Financial Planning The Right Way. Write down your goals, don't get emotional, and stay on course.

http://www.youtube.com/watch?feature=fvwp&v=e0G_ZKxbECM&NR=1

Malaysia National debt at RM257.2b in 2011

May 08, 2012

KUALA LUMPUR, May 8 — The country’s national debt at the end of last year stood at RM257.2 billion or 30.2 per cent of Gross Domestic Product (GDP), the Dewan Negara was told today.

Deputy Finance Minister Senator Datuk Donald Lim Siang Chai said the country’s national debt or external debt was debt borne by the country following loans obtained by the government and the private sector from overseas sources.

“It comprises the external debt of the federal government, non-financial public enterprises and private sector,” he said in reply to Senator Datuk Paul Kong Sing Chu and Senator Datuk Abdul Rahman Bakar.

Lim said the federal government’s total debt was RM456.1 billion or 53.5 per cent of GDP.

“Of the total, RM438 billion or 96 per cent was domestic debt while the balance RM18.1 billion or four per cent was external debt.

“The low external debt was in tandem with the government’s policy to give priority to domestic borrowing as the market had high liquidity, the cost of  borrowing was lower, and to minimise foreign exchange risk,” he said.

Lim said the federal government’s domestic debt sources were treasury bills, investment certificates, government securities, the Housing Loans Fund, issuance of Sukuk Simpanan Rakyat and Sukuk 1 Malaysia.

He said the holders of such instruments comprised financial institutions, insurance companies and institutions like Employees Provident Fund and Social Security Organisations.

He said sources of external debt were the international capital market through issuance of global sukuk, draw down of project loans from multilateral institutions like the World Bank, Asia Development Bank and Islamic Development Bank, and also bilateral borrowing in foreign currencies such as the US dollar, yen, euro, Canadian dollar and dinar.

“The government is committed to ensuring the debts are repaid according to schedule and so far, repayments are in order.

“This is the result of a prudent debt management approach. Last year, total debt service was RM17.7 billion or 9.7 per cent of the management expenditure,” said Lim.

In reply to Datuk Syed Ibrahim Kader, he said specifications for the new coins were in line with the finding of research conducted by Bank Negara Malaysia.

“The research was done between January and April 2009 covering discussions with the public, traders and other parties such as banking institutions and cash machine operators.

“The study’s crucial finding is that people prefer smaller and lighter coins compared with the previous ones,” he said.

He said the trend to reduce the size and weight of coins was among major strategies adopted by central banks in enhancing technical specifications when introducing new coins. — Bernama

Online Porn Is Huge. Like Really, Really Huge. Who Knew?

Online Porn Is Huge. Like Really, Really Huge. Who Knew?
By Ashlee Vance on April 05, 2012

The good folks at ExtremeTech took it upon themselves this week to get at one of the Internet’s crucial questions—just how big are porn sites these days? The answer? Ron Jeremy big. To study porn sites, ExtremeTech turned to the DoubleClick Ad Planner tool from Google (GOOG). It’s a useful website where you can peek at information gathered by ad-serving cookies about how much traffic a website gets, the age and income of visitors, and the amount of time people spend on a site.

According to this tool, the online porn kingpin Xvideos feeds up 4.4 billion page views per month. That’s about 10 times as many as the New York Times and three times as many as CNN.com. YouPorn—another site packed full of stimulating content—notches 2.1 billion page views per month. And while people spend a few minutes per day on news sites, they tend to spend 15 minutes or more on porn sites, which would seem to say something rather definitive about, er, male stamina.

“But it’s not just men on the sites,” you shout. True, although the top porn sites count men as about 75 percent of their visitors. Breaking the stats down further, about half of the visitors make between $25,000 and $50,000 per year, while only 2 percent earn more than $150,000 per year. According to Google, the other interests of Xvideos visitors include Latin American music and gangs and organized crime, while YouPorn visitors like networking equipment and family films, so it’s an eclectic bunch.

While anyone can dig through these numbers, ExtremeTech did a nice job of adding some context to the incredible amount of data served up by porn sites. According to the Google estimates, Xvideos would record “29 petabytes of data transferred every month, or 50 gigabytes per second. That’s about 25,000 times more than your home Internet connection is probably capable of, which is a couple of megabytes per second.” Sliced another way, Xvideos will “serve up 50 gigabytes per second, or 400Gbps,” ExtremeTech writes. “Bear in mind this is an average data rate, too: At peak time, Xvideos might burst to 1,000Gbps (1Tbps) or more. To put this into perspective, there’s only about 15Tbps of connectivity between London and New York.”

Someone at YouPorn chatted with ExtremeTech and said the Google estimates are way below actual totals. YouPorn stores more than 100TB of porn and feeds up about 28 petabytes per month.

These types of figures put the top porn sites in a class that only Microsoft (MSFT), Google, and Facebook really surpass. My takeaway from this is that companies such as Dell (DELL) and Cisco Systems (CSCO) make a ton of money selling gear to the top porn sites and that these companies must have some very savvy engineers.

Vance is a technology writer for Bloomberg Businessweek.

The Signature PE

The signature PE is the somewhat unique price-earning ratio that is tied to a company.  Over time a company consistently attracts investors at a certain multiple of earnings.

Is this rational?

"Would your car's value change so much?"
Market price volatility is the friend of a value investor.

