Friday, January 30, 2015

The Baltic Dry Index


The index truly is a great reflection of where we are at with stocks. Unfortunately its not a leading indicator but rather a lagging indicator. The new lows actually would indicate that a rebound in demand ... i.e. a rebound in commodity prices as well, inclusive of oil, and hence helping equity prices to be sustained. What this chart and article shows, more importantly, is we all could be looking at the same data, same chart, same article... but our own conclusions could be very different. Many would read this article and conclude that all markets will get worse not better this year. My view is quite the opposite based on the sharp correction in BDI (panic oversold) and being 3-4 months into the slump already, a reversal is more likely now rather than a prolonged slump.

The article was from Business Insider.



The Index That Timed The 2008 Crash Perfectly Just Slumped To A Three-Decade Low


sinking containter cargo ship
REUTERS/Svitzer/Handout
The 47,230 tonne Liberian-flagged Rena lists, about 12 nautical miles (22 km) from Tauranga, on the east coast of New Zealand’s North Island October 15, 2011, more than a week after it struck the Astrolabe Reef. 
The Baltic Dry Index just hit a 28-year low. The index famously mapped the financial crisis, going through the floor as the global economy tanked in 2008, but it’s just slumped to an even lower level.
The index measures shipping costs for dry bulk commodities (minerals and metals like coal and iron, as well as grain and other foods).
It plunged by more than 90% in just a few months in 2008 as the global crisis unrolled. Then, it was an impressive bellwether for the global situation. 
Shipping costs were previously so expensive because demand was strong and you can’t build enormous new ships overnight. As the demand disappeared, the Baltic Dry dived.
It’s now dropped by more than 50% in less than three months. Here’s how that looks:
image: https://static-ssl.businessinsider.com/image/54cb804169bedd754abdbef9-1097-511/baltic%201.png
baltic 1
Investing.com, Business Insider
It’s sensitive to oil prices, since moving huge quantities of cargo is an energy-intensive activity. So the slump in oil prices is a large part of what’s happening here. 
Of course, the index can fall because of supply as well as demand. Former Business Insider writer Vincent Fernando explained this in simple terms nearly six years ago, after the index tanked: 
Imagine you have 10 loads of iron ore and 9 ships, and that every load of iron ore must be sent no matter what while every ship must be filled no matter what. Imagine the bidding war between those 10 iron ore consumers fighting over just 9 ships. Shipping cost would skyrocket since they all need to ship regardless of cost. Now imagine if a week later two more ships enter the market. Now imagine the bidding process. Suddenly the tables have completely changed. You have 11 ships, that all need to be filled no matter what, and only 10 loads of ore. Shipping rates would plunge, despite a period of just a week passing by.
In short, demand doesn’t have to go down that much to produce the last few months’ huge drop in the index.
The Baltic Dry has never recovered to anywhere even near its pre-crisis level. Take a look:

Baltic 2
Investing.com, Business Insider
And assuming there’s no massive extra shock to demand, supply should catch back up over time. Here’s what a note from Investec said early Friday: 
The Senior Commodity Strategist at ANZ, a major Australian bank, has warned of a so-called supply tsunami as bulk-commodity producers benefit from cheaper oil, lower freight rates and declining currencies, helping them to withstand lower prices and avoid voluntary supply cuts.
Ultimately lower prices for shipping should actually encourage supply in themselves, raising the Baltic Dry from the depths one again.

Read more at http://www.businessinsider.my/baltic-dry-index-hits-record-low-2008-crash-2015-1/#8iHpfOxQwuo1HBM5.99

Wednesday, January 28, 2015

S&M Show Podcast

VIABILITY OF GLCS AS A GOVERNMENT FUNDING SOURCE

The PM announced that the government is looking for an extra RM400m dividends from government-owned companies. We look at the implications.

http://www.bfm.my/sm-salvatore-dali-malaysiafinance-150128-viability-of-glcs-as-a-government-funding-source.html


Song Pick:  Demis Roussos passed on a couple of days back. While he was nowhere near my list of favoured performers, he did have some great songs. Top of my list is Forever and Ever.





