Bursa Malaysia teaches Don't Buy And Hold

This is one of the Golden Rules from Bursa Malaysia teaching people how to trade Malaysia stock market.

This is the topic content and my highlight in RED.

The Malaysian stock market is one of the strongest and sometimes most dynamic markets in the world.

While the market has always recovered from falls, the same cannot be said for individual companies. Even during a booming market, some companies can suffer significant losses.

Trade only on an uptrend and sell the poor performers, this will make it impossible to experience a large loss. This is the secret to outperforming the market and achieving a consistently superior return.

Undertake some research on the Bursa Malaysia or in a local investment paper. List three shares that have showed decreased performance recently and three shares that have showed increased performance recently.

Did you get that ? "IMPOSSIBLE to LOSE A LOT" !! What a way to set GOAL in stock investment !! Furthermore, making MANY small loses is as bad as making ONE big lost. As a matter of fact, many small loses may actually be worse because you didn't feel the pain and didn't realize how much you have lost. As in Boiling Frog story.

Compares that with the Number 1 TOP stock investor in the world ...

What they should have said is to Employ A proper Stop Loss Strategy. Aim to be right and learn until you make more correct decisions, that is what the game is all about. But just in case you are wrong, preserve your capital allowing you to 'COME BACK' by adopting a stop loss strategy. When investing in a fundamentally strong business, it takes patience and sometimes ignorance to just buy and hold.

Why does even Bursa make such a bias education ? Well, buffett has said it above. Bursa needs brokers, brokers need money, so Bursa also wants you to buy and sell as much as possible so that you pay them more transaction fees.

Sell it ! Don't Hold ! Else Bursa will DIE !!

Ya right ! You may just as well donate your money to Bursa ....

Guest Post: Student Loan As An Investment and Student Loan Debt Consolidation

Sharell Crawford is currently working for Debtconsolidationcare. Having a lower debt amount will mostly improve your chances of getting lower interest rates for most of the purchases you made.

A student loan is considered to be a good investment since it is taken out to establish the career of an individual that helps him earn his livelihood. However, sometimes it becomes impossible to prevent debt arising from student loans. Debt consolidation plays an important role over here. Student loan debt and mortgage loan debt are considered as “good debts” because of their positive aspects. On the other hand, credit card debt and car loans are regarded as “bad debts’” since they signify lavishness. You don’t acquire student loan debt by extravagance. These loans can be obtained more easily from federal sources than private lenders. You can get useful returns from utilizing a student loan. The more you become educated, the more is your earning capacity. However, you must not forget that you have got to pay it off.

The anxiety of paying back multiple student loans can be annoying on certain occasions. In addition to this, procrastination is a normal feature of the college life of a student. This does not spoil your results but not paying your loans when they become due for payment would certainly have a bad impact on your financial future. The most effective option for a student to drive away his financial concerns and get pleasure from his college life is a student debt consolidation loan. This type of a loan combines all your student loans into one loan that is simple to handle. You basically take out a bigger loan to manage your various smaller student loans. As a result of the affordable and competitive interest rates, you can save some money. By stretching out the repayment terms, your monthly payments are reduced considerably. You also have the opportunity of locking in an affordable rate.

At present, the last thing that you want to happen to your finances is piling up a huge amount of student loan debt. A student debt consolidation loan can be the right solution to conquer your debt problems. You have to keep in mind that private student loans cannot be consolidated with federal student loans. If you’re suffering from student loan debt, you have to consolidate your federal student loans and private student loans separately.

notet from Doroth, Financial Helpdesk.

Late Breaking News on the Athlete's Village

Pulled off CTV news.

Final cost to tax-payers depends on how strong the property market is. Best case from Robertson = break even.

Worst case $1 billion in the hole.

As they said on CTV, politicians should not dabble in business.

More importantly who advised the previous council (only Susanne Anton is left in the boat from that administration) ? Which law firm, which accountants and financial advisers??

Should they not be held liable?

Does anyone have the time to ferret through City info and find out who these advisers were?

Meanwhile the RCMP have been questioning the friends of Olympics opponents. Be careful who you share that extra-hot skimmed late with :

http://tinyurl.com/ydgsz4w

And yes anon (from the last comments) I did see what happened to Canwest. The ire of the public prevented at least one tax-payer bail-out, though I do feel sorry for the employees:


CanWest union decries bankruptcy protection

2009-10-06 16:01 ET - News Release

Mr. Peter Murdoch reports

CANWEST EMPLOYEES DESERVE BETTER

After CanWest Global Communications Corp. filed for Companies' Creditors Arrangement Act (CCAA) protection for some of its operations, Peter Murdoch, vice-president of media for the Communications, Energy and Paperworkers Union of Canada (CEP), said in reaction, "Media workers at Canwest stations should not be forced to pay the price with their pension and severance payments for financial problems that are of the company's own making."

