Frank Comments by Dennis Ng on various Topics

[ilovecck]

I even know of clients who have children who are in their 20s and 30s and working and still get pocket money from their parents every month as my clients felt that they only earn S$3,000 to S$4,000 and may not have enough money to spend...this is indulgence to the extreme in my opinion. Is this Love? I think this Love can cause Harm, teaching them to spend more than they earn can lead to disastrous consequences in future.

wa lau , they wont feel pai seh? I know this can be quite common too in well to do families in China, I know of one the last time I went to China, their reason being that only child and high standard of living, so they do not expect their children to give allowance, what matters most is their children is safe and happy, if needed they wont mind supporting their children a bit in expenses.

[candy_chia]

Obviously the parents fail in teaching them the right values (thrifty, filial piety) , rather than over-emphasizing on the skill and knowledge (grades in school).

It is irresponsible for the parents to state that they don't expect their children to give allowance, this is as good as teaching them not to be filial.

As mentioned by 蔡礼旭老师: 要先教孩子把人做好

http://www.youtube.com/watch?v=OEkhcsSy ... ure=relmfu

I even know of clients who have children who are in their 20s and 30s and working and still get pocket money from their parents every month as my clients felt that they only earn S$3,000 to S$4,000 and may not have enough money to spend...this is indulgence to the extreme in my opinion. Is this Love? I think this Love can cause Harm, teaching them to spend more than they earn can lead to disastrous consequences in future.

wa lau , they wont feel pai seh? I know this can be quite common too in well to do families in China, I know of one the last time I went to China, their reason being that only child and high standard of living, so they do not expect their children to give allowance, what matters most is their children is safe and happy, if needed they wont mind supporting their children a bit in expenses.

[Dennis Ng]

I was on Capital Radio 95.8 FM at 8.35 am to 9 am today (22 May 2012) to discuss this: http://www.todayonline.com/Singapore/ED ... h-managers

I have high respect for Mr Ngiam Tong Dow. But his comments show that even the top leaders in Singapore have misconceptions about What is Wealth. And DPM Teo says Worker's Party did not send best man to Hougang is a comment that has no logic. Let me explain why.

It shows 2 problems:
1. most people in Singapore have wrong concept about Welath.
2. Most people in Singapore are NOT taught how to think by our education system and cannot think independently and would blindly accept statements without logic without even questioning.

These are the main problems of the Singapore education system.

My comments:

1. I have alot of respect for Mr Ngiam but his comments actually reveal to us that even Top leaders in Singapore have misconception about What is Wealth.

He mentioned "Shenton way" (wealth management) as not creating wealth. Is that true? Of course not. Warren Buffett is in wealth management, yet if you had invested US$1,0000 with Warren Buffett back in 1956, today it would grow to more than US$31.2 million, so how we can say Wealth Management does NOT create wealth?

$1000 invested with Buffett in 1956 would now be worth $31,289,750. Annual compound rate of return is 24.7% ($1000 invested in the S&P index in 1956 would now be worth $80,387.)

The Real Formula for and definition of Wealth is the number of people we serve (in terms of providing product and/or service) x Value Add we provide.

Thus, as long as you work on increasing the number of people you serve, be it a Product or a Service, you are Creating Wealth and your wealth will definitely increase.

As long as you increase your value add, be it a Product or Service, you are Creating Wealth and your wealth will definitely increase too.

So why is Facebook founder the youngest billionaire and why is Facebook the company valued at US$100 billion? Becos facebook have more than 900 million users, (it serves more than 900 million people)!

Why is an International Star paid more than a Singapore Star (Actor/Actress)? Becos the international star serves international audience, many people while the Singapore Star only serve the Singapore audience, which is a much smaller number of people.

This is the Formula. This is NOT an opinion. If you really grasp it and apply it, you will become Richer. Guaranteed.

My other comments:
1. Mr Ngiam says learn to think out of the box.

actually, if you think out of the box, you are still thinking about the box, the best thing is to have NO limitations at all in your thinking, don't even think of a Box in the first place!

2. Our Primary/Secondary school education still focus too much on Model Answers, that's the root of the problem. In real life, there are many questions, and each question can have many answers, no such thing as the Model answer. Having model answer is "giving the student a fish", teaching student How to Think is teaching students how to fish.

Our education system's main problem is it does NOT focus too much on teaching students How to Think, that is what we should focus on. To encourage creativity, students must be encouraged to think for themselves, to think independently.

