Friday, October 23, 2015

Gold To Trade ‘Well Below’ $1,100, But Not Under $1,000 - LBMA’s Top Forecaster

Sentiment toward metals, particularly gold, seems to be bearish these days and an LBMA six-time forecasting winner says he expects the price to trend lower in 2016. Philip Klapwijk, managing director of Hong Kong-based consultancy Precious Metals Insights, said he expects gold prices to trend ‘well below $1,100’ an ounce. ‘I think gold at the moment is looking very ‘toppy,’’ he told Kitco News at the London Bullion Market Association (LBMA) conference in Vienna, Austria. However, despite the somewhat bearish call, he said he doesn’t expect the metal to trade at sub-$1,000 levels for too long. 
‘That does not mean we can’t get a spike below but I don’t think we’re going to trade for any extensive period below that level,’ he noted. In 2014, the LBMA awarded Klapwijk with the top forecasting title for platinum, which he said should continue to suffer post the Volkswagen scandal. ‘The reason for that is the very high market share of diesel in Europe and the damage, I think, will be done somewhat permanently to diesel’s image in Europe,’ he explained. Comex December gold futures were last quoted $2.40 lower at $1,175.10 an ounce, while Nymex January platinum futures fell $8.20 to $1,011.90.
Stocks in this video: GCPASL

Thursday, July 9, 2015

How do we test for fake or real gold?

When we buy precious metals, we want to make sure we get the real, authentic metal. We want the real gold. There are many good ways to test for gold. Caliper Test Many established branded gold bars or coins has known dimension and tight tolerance levels.  For example, a 1 oz  Canadian Maple Leaf Gold Coin has a diameter of 30.0mm and a thickness of 2.80mm. A 1 oz Chinese Panda Gold coin has a diameter of 30.05mm and a thickness of 2.70mm. Calipers can reveal any inconsistencies in dimensions, and you should refrain from buying such items. [caption id="attachment_1098" align="alignnone" width="706"]Gold Coin CML descriptions Gold Coin CML descriptions[/caption] Magnet Test One of the easiest way is to use magnet. Most metals are attracted to magnet, but silver and gold are diamagnetic (metals that are not attracted to magnets) and a magnet will not stick to it. Use a very strong magnet, such as neodymium, to test the gold. If it stick to the magnet, then it is fake gold. Do note that this is not a 100% foolproof test to determine real gold. Some counterfeit gold are made from metals that are not magnetic in nature. Density Test Get an accurate scale and note the weight of your Gold bar. Get a glass of water, place it on the scale, and set the scale to ZERO. Tie the gold bar, dip it COMPLETELY into the water, but without touching the base of the glass. The gold bar should be in the middle of the water, note this new weight number on the scale. Divide the first weight of the bar, by the 2nd weight number (in the water), this number should be 19.30 for an accurate measurement of Gold density. (Pure Gold Density = 19.30 g/cm3)   Ultrasound Test. Using special instrument, you can use an ultrasonic device to test for consistency in a bullion bar. Sound waves travel at different speed through different metal. If your gold bar is merely gold plated, the numbers would differ from a pure gold bar of 99.9 purity. The sound velocity for pure gold should be 3200 meters / second (or  0.130 Inch/µSecond)   Porcelain Test Rub the piece of gold across a piece of unglazed porcelain tile. It should not make a black streak. If it does then it is pyrite. If the streak is golden yellow then it is gold. Acid Test Warning: This test is destructive and will spoil a tiny portion of your gold. Please do not use unless absolutely necessary. Buy a nitric acid test kit. Scratch a surface of the gold piece and add a few drops of the acid on the gold. If it turns green, the item is either brass metal or gold plated. If it turns milky, it is gold plated sterling silver. If there is no reaction, then it is real gold. Some key pointers before you buy that gold!
  • Buy from a reputable merchant. If you buy directly from something like Ebay or Carousell, there are no guarantees that your product is authentic. (www.goldsilvercity.com.sg is backed by a Singapore firm, Newell Builders Pte Ltd, that has been established for more than 30 years. We are here for long term business. Over time, we have many regular gold and silver clients, check the clients' reviews at www.facebook.com/goldsilvercitysg)
  • Mints are starting to fight back as well – some newer products have additional security features to prevent counterfeiting.
  • Know and understand how the different tests for fake bullion work, and use them to verify that your gold or silver is real.


Thursday, May 7, 2015

Demand for Silver – Silver in everyday uses

What is silver used for? Just jewellery? More than you think.....
One of the reason to be bullish on silver in the long term is that silver is used by many commercial and industrial firms for products that are indispensable in our daily lives. Demand for Silver is high in our industrial society.
Silver is now such a versatile industrial metal that we see it as a great way to save and invest in our diversified portfolio.
You may not realised it, but the moment you woke up, you have been using products with silver in it.
Silver is present in your alarm clock, your wall switch, bathroom mirror, your electronics devices that you check immediately upon waking up, such as your mobile phone, your iPad, Apple Watch or your computers.
When you have breakfast, silver is in your microwave, your refrigerator, your water purifier.
Silver is now starting to be used widely to purify your water instead of toxic chemicals like chlorine or bromine. Silver is also used in some food processing, and food packaging to keep bacteria out.

