TAN TENG BOO: Top fund manager expects 30-40% gain next year

TAN TENG BOO: Top fund manager expects 30-40% gain next year

Written by Leong Chan Teik
Thursday, 12 November 2009

IF YOU have not heard of Tan Teng Boo before, you will find that he quickly shines through in an article in the current edition of The Edge newsweekly.

He is 55, and a Malaysian fund manager. His iCapital Global Fund has gained 64% this year as at end-September, resoundingly beating most global equity funds and the 22.5% return achieved by the MSCI World Index.

He has three funds operating in three countries investing in 42 countries.

My search on Google found a May 2009 article in the Malaysian newspaper, The Star, which quoted him saying (this may take your breath away!):

“I’m pretty damn good at what I do. I would say I am one of the top five fund managers in the world. It is a pity that people don’t really recognise that.”

Among the top 5? If true, we should pay close attention to what he says ......

Some highlights of The Edge’s article are summarized below. For the full-blown story, which we can't reproduce anyway, please go buy the magazine today (only $3.80).

* A bull market really? 

Mr Tan has no time for doubters who think the market could fall again on a double-dip recession.

“People are still seeing the rebound as a bear-market rally. In my view, it’s definitely a bull market. In fact, it’s a good old-fashioned bull rally and certainly a V-shaped recovery,” he said.

* Explain! 

Mr Tan said economic growth and corporate earnings are recovering and will become ‘self-enforcing’. He believes that global stocks could jump 30-40% next year.

And, of course, there’s China’s economic growth which will support a long market boom.

* What stocks are you betting on? 

He said his fund owns UK supermarket chain Tesco, UK engine manufacturer Rolls Royce, and German car maker Porsche.

As for Chinese companies, it owns shares in bank group Bank of East Asia, cigarette paper packaging firm Shanghai Asia Holdings and Beijing Capital Land. These are examples.

For his recently launched Australia-registered iCaptial International Value Fund, he has added Australia-listed Mermaid Marine, a diversified marine services provider, and Singapore-listed Mermaid Maritime,a drilling and sub-engineering service provider operating in the oil and gas industry.

”Mermaid Marine currently operates a fleet of oil supply vessels in the northern part of Western Australia, where Chevron has discovered the Gorgon oil fields. It is a huge project.”

Mermaid Maritime was bought at S$0.70 a share. The company was incorporated in Thailand and was listed on the Singapore bourse in 2007.

Its operations are mainly in Southeast Asia, including Thailand and Malaysia.

* How are you rewarded? 

His answer is surprising. According to the article, he does not pay himself a salary or take a director’s fee from the funds he manages. He lives on the investment gains generated by his personal investment portfolio.


http://www.nextinsight.net/content/view/1686/60/


Related:
Riding on the Coattail of Tan Teng Boo

Tan Teng Boo on investing in the Australian market

http://in.bgvip.tv/play.php?vid=27081931

The QVM approach to finding promising Growth Stocks

QUALITY:  I recommend that you start by examining earnings for several years because companies that have grown strongly for several years, on average, are sound candidates to generate good earnings in the future.

VALUE:  Before you buy a growth stock, you should consider the possibility that the price may already be reflecting a high growth potential.  Evaluate its P/E ratio or, preferably, compute its intrinsic value.

MANAGEMENT:  You will need to examine the qualitative variables, such as the quality of management and company culture, as they are the true underpinnings of future growth.

Overall, success in growth investing requires you to have 

• a very good knowledge of the company's business and 
• an ability to forecast its earnings well.

These most important determinants of your success in investing can be abbreviated as the QVM approach

Q = Quality - the quality of the company you own
V = Value - the price you paid for your stock
M = Management - the integrity of its management

Growth Investing: The importance of track record of Sales and Earnings

The most important driver of growth in stock price is growth in earnings.  Future earnings growth frequently depends on past earnings growth.