The problem with many Singaporeans now is many do NOT think at all.

For instance, this argument by DPM Teo that Workers' Party didn't send their best man to Hougang. Does it make sense?

http://news.asiaone.com/News/Latest%2BN ... 47183.html

Well, let me ask you. If today, the PM dies. What will PAP do? PAP will get a replacement. Then can we say the next PM is NOT the best man? Then is shortchanging Singapore?

Well, imagine if Workers' Party at that time sent Mr Png to parliament as NCMP. Then now there is a need for re-election for Hougang. Then Workers' Party still need to send someone else to Hougang and again DPM Teo can say that Workers' Party didn't send the best man to Hougang...haha.

So this kind of logic has no logic. And the fact that even Workers' Party cannot see that this logic has no logic shows to you that most Singaporeans do NOT know how to think independently!

Cheers!

Dennis Ng

DPM Teo says:
The Workers Party (WP) is not fielding its best man in the Hougang by-election, said Deputy Prime Minister Teo Chee Hean in his keynote speech at the People's Action Party's (PAP) first rally of the Hougang by-election.


"The WP itself decided not to send Png Eng Huat to Parliament. They did not send him to Parliament when they could have done so," said Mr Teo.

He explained that when the party had to choose one member from the East Coast team to send to Parliament as a Non-Constituency Member of Parliament (NCMP), they chose Mr Giam instead.

An NCMP slot is given to the 'best losers' in the General Election (GE).

He asks, "If he was their best man, why didn't they choose him?"

Singapore 'should nurture wealth creators, not just wealth managers'
by Cheow Xin Yi
04:45 AM May 17, 2012
SINGAPORE - Singapore has to decide, going forward, whether it aims to be a "Jurong Island" or a "Shenton Way", said retired top civil servant Ngiam Tong Dow at a forum yesterday.

Pitting the two models against each other and as metaphors of "wealth creators" and "wealth managers", Mr Ngiam expressed concern that Singapore might be nurturing more of the latter, at the expense of the former.

"I believe that, while many Singaporeans are competent in our jobs, few among us are brilliant," said Mr Ngiam, the former Ministry of Finance permanent secretary, who is now Pro-Chancellor at the National University of Singapore.

What would differentiate the wealth creator from a wealth manager, he felt, would include attributes such as tremendous reserves of energy, the ability to think out of the box and "seeing possibilities where others can only see rocks".

Speaking to a group of around 250 engineering students, academics and industry representatives at NUS Engineering Auditorium, Mr Ngiam was asked during the one-hour dialogue why Singapore could not possess both wealth creators and wealth managers. He replied that a job in the technology sector has got more multiplier effects than one in the services sector.

"Even if you take banking and wealth management, there's no reason why people should come to Singapore to manage their funds. It can be in the middle of the Indian Ocean with a computer. The barriers to entry are very low," said Mr Ngiam.

Lauding the late Dr Goh Keng Swee's contribution to the wealth creation of Singapore, Mr Ngiam noted how Dr Goh, who was Defence Minister, had established Sheng-Li Holdings to build up Singapore's defence technology. Sheng-Li was later renamed Singapore Technologies (ST) Holdings.

Under Dr Goh, Mr Ngiam said that ST engineers refurbished fighter aircraft and built battle tanks, which were comparable to others internationally.

"After Dr Goh retired from the Government in 1986, there is no one to replace him as our wealth creator," he added. "The Government of Singapore Investment Corporation and Temasek (Holdings) are sovereign wealth managers for our national savings and reserves. They are not wealth creators."

Temasek in particular, Mr Ngiam felt, is supposed to be a wealth creator, but are just being "fund managers".

Going forward, Mr Ngiam said the direction Singapore takes will have an impact on its political, economic, educational and labour policies.

Asked what Singapore can do now to nurture wealth creation, Nr Ngiam said: "The engineering faculty should be given more resources." Later, he suggested that the Government could provide funding for university final year students of any discipline to start their business aspirations.

"At the end of the day, if 10 per cent succeed out of 100, there will be 10 future companies," said Mr Ngiam.

[Dennis Ng]

Average investors have some misconceptions about Investing. One of the most common misconceptions is that "buying blue chip to collect dividends is a safe and sound investment strategy"...