Tuesday, January 27, 2015

My Favourite Commercial Of All Time - Living The Life You Want

Finally, I found a version of my favourite commercial with English subtitles. Its for TC Bank in Taiwan, but what makes for a great commercial is that in 3 minutes, its better than watching a movie.


A special person shared with me last week about attending a talk by a 'wise person', and that it is important to "learn how to let go". To let go of our bad memories, failures, unproductive ways, etc... To which I replied that "we always hold onto people who don't love us or people who hate us or people who make us mad or people who take us for granted ... we also care too little for the people who love us unconditionally, the people who adore us, the ones who still stick around in spite of all your shortcomings". Such wasted priorities. Live the life we want, don't resign to fate, don't waste it waiting for those who never intend to turn up, don't waste it on bad memories of those who wronged us, don't dwell on regrets and failures ...

I think this commercial, based on a true story, was magnificently crafted and very meaningful, and probably based on some 6 old foggies' true life story. Love the Chage Aska song in the background, On Your Mark.

If we don't live the life we want, if we do not chase our dreams, no one else will do it for you.



The Young Ones


The young ones will always look at older folks with disdain ... esp when the older folks keep telling them how wonderful, real and meaningful their experiences were when they were younger compared to the youths' nowadays. Its easy to fall into the trap of brushing the older folks as being partially senile, and hence their selective memory only allows them to remember the good things ... lol. Take from this what you will ... not my work (though you will find that I had added my own embellishments) but worthwhile to share.

WHEN LIFE WAS SIMPLER & CLEARER ...




for those of us born in the 40s, 50, 60s and 70s ...
without any maids, our mothers cooked, cleaned and took care of the whole family and still have time to chat with the neighbours

everyone ate candy floss, drank fizzy cola drinks and had shaved ice with syrups, diabetes were rare and aspirin/panadol cured everything

there were no 'victims mindset' ... nobody had ADD (attention deficit disorder) or dyslexia, maybe these were not discovered back then which just meant all had to work harder to overcome obstacles and not blame shortcomings on anything and everything

we rode adult bicycles to school, richer ones had their own Chopper or racing bikes ... ironically all had the same problems with our brakes

Prefects were a fearful lot, some more than teachers. Detention class was like going to prison for a day and there was "public caning" in schools

no one ever won big prizes playing "tikam", but it was a scam and kind of paved the way for early learning before graduating to 4D, Genting, etc...

we rode motorbikes without helmets, taxis was a huge luxury, heck even taking a bus was not cheap - we mostly walked or cycled everywhere

we always drank water from the tap (imagine doing that now)

we spend hours in the fields playing football, flying kites, without nary a worry about UV rays, we were kind of invincible that way


we would roam the edge of jungles to catch spiders and did not worry about Aedes


girls can play endless games with just 5 pebbles, guys can do likewise with a tennis ball


when it rained, we trudged through big drains and canals to catch ikon keli, we lived



we shared one bottle of soft drink with friends, no one caught anything

we ate salty, sweet & oily foods, bread with real butter and condensed milk ... we loved all the very sweet stuff but were not obese because we were out playing all the time, we had a real childhood

we left home in the morning and played all day till hunger drove us home. When needed, our parents knew where to find us. No one actually watched over us and we were always safe

we did not have mobile phones bugging us, when you call to make an appointment, you better be bloody sure to make it and on time too cause there is no way to cancel last minute or tell your friends that you were going to be late

no Nintendos, Playstations, X-boxes, 50 tv channels, DVDs, surround sound, no PCs, no notebooks, no Facebook, no INTERNET (OMG) ... but we had friends, real friends ... we went outside and found them, no need to poke ... when we take photos we really cherish them, no such thing as selfies (I think they are short for selfish or obsessive)


