To Buy or to sell?

A very interesting point for global equity. Some people must be wondering whether to follow the herd to buy and buy, or to sell and take profit.

A look at the recent trend, all tumbling stocks belong to defensive stocks - look at those stocks falling on Dow - Coke, J&J etc. In Singapore, REIT is tumbling down these 2 days after reaching new highs, and yield is falling to an average of 5%.

The fact that defensive stocks are falling, is good news for future stock trend, as investor are selling these stocks to jump into banking stocks and some cyclical stocks.

All central banks are printing money like nobody business, or lowering their interest rate, and this will continue to flood the stock market and keep it going.

US economy is improving, and my viewpoint is it will not be strong enough to entice Fed to stop the bond purchase, at least in the next 6 months, and this will also keep stocks going and US dollar getting stronger against other currencies. With it, gold and silver will keep falling.

Short Term Outlook: Sell Commodities and Precious Metals (especially Gold). Buy into US banking and cyclical stocks.

Long Term Outlook: Fed pullout will cause a tsunami, keep a lookout on REIT, and commodity stocks while it keeps falling. Some accumulation of gold will be good near 1000 mark.

Buy buy buy!

USA good job data, Greek debt will reach agreement, short term strong buy on equities.

US and European Total Writedowns - 2

BANK             2007     2008     2009      TOTAL

Citigroup        29.1     63.4     30.7     $123.2
Wachovia Corp     4.0     73.4               $77.4
Bank of America  12.1     29.2     35.5      $76.8 HSBC             19.3     30.3     26.4      $76.0
Lloyds            6.8     28.9     36.1      $71.8
Merrill Lynch    25.1     38.6               $63.7
UBS                       50.6      1.8      $52.4
RBS               7.0     23.5     21.3      $51.8
Fannie Mae        4.7     26.9     15.4      $47.0
JPMorgan Chase    4.5     10.2     29.5      $44.2
Freddie Mac       5.2     24.4     12.8      $42.4
Washington Mutual 5.1     36.7               $41.8
Barclays          7.0     16.5     12.7      $36.2
Wells Fargo       3.5      8.7     18.2      $30.4
Lehman Brothers  12.5     14.0               $26.5
Santander         4.8      8.3     13.2      $26.3
Morgan Stanley   10.3     10.1      2.4      $22.8
Commerzbank       3.9     13.3      4.5      $22.3
BNP Paribas       2.4      8.0     11.4      $21.8
Deutsche Bank     4.0     11.2      4.9      $20.1
UniCredit         3.5      5.1     11.3      $19.9
IKB                                          $14.7
Credit Suisse     3.5     11.9      0.5      $14.6
BBVA              2.7      4.2      7.7      $14.6
National City                                $14.0
C.Agricole        2.7      4.4      6.3      $13.4
Societe Gen       1.3      3.7      7.9      $12.9
Intesa Sanpaolo   1.6      4.5      4.9      $11.0
ING                        7.1      2.4       $9.5
Bayern LB                  1.1      8.0       $9.1
Goldman Sachs     1.7      4.9      1.9       $8.5
Natixis           2.0      2.5      2.0       $6.5
Canadian Imp                                  $6.5
Stan Chartered    0.8      1.8      2.0       $4.6
Erste Bank        0.8      2.5      1.3       $4.6
Bear Stearns               3.0      0.6       $3.6
Fortis                                        $3.1
WestLB                                        $3.0
Rabobank                  0.8       1.7       $2.5
 ===================================================

Total                                      $1,151.5

 (Sources: Reuters/annual reports/company filings)

Best of Singapore Food

Below are all the excellent food that I have personally tried and I have decided to blog them down to share. Go try them!!

Last updated on 13 Mar 10: Chia Bee Lor Mee, Whampoa Fish Head Steamboat and Ippudo

Singapore - Restaurants

1. Astons Specialties - Western Cuisine, 119 East Coast Road & few other express outlets around Singapore, visit http://astonsspecialties.blogspot.com/ for more information. Try the steak, it is soft and tender and cheap! Serves Wagyu beef at a reasonable price.
2. Boon Tong Kee at Balestier Road- Chinese Cuisine, 401 Balestier Road, this branch serves undenibly the best chicken rice in Singapore. The chicken is so tender that it melts in your mouth. Other dishes like the pork rib, soup, and salad you tiao are good as well!
3. 黑社会- Translate to Boss Restaurant, Chinese Cuisine, 1 Harbourfront Walk #02-156/157 Vivocity, Aircon and nice ambience, serves the best dim sum in town! but the dim sum is only available in the afternoon till 5pm.
4. Bottle Tree Village Seafood Restaurant - Chinese Cuisine. 60 Jalan Mempurong (Sembawang). This is a very tranquil and unique place located deep inside Sembawang Park and is facing the beach. A very nice ambience. You can only drive there and the place is so secluded that it is not easy to find. Direction: From Sembawang Road, head all the way to the end, in the direction of Sembawang Park, past the Sembawang Straits estate. When you come to Andrew Ave (where some pretty nice houses are being built), turn right and follow the signs leading into Jalan Mempurong where Bottle Tree Village is located. It serves seafood with Thai-Chinese style. Try the butter prawn, it is one of the best i have ever tasted. The rest of the food tastes pretty good too!
5. Canton Wok by Chef Kang - Chinese Cuisine, 382 Joo Chiat Road. Try the set menu, which comes with 10 dishes at around $260. It is relatively cheap and the food is yummy! However the crab is ok only.
6. Whampoa Fish Head Steamboat - Chinese Cuisine, at intersection of Balestier Rd and Ah Hood Road. Beside the Fish Head Steamboat, its other dishes are very good too! Prices are reasonable.
7. Tambuah Mas, Indonesian Cuisine, Orchard Road Paragon #B1-47. Branches at marina square and tanglin shopping center. It serves authentic Indonesian homestyle cuisine, delicious with classic coconut milk and belachan fragrance. Try the otah, curry and chilli chicken, belachan kangkong, sotong, and many more! and don't miss out the chendol dessert!
8. Matsuo Japanese Restaurant, 松尾，Japanese Cuisine, 1 Newton Road #01-17 Goldhill Plaza. An small authentic japanese restaurant frequent by japanese businessman, and it serves the freshest and sweetest sashimi in town, which is as good as those you find in Japan. However it is expensive (ard $120 per person). Be there to try the assorted sashimi set and the beef, they are simply awesome! Ambience is casual.
9. Ippudo - Japanese Cuisine, Mandarin Gallery Orchard #04-02/03/04. Serving one of the best ramen I have ever eaten. Tel: +65 6235 2797.
10. First Thai Food - Thai Cuisine, Purvis Street, Non-aircon and casual, Cash payment only, no reservation, serves the most authentic, best and one of the cheapest Thai food in Singapore. Try the Fried/Steam Fish and Fish Cake!
11. Nana Restaurant - Thai Cuisine, Far East Plaza, Aircon and casual, cheap and excellent. Try the Butter Prawn and Pandan Chicken!