Imagine if you bought SGX shares in year 2007 at over S$16, despite the recovery of stock market (STI) by over 100% from low of 1,456 in Mar 2009, on (25 May 2012), SGX shares closed at S$6.27, or you still suffer a loss of 60% on your capital.

http://sg.finance.yahoo.com/echarts?s=S ... =undefined;

If you bought DBS shares at S$24 in year 2007, on 25 May 2012, DBS shares closed at S$13.17, similarly, you still suffer a loss of 45% on your capital. But if bought DBS shares at S$8 in year 2009, you're making money, returns of 64.6%.

http://sg.finance.yahoo.com/echarts?s=D ... =undefined;

It's not about what shares you buy, what is important is what Price did you buy, did you over-pay? If you over-pay for a share, you are likely to lose money, whether the shares you bought is a Blue Chip, Red Chip or Potato Chips ("Rubbish stocks").

[Dennis Ng]

Another misconception about Investing is people who think that "Income Investing" or investing to earn Rental Yield (on property) or dividend Yield (on stocks) can help them become Richer SUBSTANTIALLY.

They might "learn" this from some books, eg. books by Robert Kiyosaki who keeps emphasizing on "Cashflow" on investments.


One can get rich through income? Just work out the maths and you know it is NOT true. Rental yield of 4% on property, Dividend yield of 4% on stocks, how many years of collecting dividends to double your Capital? You do the Maths yourself. One can easily make over 100% returns in 3 to 4 years on average, just trace the history of stock markets and you would know that I'm sharing the truth.

My view is exactly opposite. Capital Gains is the Main Source of Gains, Income is secondary. People who buy property now earning rental yield of 4%, if property price fall by 20%, it would take them 5 years to just cover the loss. The Maths is simple enough for everyone to understand provided they bother to do the Maths.

And if a person earns income or rental yield or dividend yield of 4% currently is actually losing money when inflation rate is over 5%. Investors focus on Real Returns, returns over and above inflation rate. As mentioned, average investors have many misconceptions about Investing, including NOT knowing they NOW lose money by just earning 4% yield on their investments.

As I shared, the Key determinant of Risk of investing is the Price you paid for your investments. Did you over-pay? If you over-pay eg. pay S$24 for DBS shares in year 2007, despite 5 years of collecting dividends of 4% you're still losing money, as much as 34% even after including the dividends you received.

Note: DBS gives total dividends of about 56 cents for 1 year, or work out to total S$2.80 for total dividends collected for 5 years.

The TRUTH is Capital Gains is the main source of gains and Wealth Creation, this is NOT an Opinion, but a statement of Fact. Want a recent example? Sure, founder of Facebook is the youngest billionaire not becos of the profits or income Facebook earns but becos of the Capital Gains on his shareholding in Facebook.

Learn the Truths about Investing instead of learning and continue to having misconceptions about Investing.

Facebook IPO at US$38, or PE ratio of 107 times. This means that based on Net Earnings of the co's latest financial period, it would take facebook 107 years to earn the facebook founder the wealth that he straightaway reached by listing the shares at PE of 107 times. This goes to show Capital Gains (whether realised or unrealised) is the Main Source of Gains and Wealth rather than Income. Anyone who knows what is PE would agree with what I just shared.

Mark Zuckerberg is the largest individual shareholder with 28.4 percent of the common stock and controls 56.9 percent of the voting power.[9] As of 2012, his personal wealth was estimated at more than $19.1 billion, making him one of the world's youngest billionaires.

Facebook co-founder's Main Wealth is from Networth (or realised and unrealised capital gains from his shareholding in facebook, NOT from income or earnings of Facebook).

Facebook co-founder Chris Hughes’ net worth has soared as the company he helped start in a Harvard dorm room raked in hundreds of millions of users. Facebook filed for an IPO at the start of February and Hughes’ minority stake in the company is worth at least $600 million — and possibly much more when it finally goes public.

http://www.forbes.com/sites/briansolomo ... -republic/

http://www.telegraph.co.uk/technology/f ... 100bn.html

[Dennis Ng]

Cat's In The Cradle - Harry Chapin (lyrics & trivia)
https://www.youtube.com/watch?feature=p ... 0h5JMlpLNc

This song is a good reminder for all parents to remember to take the effort to spend more time with our children while they are young and growing.

Time really flies. Suddenly, my elder son now 13 years old has grown taller, and now he is as tall as my wife, at 1.6 m tall, and it seems like just yesterday when he was just a small child...

Actually my family means a lot to me, but my Personal Life Mission to educate the public is also very important and consciously, I made the choice and sacrifice to spend 3 out of 4 weekends teaching...of course, some may think I'm doing it for the money, but actually a simple person like me really needs very little money and I already reached Financial Freedom before I started conducting seminars on weekends since May 2009...so I know WHY am I doing it.

