Auto-Pilot Millionaire

Here's a recap on the book i have read before - The Automatic Millionaire: A Powerful One-Step Plan to Live and Finish Rich.

Whenever people receive their paychecks, they think of buying something to reward themselves for the hard work they have put in this month (I am also guilty of that =p). After that, they spend on the needs of the family, like tuition & school fees, utility bills etc. Thereafter, people tend to discharge some allowance leftover to pamper themselves with the Wants which differ from person to person. Then Lastly, they see what is the surplus and try to save them in banks, invest in stocks etc.

So how do YOU exactly become a millionaire?

Take the last step and shift it to the first priority! In that way, whenever you get ur income, part of it has already gone to your savings/investing.

Benefits

1. You start off with a lower income, so automatically you reduce spending on your WAnts and Urges because you definitely have to pay off for your Needs!

2. You won't get to SEE the money come to your hands and suffer the agonising pain of not being able to buy the latest gadget because you need to save them.

3. As you set aside a certain % to invest monthly, it is easy to maintain. Once you get used to it, you can slowly increase the percentage to invest. By doing it gradually, you are one step closer to being a millionaire & slowly the pain of remembering you have a higher income in the first place will dwindle.

4. By the time you know it, You will be half-way to becoming an Auto-Pilot Millionaire!

IPO Fever coming soon to Singapore!

In these few days, if you have been reading the newspapers, you would have feel another kind of fever other than the Euro 2012... which is the IPO fever!

With Cordlife leading the way in 2012, there are also several big names appearing in the headlines - *read more from the links*

Bumitama Agri: (http://www.channelnewsasia.com/stories/singaporebusinessnews/view/1191384/1/.html) & 

the very hyped up 

Formula One IPO: (http://www.channelnewsasia.com/stories/singaporebusinessnews/view/1190864/1/.html).

One question many will ask is: What use has all these IPOs for Me?

If you are interested in making more money; it has definitely Everything to do with you!

Let's list down why:

1) During the Boom period after US subprime crisis, IPOs are like pop-corn which keep popping out once every few days.. It has died down during the Euro Debt crisis and now, after the bad news have become "not-so-bad", IPOs are reviving once again. 

In a nutshell, the CEOs of companies will only list their companies when they believe the stock markets are on the climb. If the top people who have so much capital and talents are taking advantage of this, i don't believe why you shouldn't...

Thus, this simply signifies the start of a major stock rally and you won't want to knock yourself on the head for missing this recovery period.

2) IPO companies which are the hot favourite among investors have shown considerable returns (on share prices) after their IPOs. Examples are the Sheng Siong and Dyna Mac. So how do you pick the *hot* IPOs? 

Here is a secret: Just keep a lookout for IPOs which many people are talking about in forums and chatrooms [http://forum.shareinvestor.com/forum/forum.php, http://www.sharejunction.com/sharejunction/listLatestTopics.htm].  Feel what the majority are anticipating or what actions they will take.

For now, i will keep a lookout on how Cordlife performs for the first few days of its 'debut'. If it is doing well, i trust on my hunch that the few upcoming IPOs will reap me and my readers handsome profits :D

What a Run on the Euro Could Mean for Precious Metals Prices

What a Run on the Euro Could Mean for Precious Metals Prices

We haven't heard much out of Europe lately. In fact, since Greece secured another bailout a couple weeks ago, it's been downright quiet. Oh sure, there are some whispers about Spanish unemployment and some new Italian tax program. But for the most part, Europe has surrendered the headlines… And it's all quiet on the western front. But not for long… The euro looks like it's ready to tumble toward new lows for the year. Take a look at this 60-minute chart of the euro currency ETF (FXE)…   FXE is forming a bearish head-and-shoulders pattern. This happens when a chart hits a new high – which FXE did in late February – but then fails to make a higher low. The next rally attempt fails to make a new high, and the chart starts to roll over – which is what's happening now. FXE does have support at about $129.50. But a drop below that level projects a move all the way down to $125 – which would be a new low for the year. The interesting thing about this chart is FXE is forming a short-term head-and-shoulders topping pattern on its 60-minute chart (getting bearish) as both gold and silver are forming longer-term head-and-shoulders bottoming patterns on their daily charts (getting bullish). But the gold and silver patterns need one more push lower to create symmetry on the charts. Weakness in the euro supports a strengthening dollar. A strong dollar usually leads to lower precious metals prices. So if the euro falls in the short term, we might get the necessary push lower for gold and silver to set up their longer-term bullish patterns. It looks like everything is just about ready to come together. Keep an eye on the euro, and watch for bad news out of Europe to take over the headlines once again. That'll be the first sign that it's time to re-enter the gold and silver markets.

A strong reason to Buy OSIM

I have been a strong advocate of OSIM because of its strong business fundamentals and undemanding valuation.
Furthermore, it has not been on the radar of many other investors yet, signalling a high chance for exceptional capital gains moving forward.


