Jul
29
2009
0

2009-07-29 Stock tips for retail investors

Source:  The Star, Malaysia
Personal Investing column by Ooi Kok Hwa

Ooi Kok Hwa

Highlights

1.  In the stock market, there are two main types of investors – smart investors and retail investors.

2.  Smart investors make money; retail investors suffer losses most of the time.

3.  As the market saying goes, only one out of 10 investors make money.

4.  Some retail investors believe they can make quick money.  They also believe the stock market is the best way to accumulate wealth fast.

5.  However, due to lack of proper financial training, investing knowledge and intelligence, they always find themselves at the losing end.  When they are excited, the market may be nearing its peak.

6.  When they are suffering losses, they lose patience and start cutting their losses.  The market may be touching bottom, and in fact, that is supposed to be the best time to invest.

7.  A majority of retail investors seldom pay attention to the stock market.  They only start doing so when the newspapers or TV news headlines show that the market is touching a new high.

Driven by greed and the thought of making fast money, they will follow their friends or tips from brokers to invest without paying much attention to the fundamentals of the stocks.

Comments

1.  I am a fan of Ooi Kok Hwa’s investing column.  He offers useful and practical advice as well as guidelines for stock investors, especially those who are new to the stock market.  He explains concepts in a simple and easy-to-understand manner.

2.  In today’s article he explains clearly why 90% of investors lose money.

Learning message:  Emotional control and investing knowledge are essential to success in stock market investment.

Jul
28
2009
0

2009-07-27 Financial woes among excuses made by offspring who dump aged parents

Source:  The Star, Malaysia

Highlights

1.  “Those who abandon their parents are being extremely cruel,” Malaysia’s Women and Family Development Minister Datuk Seri Shahrizah Abdul Jalil said.

2.  Old people are simply abandoned at hospitals or on the streets.  Some are left unattended at old folks homes.

3.  In Singapore, the Maintenance of Parents Act 1996 compels children to care for their aged parents.  It comes with a jail term of up to six months for offenders.

4.  Chinese make up a huge number of old folk abandoned at welfare homes.

5.  Financial difficulties, lack of filial piety and responsibility, and the need to create a distance are among excuses used by children to abandon their parents.

6.  This trend has been increasing in recent years.  Some feel that their parents are a burden, especially parents who are bedridden or with an illness.

7.  Some children say they could not afford to pick up their parents from the hospital as they could not afford to do so, and asked the authorities to look after their parents.

8.  Even charity homes cost between RM600 to RM1,000 a month.

Comments

Aged parents

1.  It is hard to imagine that children would abandon parents who gave birth to us, fed and clothed us, educated and cared for us.  Such people should do some soul-searching.

2.  The fact is that a lot of people are struggling to survive themselves, let alone carry the financial burden of taking care of their parents.

3.  There is a popular saying nowadays, “In the olden days the head of the family is able to take care of many children, but today the total income from many children is not enough to feed the head of the family who is now unable to work.”  What has gone wrong?

Insurance agents use another saying to convince prospects, “Mong chi seng lung, lung pin chung.”  In Cantonese, it means parents hope their children will be dragons, it turns out that the dragon is actually a worm.  Prospects should just take out a policy to protect their old age, instead of relying on their children.  That is actually wise advice.

4.  Old people are not the only ones to suffer.  Children, too, often had to bear the brunt of work and financial pressure of young parents.  They may be shouted at or even beaten up if things did not go well at the office for the day.  Their stress prove to be too much and had to be released on their kids or even their pets.

5.  Start planning for a passive source of income today.  It will not only protect you; it will take the pressure off your family as well.

6.  While you may take time to learn about property or stock investing, you may want to consider saving in fixed deposits or insurance policies.  Insurance policies today are getting very innovative.  They allow you to save and accumulate your money at attractive rates.

Also, never look down on fixed deposits, even though the rates may be ridiculously low.  Why do I say this?  Simply because investors who are desperate to make money fast (now hurry, I’m getting old, there is not enough time), take their FDs and place them in properties and shares.  Due to their lack of expertise, the money quickly disappeared into some black hole, never to be seen again.  Such investors are left to regret for the rest of their miserable lives.