Demand for Silver
Money. Silver is minted as money as well.

When you switched on your electricity, not only are silver wiring more efficient in conducting electricity, your energy plants also uses silver for generation.
Fossil fuel plants uses silver coated mirror for steam generation, and solar photovoltaics uses silver paste in their productions.
You put on your clothes, if you are wearing polyester, silver is required. And if you used a washing machine to clean your clothes, silver is present as a catalyst for the cleansing operations. For smart clothings now in trials, silver is used too.
As you head out to your car to start your day, guess what, your car contains many ounces of silver, both in the electronics component as well as in the engine as catalyst. Your modern RIFD car key contains silver, and if you are one of the electric car owners, well, more silver is inside.
Yes I can go on and on, but I think you get the message, widespread demand for silver is a key fundamental reason why so many savers and investors like to stock up on silver. And many have stock up from www.goldsilvercity.com.sg
For seasoned investors with a healthy portfolio of stocks, bonds or property, silver /gold physical bullions offer a great way to diversify into a stable and rewarding portfolio such as the Browne Permanent Portfolio, which I will go into more details on another post.

As for why physical holding of bullions and coins may be a good choice, we would visit this soon! 

Cedric Soh 
www.goldsilvercity.com.sg

PS:- Pls visit https://www.facebook.com/goldsilvercitysg to LIKE the page for weekly updates, photos and promotions.



Monday, May 4, 2015

Why own physical silver or gold? Protect & accumulate wealth

Many people have asked me why should they own physical stocks, instead of just CFD or paper certificate silver or paper gold?
For many  investors, they may choose to hold a portion of their investments in gold and silver to hedge against inflation and economic black swan events. To hold precious metals as a hedge, there are a huge variety of choices – Gold, Silver ETFs, stocks holdings of mining companies and paper certificates.. So why own physical silver or gold?
Do remember that all paper assets are at the mercy of the financial market. Paper records can be varnished in a disaster, either man-made or natural. Financial markets turmoils in a black swan event can rendered you asset-less.
Only physical gold / silver bars or coins that you possess guarantees ownerships.
why own physical silver or gold
By investing in physical stocks, you would also have a better saving habit due to human psychological emotions. – You would be much more reluctant to return your physical silver bars or coins than it is to click on “sell” on your paper certificates.

Buying physical gold / silver bullion or coin is also amazingly easy.

There is no need to set up brokerage account, no need to sign any documents. You can just walk into any jewellery or coin/bullion shops, though you would have to pay a slight premium. An easier way is to buy online fromwww.goldsilvercity.com.sg which provides free delivery as well. You would be paying lesser because the online business has no expensive rentals. Every dollar saved goes to your peaceful retirement account!
Large bullions like 1 kg silver bar is more value for money. However you may consider smaller coins or bars, such as 10-ounce coins. A large collection of smaller coins or bars is easier for you to only sell a few coins to meet your needs, such as for a travel holiday, a business expansion, instead of having to sell the whole kilogram of silver or gold.
It is also more sensible to collect silver, as silver is more affordable and easier to collect monthly as a saving plan. As an investment asset, it is comparable in terms of liquidity, long term value, and has great fundamental demands in industries.
When you fall in love with gold, silver collection, you may move to numismatic collections, appreciating the artistic and beautiful designs on coins! There are many reasons to why own physical silver or gold, but one of the best reason is probably this:- it can be a great hobby for many collectors. Collectors know that many of their collections appreciate in values, and could be a lot more financial rewarding than other expensive hobbies.
Sincerely,
Cedric Soh
www.goldsilvercity.com.sg

PS: Pls visit https://www.facebook.com/goldsilvercitysg to LIKE the page for weekly updates, photos and promotions.

Friday, May 1, 2015

Buy Silver Gold Singapore Free Delivery?

Heya, are you living in Singapore and stacking up physical silver and gold bars / coins?
Gold Silver City now offers you an easy way to invest and save up in physical silver and gold! You can now buy silver or gold, either in bars or coins, from the comfort of your home. You only pay for it when it arrives at your doorstep.
Buy Silver Gold Singapore Free Delivery

Buy Silver Gold Singapore Free Delivery

We deliver the silver and gold to your location. For this soft launch of our website, we have reduced the minimum requirements. That is right, instead of the usual 100 oz silver minimum purchase, all combined purchases above $200 is entitled to qualify for this FREE delivery offer!
This free delivery will last till 1st June 2015, on our official launch date! Do stay tuned on this website or like our Facebook page for special launch promotion!
And to top it off, we are currently the lowest priced for all of our silver and gold bullion and numismatic coins in Singapore! Not only are our gold and silver prices the best in Singapore market, you are getting a special delivery service with it. There are no financial risks as you only pay when delivery is made to your location.
As mentioned in our About Us, we have our background in 30 over years of construction business. We are vested to provide high grade silver and gold precious metal to all our clients!
Please do take advantage of the current low historical silver and gold spot rate to Buy Silver Gold Singapore Free Delivery!
This is a simply great time to start saving up in precious gold and silver.
For all enquires, you can email me at info@goldsilvercity.com.sg
Sincerely,
Cedric Soh
www.goldsilvercity.com.sg
PS: If you know a good deal, please do share it with your friends! Please Like and Share our facebook page, or recommend your relatives and friends to us. They would appreciate you recommending a good deal. =)

