Frank Comments by Dennis Ng on various Topics

[Dennis Ng]

The US$ has strengthened against major currencies recently.....has anything fundamentally changed?

What is the Longer Term Fundamentals of US$ (3 years or longer)?

And when people lose confidence in US$, what are likely to go up?

Real Money - Gold & Silver...

Just my opinion, I might be wrong though.

[Dennis Ng]

agree with Warren Buffett that Risk is NOT knowing what you're doing.

A person can actually reduce risks by raising his financial/investment knowledge.

A Knowledgeable investor when he/she makes his/her investment move, he/she is already prepared for the worst case scenario. On the other hand, an average person typically invest on based on "hope" and does not think/prepare both mentally and financially for the possibility that he/she might be wrong.

Robert Kiyosaki only teaches about "mindset change". As I have mentioned before, if a person changes his/her mindset without acquiring the necessary "skillset", the consequences can be very dangerous and devastating.

[Dennis Ng]

Each Crisis holds a lot of lessons for us to learn.

For people who are experiencing this Crisis as the First Crisis they experienced as investors, I suggest that you should write down your thoughts; your reasons for taking whatever actions on your investments;

in time to come, when you look back, these notes would be really priceless....and possibly help you avoid future crisis or be better positioned in any future crisis.

Remember that "This too shall pass." .......

[Dennis Ng]

in every Crisis, there'll be people who lost out and people who gained.

It is very clear that there are a few Clear winners in the current Crisis. JP Morgan & Chase is one of them.....they bought Bear Sterns backed up with US Fed Guarantee.....and now they takeover most of the assets of Washington Mutual....at fraction of their assets...

After this Crisis, the world will face the dangers of the most of the power and distribution of finance concentrated in the hands of a few corporations...some of these corporations will have so much of the "distribution power" in the whole world that they are probably more powerful than any countries in the World...

If we just imagine the Financial System as the "heart" of the body (world), whoever who controls the money and the flow of the money basically controls the world...

I really urge people to view the video below. It is very thought provoking and scary...

http://video.google.com/videoplay?docid ... 0256183936

[Dennis Ng]

U.S. currently protect up to US$100,000 for bank deposits for individuals. While S'pore bank deposits are only protected up to S$20,000 per depositor per bank.

U.S. is looking to revise the protection limit to US$250,000. I think if S'pore keeps our protection at only S$20,000, it will appear as a big joke, we cannot be so far behind other countries on Bank Deposits protection.

I have put some of my money into UK Traded Endowment whereby UK has a government backed scheme "Financial Services Compensation Scheme" that protects 90% of the Cash value of the UK Endowment. S$20,000 protection is really too little. Many people in S'pore have more than S$20,000 in bank.

If Singapore wants to be one of the world's major financial centres, we need to increase the Protection for Bank Deposits, especially in uncertain times that the world is in currently.

[Dennis Ng]

As China's Chairman Mao said:"Black cat or white cat, the one that catches the rat is a Good Cat."

Many think it is easy to learn to be Warren Buffett. I used to think so as well, but I don't think so anymore.

You think it is easy to estimate the intrinsic value of a business? Think again. There are many times I overestimate or underestimate the intrinsic value of a stock, despite the fact that I have an Accountancy degree and I had many years of experience lending to Companies when I was working in the bank.

It might be easier to learn to invest according to business/market cycle instead for the average person out there.

Just give you one of many real life personal examples: eg. if I had not sold MIIF at S$1.05 in year 2007 to take profits, today I'll be holding MIIF at S$0.45 while my cost is S$0.85.....thus, instead of making a realised Capital Gain of 23.5%, I would be staring at unrealised loss of 47% instead.

Anyone out there can have a different opinion. I'm just sharing my personal experience.

Below is the information I read on the "who's who" who invested big time in Fannie Mae and got hit big time:

Look at the major holders of FRE and FNM. This is the honor roll of active value investors who were all major holders of FNM and FRE common stock.

http://finance.yahoo.com/q/mh?s=FNM

Dodge and Cox, Capital World (American Funds ?), Lord Abbett, Merrill.
D&C holds 6.45% of total outstanding shares !

http://finance.yahoo.com/q/mh?s=FRE

Hotchkis and Wiley, Legg Mason, Brandes, Capital World (American Funds ?). H&W and Brandes are marquee value managers.

[Dennis Ng]

this time round, the Sep 11 happened on Sep 15, which will go down in history in future as another Black Monday.

Similar to Sep 11, share prices after falling for a few days staged a rebound, but later on started falling again....

if you trace the events, the trend is the same this time round....

[Dennis Ng]

I used to think there is no such thing as Job Security.

After many years, I finally discovered that the Formula for Business Security and Job Security is this:

Your Value Add must be MORE than Your Cost.

For business, ie. your cost is the price you charged to customers.

For employees, ie. your cost is your remuneration (salary).

It is that simple.

Thus, if you tell me you're underpaid, Congratulations! It means that you have Job Security. The people who need to be worried are those who are over-paid. They'll be the first to be retrenched in a recession.

If you're underpaid, even if you are retrenched, you can easily find another job again, since NO boss will hesitate to hire a staff who is able to bring more profits to the business than the cost to hire him/her.

actually if you think about it, the only way that you will get an increment or promotion is that you "go the extra mile", ie. provide more value add than what you're currently paid.

