Frank Comments by Dennis Ng on various Topics

[yhendra]

Hi RoyChen,
Yes. Thanks. I would like the paste article into into this blog.

Hi ngtfook,

I believe this is what you wanted to do:

https://picasaweb.google.com/lh/photo/4 ... _c9uN3rfd0

Hi ngtfook,

if you want to show your image which you have uploaded into PICASA-WEB album, follow the following steps:

Go to that picture. Say the following picture is the one you want to publish.



You need to (see the circled numbers)
1. Click on 'Link to this Photo'
2. Check 'Image only (no link)'
3. Select the size of the photo you want to display
4. Copy the provided link in 'Embed image'

Now suppose you got the link as
https://lh5.googleusercontent.com/-G4FC ... reLink.png

Of course people can click on the link and go to the picasaweb to see the image. But, it will be nice if you can show it right here in this forum, right?

What you need to do is putting that link inside when you post something.
So, it will look like this (depending on the size you chose):

[ngtfook]

Hi yhendra,

thanks for the detail procedure. Would I be able to see the picture during preview?

[yhendra]

Hi yhendra,

thanks for the detail procedure. Would I be able to see the picture during preview?

ABSOLUTELY! Try it out

[ngtfook]

Hi yhendra,

thanks for the detail procedure. Would I be able to see the picture during preview?

ABSOLUTELY! Try it out

here you go...

[Dennis Ng]

I would like to get your opinions since the markets have drop quite a bit wouldnt this be a good time to pick up "discounted" stocks?

Like for example certain blue chips looks "attractive" now and if we buy them now, usually they would recover first if the markets was to go up again in the next few months, wouldn't they?

It would also mean that we are buying when everyone is fearful and getting out of the market.

But the term of catching a falling knife scares me until I heard the following.

I remember on tuesday a investor said that the current market maybe a falling knife now and it might cut off a few fingers when you try to catch it.
But when the knife rebounds, it will rebound so fast that you will have money to buy a whole hand. Which I think is quite a funny quote.

there is a lot of fear in the market.

For those who have not bought enough stocks, can consider buy some, but with a Clear Exit Plan, cut loss plan. Of course if one buys now, one must be clear that one is buying based on FA, and NOT TA, since there are no clear TA signals to buy at this moment.

The next few days and weeks how Global stock markets perform, especially U.S. markets would be crucial.

2,800 is also the next important psychological support level that if STI break below this level more than a few trading days, might be time to head for exit. It's also important that STI can recover above 2,900 level within the next 2 weeks or so.

I have 32% of my money in Cash and 35% invested into stocks.

Even if markets crash, and say, eventually crash to 1,600 levels, by selling at around 2,800 levels, even if say I lose 30%, but importantly I would have avoided further loss of 43%. And if markets bottom and subsequently I buy at say around 1,700 level and in time to come, markets go back to say 2,800 levels, I would have made 65% returns.

So I lost 30% and made 65% returns. Overall did I make or lose money?

Likewise, you can base on your own situation to make some calculations and estimation to find out in a Stock Market Crash situation, how your portfolio would "look like".

P.S. at current market levels, my overall stock portfolio is still in the black, as most of my stocks were bought at much lower prices. eg. Suntec REIT at S$1. Only my recent purchases are in the red. So even if market drop further to below 2,800 level, overall I do not lose 30% as illustrated above. Above illustration I think would be representative of the portfolio situation of some seminar graduates though.

[Dennis Ng]

Hi All,

I saw this in youtube.
http://www.youtube.com/watch?v=Jjv-MtGp ... r_embedded

Easy to understand, and sound logical.

thanks yhendra for sharing.

Yesterday, U.S. government just issued some new 10 year bonds at interest rate of 2.14%...imagine inflation is 3.6%, so these investors are losing 1.46% per year and getting Poorer and Poorer.

