A quick look at Dialog (12.5.2010)
http://spreadsheets.google.com/pub?key=tYLLOQgmBsAJYTQNRLcGRIA&output=html
Wednesday, 12 May 2010
A quick look at White Horse Bhd (12.5.2010)
A quick look at White Horse Bhd (12.5.2010)
http://spreadsheets.google.com/pub?key=tShHrZib6ybW69B8h8EjONQ&output=html
http://spreadsheets.google.com/pub?key=tShHrZib6ybW69B8h8EjONQ&output=html
A quick look at Tien Wah Press (12.5.2010)
A quick look at Tien Wah Press (12.5.2010)
http://spreadsheets.google.com/pub?key=tEWwIR3DX9yyeHyBhASJBhg&output=html
http://spreadsheets.google.com/pub?key=tEWwIR3DX9yyeHyBhASJBhg&output=html
A quick look at Apex Healthcare (12.5.2010)
A quick look at Apex Healthcare (12.5.2010)
http://spreadsheets.google.com/pub?key=tkkevAQFvRaUZTdTV-F__DQ&output=html
http://spreadsheets.google.com/pub?key=tkkevAQFvRaUZTdTV-F__DQ&output=html
Can you profit from the political turmoil?
Can you profit from the political turmoil?
We explain what our hung parliament and the euro crisis mean for savers and investors.
By Emma Simon and Rosie Murray-West
Published: 9:52AM BST 11 May 2010
Economic turmoil in Europe and political uncertainty at home are conspiring to send stock markets, bond markets and currency markets into overdrive. Share prices may have been buoyed by the Greek bail-out, but Gordon Brown's resignation announcement yesterday caused the pound to lose about 1½ cents against the dollar. These events are having a huge effect on the personal finances of many worried readers. Below, we give answers to the financial questions that are troubling many ordinary households hit by problems at home and abroad.
IS THE GREEK BAIL-OUT GOOD NEWS FOR UK INVESTORS?
Both the size and the scope of this bail-out have helped to stabilise jittery stock markets around the globe. European finance ministers have also unveiled a financial plan that effectively guarantees the debt of any country that uses the euro. It is hoped that this will stop the Greek debt crisis affecting other EU countries – in particular Spain and Portugal – and prevent a run on the euro.
In the short-term, at least, the plan appears to have worked, with the FTSE100 rising by 5 per cent yesterday, and the euro strengthening against the dollar after hitting a 14-month low the previous week. This can only benefit those with pensions, Isas and other investment portfolios that are largely invested in UK and European shares.
However, this rescue package has to be backed by action from various European countries to reduce budget deficits. If this does not happen it is likely to weaken the euro again, which could have a negative effect on stock markets both in Europe and the UK.
WHY HASN'T THE UK'S HUNG PARLIAMENT SENT SHARE PRICES TUMBLING?
There had been speculation that political uncertainty in the UK would cause stock markets to wobble – potentially wiping millions off people's pensions and investments. In fact, the reverse happened, and share prices rose yesterday. This was because the more immediate situation in Europe is, for now, taking precedence. However, it remains to be seen how stock markets react today to Brown's announcement, as this creates further uncertainty.
SHOULD I HOLD OFF INVESTING IN THE STOCK MARKET?
Markets look set to be volatile for some time. During such periods of volatility, investors are advised to drip-feed money into markets, to reduce the chance of investing a lump sum just before a sharp drop in share prices. Investment experts, such as Darius McDermott of Chelsea Financial Services, says that those with money to invest should use any volatility in the market to their advantage and drip-feed money in on days when the FTSE has fallen. Investing a sum of money on a regular basis – such as making monthly contributions to a pension or Isa – can smooth out these ups and downs and prove beneficial in the long run. This is known as pound cost averaging.
HOW DOES THIS AFFECT UK GILTS AND BONDS?
The guarantees only underpin the debt issued by countries in the eurozone. There is no guarantee given to the debt, or loans, issued by the UK Government. These bonds, known as gilts, will, however, be adversely affected if the ratings agencies, such as Standard &Poor's, decide to "downgrade" the UK's credit rating. This could happen if there are more delays in forming a new government, or disagreements about how the deficit should be reduced. A bigger threat to the bond and gilt markets is inflation. If this does not reduce this year it is likely to cause interest rates to rise, which will have a negative impact on gilt and bond yields.
