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Showing posts from July, 2007

Singapore shares close 2.4% lower following Wall Street slump

SINGAPORE - Singapore share prices closed 2.4 percent lower on Friday, falling sharply in line with other regional bourses after one of Wall Street's worst sell-offs overnight, dealers said.

The Straits Times Index was down 87.03 points at 3,492.70, its lowest finish since June 8.

Overall volume was 4.11 billion shares worth S$4.11 billion, with losers leading gainers 933 to 139 and 491 stocks remaining unchanged.

US shares plunged Thursday by more than 300 points, with investors gripped by anxiety over the housing market.

Those losses, coupled with lacklustre local corporate results from DBS Group Holdings and Chartered Semiconductor, prompted investors to dump shares, dealers said.

CIMB-GK Research said a technical analysis of global equity markets showed signs of an impending major correction.

"Stock markets in Europe and the US have started to correct and weekly indicators have turned negative," CIMB-GK said in a research note. "Asia (excluding Japan) still looks st…

All Good Things Gotta Come to an End

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The stock market has been on a dizzying ride over the past year, up almost 30% over the past 12 months. And by following a number of seasonal and sentiment models – many of which I have written about in the past – I have been able to convince myself to sit tight and enjoy the ride, rather than trying to "outguess" the market and take profits prematurely. But as the old adage goes, "all good things gotta come to an end." Now that statement in this context should not be construed to mean that the stock market is due to top out and embark on a major price decline anytime soon, nor that investors should "sell everything" and run for the hills. It simply means that investors should probably not expect another 30% gain on top of the one we have just experienced.To get a sense of why I am pulling in my horns a bit, let's look at a few of the "gathering clouds."THE 40-WEEK CYCLE FLIPS TO THE BEARISH PHASEAs many Optionetics and ProfitStrategies stud…

What could derail the M&A boom

A number of factors have driven the M&A market to record levels. Here's what might turn off the flow of deals.
By Grace Wong, CNNMoney.com staff writer
LONDON (CNNMoney.com) -- A swell of private equity buyers, solid corporate profits, the availability of cheap debt and robust liquidity have all helped propel the boom in mergers and acquisitions.U.S. merger volume has risen to $1.2 trillion so far this year, according to deal tracker Dealogic. By comparison, deals in the U.S. totaled $1.5 trillion for all of 2006.
While many in the industry agree that activity has peaked, they also say the fundamentals underpinning this activity remain strong. In short, barring some external shock, few expect the boom to go bust.At the same time, the factors keeping the deals flowing are strongly linked, which means that a problem that crops up in one area could trigger a chain reaction of difficulties for the market. Here's a look at what analysts are watching for.
Economic growth. Solid econ…

Why banks beat bonds

Fortune's Shawn Tully says these stocks offer an appealing combination of juicy yields and growth potential - plus they're cheap!
By Shawn Tully, Fortune editor-at-large
(Fortune Magazine) -- Wouldn't it be great if you could find the ideal blend - an investment that combined the cozy security of government bonds with the double-digit returns investors expect from stocks? That seems like a pipe dream in a world where ten-year Treasuries yield 5 percent and equities sell at premium prices that augur a dim future. But this ideal investment exists, and believe it or not, it's called a bank stock. Hold that yawn. Bank stocks offer a sterling array of qualities right now. They pay huge dividends, approaching 5 percent, that are bound to keep rising. They're incredibly cheap. And their prospects for growth are surprisingly sprightly.
Three giant banks with beaten-down share prices and fat dividend yields are excellent choices right now: Bank of America (Charts, Fortune 500)…

You can handle a crash better than you think

Stop worrying and stay invested. Research shows that fear of a loss feels worse than the actual loss itself.
By Jason Zweig, Money Magazine senior writer/columnist
(Money Magazine) -- Have you ever been snoozing on an airplane and been jolted awake by a crunch of turbulence? Your heart pounds, you clutch the arms of your seat, and you jump when the captain comes on the p.a. That's what the stock market has felt like lately. After a 19% gain in 2006 lulled us to sleep, the Dow Jones industrial average dropped 416 points on Feb. 27 and another 243 on March 13.t's at times like these that your own behavior feels hard to forecast because everything seems uncertain. What if you sit tight and the market drops further? What if you bail out and the market goes up? If this is how you feel, you're not alone. But you have less to fear than you think. Research shows that the regrets you expect tend to be more painful than the ones you experience. And doing nothing - exactly what you sho…

Survive stock drops - and profit from them

Losing money never feels good. But keep things in perspective and you can boost long-term returns.
NEW YORK (CNNMoney.com) -- You have to admit: Stocks have risen to mighty heights mighty fast. The Dow has hit three milestones in nine months - crossing 12,000 in October, 13,000 in April, and just last week, 14,000.That was Dr. Jekyll Dow talking. But Mr. Hyde Dow was always lurking.
On Thursday, the leading stock index closed down 311 points, or more than 2 percent, the second biggest point drop this year. The biggest came Feb. 27, when the Dow fell 416 points, or 3.3 percent. What to make of this? Stocks are volatile. Or more to the point, investors' emotions are.It takes nerves of steel to shake off a big stock drop. But the world's best investors not only shake them off - they thrive on them.
They know sell-offs are common, perfectly normal, and even healthy. When stocks go way up in a hurry, their prices become unsustainably high. Only by falling occasionally (and even sharpl…