we do not know the word "bumiputra", we knew our friends by name, their parents were all Pakciks, Makciks, Aunties or Uncles

we fell out of trees, got cut, broke bones and teeth and still continued with our stunts ... parents who are so protective nowadays led a very different childhood when they were young, is it because we now know better or that we know too much


we did not have parties till we were 16 or 21 ... parties do not happen every year


in badminton we did not change the shuttle as long as it can still be in flight, the number of feathers left was immaterial


match boxes were always "Chilli" or "Kingkong" brand ... collecting matchboxes from restaurants and hotels was popular and fun


Friday, January 23, 2015

Down 7.7% One Day, Up 4.7% A Couple Of Days Later ...


World’s Wildest Stocks Show Chinese Booms and Busts Getting Bigger on Debt




The one thing China’s bulls and bears can agree on is that swings in the world’s most-volatile major stock market are only going to get bigger after equity traders took on record amounts of debt. 
Both Bank of America Corp. strategist David Cui, who predicts Chinese shares will fall, and JPMorgan Chase & Co.’s Adrian Mowat, who has an overweight rating, say the surge in margin lending to all-time highs is amplifying price fluctuations in the $4.9 trillion market. Volatility in the benchmark Shanghai Composite Index reached the highest level since 2009 this week after rising more than fourfold since July. 
While the flood of borrowed money into Chinese stocks added fuel to a 59 percent rally in the Shanghai Composite during the past 12 months through yesterday, the gauge’s 7.7 percent tumble on Monday illustrates how leverage can also accelerate declines. Margin traders unloaded shares at the fastest pace in 19 months during the rout, which was sparked by regulatory efforts to cool the growth of margin debt in a market where individuals drive 80 percent of equity volumes. 
“Margin trading will add more up-and-down to the market and increase volatility,” Xie Weiyu, a strategist at Shenyin & Wanguo Securities Co. in Shanghai, said in a Jan. 12 e-mail. “If a correction starts, the magnitude will be bigger than the past few years.” 

CSRC Curbs 

In a margin trade, investors use their own money for just a portion of their stock purchase, borrowing the rest from a brokerage. The loans are backed by the investors’ equity holdings, meaning they may be forced to sell when prices fall to repay their debt. 
The Shanghai Composite sank the most in six years on Monday after the China (SHCOMP)Securities Regulatory Commission suspended the nation’s two biggest brokerages from lending money to new equity-trading clients and said securities firms shouldn’t lend to investors with assets below 500,000 yuan ($80,467). 
Outstanding margin loans on both the Shanghai and Shenzhen exchanges surged more than tenfold in the past two years to a record 1.1 trillion yuan as of Jan. 16, or about 3.5 percent of the nation’s market value. On the New York Stock Exchange, margin debt amounts to about 2.1 percent of market cap on the NYSE Composite Index. 
Margin lending is a “new phenomenon in China,” said Cui, who anticipates the Shanghai Composite will fall about 5 percent by year-end. “When the tide turns, it’s going to be very ugly, because you will have a forced exit from the market.” 

Volatility Jump 

gauge of 30-day volatility on the Shanghai Composite rose to 42.3 on Jan. 19, the highest among the 15 biggest global benchmark indexes tracked by Bloomberg and up from its decade-low 9.4 in July. Daily turnover on China’s exchanges reached a record 1.24 trillion last month, when the Shanghai stock measure surged 21 percent. 
Monday’s tumble followed a string of big moves in Chinese stocks during the past two months. The Shanghai Composite surged 4.3 percent on Dec. 4 after mainland investors opened new stock accounts at the fastest pace in three years. The stock gauge plunged 5.4 percent on Dec. 9 as authorities tightened collateral rules for short-term loans in the nation’s repo market. 
The CSRC on Jan. 16 banned Citic Securities Co. (600030), Haitong Securities Co. and Guotai Junan Securities Co. from adding margin-finance and securities lending accounts for three months, following rule violations. 