I AM DUE TO BUY AN ANNUITY WITH MY PENSION POT. SHOULD I DO IT NOW OR HOLD OFF UNTIL LATER?
On the surface, uncertainty surrounding the hung parliament should be good news for your annuity, with gilt yields rising and pushing up annuity rates. However, Laith Khalaf, a pensions expert at Hargreaves Lansdown, says: "There is no certainty about what will happen to annuity rates." He said companies were using other investments, such as corporate bonds and equities, to back annuities, and that the annuity marketplace was not currently that competitive.
He said anyone considering buying an annuity should get a quote now, which could be valid for between 18 and 45 days. These quotes are available from providers such as annuitysupermarket.com, annuity-bureau.co.uk and h-l.co.uk
ARE INTEREST RATES LIKELY TO GO UP NOW?
Some people may be concerned that during the last recession, under the Conservatives, interest rates shot up to 15pc, but a rise of this magnitude looks unlikely. The Bank of England will be forced to raise rates if inflation increases, but even the most hawkish economists are predicting only modest rises.
WHAT ABOUT FIXED-RATE MORTGAGES? ARE THESE LIKELY TO INCREASE?
The cost of fixed-rate mortgages has actually fallen slightly over the past week, despite some sharp fluctuations in the money markets, which determine the price of these deals. David Hollingworth, of London & Country mortgage brokers, says there was a spike in these markets after the last set of inflation figures, but this has not fed through to higher mortgage prices. Earlier this week, both Northern Rock and Nationwide reduced the cost of their fixed-rate deals. "There is now more 'fat' built into the pricing of these deals, so lenders can ride out such short-term fluctuations," he says.
I WAS HOPING TO BUY MY FIRST HOUSE THIS YEAR. WILL I NOW HAVE TO PAY STAMP DUTY?
In the last Labour budget, Alistair Darling announced that first-time buyers would not have to pay stamp duty on properties priced less than £250,000. Neither the Conservatives nor the Liberal Democrats will want to repeal this. Other changes could see the abolition of Hips (Home-buyers Information Packs), which both other parties say are an expensive brake on the property market.
WHAT WILL HAPPEN TO MY CHILD'S CHILD TRUST FUND IF THE SAVINGS SCHEME IS SCRAPPED?
The Tories have suggested that the Child Trust Fund (CTF), which was one of the pioneering savings schemes of the Labour government, will be scrapped for all but the most deprived families. Doing so is likely to require primary legislation, according to Martin Shaw, chief executive of the Association of Financial Mutuals, since the current legislation suggests the trust funds are universal.
He said that although it is not yet clear what would happen if the funds were scrapped, indications are that accounts that are already in place would run until their recipients' 18th birthdays, when they would become Isa-type accounts. Children who are currently below the age of seven would be unlikely to get Government top-ups to their accounts unless they have parents on very low incomes.
He suggested that legislation scrapping the accounts could come into force as early as July if it was included in a finance bill, and urged those who had not yet invested their CTF vouchers to act quickly. The voucher is sent when a child is registered for child benefit.
I AM HOPING TO GO ON HOLIDAY ABROAD THIS SUMMER. WHAT WILL HAPPEN TO MY SPENDING MONEY?
The currency market is hard to call at the moment, with the pound's position against the euro confused by events in Greece. It has already strengthened this week, and Duncan Higgins, market analyst at the currency group Caxton FX, expects it to strengthen further if details of any Tory and Lib Dem pact are fleshed out.
He said that those choosing between the eurozone and the US as destinations should bear in mind that the US recovery is outstripping ours, and this will cause continued weakness against the dollar. "Against the euro our position is better, as the bail-out is really treating a symptom rather than a cause and there will be ongoing problems," he says. However, he also warns that if a coalition government is announced and then does not work, or there are further shocks, the pound will fall further.
If you see an attractive rate against the euro you can lock into it by using a prepay currency card for your travel money with either Caxton FX or FairFX. If you require more money, for example if you have a second property in the eurozone, you could take out a forward contract with your broker now to hedge yourself against any losses.
http://www.telegraph.co.uk/finance/personalfinance/investing/7709528/Can-you-profit-from-the-political-turmoil.html
We explain what our hung parliament and the euro crisis mean for savers and investors.