Singapore - Hawker Centers/Coffee Shops

1. Bak Kut Teh - Sin Heng Claypot Bak Kut Teh - 439 Joo Chiat Road. The Best Bak Kut Teh I have ever experienced.
2. Bao & Cantonese Dim Sum - 道记，Dao Ji, #01-1018, People's Park Cooked Food Centre at Chinatown next to OG Department Store. This stall serves the best Bao (meat bun) in Singapore!!
3. Carrot Cake - 青山菜头粿, Qing Shan Carrot Cake, Blk 127 Toa Payoh Lor 1 Market, #02-30, 6am - 1pm, Closed on Mon. Try the white carrot cake, chilli is must have! It is the best I have tried!
4. Char Kway Teow - Cui Lu Shang Tang Fried Kuay Teow, 505 Beach Road, Golden Mile Food Centre #01-91. A unique fried kuay teow with lots of fried crispy anchovies and green crunchy vegetables, besides the fresh clams. Though it does not use lard, it tastes better than those with it. A must try and be there early as it usually closes by dinner time.
5. Chicken Rice - 瑞丰，Rui Feng Hainanese Chicken Rice, #01-1012, People's Park Cooked Food Centre at Chinatown, the large hawker center next to OG Department Store & ChinaTown MRT Exit. The chicken is soft and tender, the sauce is yummy, and the chilli is fragrant and hot enough!
6. Claypot Rice - Geylang Claypot Rice, 639 Geylang Lorong 33. This is the place which serve the best claypot rice in Singapore. You should try other signature dishes like the lotus duck, soft shell crab, stir fried beans and grouper. They are excellent too!! Visit http://www.geylangclaypot.com/ for more info, and please call 6744 4574 to pre-order to avoid long waiting time.
7. Crab - Mellban Seafood, Blk 232 AMK Ave 3 St 22. Try the butter crab, it is awesome! It has a branch at Toa Payoh Lorong 8, Blk 211, the crab at this branch is not as good.
8. Duck Rice - 福南鸭饭 Hock Nam Duck Rice, 588 Balestier Road, it is a small coffee shop situated along Balestier Road (near to Thomson side). Open only during the day. It serves one of the best tasting braised duck, that comes with chicken rice, some vegetables, and a tasty peanut soup at the price of $3.50. Trust me, it is marvellous!
9. Duce Rice - 阿盛鸭饭 Ah Seng Duck Rice, Serangoon Garden Hawker Center, it is a large hawker center situated just before the circle, opposite the Post Office. The braised duck sauce is very yummy!! The duck meat is also very thinly sliced, and the slightly salty but tender and tasty duck meat blends well with the white rice served.
10. Fish Soup Noodle - Wu Xiang Fish Soup, Located at a coffeeshop at Blk 304 Serangoon Avenue 2 (same of Dju Dju). The fish is fresh and the soup is very tasty! Open till after Midnight.
11. Fried Hokkien Mee - 天天来, Tian Tian Lai Fried Hokkien Mee, #02-27 Toa Payoh 127 Market & Food Centre, it serves the best ever fried hokkien mee I have ever tried, tasty with fragrant prawn smell and taste.
12. Kueh - 荣潮州 Yong's Teochew Kueh, Toa Payoh HDB Hub Interchange basement food court.
13. Laksa - 真善美 Zhen Shan Mei Claypot Laksa, Shenton Way Market Street Car Park Building. You can find the hottest, thickest and tastiest laksa in Singapore here. It is previously located at Depot Road, which is then moved to Killiney Road, and then to this new place.
14. Lor Mee - Chia Bee - Blk 10, North Bridge Road (coffee shop nearest to main road) - The Best Lor Mee with crispy fried fish, but it is only opened from around 1am till 11am.
15. Pig's Trotter - 韩家肉骨茶，Han's Bak Kut Teh, Store 42, East Coast Lagoon Food Village. Open in the afternoon till early evening. The braised Pig trotter is huge, fatty and delicious! and the dark sauce gravy is splendid! This is one place which sells the best braised pig trotter in town!
16. Rice - Dju Dju Indonesian Food, Located at a coffeeshop at Blk 304 Serangoon Avenue 2. The chilli is very nice, but spicy. The sambal chicken, sotong and otak is a must try! Closed at 9pm.
17. Rojak - 顺兴 Soon Heng Rojak, Toa Payoh HDB Hub Interchange basement food court. It is crispy, fresh with lots of peanuts! Closed at 8pm, & on weekends.
18. Wanton Mee - 华记云吞面，Hwa Kee Barbeque Pork Noodles，Stall no. 45，East Coast Lagoon Food Centre. It serves the best wanton mee with its yummy barbeque sauce in town!
19. Wu Xiang - 93 五香虾饼 93 Wu Xiang Xia Bing, #01-202 Hawker Centre, Blk 93, Toa Payoh Lorong 4, very crispy and fragrant! A must try!