Monday, March 30, 2015

USA stocks & options- Updates 30 March 2015

Stocks and/or Options (bullish options strategy only)

Strategy of portfolio holdings based mostly on FA.
Entry and exit will slightly depends on TA.

Current Portfolio- (arranged accordingly to weightage)
AAPL
MEI
HCP
SIG
RAI
LB

Will sell OTM calls for the above portfolios, if not assigned, its premiums for me.
If assigned, happy to sell them off with profits.
Just collected premiums for AAPL. Will add on to MEI position
Will also add on to LB position.


Holding but considering selling them off at a losses
GPRO
BABA
PBR

Additional to Portfolio
Planning to add these 3 stocks, which are great in FA, and excellent entry points based on TA.
All three stocks will benefit from a booming USA domestic market, and the stronger USD would not affect them.
All current outlook is on companies with a domestic advantage.

ALL
CHRW
COST



COST Chart


CHRW Chart



ALL Chart

Saturday, February 21, 2015

Turtle Trader System and Rules


The Complete Turtle Trader


I did not summarise the human stories and emotions behind it because it would be difficult for me to do justice to the stories. Basically you need to read it to understand the essence. But if you take my word, it just means anyone can be a trader, but you need to put in effort and practise hard.
Practise practise practise.

But I have taken the technical rules of the turtle trading system and symmarise here.
Take note these are the technical rules... do not run too far without the software.

____________________________________________________________________

Trading your Own Account Tip #1

You need to calculate your edge for every trading decision you make, because you can't make "bets" if you don't know your edge. It's not about the frequency of how correct you are; it's about the magnitude of how correct you are.

Trading your Own Account Tip #2

Stop watching TV! Stop looking at financial news.
Start keeping track of the Open High Low, and Close of each market you are trading.

Trading your Own Account Tip #3
System One
4 week price breakout for entry
-enter if market make a new 4week high (or low for shorting)
-exit if market makes a 2weeks low (or high for shorting)

2week means 10 trading days.

Filters- The turtles ignored System one if the last 4weeks breakout signal was a winner, even if they didnt take it.
If the last 4weeks breakout signal was a 2N loss they could take the breakout ("N" was simply their measure of volatility)
Direction of the 4weeks breakout was irrelevant, if their last trade was a short losing trade and a new long or short breakout hit, they could take it.

Proglem- if the last trade is a winner and turtles have to ignore this new trade, they may  miss beginning of a hugely profitable trend. Hence they can use System Two

System Two
11weeks breakout (55days) for entry and 4weeks breakout in opposite direction to exit.

Trading your own account #4
You are going to live emotionally losing 7 out of 10 trades.
This is the only way you were ever going to hook the real trend.

Trading your Own Account Tip #5
Feel free to experiment on the breakout length, do not fixate on specific values. The key will be to accept a breakout value and stick with it consistently. Test and practice are wise for confidence. Trust, but verify.

In reality, a minor change of a variable in any robust trading system should not cause significant pwrformance changes.

Liquidation is vastly more important than initiations. If Turtles applief appropriate risk management they could handle the worst that came down the pike once they were in any trade.

Trading your Own Account Tip #6
Stop worrying only about how you enter a trade. The key is to know at all times when you will exit.

Risk Management- how much do u bet on each trade?

Volatility "daily range" "N" maximum of the following
1) distance from today's high to today's low

2) distance from yesterday's close to today's high

3) distance from yesterday's close to today's low.

If the result is a negative number, it is turned into an absolute value.

Max value of the 3 choices is the "true range" or technically the absolute distance (either up or down) the market travelled in a 24hrs period.
This is also the "Average True Range", ATR.

Take the 20days Moving Average

Trading your Own Account Tip #7
All turtles must know how to calculate N values.
N is a volatility measurement and a useful rule of thumb to classify how far a market has trended.
Trade the amount in terms of N, remove the emotions in term of money.

N fluctuate, take note of the fluctuation.


Trading your Own Account Tip #8
2% of your cash is 1 unit.
A Hard stop of 2 N

For example a corn futures is $50
A N of 7 cents, means a risk of $350 ($50 x 7)
2 N means a risk of $700.

If you have a $100,000 account, 2% means you can risk $2000 only.
$2000 / $700 (2N) = 2.67 future contract,
hence, do only 2 contract.

