Weekend: The 10 Maxims of Successful Investing
By Steve Christ | Saturday, June 25th, 2011
Templeton's 10 Maxims
He called them Templeton's 10 Principles for Successful Investing. They included the following:
Invest for real returns: “The true objective for any long-term investor is maximum total real return after taxes.”
Keep an open mind: “Never adopt permanently any type of asset or any selection method. Try to stay flexible, open minded and skeptical. Long term top results are achieved only by changing from popular to unpopular the types of securities you favour and your methods of selection.”
Never follow the crowd: “If you buy the same securities as other people, you will have the same results as other people. It is impossible to produce superior performance unless you do something different from the majority. Buying when others are despondently selling and selling when others are greedily buying requires the greatest fortitude and pays the greatest reward.”
Everything changes: “Bear markets have always been temporary. And so have bull markets.”
Avoid the popular: “When any method for selecting stocks becomes popular, you will need to switch to unpopular methods.”
Learn from your mistakes: “'This time is different' are among the most costly four words in market history.”
Buy during times of pessimism: “Bull markets are born on pessimism, grow on skepticism, mature on optimism and die on euphoria. The time of maximum pessimism is the best time to buy, and the time of maximum optimism is the best time to sell.”
Search worldwide: “To avoid having all your eggs in the wrong basket at the wrong time, you should diversify. When you search worldwide, you find more better bargains than when you monitor only one nation. You also benefit from more safety thanks to diversification.”
Hunt for value and bargains: “Too many investors focus on outlook and trend. Therefore, more profit is made by focusing on value. In the stock market the only way to get a bargain is to buy what most investors are selling.”
No-one knows everything: “An investor who has all of the answers doesn't even understand the questions.”
Of course, those aren't the only words of wisdom Templeton had to offer. He also once said, "It's nice to be important, but it is more important to be nice."
Templeton passed away in July 2008 at the age of 95.
As for some places to start building a lifetime of wealth, our editors have put together a few of their best ideas for the years to come in this week's top-read articles from Wealth Daily and Energy & Capital, below.
Have a great weekend.
Your bargain-hunting analyst,
Steve Christ
Editor, Wealth Daily
马 到 功 成. Success is when the horses come. Success goes only to those who dare and act, it seldom goes to the timid. The pessimist complains about the wind; the optimist expects it to change; the realist adjusts the sails.
Sunday, June 26, 2011
Friday, June 17, 2011
Sell when Investors Are Most Optimistic
Everything has a value. In times of extreme optimism shares become overvalued. In times of extreme pessimism, shares become undervalued. A savvy investor is able to exploit these extremes.
When a stock becomes overvalued, it may become more overvalued and stay overvalued for a long time. As long as the trend keeps going up, you should hold on to your stock. In a bullish scenario, man can become mad with enthusiasm. Thomas Edison said, " I can calculate the movements of the stars, but I can't calculate the madness of man."
In the bull market of 1971 to 1973, OCBC went up to a high of $50 per share. Stocks were then traded at 1000 shares per lot. That means if you buy 1 lot of OCBC, you have to pay $50,000 which was then equivalent to the cost of 2 terrace houses that could fetch an annual rental of $4000. As for 1 lot of OCBC, your annual dividend is only $100. Such was the madness of the stock market then.
The bubble in OCBC eventually burst. Within less than 3 months, if I am not mistaken, OCBC plummeted to $3 per share.
You will do well to remember that when shares are sold ex-hope and cum-despair, it is the time to buy. But when shares are at the other extreme, you should get ready to sell everything, and sell everything when the trend reverses.
When a stock becomes overvalued, it may become more overvalued and stay overvalued for a long time. As long as the trend keeps going up, you should hold on to your stock. In a bullish scenario, man can become mad with enthusiasm. Thomas Edison said, " I can calculate the movements of the stars, but I can't calculate the madness of man."
In the bull market of 1971 to 1973, OCBC went up to a high of $50 per share. Stocks were then traded at 1000 shares per lot. That means if you buy 1 lot of OCBC, you have to pay $50,000 which was then equivalent to the cost of 2 terrace houses that could fetch an annual rental of $4000. As for 1 lot of OCBC, your annual dividend is only $100. Such was the madness of the stock market then.