I told my children the reason for my absence during weekends and they told me they understand why I did what I did...I really hope they do, or it'll be sad if it ends up like the lyrics of the song...

Note: I do try to make it up by spending more time with them on weekdays and also have the weekend that I'm free to be 100% for my family only. But of course 3 weekends lost is 3 weekends lost. Nothing can make up for that.

This June holidays, we'll be going to 2 countries I wanted to go when I graduated back in 1993 but didn't becos I didn't have much money then...Paris and London...looking forward to the precious family time (together with my children and also my 82 years old mother).

Cat's In The Cradle - Harry Chapin (lyrics & trivia)
https://www.youtube.com/watch?feature=p ... 0h5JMlpLNc

Cats In The Cradle Lyrics
Artist: Harry Chapin (Buy Harry Chapin CDs)
Album: Cats In The Cradle

My child arrived just the other day
He came to the world in the usual way
But there were planes to catch and bills to pay
He learned to walk while I was away
And he was talkin' 'fore I knew it, and as he grew
He'd say "I'm gonna be like you dad
You know I'm gonna be like you"

And the cat's in the cradle and the silver spoon
Little boy blue and the man on the moon
When you comin' home dad?
I don't know when, but we'll get together then son
You know we'll have a good time then

My son turned ten just the other day
He said, "Thanks for the ball, Dad, come on let's play
Can you teach me to throw", I said "Not today
I got a lot to do", he said, "That's ok"
And he walked away but his smile never dimmed
And said, "I'm gonna be like him, yeah
You know I'm gonna be like him"

And the cat's in the cradle and the silver spoon
Little boy blue and the man on the moon
When you comin' home son?
I don't know when, but we'll get together then son
You know we'll have a good time then

Well, he came home from college just the other day
So much like a man I just had to say
"Son, I'm proud of you, can you sit for a while?"
He shook his head and said with a smile
"What I'd really like, Dad, is to borrow the car keys
See you later, can I have them please?"

And the cat's in the cradle and the silver spoon
Little boy blue and the man on the moon
When you comin' home son?
I don't know when, but we'll get together then son
You know we'll have a good time then

I've long since retired, my son's moved away
I called him up just the other day
I said, "I'd like to see you if you don't mind"
He said, "I'd love to, Dad, if I can find the time
You see my new job's a hassle and kids have the flu
But it's sure nice talking to you, Dad
It's been sure nice talking to you"

And as I hung up the phone it occurred to me
He'd grown up just like me
My boy was just like me

And the cat's in the cradle and the silver spoon
Little boy blue and the man on the moon
When you comin' home son?
I don't know when, but we'll get together then son
You know we'll have a good time then

[Dennis Ng]

No change in my views since 7 May 2012. Markets can stage technical rebounds, but if they don't rebounce back to those levels I mentioned on 7 May 2012, then nothing has really changed to the overall Market tone.

Once you have Investment Knowledge, your mind can be Clear and Peaceful while most people are baffled or even frustrated by the day to day fluctuations of the stock market.

Cheers!

Dennis Ng

7 May 2012

My sense is we are nearer to the end of the Bull market than the beginning.


STI need to stay above 2,900. HSI above 20,000, Dow above 12,600 and S & P above 1,350...for markets to remain in uptrend.

Be alert, this is what I want to say to everybody now.

[Dennis Ng]

I feel really good when I see more and more people now learn how to differentiate Good Debt from Bad Debts. As you might know, when I first shared about Good Debt and Bad Debt in Singapore about 10 years ago in internet discussion forums, I faced alot of rebuttals, objections and even to the extent of name calling and personal attacks.

It took quite a while for some people to finally see the point I'm trying to bring across about the difference about Good Debt and Bad Debt, one person who still does NOT get it is Dr Michael Leong, founder of shareinvestor.com as he stated there is no such thing as his good debt even in the book he has written. Sigh.

Cheers!

Dennis Ng

The Straits Times May 27, 2012, me & my money
Early bird profits from industrial properties
Businessman snapped up sites before market was hot; assets put in investment vehicle for children

By Joyce Teo

Industrial property was hardly on the radar for retail investors in 2004 but businessman Joe Fam saw an opportunity beckoning and he went for it, snapping up some promising sites.

