Warren Bufettf & Ray Dalio Advices

"You've got to do the opposite," Dalio said. "It's when you're not scared you probably want to sell and when you are scared you probably want to buy.

"The greatest mistake of the individual investor is to think that a market that did well is a good market rather than a more expensive market. And that a market that did badly is a worse market ... rather than a cheaper market," he explained.

"We spend hundreds of millions of dollars a year to get an edge, and others do that too," Dalio said, referring to Bridgewater, which manages about $160 billion. "So it's very difficult for the individual investor to assume that he [or she] can pick something better."

Instead, create a diversified portfolio and hold steady, advised Dalio. "The best thing you can do is know how to have a balanced portfolio ... because you ain't going to win that game."

"That was very valuable advice that if you can discipline yourself and your relatives to follow over the next substantial number of years will be worth a lot of money to you," he said.

Buffett emphasized that holding onto investments long-term is crucial to having them pay off. "The money is made in investments by investing and by owning good companies for long periods of time," the Berkshire Hathaway CEO told CNBC. "If they buy good companies, buy them over time, they're going to do fine 10, 20, 30 years from now."

He continued: "What investors then need instead is an ability to both disregard mob fears or enthusiasms and to focus on a few simple fundamentals. A willingness to look unimaginative for a sustained period — or even to look foolish — is also essential."

Dalio, the founder of investment firm Bridgewater Associates who is worth an estimated $14.6 billion, agrees. Though it's tempting to sell when the market begins to drop, he says, giving in to your fear is not a sound strategy.

"You can not possibly succeed that way," Dalio said at the Harvard Kennedy School's Institute of Politics. "You've got to do the opposite. It's when you're not scared you probably want to sell, and when you are scared, you probably want to buy."

Both investors say that the best way to invest successfully is by not trying too hard to anticipate market fluctuations and by staying calm despite them.

Coutersy of CNBC.

COE is dropping, but car price is not dropping?

It can predict that COE for the coming months will be in the down trend. However, the car price seems not follow, why?

I have done some research and study, the car price compare to last year where the COE is still above 50,000, the selling price is lower than now. Although it is not significantly lower, it does show that the car maker needs to maintain their margin, the lowest price might just soon ve around the corner.

Taken into account of 2018, Singapore government will implement new Vehicular Emissions Scheme (VES), the consensus of car price across the board, whether it is category 1 or category 2, will have 10,000 or more increased.

From another perspective, economy outlook seems not in the bright side and facing some downside risks, such as  US to shrink the balance sheet, tightening of monetary policy of China as well as high mounting debts of China banking system.

In this scenario, do you think it is worth ro buy new car now?

Top 10 firm in 2022

Top 10 firm in 2022

Courtesy of Eddie Tam,  founder and CEO of Central Asset Investments.
His predictions, along with a table below: 

Berkshire Hathaway will drop out of Top 10

Berkshire Hathaway CEO Warren Buffett is now 86 years old, and he would probably have retired in five years from now. Buffett has had high praise for his colleague Ajit Jain since 2013, and market expects Jain to be a leading candidate to take over as the next Berkshire chairman. While there may be good options, I however believe Buffett’s achievement and wisdom can be hardly matched by any successor in the future.

Saudi Aramco will take the place of ExxonMobil

Saudi state-owned oil company Saudi Aramco is planning to go public and the country’s deputy crown prince Mohammed bin Salman has pegged the value of Aramco at US$2 trillion. Aramco’s plan is to sell 5 percent of its shares publicly in an IPO worth around US$100 billion – making it the world’s biggest IPO by market capitalization if things go according to plan.

ICBC will replace J.P. Morgan

China’s efforts toward financial deleveraging and cracking down on shadow banking would favor the nation’s Big Four lenders. For now, ICBC has a market capitalization of around US$250 billion with a price-to-book ratio of 0.82, while J.P. Morgan is worth US$300 billion with PB ratio of 1.31. When investors show renewed confidence over China’s economy, ICBC’s PB ratio will exceed 1, and the Chinese bank will surpass J.P. Morgan in market cap.

Alibaba will outpace Tencent

Alibaba is China’s largest provider of public cloud computing and is well ahead of Tencent and other rivals. Also, investors are gearing up for the IPO of Ant Financial, which could add US$30 billion to Alibaba valuation. With a lower P/E (28) and faster revenue growth pace (2017Q1 – 60 percent), Alibaba’s market cap is likely to beat Tencent by 2022.