By Emma Simon and Rosie Murray-West
Published: 9:52AM BST 11 May 2010
Economic turmoil in Europe and political uncertainty at home are conspiring to send stock markets, bond markets and currency markets into overdrive. Share prices may have been buoyed by the Greek bail-out, but Gordon Brown's resignation announcement yesterday caused the pound to lose about 1½ cents against the dollar. These events are having a huge effect on the personal finances of many worried readers. Below, we give answers to the financial questions that are troubling many ordinary households hit by problems at home and abroad.
IS THE GREEK BAIL-OUT GOOD NEWS FOR UK INVESTORS?
Both the size and the scope of this bail-out have helped to stabilise jittery stock markets around the globe. European finance ministers have also unveiled a financial plan that effectively guarantees the debt of any country that uses the euro. It is hoped that this will stop the Greek debt crisis affecting other EU countries – in particular Spain and Portugal – and prevent a run on the euro.
In the short-term, at least, the plan appears to have worked, with the FTSE100 rising by 5 per cent yesterday, and the euro strengthening against the dollar after hitting a 14-month low the previous week. This can only benefit those with pensions, Isas and other investment portfolios that are largely invested in UK and European shares.
However, this rescue package has to be backed by action from various European countries to reduce budget deficits. If this does not happen it is likely to weaken the euro again, which could have a negative effect on stock markets both in Europe and the UK.
WHY HASN'T THE UK'S HUNG PARLIAMENT SENT SHARE PRICES TUMBLING?
There had been speculation that political uncertainty in the UK would cause stock markets to wobble – potentially wiping millions off people's pensions and investments. In fact, the reverse happened, and share prices rose yesterday. This was because the more immediate situation in Europe is, for now, taking precedence. However, it remains to be seen how stock markets react today to Brown's announcement, as this creates further uncertainty.
SHOULD I HOLD OFF INVESTING IN THE STOCK MARKET?
Markets look set to be volatile for some time. During such periods of volatility, investors are advised to drip-feed money into markets, to reduce the chance of investing a lump sum just before a sharp drop in share prices. Investment experts, such as Darius McDermott of Chelsea Financial Services, says that those with money to invest should use any volatility in the market to their advantage and drip-feed money in on days when the FTSE has fallen. Investing a sum of money on a regular basis – such as making monthly contributions to a pension or Isa – can smooth out these ups and downs and prove beneficial in the long run. This is known as pound cost averaging.
HOW DOES THIS AFFECT UK GILTS AND BONDS?
The guarantees only underpin the debt issued by countries in the eurozone. There is no guarantee given to the debt, or loans, issued by the UK Government. These bonds, known as gilts, will, however, be adversely affected if the ratings agencies, such as Standard &Poor's, decide to "downgrade" the UK's credit rating. This could happen if there are more delays in forming a new government, or disagreements about how the deficit should be reduced. A bigger threat to the bond and gilt markets is inflation. If this does not reduce this year it is likely to cause interest rates to rise, which will have a negative impact on gilt and bond yields.
I AM DUE TO BUY AN ANNUITY WITH MY PENSION POT. SHOULD I DO IT NOW OR HOLD OFF UNTIL LATER?
On the surface, uncertainty surrounding the hung parliament should be good news for your annuity, with gilt yields rising and pushing up annuity rates. However, Laith Khalaf, a pensions expert at Hargreaves Lansdown, says: "There is no certainty about what will happen to annuity rates." He said companies were using other investments, such as corporate bonds and equities, to back annuities, and that the annuity marketplace was not currently that competitive.
He said anyone considering buying an annuity should get a quote now, which could be valid for between 18 and 45 days. These quotes are available from providers such as annuitysupermarket.com, annuity-bureau.co.uk and h-l.co.uk
ARE INTEREST RATES LIKELY TO GO UP NOW?
Some people may be concerned that during the last recession, under the Conservatives, interest rates shot up to 15pc, but a rise of this magnitude looks unlikely. The Bank of England will be forced to raise rates if inflation increases, but even the most hawkish economists are predicting only modest rises.
