Weekend Rumble

Weekend is here! I am quite impressed the way the US markets closed, with average volume. Impressive! The daily chart is still bearish however. This is reversed if the S&P can close above 900. Support for any downside should be at 800 for the rest of the year.

Let me take a break from the charts and talk bout the investors that I look up to. I don’t think I have spoken about it before. No, it is not Mr W.B. I have read his book. A genius indeed and his net worth speaks for itself. However I aint within the “WB Party”. I’m with the “GS and JR Party”. It sounds like some democrat vs republican parties eh?

GS of course for George Soros and JR for Jim Rogers (James Beeland Rogers). I believe he’s moved to Singapore with his family last I heard. Not too sure if he still is around.  He wanted Asia as he felt the drive and motivation among Asians very attractive but chose not to relocate to China/Hong Kong due to pollution problems.  The Quantum hedge fund he set up with George Soros is largely based on shorting US financials. He believes the kind of bonuses paid out to young Wall Steet folks is not sustainable and when the dust settles, there will be consequences.  His calls have come into fruition but before you blame him for killing off Lehman Bros..Bear Stearns and all those, he shorts the index more using ETFs. We also have an STI ETF but it is a long only thing. Recently Phillips has a CFD tradable ETF and this is VERY EXCITING! The ETFs in the US market returns 2x short on the index movement. Generally quite few ETFs there work this way and imagine if you think the DJIA has say, 500 points down, and you go short, you are going short 2x. The irony of an American going short on american financials cause he simply does not believe in them. I like that philopsphy. Pretty much how the way I think. If I were in his shoes, my personal opinion is ‘so what if I am an american?’.

The bottom line from Jim? ” Stocks in the industry, which pays too much in bonuses, may fall as much as 70 percent in a bear market, he said.”

George Soros was born in Hungary and is Jewish. His drive in investment was simple. To earn enough Wall Street to support himself as a philosopher. He had a target of 500,000 within a 5 year span which he felt was enough. 5 years came and went and he exceeded his own expectations by netting around 11billion.  He’s also famous for being the currency speculator that killed BOE.

“On Black Wednesday (September 16, 1992), Soros became immediately famous when he sold short more than $10 billion worth of pounds, profiting from the Bank of England’s reluctance to either raise its interest rates to levels comparable to those of other European Exchange Rate Mechanism countries or to float its currency.

Finally, the Bank of England was forced to withdraw the currency out of the European Exchange Rate Mechanism and to devalue the pound sterling, and Soros earned an estimated US$ 1.1 billion in the process. He was dubbed “the man who broke the Bank of England.”

The Times of Monday, October 26, 1992, quoted Soros as saying: “Our total position by Black Wednesday had to be worth almost $10 billion. We planned to sell more than that. In fact, when Norman Lamont said just before the devaluation that he would borrow nearly $15 billion to defend sterling, we were amused because that was about how much we wanted to sell.” -Wiki

Soros is also a philanthropist and has given away more than 6 billion to various projects from Africa (including helping black students into university in south africa), Europe (Iron curtain) and USA.

If I had to put my money somewhere, it would be into the Quantam hedge fund. But where I currently stand they won’t be interested hehe.. So instead of berkshire shares (which in all fairness is probably one of the best (and hardest) shares to own long term), I’d like a hedge fund. However I somewhat tend to be rather ambitious and a control freak of sorts. While I am no where near as good as the gurus I mentioned above, I like to manage my own money. Money I earned, and money I can trust with myself only.  I am very likely to do asset reallocation over time depending on the situations surrounding but for now, I have just 1 goal to achieve. To be clear, it is a never ending goal. I have to remind myself where enough is enough. As my trusty remisier reminds me here and there, do not ‘zhou huo ru mo’ hahaha..

By the way, have you guys pondered on the cause of the credit crisis? I was just thinking bout it, in my sleep! Is the media the ultimate culprit? It is a vicious cycle. The people want the news, they report the news. The more they report, the more people are interested. Unfortunately, ratings still matter a lot. But they are working towards responsible reporting. They had better. It is said that, the recession and collapse of so many FSIs isn’t exactly due to credit issues. Those are real, but indirect. The speed at which things tumble forcing them bankrupt is fuelled by the speed of media. Imagine the value of your property is going down by 2/3. If it is gradual, perhaps u may be able to find a way out. But if the value plummets by 75% over 5 days, and u still have loans, u could be bankrupted in that 5 days alone. It isn’t one entity that brought down the economy. It is a perfect storm. 20 yrs they had media, today there is, 20 yrs from now there still will be, and it is gonna be the same story again and again.

PS – We have seen how quick financial stocks have plummeted this year. It was truly unbelievable.. but now I have seen it with my own eyes!

Have solid long weekend everyone! Selamat Hari Raya Haji to all who celebrate it!