But the world has caught up since and Mr Fam, 52, has backed off, maintaining that prices have gone too high, although he has held on to three freehold properties.

'When everybody rushes into the market, you have to get out.'

I am into conservative gearing for better investment returns. If I borrow $1 million paying a 2 per cent interest cost and I can get a 7 per cent yield, then literally speaking, I can use other people's money for a $50,000 gain per annum.

My rule of thumb is not to exceed 60 per cent of whatever assets I pledged to the bank so that in case there is a market correction, I will still be able to meet the obligations.

As I read the article, I smiled, as I know who is the person who helped changed her concept about Debt and realising that NOT all debts are bad and her guideline on Debt-Service ratio not to exceed 35%.

Cheers!

Dennis Ng

Lorna Tan of Straits Times will be leaving her job in one week's time. This is her parting advice to all of us!

Aug 7, 2011
7 investing rules to live by, as I say goodbye
My parting gift to readers: Some lessons I've learnt in my years of financial reporting
By Lorna Tan, Senior Correspondent

After 11 years, I will be moving on to a new career in a week's time.

5 Not all debts are bad

I used to be wary of incurring debts but I've realised that not all debts are bad. Debt is good when you can use it to earn a return that is higher than the interest on the debt. For instance, keep your mortgage if it makes financial sense. In fact, a housing loan is the cheapest loan anyone can ever get, thanks to the current low-interest rate environment.

In the past several years, I've deliberately maintained the housing loan of my investment property and switched to a floating rate when rates plummeted. While I patiently wait for the property to appreciate, I channel the rental income to fund my annual family vacations.

Taking a loan for a responsible need like education, which can in turn lead to higher qualifications and an enhanced future income, is also an example of a good debt.

On the contrary, debt is bad when it is incurred to fund your consumption of say, a car, or through personal loans or credit card spending. Avoid this type of debt or settle it as soon as possible.

At all times, it is prudent to keep an eye on your debt servicing ratio, which should not be more than 35 per cent of disposable income. So if your monthly take-home pay is $5,000, you should not be paying more than $1,750 to service debts.

lorna@sph.com.sg

[Dennis Ng]

Deja Vu?

In Nov 2007, when I warned about a coming Gobal Financial Crisis, many people could not believe it and even laughed it off, including experienced "serial entrepreneur".

http://www.masteryourfinance.com/forum/ ... f=10&t=634

I copy and paste a posting to show you for your easy reference.

Please note that nobody knows the exact timing when a Crisis would come, only god knows, but we can roughly know when, and prepare ourselves financially to not only survive, but Prosper from a Crisis.

Cheers!

Dennis Ng

16 Nov 2007

When crisis comes, even if you use the CPF to buy index fund, you're likely to make 100% to 200% returns.

Remember I shared that a 100% returns is as good as earning 3.5% returns for 20 years and 200% returns is as good as earning 3.5% returns over 30 years!

my opinion is we are near the tail end of a bull run and thereafter there'll be a market crash.

With this view, it is better to keep Cash/CPF now so that we have more Opportunity fund to take advantage of the up-coming crash. I guess we don't have to wait more than 2 years for the up-coming Opportunity.

Is buying shares at half price of their Net Asset Value (especially if you follow guideline of say, only looking at value of a company's Cash and Property assets) risky? I don't think so.

I think it is time to BUILD up Opportunity Fund.

transferring CPF money into Fixed Deposits is to "side-step" the "Impending" lock-up of S$20,000 in CPF Ordinary account.

Above is just my personal opinion. Anyone is free to disagree.

Dennis, as I was reading through some of your posts, a thought came to mind.

Eventhough we all know that the crisis is round the corner, the immediate crisis may not be as bad as we hope. If this happens, the prices of equities, properties, etc may not lose too much ground. On the other hand, if the crisis happens gradually (say over a 12-24 mth period), then how would investors know when is the time to move in?

If prices fall by say just 10-20% over next 12 mths, it may not be compelling enough for us to invest our opportunity fund right? How much in your opinion then should prices fall before we capitalise on the opportunity?

Hi SerialEntrepreneur,
thanks for your message.

Yes, I always ask myself what if I'm wrong? This is the reason why currently I only have 30% in Cash and not something like 80% in Cash.

I personally see a BIG Crisis possible within the next 1-2 years. I'm only interested to use my Opportunity Fund of 30% if I see the upside potential as at least 50% while the downside risk is MAXIMUM 20%.

That is a personal guideline I have, not backed or supported by any Financial Theories from Harvard of Princeton or anything like that.