M&A careers are passé

Working in M&A is sooo yesterday, says William D. Cohan, author and former MD at JPMorgan and VP at Lazard. With US$5 trillion worth of transactions likely this year, the global M&A market is booming and on track to have its best year ever by a wide margin. But does that news bode well for those aspiring to a career as a Wall Street M&A advisor? The answer, alas, is "not really". While Wall Street managers – overpaid and over-promoted bankers themselves – have never been particularly savvy at matching hiring needs to the flow of deals, they are at least clever enough not to bulk up their M&A departments this late into a market expansion that's close to four years old. Much of the M&A hiring occurring now seems to be at the managing director level, replacing those experienced industry experts that jump to rivals or – more and more – who leave investment banking altogether for the holy land of private equity or hedge funds. And while it is certainly tr…

Five Ways to Become Job-Search Savvy

By Carol Lippert Gray

Some people scour jobs boards, others network like there's no tomorrow. Whatever your job-search strategy, here's five tips to help you stand out from the pack.

Think Strategically

"You never want to get caught behind changes in the marketplace," says Dawn Fay, New York-based regional vice president of Robert Half International. "When the market changes, it's often subtle, so stay ahead of the game." That means reading as much as you can in professional and generic publications and Web sites and constantly nurturing your network to keep the pulse of the hiring climate. "There's always an ebb and flow of demand for certain skills and positions. Stay focused on the big picture," Fay says. "Keep an inventory of your skills and network going and really think things through."

You also may have to learn to think entrepreneurially, to reformat your skills to match morphing ma…

Seven Reasons to Be Bullish Now

By James Altucher

I got into a fistfight in a bar the other day. There was blood everywhere. I got glass splinters in my face. The other guy might still be in a coma. I'm still wearing the white bracelet they put on me when they checked me in for "observation."

This is how I feel every day when I battle the bears who participate with me on an email list made up of investors and traders. The wall of worry is huge and seemingly insurmountable. But here are a few bricks for the wall of hope. 1. Private equity. There's roughly a trillion dollars sloshing around in the private-equity world, including the money that banks would lend to close any major purchases. With Blackstone buying Hilton at 16 times cash flows and the average purchase now coming in around 11 to 13 times cash flows, it opens up an entire universe of stocks that can be takeover targets. Possible candidates include Macy's and Wyndham. 2. Retail investing. The retail investor still has not gotten back…

Warren Buffett: Try index funds

Leslie McFaddenIt's not every day you get to see the world's second richest man lose.But the shareholders of Berkshire Hathaway Inc., Warren Buffett's holding company, got to see it twice during the first weekend in May at the Berkshire Hathaway 2007 Annual Shareholders Meeting in Omaha, Neb.First Buffett, whose net worth Forbes magazine lists at $52 billion, took on friend and Cleveland Cavaliers basketball star LeBron James in a game of "horse." Then he challenged an 11-year-old table tennis champion.Suffice to say, Buffett probably ought to stick to investing.Much of the weekend was filled with light-hearted fun. Shareholders who made the pilgrimage to Omaha this year got a chance to shop the merchandise of Berkshire's many subsidiaries, watch a company video of Buffett playing James and capture many Kodak moments of Bill Gates and Warren Buffett playing table tennis at the local mall.Of course, the real reason people flocked to Omaha, had nothing to do wi…

Five Mistakes Investors Just Can't Afford

By Roger Ibbotson

Traditional concepts of finance are built upon the idea of efficient markets. In that world, investors are rational, unbiased, logical, and risk-averse. When investors act in accord with these qualities, a stock's price equals its value, and no trading strategy should beat the market.

But those of us who invested in the stock market in the late 1990s suspect that might not always be the case--and we may have even been guilty of a little "irrational exuberance" ourselves.We're Consistently Irrational
For decades, psychologists have been studying human decision-making and discovered that we are systematically irrational. We tend to consistently act in an irrational manner in certain situations and when making certain decisions. When this discovery was later applied to investing, the field of behavioral finance was born.Though this field of study has been around for some time, it gained fresh attention following the technology bubble. Investors and econom…

Five Reasons to Sell, Sell, Sell

By Ben Steverman

U.S. stocks are at record levels. Earnings season is under way, with many expecting a modest rise in corporate profits. Unemployment is very low. So far problems with housing haven't infected the rest of the economy, which seems poised to bounce back from slow growth in the first quarter.