Artificial Liquidity 

“In the short term, we’ve got an extremely fast and sharp move and there’s some leverage in play which is not good quality,” said David Gaud, a Hong Kong-based money manager at Edmond de Rothschild Group, which oversees about $158 billion. “For long-term investors, this is a worry. It disturbs and disrupts the picture of liquidity which is artificial and may disappear overnight.” 
The Shanghai Composite rebounded 1.8 percent Tuesday after economic data beat estimates and the CSRC said the measures aren’t designed to curb equities trading. The securities regulator said it will help support the “healthy growth” of margin financing. 
The stock index surged 4.7 percent today, its biggest gain since October 2009, while a gauge of 10-day volatility jumped to its highest level in six years. 
For JPMorgan’s Mowat, the increase in margin debt poses little risk to China’s financial system because the shares backing the loans can be easily sold to repay creditors. His bull case for China’s mainland shares is predicated on the prospect that local individuals will increase their equity allocations amid looser monetary policy and a slowing property market. 
“Margin lending increases the impact of cash flow,” Mowat, the head of Asian equity research at JPMorgan, said in a Jan. 7 interview. “As the market goes up, it can accelerate movements.” 

Thursday, January 22, 2015

Eco World Bhd Shows Deep Value


from The Edge Markets:


BY YIMIE YONG
KUALA LUMPUR: Eco World Development Group Bhd surged as much as 12.12% or 24 sen to RM2.20 after its non-independ- ent non-executive director Tan Sri Liew Kee Sin said he plans to step down as chairman of Bat- tersea Project Holding Co Ltd (BPHC).

Eco World (fundamental: 0.95; valuation: 0.3) closed at RM2.15, up 8.59% or 17 sen, with 4.37 million shares traded, giving it a market capitalisation of RM1.09 billion. The counter was one of the top gainers yesterday.

Liew was quoted in a local news report as saying he had ten- dered his resignation from BPHC, and was “waiting for a response” from the latter’s board.
BPHC is a joint venture com- pany owned by S P Setia Bhd (40%), Sime Darby Bhd (40%) and the Employees Provident Fund (20%). It owns the Batter- sea Power Station redevelop- ment project in London, United Kingdom.
Liew has been in the driv- er’s seat of the iconic £8 billion (RM43.72 billion) Battersea re- development since its launch in 2013, and was supposed to stay on as chairman until September.

It was announced earlier that Liew would spearhead the list- ing of Eco World International Bhd (EWI) as a special purpose acquisition vehicle for the pur- pose of investing in real estate in the UK and Australia.

Eco World had previously announced that it plans to subscribe for a 30% equity stake in EWI.

Eco World’s share price also went ex for its 1-into-2 share split yesterday, which reduces the par value of the stock to 50 sen and increases the group’s paid-up share capital to 506.6 million shares. 

My View:
Let's bear in mind that its market cap now is around RM1.15bn. The 30% stake in the SPAC alone assuming the London project, which has a GDV of $3.3bn. The SPAC has a 75% option into the project, which is now almost unthinkable fort not to be approved. Being conservative let's assume a net margin of 25%.

3.3 x 0.25 = 0.825 x 3.5 = RM2.88bn x 0.75 = RM2.16bn / 5 years x 0.3  = RM678m  over 5 years

Of course there are a lot of assumptions, the SPAC must be approved, then the SPAC has to take up the option, but it seems a formality to me with Liew resigning from Battersea. Cumulatively there should be RM2.16bn in net profits for the 75% stake in the SPAC. Ecoworld's 30% stake alone would technically bring in RM678m profits over 5 years.

As you all know, there are a lot of things happening under Ecoworld Bhd, the Pudu jail project, their current townships, etc... hence if you were to crunch the numbers, the stock looks to be a worthwhile investment at current level. It is somewhat shielded from the flattish local property markets. It is also technically "hedged" by being in one of the stronger property markets in the world, London. The follow on benefits and goodwill from Battersea is going straight to Ecoworld London.