WHAT ABOUT FIXED-RATE MORTGAGES? ARE THESE LIKELY TO INCREASE?
The cost of fixed-rate mortgages has actually fallen slightly over the past week, despite some sharp fluctuations in the money markets, which determine the price of these deals. David Hollingworth, of London & Country mortgage brokers, says there was a spike in these markets after the last set of inflation figures, but this has not fed through to higher mortgage prices. Earlier this week, both Northern Rock and Nationwide reduced the cost of their fixed-rate deals. "There is now more 'fat' built into the pricing of these deals, so lenders can ride out such short-term fluctuations," he says.
I WAS HOPING TO BUY MY FIRST HOUSE THIS YEAR. WILL I NOW HAVE TO PAY STAMP DUTY?
In the last Labour budget, Alistair Darling announced that first-time buyers would not have to pay stamp duty on properties priced less than £250,000. Neither the Conservatives nor the Liberal Democrats will want to repeal this. Other changes could see the abolition of Hips (Home-buyers Information Packs), which both other parties say are an expensive brake on the property market.
WHAT WILL HAPPEN TO MY CHILD'S CHILD TRUST FUND IF THE SAVINGS SCHEME IS SCRAPPED?
The Tories have suggested that the Child Trust Fund (CTF), which was one of the pioneering savings schemes of the Labour government, will be scrapped for all but the most deprived families. Doing so is likely to require primary legislation, according to Martin Shaw, chief executive of the Association of Financial Mutuals, since the current legislation suggests the trust funds are universal.
He said that although it is not yet clear what would happen if the funds were scrapped, indications are that accounts that are already in place would run until their recipients' 18th birthdays, when they would become Isa-type accounts. Children who are currently below the age of seven would be unlikely to get Government top-ups to their accounts unless they have parents on very low incomes.
He suggested that legislation scrapping the accounts could come into force as early as July if it was included in a finance bill, and urged those who had not yet invested their CTF vouchers to act quickly. The voucher is sent when a child is registered for child benefit.
I AM HOPING TO GO ON HOLIDAY ABROAD THIS SUMMER. WHAT WILL HAPPEN TO MY SPENDING MONEY?
The currency market is hard to call at the moment, with the pound's position against the euro confused by events in Greece. It has already strengthened this week, and Duncan Higgins, market analyst at the currency group Caxton FX, expects it to strengthen further if details of any Tory and Lib Dem pact are fleshed out.
He said that those choosing between the eurozone and the US as destinations should bear in mind that the US recovery is outstripping ours, and this will cause continued weakness against the dollar. "Against the euro our position is better, as the bail-out is really treating a symptom rather than a cause and there will be ongoing problems," he says. However, he also warns that if a coalition government is announced and then does not work, or there are further shocks, the pound will fall further.
If you see an attractive rate against the euro you can lock into it by using a prepay currency card for your travel money with either Caxton FX or FairFX. If you require more money, for example if you have a second property in the eurozone, you could take out a forward contract with your broker now to hedge yourself against any losses.
http://www.telegraph.co.uk/finance/personalfinance/investing/7709528/Can-you-profit-from-the-political-turmoil.html
Gold rises to new record as investors flock to safety
Gold rises to new record as investors flock to safety
May 12, 2010 - 6:55AM
Gold futures rose to a record in New York as government debt in Europe spurred demand for the precious metal as an alternative to currencies.
Gold futures reached $US1232.50 an ounce amid concern that Europe's most-indebted nations will struggle to contain deficits after policy makers provided almost $US1 trillion in a rescue package. The metal priced in euros also reached an all-time high today, and bullion in UK pounds and Swiss francs has surged.
"This is the beginning of the unraveling of fiat currencies," said Michael Pento, the chief economist at Delta Global Advisors Inc. in Huntington Beach, California. "Money has to be backed by something. People are beginning to realize that gold is the world's reserve currency."
Gold futures for June delivery rose $US30.90, or 2.6 per cent, to $US1231.70 on the Comex in New York, compared with yesterday's settlement. The previous record was $US1227.50 on December 3.
Gold for immediate delivery reached an all-time high of $US1231.70, exceeding the previous record of $US1226.56 set on December 3.