To convince yourself that you must look at the track record, companies that have had positive results for a while are likely to exhibit that kind of performance for years to come, especially when the management team remains in place.  Once in a while, this may not work, but on average you will come out a winner if you play the game by emphasizing a company's track record of earnings.

A short record of, say, less than five years is probably a dangerous way to identify the future growth of a company.  It is important to focus on a longer time span.  Great growth companies remain outstanding for many years after their initial spurt in growth.

Unless you know a lot about the company, it is best to avoid initial public offerings (IPOs).  The average three-year post-IPO performance is 20 percent below the corresponding market returns.  While IPOs are often marketed as growth stocks, their long-run performance has been dismal.  Generally speaking, IPOs are anything but growth stocks.

Growth in earnings does, however, depend on growth in sales, especially in the long run.  The customer is the main driver for growth in sales.  In general, it is best to keep both sales and earnings in mind when thinking about growth investing, not just one or the other.

One good approach to finding growth stocks is to identify some great products and services, as Peter Lynch has often emphasized.  Still, you must ask several questions before you actually buy stock in such companies.

Here are some qualitative questions that you should take time to ask and answer before you decide to invest in a growth stock.

Is there potential to grow sales and earnings for several years?
How are relations with employees?
Is research and development important?
How does the company respond to challenges?
Is management quality excellent?
How important are profit margins?
What is the company's Achilles' heel?

You can afford to take your time.  Great companies will give you returns of several hundred percent, and if you miss some of it in the beginning, you should still do well.

Getting private investment flowing again

Thursday April 15, 2010

Getting private investment flowing again

Making a Point - By Jagdev Singh Sidhu

ENGINEERING a structural change in any economy is difficult but is asking the private sector that has lost its desire to drive economic growth to reprise its previous role any easier?

No, if one considers the alarming drop in private investment to around 10% of gross domestic product (GDP) compared with over 30% prior to the Asian financial crisis.

There are many reasons why private investment in Malaysia has dried up. Inhibitive policies, favouritism towards government-linked companies or even better prospects in neighbouring countries are cited among the causes for the private sector taking its foot off the accelerator.

While these may be true, maybe the fault also lies in just how high the dividend rates in Malaysia are.

With the initial public offering gravy train now a dust bowl for the country’s large funds, it’s not inconceivable that such funds, namely Permodalan Nasional Bhd and the Employees Provident Fund, have now resorted to asking the large companies they own stakes in to declare a hefty percentage of their net profit as dividends.

Prior to the crisis, the concept of dividend policy was virtually unheard of. Companies routinely spoke of how large and grand their investment plans were.

In the past, such profit would have gone into re-investment, pursuing new business areas but with large chunks of profit now being channelled into the pockets of shareholders instead of being spent on new factories, products or research, it’s no wonder that private investment numbers have dropped.

Today, talk is on how much of such companies’ net profit is being distributed to shareholders.

There is no reason why companies in Malaysia should be more conservative in investing compared with their regional counterparts.

If there are problems causing this, then policy needs to be changed to accommodate private businesses seeking to invest their profit in the country.

That’s why when the Prime Minister announced that Khazanah Nasional Bhd was to divest of its 32% stake in Pos Malaysia Bhd, an immediate reaction was that such a move would get private investment flowing again.

By allowing the private sector to take control of and drive a company that has an extensive distribution channel and is an essential provider of mail services, the new owners would now be tasked to drive innovation and grow the business.

More of such stake divestments need to happen. If government-owned companies have shown lethargy in investing and growing their business, maybe it’s time that control of those businesses fall in the hands of the private sector. The one caveat is that the change of ownership must be accompanied with a fresh impetus towards investment and growth.

The other thing that needs to happen is allowing more competition in the economy.

As we have seen with the cellular phone segment, competition breeds innovation, growth and profit. If other areas where monopolies are entrenched and have proved to be an impediment, the onus is on the Government to free up competition in these sectors.