The bubble in OCBC eventually burst. Within less than 3 months, if I am not mistaken, OCBC plummeted to $3 per share.
You will do well to remember that when shares are sold ex-hope and cum-despair, it is the time to buy. But when shares are at the other extreme, you should get ready to sell everything, and sell everything when the trend reverses.
Thursday, June 16, 2011
Bank Negara warns of phishing email
PETALING JAYA: Bank Negara Malaysia (BNM) has warned of an email aimed at deceiving members of the public into disclosing their personal banking details.
A statement issued by the central bank Thursday said the email, which claims to be from Bank Negara, urges people to update their account details through a provided hyperlink.
"Intended victims receive emails purportedly from BNM, informing them that BNM is collecting personal banking information to update its database. They will be prompted to either click on a link or reply to the email directly.
"Once the victim clicks on the link provided in the email, they are directed to a fake website requesting disclosure of personal financial details such as credit or debit cards details including card code verification or other personal identification numbers (PIN)," the statement said.
BNM said financial institutions, including credit card issuers and BNM and all banking institutions will never request for personal banking information when contacting customers, be it via telephone calls, SMS or emails.
People who have received such emails are advised to contact their respective banks or contact the Associations of Banks in Malaysia (ABM) toll-free service at 1-300-88-9980.
For more information on financial scams activities, visit the financial fraud alert site at http://fraudalert.bnm.gov.my.
The public can also contact BNMTELELINK (Customer Contact Centre) at 1-300-88-5465 or email to bnmtelelink@bnm.gov.my for enquiries.
A statement issued by the central bank Thursday said the email, which claims to be from Bank Negara, urges people to update their account details through a provided hyperlink.
"Intended victims receive emails purportedly from BNM, informing them that BNM is collecting personal banking information to update its database. They will be prompted to either click on a link or reply to the email directly.
"Once the victim clicks on the link provided in the email, they are directed to a fake website requesting disclosure of personal financial details such as credit or debit cards details including card code verification or other personal identification numbers (PIN)," the statement said.
BNM said financial institutions, including credit card issuers and BNM and all banking institutions will never request for personal banking information when contacting customers, be it via telephone calls, SMS or emails.
People who have received such emails are advised to contact their respective banks or contact the Associations of Banks in Malaysia (ABM) toll-free service at 1-300-88-9980.
For more information on financial scams activities, visit the financial fraud alert site at http://fraudalert.bnm.gov.my.
The public can also contact BNMTELELINK (Customer Contact Centre) at 1-300-88-5465 or email to bnmtelelink@bnm.gov.my for enquiries.
Tuesday, June 14, 2011
Control Your Emotion or Others will Control You
When you buy a stock,
Hope is high that you will make a lot.
But things are normally not that rosy.
The moment you buy, things become messy.
The price drops and drops and drops.
You become frustrated, 'cos your attempt flops.
Your hope of a profit vanishes.
Already set in are much damages.
You hope and pray for a rebound.
One day it comes and things seem to turn around.
Just when the going looks good,
The price stops moving and just stood.
Moments later, the price starts to retreat.
Nothing is left to benefit.
Your hope has turned forlorn.
Your hope remains unborn.
Next time it moves up, I will sell, you say.
But for long, the price has gone astray.
At the darkest hour, comes the dawn.
Despair is now a conclusion, forgone.
As the price turns around,
Your chance to sell at a small gain is abound
Soon the price hits your target.
You sell with joy and without regret.
But your joy soon turns to frustration,
'Cos you sell at a bullish occasion.
If you have held on to your gains,
You would have much much more to gain.
Hope is high that you will make a lot.
But things are normally not that rosy.
The moment you buy, things become messy.
The price drops and drops and drops.
You become frustrated, 'cos your attempt flops.
Your hope of a profit vanishes.
Already set in are much damages.
You hope and pray for a rebound.
One day it comes and things seem to turn around.
Just when the going looks good,
The price stops moving and just stood.
Moments later, the price starts to retreat.
Nothing is left to benefit.
Your hope has turned forlorn.
Your hope remains unborn.
Next time it moves up, I will sell, you say.
But for long, the price has gone astray.
At the darkest hour, comes the dawn.
Despair is now a conclusion, forgone.
As the price turns around,
Your chance to sell at a small gain is abound
Soon the price hits your target.