Its going to be a gradual thing but I believe that the shares should be worth a market cap of RM1.5bn at least once the SPAC is approved, or around RM3.00 a share. Hence if all goes accordingly, the path for Ecoworld Bhd's share price has been mapped out according to the likely unfolding events.

 From CIMB's recent report - For Eco World's maiden year, the group chalked up RM3.2bn in new sales, 60% above its target. This is very impressive considering that the sales came largely from only six projects - two in the Klang Valley (Eco Sky and Eco Majestic) and four in Johor (Eco Botanic, Eco Tropics, Eco Spring and Eco Business Park 1). Eco World is targeting to achieve RM7bn new sales over the next two years.

The next step will be the upcoming acquisition of 3,000 acres of landbank from Eco World Sdn Bhd (EWSB) for RM3.8bn. The proposed 1-for-2 rights issue and 20% share placement will take place in the coming months. Potential re-rating catalysts include the ongoing restructuring exercise, better-than-expected new sales and continuous land banking. The next milestone will be the issuance of 806.85m new shares at a subscription price of RM1.70 each for the acquisition of 3,000 acres of landbank held by EWSB.

Disclaimer: The content on this site is provided as general information only and should not be taken as investment advice. All site content, shall not be construed as a recommendation to buy or sell any security or financial instrument. I may already have positions in the above mentioned stock. The ideas expressed are solely the opinions of the author. Any action that you take as a result of information, analysis, or commentary on this site is ultimately your responsibility. Consult your investment adviser before making any investment decisions.

Wednesday, January 21, 2015

S&M Show Podcast

CIRCUIT BREAKERS & STOCK MARKETS

We look into the pros and cons of having circuit breakers for share trading.

http://www.bfm.my/sm-salvatore-dali-malaysiafinance-circuit-breakers-stock-markets-150121.html


Song Pick:   Going Phil Collins way today ... Do You Remember a simple song with a simple melody but somehow it grows on you in a special way the more you listen to it. Like meeting a good old friend.