What I do can possibly be termed as Street Smart Investing, gleaned from years of learning from other more experienced investors and my own personal experience.

[Dennis Ng]

someone asked me whether he should sell away his Noble shares now, share price right now is about S$1.08.

Well, if a person knows how to invest, know how to read charts and do Technical Analysis, he/she would have arrived at the conclusion that when Noble share price broke below S$2.05, it is in a downtrend and if one owns the shares then, should have cut loss then, and avoided losing another S$1 (or about 50% additional loss).

Anyone who didn't own Noble shares, should NOT have bought when share price fell below S$2 becos you don't buy a share when it is in a downtrend, becos you won't know how low prices can go, if you think S$2 is cheap, it can go to S$1.08, as this Real Life Example shows.

Learn how to Invest to avoid making such investment mistakes in future, and avoid making such Unnecessary losses (unnecessary since by having knowledge, one could have easily avoided the loss).

If you want to learn, I teach, but no point asking me for Answer (to buy or sell on this stock) becos feeding you a fish will only keep you full for one day, tomorrow you will go hungry again. Why not learn how to Fish? (Invest) and you will never go hungry again. If you choose NOT to learn how to invest, you would keep repeating such investment mistakes again and again, and losing money again and again, UNNECESSARILY.

[Dennis Ng]

There are Young Stock Analysts. And there are Old Stock Analysts.

You typically cannot find a Good and Old Stock Analyst. Why? Becos the really good ones would realise they would get richer investing rather than dishing out Analysis reports. This is what I heard from one of my multi-millionaire sifus, and I think what he said makes sense.

[Dennis Ng]

I really cannot understand it. Many parents can easily spend S$300 per month or even more on their children's tuition and/or enrichment classes, or S$3,600 or more per year just to help their children pass some school exams. However, they are NOT willing to spend S$3,000 to learn how to invest and how to Reach Financial Freedom.

You start to get Richer when you start to make Wise decision and know which is a good deal and what is worthwhile or not worthwhile. If you cannot even differentiate this, how can you ever make any wise investment decisions?

There are 2 types of School Fees. No. 1 is don't learn how to invest, pay "school fees" by losing money in investments, eg. by buying Noble at S$2 when it is clearly in downtrend and see the price fall to S$1.08.... No. 2 is pay a pre-determined School Fee to learn how to invest. Which school fee you choose to pay is really up to you. Which is more expensive, you go figure it out yourself.

Of course, we must invest in our children, I have 2 children too. But what I mean is that if one is willing to invest in our children, the question is why is one not willing to invest in your own Financial Education? Once you learn, you can even teach your children. And if one thinks that helping one's children get a good degree will really help them, one needs to really re-think.

Frankly, even if my children cannot study well and get a good degree, I'm NOT worried at all, becos I know that if I teach them Financial knowledge, they can reach Financial Freedom regardless of their education qualification. In Singapore, many educated people in their 40s got retrenched and struggling financially, we must wake up to this reality, and not pretend it will not happen to you or to your children.

[Dennis Ng]

Learning how to invest and having Investment knowledge can help you avoid losses.

As early as 30 Nov 2011, when the planned IPO of facebook was first announced, I already analysed Facebook and commented in our MasterYourFinance.com discussion forum that facebook is over-priced.

Facebook was IPO at US$38. After 5 days of trading, price dropped to US$28.84 or losing 24%!!! And it goes into history as the Worst IPO in last 10 years' history!

If you don't know how to analyse a company, becos of all the hype about facebook, you might have bought facebook shares on first day of trading when it was above US$38 and now suffering big losses.

Cheers!

Dennis Ng

30 Nov 2011

Hi all,

Facebook is reportedly looking at IPO valuing the company at US$100 billion.

Facebook has 800 million users, that mean each user is worth US$125. But with facebook revenue at US$4 billion, US$100 billion is 25 years of revenues, not even profits.

As a comparison, google is valued at price to sales of 5 times, while facebook at US$100 billion, is valued at price to sales of 25 times. No doubt facebook has more potential to grow, but does it mean nothing can go wrong with facebook or 3 years down the road, any possibility of it being replaced by something better and new?

We are not even using profits to value facebook as at its current stage of growth, it is not unusual that the company might not have much profits. So Price to Sales is another possible measure to value facebook.

If this is NOT over-priced, I don't know what is.

