Friday, July 31, 2015

Why 99% of trading is pointless

Bloomberg News/Landov

"An astonishing $32 trillion in securities changes hands every year with no net positive impact for investors, charges Vanguard Group Founder John Bogle...

...It's a lot of money, $32 trillion. Nearly double the entire U.S. economy moving from one pocket to another, with a toll-taker in the middle. Most people refer to them as "stock brokers," but let's call them what they are — toll-takers and rent-seekers...

...Ostensibly, the job of a financial adviser is to provide advice. Do you actually get that from your broker? It is worth anything?
Research shows, over and over, that stock brokers can't do much of anything demonstrably valuable. They don't know which stocks will go up or down and when. They don't know which asset classes will outperform this year or next.
Nobody knows. That's the point. If you're among that small cadre of extremely high-level traders who can throw loads of cash at a short-term fluke, fantastic. If you have a mind for numbers like Warren Buffett that allows you to buy companies on the cheap and hold them forever, excellent.
If you're a normal retirement investor trying to get from A to B and retire on time, well, you have a really big problem to face: The toll-taker wants your money" full article.

Friday, July 24, 2015

Malaysia at risk of multi-notch downgrade

BNP Paribas has cautioned investors that Malaysia is at risk of a multi-notch downgrade in its sovereign credit rating, despite a recent upgrade by Fitch Ratings, opining that the review overlooked its sovereign credit rating compared with its peers, where it falls below par.
In its Asia Desknote, BNP Paribas said Malaysia's public finance performance trends against rating peer medians are a particular concern as its analysis suggests that Malaysia fell further behind the 'A' range on key indicators such as debt-to-revenues, since Fitch initially placed the rating on a negative outlook in mid-2013.
At the end of June, Fitch affirmed its 'A-' on Malaysia's sovereign rating and reverted its outlook to stable from negative.
"The persistence of this relative deterioration suggests that Malaysia's sovereign rating should have been downgraded regardless of the reforms implemented. That it wasn't, speaks to a potentially more concerning state of affairs: sovereign rating committees are reluctant to take negative rating actions.
"IMF (International Monetary Fund) research highlights that such reluctance is not a new trend. After investigating the history of sovereign rating actions, they found that, in their effort to rate 'through the cycle', the agencies have repeatedly given sovereigns the benefit of the doubt," BNP Paribas said.
BNP Paribas said Malaysia's risk of a multi-notch downgrade is especially high when there has been a marked deterioration in the external finances. With public finance and structural components of the credit profile weak relative to that of its peers, external finances have historically been the core credit strength underpinning Malaysia's standing as an 'A' range more

Tuesday, July 14, 2015

DOLPHIN and friends learn new trick - Play Dead

Even my pet dog has learned to perform this trick - Bang! Play dead! Rollover! - and then get up and continue on your merry ways.

Saturday, July 4, 2015

GUOCOLAND begins to harvest from Damansara City

GUOCOLAND is selling its subsidiary that owns "Office Tower A" in Damansara City to Hong Leong Bank Berhad for an indicative cash consideration of RM189.3 million.

The proposed disposal is undertaken to unlock its investment at current market value and realise its gain. The cash proceeds of RM189.3 million will be utilised to pare down its bank borrowings, which is expected to result in an annual interest savings of approximately RM7.8 million.

Upon completion of the disposal, it is expected to realise a net gain of about RM137.3 million, and resulting in an increase in earnings per share of about 20 sen.

As more property disposals in the project may be forthcoming, I am hanging on dearly to my GUOCO shares until the harvesting season is over.