Tuesday, January 20, 2015

Gold & Central Banks

Growing distrust in the central banks
During the last round of the global financial crisis, bold decisions made by central banks around the world did avert a collapse of the then fragile economic systems. The loose monetary policies adopted in the US have probably rescued the nation from entering into another "Big Depression" as we knew in the 1930s. Nonetheless, the zero interest rate policy (ZIRP) has been in place for more than a "considerable period". The economy has not been able to grow in a robust manner as in the previous economic rebounds. The average annual GDP growth is around 2.5% in the aftermath of the 2008 crisis. Chairperson of the Fed, Dr. Janet Yellen, said once the economy is strong enough to stand on its feet, the Fed would start increasing the Federal fund rates gradually and "with patience." With the revised GDP growth in Q314 standing at 5% and the unemployment rate at 5.5% last December, many stock investors probably believe our economy is indeed the best among the G-7 countries. They expect the Fed start hiking rates later this year. The bond investors, nevertheless, beg to differ.
Look at the price actions of the US long-term government bonds in the past 12 months. iShares Barclays 20+ Years Treasuries Bond Fund (NYSE: TLT) is a very popular ETF betting on the appreciation of the fund price when interest rates go down. What the chart is revealing is that bond investors do not believe that the Fed would honor its words. Put it in a more diplomatic manner, they do not believe the Fed would not be able to raise rates because there is very little economic growth both in sight and in the pipeline. The latest statement from one of the Fed's top officials did contain such ambiguity. Last Friday San Francisco Federal Reserve Bank President John Williams said:
"There is no need to rush to raise rates; at the same time we want to make sure that we appropriately act in a way that we don't get behind the curve. If the forecast evolves the way I expect, six months from now or whatever - middle of this year - I think we'll have a better position to understand either well we need to wait longer, or maybe it's we could act now."
(click to enlarge)
Source: Stockcharts.com
The chart simply shows that the bond investors who are always considered to be more prudent, if not more intelligent, have ruled out any chance of a rate hike in 2015. If they had listened to the talk of the Fed and trusted what the Fed would do, the prices of the Treasuries would have been gone down instead of going up. When it comes to bond investing, high interest rates would always bring bond prices down and vice versa.
There are good reasons not to trust the central banks. The sudden reversal of the Swiss National Bank (SNB) last week to de-peg its national currency from the Euro is the best example to show how a central bank could dishonor its commitment overnight. Few days before the policy reversal, the central bank vowed that the peg was a "cornerstone of the country's monetary policy." Nonetheless, the good intentions of SNC to prevent global funds from flowing into Switzerland during the Euro zone crisis resulted in a fast accumulation of foreign currency reserve. In order to cap the exchange rate of one Euro to 1.2 franc, SNB ought to keep the printing press rolling to enable it to keep buying Euro. This is the only alternative in a current peg to keep the Swiss franc from going strong. However, the declining Euro due to anemic economic growth in the Euro zone has proved to be a financial burden too much for the country.
(click to enlarge)
Source: Swiss National Bank
The de-pegging decision led to an immediate 10% plus rise in the value of Swiss franc against almost all major currencies. Many retail and institutional investors were caught unprepared. The "Black Swan" has created havoc in the financial markets. The sudden unexpected upswing in the Swiss franc has caused bankruptcy of two relative small foreign currency traders in the UK and New Zealand - Alpari and Global Brokers NZ.
In the US, a New York-based currency broker FXCM, confirmed late Friday that it was getting a $300 million rescue loan from financial firm Leucadia National Corp. The online currency trader was about to breach regulatory capital requirements following a $225 million loss by its clients overnight. 
(click to enlarge)
Source: Stockcharts.com
Trading resumed in the after-hours on Friday and the last trade was at $4.3. Compared with the stock's closing price at $17 one week prior, the stock lost 75% of its value. The extent of financial instability brought about by an unanticipated move of a major central bank cannot be underestimated.
The global currency trading market is huge estimated at nearly $2 trillion turnover per day on the spot market. The real carnage to major US banks and other financial institutions are unknown as of now. Regulators in New Zealand, Hong Kong, Britain and the United States said they were checking on brokers and banks to assess the consequences after reports of volatility and losses. The incident shows that any change of mind by any major central bank on set policy goals would send ripples or cause severe turmoil to the global financial system.
The incident serves to remind stock investors that they should not place complete trust in decisions of the central banks. Take the Bank of Japan (BOJ) for example. The unprecedented stimulus program launched by BOJ in the past two years has failed so far to bring the country out of deflation. The 2% inflation rate it vowed to reach remains a remote target. On the contrary, the trade surplus Japan used to enjoy for decades because of its stellar export performance has turned negative. The current account is in the red. The national debt keeps rising to over two times of its GDP. Many critics suggest that the failure of BOJ's QE program would lead the country and even the world into uncharted waters.
A critic on Reuters Breakingviews who is skeptical about the ability of central banks to fight deflation reminded investors that central bankers are not omnipotent. Here is what the columnist Swaha Pattanaik wrote:
"Swiss monetary policy did not work as planned. The Bank of Japan, and the ECB, which is expected to launch a government bond-buying program soon, may not be any more successful. The U.S. Federal Reserve and the Bank of England do not have to worry much about stimulating growth now, but if they do, their arsenals are depleted"
The ECB chief Mario Draghi vowed to do "whatever it takes" to save the Euro in 2012. He succeeded. On Thursday, when the ECB announces its scheduled plan to resurrect the Euro zone inflation, I believe the market would not respond mildly to the long overdue solution. Any disappointment might lead to another round of havoc or volatility in the financial markets. Against this kind of uncertainty, retail investors must monitor the equity markets closely or take profits first to protect their portfolio.