Looks like there is another bubble in Tech stocks in year 2011, just like in year 1999, 12 years ago...Groupon just listed and the share price is now LOWER than IPO price.

So don't get caught in the frenzy and buy facebook shares just becos you're a facebook user.

I'm a heavy facebook user but I will NOT be buying facebook shares at such a pricing.

Cheers!

Dennis Ng


Facebook Said to Plan IPO at $100B Valuation
By Douglas MacMillan and Brian Womack
Nov 29, 2011

Facebook Inc. is considering raising about $10 billion in an initial public offering that would value the world’s largest social-networking site at more than $100 billion, a person with knowledge of the matter said.

The company may file for the IPO before the end of the year, said the person, who asked not to be identified because the deliberations are private. Exact timing for the filing hasn’t been determined, the person said.

Facebook’s $100 billion valuation would be twice as high as it was in January, when the company announced a $1.5 billion investment from Goldman Sachs Group Inc. (GS) and other backers. Facebook aims to capitalize on strong demand for social- networking IPOs, said Josef Schuster, founder of Chicago-based IPOX Schuster LLC.

“It’s obviously a very steep valuation,” said Schuster, whose firm invests in IPOs and oversees about $2.5 billion in assets. “They are realizing their window of opportunity, and they want to do it sooner rather than later.”

At $10 billion, the offering would raise more money than any other technology IPO, a sign Facebook expects investors to clamor for a piece of the social-networking company. The amount would dwarf that of the previous record holder, Infineon Technologies AG, which generated $5.23 billion in its 1999 debut. Agere Systems Inc. raised $4.14 billion in 2000, putting it second.

Hard to Predict
Facebook’s IPO is far enough away that the details may change, said Lise Buyer, principal of the Class V Group, an IPO advisory firm.

“It’s far too early to accurately predict where the valuation will be on deal day,” she said.

Facebook expects to be required by U.S. regulators to disclose financial results by April 30, 2012, if it doesn’t go public by then, the company said in January. Facebook decided to wait until 2012 for its IPO to give Chief Executive Officer Mark Zuckerberg more time to gain users and boost sales, people familiar with the matter said last year.

Facebook, which boasts more than 800 million users, also is increasing its focus on mobile technology, aiming to take advantage of the shift to smartphones and tablets. The company expects its next 1 billion users to come mainly from mobile devices, rather than desktop computers.

Jonathan Thaw, a spokesman for Palo Alto, California-based Facebook, declined to comment on the IPO plans.

Google’s IPO
Google Inc., one of Facebook’s chief rivals in the Internet advertising market, raised $1.67 billion in its IPO in 2004. It is now valued (GOOG) at $190.4 billion.

Facebook’s valuation is currently pegged at $66.6 billion by SharesPost Inc., which handles trading of privately held companies. The Wall Street Journal reported earlier yesterday that Facebook was considering the $10 billion IPO with a valuation of more than $100 billion. The company aims to go public between April and June, the Journal said.

Demand for technology IPOs reignited in November after a summer lull, setting the stage for Groupon Inc. and Angie’s List Inc. to go public. Groupon, the largest provider of online coupons, has lost 24 percent of its value since its debut at $20 earlier this month.

Groupon’s decline may be spurring other companies to pursue IPOs before they lose the chance, Schuster said.

“Groupon has lost a lot of steam and I believe bankers are saying, ‘The market is still hot so let’s do it right now,’” he said.

[Dennis Ng]

A seminar graduate emailed me and said that the only thing she learned and is now applying is to save 20% of her income.

I am so shocked to hear this. Please go through your notes. I teach so many, many things in the 3 seminars, each Seminar comes with notes of over 100 pages each.

I have taught. But have you (seminar graduate) learned? This question can only be answered by yourself. And if you don't learn, then what can I, the teacher do? You need to learn to apply what is being taught.

And if you say that you forgot or don't understand any part of what is being taught, what are the things you can do?

1. you can come back for revision. You can come back to attend the seminar as many times you want to revise until you get it.

2. you can ask questions in this forum.

If I don't know what you don't know, how do I help?

If you're a parent, you would also realise ultimately it is up to the child to learn, otherwise, no matter how many assessment books you buy, how many tuition and enrichment classes he/she attend, he/she might learn nothing at all.

I am doing my part as a teacher, and I can say with a Clear Conscience I probably do MORE than any Trainer in Singapore that I know of. NO Trainers share on a daily basis with their seminar graduates.

The question is: are you doing your part to learn?