Learning message:  The lack of financial education has dire consequences.

Jul
28
2009
0

A Brief History of Slavery

This post is dedicated to all my friends with low self-esteem, who think they will never amount to anything much.  I sincerely hope and pray that the following story will touch their hearts and set them free from the invisible chains that bind them, so that they can find their rightful place in our money world.

Financial intelligence is only 20% technical skills.  The difference between success and failure, between the rich and the poor, is in the 80% which is emotional control and discipline.  The fact that more than 90% of the world’s population belongs to the poor and middle class suggests that this group of people may be subjected to some form of unconscious fear or mental bondage.  As you read on you will agree that this is such a tragedy.  The victims at that time usually had no hope of freedom whatsoever.  But today, we have healthy and educated individuals who use the power of their brain to tell themselves everyday that they will not succeed in whatever they do.

The following account is not fiction.  It is to the best of my knowledge as close to the truth as the events were recorded.

Slave Cell

In the fifteenth and sixteenth centuries, the Europeans began colonising the Americas.  They had one big problem.  They found that many of their great projects were being hampered due to a shortage of labour.  The indigenous people (or bumiputras as they are called in Malaysia) were not prepared to work for wages.  Neither did they make good slaves, as it was easy for them to escape and live among their own people.

In Africa, however, the slave trade was already well established.  In most places in the world, an informal system of slavery had been established from the earliest times.  Those that lost a war became slaves to those who won.  Slaving then became a commercial enterprise.  As early as 650 AD, Arab slave traders began taking African slaves to Arabia.  In 1444, the Portuguese started taking slaves from West Africa.  When the Americas opened up, West Africa became the natural place to find cheap labour.

At first, European ships would sail to the West African coast with manufactured goods that they would exchange for slaves who had been brought to the beaches by the local chieftains or traders.  The slaves would be transported to West Indies where the slave markets were.

American ships sailed out of Boston, Massachusetts and Newport, Rhode Island, and were called ‘rum boats’ as they carried rum to Africa.  The cargo was then exchanged for slaves.

The journey across the Atlantic was called the “Middle Passage”.  (If you Google “middle passage” you will get lots of references on today’s story.)  Over 11 million Africans made the trip.  Some put the figure much higher.  This compares with over 18 million Africans taken eastwards by Arab traders.  Nearly half of those who went to the New World were carried by the Portuguese and were taken directly to Brazil.

By the eighteenth century, transatlantic slave trade was at its peak.  Slave ships were practically floating coffins.  As there were rarely enough sailors to control the slaves, they tried to purchase Africans from different nations, so they could not easily organise a mutiny.  Some captains picked out a few slaves to guard over the others, armed with a whip.

Slaves were shackled in pairs with leg irons.  Before they were purchased, they were given a medical examination to make sure they were healthy.  Special attention was paid to their teeth, and any signs that they were aging.  Then their heads were shaved, their clothes taken away, and they were branded with a red-hot iron.

Once on board, the men were kept chained until the ship sailed, and sometimes for the entire voyage.  Women and children were allowed to go free.  On some ships sexual relations with the captives were forbidden.  On most, the young women and girls were repeatedly raped by the sex-starved sailors.

The slaves were housed in a cargo hold.  This was about five feet high, so it was impossible for most to stand upright.  A worse method of cramming in even more of the human cargo was devised:  a shelf six feet wide around the hold to hold a second tier of slaves.  In larger ships, there were two shelves.  These allowed slaves 20 inches of headroom.  Slaves were packed in so tightly that they had to lie on their side rather than on their backs.

Some slaves were flogged by the sailors.  When one man jumped overboard to escape a flogging and was rescued from the sea, he was asked if he was not afraid of being eaten by sharks.  “I would prefer that to life on this ship,” he said.

