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Showing posts from October, 2007

As Fed meets, U.S. stocks see warning signs

By E.S. Browning
1401 words
30 October 2007The U.S. Federal Reserve meets this week amid persistent signs of trouble in the stock market.
After the Fed's half-percentage-point interest-rate cut six weeks ago, major stock indexes rebounded, and the Dow Jones Industrial Average remains near its record high. But rising oil prices, mixed corporate-profit reports and the spreading effects of a housing slump continue to fuel tumult in the economy -- and some underlying patterns suggest that stocks may have trouble maintaining their high-wire act. Major stock indexes are being supported by multinationals such as Microsoft Corp., Coca-Cola Co. and Procter & Gamble Co., which benefit from the strong global economy. Many other stocks, notably financial institutions and smaller companies dependent on the flagging U.S. consumer, have taken hits. Other indicators also suggest thin support for the market. The ratio of the number of stocks rising versus the number that are falling has been gett…

Alert: Sunshine Empire

The Electric New Paper :

WHAT WATER THEME PARK PROJECTS?
Blacklisted S'pore MLM company unveils lavish M'sian developments. But M'sian authorities say...
THEIR presentation was certainly designed to impress and strike awe.
By Hedy Khoo
29 October 2007

THEIR presentation was certainly designed to impress and strike awe.

With just $12,000, you stand to make many times more by being part of a 'global' company that has stakes in many high-profile projects in the region.

These include a trading portal that is supposedly better than eBay, as well as majestic theme parks in Malacca and Sabah that boast floating villas and underwater hotel rooms.

To prove the point to about 100 people who attended Sunshine Empire's talk last week, a slide show titled Anything Is Possible was shown.

Without any explanation, the audience was shown several pictures, including one of an overcrowded bus in India with some passengers on the roof and others with legs dangling out of the windows.

Another…

Millionaires focus on freedom

Jay MacDonald Want to get to the top financially? Take advice from those who are already there. At a glance Name: Keith Cameron Smith Hometown: Ormond Beach, Fla. Education: Calvary Christian Academy, Ormond Beach, Fla. Career highlights: Author of the national best-seller, "The Spiritual Millionaire" and "The Top 10 Distinctions Between Millionaires and the Middle Class" Entrepreneur and self-made millionaire at age 33 Hosted "Flames of Truth," a motivational radio program, for five years Hosts seminars and teaches success principles to individuals, churches and companies across America Financial guru Keith Cameron Smith, author of the best-selling "The Spiritual Millionaire" and himself a self-made millionaire at age 33, invested $100,000 and two years of his life to meet face-to-face with some of the world's wealthiest people to learn what makes them tick. Overwhelmed by the life lessons they imparted, Smith holed himself up in a North Ca…

What's the best advice you've gotten?

Dana Dratch When you need advice, it's usually best to go to the experts. So Bankrate did, collecting the thoughts of eight personal finance gurus on increasing your wealth. In some cases, the experts had to learn the lesson themselves (usually after a few hard knocks).Many times, a sound example was offered by someone successful who was already living it.
And in every case, the person who later became an expert recognized the wisdom for what it was -- and is still using it to build wealth. Learn what these successful people said they consider the best personal financial advice they ever received.Experts' best advice Get advice from the authorities. Here's what these personal finance experts had to say: Gary Belsky, co-author of "Why Smart People Make Big Money Mistakes and How to Correct Them: Lessons from the New Science of Behavioral Economics": "Be afraid when people are greedy, and greedy when people are afraid. It's basically, 'Buy low and sell …

As China's bubble fears grow, choosy investors favor large caps

Beijing -- AS CHINA'S stock markets have zoomed to new highs this year, local investors have become increasingly worried about a bubble and are getting pickier with their choices.
The result? The market is going still higher, as investors pour cash into the large companies that dominate the broad indexes. Such stocks are seen as safe and conservative investments in the context of China's market, and are favorites of domestic mutual funds and institutional investors. So even as concerns about a bubble grow, many analysts are still saying that China's biggest listed companies are worth buying, since they are generally seen as well positioned to deliver decent earnings growth at a lower risk. These tend to be state-controlled companies in sectors from energy to telecommunications to metals and real estate. The shares, traded in Shanghai and Shenzhen, are generally off-limits to foreign investors, although shares of some companies also trade in Hong Kong. Also, foreign fund man…

With inflation monster tame, Fed can manage risk

CHICAGO (Reuters) - With inflation pressures relatively tame for now, the Federal Reserve appears to have a wide-open window to pursue a "risk management" interest rate policy that insures against a steep economic downturn created by the housing market slump.

Recent mild inflation data has been applauded by policy-makers, and even as the dollar sags and crude oil prices climb many Fed watchers guess that inflation will stay contained by anemic economic growth.

"The cost of cutting with regard to inflation risk is low, but the cost of doing nothing in terms of economic growth may be high," said Cyril Beuzit, economist at BNP Paribas.