Deputy news editor Jagdev Singh Sidhu wonders what would be worth watching after the season finale of the addictive series Spartacus: Blood and Sand this weekend.

http://biz.thestar.com.my/news/story.asp?file=/2010/4/15/business/6057524&sec=business

Valuation of KNM and Sustainable Growth Companies

In the absence of clarity in future earnings, very low NTA and significant debt, how does one value KNM?

? 10 sen / share

A quick look at KNM
http://spreadsheets.google.com/pub?key=tnYPvXKu8my2Fsri8qR60oA&output=html


A related story:

One-time events that help grow companies for a short period usually affect prices significantly, but such changes are often temporary.

In the mid-1970s, again in the mid-1990s, and once again in the mid-2000s when oil prices went up quickly, many companies supplying oil-drilling services became high-growth companies.  However, they could not sustain their growth.

For example, Global Marine, an otherwise well-managed company, was trading at around $35 per share in late 1997, but oil prices went down in 1998, and Global Marine's stock price quickly retreated to less than $8 per share.  

A careful investor looking for an outstanding long-term growth company would have avoided Global Marine because the growth was from a one-time event.

It was and can be difficult to know which companies would have sustainable growth.

On the other side, note that at the time of going public, even Microsoft was not an outstanding growth stock because it was not clear that the company could sustain its growth.  However, over time, it became clear that Microsoft's products were immensely successful.  Microsoft was a near monopoly, and the number of customers for those products would increase for many years to come.  At that point, it was a good growth stock worth investing in.

Malaysian Glovemakers Fall on Higher Rubber, Ringgit

Bloomberg

Malaysian Glovemakers Fall 

on Higher Rubber, Ringgit 

April 13, 2010, 5:12 AM EDT

By Barry Porter

April 13 (Bloomberg) -- Malaysian glovemakers led by Top Glove Corp. declined in Kuala Lumpur trading on the prospect a surge in rubber prices and a higher ringgit will increase costs and lower the value of overseas earnings, damping earnings.

Top Glove fell 4.4 percent to 12.90 ringgit at the close, its biggest retreat in almost a year. About 21 percent of the company’s revenues in the year to Aug. 31 were made outside Malaysia. Supermax Corp., which makes the majority of its sales in America, slid 3.6 percent to 6.64 ringgit.

Rubber futures reached a 20-month high in Tokyo trading yesterday, increasing the cost of latex used in medical and other protective gloves, while the ringgit touched a 23-month high against the dollar. A higher local currency reduces the value of overseas sales when converted back into ringgit.

“With higher latex costs, a weaker ringgit against the U.S. dollar and potential pricier energy costs, we see growing concern for earlier-than-expected margin compression,” AmResearch said in a report on April 9. Investors are concerned that glove-makers won’t be able to pass on all the increased costs to their customers, it said.

AmResearch downgraded the sector to “underweight” on April 9. Top Glove was cut to “hold” with a lower fair value of 12.50 ringgit. Kossan Rubber Industries Bhd. was reduced to “hold” with its fair value trimmed to 7.65 ringgit. The stock lost 4.4 percent to 7.56 ringgit today.

Demand Boost

Glovemakers have outpaced the broader market in the past 12 months as global health scares bolstered medical glove demand. Top Glove has jumped 141 percent in the period as first-quarter and second-quarter earnings almost doubled from a year earlier. Kossan rallied 136 percent and Supermax gained 498 percent.

Global demand rose by 10 billion units last year, while Malaysia manufacturers increased output by less than 5 billion pieces, according to Jason Yap, an analyst with OSK Research Sdn.

“Demand is still strong compared to supply,” Yap said in a telephone interview today. “Maybe by the end of this year it will reach equilibrium when additional capacity comes on stream.”

Yap, who believes today’s drops are “short-term retracements”, retains “buy” ratings on Malaysia’s largest glove makers, with a 15.15 ringgit share target for Top Glove, 11.30 ringgit for Kossan and 10.00 ringgit for Supermax.