Singapore (Swap Offer Rate) SOR rate went down to -0.0119%, or below ZERO yesterday! Yes, it means that one can basically borrow money at almost zero interest rates for Housing Loans with interest rates pegged to SOR. eg. if Housing Loan is SOR + 0.8%, then you pay about 0.7881%. Considering that inflation rate in Singapore is currently at 5.2%, it means you pay NEGATIVE interest rate of -4.4119%, that you actually GAIN by borrowing money!

On the other hand, the Poor save money in Fixed Deposits and earn 0.7% interest. With inflation rate at 5.2%, he/she actually loses 4.5%, and is getting Poorer, NOT Richer.

This is why I always say in seminars that the Poor save money to become Poorer and Poorer while the Rich borrow money to become Richer.

Yes, U.S. government bonds are possibly the WORST Investment to BUY NOW!

One day (possibly next year), U.S. government bond prices can crash 30% to 50%...and of course when this happens, probably you would remember that I (Dennis) already warned about this months ago before it happens.

[Dennis Ng]

Hi Dennis, Silver price will crash in the event there is a stock market crash?

If so, would it be a better strategy to wait for the crash to happen then buy Silver?

To me, it seems QE3 or whatever it will be called, will be launched. This will cause the stock market to rally before crashing down. At the same time, Gold and Silver will continue their rise in prices. Until The Mother of All Crashes happens.

Would it be too late to buy Silver then?

Hi Tanks,
my view:
Silver upside possibly US$49 to US$70.

Silver if break below US$30, then might turn to downtrend.

So currently Silver at US$39, is it a buy or a sell?

You decide yourself, each person make their own decision.

[Dennis Ng]

12 Aug 2011

The next Global Financial Crisis will be More Prolonged and Deeper (more pain).

Why? Becos last round governments around the world Borrowed (Printed) money to save economy, this round, most have borrowed to Max or near Max already.

Last round no inflation, can cut interest rates. This round Rising inflation, NO room to cut interest rates.

Build up your Cash position if you have NOT, and brace yourself for the Worst Financial Storm you have ever lived through.

[Dennis Ng]

Hi Dennis Sifu,

Discounting that the current turmoil as the start of the "Next Financial Crisis" and we still have quite a few months of lead time...
if in the future we start to see tell-tale signs on the start of the next financial crisis, when should we get out of stocks? do we still based on 50/200MA or a more kiasu/kiasi 20/100MA?

Just to prepare the strategy for this, since it's going to be a prolong and painful economic crisis...

Thanks..

Hi walkinepark,
there is always Pro and Con in each indicator you use. 20/100 might mean more whipsaws.

I've observed that 50/200 MA is most accurate in indicating change in Major Market Trend. I think yhendra's posting of historical charts of STI also clearly proves this as well. My multi-millionaire sifus also use 50/200 MA.

Having said this, Dow (U.S. market 50 day MA has NOT cut 200 day MA yet).

A Crisis always starts unexpected, otherwise how would markets fall unexpectedly...

But unlike many people out there who have NO "compass" to know the direction of markets, my seminar graduates will KNOW what to look out for and what to do in different situations.

For example, whether to sell stocks and when to sell, is covered in the notes as well. Please read and re-read them.

So, there are 2 possibilities:
1. this is start of Bear Market, the markets will rise and fall, but each time we'll see lower high and lower lows...U.S. Dow 50 day MA will cut 200 day MA and when overall market trend change, I would sell possibly all my shares to conserve Capital.

2. the markets will remain volatile until U.S. launches QE3, this would lead to a Last Rally in Global Stock Markets, but this rally might be short-lived, eg. 1 to 3 months and thereafter followed by a Stock Market Crash...

What I know is as I have 32% in Cash and 35% in Stocks, no matter what scenario happens, I'll be financially ok, since I've LONG planned for a possible Stock Market Crash and Next Global Financial Crisis since Oct 2010.

P.S. I also have about 26% in Real Assets, which will do well in times of High Inflation. ie. Silver 5%, Gold 2%, Investment Property 12%, Land 7%. I also have 7% in UK Traded Endowment, which provides 100% Capital Guarantee in the form of its Cash Value, so that I have peace of mind even in Global Financial Crisis. So my Investment Portfolio is ALL Weather Proof. Is yours?

