DBS begins axing staff

Yes, it's not new news now.

DBS is axing 6% of their staff strength (about 900 employees) across their Singapore and Hong Kong operations (news article here).

Usually the end of the bear market is indicated by banks laying off staff. DBS is the first, and probably won't be the last.

STI has rallied, but no I don't imply that the end of the bear is here. The worst seems to be over though.

Discount price, anyone?

The Great Sale

I don't know why it hasn't dawned on you yet. There is a great sale going on in the financial markets. Here's why:

1. STI is at least 50% lower than it usually was.
2. Unit trust funds are also at a price which brings envious investors who missed the boat, to hop right in again.
3. Financial institutions are bending their backs to come up with attractive financial products that they normally wouldn't bother when they are enjoying good times (eg: single premium endowments with bonus returns)

So long as the majority fails to realize that this is a sale, the price will remain low, and financial institutions will continue to do cartwheels. But one day they will realize it, and it's those bargain hunters who will have laughed to the bank way before.

If you're always waiting for Sheng Shiong and Harvey Norman to come up with a sale, what are you waiting for regarding this one?

Attempting to raise investors confidence

What encourages me is to see governments step in. The objective is to assure investors and to raise confidence in the market.

http://news.yahoo.com/s/afp/20081020/ts_afp/financebankingworld
Have you begun returning to the market yet?

Is this a "dead cat bounce"?

My laptop died on me yesterday. Got it fixed today.

The following article isn't fresh from the oven, but it does speak well that can help us manage our expectations regarding the market rebound.

http://www.marketwatch.com/news/story/dont-break-out-bubbly-just/story.aspx?guid={E913C56F-C1ED-4636-A62D-3F30B00D91AE}

I really don't think the bad times are over yet. But there are still alternatives.

Yahoo! News: Dow roars back from worst week ever

Something quite nice to read about finally. http://news.yahoo.com/s/ap/20081014/ap_on_bi_st_ma_re/wall_street

However, exercise caution. As quoted in the article,

"My screen is completely green, and I love that," said John Lynch, chief market analyst for Evergreen Investments in Charlotte, N.C. "But I'm not doing any backflips yet. We still have many challenges up ahead."

and

"I would say this is closer to the bottom. I can't say this is the bottom," said Bill Schultz, chief investment officer at McQueen, Ball & Associates in Bethlehem, Pa. "I think it's more relief, the rally today."

and

"I think we had enough negatives last week that if the government steps in we could have a pretty nice run," said Denis Amato, chief investment officer at Ancora Advisors. "Is it off to the races? No, I don't think so. We have a lot of stuff to work through."

Yep, I think so too.

Congratulations to those who profited from this rally. It sure is helpful when you have spare cash to risk riding this possibility. For many, it seems that it had paid off. Good for you.

Investors do the darndest thing

The market has bounced back again.
Asia: http://sg.news.yahoo.com/ap/20081013/tbs-as-world-markets-e285837.html
Wall Street: http://news.yahoo.com/s/ap/20081013/ap_on_bi_st_ma_re/wall_street

It's almost funny that when the market plunged, everyone is crying the loudest. When the market rebounds, no one seems to notice. I barely heard a whimper.

I'm talking about investors.

Like crashing and booming markets, these are cycles that repeat over and over. Every market crisis has the wise making money because the majority freaked out and pulled out when they were not supposed to, sending prices falling at the "unprecedented" lows (that's when people like Warren Buffet come in and get richer). Every time, the majority makes the same mistakes, and the wise reaps same profit the same way.

Don't get me wrong, I know how it is to lose money. I have lost money in investments before, and believe me, I started thinking irrationally and made more and more bad moves each time I did anything about it. Yet, I did know how the markets work, but I still made that mistake.

It's called emotions. Emotions are what make us human. Emotions help us appreciate joy, love and everything else that is nice. But it also has a dark side. If not managed properly, you really end up doing the stupidest things.

Don't blame yourself. You're only human. Just get better each time you mess up. It's just like this.

New York, New York... why you so like dat???

Nope, confidence isn't restored yet. http://news.yahoo.com/s/ap/20081009/ap_on_bi_ge/financial_meltdown

And the debt clock reaches numbers it never was designed for. http://news.yahoo.com/s/ap/20081009/ap_on_re_us/odd_national_debt_clock

And AIG's likely to get less popular with the public following yet another controversy, and now having another loan granted to them. http://news.yahoo.com/s/ap/20081009/ap_on_bi_ge/fed_aig

A breath of air

The Feds have cut interest rates. That's gonna help for a while. Hopefully the market can rebound and restore some confidence.

http://news.yahoo.com/s/ap/20081008/ap_on_bi_ge/fed_interest_rates


If you think Singapore is going to face a rough patch, count your blessings as you read about Iceland.

http://www.cbsnews.com/stories/2008/10/07/world/main4508148.shtml

Tough times ahead

I don't know what you think of the US Bailout plan. I can't think of a better way, but I don't like it.

I don't know what you think about Mr Tharman's bleak economic outlook for the quarters to come (read: years to come). I too can't think of a better way he should get things done, but I don't like it either.

I'm reminded of a popular prayer:

God, grant me the serenity to accept the things I cannot change;
The courage to change the things I can;
And the wisdom to know the difference.

I know I cannot change the way the economy moves (I'm not even sure if Paulson can!) but I can change the way I deal with it everyday.

Economy rises and falls all the time. AIA gets into trouble all the time (not that it matters that much to me anymore). But at the end of the day, the winter clears and the sun comes back. Often enough, if we had placed ourselves in self-pity, we will miss the break of spring and only come out to bask in its glory when the hot summer sun is about to roast the hair off your skin.

Take courage, to do what you need to do. I applaud a friend who knows the bleak outlook, but chooses to take the courage to begin his plans, so he can send his newborn son comfortably to the university in 20 years time. He knows he cannot change the economy, but he sure has that wisdom, sufficient enough, to bring forth courage to bring his family to success.

Yahoo! News: Bailout passes Senate, House foes soften

The bill is approved by Senate. http://news.yahoo.com/s/ap/financial_meltdown

Still, be on your toes... It's not the final order yet. Stay tuned.

Be invested, but trod wisely.

The People are FED UP!!!

The people has had it. No, they will not let the Bill pass, and the Congress is behind them.

That's it. The Bill to rescue dying financial institutions with US$700 billion (read: the taxpayers' money) has been rejected.

I'm expecting to see the market plummet (not that it hasn't already, Dow is down 700 over points!) further and further until a new proposal is put in place, we should see another rally. If the proposal fizzles, another fall. Another proposal, another rally. Is anyone able to predict what is going to happen?

The last few days, I've met with fund managers, managed accounts managers, read articles from economists, columns from newspapers, etc. Many said that the Bill "sure push through one!" "Even Warren Buffet has bought Goldman Sachs."

Hmmm... So is Warren Buffet wrong? Probably not, in the long term. But certainly he gave me the impression that he was confident that the Bill will come through. He made very clear that he supported the Bill, and I don't fault him on that, but I think he too was surprised that Congress did not let it come to pass.

At this point in time, I think very few people are left to say, "The Dow has dropped so many points! It's cheap! Let's buy!" Because we REALLY know that it is likely to drop even further. While this is not about timing the market, this is common sense...

So, how do you think you should be doing your investments today? Stay in the sidelines for an indefinite period of time and let the Inflation Monster slowly chomp your money away? Rake up a huge amount of money like Warren Buffet and put your bets on things that have been proven to be impossible to predict anymore? Or enter the market slowly but steadily - tiny but sure investments, minimizing inflation losses, expecting to reap greater profits when the market recovers?