Friday, February 5, 2010
Tricks by property agents
Some property agents used unethical means to mislead the buyers into paying a high price for a property or sellers to sell the property at below the market. In some cases, they pocket the difference. There are other property agents who are honest. Share your experiences here.
15% discount at Internet Shop
Order now to enjoy 15% discount on the following items:
Practical Guide on Financial Planning ($12)
Rechargeable torchlight ($6.50)
Shape Quiz book ($6)
Note: the above prices are before discount.
Enter the Promotion Code - BLOG (valid for February 2010 only) to get 15% off the above prices.
Order here.
Practical Guide on Financial Planning ($12)
Rechargeable torchlight ($6.50)
Shape Quiz book ($6)
Note: the above prices are before discount.
Enter the Promotion Code - BLOG (valid for February 2010 only) to get 15% off the above prices.
Order here.
Pro-investor
The steps to play the game are:
1. Register an account and create your user ID and password.
2. Login with your user ID and password
3. Read the Guide
4. Click Play to play a game. You will start at Level 1. Each game start with year 1 and continue to year 24. For each year, you have to view the Summary and Pick, select the stocks to invest in and click on End Year to see the results. Click on Next to go to the next year.
5. You should continue the game until year 24. However, if you reach a cumulative gain of $300,000 earlier, you will be upgraded to the next Level. If you have a cumulative loss of $300,000, you have to start the game again at the current level.
6. When you complete Level 9, you will be recognized as a Champion and have your name recorded. You can also share your experience. You will have greater confidence to apply for a job as a Fund Manager!
Click here to try the game.
1. Register an account and create your user ID and password.
2. Login with your user ID and password
3. Read the Guide
4. Click Play to play a game. You will start at Level 1. Each game start with year 1 and continue to year 24. For each year, you have to view the Summary and Pick, select the stocks to invest in and click on End Year to see the results. Click on Next to go to the next year.
5. You should continue the game until year 24. However, if you reach a cumulative gain of $300,000 earlier, you will be upgraded to the next Level. If you have a cumulative loss of $300,000, you have to start the game again at the current level.
6. When you complete Level 9, you will be recognized as a Champion and have your name recorded. You can also share your experience. You will have greater confidence to apply for a job as a Fund Manager!
Click here to try the game.
Seek compensation for losses on the credit linked notes
Legal Action
The investors can take legal action on the following grounds:
a) against the distributor (i.e. the financial institution that sold the product to you) on the grounds that they have mis-represented the product or have failed in their duty to give proper advice.
b) against the issuer (i.e. the bank that created the product) on the grounds of mis-representation, fraud or other wrong doings.
If the investors take legal action, their lawyers have to prove the case in court. This is expensive and has an uncertain outcome. There are two class actions (involving the Mini bond and the High Notes 5) being heard in the Singapore court.
FIDREC
Many investors have taken an adjudication case in FIDREC, which is rather inexpensive. Some investors were satisfied with the decision by the FIDREC adjudicator, but many were dis-satisfied with the outcome.
CLASS ACTION IN USA
A US lawyer is holding a seminar in March to explain how investors can participate in a class action to recover their losses against the issuers in USA. More details are set out in a separate posting in this blog.
Tan Kin Lian
Residual values of credit linked notes
A few investors still do not understand why the residual values of the Mini bonds are better than the Pinnacle Notes, Jubilee Notes and High Notes 5. It is important that they put in the effort to understand what they have bought and why it has dropped in value. They should not continue to be ignorant.
Here are the differences in structure of these notes.
Mini bonds. They carry credit default swaps on a number of entities. None of these entities failed, so there in no call on the swaps. The underlying asset is still intact. The problem is that the issuer Lehman Brothers has gone into insolvency. The trustees appointed a firm to handle the liquidation of the underlying assets and pay the residual value to the investors. These values range from 23% to 75%, depending on the tranche.
High Notes 5 and Jubilee Notes. These notes carry credit default swaps on a number of entities. One entity is Lehman Brothers. When this entity went into insolvency, the swap was called and the total invested amount was taken away to pay the counter-party to the swap. There is no residual value in these notes.
Pinnacle Notes. These notes carry credit default swaps on a large number of entities. If a specified number of entities (say 13 out of 200 entities) go into default, the total invested sum is used to pay out to the counter party to the swap. A few tranches have reached this critical number and the value of these tranches is almost nil. Some tranches are approaching this number, and the value is now quite low, say less than 20%. The investors can only hope that there are no more credit events, to get back their original investment. The alternative, is to sell them at the current market value.
Sell at market value?