Cakes, Pastries & Desserts

1. RIVE Gauche - Orchard Road, Takashimaya Department Store, Basement 2, a small retail outlet that sells the best cake I have ever tried. Try the Mango and Guanaja, it is simply awesome! It has another outlet at Orchard Road, Plaza Singapura, Basement 2.

This post will be updated continuously.....Stay Tuned!

Buy Financials on this Dip!

Most, if not all economy indicators are pointing to a recovery. Even a shocking event like Dubai World defaulting on their loans, is not strong enough to jolt the market from their uptrend. This proves the strength of the market. The lingering unemployment issue in the US is also seen to be stabilizing and employment rate will be ticking up gradually.

Most US banks have returned their TARP loans, except for a minor glitch recently by Citibank, that pull the financial stocks down yesterday due to the cold response to its new stocks, but this is Citibank, the worst hit bank by the financial crisis, and a bank that is still majority held by the US government, and with the fact that the government is looking to sell all their current holdings, the market will not be big enough to absorb all of this, and Citibank stock price will remain under pressure for a long time to come.

I do not see anything wrong with the other US banks, and with the recovery, financials will be the first to ride the bull. Include some financials into your portfolio, and I believe this few weeks will be a good time to do so.

Buy on dips!

The market seems to be running out of steam, and with a mixture of good and bad signals, traders seem to have chosen to take some profits off the table.

US markets lost 2-4% last night, and Asian markets are currently on the downtrend. As reasoned in my previous article, I believe there are more downside, however there are several stocks which have reached reasonable prices, and you may want to nibble a little.

One particular stock that I like is Toyota Motor (TSE). I have especially waited for its Sep sales results to be announced (and I expected it to be poor, or at least a drop from Aug), after the US cash for clunkers program in Aug. It has dropped from around 4100 to 3380 within 2 months, and historical prices have been an average of 5000-8000 plus. Its tangible book value is around 3208, which means it is pretty near its book value. March lows is around 2500.

Though Toyota is bleeding now, but one thing to note is Toyota is the number 1 automobile company in terms of global sales, it has the highest sales in US (exceeded GM), and it owns the most popular electric hybrid car, Prius.

Automobile industry is subjected to cycles, and though I do not expect Toyota to bounce back very soon, it will be back eventually. Being also a dividend stock (around 2-4%), my view is this is a stock to hold for long-term, for both dividend and capital gains.

Thus I have issued a buy call for Toyota Motor, at a buy price of 3380 yen. Good luck!

Where is the market going from here?

The market has risen more than 50% from its March low, and recent market indicators seem to imply improving economy, but with some mixed signals. So is it a good time to go into the markets, for those who have not taken the courage to do so earlier and have missed the cash boat?

Let us take a look at what has happen since last year.

The main cause of this crisis is mortgage default, mainly in the US, and with this, causes many related subprime products to collapse. As a result, banks could not collect back their mortgage loans, and are stuck with lots of foreclosed empty houses. Losses on subprime products also accelerated the depletion of their cash. People starts withdrawing their investment with the banks, and the collapse of Lehman results in more default loans to most major banks.

While bank’s loan are insured, their insurers, like AIG, collapse under the influx of loan defaults. As a result, banks which can usually do loan from other banks, could not do so anymore as banks tighten their credit to ensure their liquidity to cover their losses.

Thus government has to intervene to do “free” loan to these banks, so that they can tide over the cash drain. And fortunately, this has indeed help to stabilize the banks, and prevent more from falling on their knees.

Market falls steeply, and the main fear is more banks will collapse, however what many people has forgotten is, this has pull down the entire market – consumer spending has declined steeply, job are lost, companies in other industry have collapsed, including retailers, and thus this has result in a different kind of loan defaults, like credit card and corporate loans.

Stocks start to rise from its March low, when it becomes clearer that the banks will no longer collapse, under the government support, and it starts to increase further when 2nd quarter results of most companies beat analysts’ expectations. Analyst Expectations? who are these analysts? Are they fortune tellers? Yes they are, and they are normal human beings like everyone of us, and the key thing is, they have the same objective as everyone of us, they want to make money out of the stock market, as their performance is not based on how accurate you write the report, but how much returns you have brought back for the company. Take a deeper look into the actual results and balance sheet of these companies and do a year-on-year comparison, you will see how badly hit these companies are. In normal circumstances, the stocks of these companies will be sold off steeply, instead of rising just because they beat expectations.

One thing to remember is, most government has pumped money into stimulate the economy, somewhere around the 1st quarter, and the most straightforward way to do this, like China, is to increase storage of commodities, make more loans to more companies. Companies also start to replenish their inventory after stopping for 3-6 months.

Who is going to buy the products made by these companies? Who is going to buy the houses built by the developers? One answer: End consumer, and one thing that many people has forgotten is US consumer spending accounts for two-third of its GDP, and US will still be the leading economy at least for the next 20 years.What do the banks do with those foreclosed houses that they are holding on?

