The surprising downturn in stocks has caught many people offguard as they thought that 2010 is a year of strong economic growth, with Asia and the US on the recovery. Well, it probably will turn out that way but stocks are a different creature at times because they can swing violently. The lesson is don't be greedy in a bull run and take excessive risks. In a downturn, dont be too scared - there is always a bargain or 2 you can pick up --- provided you have not maxed out your investment monies in the first place (which goes back to point no. 1). Don't lose capital permanently and you can still have a chance to grow your wealth. Grow yr net worth steadily.... Good luck everyone. The sun will shine strongly once again. hopefully soon.
Templeton was perhaps best known for investing in Japan in the 1950s when "Made in Japan" was synonymous with free toy trinkets hidden in cereal boxes. Central to his investment philosophy was to buy superior stocks at cheap prices at points of "maximum pessimism." He diligently applied this approach across a range of countries, industries and companies. As Templeton noted in an interview in Forbes in 1988: "People are always asking me where the outlook is good, but that's the wrong question. The right question is: 'Where is the outlook most miserable?' " I still find it astonishing how often focusing on this question is the key to making a fortune in the markets -- and how difficult it is to put in practice.
And like all great investors, Templeton was not afraid of big bets. At one point in the 1960s, Templeton held more than 60% of the Templeton Growth Fund's assets in Japan. That kind of a concentrated position in a global fund would be impossible on Wall Street today -- which explains why Templeton decamped to the Bahamas early in his career. At the same time, Templeton also had the savvy to exit markets when they were overvalued. He had no problem selling out of Japan -- the market in which he made his first fortune -- well before it collapsed in 1989. My favorite Templeton anecdote was his bet against the U.S. tech bubble in 1999. Templeton famously predicted that 90% of the new Internet companies would be bankrupt within five years and he very publicly shorted the U.S. tech sector. I think it's a terrific irony that John Templeton -- a value investor knowing for sussing out little known global opportunities -- made his quickest -- and possibly biggest fortune by shorting U.S. stocks.
John Templeton: Lessons for Today' Market
As most global markets drop into bear-market territory, you may find some comfort in John Templeton's most famous piece of advice: "To buy when others are despondently selling and to sell when others are greedily buying requires the greatest fortitude and pays the greatest reward." This advice is simple -- but not easy to implement, as bottom fishers in U.S. financial stocks know too well. But Templeton added this small refinement: always take a small position in your investment ideas before rushing in. If it's a truly great bargain, there's no need to hurry. What I found most sympathetic about John Templeton is his relentless yet realistic optimism. A few years ago, he asked a journalist to write about why the Dow Jones Industrial Average might rise to one million by the year 2100. On its face, that sounds absurd. Yet it turns out that thanks to the miracle of compound interest, the Dow would only need to rise about 5% per year to hit that level in 92 years.
Global Investment Ltd is an excellent penny which have hugh potential, a A class management and high dividend. Worth keeping on your radar
Current price:15c Tgt Price: 25c
Brief History:
It started out as Babcock & Brown Global Investments Limited and IPOed at $1.01.
The Company mainly invest in CMO, CDO and operational leases, it act like a trust making investments in securities that the normal retail investors could not get.
During 2008 crisis, this stock suffered massive losses and the parent company and manager Babcock and Brown went under. The company then underwent restructuring and looked for a new management. After a publicity blitz, STAM(ST asset Management) a subsidiary of Temasek holdings got appointed as the new Manager.
It is now under the stewardship of Mr Boon Swan Foo(former CEO of ST engineering) and Goh Mui Hong(former CEO of OUB Asset Management). They are also serving as board members to various local companies and government agencies.Mr Boon Swan Foo showing confidence even invested his own money for 10% of the company shares.
The recent rights issue, coupled with the Japan earthquake have lead to the share price dropping to 14.5-15c. It is now under its NTA and is undervalued as it is relatively unaffected by the Earthquake in Japan and Oil crisis in Libya.
Its current holdings of CMOs, CDOs and securities are currently yielding high returns after writebacks from aggresive writedowns during the crisis and also from improving housing markets in Europe ,USA and Australia.
It just announced a dividend guidance of 0.75 c for the 1H of 2011 after just 3 months of the year showing confidence of this year performance even after the quake. The annualised yield for this stock will be 10% or more if it keeps up. It is also flused with cash after the recent rights issue which STAM will no doubt put in good use for attractive yield.
I know this post of mine is going to make you turn off. But out-of-favour stock are not liquid mostly. If you buy them and like some wise guy say, waitng for the mkt to realise it value, wait till when? They say long term, how long?
Why buy a good stock when nobody is interested in? there are many in SGX. You buy you stay there yawning.
I know there are many stock have good balance sht and so on, but the volume is too low, so what so good?
You want to buy something that can sell. You dont want to buy something and stay there and comfort yourself that u are right with your investment, sort of a self-comforting. And say at least i got the 5% or so many per cent div. and so on and so on.....
reality hurt, but to bluff oneself and imagining thing is even worse.
good luck to your out-of-favour stock.
>>
Global markets are signaling that sustained economic growth will more than make up for
Japan
’s worst disaster since World War II, rising commodity prices and uprisings throughout the Middle East and North Africa.
Interest-rate derivatives, bond sales by the riskiest borrowers and rebounding benchmark stock indexes all show increasing confidence in the economy. New York-based JPMorgan Chase & Co. is putting up $20 billion of its own money in a short-term loan to finance
AT&T Inc. (T)
’s $39 billion bid for Deutsche Telecom AG’s T-Mobile business.
Manufacturing strength from the U.S. to
Germany
and China is giving economists more confidence that the recovery from the worst financial crisis since the Great Depression will continue. Goldman Sachs Group Inc. forecasts a global expansion of 4.8 percent this year, while JPMorgan calls for 4.4 percent. The average over the past two decades is 3.4 percent.
“People are trying to balance the global growth with these exogenous economic shocks,” said Charles Burge, the Louisville, Kentucky-based head of investment-grade
money management
at Invesco Ltd., which oversees $641 billion. “People are thinking growth is the one that’s ultimately going to win and we can move past these one-off incidents.”
NextInsight
a hub for serious investors