--Editors: Richard Frost, Reinie Booysen

To contact the reporter on this story: Barry Porter at bporter10@bloomberg.net

To contact the editor responsible for this story: Linus Chua at lchua@bloomberg.net

http://www.businessweek.com/news/2010-04-13/malaysian-glovemakers-fall-on-higher-rubber-ringgit-update1-.html

Herd instinct - This is probably the most important concept that you need to know about market psychology.

You do not need a degree in psychology to understand that in the short run, the price of a stock can deviate substantially from its basic value because market participants may betray a herd instinct in their behaviour.  This is probably the most important concept that you need to know about market psychology.  

• When people do not understand a company well, they follow the crowd:  
• They chase the winners and dump the losers indiscriminately.

Because of this herd mentality, individual stocks - and the entire market - may go up or down dramatically.  Herding stems from greed or fear.  

When interest rates rise or when there are fears that an important country's economy will falter, world markets react substantially.  It is extremely difficult to time the market or to forecast events that make markets move dramatically.  The lesson to learn is that when the market does go down significantly, prime buying opportunities may surface.

Do you know whether you have the herding instinct?  It's a good idea to find that out if you can.

• The most common phenomenon I have observed is that people feel like buying a stock when its price has recently gone up or when the market has gone up.  If you do so without evaluating the company, you are probably herding.  
• Do you evaluate the price increase in a logical manner?  You are probably not herding if you compute a stock's intrinsic value before you make a buy or sell decision.

Related:

Comparative Qualitative Analysis of Glove Companies

Look at these charts.  At the beginning of 2010, all the prices of these glove companies climbed exponentially reaching their peaks.  These were evidence of herd instinct driven by greed.   Recently, the sector was downgraded and the great, good and gruesome glove stocks were sold down driven by fear.  This was yet evidence of herd instinct.  When people do not understand a company well, they follow the crowd, chasing the winners and dumping the losers indiscriminately. 

Reposting on Investment, speculation and gambling (Security Analysis, Ben Graham.)

It is commonly thought that investment, is good for everybody and at all times. Speculation, on the other hand, may be good or bad, depending on the conditions and the person who speculates. It should be essential, therefore, for anyone engaging in financial operations to know whether he is investing or speculating and, if the latter, to make sure that his speculation is a justifiable one.


Investment, speculation and gambling(Security Analysis, Ben Graham.):

1. Graham defined investment thus: An INVESTMENT OPERATION is one which, upon THOROUGH ANALYSIS, promises SAFETY OF PRINCIPAL and a SATISFACTORY RETURN. Operations NOT meeting these requirements are speculative.
The difference between investment and speculation, when the two are thus opposed, is understood in a general way by nearly everyone; but it can be difficult to formulate it precisely. In fact something can be said for the cynic's definition that an investment is a successful speculation and a speculation is an unsuccessful investment. The failure properly to distinguish between investment and speculation was in large measure responsible for the market excesses and calamities that ensued, as well as, for much continuing confusion in the ideas and policies of would-be investors.


2. Graham's addition criterion of investment: An investment operation is one that can be justified on BOTH QUALITATIVE and QUANTITATIVE grounds.
Investment must always consider the PRICE as well as the QUALITY of the security.



Main points:______________

INVESTMENT OPERATION: rather than an issue or a purchase.

PRICE: is frequently an essential element, so that a stock (and even a bond) may have investment merit at one price level but not at another.

DIVERSIFICATION: An investment might be justified in a group of issues, which would not be sufficiently safe if made in any one of them singly.

ARBITRAGE AND HEDGING: it is also proper to consider as investment operations certain types of arbitrage and hedging commitments whichinvolve the sale of one security against the purchase of another. In these rather specialised operations the element of SAFETY is provided by the combination of purchase and sale.


THOROUGH ANALYSIS: the study of the facts in the light ofestablished standards of safety and value, including all quality of thoroughness.