<---- At the left side is the annual report i got from buying the OSIM shares. (Just to show you I practise  what i preach :D)


But more importantly, below is an analyst report from Kim Eng which i wish to share with you:


OSIM International is renowned for its massage chairs, the core of its original business.  However, over the next decade, we see the company blazing the same path in lifestyle products as Francebased LVMH did for fashion in its initial years, amassing more than 60 brands through a series of M&A activities to become the luxury fashion powerhouse it is today. 


OSIM is in pole position to become the king of lifestyle brands in Asia, a crown still up for grabs. It is already the undisputed brand leader for massage chairs. As the master franchisee of GNC, it has pushed this health and nutrition brand into a dominant market position in Singapore and Malaysia, and is replicating this model in China through its own RichLife brand. 


New acquisition TWG Tea is poised to revolutionise the way Asians perceive tea drinking. Underlying this relentless pursuit of growth is an unrivalled know-how in Asian retail and a passion for brand building. Companies with true brand equity are able to command pricing power and sustainable margins. OSIM’s margins are comparable to any global retailer, including Hermes and LVMH.


While luxury brands are scrambling for a foothold in Asia, OSIM already has extensive retail experience in North Asia and a favourable exposure to this market, making it the envy of global competitors. Yet, it is trading at more than 40 per cent discount to them. 


Contrary to popular perception, OSIM has always been a business that generates very strong cash flow, thanks to its high-margin products and low working capital requirements. While there have net cash position today and paying out healthy dividends. We believe the likelihood of impending M&As has been a stock price overhang, given the negative experience with OSIM’s purchase of Brookstone. But we beg to differ. OSIM currently has a much stronger balance sheet and profit base to absorb new businesses, lowering execution risk substantially. It is the cheapest high-end brand-owner in the region, in our view.

Summary

In conclusion, you can just take a look at all the favourable points highlighted in blue and you will know why OSIM is poised to be growing successfully in the next few years at least. Thus, a strong business will definitely paves the way for an increase in the stock price when everyone sees how OSIM can be the next stock that everyone will chase.

Why the P/E Ratio Might Be Useless.. and What can Replace it?

Countless investors -- individuals and professionals alike -- spend their time seeking out cheap stocks with very low P/E ratios. Sometimes the stocks are cheap are a reason, they are not in favourable industries or have poor fundamentals hidden within. And as a result, the stock prices stay stagnant... sometimes for years! (That is what happened to me once!).

In addition, this creates the notion that stocks with high P/E ratios should be written off as expensive (meaning opportunities often lie hidden in this group).

The problem, though, is that a company with a high P/E ratio may not actually be expensive. A company with a P/E ratio of 50 -- or higher -- may be cheap. Which means...

For some companies, the P/E ratio is meaningless.

It's a bold statement, but stick with me.

You see, the problem with the P/E ratio is that it's a retroactive metric. It pits a company's current market cap against its trailing-12-month profit. But when you buy shares of a company, you're not purchasing its history -- you're purchasing its future cash flows. What matters is what the company is going to do -- not what it has done.

This is important because there are a slew of companies whose P/E ratio may seem high, but their growth potential is so massive that buying them is still a bargain. And i am talking about High-growth innovative companies that shake up the status quo.

Let's take a look at some examples:

1) Apple (Nasdaq: AAPL ) . Though its P/E ratio is currently just 16, this wasn't always the case.

In fact, during the first quarter of March 2003, Apple's P/E reached as high as 297. Yet had you bought shares of the company then, you'd be up over 7,300% today!

Apple achieved this remarkable success by continuing to innovate, bringing more and more products to market (the iPod, the iPhone, the iPad) that people didn't even realize they needed.

And although it's a $500 billion company today, its stock could still be a smart buy. If Apple continues to innovate and offer enticing products that consumers eagerly snap up, it could easily become a $1 trillion company -- or larger.

2) Intuitive Surgical (Nasdaq: ISRG ) . Its P/E ratio ran as high as 299 during the last quarter of 2004. Yet had you bought shares then, you'd be up more than 1,600% today. A $10,000 investment would be worth over $170,000.

Intuitive Surgical came to market with an innovative medical machine that allowed doctors to perform minimally invasive surgeries on patients. It was a win-win proposition: It allowed more precision for the doctor, meant a quicker recovery time for patients, and less risk for both parties.

Its machines were expensive, but it didn't take long for Intuitive Surgical to convince the medical community of the merits of its device. Now it can continue to find new surgical uses for its machine -- or develop ancillary devices within its niche.

And that's why -- even trading for 42 times earnings today -- Intuitive Surgical could still be a smart investment.

3) Amazon.com (Nasdaq: AMZN ) , the world's largest online retailer, has a P/E ratio of 134. On the face of it, this seems insanely high for a company with a market cap of more than $80 billion. Yet Amazon is furiously building out its empire -- both through acquisitions like Zappos and Diapers.com and through expanding its platform with devices like the Kindle. Not to mention, it also has a growing presence in the cloud computing niche, leasing out server space and offering virtual storage.

So what exactly can replace it?

The previous paragraphs come with a meaning - and that is... do not judge whether a stock is cheap or not using the P/E ratio. Instead You should use a less frequently used indicator known as PEG ratio.

PEG takes into account the growth rate of firms, and just like the examples shown, they become cheap when you value them using PEG.

