM1,500 every month during your 25 year retirement period.
After deciding how much we need in the future, now, let’s see how we can achieve our retirement goal. Many people have the wrong attitude towards savings, they will choose to pay their monthly expenses first, whatever the balance (if any) will then turn into their savings. Sometimes, they may have impulse buying on branded handbags or hand phones, and they will not hesitate to withdraw from their savings to purchase them.
The right attitude should be to pay into the retirement fund before any monthly expenses. In addition, you should try not to withdraw from the fund for any impulse buying. A good way to help you to achieve your retirement goal is to set up a unit trust regular saving plan with a reputable unit trust company with initial RM1000 investment, followed by auto-debit instruction from your bank account to invest RM300 monthly into an equity fund.
However, if you notice, I did not include the EPF into this retirement fund. The reason why I didn’t include is because most of us, before the retirement age, we have already used up at least one third for purchasing property, and the remaining upon retirement the money is usually used for children’s university expenses, hence, the remaining may not be significant. However, if you do have money left from the EPF that will be a bonus for you.
3. I love traveling to different parts of the world, but I’m afraid I might spend too much on trips and not saving enough for my retirement, what should I do?
As Malaysia is moving towards becoming a developed nation and our society is becoming more affluent, overseas trips has become part of our lifestyle. However, these trips are not cheap, they may cost up to about RM2000 to RM6000 per person. If we lose focus we may ended up spending too much and not saving enough for our retirement fund. My advice is that you need to be disciplined enough to set aside the required amount, say RM500 monthly for your retirement fund first, the remaining you may allocate according to your other needs such as your overseas trip. Hence, it is very important that we must have proper financial planning to safeguard our hard earn money so that our retirement goal can be achieved.
4. Medical cost is getting too expensive, is it advisable to get myself covered with insurance? What is the right amount for my insurance coverage?
Medical expenses are rising faster than the costs of any other service. They are climbing at rates that very much exceeding the inflation rate. On top of that, with the hectic lifestyle and bad eating habits, the chances of contracting terminal illness have increased tremendously in the recent years. Hence it is very important that everyone should buy a medical insurance for protection.
How much medical coverage is enough depends on the following factors: your ability to pay the premiums, your health condition, your family history of terminal illness, your debt obligations and your family commitments and other personal objectives such as whether you need some investment component in it.
In general, for a 30 year old woman with good health condition would need minimum RM200,000 for a lifetime medical coverage. However, if budget allows, you may consider increase your coverage through other add-on benefits such as hospitalization, disability benefits, income benefits, and regular saving feature in it.
5. I am still young, do I need to write a Will?
It’s never too young to write your Will. As soon as you have turned 18 years old, you may start to write your Will. What is a Will? A Will is an important legal document that contains your instructions and wishes for distributing your property and assets after you die. This document contains the names of the people you want to benefit, your beneficiaries, as well as details about your home, land, vehicles, bank accounts, investments, jewelry, artwork, and other possessions. Your Will also allows you to choose a personal guardian to care for your children if you should die when they are still minors. Your Will should be written carefully, correctly and in compliance with the laws of your state to be sure your beneficiaries will be taken care of when you are gone.
In order for your Will to be valid, and accepted by the court, it must be in writing, signed with your signature, and witnessed by at least two witnesses who are neither relatives nor beneficiaries. Otherwise, the court may not accept your Will, and it may be unenforceable. If your Will is found invalid, the court may distribute your assets as if there were no Will (or intestate), and the court will distribute your asset according to the Distribution Act 1958 (amended 1997) and it may take up to seven years for the whole process.
Thursday, July 28, 2011
Tuesday, July 12, 2011
Margin of Safety
"A margin of safety is achieved when securities are purchased at prices sufficiently below underlying value to allow for human error, bad luck, or extreme volatility in a complex, unpredictable and rapidly changing world." Seth Klarman
By far the most effective behavioural finance strategy which is highly recommended by many investment gurus is value investing. The virtue of value investing is that investors buy at prices that are already low, so there isn’t much room for further down play. I would like to introduce to you our "Father of Value Investing" - Benjamin Graham.
Benjamin Graham
Benjamin Graham, born in 1894 witnessed the devastation of the 1929 crash and has since developed resilient techniques that could be used by any investor. He popularized the examination of price-earning (PE) ratios, debt-to-equity ratios, dividend records, net current assets, book values and earnings growth. That earned him the name of the “Father of Value Investing”. He brilliantly concocted the ‘Margin of Safety” theory that has gained tremendous support across the finance industry. Graham defined margin of safety as the margin at which a stock can be purchased with minimum downside risk.
