What i'm doing here is to show my view on the market and let everyone to justify the view/opinion. I've shared my pov in the my last post starting with sentence "Hi everyone..." I usually do things in a contradict way from last year.

Im trying to share my ideas in a blog, if there anyone interested, kindly pm me.

For anyone who Doesnt have any objections to things that i share, you do not have to response to my posts. I have no means to beat everyone in order to show that i conquer the world. Im only sharing for the good deeds of everyone, instead of gaining anything from you guys.

mita,

<<If the world recover, we will surely recover though not as spectacular as others. >>

This has been proven WRONG. Malaysia had not recover from the 97/98 recession while others has. So, what makes you think that Malaysia can recover this recession??

<<Warren Buffetts says that diversification is a protection against ignorance. >>

Bingo. Unless you are Warren Buffet, you are IGNORANT.

In personal finance, there are ONLY 2 kinds of people,

1) Those who know that they know nothing.

2) Those who do not know that they know nothing.

<< If you know that financial assets and housing assets are going to crash to the abyss because of massive debt deflation, it just doesn't make sense to diversify into these area right?>>

So, tell me when the crash going to happen and when it is going to stop?? You DO NOT KNOW. And, nobody knows. So, a strategy that is based on TIMING does not work either.

An asset allocation based investment strategy does not based on TIMING. And, by rebalancing, you always SELL HIGH and BUY LOW.

http://www.marketwatch.com/LazyPortfolio

Check out lazy portfolio above.

Dreamer

This post has been edited by dreamer101: May 20 2009, 09:36 PM

See! i'm right once again. The index is down consecutively 2 days, now trading at around 17000.

In Oct 2008, everybody rushed out and said Hang Seng Index would go to 8000. What did you do that time?

Now, everybody said HSI will go to 20,000. What will you do this time?

Tell me......

This post has been edited by rockcrawler: May 22 2009, 10:44 PM

I am reasonably entertained by this thread, and makes me think a lot. Questions:

1) You are implying that Fund Managers are allowed and encouraged to take excessive risk, while I thought it is regulated. May be not in Malaysia, I suppose.

2) If such a fund exist, given the higher risk taken, it tends to perform worse than other funds. If we believe in market with free competition, it will lose its client much faster than others, and soon out of business. Unless it is a monopoly or oligopoly market, such a fund should be and would be short lived. Again, is this very different in Malaysia ?

3) All financial institution is governed and regulated on the amount of risk they took, basic measurement such as the Greek factors, and Value At Risk calculations should be reported to the central bank regulatory. Is that not the case for Malaysia ?

4) Hedge funds does not operate based on 'hedging' per se, but rather they do delta hedging using Black Sholes formula. However, there are funds that don't and still call themselves hedge fund. Is there any hedge funds in Malaysia ? Without the ability to short the market, I would imagine delta hedging is impossible.

5) The key concept of finance is all about opportunity cost. When a person hire a fund managers and pay him for transaction brokerage fees, you mentioned it is a 'head you win, tail I lose' situation, but do not forget the person frees up his time in doing those transactions and able to use those time to earn money. Some would argue that what is important is 'Can you earn more than the brokerage if you were to do it yourself?' rather than declare that paying brokerage mutual funds is not worth it. What is your opinion on this ?

6) The same opportunity cost goes on hiring a fund manager. If one were to spend time pick up finance and investment as a subject (depends on your maths and econs foundation, it can be done in 3 months to few years), and then willing to do analysis on all companies that he is tracking (which is time consuming) and also collect and consolidate market information (super time consuming for a normal person), I see a huge amount of time and effort invested. Time, is money. I would imagine the question is back to 'How much can you earn with those time spent on other areas, such as your job?". What do you suggest ?

7) Imagine a person spent all the above time and effort and now become capable of managing his own investment, his cost is probably still higher than a fund manager, because fund manager would be able to spread his cost over larger amount of transactions (and more clients), compare to the individual. Can the individual really do it more cost effective than a fund manager ?

8) Assuming both can do the same efficiency and effectiveness in investment, which would also translate to the fact that the chances of success is the same. The individual can make the same mistake as the fund managers. The only difference is how risk averse is the individual. If the individual is highly risk seeking, he/she will potentially bet bigger than the fund (which should be regulated on total risk committed). So I suppose your suggestion is for investor who is highly risk averse, who would bet lesser than the fund manager and therefore lost less money should the bet turn bad. What do you think ?