Let us take a look at the latest indicators: US jobless rate at 9.7% – a 26 year high, and an increase from 9.4% from the last month, and people cheers that the number of job losses are less than expected. Consumer savings are increasing, and latest consumer confidence has dropped as well. These are dark figures in terms of consumer spending.

One can only fix an issue when the source is fixed. The source of the entire crisis is housing loans. What is happening now is the banks are trying their best to work with people to prevent more foreclosure and help them to continue with their loans, to the extent when interest rates are lowered or loan periods are extended. They are doing this as it makes no sense for them to force closure, as what are they going to do with the stocks of foreclosed empty houses?

Let’s look at the housing data. One thing to cheer though, is that housing indicators are improving in the US, but a dark spot is that the percentage of mortgage defaults are still increasing. This is another indicator of poor consumer spending power.

The economy is stabilizing, and is not as bad as before, and is definitely deteriorating at a slower pace – note that is not growing. My point is, though unemployment rate is a lagging indicator, but this rate at a 26 year high is no joke, and without consumer sucking up all those stock-up inventory, the economy will not move and will not grow.

The market warrants an increase from its March lows, but definitely not an increase of 50-80%. Few good indicators of market bubble are the volatility of the stock markets recently, especially China, the pulling back of loans in China as advised by the government to avoid bubble, and the high volume trading of cheap and poor quality stocks – in the US: Citibank, AIG, Freddie, Fannie and BOA, in Singapore: penny stocks which has poor historical results in the top 10 active list and this has been happening for some time. Another indicator is the never-seen in tandem rise of bonds, gold and equity, one of this has to break off its relationship, and my take is equity.

The 3rd quarter results are especially important on determining the market directions from here, but meanwhile, i do not see anything boosting a further increase from here. My take is a fall of at least 10-15% from here, especially during the Sep/Oct period.

As a long term investor, do buy on this dip, as my feel is this is going to be the last few dips, and the market is going to rise slowly from here. My last note: I am also a fortune teller, like all those analysts. Thus you may not want to take my word too seriously and do make this a leisure read.

US and European Banks Writedowns

BANK 2007 2008 2009 YTD TOTAL Citigroup 29.1 63.4 11.9 $104.4 Wachovia Corp* 4.0 73.4 $77.4 Merrill Lynch* 25.1 38.6 $63.7 HSBC 19.3 30.3 4.8 $54.4 UBS 50.6 3.6 $54.2 Bank of America 12.1 29.2 6.9 $48.2 Washington Mutual* 5.1 36.7 $41.8 Fannie Mae 4.7 26.9 7.2 $38.8 RBS 7.0 23.5 8.0 $38.5 Freddie Mac 5.2 24.4 7.1 $36.7 Lloyd 6.8 28.9 $35.7 Barclays 7.0 16.5 7.2 $30.7 Lehman Brothers* 12.5 14.0 $26.5 Morgan Stanley 10.3 10.1 0.8 $21.2 Commerzbank 3.9 13.3 2.8 $20.0 JPMorgan Chase 4.5 10.2 4.4 $19.1 Deutsche Bank 4.0 11.2 2.8 $18.0 Credit Suisse 3.5 11.9 1.5 $16.9 Santander 4.8 8.3 3.1 $16.2 IKB $14.7 National City* $14.0 BNP Paribas 2.4 8.0 2.5 $12.9 Wells Fargo 3.5 8.7 0.5 $12.7 Unicredit 3.5 5.1 2.4 $11.0 ING 7.1 2.4 $9.5 Bayern LB 1.1 8.0 $9.1 C.Agricole 2.7 4.4 1.5 $8.6 BBVA 2.7 4.2 1.3 $8.1 Intesa Sanpaulo 1.6 4.5 1.0 $7.1 Societe Gen 1.3 3.7 1.9 $6.9 Goldman Sachs 1.7 4.9 $6.6 Canadian Imp Bk $6.5 Natixis 2.0 2.5 1.3 $5.8 Erste Bank 0.8 2.5 0.7 $4.0 Bear Stearns* 3.0 0.6 $3.6 Fortis $3.1 WestLB $3.0 Standard Chart 0.8 1.8 $2.6 Rabobank 0.8 1.7 $2.5

Top Performing ETFs on AMEX

Trade Commodity via ETFs listed on AMEX

With the recent lows of Crude Oil and highs of Gold prices, and with recent spate of inappropriate corporate governance leading to total erosion of stock prices, it may be interesting to look at commodity ETFs listed on AMEX, especially when we have limited access to buying Futures, and if you fear of the expiration period of the Futures.

There are tons of ETFs listed on AMEX, and trading is very active, unlike those listed on SGX, which is pretty premature and trading volumes are low. I have put up 3 ETFs live prices on my site, namely United States Oil Fund, PowerShares DB Crude Oil Double Long ETN and SPDR Gold.

All these funds seeks capital appreciation and tracks Crude Oil and Gold prices pretty closely. With prediction that Crude Oil prices being on the uptrend on a long term basis, these ETFs provides the chance to be invested in these commodity, yet without the worries that prices will not appreciate to your expected level before expiration like in Futures.

However one thing to note is ETFs that trade oil futures, which allow investors to lock in the cost of oil they plan to buy later, face unique challenges. During bullish times, when oil prices are expected to rise, funds can end up paying contract prices that are higher than spot prices, a situation called "contango." Each time an oil ETF rolls contracts forward a month during periods of contango its return is eroded.