People who try to limit their effort and be "smart" and to only put in the effort for what they're being paid, are unlikely to get pay increment or promoted, unless the system is that of rewarding seniority and years of service.

So, you MUST consciously work towards being under-paid to get ahead.

Think about it.

[Dennis Ng]

Ministry of Trade and Industry announced that Singapore now offically in recession. This recession might be the longest and most painful since S'pore independence...that it would probably make 1985 and 1997-98 Crisis looked very mild...

[Dennis Ng]

Singapore is actually one of the best positioned country in the world. In a world of uncertainties, there'll still be ample liquidity in Singapore due to Singapore being seen as a safe haven, with a strong currency.

Singapore will go through the Worst Recession since Independence.....many businesses will fail, many jobs will be lost, many people going bankrupt (definitely worse than what we went through in Asian Crisis)....however, after the Crisis, Singapore would still remain one of the Best place for the Rich to put their money becos:

1. we have No estate duty
2. we have No capital gain tax
3. Low Effective Corporate Tax Rate and easy to set up/close business
4. our security is good, Rich need not worried being kidnapped.
5. banking secrecy, thus the identities of the Rich are protected.

No doubt that Singapore will suffer alot, but I believe we are positioned to rebound strongly after this Crisis is over.

It is my belief that "this too shall pass".....that in the end, somehow there'll be a way to restore confidence....of course, I'm not saying that the world can avoid a Global Recession. Nope, unlikely, there'll be a Worst Global Recession in the last 80 years before this crisis is over...

Above is just my personal opinion. Anyone else can have a different opinion.

[Dennis Ng]

some people opined that the Credit Crunch is over, which I don't agree.

the banks have money? Not really. Most of the banks have "impaired balance sheets". Many banks need fresh injection of Capital for them to survive.

They would need even more injection of Capital to have any money to lend to companies.

Thus, my opinion of the current status is this:

the Risk of a Total Collapse of the Global Financial System has evaded, however, the real pain of the de-leveraging process has only just Begun.

This will lead to a Long and Painful Recession. Many companies will not survive this Global Credit Crisis. Ferrochina is just the first victim. Many more will follow.

[Dennis Ng]

Banks in Hong Kong and Singapore now might have to compensate customers who were misled into buying some minibonds.

Actually 3 simple principles to doing business can avoid all these problems:

Only do business that is
1. Legal
2. Ethical AND
3. Win/Win.

these 3 principles are what guide us in doing business.

I personally hope more people/companies adopt these 3 simple principles to doing business, and consumers will definitely benefit. And they themselves will benefit as well, from word of mouth referrals.

[Dennis Ng]

The latest COE bidding result: S$2 COE for private cars 1,600 cc and below.


Actually, COE at S$2 is S$2 extra to pay. Other countries don't have COE at all.

With S$20,000 one can get a very nice car in Australia already.

Most Singaporeans like to buy depreciating assets and wonder why they are not getting richer.

[Dennis Ng]

yesterday I watched a very meaningful movie entitled "The Peaceful Warrior".

Firstly, I like to thank Andy for sharing this meaningful movie with us. Thanks for the magical moments.

The movie really made me ask myself: Do I really love to do what I do? Or am I doing it for the rewards, recognition or whatever other reasons.

When we really love what we do, we just do…..becos the doing itself is the fulfillment and reward by itself. We don’t need any other external confirmation/recognition/reasons.

The only moment we have is NOW, the current moment, when we lose ourselves and immerse 100% in the moment, magic starts to happen….people will be amazed…..but to us, we are just doing the thing….that’s all.

Most of us like to think of the past or dream of the future, grasp the moment, NOW is all that we really have, that’s why it is called the Present. Every moment in the past was once NOW and our future is determined by what we do NOW.

That is why when we are in the moment, time flies by…becos we lose the sense of time….there is no time….only NOW.

[Dennis Ng]

I like to share with you comments made by a friend, after watching the same movie:

Quote:

It was indeed an enjoyable and yet awakening movie, of which the below reference seems aptly summarise the main points of this film show.

The three decisions that control your destiny are:

1. Your decisions about what to focus on.
2. Your decisions about what things mean to you.
3. Your decisions about what to do to create the results you desire.

You see, it's not what happens to you now or what has happened in your past that determines who you become. Rather, it's your decisions about what to focus on, what things mean to you, and what you're going to do about them that will determine your ultimate destiny. Know that if anyone is enjoying greater success than you are in any area, they're making these three decisions differently from you in some context or situation.


"Awaken the Giant Within", by Anthony Robbins

Best wishes,
John Lim

End Quote

yesterday I watched a very meaningful movie entitled "The Peaceful Warrior".

Firstly, I like to thank Andy for sharing this meaningful movie with us. Thanks for the magical moments.

The movie really made me ask myself: Do I really love to do what I do? Or am I doing it for the rewards, recognition or whatever other reasons.

When we really love what we do, we just do…..becos the doing itself is the fulfillment and reward by itself. We don’t need any other external confirmation/recognition/reasons.

The only moment we have is NOW, the current moment, when we lose ourselves and immerse 100% in the moment, magic starts to happen….people will be amazed…..but to us, we are just doing the thing….that’s all.

Most of us like to think of the past or dream of the future, grasp the moment, NOW is all that we really have, that’s why it is called the Present. Every moment in the past was once NOW and our future is determined by what we do NOW.

That is why when we are in the moment, time flies by…becos we lose the sense of time….there is no time….only NOW.