Gold has climbed 11 per cent in 2010, following nine straight annual gains. This year, the euro has dropped more than 11 per cent against the US dollar, an index of equities in major markets is down and returns on the benchmark 10-year US were up 3.8 per cent.
"People are in panic mode," said Matt Zeman, a metals trader at LaSalle Futures Group in Chicago. "There is absolute panic over the risk of contagion spreading to other countries in Europe. Yields on Treasuries are so low, people are starting to look to gold as an alternative."
Bloomberg
May 12, 2010 - 6:55AM
Gold futures rose to a record in New York as government debt in Europe spurred demand for the precious metal as an alternative to currencies.
Gold futures reached $US1232.50 an ounce amid concern that Europe's most-indebted nations will struggle to contain deficits after policy makers provided almost $US1 trillion in a rescue package. The metal priced in euros also reached an all-time high today, and bullion in UK pounds and Swiss francs has surged.
"This is the beginning of the unraveling of fiat currencies," said Michael Pento, the chief economist at Delta Global Advisors Inc. in Huntington Beach, California. "Money has to be backed by something. People are beginning to realize that gold is the world's reserve currency."
Gold futures for June delivery rose $US30.90, or 2.6 per cent, to $US1231.70 on the Comex in New York, compared with yesterday's settlement. The previous record was $US1227.50 on December 3.
Gold for immediate delivery reached an all-time high of $US1231.70, exceeding the previous record of $US1226.56 set on December 3.
Gold has climbed 11 per cent in 2010, following nine straight annual gains. This year, the euro has dropped more than 11 per cent against the US dollar, an index of equities in major markets is down and returns on the benchmark 10-year US were up 3.8 per cent.
"People are in panic mode," said Matt Zeman, a metals trader at LaSalle Futures Group in Chicago. "There is absolute panic over the risk of contagion spreading to other countries in Europe. Yields on Treasuries are so low, people are starting to look to gold as an alternative."
Bloomberg
Tuesday, 11 May 2010
A quick look at Shell (11.5.2010)
A quick look at Shell (11.5.2010)
http://spreadsheets.google.com/pub?key=tuQ5isf0V_9SOSKAgBWlIiA&output=html
http://spreadsheets.google.com/pub?key=tuQ5isf0V_9SOSKAgBWlIiA&output=html
A quick look at Hartalega (11.5.2010)
A quick look at Hartalega (11.5.2010)
http://spreadsheets.google.com/pub?key=tQyfFDm87g4Zw0aazeJJ1ew&output=html
http://spreadsheets.google.com/pub?key=tQyfFDm87g4Zw0aazeJJ1ew&output=html
A quick look at Petronas Gas (11.5.2010)
A quick look at Petronas Gas (11.5.2010)
http://spreadsheets.google.com/pub?key=tFknuWgtf7GqSvQDRjS5aig&output=html
http://spreadsheets.google.com/pub?key=tFknuWgtf7GqSvQDRjS5aig&output=html
Why do bubbles sometimes last so long?
Bubbles are fueled by speculators who are willing to pay even greater prices for already overvalued assets sold to them by the speculators who bought them in the preceding round.
Each financial bubble in history has been different, but they all involve a mix of fundamental business and psychological forces. In the beginning stages, an attractive return on a stock or commodity drives prices higher and higher. People make questionable investments with the assumption that they will be able to sell later at a higher price to a "greater fool." Unrealistic investor expectations take hold and become self-fulfilling until the bubble "pops" and prices fall back to a more reasonable underlying value.
Why do bubbles sometimes last so long? One reason is that nobody likes to be a "party pooper" and people ARE getting rich. In addition, there is nothing inherently illegal about profiting during a bubble. The only problem is getting out BEFORE the collapse. Whoever owns the overpriced asset when the bubble pops is the loser, just as the last person standing in a game of musical chairs.
17th century in Holland: Tulip Bulbs bubble (1630s)
1995 - 2001: Technology Stocks bubble
2007: U.S Housing Crisis bubble
Investing in bubbles can be quite profitable if you can get out before the bubble bursts. However, many people who did not get out before the 'pop' saw their market crashed and their wealth value evaporated.