There are many criteria for Graham’s margin of safety investment approach, the most stringent is this: Purchase the stock with price not more than two-thirds of Net Current Asset Value (NCAV).
How to calculate the NCAV?
Net Current Asset Valuation (NCAV) is computed by total current assets less total liabilities.
Example – Calculation for NCAV
RM’000
Cash at bank 200
Debtors 100
Inventory 100
Total Liabilities 200
# of shares 100
Share price 1.80
In the example, given that the total current assets are RM400,000 and total liabilities are RM200,000, the net current asset per share is RM2 which is lower than the current market price. However, it is still not good enough as according to Graham’s criteria, the purchase price must not be more than two-thirds of the NCAV which is RM1.33. Therefore, we will not purchase the stock.
The margin of safety for this case is 26% (the difference between current market price and the conservative calculation using Graham’s criteria) which is lower than the minimum margin of safety of 33%. Buying at steep discount using the margin of safety approach can help to cushion the negative surprises in the financial market.
The above theory looks nice in theory but it is not very practical in the modern world now. Using this method, I can't find any good bargain because most of the companies have more debt than their current assets. But this method does screen out those companies with solid cash position in their balance sheet. Perhaps, we can improvise the strategy a little, rather than 2/3 of NCAV, maybe we can multiply the NCAV by 2 or 3 times instead.
Happy investing,
Pauline Yong
By far the most effective behavioural finance strategy which is highly recommended by many investment gurus is value investing. The virtue of value investing is that investors buy at prices that are already low, so there isn’t much room for further down play. I would like to introduce to you our "Father of Value Investing" - Benjamin Graham.
Benjamin Graham
Benjamin Graham, born in 1894 witnessed the devastation of the 1929 crash and has since developed resilient techniques that could be used by any investor. He popularized the examination of price-earning (PE) ratios, debt-to-equity ratios, dividend records, net current assets, book values and earnings growth. That earned him the name of the “Father of Value Investing”. He brilliantly concocted the ‘Margin of Safety” theory that has gained tremendous support across the finance industry. Graham defined margin of safety as the margin at which a stock can be purchased with minimum downside risk.
There are many criteria for Graham’s margin of safety investment approach, the most stringent is this: Purchase the stock with price not more than two-thirds of Net Current Asset Value (NCAV).
How to calculate the NCAV?
Net Current Asset Valuation (NCAV) is computed by total current assets less total liabilities.
Example – Calculation for NCAV
RM’000
Cash at bank 200
Debtors 100
Inventory 100
Total Liabilities 200
# of shares 100
Share price 1.80
In the example, given that the total current assets are RM400,000 and total liabilities are RM200,000, the net current asset per share is RM2 which is lower than the current market price. However, it is still not good enough as according to Graham’s criteria, the purchase price must not be more than two-thirds of the NCAV which is RM1.33. Therefore, we will not purchase the stock.
The margin of safety for this case is 26% (the difference between current market price and the conservative calculation using Graham’s criteria) which is lower than the minimum margin of safety of 33%. Buying at steep discount using the margin of safety approach can help to cushion the negative surprises in the financial market.
The above theory looks nice in theory but it is not very practical in the modern world now. Using this method, I can't find any good bargain because most of the companies have more debt than their current assets. But this method does screen out those companies with solid cash position in their balance sheet. Perhaps, we can improvise the strategy a little, rather than 2/3 of NCAV, maybe we can multiply the NCAV by 2 or 3 times instead.
Happy investing,
Pauline Yong
Tuesday, July 5, 2011
Herd Mentality
“Although markets do tend toward rational positions in the long run, the market can stay irrational longer than you can stay solvent.” - John Maynard
Today I would like to share with you a mental bias that concerns every investor, which is known as "herd mentality". But before that, let's acknowledge that the phenomenon of the herd mentality can be useful in many ways. For example, research shows that although 5% of the animals in a herd know the location of the water source, the entire herd is able to find it. In our daily lives, we use this instinct to navigate to the exit in cinemas and crowded streets.
We have to admit that herding is our human instinct. Herding always makes us feel comfortable, and being the odd one out make us feel uneasy. We are programmed to feel that the consensus view must be correct one; and this mistaken belief has led to many disastrous decisions such as the “Four Dragons” and “Four Tigers Era” of the 1990’s where many investors who were initially sceptical ended up buying into the hype under the mistaken belief that not everyone could be wrong. And yet, most people were wrong.