Generic crude oil contracts for May 2009 are trading at $48.46 a barrel on the New York Mercantile Exchange. The price rises to $55.04 for October 2009 contracts and $60.20 for May 2010 contracts. Each time an oil ETF rolls contracts forward a month, its return is eroded.

Thus there still exists a risk that ETF prices may not track commodity prices as closely as it is expected.

INVESTORS SHOULD NOTE: There are two types of ETFs -- those backed by physical commodities in storage, such as the largest precious-metals ETFs, and those that aren't, says Maister. With GLD, investors buy shares that track gold, minus 0.40% for expenses: "They buy physical gold, stick it in a vault and charge you 40 basis points a year. The 40 basis points is the only tracking error."

It's harder to store oil and grains indefinitely. So ETFs that include these commodities access the market through futures contracts, say Maister and Burns. But this means more potential for a tracking error, adds Maister. ETFs utilizing futures are likely to show greater deviations from changes in spot prices.

Sen notes that even if oil goes up, investors can lose out periodically, when nearby futures are more expensive than the next month out. An ETF may have to sell the front month at a lower price than it pays for the next during rollover. The plus of such ETFs is that they let those with less capital invest in oil without going it alone in futures, and without the worry of stock-picking the wrong name.

Time to accumulate some stocks!

Stimulus packages announcement seems never ending, from Barack Obama's recent $789 billion stimulus package, to the European nations and Asian Nations, every country is announcing stimulus packages to stop the economy from slipping further into recession.

There are 2 things that I would like to bring up here:

1. Before there are any signs of the economy recovering, the economy will already been in the recovery process for around 6 months. Thus there will be a point where more stimulus packages are pumped into the economy than needed.
2. The world is never fair, there are bound to be some industries that will benefit from these stimulus packages more than others.

A few industries that I would like to highlight here are:

1. The "new oil" = Fresh Water; The human race can survive without crude oil, but not without water. We can’t live more than a week without it. The main problem with oil is finding more of it. With water, it’s the distribution system that’s the issue, as it primarily flows through pipes. In developed countries, there is always a need to repair and maintain the existing pipes, in developing and undeveloped countries, there is a strong need to build new pipes and supply of clean and fresh water is inadequate. In China alone, roughly 300 million of its 1.3 billion people don’t have access to clean drinking water out of the tap. While the recession has consumers hunkering down - and cutting back their purchases of computers, cell phones, toys and other discretionary items - it hasn’t decreased their demand for clean, fresh water. And the biggest company in the world that is able to provide the infrastructure is Veolia Enviroment (US:VE).

   It provides bumper-to-bumper environmental management services for both water and wastewater. Whether it’s supplying clean water, recycling wastewater, or developing waste conservation systems, Veolia has a solution. In China, it’s operating freshwater plants, wastewater decontamination and recycling plants and sewerage treatment facilities.

   And now you can add some shares to your portfolio at more than a 75% discount to what they were trading a year ago. Veolia currently trades with a P/E of 8.8 and sports an 8.1% dividend yield.

2. Power - Similar to Water, there can only be an increasing hunger for power in this world. The largest producer of power generators in the world - General Electric is bound to benefit from those stimulus packages. General Electric, one of the most diverse corporation in this world, will be affected by the recession, but will not be forced to kneel down in front of the recession. The only affected division is GE Capital, which I believe is not as serious as Citibank, and they have already raised the needed capital earlier. The stock price is the lowest since 1995, and with a dividend yield of 13%, it is time to accumulate this stock. Do bear in mind that there is a risk of their AAA rating being cut by Moody, and there is a risk of them cutting their dividend, though they insisted that they will not.

Thus I have issued a buy call for GE and Veolia.

In addition, though prosperity may not be just around the corner, but statistical evidence is mounting to suggest that the worst of this recession may soon be past. Some evidences:

The Conference Board's index of leading economic indicators has risen for two months in a row.

Producer prices have increased for two straight months.

Consumer prices rose in January -- the first monthly gain in six months.

The Baltic Dry Index, which measures the cost of shipping key raw materials like copper, steel and iron, has more than doubled from its recent lows.

The ISM index of manufacturing went up last month.

The ISM index of services rose last month for the second month in a row.

The money supply is soaring, a sign that there's plenty of liquidity in the economy.

The 3-month London interbank offered rate, a measure of banks' willingness to lend to each other, has dropped to 1.2% from close to 5% a number of weeks ago.

All this said, the economy is still a long way from a pink-cheeked state of health. But remember, you've got to crawl before you can walk. And it looks like the economy is about to do just that.

Has the Market Reach the Bottom?

Investment banks have all but vanished from Wall Streets, giant corporations like AIG, Big 3 Motors, and even GE needed rescue package and loans from the US government, the world stock market has lost between 30-50% of its high. Recently, market starts to recover from its low, and from 1st day of 2009, there seems to be some signs of bull market raging on.

Should we hitch the bull ride?

We all know that stock market is forward looking, and when market indicators show signs of a recovering market, it will be too late and you would have already missed out. The time to buy is when things still looks dark. However I personally do not think the market has reached its bottom yet.

The biggest obstacle that the market faces right now is economic uncertainty. Nobody knows how long this recession will last. If it is to follow 2001, it will be a short one, but right now, it looks more like it will follow the deep and prolonged recession as in the 1980s.

2001 recession is triggered by external factors, it has nothing to do with consumer demands. Our current recession, though started off as a mortgage crisis in US, sparks off a chain reaction, starting from banks down to corporations, and down to consumers like you and me, and this is a world recession, not just the more simplistic Asian Financial Crisis.

