I warned about Stock Market Crash As Early as June 2007...

[Dennis Ng]

Welcome to the 40th Issue of Weekly e-newsletter by www.HousingLoanSG.com This week I like to share with you “Stock Markets Crashed, Remember my Warning Since June 2007?”

P.S. would you believe it, if I tell you I’m writing this while still down with a bad flu and temporarily lost my voice? Yes, when you’re so passionate about certain things, nothing can really get you down.

If you have friends who like to receive this information-rich FREE Weekly E-Newsletter, ask them to go to our website http://www.HousingLoanSG.com where they can sign up immediately and get a FREE Special Report “How to cut your tax legally by 23% to 59%?”

Cheers!

Dennis Ng, http://www.HousingLoanSG.com – help you get BEST Deal in Housing Loans in Singapore & Australia!

Stock Markets Crashed, Do You Remember I Warned about this as Early as June 2007?

Many analysts are now coming out to warn people about the dangers of the stock market in view of the recent drop in stock market of more than 20%.

I don’t like to do hindsight analysis. Readers of our e-newsletters were warned about the risks of a stock market crash as early as June 2007, giving you (the subscribers to our e-newsletters) enough time to prepare for this event.

In case you think I made it up, here's a copy of our e-newsletter I posted in our discussion forum, this is the url for this particular message:

http://www.housingloansg.com/forum/phpB ... .php?t=353

The following is part of the message I wrote back in June 2007:

Recent plunge in China stock market and Dow didn’t trigger any effect on Asian Stock Markets, in my opinion, this is a sign of market going crazy. Even recent plunge in China market, DOW and other global markets also didn't react as well.

This is a global bull run driven by liquidity......however, when things turn around, it will be a BIG, BIG Crash becos much of the liquidity is attributed to Leverage by Hedge Funds, Private Equity, Yen Carry Trade etc, etc.... when liquidity tide turns and risk premium increases.....the crash would be like an avalanche....

The Crash would occur in both Global Stock Markets and Global Property Markets....remember the global stock market crash in year 2000 to 2002 was buffered by rise of global property markets.....so if BOTH Stock and Property markets crash, it will not be a pretty sight.

What will be the trigger for the Crash? It can be anything.

the thing with Global Liquidity as I mentioned, it can vanish overnight as well, when everyone rush for the exit, it is when the crash would occur. What cause everyone to rush for the exit door....I really don't know.

why it will be the WORST in history is becos of the HUGE expansion in Deriviatives and LEVERAGE in the past 5 years......and the Massive Growth in things such as Collaterised Debt Obligaitons, Hedge Funds, Private Equity Fund etc....

Please note that yes, if this CRASH occurs, Singapore will NOT be spared. Singapore is like a small "sampan" in a big ocean. However, in my opinion, Singapore will be one of the Few SAFE Havens in the whole world becos Singapore is one of the rare few countries in the world whereby we are financially strong, each S$ issued is somewhat backed by foreign reserves we have.

Furthermore, Singapore is a Global Financial Centre, whereby even in a crisis, there'll still be Wealth parked in Singapore due to the many advantages that Singapore has.

We will not know the exact timing of the next Crash. My guess is end year 2008 or year 2009, LBWOES's guess is much earlier than that.

More importantly, we must ask ourselves how are we prepared for this Crash, how are we positioning ourselves to not only survive the Crash but be one of the Few that will actually increase our wealth massively in the coming Crash.

Each Crash is a MAJOR Transfer and Re-allocation of Wealth. The IMPORTANT question is whether you will receive wealth or you will suffer loss.

How to Prepare For The CrashI mentioned in another e-newsletter in Nov 2007:,

Tips on Managing Money:
Have a “Just in Case” fund that cover your total expenses for 6 to 12 months. This will help to boost your "defence", on top of Insurance coverage.

Also have an Opportunity Fund. Opportunity Fund is cash set aside to take advantage of rare opportunities and bargains. For instance, when stock markets crashed in year 2002, I used it to buy stocks whose returns have exceeded 500% in some cases.

Opportunity Fund is like "reserve strikers". Only send them in when you're almost certain that they will help to score some goals.

And should you be using your Cash/CPF to pay off/reduce your Housing Loan? In a e-newsletter sent out in Aug 2007, again I repeated my warning about coming Crash:

Anyone with Cash/CPF now I would advise not using the money to pay one lump sum to reduce your Housing Loan. The next Crisis can be 3 months to 2 years from now and you would then realise it is very easy to make 50% to 200% returns on your capital if you buy during a crisis. I've already shown you past crisis to prove that it had happened before, I am sharing with you actual experience, not classroom theory.