Hence, a corn unit is same as gold unit or a Cocacola Unit. Deal with the markets in number

A hard stop of 2N
If corn futures of 7 cents of N, means 2N = 14 cents.
An entry price of $250 would see a hard stop at $236
Just exit, do not overthink.
A small N means more contracts.

Trading your Own Account Tip #9
Assume a price entry at 100, and a N of 5.
Pile a new unit entry at 105, 110, pyramid till a maximum of 5 units.
On first day of trading, stops may be 1/2N. And from then onwards, 2N stops to be used. Once 2nd unit was bought, both stops brought up to the new unit's 2N stop.
As new units were added, all stops were brought up to the stop of the newest unit added.

Trading your Own Account Tip #10
1) Account size $50,000
Account risk 2%, or $1000.

Long signal in cattle at $74, 1N value is 0.80
1 point in live cattle is $400, so 1N = 0.8 = $320
2N value = $640

Account risk $1000 / $640 = 1.56 contract
Hence Trade 1 contract.
with Stop at $74 - $1.60 = $72.40

2) When price $74 move to $74.80, a new unit is added
Account value is now $50,000 + $320
Account risk 2% = $1006.40
With 1N remaining at 0.80 or $320, 2N = $640

Contract to trade = $1006.40 / $640 = 1.57 or 1 contract
New stop = $74.80 - $1.60 = $73.20

3) Next point to add unit = 74.80 + 0.80 = $75.6
Account value now = $50000 + $640 + $320
Account risk 2% or $1019.20

At $75.60, add 3rd unit, 1N has decreased to $0.70 or $280 hence 2N is $560
Contracts to trade $1019.20 / $560 or 1.82contracts = 1 contract
New stop at 75.60 - 1.40 = 74.20

Add new unit at 1N or 75.60 + 0.70 = 76.30

4) Addition of 4th unit
Account value = $50000 + unit one gain of $920 + unit two gain of $600 + unit three gain of $280
=$51800
Account risk 2% or $1036
at 76.30, 1N = 0.70 = $280, 2N = 1.40 = $560
Contracts to trade = $1037 / $560 = 1.85 contracts hence 1 contract.
New Stop at 76.30 - 1.40 = 74.90

Add new unit at 1N or 76.30 + 0.70 = 77.00

5) Additional of 5th and final unit
Account value = $50000 + unit one gain of $1200, units two gain of $880, unit three gain of $560, unit gain of $280 = $52920
Account risk of 2% or $1058.40
1N has increased to 0.85 or $340
2N value is now 1.70 or $680
Contracts to trade $1058.40 / $680 = 1.55 contract hence 1 contract.
New Stop at 77 - 1.70 = 75.30

Position exit
Live cattle rallied to 84.50 and exit criteria were met.

The pyramid allows profit with big trends, but many false breakouts that eat away capital
To protect capital, for every 10% in drawdown, Turtles cut their trading unit risk by 20%.

If a 11% drawdown happened, their trading size dropped from 2% to 1.6% (2% x 80%)
If a 22% drawdown happened, their trading size dropped from 1.6% to 1.28% (1.6% x 80%)

Unit size goes back to normal when capital goes back up.
One turtle lost 50% of his capital, but ended the year with a bonus when market start clicking.
Statistically, you will face more incidents of losses than wins, but the pyramid allows riding the trends.

Take note that you stop if you reach STOP 2N or via System One or System Two Stop.

Trading your Own Account Tip #11

Can trade any markets with liquidity and volatility, but do not trade 2 markets with high correlation, that would be like trading in 1 market with 2 units.

Diversify into many markets of long and short.
Example portfolio
Long in corn, feeder cattle, gold and Swiss Francs for 4 units
Short in british pound, copper and sugar, for 3 units.

Take the smaller number and divide by 2, subtract from the larger number
4 - (3/2) = 2.5
Thats the units at risk, that is how turtles added more units without adding risks.

The reason to diversify into so many markets is that they do not know when and where would be the next big trends, and they do not want to miss it. Diversify ensure they lose many, but caught on to that big trend.



Monday, January 5, 2015

122 Truths You should know to be a better Investor

MOTLEY Fool writer Morgan Housel recently came up with an impressive list of 122 investing aphorisms that distil the wisdom he has gleaned from years of writing about markets and the financial industry. Most are either insights into human psychology or historical facts and figures. Almost all of them, in my humble opinion, are good advice.

1. Saying “I’ll be greedy when others are fearful” is easier than actually doing it.

2. When most people say they want to be a millionaire, what they really mean is “I want to spend $1 million,” which is literally the opposite of being a millionaire.

3. “Some stuff happened” should replace 99% of references to “it’s a perfect storm.”

4. Daniel Kahneman’s book Thinking Fast and Slowbegins, “The premise of this book is that it is easier to recognize other people’s mistakes than your own.” This should be every market commentator’s motto.

5. Blogger Jesse Livermore writes, “My main life lesson from investing: self-interest is the most powerful force on earth, and can get people to embrace and defend almost anything.”