The start of a bad quarter for corporations are only in the 4th quarter of 2008, and consumers have only started to tighten their belts a few months back. There can only be more bad news of more companies filing for bankruptcy and job cuts.

The next 6 months will show unemployment peaking in many countries, and more bad news from companies. In fact, the upcoming US Labor Department report will likely show an unemployment rate of 7% -- the highest it's been since 1993 -- according to Bloomberg. Also, Ford Motors (NYSE: F) announced a 32% drop in revenue during December, along with plans to reduce their North American workforce by 10%. Ford is in good company, with Merck (NYSE: MER), Goldman Sachs (NYSE: GS), Whirlpool (NYSE: WHR), and Yahoo! (Nasdaq: YHOO) also recently announcing layoffs.

In addition, on other fronts, the ISM November manufacturing index has fallen to its lowest level since 1982, and the service sector has fared little better. The services index, which accounts for roughly 80% of U.S. economic activity, fell to its lowest reading since its creation in 1997. Consumer spending has fallen off a cliff as worried families retrench and prepare for the worst.

Another indication that the market is not showing any sign of settling down soon is the incredible level of volatility we've encountered in recent months. While the CBOE Volatility Index -- aka the Wall Street fear gauge -- is down significantly from November, it's still pretty much off the charts. Historically high levels of volatility are a good indication that we haven't worked the panic out of the market just yet, and that further declines may be in the works.

Consumer spending accounts for 70% of US GDP, and consumer spending has not yet reached the bottom, and the core problem of this crisis, housing prices, has not stopped falling. Thus I believe more bad news will emerge and things will get worse before it gets better. Economic data will continue to disappoint and we will see new lows of stock.

I may not be right, thus if you have loads of spare cash, it doesn't hurt to start accumulating now, especially blue chips, in case I'm wrong and got blamed for causing you to miss the cash boat.

Overview of Singapore REITs

Update on Singapore REITs:

Botanical Cells Skin Products

Botanical Cells Skin Care Product, or some call it Stem Cells, is one of the latest craze recently. It has been hailed as the secret to fair, vibrant and youthful looking skin.

So what exactly are botanical cells products?

They contain 100% of extracts from plants, meaning all ingredients are natural and they do not contain any unnatural chemicals which is so in most other skin care products. It also undergoes little or no processing. As most people know, there is always a complementary relationship between human and plant, and thus botanical cells products are always safe without side effects!

But what exactly is in these botanical cells products that gives it such a good healing effect?

Botanical Cells Product contains a high level of amino acids (the basic building blocks of protein), vitamins (especially C and E), and antioxidants. All these are core essentials to building up a good skin.

Amino Acids

Botanical Cells Product contains essential amino acids that cannot be synthesize by our body, like lysine, leusine and threonine. Lysine is needed for collagen synthesis as well as healthy surface of proteins and enzymes. Leusine is coded for DNA and is a crucial element inside proteins and enzymes. Threonine contributes to the rich protein contents needed in collagen and elastin.

Vitamins & Antioxidant

Vitamin C (L-ascorbic acid) is one of the relatively few topical agents whose effectiveness against wrinkles and fine lines is backed by a fair amount of reliable scientific evidence, so I need not say more. Vitamin E, an antioxidant, is vital in protecting skin cells from ultra violet light, pollution, drugs, and other elements that produce cell damaging free radicals.

Botanical Cells Products also contain a high level of Nucleic Acid, a core component of DNA, and helps to repair skin cells at genetic level, Lycopersicon Esculentum, which provides a rich supply of Lycopene and Carotenoid to provide tremendous antioxidant effect, immunopotency as well as heals wounds and scars.

Botanical Cells Products are not widely available, and are usually available only at beauty salons. I personally am using it, and it does help in controlling oil secretion, provide tightening to your face, and give your skin a smooth and vibrant look and feel. It helps in reducing wrinkle lines as well. Strongly recommended.

It is not cheap though, but I believe every cents is worth it. If you ask me where to get it, I can only reveal the beauty salon that I am patronising, but I believe there should be few others that are selling it.

The one that I went to is called True Shape, a nice, comfortable little shop located at The Adelphi Building, the building just opposite Funan. The unit is #03-03. You can call 63366596 for enquiry if you wish.

Cheers!...next coming up will be Majolica Cosmetics Products...Stay Tuned!

Investing in Exchange Traded Fund - ETF

With major indices and commodities falling to one of the all-time lows, it will be a good time to take a look at investing in one of the derivatives - the Exchange Traded Fund or in short, the ETF.

Many people will panic during a market downturn, and do not know which stock will be the next to be hit, but most of these people also like to make good use of this downturn to buy stocks at a bargain price. A good alternative will be to look at ETF.

What is ETF?

1. It is a investment fund listed on a stock exchange.
2. It tracks the performance of an index, commodity or bonds.
3. It functions the same way as a normal stock, and can be bought or sold via your broker like a stock.

In short, it inherits the PROS of both stock and unit trust.

Benefits

1. Diversification - It allows a wide exposure via a single instrument, e.g buying the STI ETF allows exposure to the STI which comprises of 30 stocks.
2. Exposure to inaccessible market - It allows exposure to say Taiwan and India markets via the Lyxor Taiwan and IS MSCI India ETFs, where normal investors normally have no means to buy a stock in these countries.
3. Lower cost - Instead of upfront charges of 3-5% for unit trusts, ETF will only incur the usual brokerage commissions of approximately 0.5% and clearing fee of 0.04%.
4. Transparency & Flexibility - ETF can be bought or sold like a stock during normal trading hours and its live prices can be easily accessible, unlike unit trusts where investors can only buy or sell at the end of the day.