You sell with joy and without regret.
But your joy soon turns to frustration,
'Cos you sell at a bullish occasion.
If you have held on to your gains,
You would have much much more to gain.
Friday, June 10, 2011
Ten commandments for life
Someone has written these beautiful words. Must read and try to understand the deep meaning of it.
They are like the ten commandments to follow in life all the time.
1] Prayer is not a "spare wheel" that you pull out when in trouble, but it is a "steering wheel" that directs the right path throughout.
2] So a Car's WINDSHIELD is so large & the Rear view Mirror is so small? Because our PAST is not as important as our FUTURE. So, Look Ahead and Move on.
3] Friendship is like a BOOK. It takes few seconds to burn, but it takes years to write.
4] All things in life are temporary. If going well, enjoy it, they will not last forever. If going wrong, don't worry, they can't last long either.
5] Old Friends are Gold! New Friends are Diamond! If you get a Diamond, don't forget the Gold! Because to hold a Diamond, you always need a Base of Gold!
6] Often when we lose hope and think this is the end, GOD smiles from above and says, "Relax, sweetheart, it's just a bend, not the end!
7] When GOD solves your problems, you have faith in HIS abilities; when GOD doesn't solve your problems HE has faith in your abilities.
8] A blind person asked God: "Can there be anything worse than losing eye sight?" He replied: "Yes, losing your vision!"
9] When you pray for others, God listens to you and blesses them, and sometimes, when you are safe and happy, remember that someone has prayed for you.
10] WORRYING does not take away tomorrow's TROUBLES, it takes away today's PEACE.
If you really enjoy this, please pass to others. It may brighten someone's day...
They are like the ten commandments to follow in life all the time.
1] Prayer is not a "spare wheel" that you pull out when in trouble, but it is a "steering wheel" that directs the right path throughout.
2] So a Car's WINDSHIELD is so large & the Rear view Mirror is so small? Because our PAST is not as important as our FUTURE. So, Look Ahead and Move on.
3] Friendship is like a BOOK. It takes few seconds to burn, but it takes years to write.
4] All things in life are temporary. If going well, enjoy it, they will not last forever. If going wrong, don't worry, they can't last long either.
5] Old Friends are Gold! New Friends are Diamond! If you get a Diamond, don't forget the Gold! Because to hold a Diamond, you always need a Base of Gold!
6] Often when we lose hope and think this is the end, GOD smiles from above and says, "Relax, sweetheart, it's just a bend, not the end!
7] When GOD solves your problems, you have faith in HIS abilities; when GOD doesn't solve your problems HE has faith in your abilities.
8] A blind person asked God: "Can there be anything worse than losing eye sight?" He replied: "Yes, losing your vision!"
9] When you pray for others, God listens to you and blesses them, and sometimes, when you are safe and happy, remember that someone has prayed for you.
10] WORRYING does not take away tomorrow's TROUBLES, it takes away today's PEACE.
If you really enjoy this, please pass to others. It may brighten someone's day...
Thursday, June 09, 2011
Published: Wednesday June 8, 2011 MYT 8:38:00 PM
Public warned about syndicate passing off as HK police
Be extremely careful when you remit money to another account, because the money remitted may never come back.
MALACCA: The state police have advised the public to beware of a fraud syndicate, which passes itself as the Hong Kong police and Bank Negara staff to cheat victims.
Explaining the modus operandi, state police chief SAC Datuk Chuah Gee Lye said that syndicate's members would introduce themselves as policemen from Bukit Aman and tell the intended victim that his identity has been used to launder money abroad.
They will ask the victim to contact the Hong Kong police using a number they give, Chuah told reporters here.
“On calling the number, the victim will be told that Bank Negara has been contacted. Shortly after that, he will receive a call from an officer, supposedly from Bank Negara, who will confirm that his account was used for illegal activity.
“The syndicate members will then advise their intended victim to transfer his money into another account if he does not want his funds to be frozen,” he added.
Chuah said that two cases had been reported in the state but the intended victims were lucky to escape from being cheated.
He advised members of the public who are similarly approached to contact the state Commercial Crime Investigation Department at 06-2854196.
Public warned about syndicate passing off as HK police
Be extremely careful when you remit money to another account, because the money remitted may never come back.