6. As Erik Falkenstein says: “In expert tennis, 80% of the points are won, while in amateur tennis, 80% are lost. The same is true for wrestling, chess, and investing: Beginners should focus on avoiding mistakes, experts on making great moves.”

7. There is a difference between, “He predicted the crash of 2008,” and “He predicted crashes, one of which happened to occur in 2008.” It’s important to know the difference when praising investors.

8. Investor Dean Williams once wrote, “Confidence in a forecast rises with the amount of information that goes into it. But the accuracy of the forecast stays the same.”

9. Wealth is relative. As comedian Chris Rock said, “If Bill Gates woke up with Oprah’s money he’d jump out the window.”

10. Only 7% of Americans know the U.S. stock market rose 32% last year, according to Gallup. One-third believe the market either fell or stayed the same. Everyone is aware when markets fall; bull markets can go unnoticed.

11. Dean Williams once noted that “Expertise is great, but it has a bad side effect: It tends to create the inability to accept new ideas.” Some of the world’s best investors have no formal backgrounds in finance –which helps them tremendously.

12. The Financial Times wrote, “In 2008 the three most admired personalities in sport were probably Tiger Woods, Lance Armstrong and Oscar Pistorius.” The same falls from grace happen in investing. Chose your role models carefully.

13. Investor Ralph Wanger once explained how markets work, recalled by Bill Bernstein:

“He likens the market to an excitable dog on a very long leash in New York City, darting randomly in every direction. The dog’s owner is walking from Columbus Circle, through Central Park, to the Metropolitan Museum. At any one moment, there is no predicting which way the pooch will lurch. But in the long run, you know he’s heading northeast at an average speed of three miles per hour. What is astonishing is that almost all of the market players, big and small, seem to have their eye on the dog, and not the owner.”

14. Investor Nick Murray once said, “Timing the market is a fool’s game, whereas time in the market is your greatest natural advantage.” Remember this the next time you’re compelled to cash out.

15. Bill Seidman once said, “You never know what the American public is going to do, but you know that they will do it all at once.” Change is as rapid as it is unpredictable.

16. Napoleon’s definition of a military genius was, “the man who can do the average thing when all those around him are going crazy.” Same goes in investing.

17. Blogger Jesse Livermore writes, “Most people, whether bull or bear, when they are right, are right for the wrong reason, in my opinion.”

18. Investors anchor to the idea that a fair price for a stock must be more than they paid for it. It’s one of the most common, and dangerous, biases that exists. “People do not get what they want or what they expect from the markets; they get what they deserve,” writes Bill Bonner.

19. Jason Zweig writes, “The advice that sounds the best in the short run is always the most dangerous in the long run.”

20. Billionaire investor Ray Dalio once said, “The more you think you know, the more closed-minded you’ll be.” Repeat this line to yourself the next time you’re certain of something.

21. During recessions, elections, and Federal Reserve policy meetings, people become unshakably certain about things they know very little about.

22. “Buy and hold only works if you do both when markets crash. It’s much easier to both buy and hold when markets are rising,” says Ben Carlson.

23. Several studies haveshown that people prefer a pundit who is confident to one who is accurate. Pundits are happy to oblige.

24. According to J.P. Morgan, 40% of stocks have suffered “catastrophic losses” since 1980, meaning they fell at least 70% and never recovered.

25. John Reed once wrote, “When you first start to study a field, it seems like you have to memorize a zillion things. You don’t. What you need is to identify the core principles — generally three to twelve of them — that govern the field. The million things you thought you had to memorize are simply various combinations of the core principles.” Keep that in mind when getting frustrated over complicated financial formulas.

26. James Grant says, “Successful investing is about having people agree with you … later.”

27. Scott Adams writes, “A person with a flexible schedule and average resources will be happier than a rich person who has everything except a flexible schedule. Step one in your search for happiness is to continually work toward having control of your schedule.”

28. According to Vanguard, 72% of mutual funds in the U.S. (the equivalent of unit trusts here) benchmarked to the S&P 500 (an American market index) underperformed the index over a 20-year period ending in 2010. The phrase “professional investor” is a loose one.

29. “If your investment horizon is long enough and your position sizing is appropriate, you simply don’t argue with idiocy, you bet against it,” writes Bruce Chadwick.

30. The phrase “double-dip recession” was mentioned 10.8 million times in 2010 and 2011, according to Google. It never came. There were virtually no mentions of “financial collapse” in 2006 and 2007. It did come. A similar story can be told virtually every year.

31. According to Bloomberg, the 50 stocks in the S&P 500 that Wall Street rated the lowest at the end of 2011 outperformed the overall index by 7 percentage points over the following year.

32. “The big money is not in the buying or the selling, but in the sitting,” said Jesse Livermore.

33. Investors want to believe in someone. Forecasters want to earn a living. One of those groups is going to be disappointed. You know which.

34. In a poll of 1,000 American adults, asked, “How many millions are in a trillion?” 79% gave an incorrect answer or didn’t know. Keep this in mind when debating large financial problems.