[yhendra]

12 Aug 2011

The next Global Financial Crisis will be More Prolonged and Deeper (more pain).

Why? Becos last round governments around the world Borrowed (Printed) money to save economy, this round, most have borrowed to Max or near Max already.

Last round no inflation, can cut interest rates. This round Rising inflation, NO room to cut interest rates.

Build up your Cash position if you have NOT, and brace yourself for the Worst Financial Storm you have ever lived through.

TIPPING POINT

Everyone knows that when you boil water, the water does not instantly boiled and becoming hot...
However, once the critical temprature, i.e. 100 degree Celsius reached then the water started to boil violently...
Of course before that you can see some bubbles building up before it reached the critical temperature.
This critical temperature is called the tipping point.

We are fortunate enough to have a privilege from Dennis' sharing that "the water is going to boil soon". He could see the small bubbles in the water before reaching the boiling point.

I can feel that the sharing in this forum is POWERFUL enough that we can share, learn and become a strong community whereby we can make a difference!
There are a lot of selfless forumers out there who share their point of view, share news, share their experience, etc.

A good master or teacher, never give you the fish, he teaches you how to fish. The students have to "struggle".

Do we see the small bubbles building up in the water?

[Dennis Ng]

people will lose confidence in many currencies around the world in the next Crisis.

The 5 fundamentally strongest currency in the world are: China Renminbi, Switzerland Swiss Franc, Canadian Dollars, Australian Dollars and Singapore Dollars.

(Canada and Australia are commodity backed currency) while other 3 countries are backed by foreign reserves.

Good news is Hot money might flow to Singapore in the next Crisis becos of our safe haven status.

[jfoo2]

Hi Dennis,

Can you enlighten "(Canada and Australia are commodity backed currency) while other 3 countries are backed by foreign reserves?"

For e.g Singapore is backed by foreign reserves. Does it mean they hold a lot of US dollars so that the liquidity and supply of Singapore dollars is maintained at a balance level or some sort?

So if there is a high demand for Singapore dollars (ie more investor exchange US/Euro dollars for Singapore dollars), MAS will own more US/Euro dollars in return?

[Dennis Ng]

Hi Dennis,

Can you enlighten "(Canada and Australia are commodity backed currency) while other 3 countries are backed by foreign reserves?"

For e.g Singapore is backed by foreign reserves. Does it mean they hold a lot of US dollars so that the liquidity and supply of Singapore dollars is maintained at a balance level or some sort?

So if there is a high demand for Singapore dollars (ie more investor exchange US/Euro dollars for Singapore dollars), MAS will own more US/Euro dollars in return?

Hi jfoo2,

Singapore as at 31 Dec 2010 has total foreign reserves of about US$225.7 billion.

http://www.mas.gov.sg/data_room/reserve ... erves.html

Singapore currently holds about US$57.4 billion of U.S. government bonds.

http://www.treasury.gov/resource-center ... ts/mfh.txt

I think you confuse the issue. If hot money flow into Singapore, then people buy S$ and sell their foreign currencies, these money does NOT belong to Singapore, it is just money parked in Singapore banking system.

But money flow into Singapore either can:
1. flow out again
2. or be converted into Singapore assets, ie. these hot money will either buy stocks or property...which do you think higher chance? I think stocks, since Hot money wants to quickly get in and quickly get out, instead of being tied down in property.

[jfoo2]

Hi Dennis,

Thanks for the reply.

Wow, the data you share is certainly illuminating!

[Dennis Ng]

12 Aug 2011

Hi all,

The way i see the massive volatility and movement in DJ and thus affecting all global markets are caused by the systematic programs by investment banks, hedge funds playing and trading the stocks against us retail investors.

Hi tivoli,
this is what I suspect as well. As I mentioned, the sell down might be conspired as an Excuse for U.S. to launch QE3, to "save" the world.

I think QE3 (of course they will call it something else instead of QE3) will come very soon, can be just days from now, or by end of Aug 2011.

Cheers!