MALACCA: The state police have advised the public to beware of a fraud syndicate, which passes itself as the Hong Kong police and Bank Negara staff to cheat victims.
Explaining the modus operandi, state police chief SAC Datuk Chuah Gee Lye said that syndicate's members would introduce themselves as policemen from Bukit Aman and tell the intended victim that his identity has been used to launder money abroad.
They will ask the victim to contact the Hong Kong police using a number they give, Chuah told reporters here.
“On calling the number, the victim will be told that Bank Negara has been contacted. Shortly after that, he will receive a call from an officer, supposedly from Bank Negara, who will confirm that his account was used for illegal activity.
“The syndicate members will then advise their intended victim to transfer his money into another account if he does not want his funds to be frozen,” he added.
Chuah said that two cases had been reported in the state but the intended victims were lucky to escape from being cheated.
He advised members of the public who are similarly approached to contact the state Commercial Crime Investigation Department at 06-2854196.
Wednesday, June 08, 2011
The 6 Rules For Successful Investing In Chinese ADRs
By DOUG TSURUOKA, INVESTOR'S BUSINESS DAILY
Posted 05/11/2011 05:50 PM ET
The Chinese flag is displayed on an electronic screen at Nasdaq on Wednesday for the initial public offering of Jiayuan.com. China's largest dating... View Enlarged Image
A passel of U.S.-listed Chinese stocks have run into trouble lately. Some have restated earnings or undergone trading halts as the SEC probes accounting glitches or allegations of malfeasance.
Trading in the last two months was halted on China Electric Motor, NIVS Intellimedia Technology and Puda Coal, to name a few. Fertilizer and feed maker Yongye International's (YONG) production figures and ties are also being questioned by analysts.
Shares of several others tumbled without any company-specific news. The volatility comes at a time when Chinese IPOs in general are struggling. Renren (RENN), "China's Facebook," fell below its $14 IPO price Wednesday after hitting 24 intraday in its May 4 debut. But appliance maker Deer Consumer Products (DEER) brushed off criticism to post Q1 profit and sales growth above 40% on Tuesday.
There are no hard rules to investing in China-based companies that trade in the U.S. But analysts say these six points offer a good checklist:
1. Are they industry leaders in China?
2. Do the companies use any of the Big Four global accounting firms (KPMG, PricewaterhouseCoopers, Deloitte Touche Tohmatsu, Ernst & Young)?
3. Do they have the sponsorship of big investment funds?
4. Is there serious backing from venture capital funds?
5. Are sizable chunks of equity owned by management?
6. Are Americans on the board?
"The best rule of thumb for investing in China is whether that company is No. 1 in its space," said venture capitalist David Chao, co-founder of early-stage tech VC firm DCM. "Competition is fierce in China. Such companies have withstood the test of time."
Chao compares China's situation to Japan, where giants like Sony (SNE), which led in the early 1960s, are still pretty much the leaders today. Chao is on Renren's board.
John Mattio, a senior vice president at investor relations firm HC International in New York, says many U.S. fund managers won't take a stake in a Chinese company unless its auditor is one of the Big Four. It stems from a belief that smaller bookkeepers can't check or balance their work.
But Mattio warns that bigness alone won't ensure accuracy. Chinese law requires large foreign auditors to join with local accounting firms, he notes. This means Chinese partners, not U.S. expats, often do the books.
"It's not like the team from midtown Manhattan is flying to China to do the audit," he said.
China MediaExpress (CCME) hasn't traded since March 11 after months of claims of cooked books. That same day, a Deloitte Touche affiliate severed ties.
Sponsorship and rising holdings by big mutual funds, hedge funds, banks and other institutions are other positives.
Janet Stites, publisher of China Business Knowledge, an online newsletter that tracks U.S.-listed Chinese firms, says big funds have the staff and resources to conduct due diligence.
"If Fidelity is investing, it's not a 100% good call, but it's a good place to start," Stites said.
Also desirable are credible margins and strong EBIDTA, though those can be hard to pin down in fast-changing, booming China.
Analysts like to see top executives with a stake in future performance. For example, managers own 17% of Chinese search engine Baidu (BIDU).
The downside: Some heavily family-owned Chinese firms are used as cash dispensers.
Depth and length of VC funding is another guide. Internet firm Qihoo 360 (QIHU), which raised $175 million in a successful March IPO, had over five years of substantial VC backing, Stites says.
