THE POWER OF PARADOX: HOW WE GAIN AND LOOSE INFLUENCE

A paradox is a statement that contains conflicting ideas or that seems contradictory.  In other words, they are propositions that show credible but, in fact, they are illogical. That is because it contains two facts that are opposed to each other and can't exist at the same time. The two things can’t happen at the same time is termed as paradoxical.

The similar situation is arising from the White House’s plan to cut its trade debt by forcing trade tariffs on the rest of the world. Think about what occurs when America buys $100 worth of goods from China. It pays for the purchases in US dollars. If China then buys $100 worth of American goods, then no trade deficit. The latest Singapore Stock Blogs are here.

Meanwhile, it also wants to be the reserve currency of the world. But it also means that China would have nothing in reserve. So, it buys less than $100 worth of goods from America and keeps the balance in US Treasuries or it allows the back-balance to America.

The conclusion is that if America wants to be the world’s reserve currency, which it does, then it must run some sort of a trade deficit with not only China but also with the rest of the world. That is the price it must pay for being the world’s reserve currency.

         The value of the US dollar is likely to be artificially boosted which will make us less competitive in terms of US goods and services and could turn, increase in its trade deficit. Who would want to buy American-made vehicles, when Japanese vehicles are cheaper?

The problem with America’s trade deficit is contrary. It can influence China and other countries to buy more goods to narrow the trade deficit but then the US dollar would no longer be the reserve currency of the world. Thankfully, that is not going to happen. So, America is attached to a problem that even trade tariffs won’t solve. You can go through with Singapore Stock Market News.

Investors Should Decide Which Approach Is Suitable For Them: The active or The passive way.

Whenever there’s a discussion about active or passive investing, it can rather quickly turn into an excited debate because investors and wealth managers serve strongly favor, one strategy over the other. I hope this article can help investors to make a better choice between the pair.

Active Investing:   Active investing refers to an investment strategy that involves ongoing buying and selling activity by the investor. Active investors purchase investments and continuously monitor their activity to exploit profitable conditions. Active investing requires confidence that whoever’s investing the portfolio will know exactly the right time to buy or sell. 

                            Active investing requires a constant monitoring of the market, and research to select stocks. Stock investment. This also means that investors would need to spend a substantial amount of time to keep up with market developments. Active investors can also usually be grouped into three different camps, such as income investing, growth investing, and value investing. 

Here are some advantages and disadvantages of active investing ;

1. Flexibility – Active managers aren't required to follow a specific index. They can buy those "diamond in the rough" stocks they believe they've found.

2. Hedging – Active managers can also hedge their risks using various techniques such as short sales or put options, and they're able to exit specific stocks or sectors when the risks become too big. 

3. Tax management – Even though this strategy could trigger a capital gains tax, advisors can tailor tax management strategies to individual investors, such as by selling investments that are losing money to offset the taxes on the big winners. 

Disadvantages :

1. Very expensive – The average expense ratio at 1.4% for an actively managed equity fund. Very expensive because all that active buying and selling triggers transaction costs, not to mention that you're paying the salaries of the analyst team researching equity picks. 

2. Active risk – Active managers are free to buy any investment they think would bring high returns, which is great when the analysts are right but shocking when they're wrong.

Passive Investing:  Passive investing is an investment strategy that aims to maximize returns over the long run by keeping the amount of buying and selling to a minimum. This a very cost-effective way to invest. The strategy requires a buy-and-hold mentality.   By investing in a passive manner, there’s no requirement to think about the varieties of stocks that go into our portfolios – we can buy the whole market. Share Investment

Investors may want to choose a passive approach because -they may have no time to analyze stocks due to work or family responsibilities, Or they have no interest in learning the necessary steps to invest with an active approach. 

Advantages: 

1. Ultra-low fees – There's nobody picking stocks, so failure is much less expensive.  Passive funds simply follow the index they use as their benchmark.

2. Transparency – It's always clear which assets are in an index fund.

3. Tax efficiency – Their buy-and-hold strategy doesn't typically result in a large capital gains tax for the year.

Disadvantages: 

1. Too limited – Passive funds are limited to a specific index. Thus, investors are locked into those holdings, no matter what happens in the market.

2. Small returns – By definition, passive funds will pretty much never beat the market, even during times of confusion, as their core holdings are locked in to track the market. Sometimes, a passive fund may beat the market by a little, but it will never post the big returns active managers crave unless the market itself booms. 

LONG TERM INVESTING CONCEPT BY WARREN BUFFETT;

I start with Buffett’s well-known saying: “Successful investing takes time, discipline and patience. No matter how great the talent or effort, some things just take time." 

                                                  

Warren Buffett is probably one of the best investors in the world.  One of the key reason for Buffett's incredible return in the stock market is his Patience. He is well-known for holding his stocks for the long-term. In fact, his favorite holding period in stocks is “forever”.  Stock Tips

From 1965 to 2017, annual returns of around 19% for his company’s shareholders was generated by Buffett. If you had invested just $1,000 in his firm, you would be sitting on a cool $8.9 million by 2017.