35. At last year’s Berkshire Hathaway shareholder meeting, Warren Buffett said he has owned 400 to 500 stocks during his career, and made most of his money on 10 of them. This is common: a large portion of investing success often comes from a tiny proportion of investments.

36. Wall Street consistently expects earnings to beat expectations. It also loves oxymorons.

37. The S&P 500 gained 27% in 2009 – a phenomenal year. Yet 66% of American investors thought it fell that year, according to a survey by Franklin Templeton. Perception and reality can be miles apart.

38. As Nate Silver writes, “When a possibility is unfamiliar to us, we do not even think about it.” The biggest risk is always something that no one is talking about, thinking about, or preparing for. That’s what makes it risky.

39. The next recession is never like the last one.

40. Since 1871, the U.S. stock market has spent 40% of all years either rising or falling more than 20%. In Singapore, the Straits Times Index (SGX: ^STI) has also spent almost half of all years since 1988 doing the same thing. Roaring booms and crushing busts are perfectly normal.

41. As the saying goes, “Save a little bit of money each month, and at the end of the year you’ll be surprised at how little you still have.”

42. John Maynard Keynes once wrote, “It is safer to be a speculator than an investor in the sense that a speculator is one who runs risks of which he is aware and an investor is one who runs risks of which he is unaware.”

43. “History doesn’t crawl; it leaps,” writes Nassim Taleb. Events that change the world – presidential assassinations, terrorist attacks, medical breakthroughs, bankruptcies – can happen overnight.

44. Our memories of financial history seem to extend about a decade back. “Time heals all wounds,” the saying goes. It also erases many important lessons.

45. You are under no obligation to read or watch financial news. If you do, you are under no obligation to take any of it seriously.

46. The most boring companies – toothpaste, food, bolts – can make some of the best long-term investments. The most innovative, some of the worst.

47. In a 2011 Gallup poll, 34% of Americans said gold was the best long-term investment, while 17% said stocks. Since then, U.S. stocks are up 87%, gold is down 35%.

48. According to economist Burton Malkiel, 57 equity mutual funds in the U.S. underperformed the S&P 500 from 1970 to 2012. The shocking part of that statistic is that 57 funds could stay in business for four decades while posting poor returns. Hope often triumphs over reality.

49. Most economic news that we think is important doesn’t matter in the long run. Derek Thompson ofThe Atlantic once wrote, “I’ve written hundreds of articles about the economy in the last two years. But I think I can reduce those thousands of words to one sentence. Things got better, slowly.”

50. A broad index of U.S. stocks increased 2,000-fold between 1928 and 2013, but lost at least 20% of its value 20 times during that period. People would be less scared of volatility if they knew how common it was.

51. The “evidence is unequivocal,” Daniel Kahneman writes, “there’s a great deal more luck than skill in people getting very rich.”

52. There is a strong correlation between knowledge and humility. The best investors realize how little they know.

53. Not a single person in the world knows what the market will do in the short run.

54. Most people would be better off if they stopped obsessing about politics, and the U.S. Federal Reserve, and focused on their own financial mismanagement.

55. In hindsight, everyone saw the financial crisis coming. In reality, it was a fringe view before mid-2007. The next crisis will be the same (they all work like that).

56. There were 272 automobile companies in America in 1909. Through consolidation and failure, three emerged on top, two of which went bankrupt. Spotting a promising trend and a winning investment are two different things.

57. The more someone is on TV, the less likely his or her predictions are to come true. (University of California, Berkeley psychologist Phil Tetlock has data on this).

58. Maggie Mahar once wrote that “men resist randomness, markets resist prophecy.” Those six words explain most people’s bad experiences in the stock market.

59. “We’re all just guessing, but some of us have fancier math,” writes Josh Brown.

60. When you think you have a great idea, go out of your way to talk with someone who disagrees with it. At worst, you continue to disagree with them. More often, you’ll gain valuable perspective. Fight confirmation bias like the plague.

61. In 1923, nine of the most successful U.S. businessmen met in Chicago. Josh Brown writes:

“Within 25 years, all of these great men had met a horrific end to their careers or their lives:

The president of the largest steel company, Charles Schwab, died a bankrupt man; the president of the largest utility company, Samuel Insull, died penniless; the president of the largest gas company, Howard Hobson, suffered a mental breakdown, ending up in an insane asylum; the president of the New York Stock Exchange, Richard Whitney, had just been released from prison; the bank president, Leon Fraser, had taken his own life; the wheat speculator, Arthur Cutten, died penniless; the head of the world’s greatest monopoly, Ivar Krueger the ‘match king’ also had taken his life; and the member of President Harding’s cabinet, Albert Fall, had just been given a pardon from prison so that he could die at home.”

62. Try to learn as many investing mistakes as possible vicariously through others. Other people have made every mistake in the book. You can learn more from studying the investing failures than the investing greats.

63. Bill Bonner says there are two ways to think about what money buys. There’s the standard of living, which can be measured in dollars, and there’s the quality of your life, which can’t be measured at all.