SAFETY: The SAFETY sought in investment is not absolute or complete; the word means, rather, protection against loss under all normal or reasonably likely conditions or variations. A safe stock is one which holds every prospect of being worth the price paid except under quite unlikely contingencies. Where study and experiences indicate that an appreciable chance of loss must be recognized and allowed for, we have a speculative situation.


SATISFACTORY RETURN: is a wider expression than "adequate income", since it allows for capital appreciation or profit as well as current interest or dividend yield. "Satisfactory" is a subjective term; it covers any rate or amount of return, however low, which the investor is willing to accept, provided he acts with reasonable intelligence.

_______________


For investment, the future is essentially something to be guarded against rather than to be profited from. If the future brings improvement, so much the better; but investment as such cannot be founded in any important degree upon the expectation of improvement. Speculation, on the other hand, may always properly – and often soundly – derive its basis and its justification from prospective developments that differ from past performances.

GAMBLING: represents the creation of risks not previously existing – e.g. race-track betting.

SPECULATION: applies to the taking of risks that are implicit in a situation and so must be taken.

INTELLIGENT SPECULATION: the taking of a risk that appears justified after careful weighing of the pros and cons.

UNINTELLIGENT SPECULATION: risk taking without adequate study of the situation.

Comparative Qualitative Analysis of Glove Companies

The ratings consist of three letters and a number. Each letter reflects a composite qualitative measurement of numerous individual standards which may be summarized as follows:

A = Outstanding; B = Excellent; C = Good; D = Fair; L = Limited; N = Not Rated.

The number component of the Quality Rating is also a composite measurement of the annual corporate growth, based on earnings and modified by growth rates of equity, dividends, and sales per common share. The Growth rating may vary from 0 (lowest) to 20 (highest). (See sample Quality Rating above.)



Wright Quality Rating: DBD0 Rating Explanations


Wright Quality Rating: CANN Rating Explanations


Wright Quality Rating: LDNN Rating Explanations


Wright Quality Rating: DBC8 Rating Explanations


Wright Quality Rating: DBA2 Rating Explanations


Wright Quality Rating: LBD1


Wright Quality Rating: DBB2 Rating Explanations


Wright Quality Rating: CAA2 Rating Explanations

Following a systematic approach will help you overcome your psychological biases and know when you are making a judgement call.

To apply psychology in your stock buying and selling decisions, the first thing you should explore is your primary reason for making that decision.  

Consider a situation in which you decide to buy a stock because the stock's P/E ratio is low.  Knowing the primary reason for your decision, you should ask yourself:

Is buying a low P/E stock rational?

• There is plenty of evidence in the literature to suggest that in the long run, buying a low P/E stock results i higher-than-average returns.

Thus, your motivation appears rational.  You may have follow-up questions:

• Why is the P/E low? 

or

• What percentage of low P/E stocks actually outperforms the market within three years?

or

• How long should I hold a stock after I buy a low P/E stock?

Because you realize that you are not very patient, you may not like the answer that you should hold a stock for three to five years, and you may decide not to invest in low P/E stocks.

Systematic thinking will help you determine what you know or do not know and overcome your psychological biases.  When you do not know the answer, you need to make a judgement call.  

In the case of buying a low P/E stock, you might find that one possible reason for the low P/E is that the earnings are temporarily high.  

• It may not always be possible to gauge the extent to which earnings are temporarily high, and you may have to make a judgement call based on your knowledge of available financial data.  

In computing intrinsic value, we have to make estimates or judgement calls.  


Ultimately, everyone has to make judgement calls, but following a systematic approach will help you know when you are making a judgement call.

Related:

Strategies for Overcoming Psychological Biases

The field of behavioural finance highlights many psychological biases can impair the quality of investment decision making.

Commenting on selected KLSE stocks.