9) Given the above, I would also think you may want to consider this: If the fund manager is more prone to taking higher risk, which has higher return, it is best to engage them during the bull time. When bear market comes, just withdraw your money and put it into bond or other fixed income product. Isn't it better to make use of fund managers for what they are good at, rather than discount them completely ? Would like to hear your opinion on this.

1) Fund managers (this could be excluded as explained below) or CFO of financial instituiion are well known for risk taker as it is their job scope. While they get performance bonus based on risk taking if it yield fruit.
Recent financial crisis has exposed this issue quite thoroughly, as fund managers you get nothing if being defensive. But if you are wrong to be defensive, your job could be in jeopardy because you performs poorly compared to the peers.
So this always prompt FI CFO to take more risk, as long as more loan being granted (like subprime) or financial products being sold like CDO, then I contributed more profit to the company, I get more bonuses and better performance. Whether this risky move will be turning sour or not after few years, nobody knows and they don't care much (subprime issue has exposed this issue).

2) no issue on this

Malaysia UT is highly regulated, they cannot do leveraging or whatsoever, just purely invested client's money into stocks. So leveraging and excessive risk taking is out of question, but the major problem is fund is rigid, no matter how high the market goes, they still will invest no less than 70-80% of their fund money available, no matter how they see the market whether it is bubble or unsustainable already.

The execessive risk taking issue is more on investment banks and financial instituition that can do levaraging, not appropriate appied on UT fund managers except the rigid strategy they cannot do anything.

3) In US, there is no guideline and regulation to stop any financial instituition to have whatever leverage ratio can be 1:50 as well. In Malaysia, since a lot of finance product is highly regulated, you don't see much chance for FI to do some funny stuff like CDS, MGS etc. It is the derivatives product that bring out this financial crisis, not old fashioned banking loan, which Malaysia is still in this phase.

4) No, as said Malaysia is an old fashioned and highly regulated finance market.

5,6,7,8) The concept is same running a company business, you are the boss, you hired worker and paid the salary, no matter the business is profitable or not. Major complaint of this issue is from high initial service charge of 5-6% and annual management of 1.5%, which seems a bit high, more related to 8

9) Yes, it can be done and should be done.

Just my 2 cents.

Yes, I agree investors should attempt to do capital preservation by withdrawing in a bear market (hopefully before, and not after). In fact, you don't have to withdraw as many fund houses allow you to switch to low risk funds, and then switch back in future without incurring any service charges.

But when do you do it is not an easy question to answer, unless you have perfect hindsight. You don't want to do it too often as that would defeat the purpose of a fund manager managing on your behalf. Even in a bear market, you may not want to do it just in case the market goes back up. But what is a bear market? If you look at the charts, there were a couple of periods in 2007 where there were sharp downturns, but then the markets recovered pretty quickly and went even higher.

So what do you do? Sit and wait for the markets to recover? Or sell? If you sat and waited in 2007, you would be right. If you sat and waited in 2008, you would be wrong. The decision is yours.

I guess with a brain size of testicle like yours you can't see very well how interconnected our economy with other nations, If USA and Japan go broke, there won't be any trading between us and them. They would start pulling out their factories and investment out of our nation. When these developed nations recover, obviously, our economy is going to recover as well because there will be FDI and trading taking place between us and them. We are truly going to prosper or sink together though at different levels. When i say the word "recover", it means job employment, business/trading activities and etc .





No, i'm not, I was just trying to enlighten someone like you



There is a thing called Trend research and Forecast. You don't know the exact date when it will happen but you know it will happen . I avoided the latest market crash and made some money.

http://www.trendsresearch.com/forecast.html

Your ignorance on global market and economy bemused me and you're calling me ignorant ? What a joke ...

This post has been edited by mita: May 23 2009, 06:09 PM

warning for all the people here, be very careful what some people says here... I ASKED A VERY SIMPLE QUESTION, and he/she dont want to answer.

This post has been edited by henry_swk: May 23 2009, 07:06 PM


Attached thumbnail(s)

mita,

<<If USA and Japan go broke, there won't be any trading between us and them. They would start pulling out their factories and investment out of our nation. When these developed nations recover, obviously, our economy is going to recover as well because there will be FDI and trading taking place between us and them. We are truly going to prosper or sink together though at different levels. When i say the word "recover", it means job employment, business/trading activities and etc .
No, i'm not, I was just trying to enlighten someone like you>>

You DO KNOW that our FDI is going down year by year even before this recession. Hence, we have problem of our own not related to this global recession.

