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PUBLIC LECTURE by Dr Jomo Kwame Sundaram

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Details of the lecture are as follows: Title: When will we ever learn? Has Malaysia learnt the correct lessons from past crises? Date: Wednesday, 16 December 2009 Time: 7.30pm Venue: Hotel Singgahsana, Persiaran Barat, off Jalan Sultan, 46760 Petaling Jaya (next to Taman Jaya LRT Station) Admission: FREE The Topic The world is still struggling to emerge from the longest and deepest financial crisis in six decades. For every piece of optimistic news about recovery there are stories of setbacks and worsening downturns. Asia has been here before. A decade ago, the Asian financial crisis swept across the region. It not only prompted some rethinking of how to 'manage' financial crises but also stimulated some serious rethinking about the character of the development model in Asia. Lessons were learnt and new policy and institutional frameworks were put into place. But the severity of the current crisis begs a question: did politicians and policymakers really learn the right lessons ...

Book Fair at Danga City Mall

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There will be a book sharing session at the following book fair: Venue: Danga City Mall Johor Bahru Date: 28-11-2009 Time: 5:30pm - 6:30pm As usual, I'll be sharing with my readers some usefull investment tips. So see you there!
How Happy Are You? If I were to ask you a question: How happy are you? To answer this question, you will start to look around your friends and neighbours what they have in order to judge how happy you are with what you have. This is known as "anchoring" which means we like to make decisions based on some reference points. To illustrate this concept further, there was an experiment done by a famous behavioural economist, Dan Aeriel based on an actual ad from the Economist . There were three offers in the ad: an Internet-only subscription for $59, a print-only subscription for $125, and a combined print and Internet subscription, also for $125. When Dan gave these options to a group of students, 16% chose the internet-only subscription, none took the print-only subscription, and 84% opted for the combined subscription. Sounds reasonable ? But in his second round of experiment, he took out option 2 since no one selected it and offer the Internet-only and combined subscription op...
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What If Jeremy Grantham is Right? Jeremy Grantham, president of investment management firm GMO LLC, has been getting a lot of press lately. At the market's top, he warned of an impending bear market. At the bottom in March, he forecast a historic rally. Today, he says the market is 25% overvalued. Should you be worried? Perhaps not. Let's start with Grantham's track record. He's made a couple of good calls lately. But does he get it right all the time? Of course not. No one does. But even if he's right, it wouldn't necessarily be negative. It all depends on your time horizon. Here's why... How Long-Term Investors Can Benefit From A Bear Market If you own stocks on margin, call options, or LEAP options, a market downturn could be devastating. A 50% decline in the value of a fully margined account would erase your equity. Your options could expire worthless. Who benefits from a bear market? The obvious answer is short sellers and put options buyers. But others...

Double Dip Economy

Recently many economists have warned that the global economy may suffer a double dip economy in the near future. There are reasons for their worry. Firstly, governments around the world have been pumping billions of dollars into their economies for fear that their economies will undergo a prolonged recession like the 1929 "Great Depression". The aggressive fiscal stimulus policies have been doing the wonders of a speedy V-shaped recovery for most of the economies in the world, especially the Asian countires. Secondly, the "Fear and Greed" factor in human's emotion has started to build bubbles in the stock markets and property markets around the world. Since the subprime crisis, Singapore STI up 77%, Hong Kong HSI up 65%, Indonesia JKSE up 100%, Bursa Malaysia up 50%. And property market in Singapore also see sales volume reaching its pre-crisis level. Its 2Q 2009 almost doubled 1Q 2009’s level to reach an eight-quarter high of 4,714 units. A year ago, "fear...

Consumer Confidence Index

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Warren Buffett said:"Be fearful when others are greedy; and to be greedy only when others are fearful." We know the idiom very well but how many of us know how to apply this classic idiom in the stock market? There are many indicators that track the market sentiment such as the GDP, unemployment rate, volatility index, put-call ratio and so on. Today I want to talk about one particular indicator which I think is a good representation of the sentiment of the economy as well as the stock markets - The Consumer Confidence Index (CCI). Consumer Confidence Index is an American indicator but it definitely affects the rest of the world. From the CCI we can tell whether the public sentiment is bullish or bearish. This is important because we want to know when the majority people are greedy and when they are fearful. Here's a look at the current CCI, as at August 2009 the CCI stood at 54.1, while the base year was 1985 with 100 index. The dip we saw in the chart above was regist...

Trading Strategy - Dogs of the Dow

Dogs of the Dow Strategy How this works is very simple. All you need to do is to rank the FTSE Bursa Malaysia top 30 largest companies according to (1) PE ratio from lowest to highest; and (2) Dividend yield from the highest to lowest. The aim is to select those companies with the highest dividend yield and lowest PE ratio. Here's the top 5 stocks for the lowest PE and the highest DY as at 28th August 2009. Top 5 PE Stocks Hong Leong Bank 9.60 RHB Capital 9.65 Berjaya Sports Toto 13.00 YTL Corp 13.14 AMMB Holdings 13.26 Top 5 Dividend Yield Stocks Digi.com 8.51 Telekom Malaysia 8.33 Malayan Banking 7.99 Berjaya Sports Toto 6.76 UMW Holdings 6.00 Hence the best stock from this strategy is BToto as it appears twice on the lists. (For more info on BToto please visit this website: http://www.pg8.net/viewtopic.php?f=4&t=119&start=10 ) Different people will need to establish their own trading strategy according to their lifestyles, investment knowledge, debt obligation, and risk...