10 Lessons to be Learnt

10 Lessons to be Learnt

The Daily Telegraph's EMMA SIMON had summarised 10 lessons to be learnt for the last 10 years to remind the investors that shocked the stock market.

They are:

1. A guarantee is only as good as the guarantor;
2. Don't buy something you don't understand;
3. Higher returns come with higher risks;
4. Don't pay more than you have to;
5. Long-term investments do not always mean long-term gains;
6. Ask how your adviser earns his money;
7. Read the small print;
8. Don't rely on easy credit;
9. Don't rely on others to provide a pension;
10. What goes up also comes down.

China Megatrends

China Megatrends
By John & Doris Naisbitt

John & Doris Naisbitt and his 28 staff members of the Naisbitt China Institute in Tianjin studied the patterns of the rising of China economy. The research reveals that China is not only undergoing fundamental changes but also creating a new social and economic system - VERTICAL DEMOCRACY - that is changing the roles of global trade and challenging Western democracy with its own model.

In their research, they have found out the EIGHT pillars of the new Chinese system. They are:

Emancipation of the Mind
Balancing Top-down and Bottom-up
Farming the Forest and Letting the Trees grow
Crossing the River by Feeling the Stones
Artistic and Intellectual Ferment
Joining the World
Freedom and Fairness
From Olympic Medals to Nobel Prizes

A thoughtful, ambitious overview sure to be of interest to all those curious about China economics.

Billion Dollar Green - Profit from the ECO Revolution

Billion Dollar Green
by Tobin Smith

Climate changes, that caused the rises of sea water level, have started to affect our usual way of living. Strategies to combat global warming are being worked out. These includes a carbon trading system to cut greenhouse gas emissions. So a green revolution of sorts has begun and with that comes business opportunities on developing viable sources of alternative energy.

Tobin Smith gives you the facts and forecasts on growth in the 'green investing front' and let you see for yourself just how large this opportunity is. He analyses different green energy sectors from solar to wind energy, from hydrogen fuel cells to green car to green buildings and etc. On top of the analysis, he also provides information on investing in green companies.

Tobin Smith tells you not only where the hot money will be made, but, what revolutionary trends lie just around the corner. He details ten or more companies who are real growth stocks with investment profit potential. This book is for anyone interested in investing in the companies that will make billions from the solutions to the billion-dollar problems in the green technology space.

Overall the book is an informative read for those who are looking to learn about green technology and are interested to invest in green technology companies.

How to Smell a Rat : The Five Signs of Financial Fraud

How to Smell a Rat: The Five Signs of Financial Fraud

By Ken Fisher

With the recent financial fraud led by Bernard Madoff, many investors are unsure who to trust with their hard earned money.

In "How to Smell a Rat : The Five Signs of Financial Fraud" the latest book from Ken Fisher, CEO of Fisher Investments, provides you with an insider's view on how to spot potential financial disasters before you commit your money to a scam and protects you against similar frauds in the future. Using real examples of recent and historic fraudsters, this book examines how they operated and how investors could have avoided them. Ken Fisher identifies important red flags and questions that can be used by investors when evaluating money managers:

Advisers with direct access to investors' funds;
Firms with numbers that seem too good to be true;
Managers with fees that are too low (Madoff didn't charge any fees, he just charged for trading);

You'll be better prepared to identify and avoid financial scams that could destroy the wealth you've worked so hard to build.

The main chapters of the book are

Chapter 1 : Good Fences Makes Good neighbours

Chapter 2: Too Good to be True Usually Is

Chapter 3: Don't be Blinded by Flashy Tactics
Chapter 4: Exclusivity, Marble and Other Things That don't Matter
Chapter 5: Due Diligence is Your Job, No One Else's
Chapter 6: A Financial Fraud - Free Future

Holiday

Holiday during last four months

We have been occupied by other matters and events during last four months and we regret for no publishing any posts in this blog. There were a lot of changes during this period especially for investors. Most of the investors were happy about the bullish of the shares markets as well as commodities markets.

We wish to share our happiness of the marriage of our daughter. The following are some of the photos that have been taken during her wedding.

Ten Rules to remember for share investors

Robert Bab Farrell, former Merrill Lynch chief market strategist, has fifty years of top Wall Street experience and insights, summaries the markets in ten commonsense simple rules for us to remember when investing.

1. Markets tend to return to the mean over time.
2. Excesses in one direction will lead to an opposite excess in the other direction.
3. There are no new eras - excesses are never permanent.
4. Exponential rapidly rising or falling markets usually go further than you think, but they do not correct by going sideways.
5. The public buys the most at the top and the least at the bottom.
6. Fear and greed are stronger than long-term resolve.
7. Markets are strongest when they are broad and weakest when they narrow to a handful of blue chips names.
8. Bear markets have three stages - sharp down; reflexive rebound; a drawn-out fundamental downtrend.
9. When all the experts and forecasts agree - something else is going to happen.
10. Bull markets are more fun than bear markets.

The End of Food by Paul Roberts

In the book, Roberts says one of the main roots of the wider food crisis is the way a unified farming process was broken down into discrete components so that they could each be industrialised, from the development and production of seeds and the mechanisation of planting and harvesting through to factory-scale food processing.
These changes have lead to a system where each individual step in the process takes no account of the wider costs imposed on the rest of society.
In addition, there is an ongoing concern about climate change. Not only does this system generate enormous greenhouse gas emissions. It is also dependant on huge quantities of water, something that is to become less secure as existing water sources are used up.
Roberts says, for example 'bird flu' is one of a number of bullets that could strike the modern food system . He also lists oil price rise, extreme weather, plant diseases and the loss of water supplies as other potential disasters awaiting us in this global Russian Roulette.
The title of this book - The end of food - means the collapse of this industrialised food system. It is this pessimism that runs to the heart of the book.