So.. How does it work?

A crude analysis suggests that companies with PEG values between 0 to 1 may provide higher returns (the closer to 0 the more undervalued). The PEG Ratio can also be a negative number, for example, when earnings are expected to decline.This may be a bad signal, but not necessarily so. Under many circumstances a company will not grow earnings while its free cash flow improves substantially. 

Here, as in other cases, analyzing the components of PEG becomes paramount to a successful investment strategy. Thus, don't just stop at P/E ratios from now on... move a step in depth to calculate the PEG ratio and you can get all the undervalued stocks and handsome $_$ to come!

HUAT AH!

If you have been following my posts, you would have also joined in the fun and reap such handsome gains in just a few weeks or a day!

I have been busy the week before and always wanted to write a post on why buy MDR & Sarin...

Furthermore, on why the market conditions are favourable for you to invest right now: http://kissinvesting.blogspot.com/2012/03/euro-worries-wanes-beginning-of-global.html :)

Euro worries wanes, Beginning of a GLOBAL Stock Markets Recovery?

**The world’s biggest banks are less pessimistic about the euro as the European Central Bank provides unlimited cash to the region’s financial system, Germany may avoid recession and Greece looks to complete the biggest sovereign debt restructuring in history. 
You can read it more here: http://www.bloomberg.com/news/2012-03-12/euro-weakness-waning-as-draghi-cash-prompts-forecasters-to-drop-bear-views.html

Here it goes again...

Whenever bad news come during a bullish market, people shrug it off and newspapers continue to say that things aren't that bad & Stocks are looking even cheaper! However, when GOOD news come during a bearish market, people are slow to digest it and get back to investing in the stock markets due to the pro-longed fears that things aren't over yet.

There is the wrong Herd mentality almost 90% of the stock (investors/speculators?) have! They should start investing when the WORST is over... and things aren't going as bad as they are. You only require PATIENCE and the determination to hold onto the stocks and ignore all the buzz buzz going around you..

So.. in a nutshell, it's the right time to invest NOW. Greece isn't going on a default, and basically i don't really care about how they are going to solve the problems. I just know things are not going to be WORSE than what has happened before [no default = good news!] and i rather be the early bird to invest at the start of the trend... 

As the early bird gets the worms!

REITs: Both Pros & Cons

Recent newspaper articles have increasingly laid blame on real estate investment trusts (REITs) for the rising occupancy costs in retail and industrial properties. Here is an article i plucked out from todayonline.com about Reits so that people may gain more understanding about it.

REITs, in their relentless pursuit of superior shareholder returns, have generally been very proactive and efficient in raising the rental rates of their investment properties. This is in the best interests of REIT shareholders; unfortunately, it also results in higher rental costs, which eventually filter through to the inflation basket.

However, while potentially resulting in higher inflation, REITs also have their benefits.

First, the introduction of REITs has provided a cost-effective way for investors, especially the retail investors, to gain exposure in a pool of diversified commercial or industrial properties. Before REITs were introduced, ordinary investors were largely shut out of commercial and industrial real estate due to the generally large amount of capital involved. REITs have helped to attract retail money into these previously inaccessible property sectors, thus expanding the investment options of ordinary Singaporeans.

This, in turn, has boosted the supply of commercial and industrial properties in Singapore. Even if REITs mainly purchase existing buildings from property developers, they effectively free up capital in the property developers, who then gain the incentive to build new commercial and industrial buildings. In fact, many property developers who are large REIT sponsors in Singapore, have been recycling the capital they generate from the sales of their investment properties to their sponsored REITs to build new retail properties. This helps to create a more vibrant retail mall scene in Singapore. One might even say REITs have helped to boost Singapore's profile as a tourist and commercial hub.

Second, REITs also help to improve the quality of existing commercial and industrial buildings. Due to their focus on shareholder returns, REITs are normally very active in enhancing the premises, facilities and services of their investment properties whenever the opportunity arises. This has resulted in better quality investment properties (especially the retail malls) that are more exciting to visit. For example, many retail malls (such as Plaza Singapura and IMM Building) have been successfully refurbished and enhanced by their REIT owners.

Last but not least, the Singapore REIT sector was created to provide an additional high-yielding financial instrument for Singaporeans to invest their savings in order to secure a steady income upon retirement. This is especially important given Singapore's ageing society. The sector has developed well over the past decade with more than 20 REITs being listed currently, offering investment opportunities into different investment property asset classes. In fact, the Singapore REIT sector is currently the second-largest in Asia, just behind Japan, another ageing society.

Thus, like in most situations, the case for or against REITs is not a straightforward one as it entails both social and financial benefits and costs. I guess the key question is whether Singapore as a society values the social and financial benefits of REITs more than its costs.

by Tan Chin Keong

Analyst at UBS Wealth Management Research.

In my opinion, Overseas markets have been doing very well with the inception of REITs and has been there since 10+ years ago. Singapore is new to this field and a few teaks here and there will balance out everything. Nonetheless, i believe that one should still take advantage of the high dividend yield REITs are providing (it's so much better than putting your money into bank savings account where your money is eroding each day!)