Some researchers theorise that investors follow the crowd and conventional wisdom to avoid the possibility of feeling regret in the event that their decisions prove to be incorrect.
Fear of Regret
People tend to feel sorrow and grief after having made an error of judgment. Investors deciding whether to sell a security are typically emotionally affected by whether the security was bought for more or less than the current price.
For example, most investors avoid selling stocks that are making paper losses in order to avoid the pain and regret of having a bad investment. The mentality is: after all, it’s only a paper loss, as long as I don’t realise the loss, it doesn’t count!
In addition, investors have the mindset of “what if the price goes up after I’ve sold it”; hence they would rather hold on to bad stocks hoping one day it will turn into a star.
However, some professional traders even advocate trend following as their winning trading strategy. They would apply technical analysis to help them in identifying the prevailing trend and trade with the trend. The biggest pitfall of this method is that it ignores fundamental analysis totally.
Herd mentality can be for good or bad. It is not totally wrong to follow the herd, but we must know when to follow and when not to. The challenge is in making an educated guess about when a turning point will occur and developing a trading plan to capitalise on it.
Happy investing,
Pauline Yong
Today I would like to share with you a mental bias that concerns every investor, which is known as "herd mentality". But before that, let's acknowledge that the phenomenon of the herd mentality can be useful in many ways. For example, research shows that although 5% of the animals in a herd know the location of the water source, the entire herd is able to find it. In our daily lives, we use this instinct to navigate to the exit in cinemas and crowded streets.
We have to admit that herding is our human instinct. Herding always makes us feel comfortable, and being the odd one out make us feel uneasy. We are programmed to feel that the consensus view must be correct one; and this mistaken belief has led to many disastrous decisions such as the “Four Dragons” and “Four Tigers Era” of the 1990’s where many investors who were initially sceptical ended up buying into the hype under the mistaken belief that not everyone could be wrong. And yet, most people were wrong.
Some researchers theorise that investors follow the crowd and conventional wisdom to avoid the possibility of feeling regret in the event that their decisions prove to be incorrect.
Fear of Regret
People tend to feel sorrow and grief after having made an error of judgment. Investors deciding whether to sell a security are typically emotionally affected by whether the security was bought for more or less than the current price.
For example, most investors avoid selling stocks that are making paper losses in order to avoid the pain and regret of having a bad investment. The mentality is: after all, it’s only a paper loss, as long as I don’t realise the loss, it doesn’t count!
In addition, investors have the mindset of “what if the price goes up after I’ve sold it”; hence they would rather hold on to bad stocks hoping one day it will turn into a star.
However, some professional traders even advocate trend following as their winning trading strategy. They would apply technical analysis to help them in identifying the prevailing trend and trade with the trend. The biggest pitfall of this method is that it ignores fundamental analysis totally.
Herd mentality can be for good or bad. It is not totally wrong to follow the herd, but we must know when to follow and when not to. The challenge is in making an educated guess about when a turning point will occur and developing a trading plan to capitalise on it.
Happy investing,
Pauline Yong
Tuesday, June 28, 2011
Overconfidence
One of the most documented of all psychological errors is the tendency to be over optimistic. In general, most people do not see the need to improve the way they make decisions, as they believe that they are already making excellent decisions. The unwarranted belief that we are usually correct is a major real-life barrier to critical thinking.
People exaggerate their own abilities and this is particularly common in managing their assets. Overconfidence often results in investors being fooled by small gains in a few trades, feeling much more in control of a situation than they are. Money managers, advisors and investors are consistently overconfident in their ability to outperform the market, but fail to do so.
For example, mutual fund managers, analysts, and business executives at a conference were asked to write down (1) how much money they would have at retirement and (2) what is their net worth now. The average figures were $5 million and $2.6 million respectively. The professor who asked the question said, “regardless of the audience, the ratio is always 2:1”. People are definitely very confident that they will at least make more money in future than now.
Overconfidence can lead to the followings:
1. Not having an investment plan
Perhaps the most common reason why investment plans fail is that the investor doesn’t actually have a plan. The very first step of a rational investor is to draft a plan stating investment goals and conditions. This is to make you detached from the whole investment business and follow strictly by the book not your heart.