Yes, Buffett has sold shares often, but it is the thinking behind his quote that matters. If you have a long time horizon when investing, you will focus on the things that matter (hint: stock prices are not one of them) and will not bother with the things that don’t. STOCK INVESTMENT

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For any business to do well, it requires a considerable amount of time. By focusing on the long-term, we are forced to think about the quality and fundamentals of the company we are investing in. If we have an “investing” time frame of just one month, we would only be looking at stock price fluctuations alone, and it turns the damage to our portfolio. The daily fluctuation in stock prices will not do any good for our psychological health as well.

However, if our investing time frame is measured in decades or even generations, we will be forced to think about the things that matter: The long-term prospects of a business; the leaders behind a company; and the value of a business. Singapore Stock Blog

we want to invest in companies that have products or services in the next few years that will not become outdated  – ideally, we want companies with businesses that can succeed. Moreover, when we invest in the long-term, the probability of suffering losses will be much lower. 

iFAST & RAFFLES HAVE SHORT TERM PAIN BUT FOR LONG TERM GAIN

Today iFAST Corporation Ltd (SGX: AIY) and Raffles Medical Group Ltd (SGX: BSL) these 2 stocks have seen fallen hard from their peaks, but these two companies could still be great investments in the upcoming years.  let's see-  Share Investment

Company 1: iFAST

The chairman and chief executive of iFAST are Lim Chung Chun. It is an Internet-based investment products distribution platform that provides a comprehensive range of investment products and services to both corporate clients and retail investors. 

In May 2015 iFAST's shares are exchanging hands at S$1.06 apiece, which seen 32% down from a peak of S$ 1.565.

iFAST’s China operations posted a loss in 2017, just like in 2016. However, the company’s business in China is still in its early days as it was launched only in 2016. It will take time for iFAST’s operations in the country to stabilize.  Stock Market News Today

Lim Chung Chun said the following in the company’s 2017 annual report:

China is expected to be the biggest wealth management market in Asia, and it is a market that we should not ignore. Some shareholders have been concerned about the operating losses that we are currently incurring for China. We see this initial phase as an important investment for the long run. iFAST expects losses from China in 2018, and for the losses to be comparable to that in 2017. In the coming years, iFAST thinks that China can be an important contributor to its overall business.  Penny Stock Singapore

Company 2: Raffles Medical

Raffles Medical,  Established in 1976 is one of the largest private healthcare groups in Singapore. It also operates with 12 cities across Singapore, China, Japan, Vietnam, and Cambodia.

In recent time the company’s stock has not been doing well. One of the main reasons for this poor performance is that Raffles Medical’s business growth has slowed down tremendously. From the time high of S$1.675 seen in May 2016, Raffles Medical’s shares are changing hands at S$1.02 each now – that’s a fall of nearly 40%.

From 2014 to 2017, the company’s earnings per share came in at around 4.0 Singapore cents in each year. The market may also be worried about the start-up losses that the company is going to suffer when it opens its new hospitals in China.  Stock Reccomendation

However, it is the China hospitals that I feel will fuel growth for Raffles Medical over the long run. The private healthcare services provider is developing a 400-bed international general hospital in Shanghai, and a 700-bed international tertiary general hospital in Chongqing. The hospitals are scheduled to open in the second half of 2019, and the fourth quarter of 2018, respectively. Yes, start-up losses will be incurred. But if investors have a long-term mindset, the losses are necessary to position the company for future growth. In other words, this is some short-term pain for long-term gains.   Singapore Stocks To Buy

To give context for the potential that Raffles Medical has in Shanghai and Chongqing, Singapore’s population was just 5.5 million in 2015 whereas the two Chinese cities had populations of 30.2 million and 24.2 million, respectively. The sheer size of the market in China should ensure that Raffles Medical does not stay anemic for long.

BETTER INVESTMENT DECISION BETWEEN TOP GLOVES AND RIVERSTONE HOLDINGS

There are many companies listed on the stock exchange in Singapore. sometimes it is hard to determine which company in a particular industry is better than its peers. 

In this article, we will make some quick comparisons between two companies operating in the glove manufacturing industry, Top Glove (SGX: BVA) and Riverstone Holdings Limited (SGX: AP4). Singapore Stock Market News 

Over past few years, Glove-manufacturing businesses enhanced its strong growth in demand for healthcare and clean room gloves, favorable foreign exchange rates and low raw material prices have been catalysts to their growth. 

To determine which might give you more bang for the buck: 

Top Glove industry with its largest market player reports its market share of about 25% and has a market capitalization of around S$4.3 billion and production of 45 billion gloves annually. It supplies to over 2,000 customers across 195 countries. Top Glove has grown its revenue from S$901.6 million in FY2014 to S$1.24 billion over the last 12-month period ended 28 February 2018. And its EBITDA from S$105.2 million in FY2014 to S$166.8 million and also its earnings per share from 16 sen in FY 2013 to 30.52 sen in the last 12-month reporting period. 