Thus, the Choice is in your hands. Do you want to learn? When are you going to start to learn? Or are you attending seminars just to get Stock and Investment tips, you only want the Fish but actually you have no interest to learn how to fish (invest)?

Be True to yourself, answer these questions honestly and truthfully yourself. The Truth will set you free.

[yhendra]

.....
Thus, the Choice is in your hands. Do you want to learn? When are you going to start to learn? Or are you attending seminars just to get Stock and Investment tips, you only want the Fish but actually you have no interest to learn how to fish (invest)?
....

Hi Dennis,

When you asked me to share in Mentoring Session, 14th May, I was not prepared at all.
But, then I just accept your invitation. So then I started thinking what topic I would share.

I choose topic "CHOICE". Then I expanded my "research" about this topic then put the jigsaw puzzles together.
(You can see the summary in this link: http://www.masteryourfinance.com/forum/ ... =15&t=2616)
Actually, along the way while I am preparing my presentation, it becomes clearer to me "Why we did what we did?"

(Talking about choice, some of you will choose to skip this and move on, some of you will choose to read on! )

Everyday, every time, every single second we are always faced with CHOICE!
So, it REALLY matters what choice we make.
It REALLY matters that we know why we make certain choice.
It REALLY matters that we know that the choice we made will have impact on the next choice we have to make.
And it is a cycle in our life.... till our last breath.

And interestingly, I found that making CHOICE has to do with our Conscious Mind and Subconscious Mind.
Our conscious mind FILTER the inputs we receive from our 5 senses (See, Hear, Taste, Smell and Touch).
It has the power to choose what to accept or reject, interestingly this is mostly based on what have been planted in the subconscious mind earlier in our life.
And ironically, our subconscious mind MUST accept and CANNOT reject the inputs that are accepted by our conscious mind.
You know what, our ACTION are actually DRIVEN by the subconscious mind.
And of course action will lead to results.

What I meant here like this.
Say, during your seminar, you explain something, and you show some slides.
The student (including myself!) hear your explanation and see your slides.
Now, depending on the students' level of: consciousness, believes, paradigms, perspective, awareness, assumptions, focus, observation, etc; They will absorb, catch, understand your explanation and slides at different level.
Why? Because each individual has different level of those factors. Hence, they will accept and reject accordingly those ideas (i.e. your explanations and the slides you presented).
So, only those ideas that we accept (by our conscious mind) will stay in our subconscious mind. So, what stays in our subconscious mind will lead to our action and lead to results, and it's a cycle. Why? Because based on the results then we again filter based on our 5 senses then we accept/reject certain ideas.
Say, when we make loss in stock... Do we accept or reject the idea that I always make loss in the stocks over and over...? If we accept this idea, then that's it. It will stay in your subconscious mind and you WILL never buy stock again, you WILL never learn more, etc. These are actually the actions right? Doing nothing is also action! Zero action that is.

LEARNING is important.
We all keep learning, don't we? But, it's a choice to keep learning good things, new things, or just stay happy with what you have... and stay where you are right now.

Learning has to do with our 5 senses, conscious mind and subconscious mind, where as mentioned above will lead to our actions and leads to the results.
In learning, I come to realize these metaphors are important: "Open your mind", "Empty your cup", "Empty your mind", etc.
Why? It has to do with our subconscious mind!!!
If we want to learn something "new" we must let go CONSCIOUSLY some of the old believe, paradigm, "programming" in the subconscious mind!

Analogy, if the cup is already full and dirty. What will happen if we try to put clean water to the cup?
That's right! It will be overflow, and at the end it may be still dirty! UNLESS the clean water are filled over and over and over again, until the water inside the cup is all clean!
Another analogy. A parachute only works if it is opened! Our mind also only works if it is opened!
So, if our mind is "empty", "open" it becomes easier to learn new things and to put focus on what we want to learn.

Again, it is a "CHOICE" whether or not we want to have open mind!

Again, you can see the summary of my "CHOICE" presentation in this link: http://www.masteryourfinance.com/forum/ ... =15&t=2616
If you never do the exercise in the slide, try to do it and follow the explanation given subsequently.
It is exactly what has happened to the seminar graduate who said she "only" learned to save 20% of her income.
The focus, observation is only to that specific subject. Why she learned this and applying it (action)? My best assumption is that "she is desperately in need of capital for investment or others" (subconsciously)
Of course, I can be wrong in my assumption, only she herself can answer the reason behind her action, decision i.e. choice.