Portfolio tracking of selective KLSE stocks.
1. The severe bear market offers many opportunities.
2. One can buy good QVM companies at reasonable or bargain price.
The primary reasons for the motivation in March 2009 were rational.  The included stocks involve some judgement calls.

****Be a Better Investor

The barriers to success are psychological rather than physical.

Carefully examine the possible alternatives when you invest

Knowledge of psychology should help you inject rationality into your decisions.

The purpose of understanding psychology is to reduce the irrational component in your decision making.

To apply psychology in your stock buying and selling decisions, the first thing you should explore is your primary reason for making that decision.

Systematic thinking will help you determine what you know or do not know and overcome your psychological biases.  When you do not know the answer, you need to make a judgment call.

In computing intrinsic value, we have to make estimates or judgment calls.  Ultimately, everyone has to make judgment calls, but following a systematic approach will help you when you are making a judgment call.

Your ultimate question should always be "Is this rational based on all that I know?"  On average, if you go through a set of basic questions about the stock and psychology, you should do well in the stock market.

Of course, in the process of learning about yourself, if you conclude that you are likely to make irrational choices more often than not, maybe you should stay away from the stock market.  In that case, your situation may be similar to someone who knows the dangers of excessive drinking but cannot help but drink when he visits a bar.  He should learn not to go near a bar.

Overall, knowledge of fundamentals should help you estimate the company's long-term future, and knowledge of psychology should help you inject rationality into your decisions.


Related:

Strategies for Overcoming Psychological Biases

****Be a Better Investor

A Powerful Foundation for making intelligent decisions in the stock market: Knowledge of fundamentals of the company and human behaviour (psychology)

In recent years, behavioural finance has shed light on the psychology of stock prices and financial decisions by market participants.

Eventually, two main forces affect stock prices in the market:

• the fundamentals of the company, and,
• human behaviour.

Both forces have a role to play.

However, a combined knowledge of the two should make a more powerful foundation for making intelligent decisions in the stock market than relying on fundamentals alone.  

Many investors make dumb decisions by chasing stock prices.  Do you?  If so, what can you do about it?

We will get better answers by studying psychology than by boning up on finance alone.


The dumbest reason in the world to buy a stock is because it's going up.
- Warren Buffett

Related:

****Be a Better Investor

A V-Shaped Boom Is Coming

A V-Shaped Boom Is Coming

Published: Monday, 12 Apr 2010 | 11:01 AM ET Text Size
By: Larry Kudlow
CNBC Anchor


Conservatives shouldn’t fight the tale of the tape.

Sometimes you have to take out your political lenses and look at the actual statistics to get a true picture of the health of the American economy. Right now, those statistics are saying a modest cyclical rebound following a very deep downturn could actually be turning into a full-fledged, V-shaped, recovery boom between now and year-end.

I’m aiming this thought especially at many of my conservative friends who seem to be trashing the improving economic outlook — largely, it would appear, to discredit the Obama administration.

Don’t do it folks. It’s a mistake. The numbers are the numbers. And prosperity is a welcome development for a nation that has suffered mightily.

Credibility is at issue here.

Conservative credibility.

Capitalist credibility.

Now, I have written extensively about the tax-and-regulatory threats of the Obamanomics big-government assault. But most of that is in the future. The current reality is that a strong rebound in corporate profits (the greatest and truest stimulus of all), ultra-easy money from the Fed, and some small stimuli from government spending are working to generate a stronger-than-expected recovery in a basically free-market economy that is a lot more resilient than capitalist critics think.

Rather than blow their credibility over a cyclical rebound that is backed by the statistics, free-market conservatives should tell it like it is.

Let’s begin with the March employment numbers recently released by the Labor Department. Those numbers were solid. People say small businesses are getting killed by taxes and regulations from Washington, but the reality is that the small-business household employment survey has produced 1.1 million new jobs in the first quarter of 2010, or 371,000 per month. If that continues, the unemployment rate will drop significantly.