Bubbles are not caused by fraudulent activity. However, swindles and accounting fraud often come to light just after bubbles pop. Nobody is looking and few care while the good times roll. Highly leveraged frauds often run out of cash and collapse when bubbles pop.
1963: Salad Oil Scandal
2001: Enron
2002: WorldCom
Comment:
Is the economy in a bubble? Is the present market a bubble? A definite not. However, some individual stocks had been speculated up to bubble proportions and some had already popped. Individual stock bubbles are a lot more common than whole market bubble.
Each financial bubble in history has been different, but they all involve a mix of fundamental business and psychological forces. In the beginning stages, an attractive return on a stock or commodity drives prices higher and higher. People make questionable investments with the assumption that they will be able to sell later at a higher price to a "greater fool." Unrealistic investor expectations take hold and become self-fulfilling until the bubble "pops" and prices fall back to a more reasonable underlying value.
Why do bubbles sometimes last so long? One reason is that nobody likes to be a "party pooper" and people ARE getting rich. In addition, there is nothing inherently illegal about profiting during a bubble. The only problem is getting out BEFORE the collapse. Whoever owns the overpriced asset when the bubble pops is the loser, just as the last person standing in a game of musical chairs.
17th century in Holland: Tulip Bulbs bubble (1630s)
1995 - 2001: Technology Stocks bubble
2007: U.S Housing Crisis bubble
Investing in bubbles can be quite profitable if you can get out before the bubble bursts. However, many people who did not get out before the 'pop' saw their market crashed and their wealth value evaporated.
Bubbles are not caused by fraudulent activity. However, swindles and accounting fraud often come to light just after bubbles pop. Nobody is looking and few care while the good times roll. Highly leveraged frauds often run out of cash and collapse when bubbles pop.
1963: Salad Oil Scandal
2001: Enron
2002: WorldCom
Comment:
Is the economy in a bubble? Is the present market a bubble? A definite not. However, some individual stocks had been speculated up to bubble proportions and some had already popped. Individual stock bubbles are a lot more common than whole market bubble.
Poly 'reject' off to Harvard
May 4, 2010
Poly 'reject' off to Harvard
Indonesian is the first S'pore Poly student to get into the elite varsity
Harvard-bound Singapore Polytechnic student Kuriakin Zeng with the TR-2010 robot he designed and built with teammates. It will be one of the robots competing in the RoboCup competition next month at Suntec City. Mr Zeng, who is passionate about robotics, has clinched a full scholarship to study liberal arts at Harvard College. -- ST PHOTO: DESMOND FOO
HE WAS once rejected by Singapore Polytechnic (SP), but Indonesian student Kuriakin Zeng, 24, subsequently went on to make history at the institution, not once but twice.
Last year, he became the first SP student to score straight distinctions for all of his 33 modules in his electronics, computer and communication engineer-ing diploma course.
Last week, he became the first student from the polytechnic to be accepted into Harvard College, where he will do a liberal arts course - with the bonus of having a full scholarship from the Ivy League university.
OSK Research raises Hartalega target price to RM9.89
OSK Research raises Hartalega target price to RM9.89
Written by OSK Investment Research
Tuesday, 11 May 2010 08:51
KUALA LUMPUR: OSK Investment Research has maintained its buy call on Hartalega Holdings at RM7.79 with a higher target price of RM9.89 (from RM8.92), and said the company's 4QFY10 results scheduled to be announced Tuesday, May 11 would be in line with its own and consensus expectations.
"We see a better quarter-on-quarter performance, mainly contributed by 1) its timeliness in passing on the cost of higher latex price; 2) higher sales as a result of bigger production capacity, and 3) growing demand for nitrile gloves as the price difference with natural rubber gloves narrows due to the increase in natural rubber price.
"There is also the possibility of a bonus issue, following in the steps taken by its peers," it said in a note on Tuesday.
Written by OSK Investment Research
Tuesday, 11 May 2010 08:51
KUALA LUMPUR: OSK Investment Research has maintained its buy call on Hartalega Holdings at RM7.79 with a higher target price of RM9.89 (from RM8.92), and said the company's 4QFY10 results scheduled to be announced Tuesday, May 11 would be in line with its own and consensus expectations.