Risks

1. Market Risk - It falls and rise like a normal stock
2. Foreign exchange - Most ETF are denominated in USD and thus a fall in US/SGD will result in a loss in exchange rates.
3. Tracking Error - There is a slight risk that the ETF will not be able to replicate the underlying exactly, though this is not expected to happen.

Fair Value of ETF

The estimate of the fair price of an ETF will be its NAV (Net Asset Value) per unit. The NAV per unit is the total value of all assets minus liabilities in the fund, divided by the number of outstanding ETF units.

NAV is calculated once at the end of each trading day. An estimate of the NAV, called indicative NAV (iNAV) is also calculated periodically throughout the trading day. You can find the NAV value of those ETFs traded on SGX by going into the "General Announcements" of each ETF

I personally do not find these NAV of any significant to an investor's investment decision. Since you are buying into a portfolio of stocks, it should usually be for middle to long term investment, thus just buy when the underlying market is down. You will reap the returns when the market is up in a few years time.

SGX ETFs

Name	Underlying	Listed	Lot	Bank	Code
ABF S'pore Bond Index Fund	iBoxx ABF S'pore Bond Fund	31 Aug 05	1000	DBS	ABF SG Bond ETF
CIMB FTSE ASEAN 40	FTSE/ ASEAN 40 Index	21 Sep 06	100	CIMB	CIMBFTASEAN40100US$
iShares MSCI India ETF	MSCI India Index	15 Jun 06	100	Barclays	IS MSCI India 100US$
Lyxor China Enterprise	Hang Seng China Enterprise Index	19 Oct 06	10	Lyxor	Lyxor China H 10US$
Lyxor Commodities CRB	Reuters/ Jefferies CRB Index	18 Jan 07	10	Lyxor	Lyxor CMDTY 10US$
Lyxor Hong Kong	Hang Seng Index	1 Mar 07	10	Lyxor	Lyxor HangSeng 10US$
Lyxor MSCI AC APAC ex Japan	MSCI AC Asia Pacific ex Japan	19 Oct 06	10	Lyxor	Lyxor Asia 10US$
Lyxor MSCI Korea	MSCI Korea Index	7 Dec 06	10	Lyxor	Lyxor Korea 10US$
Lyxor MSCI Taiwan	MSCI Taiwan Index	1 Mar 07	10	Lyxor	Lyxor Taiwan 10US$
Lyxor MSCI India	MSCI India Index	5 Nov 08	10	Lyxor	Lyxor MS India 10US$
Lyxor MSCI Thailand	MSCI Thailand Index	5 Nov 08	10	Lyxor	Lyxor Thailand 10US$
Lyxor MSCI Malaysia	MSCI Malaysia Index	5 Nov 08	10	Lyxor	Lyxor Malaysia 10US$
Lyxor India Nifty	S&P CNX NIFTY index	28 Mar 08	10	Lyxor	Lyxor India Nifty 10
Lyxor MSCI Apex 50	MSCI Asia APEX 50 Index	5 Nov 08	10	Lyxor	Lyxor APEX50 10US$
Lyxor ETF Commodities CRB Non Energy	Reuters/Jefferies CRB Non-Energy index	5 Nov 08	10	Lyxor	Lyxor CRBNonEng 10 US$
streetTracks Gold Shares	Gold Spot Price	11 Oct 06	10	State Street	GLD 10US$
streetTracks Straits Times Index Fund	Straits Times Index	17 Apr 02	100	State Street	STF ETF

Review of Celestial Nutrifoods

With the demise of a popular growth China stock -FerroChina, think it is time that we take a good look at some other good China stock.

I have decided on Celestial, as it is a stock that I personally own, its valuation extremely cheap at current price, and it involves convertible bonds which is a popular method to raise cash by listed companies recently, but which also causes their prices to tumble after.

Let's take a good look at the convertible bonds of Celestial. It works this way:

1. Issued 12 June 2006 and up for redemption in 5 years on 12 June 2011.
2. A total of S$235,000,000 loaned.
3. Bond-holders can either convert the bonds to shares at the conversion price of $2.47, or redeem full on the maturity date (12 June 2011) at 129.263% of principal amount, or they have an option to redeem full on 12 June 2009 at 116.65%. Both provide same yield of 5.2%
4. The bonds do not bear any interest during the 5 years.
5. If fully converted, it will result in 91,439,689 additional shares, which is about 15.3% of the total current shares.

From the above, it clearly shows that it is in Celestial's best interest that all bond-holders will convert their bonds to shares, so that they will not have to cough up a large sum of money to repay the bond-holders. With Celestial currently trading at a price of around $0.30, I doubt that will happen, as investors will only convert when trading price is higher than their conversion price.

With current weak market sentiment, and where most bond-holders are institutional investors, in which most will need money in view of credit crunch, I have great reason to believe that most bond-holders will redeem the bonds on 12 June 2009, which means Celestial has 8 months to cough up a sum of S$274 million or RMB 1260.4 million

Let us take a look at Celestial cash flow. As of 2nd quarter 2008, it has about RMB 1651.1 million of cash, of which RMB 603 million has been invested in a new facility in Aug 2008, and left with RMB 1048 million. Based on FY 07 balance sheet, its current liabilities is around RMB 503 million, but that should be well covered by its trade receivables (assuming there is no default) of around 450 million.

Celestial net cash provided by operating activities is ard 450 million based on FY07. Adding together its trade receivables, operating cash and cash will yield RMB 1948 million. Its debt due by June 09 will be RMB 1763.4, inclusive of the payback to bond-holders. With this, I have reason to believe that Celestial has the ability to service its debt even if all the bond-holders choose to redeem on Jun 09.