Apple will be struggling to survive in Top 10

Apple has lagged behind Amazon and Tesla in the next generation high-tech race, e.g. artificial intelligence and electric cars. The lack of self-developed core technology has remained the Achilles heel of the company; Apple still relies on Samsung and other rivals for major components including OLED displays, DRAM and NAND chips. Apple is said to be designing its own underlying technology for Graphics Processing Unit (GPU), and potentially pull off a takeover of Disney or Netflix. However, I still remain conservative about Apple’s future.

Potential dark horses for the Top 10 list

1. Nvidia

Nvidia dominates the GPU market with a market cap of over US$80 billion. The company believes the total addressable market (TAM) of its GPU will approach US$66 billion after four years, a nine-fold increase from US$6.9 billion last year. Nvidia will be a strong candidate for the Top 10 list if it can maintain its market share. But the major concern is its big-name clients — Apple, Google and Tesla — are all stepping up efforts to design their own chips and compete directly with Nvidia.

2. Tesla & Uber

As the most valuable US car maker, Tesla is worth about US$50 billion now. Given the undeniably high valuation, it will be a demanding task to boost the market value ten-fold in next ten years. A better way is to merge with the “would-be” competitor Uber (valued at over US$70 billion in private market). The synergy of these two leading players teaming up will be exciting, but success will depend on whether the two aggressive tech tycoons, Elon Musk and Travis Kalanick, can get along well.

3. Ctrip & Priceline

I have a very positive outlook for online travel agency (OTA) sector. Total addressable market of China OTA will reach US$10 billion by 2020, a 3.5-fold increase from last year. It will be tough for Ctrip to join the Top 10, but an opportunity arises if Ctrip merges with Priceline (valued at about US$90 billion).

4. SoftBank & Vision Fund

The Japanese firm is worth around US$84 billion, with a considerable holding company discount. A potential merger between Sprint under SoftBank and T-Mobile in US would be a great booster for SoftBank’s market cap. Besides, SoftBank recently set up the world’s largest private-equity fund, Vision Fund, backed by Saudi Arabia, Abu Dhabi and technology giants such as Apple and Foxconn. The massive US$100 billion fund could invest in technology enterprises including Nvidia and ARM. If we take Vision Fund into account, SoftBank group can achieve US$1 trillion in market worth.

All the tech giants mentioned here are unlikely to face a threat from startups. The single greatest obstacle for the world’s largest tech firms, however, would be antitrust laws in major markets such as China, US and Europe.

This article appeared in the Hong Kong Economic Journal on May 23

Translation by Ben Ng

[Chinese version 中文版]

– Contact us at english@hkej.com

BN/RC

Is the financial crisis coming?

On 8/5/17, from the CNBC and according to Goldman Sachs, 

• Their model shows an increased 31 percent chance for a U.S. recession in the next nine quarters. That number is rising. But it's a good news, bad news story, and the good news is there is now a two-thirds chance that the recovery will be the longest on record.

• The current expansion has already lasted 95 months, now the third-longest in U.S. history in 33 business cycles going back to 1854, the economists said.

• The Goldman economists also say the medium-term risk of a recession is rising, "mainly because the economy is at full employment and still growing above trend."

On 9/5/17, Goldman Sachs CEO Lloyd Blankfein says the market's low volatility is worrisome.

• "I don't know what brings us out of the doldrums, but I do know this is not a normal resting state," Goldman Sachs CEO Lloyd Blankfein said.

• The CBOE Volatility Index, widely considered the best gauge of fear in the market hit its lowest intraday level since December 2006 on Tuesday.

• Equities have been on a tear lately, trading at record levels, but the S&P 500 has only posted two moves greater than 1 percent in 2017

On 8/5/17, New Bond King, Jeff Gundlach makes bets against U.S. stocks, for emerging markets. He is long the iShares MSCI Emerging Markets ETF and short the SPDR S&P 500 ETF specifically.

It is estimated that the two ETF might have substantial adjustment, which the time frame should be at least about six months time. This indicates that at the end of the year, the trigger point for major correction will be inseparable from the two: the Chinese factors and the uncertainty when the Federal Reserve starts trimming the balance sheet.


What do you think?