Should the investor sell the notes at the current market value? If I were an investor, I would hold on to the notes as the current market value is likely to be lower than the underlying value (whatever the value is). The market maker probably knows the underlying value, and will offer a value that represents a deep discount. However, each investor should make his or her own decision on this matter.
Tan Kin Lian
Here are the differences in structure of these notes.
Mini bonds. They carry credit default swaps on a number of entities. None of these entities failed, so there in no call on the swaps. The underlying asset is still intact. The problem is that the issuer Lehman Brothers has gone into insolvency. The trustees appointed a firm to handle the liquidation of the underlying assets and pay the residual value to the investors. These values range from 23% to 75%, depending on the tranche.
High Notes 5 and Jubilee Notes. These notes carry credit default swaps on a number of entities. One entity is Lehman Brothers. When this entity went into insolvency, the swap was called and the total invested amount was taken away to pay the counter-party to the swap. There is no residual value in these notes.
Pinnacle Notes. These notes carry credit default swaps on a large number of entities. If a specified number of entities (say 13 out of 200 entities) go into default, the total invested sum is used to pay out to the counter party to the swap. A few tranches have reached this critical number and the value of these tranches is almost nil. Some tranches are approaching this number, and the value is now quite low, say less than 20%. The investors can only hope that there are no more credit events, to get back their original investment. The alternative, is to sell them at the current market value.
Sell at market value?
Should the investor sell the notes at the current market value? If I were an investor, I would hold on to the notes as the current market value is likely to be lower than the underlying value (whatever the value is). The market maker probably knows the underlying value, and will offer a value that represents a deep discount. However, each investor should make his or her own decision on this matter.
Tan Kin Lian
Strategy to pick the right stocks - low PE and high yield
I tried a new strategy to pick the right stocks based on low price earning ratio (PE ratio) and a high yield during the past year. It produced good results in this simulation game. The theory is quite attractive - buy the stocks that are relatively cheap, i.e. low PE ratio. If these stocks have performed well in the past year, they may be on a strong trend. And they are cheap.
Click here to try the simulation game. The prices are simulated to be reflective of the trends in prices in real life.
Picking the right stocks require practice. This simulation game gives you the practice. You can find the right strategy and apply it to the real life, to see if it works. You can get the real data for the past few years to try it the theory that you have discovered through this simulation game.
Click here to download a PDF document showing the screen shots of how to play this simulation game.
Click here to try the simulation game. The prices are simulated to be reflective of the trends in prices in real life.
Picking the right stocks require practice. This simulation game gives you the practice. You can find the right strategy and apply it to the real life, to see if it works. You can get the real data for the past few years to try it the theory that you have discovered through this simulation game.
Click here to download a PDF document showing the screen shots of how to play this simulation game.
Fighting rejected health claims
In America, 1 in 14 health claims are rejected.
In this story, the insured has to fight for her claim to be paid. She went through an appeal process, involving an external, impartial expert.
In this story, the insured has to fight for her claim to be paid. She went through an appeal process, involving an external, impartial expert.
Practice to pick the right stocks
The Pro-Investor is a simulation game that uses a model to generate the earnings per share, price earning ratio of 45 stocks based on the economic trends in various countries, industries and market segment. It aims to give the player the experience of picking the right stocks in this environment.
After many rounds of practice, I found a good strategy to pick the right stocks. Find out the country, industry and market segment that performed well during the previous year. Pick the stocks that from the country, industry and market segment. It is likely to perform better than average during the following year.
The actual trends in each year can be used to pick the stocks for the following year. The stocks that are picked will rotate, but the overall results should be positive.
Will this strategy produce good results in real life? I like to have the data (EPS, PER, Price) for the past 50 years of actual stocks that have lasted for this period, together with a code to indicate their country and industry. If you have the data, you can pass them to me, so that I can use the simulation based on these real data.
If you wish to try Pro-Investor, click here. This game is best played with Internet Explorer 8.
After many rounds of practice, I found a good strategy to pick the right stocks. Find out the country, industry and market segment that performed well during the previous year. Pick the stocks that from the country, industry and market segment. It is likely to perform better than average during the following year.
The actual trends in each year can be used to pick the stocks for the following year. The stocks that are picked will rotate, but the overall results should be positive.
Will this strategy produce good results in real life? I like to have the data (EPS, PER, Price) for the past 50 years of actual stocks that have lasted for this period, together with a code to indicate their country and industry. If you have the data, you can pass them to me, so that I can use the simulation based on these real data.
If you wish to try Pro-Investor, click here. This game is best played with Internet Explorer 8.
Subscribe to:
Posts (Atom)