Once out at sea, the slaves were brought up on deck every morning.  Their shackles were attached to a chain running down the centre of the deck to stop them jumping overboard.  A sailor with a whip may then ask them to exercise.  This was a mixed blessing.  The heavy leg irons caused bruising and bleeding around the ankles, but the captains dared not let the slaves take them off for obvious reasons.

The slaves were fed two meals a day of coarse porridge.  In bad weather, they would have to stay in the stuffy, dark, stinking hold day and night.

Ship’s surgeon Alexander Falconbridge, who wrote several books about his experiences, said that each man had less space than he would have in his coffin.  It was impossible to move through the hold without walking on someone.  He would take off his shoes to avoid injuring anyone.  Slaves would bite his feet if they came near their faces.

The slaves had to move about to try and reach the lavatories – which amounted to no more than two or three large buckets for 100 men.  Many suffered from acute dysentery and died.  The smell of slave ships was so foul that other ships would sail to windward of them.

Africans were particularly vulnerable to smallpox.  Epidemics raged through the holds.  Others died of no apparent cause.  Some went mad and other managed to kill themselves.

Some slaves believed that if they died on the voyage, their spirit would return to their homeland, making suicide an attractive prospect.

More commonly, death came from what the slavers called ‘fixed melancholy’.  This had no apparent cause except for the extreme misery of the conditions.  Slaves simply lost all hope of living.

Although slavery is history now, the invisible chains of slavery are as real today as it was a few centuries ago.  Many poor people have accepted their fate just as the slaves accepted theirs in those days.  They have lost all hope of escaping from their poverty in their lifetime.  Their ‘captain’ has condemned them to eternal poverty by telling them that ‘money makes money’, and that if they had no money in the first place, they should be contented to remain poor forever.

Break free today.  The chains are not real.  They are but a figment of your imagination.  Financial freedom is real, and it is well within your grasp.  Take control of your destiny.  You can join the ranks of the rich just by understanding and accumulating assets.

Physical slavery has long been destroyed.  Mental slavery has also been destroyed.  Believe it.

Freedom

Jul
27
2009
0

2009-07-13 Snippet Get-rich-quick schemes cause RM845 million in losses

This news made the headlines for the day, although news like this could hardly be called news.  We hear of people getting conned every other day.

What does this tell us?  Many things, I’m sure.  For one, it goes to show how popular these schemes are.  Judging from the amount of money involved, we can guess the number of people involved.  Assuming a victim loses an average of RM10,000, 84,500 people would be involved.

Jul
27
2009
0

2009-07-04 Psychologists say positive thinking doesn’t work for all

Source:  The Star, Malaysia

Highlights

Light

1.  Repeating positive statements such as “I am a lovable person” or “I will succeed” makes some people feel worse about themselves instead of raising their self-esteem, a study showed.

2.  The study cites a popular self-help magazine that advises its readers to:  “Try chanting:  I’m powerful, I’m strong, and nothing in this world can stop me,” but says the practice doesn’t work for everyone.

3.  Positive self statements make people who are already down on themselves feel worse rather than better, found the study conducted by psychologists Joanne Wood and John Lee of the University of Waterloo and Elaine Perunovic of the University of New Brunswick.

4.  “I think what happens is that when a low self-esteem person repeats positive thoughts, they probably have contradictory thoughts,” Wood said.  Wood urged self-help books, magazines and TV shows to stop sending a message that just chanting a positive mantra will raise self-esteem.  “It is frustrating to people when they try it and it doesn’t work for them,” Wood said.

Comments

1.  Some people believe they will succeed, no matter what.  Their belief is so strong that it overcomes hardship and even failure.  Such belief graduates into knowledge. At one point in time, they cease to believe; they just know.  It is their destiny.

When Warren Buffett told his wife before he was rich, that he would one day be very rich, even his wife did not believe him.  Well, that didn’t bother him one bit.  He just knew he would be a multi-billionaire.

2.  Positive thinking helps reinforce what they already knew.  Chanting mantra helps to remind them they are on the path to success.  But such people do not actually need positive thinking nor mantras.

Learning message:  You are born to live a life of abundance and to succeed in our money world.  Be enlightened today.

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