<< There is a thing called Trend research and Forecast. You don't know the exact date when it will happen but you know it will happen . I avoided the latest market crash and made some money.

http://www.trendsresearch.com/forecast.html >>

I have been in this for 20 years. And, every year, someone claim that there is a new XXX technique. And, they made money for a while until they went broke.

I wish you best of luck.

<<Your ignorance on global market and economy bemused me and you're calling me ignorant ? What a joke ...>>

You do not even understand what I am saying. You have NO IDEA about what is going on in Malaysia ECONOMY that is not related to global condition.

We HAVE NOT recovered from 97/98. Over the past few years, we are dependent on the TWO OILS for growth. But, our manufacturing sector (other than oil and gas ) is sliding even before this recession. Ditto for our FDI.

The recession will just speed up the decline that is happening even before the recession.

Dreamer

The trend forecast done by Gerald Celente is based on analysis of present event, trend, fundamentals and a whole host of factors. I can understand your difficulty in acknowledging (him) because you're just trying to win the argument here . But that doesn't mean you shouldn;t expand your knowledge by reading and understanding other tools/analyses to give you a better edge in the market


Same to you too.. We all need some luck to succeed .




Of course i know what's going on in Malaysia, I'm pissed at what's going on but as i have said before , as part of a globalized economy, we are truly going to sink and rise together. Maybe we will rise so much slower than our neighbours but i don't know for sure.



Yes, Japan GDP is estimated to sink 16% , Spain unemployment rate is at 17% as we speak. Iceland is bankrupt with its government gone. Boss napping in France and etc

Have you seen TOYOTA TENT CITY ?
http://www.youtube.com/watch?v=rHrNfxEg8Ls

This post has been edited by mita: May 23 2009, 07:58 PM

mita,

<<we are truly going to sink and rise together. >>

My POINT which you are missing is this. Due to INHERENT problem in Malaysia's economy,

Malaysia economy will sink faster with global recession. But, it will not rise when the global economy recover. Malaysia's economy was sinking even before this global recession.

DReamer

---

Added on May 24, 2009, 1:50 ammita,

Let me give you two choices

A) 90% of the mutual fund manager cannot beat their bench mark index over the long run. So, in order to beat the mutual fund manager, you just buy the bench mark using passive index fund approach. This approach had been proven to work over a long period of time up to 100 years of history. And, you do not need to know ANYTHING to use this approach. You JUST have to accept that you are STUPID and average is good enough for you.

B) Some unknown technique that claim to be better than 90% of mutual fund manager. And, you have NO IDEA whether it will work over the long run. In order to work, you have to invest a lot time and energy and pray that you are better than 90% of mutual fund manager.

So, tell me would you choose (A) or (B)??

I am an investor. I setup my strategy and then I go to sleep for 5 years. I have a life to live. I do not want to spend my time watching the market. And, by the way, my STUPID method beat 90% of mutual fund manager. And, that is good enough as compare to some unknown method.

The ONLY kind of people that will choose (B) is a gambler. I prefer to own the casino instead.

Dreamer



This post has been edited by dreamer101: May 24 2009, 01:50 AM

If these is an issue, how about considering boutique funds like Singular Asset Management and many others catering for investors that are more sophisticated and had higher risk tolerance (high net worth private investors).

[quote=henry_swk,May 23 2009, 07:04 PM]warning for all the people here, be very careful what some people says here... I ASKED A VERY SIMPLE QUESTION, and he/she dont want to answer.


I know http://www.taifook.com would trade HS, if thats what u want to know. Or simply make good use of your COMPUTER to search it on your own, if thats all u want to know.

I see u as someone without manner cos u expose PERSONAL MESSAGE. It is horrible.

This post has been edited by secretsquirrel: May 27 2009, 10:16 AM

in the private message : he only tells me not working in m'sia, loss at beginning win later.. this is BIG DEAL? im without manner? im trying to warning for all the people here, be very careful what some people says here (refer post #68)... I ASKED A VERY SIMPLE QUESTION, and he/she dont want to answer.

He posted from HK, so you figure that out.

Btw, is there any relevance to this topic?
It's an open debate/discussion on funds and investment. Anyone can have their input.

I dont know yet, might not have to see it this way yet, Since im a kepo, and one would strive to keep/get as much $ as possible, i see it as an opportunity to learn more by waiting patience for what TS has been trying to share.... which is None so far...

---

Added on May 27, 2009, 1:01 pmHenry - u may remain in any status u like, but attacking other as a first move is always a bad move.

No, i didnt say he 'does not want to tell you which broker he uses', i only say he might not wish to tell anything beyond what he has told us/u in pm. Thats a way we should remain open minded in order to absorb more... no?