So what is there to worry about? Plenty. No matter how wonderful things look, the good times won't last forever. Even as most market observers remain bullish, we asked them what could derail this bull market. Stocks could keep setting records for months or even years, but it pays for investors to know what dangers are lurking out there. This Five for the Money lists the five biggest threats to the stock market rally.1. EarningsWill any stocks and sectors step up to the plate to push the market even higher? Investors are closely watching corporate earnings for clues.Earnings season began this month and so far it's not clear whether corporate profits will keep pace with expec…

Safe havens for risky times

As volatility increases, it may be a good time for investors to take a closer look at investments that hold up well when the market is challenged.
LONDON (CNNMoney.com) -- With stocks hitting new peaks, it may seem counterintuitive to focus attention on more conservative investments.But safe-haven investments are growing more appealing to some analysts, who say the market has gotten ahead of itself and is due for a correction.A lot of people have been "taking profit off the table and paring back their exposure to high-risk areas," including emerging markets like China and Latin America, said Tom Roseen, a senior research analyst at mutual fund research firm Lipper.
Volatility, as measured by the Chicago Board Options Exchange Volatility Index, has also been rising - which means sharper movements in the market are likely. Investors shouldn't overhaul their portfolio in an attempt to time market swings. The key to success with any portfolio is keeping it diversified through …

Do you think you are still unsuccessful after getting a "great" job?

For Frustrated Achievers, More Is Lessby Laura Rowley
Economist Carol Graham studies globalization, market reforms, income mobility, and growth in developing societies. A senior fellow at the Brookings Institution and a professor at the University of Maryland, Graham doesn't think of herself as a happiness researcher.
But then she discovered that something funny was happening on the way up the economic ladder.
Success Is Relative
While studying economic progress in Peru and Russia, Graham found herself repeatedly stumbling over a group of unhappy success stories. For example, she was surprised to find that nearly half of Peruvian workers with the most upward income mobility reported that their economic situation was negative, or very negative, compared to 10 years prior.
Graham conducted an analysis based on comparable data for Russia, and discovered an even higher percentage of what she now calls "frustrated achievers." Other surveys have identified a similar pattern in urba…

Another Investment Myth Exposed

by Graham Dyer
"Stocks always rise in the long term.Don't try and time the market; what you need is time IN the market! Just buy and hold."

You have no doubt had the experience of being urged like this by your stockbroker or someone else with a vested interest in you owning shares. Or it might have simply been a well-meaning friend. "You can't pick the bottom, just like you can't pick the top. So just buy stocks, and even if they fall in value in the short term they will always rise to a new high later on." This sort of advice often goes along with the "Cash is Trash" mantra. Of course, if it were a realtor urging you, the "advice" would be quite different.
So, is it true? Do shares always rise in the long term? That depends on what you mean by long term.

Ignoring dividends, if you had bought the Dow Jones index in 1965/66, do you know how long you would have had to wait to get your money back? Nearly seventeen years! That's right. …

The simple steps to creating wealth

by Scott Francis

A lot of financial planning focuses on important decisions that have to be made about 'financial planning strategy' (eg salary sacrifice contributions to superannuation) and 'investment selection' (eg index funds vs actively managed funds vs direct shares). Perhaps not enough focuses on the simple disciplines that lead to a person becoming wealthy over time. Outlined is a 5 step guide to how you can become wealthy over a life time - a 'get rich slow' recipe. We are starting to see in the media that the Henry Kaye style 'get rich quick' property seminars and the 'get rich quick' share trading programs don't work. The power of this get rich slow recipe is that it has worked for many people, and it will work for many more.

1/ Spend less than you earn. As simple as this sounds, clearly many people don't get past this first rule. Statistics on the level of debt that we have in Australian show that it is reaching record levels, …

Why Buffett's Investment Strategy Won't Work For Buffett Anymore - But For You It Will Still Work!

By Hendrik Oude Nijhuis
You probably already know that Warren Buffett is the world’s greatest investor of all time. Starting with only $ 100, Buffett made an unprecedented journey in creating a personal fortune of $ 48 billon. A truly unprecedented accomplishment, especially when you consider he never started a company of his own and never invested a single penny in technology stocks. His complete fortune comes from investing in the stock market!And, as a matter of fact, Buffett’s investment strategy isn’t that complicated: buy shares of quality companies when they are ‘on sale’. That’s all there is! With this straightforward strategy Buffett earned his billions of dollars. But, as we take a deeper look at Buffett’s returns over time something stands out…
The outperformance of Buffett compared with the S&P 500 diminishes over time. Between 1957 and 1966 Buffett outperformed the S&P 500 by a massive 14.5 times. In the most recent decade his outperformance has been diminished to ‘…

Young Ones, Go Forth and Speculate

The article below is an interesting one with ideas going against traditional financial advice for people in their 20s....see if you agree with the author :)

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ByCliff Mason, TheStreet.com Staff Reporter

Every day I read personal finance articles with bad advice that is recycled endlessly. Ordinarily I keep my mouth shut about them, but recently Jonathan Clements over at The Wall Street Journal devoted one of his columns to advice for people in their 20s, and that's my turf. You can read it here if you have a subscription and a pillow handy for the cat-nap it will likely induce.

I started foaming at the mouth when Clements suggested that investors in their 20s should put 60% of their money in stocks and 40% in bonds. I got a tic in my right eye when he pooh-poohed the idea of investing heavily in growth stocks while you're young, and I had to spend 15 minutes punching a pillow while I calmed down. This is exactly the kind of one-size-fits-all advice…