"Employees have done everything they can to sustain this company," says Mr. Murdoch. "Thousands have already lost their jobs and there has been no wage increase for years.

Though management salaries have been excessive -- $49-million to eight people from 2001 to 2008, while during that same period over 1,000 Canwest employees lost their jobs.

Those who are left are on pins and needles, including pensioners." Mr. Murdoch adds that governments, banks and media conglomerates have all ignored the warnings about the dangers of massive media convergence and unsustainable debt. "CEP will be front and centre to ensure that employees are first in line for company obligations," says Mr. Murdoch.

Mr. Murdoch also says the federal government should step up to the plate. "The federal government has been irresponsible in monitoring and policing pension plans, and where is it now to backstop this?"

"Yet another major company has filed for bankruptcy protection under Prime Minister Stephen Harper's watch," says CEP president Dave Coles. "It's time for this government to stop congratulating itself and to take action to prevent more working people from falling victim to this recession."

CEP represents more than 25,000 newspaper and broadcast employees across Canada, including workers at the National Post and Global TV who are affected by the filing announcement.

BEST rates in Malaysia - update 2009 10 06

This is a comment update to FREE Info on Best Rates in Malaysia :

Car Loan

Maybank still tops the list after many months offering starting from 2.7%. The trick is that not everybody can get that rate and further more its mostly for national cars only. So the way they published their car loan rate has successfully made them the best choice over the past few months.

2nd runner up is Bank Muamalat whose car loan rate is only 2.85% but charges a RM 600 admin fee.

House Loan

Affin bank still top the list with BLR - 2.3%, the trick is that they don't approve many loans. They have this self image that they are the 'high quality' house loan processors ...

2nd runner up is Standard Chargered BLR - 2.25%, who is relatively more flexible and more marketing oriented. That means they may listen to what you need, try their best to request benefits on your behalf, with the hope of getting your business.

Fix Deposite

FD rates haven't changed since the recession staying at 2% which really puzzle me. If the recession is really over, why isn't the saving rate goes back up yet ?

BLR is generally staying at 5.55% with a few exception where foreign banks are offering slightly lower rate.

How does Best Rate make its choice

How to use this Best Rate on your own web site

How to Find all the latest rates yourself

Malaysian Personal Finance Part 1 - EPF

If you earn a salary in Malaysia, 8% of your salary goes to EPF (2009-2010) - Employee Provident Fund - before you can ever see it. This saving scheme is enforced by law and happened automatically, so this makes it a perfect ASS - Automated Saving System.

Your employer will add another 12% to it making it a total of 20% contribution. If your monthly salary is RM 2,500, RM 200 of your money goes to EPF. Your company adds another RM 300 to it so you will have a total of RM 500 in your EPF account.

Effectively you only receive RM 2,300 cash before tax. But the value you are receiving every month is actually RM 2,800 and not your salary amount RM 2,500. A 20% enforced ASS is absolutely NOT a bad thing at all especially during your mid life.

The lowest dividend EPF can declare is 2.5%, generally higher than most bank saving accounts for such a small amount of money. Again makes it a great ASS.

Sounds too good to be true ?

Indeed government force saving scheme like this is one of the greatest thing happen to one's personal finance. Most of the poverty in this country, not by chance, turn out to be those who didn't contribute to EPF.

Are everyone off the hook then ? Well, not exactly. If you have been following this site long enough, one of the fundamentals of ASS is in R E L A T I V E. Most of the people are in debt today, so if you are not in debt and have some saving, you are better than others. That is what ASS is all about. It is the Minimum one HAVE TO DO for his own personal finance. And one of the biggest effects of ASS is its psychological stop on getting into bad debt.

ASS does not make you rich, ASS does not fight inflation, it just give you a good start.

So if everyone has ONE ASS account and you have ONE ASS account then you are just like everyone else. Still in rat race that is. The status quo in the beginning of 21st century, is to create another ASS account yourself without the help of government enforcement. If you are able to setup an ASS account yourself consistently through out the years, you have just strengthen your personal finance from a merely 10% to above 60% !! . . . . . simply because most people fail to do so now.

If you have this 2nd ASS, you have increased your chances of success by 6x ! Because this 2nd ASS account will psychologically tune you into a secure investment in future. So a real personal finance starts at RM 2,300 in above example, not RM 2,500 or RM 2,800. EPF has already been setup and we should just forget all about it, our jobs starts at RM 2,300 !!

What's wrong with EPF then ? Well basically other than above generalization of EPF, everything else doesn't seem too right.