2. Overtrading
In Odean and Barbet’s study of 78,000 investors’ accounts in a large brokerage firm from 1991-1996, the most active traders scored an average return of 10% compared to the less active investors’ 17.5% profits. And online traders suffer even lower returns as they tend to overtrade and thus lose money to brokerage charges.
3. Lack of diversification
Due to overconfidence, investors tend to invest heavily on a particular investment with the optimism that it will generate good returns. This lead to insufficient diversification of portfolios.
In general, overconfidence is caused by mental bias that leads investors to over-estimate their knowledge, under estimate the risk and exaggerate the control they have over a situation.
Happy investing,
Pauline Yong
People exaggerate their own abilities and this is particularly common in managing their assets. Overconfidence often results in investors being fooled by small gains in a few trades, feeling much more in control of a situation than they are. Money managers, advisors and investors are consistently overconfident in their ability to outperform the market, but fail to do so.
For example, mutual fund managers, analysts, and business executives at a conference were asked to write down (1) how much money they would have at retirement and (2) what is their net worth now. The average figures were $5 million and $2.6 million respectively. The professor who asked the question said, “regardless of the audience, the ratio is always 2:1”. People are definitely very confident that they will at least make more money in future than now.
Overconfidence can lead to the followings:
1. Not having an investment plan
Perhaps the most common reason why investment plans fail is that the investor doesn’t actually have a plan. The very first step of a rational investor is to draft a plan stating investment goals and conditions. This is to make you detached from the whole investment business and follow strictly by the book not your heart.
2. Overtrading
In Odean and Barbet’s study of 78,000 investors’ accounts in a large brokerage firm from 1991-1996, the most active traders scored an average return of 10% compared to the less active investors’ 17.5% profits. And online traders suffer even lower returns as they tend to overtrade and thus lose money to brokerage charges.
3. Lack of diversification
Due to overconfidence, investors tend to invest heavily on a particular investment with the optimism that it will generate good returns. This lead to insufficient diversification of portfolios.
In general, overconfidence is caused by mental bias that leads investors to over-estimate their knowledge, under estimate the risk and exaggerate the control they have over a situation.
Happy investing,
Pauline Yong
Sunday, June 5, 2011
What happens when an economist fails to predict?
There was a famous economist, who was also a Yale professor who was once a very successful man, driven by chauffeured limousine, owned $10million worth of stocks but because he made a blunder in his macroeconomics view he lost all his fortune and died in poverty! He was known as the Milton Friedman of his time, the premier monetarist – Irving Fischer, the man who contributed to the Quantity theory of Money.
Where did he go wrong? During the 1920’s the U.S. was enjoying the fruits of the industrial revolution with new technology and new consumer products, one of them was the mass production of the Ford T model. Fischer believed in this new era and he was too optimistic about the macroeconomic data at that time. He was famous for having made a statement one week before the crash, on October 16th, 1929: "Stocks appear to have reached what appears to be a permanent plateau." He argued that stocks could not go down, and economists have had to live with that.
As a great economist he failed to see the Great Depression was coming and as a result, Irving Fischer lost his entire fortune. He was totally wiped out of his $10 million, and in the late 1940's his financial situation was so dire that Yale University had to buy his home and rent it back to him for free. When he died, he died in poverty and disgrace.
Do economists have more prediction power than the rest when it comes to guessing the direction of the market? In my personal view, I think stock investing is an art. There’s no fixed rule for it and definitely we can’t just rely on facts and figures to make decisions. Having an economics degree or a finance degree doesn’t mean you can do well in the stock market. What most investors need is a combination of experience, luck, knowledge and most importantly, good analytical skills.
I’ve been pondering how well I can predict the stock market too. In 1996, I saw the super bull run in Malaysia and thought we were really the “tigers” of Asia. However my dad told me something that I will never forget! He said it could be a bubble. I was very puzzled and he explained to me further how the asset bubble was formed and how the houses were in over supply at that time because everyone thought they could make money from assets and not from production!
Rober Kiyosaki said he has a rich dad and a poor dad, but I always tell people I’ve a “Wise Dad”! I learned about the virtue of value investing from my dad because I saw how his portfolio ballooned to hundred folds when he invested during the 1997-98 Asian financial crisis. My dad doesn’t have economics or finance background, but he graduated from University of Malaya with Engineering degree. To me he’s a very successful investor. Through my dad, I think I’ve found the key factor to success in stock investing, which is:
KNOWLEDGE + ANALYTICAL SKILL + VISIONARY
Having knowledge alone is not enough, because knowledge is just a source of information. We need further analysis to get to the possible effects of the source. And we must have a visionary perspective of the whole situation to see the bigger picture.