What about crisis? Typically, a crisis comes by every few years and at least once in 12 years. During the last Asian crisis in 1998, DBS's share price was only $5, if someone just WAIT for crisis to invest, he will sure beat the interest rates on Housing Loans. Today, this person can easily sell off DBS's shares at over $20 (or 400% returns over 10 years or annual COMPOUNDED returns of 14.86%.

P.S. would you believe it, if I tell you I’m writing this while still down with a bad flu and temporarily lost my voice? Yes, when you’re so passionate about certain things, nothing can really get you down.

We help consumers compare all the Housing Loan packages so as to help them get the BEST deal. How much do we charge for our service? As we're paid by banks separately, we have decided NOT to charge a fee for our service. Therefore, this service is FREE to you and you have nothing to lose and everything to gain by engaging our service.

Just call us at 6737 8801 or email us at info@HousingLoanSG.com if you're considering to buy a property or refinance your Housing Loan, whether in Singapore or in Australia and you want to make sure you get "pre-approval" of loan before you commit your cash.

Cheers!

Dennis Ng on behalf of

www.HousingLoanSG.com – get you BEST Deal in Housing Loan in BOTH Singapore and Australia!

6737 8801 or 6339 9255

info@HousingLoanSG.com

Copyright year 2008, LEVERAGE HOLDINGS PTE LTD

www.housingloansg.com

[Dennis Ng]

People should ask themselves this SIMPLE question:

Have ALL the problems that existed VANISHED after the 75 bp interest rate cut by FED?

The way the market moved (recovering all the losses) seems to suggest so. The SIMPLE question is, do you think so?

Is U.S. still likely to go into a recession?

How long more will the BULL in Property Market in countries such as UK, China, Hong Kong, India, Australia go on? What are the likely impact if other than the stock markets, Global Property Markets also "cracked"?

Can China and India's growth help to buffer U.S. fall? (Stephen Roach said the maths does not add up). U.S is 10 trillion economy, while China and India added to less than 2 trillion dollars.

It takes time for "economic stimulus package" to work, in the next few months, companies in U.S. are still likely to report DISAPPOINTING earnings results.

We have witnessed in Asian Crisis what "damage" Hedge funds can do to whack down a country. What will happen if we see such actions by Hedge funds in the market again?

Ask yourself honestly, do you think there is such a thing as a Bull market that go on forever?

This has been one of the longest Bull market already. This bull market has started since Mar 2003 and almost 5 years old.

How much more upside does STI have? 4,300? 5,000? 6,000? 8,000?

What about the downside risks?

And to me, the MOST important question I asked myself is this:"What if I'm wrong, will I be financially ok?"

Take Care.

Wishing everyone Many Happy Returns!

(however, if you're not Happy, becos you lost money, please don't treat me as scapegoat).

We need to understand that we made our final decisions and have to be responsible for our own investment decisions. Blame no one.

[Dennis Ng]

Originally posted by Bully

IMHO... in term of STI Valuation .. ie.. STI 2700+, PE is already as low as 12+ times. That should be around its Historical LOW.

Hence I took the opportunity to add to my portfolio selectively....

Hi Bully,
thanks for sharing your views and your decisions. Appreciated.

yes, PE is not really high for STI. However, PE can shoot up when "E" falls.

It is my observation that stock market ROUGHLY trades ahead of the economy by 6 to 12 months. I know that most Singapore companies are going to report STRONG Earnings for year 2008/2007. However, what about year 2009? 2010?

I guess it is too far away to see. Frankly, I cannot see so far ahead too. My guess is when we look back some years into the future back at year 2007, we might possibly discover that year 2007 "was" the BEST year (as good as it could get).
I might be totally wrong though. This posting serves as my personal reference record to refer back in future.

[Dennis Ng]

My personal view is as follows:

After the recent "euphoria" (on the interest rate cuts and economic stimulus package), the market will face more bad news as U.S. companies are likely to report disappointing profits during this "result announcement" period.

Banks might also have to write down their CDO/Bond portfolio further as the months wear on.

My concern is that the way the markets behaved the last few days seem to suggest all problems vanished (which we know is NOT true). I think the market has to "suck in" more people and more money (there's not enough fear yet as Jim Rogers has opined) and when the next "correction" comes, most people would have exhausted all their investible funds.

I would personally take my time to selectively pick some stocks when attractive discounts appear.

Winter has not even arrived yet, there is time to pick stocks in Winter.