Jeremy Siegel and his investment books

Jeremy Siegel, a Professor of Finance at the Wharton School of the University of Pennsylvania has written a number of books on investment. The following two books are his research works on stocks.

Stocks for the Long Run (4Th edition): The definitive guide to financial market returns and long term investment strategies

This book is the best summary of the historical data on investing in US (with some comparison to other financial markets as well). The main topics are:
1. The Verdict of History;
2. Stocks Returns;
3. Economic Environment of Investing;
4. Stock Fluctuations in the Short Run;
5. Building Wealth Through Stocks.

Another book is

The Future for Investors: Why the tried and the true triumph over the bold and the new

This book cover five parts:
First two parts focus on analysis of historic data using very unique perspective, mostly with respect to changing membership of SP500 index over the years.
In the Third and Fourth parts, he discusses the different measures to consider while analysing a company's performance from the shareholders' points of view.
The Fifth part is the most useful for reader seeking investment advice. He provides a sample portfolio based on the principles he explains in the Third and Fourth parts of the book. In addition to percentage allocation for US and non-US(about 30-40%) markets, he provides allocation targets for some of the specific investment strategies he discusses in the book (centred around the dividend paid by the company).

The New Paradigm for Financial Markets

The New Paradigm for Financial Markets: The Credit Crisis of 2008 and What It Means

This is a book written by George Soros. It was published in May 2008 before the severe financial crisis in Sept 2009. So George Soros became a successful prophet of the markets.

In his book, he offers some solutions, which centre on new regulation for markets and how to avoid forced sales for US homeowners. The theory he developed is based on 'the relationship between thinking and reality' - "Reflexivity". He says, participants' thinking plays a dual function: they try to understand the situation, and to change it. The two functions can interfere with each other, when they do so the markets displays 'reflexivity'.

Soros believes that a super bubble has been formed as the result of a "long-term reflexive process". Its hallmarks include credit expansion and a prevailing misconception. There have been numerous financial crisis in this period, and these served as successful tests which reinforced the prevailing trend and the prevailing misconception. Thus the current crisis grows in severity because it marks the turning point when both the trend and the misconception have become unsustainable.

Kristabel in Singapore

Futurecast by Robert J Shapiro

This book is written by Robert J Shapiro. He looks into the future to tell us what our world will over the next dozen years.
Shapiro foresees monumental changes caused by three historic new forces - Globalization, the Aging of societies and the rise of America as a sole superpower with no near peer - will determine the paths of nations and the lives of countless millions.
Rob Shapiro thinks we can expect
- US military hegemony will be a thing of the past while the new superpower rivalry will be between China and the US.
- Mexico and Turkey will produce most of the world's cars.
- The US will be the premiere source of products and services, but the economy will be hostage to foreign lenders for capital to develop these products.
- China will be able to offer less-developed countries a new model of political and economic success based on investment -led growth.
- Japan and Europe will move to the periphery of world power.
-Labour forces will contract and economic growth will be stymied, the vast number of retirees will create a financial crisis for government.
- Two wild cards : Terrorism & Technological Advancement have the potential to unpredictably alter the projected future outcome. Technological advancement includes nanotechnology, biotechnology and information technologies.

The Snowball - Warren Buffet and the Business of Life

Miss Alice Schroeder, a former managing director at Morgan Stanley- an insurance analyst - and hand picked by Buffet to be his biographer - strips away the mystery that has long cloaked the world's richest man to reveal a life of fortune erected around lucid and inspired business vision and unimaginable personal complexity.

The Snowball is the much anticipated book recounting with intimate detail the life experiences and life-wisdom of the man known as " The Oracle of Omaha": Warren Buffet.

Being human, Buffet's own life, like most lives, has been a mix of strengths and frailties. Yet notable though his wealth may be, Buffet's legacy will not be his ranking on the scorecard of wealth, it will be his principles and ideas that have enriched people's lives. This book tells you why Warren Buffet is the most fascinating American success story of our time.

Professor John Allen Paulos and his books

John Allen Paulos is a professor of mathematics at Temple University in Philadelphia, who has gained fame as a writer and speaker. His book "Innumeracy" was an influential bestseller and "A Mathematician Reads the Newspaper" extended the critique.

The following are the abstracts of some of the books written by him.

Innumeracy - Mathematical Illiteracy and its Consequences : Innumeracy is an examination of some of the consequences in every day life of mathematical illiteracy. Topics addressed include stock scams, para psychological claims, medical testing & etc.

A Mathematician Reads the Newspaper : The book, structured like the morning paper, investigates the mathematical angles of stories in the news and offers novel perspectives, questions, and ideas to coffer-drinkers, policy-makers, gossip-mongers and others who can't get along without their daily paper.

Mathematics and Humor : In the book, he (i) explores the operations and structures common to humor and the formal sciences. (ii) shows how various notions from these sciences provide formal analogues for different sorts of jokes and joke schema and (iii) develops a mathematical model of jokes using ideas from "catastrophe theory".

A Mathematician Plays the Stock Market : The book primary purpose is to lay out, elucidate, and explore the basic conceptual mathematics of the market.