"We see a better quarter-on-quarter performance, mainly contributed by 1) its timeliness in passing on the cost of higher latex price; 2) higher sales as a result of bigger production capacity, and 3) growing demand for nitrile gloves as the price difference with natural rubber gloves narrows due to the increase in natural rubber price.
"There is also the possibility of a bonus issue, following in the steps taken by its peers," it said in a note on Tuesday.
A few investing rules that will help you avoid financial frauds
"Those who cannot remember the past are condemned to repeat it."
American philosopher George Santayana
To save you from financial ruin, here are a few investing rules that will help you avoid financial frauds:
1. Do not invest in arcane schemes with promoters who will not explain the investments clearly. Make sure you understand exactly where the investment costs and returns will come from and at what risk.
2. Beware the "quick buck" or getting "something for nothing." Promises of "too good to be true" returns are just that.
3. Always do reference checking before investing. Charlatans spend much time, money and effort in trying to appear legitimate. Beware. Do not be fooled.
Unfortunately, just following these three rules doesn't guarantee you will never be fleeced. So do not 'put all your eggs in one basket.' That way, even if you are duped, not everything is lost. Diversify your investments.
American philosopher George Santayana
To save you from financial ruin, here are a few investing rules that will help you avoid financial frauds:
1. Do not invest in arcane schemes with promoters who will not explain the investments clearly. Make sure you understand exactly where the investment costs and returns will come from and at what risk.
2. Beware the "quick buck" or getting "something for nothing." Promises of "too good to be true" returns are just that.
3. Always do reference checking before investing. Charlatans spend much time, money and effort in trying to appear legitimate. Beware. Do not be fooled.
Unfortunately, just following these three rules doesn't guarantee you will never be fleeced. So do not 'put all your eggs in one basket.' That way, even if you are duped, not everything is lost. Diversify your investments.
Risk and Uncertainty
Risk
What is risk?
In financial terms, risk is the probability of an investment's actual return being lower than expected.
Can we understand risk and take actions to lower it?
We now have the two elements necessary to start us on a path of business risk management.
How can we:
(1) lower the potential downside of risk
and/or
(2) lower the probability of occurrences?
Related:
Risk and uncertainty in investing. Investing is serious business.
What is risk?
In financial terms, risk is the probability of an investment's actual return being lower than expected.
Can we understand risk and take actions to lower it?
We now have the two elements necessary to start us on a path of business risk management.
How can we:
(1) lower the potential downside of risk
and/or
(2) lower the probability of occurrences?
Risk can be both
- intrinsic (within ourselves) and
- extrinsic (from outside).
If risk is the potential for a business loss, when may a business project be deemed a high risk?
A business project may be deemed a high risk because either:
(1) there is a high likelihood of a loss of any size,
or
(2) there is even a very small likelihood of a large loss.
Almost every business action carries some degree of risk. High-risk actions require careful management because of their potential large negative consequences to the business.
Threat: A threat is a potential event with a very low probability but a high negative impact.
"Bet-your-company risk": Avoid taking a "bet-your-company risk." The potential negative consequences of such a risk are just too, too large. For example, a bet-your-company risk would be spending all your available resources on developing a risky new product. The company could fail if development were to be delayed or if sales were much lower than projected.
However, entrepreneurial companies usually must face bet-your-company risks as they start up and grow. Understanding and managing risk and uncertainty is especially important in these fledging enterprises. Startups must be focused, innovative, responsive and also very lucky to survive. Most often, they are not.
Uncertainty
"Uncertainty" is different from risk.
Uncertainty is not knowing what the future will bring. However, under the cloak of uncertainty, high risk can lurk. Thus, lowering uncertainty can lower risks too.
Uncertainty can be more dangerous than risk. Because we often know the elements of risks, we can plan for risk and take measures to mitigate the negative consequences of risk. However, with uncertainty we are often flying blind. It is hard to lower uncertainty if you do not know what it is and thus what to do to lower it.
Quotes:
"The consequences of our actions are so complicated, so diverse, that predicting the future is a very difficult business indeed."
"The best way to predict the future is to invent it."
"It's tough making predictions, especially about the future."
Related:
Risk and uncertainty in investing. Investing is serious business.
Investing Money in Plain English (Video)
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