Gold is again becoming a sought-after safe haven

Like the Swiss franc and the greenback, gold has always been a safe haven when fears abound. In the past three years, investors dumped gold because the precious metal failed to serve as a hedge against inflation. Nor could it generate any recurrent income for the yield-hungry investors. The everlasting function of gold as a safe haven has never vanished. The recent turnaround of gold against the ever-stronger US dollar implies that a pocket of investors is finding the macro-environment worrisome. They are re-examining the value of the long-neglected asset class as a "currency" besides its universally accepted status as a safe haven during bad times.
Some investors have already moved in. According to Bloomberg, holdings in the SPDR Gold Trust (NYSEARCA:GLD), the biggest exchange-traded product backed by the metal, surged the most in more than four years. Assets in the SPDR fund jumped 1.9 percent to 730.89 metric tons last Friday when the metal closed at $1,280 - a four-month high. The holdings climbed 3.3 percent last week. With regards gold futures, call options for the right to own February futures at $1,300 an ounce soared sevenfold in two days
As of last Friday, gold has increased 12% from the 52-week low recorded last November. Most importantly, gold has two important technical breakthroughs. First, it broke above the downward daily trend line extended since last March.
(click to enlarge)
Source: Stockcharts.com
Second, in the monthly chart below, the gain in January 2015 represents a conspicuous breach above the down trend line extended from late 2012. This could be a very meaningful technical breakthrough, hinting that the time for a long-term turnaround is coming provided gold could retain its current strength by the end of the month.
(click to enlarge)
Source: Stockcharts.com
The fact gold regains the favor of investors is not by coincidence. The growing mistrust in the central banks may have led to a trend reversal of the gold prices. The concerns about an upcoming deflationary environment i.e. the first red flag mentioned at the beginning of this article are probably another contributing factor.
"It is living up to its reputation as a safe haven as other cyclical commodities are tumbling, equity markets are down, and we are seeing higher risk aversion almost everywhere."
"Gold is popping because fear is coming back into the marketplace and gold is regaining its stature as a safe-haven commodity. Look at what has happened with the global central banks today. The surprise - you know - black-swan move by the Swiss National Bank is not creating more confidence; it is creating less confidence. And people are running back to gold."
Author of the well-known investment letter Gloom Boom Doom Report, Marc Faber also attributed the growing fear to the failure of central banks to deliver what they promise. He expected gold could jump 30% in 2015.
"My belief is that the big surprise this year is that investor confidence in central banks collapses. And when that happens - I can't short central banks, although I'd really like to, and the only way to short them is to go long gold, silver and platinum."

Wednesday, January 14, 2015

The Enigmatic David Bowie

Absolutely fabulous, always cool ... the morphing looks of DB over the years.

S&M Show Podcast

BANK MERGERS & ECOWORLD LONDON


Trying to make sense of the supposedly on-off mega bank merger involving RHB-CIMB-MBSB. Plus an assessment of Ecoworld's SPAC in light of Tan Sri Liew's London foray.

http://www.bfm.my/sm-salvatore-dali-malaysiafinance-bank-mergers-ecoworld-london-150114.html


Song Pick:  When Tanita Tikaram first hit the pop scene, she was a breath of fresh air, somehow the wonderful lyrical ability and obscure meanings using words rarely heard in songs, did not translate past a couple of albums. Twist In My Sobriety.



Monday, January 12, 2015

Great Food Find ... Steamed Fish @ 1990 Prices

Thanks to the market tanking and quite a horrible year for most, not to mention the oil prices ... its time we all tighten our belts. What a find, this place is hidden at the backlane, and when you see the shop, you don't really want to go there. But actually the owner is fanatical about cleanliness despite the look of the place. Its packed to the rafters all the time.