Irving Fischer was a knowledgeable man and I’m sure his analytical skill was superb but what he lacked was “visionary”. He was unable to see the bigger picture into the future and was blinded by the rosy scenario in Wall Street.
As for me, I’m still learning. If I continue to polish my skills through learning from successful people I believe I’ll have more successful and rewarding investment in years to come.
Happy investing,
Pauline Yong
Where did he go wrong? During the 1920’s the U.S. was enjoying the fruits of the industrial revolution with new technology and new consumer products, one of them was the mass production of the Ford T model. Fischer believed in this new era and he was too optimistic about the macroeconomic data at that time. He was famous for having made a statement one week before the crash, on October 16th, 1929: "Stocks appear to have reached what appears to be a permanent plateau." He argued that stocks could not go down, and economists have had to live with that.
As a great economist he failed to see the Great Depression was coming and as a result, Irving Fischer lost his entire fortune. He was totally wiped out of his $10 million, and in the late 1940's his financial situation was so dire that Yale University had to buy his home and rent it back to him for free. When he died, he died in poverty and disgrace.
Do economists have more prediction power than the rest when it comes to guessing the direction of the market? In my personal view, I think stock investing is an art. There’s no fixed rule for it and definitely we can’t just rely on facts and figures to make decisions. Having an economics degree or a finance degree doesn’t mean you can do well in the stock market. What most investors need is a combination of experience, luck, knowledge and most importantly, good analytical skills.
I’ve been pondering how well I can predict the stock market too. In 1996, I saw the super bull run in Malaysia and thought we were really the “tigers” of Asia. However my dad told me something that I will never forget! He said it could be a bubble. I was very puzzled and he explained to me further how the asset bubble was formed and how the houses were in over supply at that time because everyone thought they could make money from assets and not from production!
Rober Kiyosaki said he has a rich dad and a poor dad, but I always tell people I’ve a “Wise Dad”! I learned about the virtue of value investing from my dad because I saw how his portfolio ballooned to hundred folds when he invested during the 1997-98 Asian financial crisis. My dad doesn’t have economics or finance background, but he graduated from University of Malaya with Engineering degree. To me he’s a very successful investor. Through my dad, I think I’ve found the key factor to success in stock investing, which is:
KNOWLEDGE + ANALYTICAL SKILL + VISIONARY
Having knowledge alone is not enough, because knowledge is just a source of information. We need further analysis to get to the possible effects of the source. And we must have a visionary perspective of the whole situation to see the bigger picture.
Irving Fischer was a knowledgeable man and I’m sure his analytical skill was superb but what he lacked was “visionary”. He was unable to see the bigger picture into the future and was blinded by the rosy scenario in Wall Street.
As for me, I’m still learning. If I continue to polish my skills through learning from successful people I believe I’ll have more successful and rewarding investment in years to come.
Happy investing,
Pauline Yong
Tuesday, May 24, 2011
Valuable Advice from Jim Rogers
The following is an extract from the recent interview by Investment U with Jim Rogers. He shared with us his valuable experience in trading, which I think is the best advice for any value investor!
Jim Rogers: I would say one lesson we all need to learn is that after you’ve had a great success, you really should be very worried. Let’s say you sell and say you’ve made 10 times on your money. You should be extremely worried. You should close the curtains, not read, look at the TV, or anything because that’s when you’re full of hubris, arrogance, confidence. You think, “God, this is something easy,” and you’re desperate to jump around to something new. You should do your very best to avoid making another play until you’ve calmed down a lot. Just wait. It’s a very dangerous time for any investor.
Likewise, if you take a huge loss and there’s a big panic and things are dumped on your head because you’re overextended or wrong for whatever reason, calm down, don’t say, “I’m never gonna invest in stocks again or commodities or whatever.” That’s the time you really should be willing to invest again if you can gather together some capital money. The investments can be terribly emotional. You have to figure out a way to control your emotions and deal with your emotions if you’re going to survive in these markets.
My advice is that, most of the time, most investors should do nothing. They should look out the window or go to the beach. You should wait until you see money lying in the corner and all you have to do is go over and pick it up. That’s how most investors should invest. The problem is we all think we need to jump around all the time and be jumping in and out and that’s not good.