In comparison, Riverstone Holdings is a much smaller player with its has an annual production of 9 billion gloves and a market capitalization of S$718.85 million, which are used in the production of hard disk and semiconductors. Because of that, it has been able to extract higher margins than its competitors. Riverstone Holdings has revenue from S$151 million in 2014 to S$277.8 million over its last 12-month period ended 31 March 2018. And increased its EBITDA from S$35.3 million in 2014 to S$64.3 and growing its earnings per share from 8 sen in 2013 to 17.1 sen in the last 12-month period. 

Revenue growth: At last Top Glove compounded its annual growth rate of 7.4% and Riverstone of 15.4%. The above study shows Riverstone has managed its growth revenue at a faster pace than Top Gloves. Stock Research Singapore 

EBITDA growth: So Top Gloves annually growth compounded is 10.7% On the other hand, Riverstone is good for a 15.2% compounded annual growth. Once again, Riverstone comes up top. 

Earnings per share growth: Riverstone managed a compounded growth of 15.6%, and Top Gloves translates to a 13.1% growth over the five-year period. Here also reports says that Riverstone Holding did marginally better than Top Glove.

GLOBAL STOCK MARKET : A MELTDOWN TRAGEDY

"Don't forget you are human. It's ok to have a meltdown. just don't unpack and live there. cry it out and then focus on where you are headed."

            Quick Thought of The Week 'Global Stock Market: A Meltdown Tragedy' is featured by David Kuo for readers of Stock Advisor Singapore and Stock Advisor Gold. Singapore Stock Market News

So, a near 500-points drop in the Big Board must feel like a calamity. So, a near 500-points drop in the Dow must feel like a calamity, Or an opportunity to climb on a soapbox.

          It all started in Italy when investors took fright at the political struggle between the Eurosceptic populists and the pro-European established politicians when the President of Italy stepped in to reject the populist choice for finance minister that things started to unravel. Political risk suddenly came to the fore.

Investors are running their slide rules over other bonds and jumping into safe-haven assets.

Singapore Stock Blog

The main beneficiary is the US dollar that could have severe repercussions for other currencies. What’s more, some of our neighbors in South East Asia could have a hairy few days, as they try to defend their currencies.

It could also have consequences for their stock markets. Markets could sell off before bargain hunters step in to pick up cheap stocks. But remember this….…. It doesn’t take a long time for bargain hunters to find the bargains in the stock market anymore. And by the time they’re finished buying, the stocks aren’t bargains anymore.

Is this a right time to evaluate Singapore stocks for trading Opportunity?

Cheaper or Expensive?

A stock market is “cheap” or “expensive” depends on its valuation. 

Valuation is calculated by the price-to-earnings (P/E) ratio. For an individual stock, computing the P/E ratio involves dividing a company’s share price by its earnings per share. Singapore Stock Blog

There are two methods to simplify our investing decision in getting a better decision or finding which one is cheaper or expensive:

1. To compare the market’s current price-to-earnings (PE) ratio to the market’s long-term average PE ratio.

2. To determine the number of net-net stocks in the market.

Stock Market News Today

First Method: In this method, we have to current PE ratio with long-term average PE ratio. The local stock market can be represented by the Straits Times Index (SGX: ^STI). It consists of the 30 biggest stocks in Singapore. Since it is difficult to get the past daily PE ratios of the index. On14 May 2018, the SPDR STI ETF had found a PE ratio of 11.6. The long-term average & STI’s average PE ratio from 1973 to 2010 was 16.9 and hit 35 as a high PE  ratio and a low PE ratio for the STI: At the start of 2009, the index was valued at 6 times its trailing earnings.

Based on the data, it is realistic to say that stocks in Singapore are cheaper than average now. Stock recommendation

Second Method: In this method, we measure the number of net-net stocks available in the local market because market capitalization of this stock is lower than its net current value. And it is calculated by using this formula:

Net current asset value = Total current assets – Total liabilities

It is an appropriate theory as investors can get a discount on the company’s current assets, such as cash, after clearing off all liabilities. 

If a large number of net-net stocks than usual can be found in a stock market at a certain point in time, then stocks would be cheapest at that moment. Stock Tips

Stock Research Singapore

From the above chart, we can observe an inverse relationship - when the STI is at a peak, the net-net stock count is low, and when the STI is at a low, the net-net stock count is high. we noted some points from the finding of the graph;

1. Firstly, we saw the net-net stock count fall to a low of below 50 for second-half of 2007 when the STI reached a peak before the Great Financial Crisis struck.

2. Secondly, we saw when the net-net stock count hit a high of nearly 200 in first-half of 2009 and it was during this time that the STI reached its bottom during the crisis.