DCM's Chao says having U.S. directors shows that a Chinese firm can tap U.S. expertise and will likely adhere to U.S. governance standards.
Stites cites hog producer Tianli Agritech (OINK). One director is Peter Gadkowski, an ex-SEC enforcement attorney and founder of a 30,000-sow farm in Colorado.
The Chinese flag is displayed on an electronic screen at Nasdaq on Wednesday for the initial public offering of Jiayuan.com. China's largest dating... View Enlarged Image
A passel of U.S.-listed Chinese stocks have run into trouble lately. Some have restated earnings or undergone trading halts as the SEC probes accounting glitches or allegations of malfeasance.
Trading in the last two months was halted on China Electric Motor, NIVS Intellimedia Technology and Puda Coal, to name a few. Fertilizer and feed maker Yongye International's (YONG) production figures and ties are also being questioned by analysts.
Shares of several others tumbled without any company-specific news. The volatility comes at a time when Chinese IPOs in general are struggling. Renren (RENN), "China's Facebook," fell below its $14 IPO price Wednesday after hitting 24 intraday in its May 4 debut. But appliance maker Deer Consumer Products (DEER) brushed off criticism to post Q1 profit and sales growth above 40% on Tuesday.
There are no hard rules to investing in China-based companies that trade in the U.S. But analysts say these six points offer a good checklist:
1. Are they industry leaders in China?
2. Do the companies use any of the Big Four global accounting firms (KPMG, PricewaterhouseCoopers, Deloitte Touche Tohmatsu, Ernst & Young)?
3. Do they have the sponsorship of big investment funds?
4. Is there serious backing from venture capital funds?
5. Are sizable chunks of equity owned by management?
6. Are Americans on the board?
"The best rule of thumb for investing in China is whether that company is No. 1 in its space," said venture capitalist David Chao, co-founder of early-stage tech VC firm DCM. "Competition is fierce in China. Such companies have withstood the test of time."
Chao compares China's situation to Japan, where giants like Sony (SNE), which led in the early 1960s, are still pretty much the leaders today. Chao is on Renren's board.
John Mattio, a senior vice president at investor relations firm HC International in New York, says many U.S. fund managers won't take a stake in a Chinese company unless its auditor is one of the Big Four. It stems from a belief that smaller bookkeepers can't check or balance their work.
But Mattio warns that bigness alone won't ensure accuracy. Chinese law requires large foreign auditors to join with local accounting firms, he notes. This means Chinese partners, not U.S. expats, often do the books.
"It's not like the team from midtown Manhattan is flying to China to do the audit," he said.
China MediaExpress (CCME) hasn't traded since March 11 after months of claims of cooked books. That same day, a Deloitte Touche affiliate severed ties.
Sponsorship and rising holdings by big mutual funds, hedge funds, banks and other institutions are other positives.
Janet Stites, publisher of China Business Knowledge, an online newsletter that tracks U.S.-listed Chinese firms, says big funds have the staff and resources to conduct due diligence.
"If Fidelity is investing, it's not a 100% good call, but it's a good place to start," Stites said.
Also desirable are credible margins and strong EBIDTA, though those can be hard to pin down in fast-changing, booming China.
Analysts like to see top executives with a stake in future performance. For example, managers own 17% of Chinese search engine Baidu (BIDU).
The downside: Some heavily family-owned Chinese firms are used as cash dispensers.
Depth and length of VC funding is another guide. Internet firm Qihoo 360 (QIHU), which raised $175 million in a successful March IPO, had over five years of substantial VC backing, Stites says.
DCM's Chao says having U.S. directors shows that a Chinese firm can tap U.S. expertise and will likely adhere to U.S. governance standards.
Stites cites hog producer Tianli Agritech (OINK). One director is Peter Gadkowski, an ex-SEC enforcement attorney and founder of a 30,000-sow farm in Colorado.
Tuesday, June 07, 2011
Malaysia's Most Expensive Fish
Presently, the Empurau is the most expensive fresh-water fish in Malaysia. The fish is known as Wang Pau Liao in Mandarin. It can grow up to a size of more than 20 kg.
In KL Restaurants, the price ranges from RM1100 to RM1800 per kg. The fish originates from Sarawak.
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