64. If you’re going to try to predict the future – whether it’s where the market is heading, or what the economy is going to do, or whether you’ll be promoted – think in terms of probabilities, not certainties. Death and taxes, as they say, are the only exceptions to this rule.

65. Focus on not getting beat by the market before you think about trying to beat it.

66. Polls show Americans for the last 25 years have said the U.S. economy is in a state of decline. Pessimism in the face of advancement is the norm.

67. Finance would be better if it was taught by the psychology and history departments at universities.

68. According to economist Tim Duy, “As long as people have babies, capital depreciates, technology evolves, and tastes and preferences change, there is a powerful underlying impetus for growth that is almost certain to reveal itself in any reasonably well-managed economy.”

69. Study successful investors, and you’ll notice a common denominator: they are masters of psychology. They can’t control the market, but they have complete control over the gray matter between their ears.

70. In finance textbooks, “risk” is defined as short-term volatility. In the real world, risk is earning low returns, which is often caused by trying to avoid short-term volatility.

71. Remember what Nassim Taleb says about randomness in markets: “If you roll dice, you know that the odds are one in six that the dice will come up on a particular side. So you can calculate the risk. But, in the stock market, such computations are bull – you don’t even know how many sides the dice have!”

72. The S&P 500 gained 27% in 1998. But just five stocks – Dell, Lucent,Microsoft, Pfizer, and Wal-Mart – accounted for more than half the gain. There can be huge concentration even in a diverse portfolio.

73. The odds that at least one well-known company is insolvent and hiding behind fraudulent accounting are pretty high.

74. The book Where Are the Customers’ Yachts? was written in 1940, and most people still haven’t figured out that brokers don’t have their best interest at heart.

75. Cognitive psychologists have a theory called “backfiring.” When presented with information that goes against your viewpoints, you not only reject challengers, but double down on your view. Voters often view the candidate they support more favorably after the candidate is attacked by the other party. In investing, shareholders of companies facing heavy criticism often become die-hard supporters for reasons totally unrelated to the company’s performance.

76. “In the financial world, good ideas become bad ideas through a competitive process of ‘can you top this?'” Jim Grant once said. A smart investment leveraged up with debt becomes a bad investment very quickly.

77. Remember what Wharton professor Jeremy Siegel says: “You have never lost money in stocks over any 20-year period, but you have wiped out half your portfolio in bonds [after inflation]. So which is the riskier asset?”

78. Warren Buffett’s best returns were achieved when markets were much less competitive. It’s doubtful anyone will ever match his 50-year record.

79. Twenty-five hedge fund managers took home US$21.2 billion in 2013 for delivering an average performance of 9.1%, versus the 32.4% you could have made in an index fund tracking the S&P 500. Hedge funds a great business to work in – not so much to invest in.

80. The United States is the only major economy in which the working-age population is growing at a reasonable rate. This might be the most important economic variable of the next half-century.

81. Most investors have no idea how they actually perform. Markus Glaser and Martin Weber of the University of Mannheim asked investors how they thought they did in the market, and then looked at their brokerage statements. “The correlation between self ratings and actual performance is not distinguishable from zero,” they concluded.

82. Harvard professor and former Treasury Secretary Larry Summers says that “virtually everything I taught” in economics was called into question by the financial crisis.

83. Asked about the economy’s performance after the financial crisis, Charlie Munger said, “If you’re not confused, I don’t think you understand.”

84. There is virtually no correlation between what the economy is doing and stock market returns. According to Vanguard, rainfall is actually a better predictor of future stock returns than GDP growth. (Both explain slightly more than nothing.)

85. You can control your portfolio allocation, your own education, who you listen to, what you read, what evidence you pay attention to, and how you respond to certain events. You cannot control what the Fed does, laws politicians sets, economics reports, or whether a company will beat earnings estimates. Focus on the former; try to ignore the latter.

86. Companies that focus on their stock price will eventually lose their customers. Companies that focus on their customers will eventually boost their stock price. This is simple, but forgotten by countless managers.

87. Investment bank Dresdner Kleinwort looked at analysts’ predictions of interest rates, and compared that with what interest rates actually did in hindsight. It found an almost perfect lag. “Analysts are terribly good at telling us what has just happened but of little use in telling us what is going to happen in the future,” the bank wrote. It’s common to confuse the rearview mirror for the windshield.

88. Success is a lousy teacher,” Bill Gates once said. “It seduces smart people into thinking they can’t lose.”

89. Investor Seth Klarman says, “Macro worries are like sports talk radio. Everyone has a good opinion which probably means that none of them are good.”

90. Several academic studies have shown that those who trade the most earn the lowest returns. Remember Pascal’s wisdom: “All man’s miseries derive from not being able to sit in a quiet room alone.”

91. The best company in the world run by the smartest management can be a terrible investment if purchased at the wrong price.