Additionally, the corporate payroll number for March increased by 224,000 -- not 162,000 as some claim -- with the prior two months being revised up by 62,000. And this is being led by private-sector job creation.

And according to just-released data, retail chain-store sales for the year ending in March were up a blowout 10 percent. Ten percent. That’s a V-shaped recovery. And the real-time ISM purchasing-managers reports for manufacturing and services indicate that the economy in the next few quarters could be much, much stronger than the consensus expects -- maybe 5 to 6 percent. Another V-shaped recovery.

Commodity charts, meanwhile, are roaring. All manner of raw industrial materials have been booming -- iron ore, steel, you name it. More V-shaped recovery. So with higher commodity prices running virtually across-the-board, there is every incentive for rapid inventory-rebuilding. (Inventory prices are going up as commodity prices go up.)

At this point it’s impossible to project a long-lived economic boom, such as we had following the deep recession of the early 1980s. For one thing, tax rates will rise in 2011 for successful earners and investors, quite unlike the Reagan cuts of the 1980s. So it’s possible that entrepreneurs and investors are bringing income, activity, and investment forward into 2010 in order to beat the tax man in 2011. This would artificially boost this year’s economy, stealing from next year’s economy.

Recall that when Hillary Clinton took her Rose Law Firm bonus in December 1992, rather than January 1993, she knew full well that her husband Bill would raise the top tax rate in 1993. So the fourth quarter of 1992 grew at nearly 4.5 percent, but the first quarter of 1993 saw less than 1 percent growth. The temporary growth spurt for all of 1992 was 4.3 percent, but activity dropped to 2.7 percent the following year.

It could happen again in 2010 and 2011.

Although the Obamacons deny it, tax-rate incentives matter a lot.

And at some point, monetary policy will tighten, with higher interest rates on top of higher tax rates. That, too, could slow growth markedly next year. And then there’s the dozen tax hikes in the Obamacare health takeover, and a possible VAT attack from Paul Volcker, all of which will work against growth in the out-years.

Clearly, we are not operating a supply-side, free-market model today. What I wish for is sound money and lower tax rates, which would promote sustainable economic growth. Instead, we’re getting easier money and higher tax rates, which could mean a temporary boom today and disappointingly slow growth after that.

But then again, who knows? Maybe the tea-party revolution overturns the obstacles to future growth and the boom is sustained. Free-market populism and a return to Reaganism, along with an anti-federal-spending coalition that is the most powerful force in politics today, could right the economic ship.

That’s the credible take.

http://www.cnbc.com/id/36421625

The Biggest Holders of US Government Debt

As the US government spends an unprecedented amount of money to fix the nation's economy, there is an equally great need to raise the cash to pay for it. This is accomplished through borrowing, whereby Uncle Sam sells Treasury securities of varying maturity.

For investors, the government bills, notes and bonds are considered a safe financial product because they have a guaranteed rate of return, based on faith in future US tax revenues. The government has been partially funding operations via Treasury securities for decades.

This borrowing adds to the national debt, which has climbed above $11 trillion and is rising every day. Much of that debt is held by private sector, but about 40 percent is held by public entities, including parts of the government. Here's who owns the most.



By Paul Toscano
Updated 17 Feb 2010


http://www.cnbc.com/id/29880401/?slide=1

The more you know about your psychological biases, the better you can function in the volatile stock market.

Everyone has opinions and psychological biases.  However, people may not know their own biases.

The more you know about your psychological biases, the better you can function in the volatile stock market.

The entire market may be influenced by psychological reasons, not by fundamental reasons alone.

From an investment perspective, the bottom line is that the market will continue to fluctuate and give you solid opportunities every so often.

Value in the long run is determined by fundamentals, while short-term gyrations reflect market participants' psychological weaknesses, such as herding.  

Knowledge is the best antidote to making wrong decisions.

If you are a long-term investor, the rational thing to do is to make decisions based on long-term fundamentals of the business.