The Fed's Open Market Committee meets Tuesday and Wednesday to decide its next move. In September, the central bank surprised markets with an aggressive 50 basis point cut in the federal funds rate, its first in more than four years. That took the key lending rate to 4.75 percent from 5.25 percent.

Financial contracts handicapping expe…

Tapping Truly Emerging Markets

By Andrew Tanzer
It's been hard to go wrong investing in emerging markets in recent years. Chris Alderson, lead manager of T. Rowe Price Emerging Markets Stock has made the most of this bull run. His fund returned a sizzling 62% in the year through October 24, six points better than the MSCI Emerging Markets Index -- the most common benchmark for funds that invest in developing countries Korea, Taiwan, Russia and Brazil. Over the past five years, he's returned an annualized 40%, an average of four percentage points per year ahead of the benchmark.So now he's turning to relatively virgin markets with T. Rowe Price Africa & Middle East, which launched in September and gained 10% in its first month. "This represents the last frontier," says Alderson.You don't want to put your life savings in such a narrow and essentially untried geographic sector, but there are quite a few intriguing aspects to this new fund. Stock exchanges in Africa and the Middle East, onl…

The Only Investment Style You'll Ever Need?

By Michael Breen

Casting your net in the fishiest waters gives an edge in fishing. The same is true in investing. The ability to slice and dice data using hundreds of specialized statistics can cause us to lose sight of the fact that the underlying goal for most investors remains very straightforward: compound capital at the highest possible rate over time. Beating the overall market over time is a common goal for many funds and investors. We looked at the performance of broad investment styles over time to see if a particular style had done a better job at helping investors meet this goal. A clear pattern emerged.

Top Fishing Hole
Here's what we did. We compared the performance of all domestic-equity share classes with the Dow Jones Wilshire 5000 Index for the trailing 15-year period through Sept. 30, 2007. We chose this index because, unlike the large-cap-leaning S&P 500 Index, it covers the full market-cap spectrum. This stretch of time also represents more than a full market …

John Bogle shares his wisdom

Cheryl AllebrandIf you can't beat the market, be the market: That's the logic behind index funds. More than 30 years ago, John Bogle set up shop to help investors capture market returns at minimal cost. He had realized a quarter-century earlier that complex mutual fund investing strategies don't consistently outperform market returns.

At a glance

Name: John C. Bogle
Hometown: Valley Forge, Pa.
Education: Magna cum laude economics degree from Princeton in 1951


Career highlights:

Founded Vanguard in 1974

Voted one of the "world's 100 most powerful and influential people" by Time magazine in 2004

Institutional Investor's Lifetime Achievement Award (2004)

Named one of the investment industry's four "Giants of the 20th Century" by Fortune magazine in 1999

Received the Woodrow Wilson Award from Princeton University for "distinguished achievement in the Nation's service" (1999)

Even Bogle's detractors have had to admit that the wisdom…

You're Not Super Rich? You Lucked Out.

By Jonathan Clements Great wealth is overrated. Whenever my kids swoon over a palatial home or a passing Ferrari, it always bugs the heck out of me. Before long, I am on my soapbox, insisting that they shouldn't be awed by such symbols of wealth.This might sound odd coming from a personal-finance columnist. But the fact is, while it is comforting to be financially secure, money is no measure of self-worth, no guarantee of happiness -- and no reason to be impressed. We all tend to sit up and take notice when we come across people with fancy titles, hefty incomes and immense riches. Yet these aren't signs of genius or virtue. Want proof? All it takes is two words: Paris Hilton. Wealth may be inherited, which means the beneficiaries' struggle for riches didn't extend beyond the delivery room. Legendary investor Warren Buffett, the billionaire chairman of Berkshire Hathaway, has described "the idea that you win the lottery the moment you're born" as "out…

Possible 2008 recession in US will hit Asia: Stephen Roach

Asia needs to take events in US more seriously, he says

THE United States could face a consumer-induced recession next year, which will also hit Asian economies, said Morgan Stanley's chairman for Asia, Stephen Roach.

Speaking at the World Knowledge Forum in Seoul, Mr Roach - well known for his bearish views - presented what he called a 'decidedly sub-prime outlook' for the US economy.

The so-called sub-prime mortgage crisis is 'the tip of a much bigger iceberg', he said. It has started to hit the American consumer.

Mr Roach, who has long predicted a US economic slowdown, pointed out that the US consumer is facing the toughest times in 30 years, and the impact on the economy could be acute.

He noted that in the first half of this year, US consumption accounted for a record 72 per cent of GDP, or about US$9.5 trillion.