You cannot access the money until you are old, ie. age 55. So practically they are NOT your money. If you die early, it would just be a high premium low sum assured life insurance, paying out to your beneficiary.

In a good ASS, you are supposed to setup the saving system up and forget about it. Let it accumulate by itself over the time. But in real life, everyone is trying their best to get money out from EPF. Why do people need to withdraw from EPF prior to age 55 ? Because they do not have their own ASS accounts !

While it is really arguable if one should or should not withdraw from EPF, but the psychological effect of relying on EPF money is seriously damaging your ability to earn the income you could have been. If you want a house, you setup an ASS for the down payment. When you want a bigger house, focus all energy to increase your income. When your personal finance is setup right, a small increase in your income streams can have double effect in your finance world.

Last but not least, although government setup such provident fund at the name of people, the real intention of such fund management is really questionable. The real target of EPF is to fight inflation. There are some well known inflation hedgers such as stock markets and properties but EPF has less than 25% exposure on these 2 areas while more than 60% are channel back into govertmental mega projects. Generally speaking securities, bonds and loans pay out higher than Fix Deposit rate but still lower than inflation.

So generally we have a great system to start with in Malaysia, ASS is enforced using EPF. However, transparency and ability for EPF to function as it should, may take slightly longer to realize, if it happens at all. People's ability to use EPF in their favor, is still a long haul educational evolution.

Part 1 : EPF

Part 2 : Amanah Saham

When Prudence Doesn't Pay

Who are bears? Permanent pessimists and negative souls ,who secretly pray for the collapse of civilization. Not most of the ones that I know.

In fact most are fiscally careful people...they save money, buy things on sale and won't over-pay for something because they 'just have to have it right now'.

For these folks Vancouver RE hasn't made sense for several years now. The widely accepted, often quoted ratios are...keep your mortgage to 3.5 X your total income and keep your house expenses to 40% of net income. Vancouver has been well over these numbers for a long time.

So they have patiently waited, like the counterparts in the US.

The US bears have been richly rewarded for their patience, as the housing crisis struck and foreclosures mounted. They now have their pick of properties and a low mortgage rate (assuming they still have a job!)

Here in Vancouver (in fact in all Canada) it looked like the bears were about to get their moment in the sun as well. As you can see from the graph below, sales completely collapsed last year.

The rate of collapse was unprecedented. The bounce up was also unprecedented, even faster than the preceding bubble. Enough to make a bear's head spin. No wonder the bears are downcast.



Who would have forecast an instant rebound back up to pre-crisis sales levels. It was like Vancouver hit a trampoline.

So why were so many caught off guard by this rebound. Here are some reasons:

1) Firstly there was the interest rates. The BOC dropped the rates to 0.25%. Never before had they been so low. As I posted at the time the drop in mortgage rates was like a 30% drop in prices.

2) The drop in interest rates not only made mortgages cheaper, but rates on deposits dropped encouraging those with a large down-payment to put it in property. Both 1 and 2 helped move the equation in the direction of buying versus renting.

3) Those of us who have a lived here a long time time failed to understand the allure of our city. This is particularly true for retirees, who come here with funds. The last that apartment sold in my building was to a retired dentist from out east. He also bought another apartment and a commercial property for investment. He admits the cap (returns) rates on both are minuscule compared with what he could get out east..'but I can keep an eye on them here'.

4) The drop in interest rates and Federal and Provincial crisis spending came at a time when we already had a boom from construction, both Olympic related and residential, commodities were still pretty solid eg gold and oil, and so we just bubbled some more.

Ok so that is what happened -what now?

I will give that my best shot in the next post.

Final projection for September

Projection from 30-Sept-2009 : 19 of 21 days Complete *

Listings: 5553 (-10% yoy) (+22% mom)
Sales: 3459 (+118% yoy) (+1% mom)
Sell/List: 62% (+36 pp yoy) (-13 pp mom)
MOI: 3.9 (-70% yoy) (+4% mom)
Actives: 13,572 (-35% yoy) (+4% mom)
* Rate of Increase: 44 per day

Avg Price SFH: $863,265 (+9.3% yoy) (-3.0% mom) (-6.2% from peak)
Avg Price Condo: $435,134 (+7.4% yoy) (+3.1% mom) (-3.3% from peak)
5-day Average SFH: $931,340 (+7.9% from current month)
5-day Average Condo: $430,755 (-1.0% from current month)

Median Price SFH: $704,211 (+1.2% mom)
Median price Condo: $378,029 (+1.1% mom)

* Missing data from Sept 21 and threw out erroneous data from Sept 30.

The REGBV will release the actual tally within a few days.