Dennis NG

9 Aug 2011

Can the recent Global Stock Market fall be a conspiracy?

Remember that many countries blame U.S. for high inflation and currency strengthening due to QE2 (2nd round print money)...

Many will object (including China, many countries and even Republican Politicians in U.S.) for a possible QE3.

So they created this Stock Market panic for people to plead U.S. to do something...and what will U.S. do?

QE3!!! (3rd round of Printing Money!)

Watch out if this (QE3) happens in the weeks to come...

In the meantime, I will stay nimble and flexible and be prepared for the possibility that my view is wrong and take remedial action accordingly.

If you had planned your Investment Portfolio as I've done, you should be ok even if the Stock Market Crash.

35% of my money in stocks, even if lose 30%, if confirmed trend reversed from uptrend to downtrend, I would get back about 25%.

32% of my money in Cash, so adding 25% to 32%, I would then be 57% in Cash. I would be ready with Opportunity Fund to scoop up bargains in stock markets (in due course).

8% of my money in UK Traded Endowment, which has 100% capital guarantee in the form of the Policy Cash Value

5% of my money in Silver, 2% of my money in Gold, these 2 days, Gold prices even exceeded reach a NEW Historical High of US$1,700!

8% of my money in Land

12% of my money in Investment Property.

So even if the stock market Crash, I would be ok, as mentioned, I consider the above Investment Portfolio ALL Weather Proof.

(Reuters) - It's still a remote possibility, but one that becomes increasingly more plausible with every tick lower in plunging global stock markets.

While most analysts still expect the Federal Reserve to not make any major changes in policy at its meeting on Tuesday, some are beginning to wonder whether the market disruptions of recent sessions warrant some kind of central bank intervention.

U.S. stocks extended last week's rout on Monday, with the Dow Jones industrial average tumbling down more than 5.0 percent for the day late afternoon, following Friday's historic downgrade of the U.S. AAA credit grade by ratings firm Standard & Poor's. U.S. stocks saw their biggest one day drop since December 1, 2008 during the worst of the financial crisis of that year. Bank shares were severely punished, raising fears of a new financial crisis, though the Fed said Friday night that the S&P downgrade of the government's rating would have no effect on bank capital ratio regulations.

"If the Fed does nothing, it could prove to be a disappointment at this point," said JP Morgan analysts on a conference call to discuss the S&P downgrade.

Many economists argue the Fed's policy toolkit is already severely depleted. Interest rates are effectively zero, and the Fed's bloated $2.9 trillion balance sheet has raised concern among conservative economists and politicians.

Still, there are a few things the Fed could do to reassure markets, including to suggest that it will revise down its growth forecasts -- the first signal that it is leaning toward further policy accommodation.

The central bank might also decide to begin reinvesting proceeds of maturing bonds into longer-dated Treasury maturities, putting further downward pressure on long-term borrowing costs.

Despite the loss of the U.S. government's prized AAA credit rating from Standard and Poor's on Friday, a steep rally in U.S. Treasuries, on renewed fears of a global downturn, has pushed such yields to their lowest levels in two years, so it is unclear how much positive effect on the economy any move by the Fed to lower rates would have.

HOLDING FIRE ON BOND BUYS

Another move the Fed could make, but one that few expect, is another round of bond purchases. These are seen as controversial and only modestly effective, so policymakers will be reluctant to resort to them again.

"(It) depends on how confident the Fed is in their own forecast," said John Silvia, economist at Wells Fargo.

At the moment, it was difficult to imagine that such confidence was very high. In June, the Fed forecast growth of 2.7 percent to 2.9 percent for 2011. But that was before the rate of first-half expansion was revised sharply downward, and the employment picture worsened.

Adding to concerns about the financial system, the latest rescue package from the European Central Bank, aimed at putting a floor on selling of Italian and Spanish bonds, was greeted with skepticism among investors.

Fed officials have noted that, while U.S. bank exposure to smaller European nations like Greece and Portugal is relatively minor, there is a certain contagion risk from their holdings of vulnerable European banks.

(Reporting by Pedro Nicolaci da Costa)