Dennis Warned About Global Stock Market Crash in Jun 2007!

[Dennis Ng]

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.

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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, http://www.HousingLoanSG.com