I dont know what is the point he is telling how much he has been earning, i guess it is a way he tried to proof he is right in his judgement? we need to read his 2nd and 3rd episode before we can judge if he is right or not....

He doesnt reply your #68 HAS NOTHING to do you to continue learning from his 10yrs of experience. U can still try to learn from him, if u can lower your guard and be a little patience. U dont have to jump into a conclusion by calling other names...

I have been working with MANY Fund Managers before and they are relatively too focus on the trades and needing a big space to stress out, than other workaholics. I tend to stand on the fend of TS cos i think he might have SOMETHING to tell us. If he just end up as a jerk, I'd conclude i have wasted my time like i have wasted it on reading /k/

Peace

This post has been edited by secretsquirrel: May 27 2009, 01:01 PM

can u recommend me to trade big money? i'll give you US$1million every year as commision. and fyi.. its hard to find good broker with ability to trade huge lot size.

Thats exactly why we are here waiting like an idiot for TS to show himself again.

this thread damn funny lor... u all acusing others keep on bashing ts; but at the same time u all keep bashing the others as well...
most of the time u all not sharing nor giving constructive idea...
i believe others who read this topic has the same feeling as well... like a nose and mouth fight...

no one will believe the information on internet 100%, and they got the right to question TS on his findings or watever.... i can understand their feeling... since our dear TS claimed that he can outperform the market all the time, i am sure others want to learn his secret as well... if he don want to share then this topic is pointless also...

it might be important to know TS years of experience and background as well.. i believe before u all decided to buy a book u all will read about the author of the book and gain some insight of the author experience as well.... it happens here too.... there are a few cases that MNC did not understand the country they will soon operate, and the business cant perform as good as the origin country... thts the reason why MNC will hire local to manage the business oversea, bcoz they are more familiar with their own country... so if TS is from hong kong he might not know malaysia financial market as well as others....

since TS is not replying why don't we just relax.. and continue the topic "whether investors perform better than the fund manager themselves"..

from my point of view, i believe that we should set a min limit to wat we claim as investment...bcoz rm10k is an investment; rm 1 million also an investment.... but the nature of both is difference... i don't see any strong reason to monitor the market like fund managers did, if we only invest rm10k.... however, you might need to keep on monitor fund managers performance from time to time if you invest rm1 million with them...

i don believe you can earn rm3k from your rm10k investment every month(constantly); and here is the reason fund managers come in... They will monitor the market for u and u can continue your current job or business... this is a type of diversification also... imagine if u lose your rm10k but u still got your current job to keep u stay strong.... unless you so bad luck lose rm10k and your job at the same time....

anyway if fund managers keep on under perform for the past 10 years, i don think any investors will stick with them for another 10 years... fund managers are competing with each other as well... for the current financial crisis, i believe that we cant curse fund managers as well... most of them depends on rating agencies too...

just my 2 cents... dont flame me...

I also thought it has been well regulated when i started to work in this field 15 yrs ago but found out that regulators also dont know thoroughly about hedge fund cos this concept happened since 1990s only. Try to recall the situation in US in these 2 years, you would know even US people are so pro in investment, they still cant regulate hedge fund and investment banking.



high risker usually means higher returns and these funds are usually outperform in bull markets and so they should not perform worse than the other funds. By the way, investors love risk so much. If you tell someone that you could generate 5-10% only "sure win" , guaranteed.....i think not many people are interested still.



i can tell you i'm quite academic when i was studying in university and i knew every single formulae in finance. However, when i really work in finance, it seems like only myself or few people remember these formulae. Of course, fund managers will not be included.



same as my answer for question 3. 80% hedge fund managers only use long/short gross net exposure method for hedging. This gross/net method is just a simple +-x/ calculation without even using a scientific calculator. i cant imagine if we require them to use Black Scholes to calculate hedging ratio, they will switch back to work in long fund. By the way, i dont quite agree with the black scholes as it assumed normal distribution but the reality is not.



no comment....but if you have enough trading knowledge, you should get rid of fund mgrs and trade for yourself and that is the main theme of my blog here.



"time consuming for normal person".....really right and that's why normal person cant win.



it depends.....you could argue that trading in a fund is actually not flexible cos you need to deal with liquidity of stocks and you can even buy tiny cap stock due to illiquidity.



kind of agree.

you can do that.....that make sense to me. Remember that involved a great skill and knowledge to determine whether it's bull or bear. If you can do that accurately, you dont need fund mgr at all.



This post has been edited by rockcrawler: May 27 2009, 09:20 PM