What if all the bond-holders do a conversion to shares and results in dilution? The converted shares are about 15% of total shares. Celestial Historical PE is 2.2, its NAV per share is around $0.59, and price to NAV is only 0.478. Its price to revenue is 0.513 and current ratio is healthy at 4.325. Thus it can be seen that though it is to current shareholders' disadvantage if the bonds are fully converted, the fear has been overplayed as with the dilution, PE is still below 5 and price is still below NAV.

Thus I believe that there is no reason for Celestial to drop to its current low price.

Actually my only fear is not on the repayment of bonds, but what if melamine is found in Celestial's products as well? This will be disastrous. Let's wait for the tainted milk saga to settle down first....

BRTC Perfect Blemish Balm (BB Cream) Review

Blemish Balm cream, short for BB cream, is the latest craze of the ladies, as it works magic in covering spots and blemishes on the face, as well as providing skin care. In short it is a foundation cum concealer that has skin care properties like SPF, skin regeneration and the reason why it is so popular is, it evens out the skin tone so well that everyone seems to be having good and glowing skin.

The product was originated in Germany and used by dermatologists to help patients who have gone through laser skin surgery soothe and regenerate the skin.

Soon after, Korean celebs started using the cream and a craze was born. Big companies then took the idea and turned it into a product widely available to the public. The new product is suitable for all skin types, especially those with sensitive and acne-prone skin.

With reviews collected from a number of friends on the latest craze of ladies, the BB cream, I would like to provide a review on the most popular BB cream - the BRTC Perfect Blemish Balm Cream.

This BB cream has a thick texture, and thus works well in evening out the skin tone and covering up spots and blemishes as it spreads out and blends into the skin easily. Dark eye circles can be covered up effectively. Its smell is fine, and works above average on oil control, though it is not the best for oil control. It provides fairly fair skin tone after application.

After prolonged usage, skin is visibly clearer and fairer, and it helps in containing oil production.

This tube cost about $45 Singapore dollars if you bought it in Korea, and around $70-80 Singapore dollars if you bought it from auction sites. Unfortunately, it is only available currently in Korea. You can check out this site http://www.brtc.co.kr/FrontStore/iGoodsList.phtml?iCategoryId=25 for reference.

Companies that currently carry the BB cream are mostly Korean and include the following:

• Bio Remedies Therapeutic Cosmetics (BRTC)
• Skin Food
• Missha
• Etude House
• The Face Shop

Those that can be found in Singapore - Skin Food, Face Shop and Missha, does not have good review as compared to BRTC.

Please note different skin tones and types may have different suitability to the products. Thus do try out a few brands!

Fall of US Financial System

First the 5th largest investment bank, Bear Sterns falls, with a bailout by JP Morgan, supported by Fed $29 billion. Then Fannie and Freddie, bailed out by Fed in full, then Lehman, the world 4th largest investment bank, whose bleak future is looking at bankruptcy, as Fed has decided that they cannot afford to continue the bailout and disrupt the self-correcting market and with its intent to tell the market that "you have to solve your own problem!".

Then came Merill Lynch, the 3rd largest investment bank, who knows that they cannot wait for a public fund, and already in talks with BOA for a buyout before they follow the trail of Lehman. In fact, it has already been confirmed:

By Binyamin Appelbaum

Washington Post Staff Writer Sunday, September 14, 2008; 9:59 PM

Bank of America has struck a $44 billion deal to buy Merrill Lynch, according to two people familiar with the negotiations, a merger that will unite the nation's largest consumer bank with one of its most celebrated investment banking firms.

Who knows what will happen to the other banks? However I am pretty confident that JP Morgan and Goldman Sachs will survive, and emerge stronger than before, Thus, it will be 2 great choice for investment if you were to invest in US banks.

With the above episode, no banks in the world will be spared from losses as they deal with one another. European banks will be the next to be greatly affected, followed by Asian banks. For instance, China banks are holding a significant amount of stakes in Fannie and Freddie, and it is only a matter of time when they have to divulge their losses. Also, there has been talks that Singapore DBS bank has strong dealings with Lehman. What will happen if Lehman goes into bankruptcy, which is more or less confirmed.

The banks' stock is going to tumble hard soon, but this also means that we will finally be reaching the bottom of the market. However, do note that this financial crisis will only end when US housing prices stop falling. Once it has stabilized, it is time to start going into the market to make a killing.

I will putting up the US mortgage rate monitor in my blog soon...so Stay Tune!

Kin Mun Clinic Toa Payoh

This is a relatively popular skin clinic located at Blk 66 Toa Payoh Lor 4 #01-319, which is usually packed. Call 62566353 for appointment. You do not have to wait if you know which products you are buying.

I have used 3 of its products:

• Skin Renewal Cream
• Washing Gel
• Toner

Skin Renewal Cream - Effectively helps to reduce spots on your face after using it once per night for 2-4 weeks. It works like AHA and will cause peeling. I have used it and it really works!

Washing Gel and Toner - Used both together for oily skin. It helps to control oil production on your face and is pretty effective as well.

No more oily skin and spots!

Kose Sekkisei White Powder Wash Helps Oily Skin

I was having problem with oily skin since puberty, and had been unable to find a washing cream that can help to alleviate the problem. Recently, I was introduced to a relatively new product by Kose - Sekkisei White Powder Wash.

You can instantly feel your face rid of all the oil after using it, and after using it for a month plus, you can feel that the oil on your face is well-controlled.

Though it may be subjective, but it's no harm trying it!

Available at all major departmental stores at around $30+ per bottle.