92. There will be seven to 10 recessions over the next 50 years. Don’t act surprised when they come.

93. No investment points are awarded for difficulty or complexity. Simple strategies can lead to outstanding returns.

94. The president has much less influence over the economy than people think.

95. However much money you think you’ll need for retirement, double it. Now you’re closer to reality.

96. For many, a house is a large liability masquerading as a safe asset.

97. The single best three-year period to own stocks in the U.S. was during the Great Depression. Not far behind was the three-year period starting in 2009, when the American economy struggled in utter ruin. The biggest returns begin when most people think the biggest losses are inevitable.

98. Remember what Buffett says about progress: “First come the innovators, then come the imitators, then come the idiots.”

99. And what Mark Twain says about truth: “A lie can travel halfway around the world while truth is putting on its shoes.”

100. And what Marty Whitman says about information: “Rarely do more than three or four variables really count. Everything else is noise.”

101. Among Americans aged 18 to 64, the average number of doctor visits decreased from 4.8 in 2001 to 3.9 in 2010. This is partly because of the weak economy, and partly because of the growing cost of medicine, but it has an important takeaway: You can never extrapolate behavior — even for something as vital as seeing a doctor — indefinitely. Behaviors change.

102. Since last July, elderly Chinese can sue their children who don’t visit often enough, according to Bloomberg. Dealing with an aging population calls for drastic measures.

103. Someone once asked Warren Buffett how to become a better investor. He pointed to a stack of annual reports. “Read 500 pages like this every day,” he said. “That’s how knowledge works. It builds up, like compound interest. All of you can do it, but I guarantee not many of you will do it.”

104. If Americans had as many babies from 2007 to 2014 as they did from 2000 to 2007, there would be 2.3 million more kids today. That will affect the economy for decades to come.

105. The Congressional Budget Office’s 2003 prediction of federal debt in the year 2013 was off by $10 trillion. Forecasting is hard. But we still line up for it.

106. According to TheWall Street Journal, in 2010, “for every 1% decrease in shareholder return, the average CEO was paid 0.02% more.”

107. Since 1994, stock market returns are flat if the three days before the Federal Reserve announces interest rate policy are removed, according to a study by the Federal Reserve.

108. In 1989, the CEOs of the seven largest U.S. banks earned an average of 100 times what a typical household made. By 2007, more than 500 times. By 2008, several of those banks no longer existed.

109. Two things make an economy grow: population growth and productivity growth. Everything else is a function of one of those two drivers.

110. The single most important investment question you need to ask yourself is, “How long am I investing for?” How you answer it can change your perspective on everything.

111. “Do nothing” are the two most powerful – and underused – words in investing. The urge to act has transferred an inconceivable amount of wealth from investors to brokers.

112. Apple increased more than 6,000% from 2002 to 2012, but declined on 48% of all trading days. It is never a straight path up.

113. It’s easy to mistake luck for success. J.Paul Getty said, the key to success is: 1) rise early, 2) work hard, 3) strike oil.

114. Dan Gardner writes, “No one can foresee the consequences of trivia and accident, and for that reason alone, the future will forever be filled with surprises.”

115. Daniel Kahneman once gave the key to making better decisions. “You should talk to people who disagree with you and you should talk to people who are not in the same emotional situation you are,” he said. Try this before making your next investment decision.

116. No one on the Forbes 400 list of richest Americans can be described as a “perma-bear.” A natural sense of optimism is not only healthy, but vital.

117. Economist Alfred Cowles dug through forecasts a popular analyst who “had gained a reputation for successful forecasting” made in The Wall Street Journalin the early 1900s. Among 90 predictions made over a 30-year period, exactly 45 were right and 45 were wrong. This is more common than you think.

118. Since 1900, the S&P 500 has returned about 6.5% per year, but the average difference between any year’s highest close and lowest close is 23%. Remember this the next time someone tries to explain why the market is up or down by a few percentage points. They are basically trying to explain why night comes after day.

119. How long you stay invested for will likely be the single most important factor determining how well you do at investing.

120. A money manager’s amount of experience doesn’t tell you much. You can underperform the market for an entire career. Many have.

121. A hedge fund once described its edge by stating, “We don’t own one Apple share. Every hedge fund owns Apple.” This type of simple, contrarian thinking is worth its weight in gold in investing.

122. Take two investors. One is a rocket scientist from the Massachusetts Institute of Technology who aced all kinds of IQ testand can recite π out to 50 decimal places. He trades several times a week, tapping his intellect in an attempt to outsmart the market by jumping in and out when he’s determined it’s right. The other is a country bumpkin who didn’t even attend junior college. He saves and invests every month in a low-cost fund tracking a broad market index – like the SPDR STI ETF (SGX: ES3), which tracks the Straits Times Index – come hell or high water. He doesn’t care about beating the market. He just wants it to be his faithful companion. Who’s going to do better in the long run? Chances are it’d be the country bumpkin. “Investing is not a game where the guy with the 160 IQ beats the guy with a 130 IQ,” Warren Buffett says. Successful investors know their limitations, keep cool, and act with discipline. You can’t measure that.
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