The Demand for Chocolate Slumps

European cocoa grindings-a key ingredient in the production of chocolate-fell by 18% in the second quarter of 2012, the largest quarterly drop for 12 years amid worsening consumer demand in Europe and Asia. Dow Jones's Neena Rai reports. 7/12/2012 8:06:52 AM2:36

Any price - and therefore P/E - movements that is not related to the company's earnings is transient.

The stock market is governed by a diverse set of influences.  And just as the sea is, it is predictable over the long term but not over the short term.

Probably the most widely watched reason for the long-term fluctuations of the price and P/E is the rise and fall of the stock market itself.  This can be a function of the economy's volatility.  The economy is battered by the rise and fall of interest rates, by inflation, and by a variety of factors that drive consumer confidence or buying power up or down.  Actual changes in the economy itself will cause longer-term changes in the market and the prices of its individual stocks.  Speculation about such changes has a shorter-term effect.

In the shorter term, there are the ripples and wavelets.  Every little utterance of a government official or company offer, insider buying or selling (which may or may not mean anything), rumour, gossip, and just about anything else can influence the whims of those on the street.  Many people will use these stories to try to make or break a market in the stock.

Over the life of a company, its fair P/E - the "normal" relationship between a company's earnings and its stock's price - is relatively constant.  It does tend to decline slowly as the company's earnings growth declines, which happens with all successful companies.  For all practical purposes, however, that relationship is remarkably stable.  And for that reason, it's also remarkably predictable.

When a company's earnings continue to grow, so will its stock price.  Conversely, when earnings flatten or go down, the price will follow.

The little fluctuations in the P/E ration above and below that constant (fair) value are not so predictable because they are all caused by investor perception and opinion.  Think of them as the winds that blow across the surface of the sea.

The broader moves above and below the norm are the undulations that are typically caused by the continuous rising and falling of analysts' expectations.  When a company first emerges into its explosive growth period, the analysts expect earnings to continue to skyrocket.  Earnings growth estimates in the 50% range or more are not uncommon.

As the company continues to meet these expectations, investor confidence booms along with it, and more investors pay a higher and higher price for the stock.  The P/E rises as a meteor right along with the price.  The faster the growth, the higher the P/E.  This does nothing to alter the value of the "reasonable or fair" P/E multiple.  It just means that investor confidence has risen well above that norm and that there will eventually be an adjustment.

Sure enough, one fine day when the analysts' consensus called for growth of 45%, the company turns in a "disappointing" earnings growth of only 38%.  The analysts start wringing their hands because the company has not met their expectations, and some fund manger sells.  Next, all of the lemmings on Wall Street follow suit.  And not long thereafter you get a call from your broker telling you that you've had a nice ride, you've made a lot of money on the stock, and it's time to take your profit and get out.  In the meantime, the broker has made a commission on your purchase and is hoping to make it on your sale as well.

After a while, after the price and the P/E have plummeted and then sat there for a while, some analyst wakes up to the fact that a 34% earning growth rate is still pretty darn good and jumps back in.   Soon the cycle is reversed.  The market starts showing the company some respect again.  And you get a call from your broker.

Of course, as a smart intelligent investor you didn't sell it in the first place!  Because you were watching the fine earnings growth all along, you knew better than to sell.  And you chose the opportunity to buy some more.  In the meantime, your brokers'; clients who were not so savvy has taken their profits (and, had paid the taxes on them, by the way) and are now wishing that they had stayed in with you.  By the time their broker called them again, the price had already climbed past the point where it made good sense for them to jump in again.

It is best to assume that any price - and therefore P/E - movements that is not related to the company's earnings is transient.  If the stories - not the numbers - cause the price to move, the change won't last.  What goes up will come down, and what goes down will come up.,  You have to be concerned only when the sales, pretax profits, or earnings cause the change, and then only if you find that the performance decay is related to a major long-term problem that is beyond the management's ability to resolve.

Remember also that a sizable segment of Wall Street doesn't make its money investing as you do; it makes its money on the "ocean motion."  Buy or sell, it makes little difference to them what you do.  They make their money either way.  But it sure makes a big difference to you!

Understanding the Financial Crisis - very well explanation!

Compound Interest: Present Value/Future Value

Equity Bond

To Warren Buffet's way of thinking, companies with durable competitive advantage have such consistent earnings that their stocks become a sort of bond.  He calls the stock an equity/bond, and it pays an interest rate equal to the yearly return on equity that the business is earning.  The earnings-per-share figure is the equity/bond's yield.  If the company has a shareholders' equity value (book value) of $10 a share and net earnings of $2.50 a share, Warren would say that the company is getting a return on its equity/bond of 25% ( $2.50 / $10 = 25%).

But since a business's earnings fluctuate, the return on the equity/bond is not a fixed figure as it is with other bonds.  Warren belives that with an equity/bond, one is buying a variable rate of return, which can be positive for the investor if earnings increase, or negative if earnings decrease.  The return on the equity/bond will fluctuate as the relationship of equity (book value) to net earnings changes.

http://books.google.com.my/books?id=COhQRkmYD_sC&pg=PA215&lpg=PA215&dq=equity+bond+of+buffett&source=bl&ots=_eVqbLzNyw&sig=uRfYVkjehVk5rrjw1v0l-vvo-hs&hl=en&sa=X&ei=55_uT5erGo_zrQfi4vm9DQ&ved=0CFMQ6AEwAjiCAQ#v=onepage&q=equity%20bond%20of%20buffett&f=false