Specialty is their steamed fish with ginger, or rather river fish. I know some may not like river fish being steamed as they say you can taste the mud, seriously folks ... thats too atas.











































Look at the bill ... two steamed fishes, a veggie dish plus taugeh dish and tea ... RM87.20!!! Food rating: 9/10. Ambience: 1/10. Value for money: 10/10.

LOCATION: (take note of the word "behind")
Behind - 91 Jalan Waras 3, Taman Connaught Cheras, Kuala Lumpur, 56000, Kuala Lumpur, WP Kuala Lumpur, 56000 (opens  for lunch and dinner)

Although they seem to have another branch but my friend insisted that the original god forsaken place is still tops.

18-20, Jalan 15A/142, 
Taman Orkid Desa,
56100 Cheras, KL.
Tel : 016-665 6331 
Operation Hours : 05:30PM - 10:00PM
Closed on every Wednesday

Friday, January 09, 2015

Let's Listen To What David Suzuki Has To Say

DAVID SUZUKI CRIES FOR HIS GRANDKIDS

David Suzuki, Founder of the David Suzuki Foundation

If I were to say that this 20 minutes interview was the best piece of radio I have heard for the longest, that would be short changing it. Thats because the subject matter is graver than religion. Its relevance greater than most of us would like to admit. Its humbling, even guilt-inducing at times because we can care more. I am still thinking how we can make the things he said more "actionable for normal people", its too safe to just nod and say that was great radio and content.

http://www.bfm.my/breakfast-grille-david-suzuki.html



Mandatory Viewing

A dire need to reconsider the death penalty: if not for morality issue (no one has the right to take another's life); then for the fact that according to data available 4% of all death row inmates could be innocent. New and modern DNA testings have exonerated more than 300 previously on death row. Just picture if one of your friends or family members or you yourself in falsely convicted.




The heartbreaking yet horrifying situation faced by many translators working for US armies.


Asset Class Performance As At 31 December 2014

I don't know about you but the recent calamity in the markets, caused by a massive drop in oil prices and to a lesser extent other commodities, plus a sharp rise in USD vis a vis most currencies ... kind of makes me mad. Why ... why is it that the US does not get punished for printing truckloads of currency, why their debts need not be serviced ... and when they have to raise rates, all the smaller nations get whacked.

US real estate investment trusts (REITs) led the performance race in December among the major asset classes, rising a healthy 1.9% in the final month of 2014. US REITs were also the top performer for the calendar year among the major asset classes.  For the rest of the field, returns in December were mostly flat to negative. The big loser last month and for 2014 as well: commodities. The US stock market was flat last month, although for year just passed US equities earned a respectable 12.6% (Russell 3000). That’s a comparatively soft gain relative to the stellar advance for US market in the last few years, but it’s above average in comparison with long-term results.

Meanwhile, portfolio diversification faced strong headwinds last month and for 2014 overall. The Global Market Index (an unmanaged benchmark that holds all the major asset classes in market-value weights) retreated 1.1% in December. For all of 2014, GMI earned a relatively soft 4.1% — a sharply lesser gain vs. 2013’s 14.2% advance.
GMI’s diminished performance last year is disappointing in the context of recent history, but the downsizing of return isn’t particularly surprising. Forward-looking risk-premia estimates for GMI have been in the neighborhood of 4.0% lately (see last month’s update, for instance). By contrast, GMI’s historical risk premiums have been running at roughly twice that pace in the last several years, based on the trailing three-year period. But as December’s numbers suggest, the wide gap between hefty profits in the rear view mirror and lean expectations for the future is closing. 
The implication: minting impressive returns with a passively managed multi-asset class strategy is going to get tougher in the foreseeable future. The solution for sidestepping softer results? The standard toolkit, of course — excelling in rebalancing and/or second-guessing Mr. Market’s asset allocation. In other words, generating a portfolio return that’s comparable to what we’ve seen over the past five years will probably require a higher dose of risk.