'The US consumer is about to take a long rest,' he said, 'and if the US consumer goes, there's nobody on the demand side who can fill the v…

Fund houses show their hand - and it's thumbs-up

Teh Hooi Ling
834 words
18 October 2007
Business Times Singapore
English
(c) 2007 Singapore Press Holdings Limited

BT survey reveals they are mildly bullish, still hot on China but worried about US slowdown
(SINGAPORE) In a unique exercise to determine exactly what the smart money is thinking, BT has polled top fund houses and found that they are moderately bullish about the equities market over the next six months. The 10 fund houses who shared their views have combined assets of US$1.39 trillion under management.

The average outlook of fund managers is +2, on a scale of -10 (being ultra bearish) to +10 (being super bullish). Their ratings are weighted by their fund size.

The most bullish rating is +8 and the most bearish -3. Meanwhile, cash level stands at about 5 per cent.

BT intends to conduct a similar poll every month and this will form the basis of a fund managers' sentiment index - a gauge of how they see things unfolding. The results of the poll will be published in Pulses, the Sin…

Emerging Asia: positive outlook despite pitfalls

Business Times SingaporeBeware uncertain global economy and riskier financial environment, says DAVID BURTON
EMERGING Asia's economies have been among the most dynamic in the world in the last decade. Today, the region accounts for almost half of global economic growth. Much of this success stems from broad reforms by these countries in the last 10 years. These reforms have led to healthier financial and corporate sectors and more robust macroeconomic policy across the region. But the recent financial turbulence, still playing out across the globe, highlights the question of just how vulnerable the region remains to developments in the United States and other industrialised countries. What, therefore, are the key strengths and vulnerabilities for the region today? And what challenges are Asia's policymakers likely to face in the period ahead? The International Monetary Fund's (IMF) Asia and Pacific Department addresses these issues in detail in its Fall 2007 Regional Econom…

This time it is different?

Most observers are holding on to this view, the consensus outlook being that although the market may undergo more short-term pain in the next few weeks, its strong fundamentals should eventually prevail.

In its Aug 3 Global Investment Strategy for example, Canadian research house BCA Research summarised this view when it said that although the damage from the sub-prime fallout will persist for a while because problems are more pervasive than first believed, it does not believe the recent selloff signals the beginning of a bear market.

'There is plenty of growth outside of the US economy: economic news from China and the rest of Asia has been very strong . . . suffice to say that the world economy is still in a low-inflation boom, driven by an enormous supply-side expansion', it said.

It all sounds very appealing - in cliched broker jargon, the present mini-crash qualifies as a 'much-needed correction' for an 'overbought' market that might even present 'bargain…

Get Out of China While You Still Can

By Morgan Housel
As you've probably heard by now, today marks the 20th anniversary of the stock market crash of 1987, which yanked down the Dow Jones Industrial Average by 22% in a single day. I can hardly think of a better way to commemorate one of the most famous stories of irrational expectations that ended in calamity than to discuss the world's frothiest, most overheated, and biggest waiting-for-trouble market: China. The financial world is no stranger to bubbles. As we've seen with the stock market crash of 1929, the Nifty 50 in the early 1970s, Taiwan and Japan in the 1980s, the Nasdaq dot-com hoopla in 2000, and the real estate mania over the past seven years, there's rarely a shortage of stupidity somewhere in the markets. One belief that tends to characterize these bubbles is that "it's different this time." People justified the incredible surge in the Japanese Nikkei average because they knew electronics would change the way our world functi…

"If I work hard, is it guaranteed that I'll succeed?"

So what is your answer to the above question? Most people say 70% hard work, 30% luck. Do you agree? I don't.The truth is, if you work hard, you are guaranteed to succeed, period!"But I've worked very hard, why am I not successful yet?"I'll give you the answer later, but let me explain why hard work guarantees success.The world is governed by a set of laws and these laws work with mathematical certainty. Some of the well known laws are the law of gravity and the law of action and reaction. These laws are taught in school because they can be proven by science. Some laws cannot be proven scientifically and thus, they are not in the mainstream of our education. One of these laws is the law of compensation.The law of compensation simply states that you get compensated for whatever you contribute, nothing is lost and nothing is wasted. If you work hard, you will succeed. That's it. There is no other conditions. There is no BUT..... There is no UNLESS....R…

Profiting from subprime turmoil

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(Money Magazine) -- News this week that major banks are planning a massive fund to prop up the hardest-hit victims of the subprime mortgage crisis got investors worrying again. Specifically, they're concerned that potential losses from bad subprime bets could be much bigger than previously feared.
In fact, the bailout fund is good news. And you actually have a chance to profit personally over the long term from today's turmoil, as long as you make your investment decisions cautiously. Shares of banks and financial services companies may not have hit bottom yet - but there will soon be bargains to be had. And some companies with exceptionally strong balance sheets are already good deals. Understanding the problems The credit crisis itself is very complicated, but here's pretty much what you need to know. As home prices kept rising over the past few years, more and more people wanted to buy houses. Lenders accommodated them by devising mortgages that required less money down a…