We think we have to have investments. No, we don’t. If I said you could only have 25 investments in your whole lifetime or if there was some way to limit you to 25, you would be extremely careful. You wouldn’t be jumping around doing all sorts of strange things. Patience is what most investors need to learn. You don’t have to be doing things all the time. Most of the time the best thing is to do nothing. You just sit with what you have as an investment and let it ride or sit and wait until you see someone sitting in the corner.
Most of the time – unless you’re a short-term trader and great at it. I’ve known some spectacular short-term traders. But for most investors, unless you’re one of those guys, then you should just do nothing. Do nothing. If you’re an investor, do nothing except re-examine what you have, and if you’re not investing, just continue to look until you find something.
Happy investing,
Pauline Yong
Jim Rogers: I would say one lesson we all need to learn is that after you’ve had a great success, you really should be very worried. Let’s say you sell and say you’ve made 10 times on your money. You should be extremely worried. You should close the curtains, not read, look at the TV, or anything because that’s when you’re full of hubris, arrogance, confidence. You think, “God, this is something easy,” and you’re desperate to jump around to something new. You should do your very best to avoid making another play until you’ve calmed down a lot. Just wait. It’s a very dangerous time for any investor.
Likewise, if you take a huge loss and there’s a big panic and things are dumped on your head because you’re overextended or wrong for whatever reason, calm down, don’t say, “I’m never gonna invest in stocks again or commodities or whatever.” That’s the time you really should be willing to invest again if you can gather together some capital money. The investments can be terribly emotional. You have to figure out a way to control your emotions and deal with your emotions if you’re going to survive in these markets.
My advice is that, most of the time, most investors should do nothing. They should look out the window or go to the beach. You should wait until you see money lying in the corner and all you have to do is go over and pick it up. That’s how most investors should invest. The problem is we all think we need to jump around all the time and be jumping in and out and that’s not good.
We think we have to have investments. No, we don’t. If I said you could only have 25 investments in your whole lifetime or if there was some way to limit you to 25, you would be extremely careful. You wouldn’t be jumping around doing all sorts of strange things. Patience is what most investors need to learn. You don’t have to be doing things all the time. Most of the time the best thing is to do nothing. You just sit with what you have as an investment and let it ride or sit and wait until you see someone sitting in the corner.
Most of the time – unless you’re a short-term trader and great at it. I’ve known some spectacular short-term traders. But for most investors, unless you’re one of those guys, then you should just do nothing. Do nothing. If you’re an investor, do nothing except re-examine what you have, and if you’re not investing, just continue to look until you find something.
Happy investing,
Pauline Yong
Tuesday, May 17, 2011
Glencore IPO
For people who are thinking of diversifying into the London Stock Exchange (LSE), perhaps you can take a look at this IPO – Glencore International.
Glencore is a Swiss-based company, one of the world's largest suppliers of commodities and raw materials, founded in 1974, over the years, it has expanded its operation into: metals, minerals, crude oil, oil products, coal, natural gas and agricultural products to international customers in the automotive, power generation, steel production and food processing industries.
How big is this company? It’s about US$50billion - $60billion in valuation, 80% held by private equity firms and state funds including Singapore GIC, China, Korea, Abu Dhabi and Kuwait state funds (CNBC). 20% will be open to the public and will be listed in both London and Hong Kong stock exchanges on the 24th May 2011.
This stock is very “hot”! It’s 4 times oversubscribed and every one is talking about it since we are in a commodity bull. However, I have to warn investors here that commodities are very volatile and its not suitable for investors with low risk appetite.
CNBC News
Happy investing,
Pauline Yong
Glencore is a Swiss-based company, one of the world's largest suppliers of commodities and raw materials, founded in 1974, over the years, it has expanded its operation into: metals, minerals, crude oil, oil products, coal, natural gas and agricultural products to international customers in the automotive, power generation, steel production and food processing industries.
How big is this company? It’s about US$50billion - $60billion in valuation, 80% held by private equity firms and state funds including Singapore GIC, China, Korea, Abu Dhabi and Kuwait state funds (CNBC). 20% will be open to the public and will be listed in both London and Hong Kong stock exchanges on the 24th May 2011.
This stock is very “hot”! It’s 4 times oversubscribed and every one is talking about it since we are in a commodity bull. However, I have to warn investors here that commodities are very volatile and its not suitable for investors with low risk appetite.
CNBC News
Happy investing,
Pauline Yong
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