The Next Big Crash - Are You Prepared?

[Art or Science]

Thought its a rather good read from fool.sg website. Happy reading.

Good to share and discuss, I feel. But it really depends on one's skills, knowledge and experience in analysing and interpreting what was shared, IMO.

Sorry, the link:-

http://www.fool.sg/2014/04/03/why-its-im...sibly-can/

[Temperament]

Good sharing.

To me,
Simply put it means someone (a Christian) had made a summary of this idea into this prayer:-

"No one reacts to things as they are but to one's own mental images. Keep me aware that it is not what happens to me in life that matters, but rather how i react to what happens."

After coming across this prayer from an unknown Christian, i realise it is a "UNIVERSAL TRUTH" whether you believe in GOD or not.

So it is applicable to investing as it should be applicable to everything in life.

[chialc88]

I felt so foolish!

The whole article explains that a successful investors need to be flexible and listen to different people.

The conclusion which is one liner stated exactly opposite.
Not being constrained by past experiences can be incredibly valuable.


What a fool!

Love Compassion

[Temperament]

i think:-
The point is no matter how much we are exposed to other people's knowledge and experiences, we all can't escape the:-

"No one reacts to things as they are but to one's own mental images".... "to things as they are" actually imply that we are not GOD or as human being we can't "see" 100% therefore we can't be 100 % "right".
Isn't this applicable to investing in the markets?

To me, it applies to everything in life.
If we really understand this deep in our heart, we will have an open heart and can accept any eventuality. We will or should become flexible, adaptable therefore highly survivable. imho
Shalom.

[specuvestor]

Agree... IMHO Mobius is one of the most overrated salesman masquarading as fund manager

Well, I respect your opinion, but not sure the ground of the opinion?

Base on his track records stated in wikipedia, I found no clue on "salesman masquarading as fund manager"?

http://en.wikipedia.org/wiki/Mark_Mobius

Based on the published figures/ papers many S-chips looks very cheap also with no hint of "snakeoil" as well

I have observed and respect many managers from Bill Miller to Kyle Bass and of course Buffett, but Mobius record is not top of the list. I wish you the best if you buy their emerging markets funds. 路遥知马力 which is similarly why I have higher regards for Paul Tudor than Paulson.

Thanks for the detail of your observation. I might not agree, but will definitely take note of it.

Paulson as a one hit wonder...

By Kelly Bit
Dec. 8 (Bloomberg) -- John Paulson’s lousy 2014 is getting
worse.
The billionaire’s firm posted a 27 percent year-to-date
loss in its event-driven fund after a 3.1 percent decline in
November, according to two people familiar with the matter. The
Paulson Recovery Fund has declined 14 percent this year and a
version of the event-driven strategy that can buy new share
issues such as Alibaba Group Holding Ltd. has fallen 17 percent.
Paulson & Co. oversees about $19 billion in hedge funds
that can bet on credit markets, mergers and corporate events.
The firm has lost money in recent months on Fannie Mae and
Freddie Mac securities and a failed health care company merger.
Energy investments such as Whiting Petroleum Corp. and Oasis
Petroleum Corp. that Paulson held as of Sept. 30 have also
tumbled in recent weeks as oil prices slumped.
Armel Leslie, a spokesman for New York-based Paulson & Co.
with Peppercomm, declined to comment on the returns.
Paulson, 58, has experienced big wins and losses in the
past few years because of concentrated bets on mergers, gold,
the European debt crisis and mortgages. After starting his fund
to profit on corporate mergers in 1994, he made $15 billion in
2007 by wagering against the U.S. housing market.

Mixed Fortunes

The billionaire has had mixed fortunes since, with assets
at the firm rising to a peak of $38 billion in 2011. That year
the event fund declined 36 percent because of his bullishness on
the economy that drove wrong-way bets in favor of U.S. financial
companies. The following year he lost a fortune on gold and
speculating against Europe before a comeback in 2013 driven by
company mergers and investing in stocks.

......................

http://www.bloomberg.com/news/2014-12-08...-loss.html

[brattzz]

don't think it will crash yet, wait out!

[chongsk]

Any valuebuddies here can please kindly advise what is the current market 10 year ave price to earnings PE now and where can I find it.

[CityFarmer]

Any valuebuddies here can please kindly advise what is the current market 10 year ave price to earnings PE now and where can I find it.

The data should only available from paid site.

The current PE is 14-15 for STI

[Behappyalways]

From The Book The New Depreciation by Richard Duncan

Page 99

In 2010, JPM Chase recorded "total derivatives notional amounts" expose of $78.9 trillion; Bank of America, $68.3 trillion, and Citigroup, $47.5 trillion. Combined, that came to $194.7 trillion for those 3 banks alone. Compare that amount with global GDP of $63 trillion in 2010. It was more than three times larger.

At the end of 2010, worldwide total notional amount of derivatives contracts was $669 trillion. Those three U.S. banks accounted for 29 percent of that global total,

Almost 90 percent of the worldwide total, or approximately $600 trillion, was composed of over-the-counter(OTC) transactions, which are subject to limited regulation and provide little transparency. Only 10 percent trade through exchanges. One of the most important sections of Dodd-Frank, the banking sector reform act that was signed into law in July 2010, required that most OTC derivativates be traded on an exchange (rather than OTC) by July 2011. That did not happen, however. The implementation of that part of Dodd-Frank has been pushed back to an unspecified date.

Consequently, there is no greater transparency or oversight of this $600 trillion OTC can of worms than before the crisis began. Exchange trading would have provided transparency as to who undertook the trades and perhaps shed light on the rationale behind the transactions. There is a very real possibility that such transparency would have exposed fraud, manipulation, and accounting trickery on a very large scale. One thing is certain: $669 trillion of transaction is too large an amount to have been entered into hedging purposes alone, It is equivalent to roughly $100,000 per person on earth - or, more or less, the value of everything produced on this planet during the last 20 years combined. There simply aren't $669 trillion worth of things in the world to hedge.

It may be that sometime after Dodd-Frank passed, regulators realized they did not want to see (and that the economy can not bear to see) the things that greater transparency would expose. The exposure of large losses or widespread unethical activity could set off a new phase of the systemic crisis and inflict even greater damage on the economy than anything experienced thus far.

Wall Street Wins Delay in Part of CFTC Overseas Swaps Policy
http://www.bloomberg.com/news/2014-11-14...olicy.html

[specuvestor]

Paulson's last tango? Don't quite understand why he would increase risk now

(Bloomberg) --
After most of his clients have fled, billionaire John Paulson has embarked on a strategy to raise assets and generate big fees at the risk of losing his own capital.

Paulson & Co. signed up last year with the three main providers of so-called first-loss funds to pursue the wagers, according to a March regulatory filing. These deals with Topwater Capital, Prelude Capital Management and Boothbay Fund Management allow Paulson to lever-up his own capital many times over after he squandered much of it on wrong-way bets.

Agree... IMHO Mobius is one of the most overrated salesman masquarading as fund manager

Well, I respect your opinion, but not sure the ground of the opinion?

Base on his track records stated in wikipedia, I found no clue on "salesman masquarading as fund manager"?

http://en.wikipedia.org/wiki/Mark_Mobius

Based on the published figures/ papers many S-chips looks very cheap also with no hint of "snakeoil" as well

I have observed and respect many managers from Bill Miller to Kyle Bass and of course Buffett, but Mobius record is not top of the list. I wish you the best if you buy their emerging markets funds. 路遥知马力 which is similarly why I have higher regards for Paul Tudor than Paulson.

Thanks for the detail of your observation. I might not agree, but will definitely take note of it.

Paulson as a one hit wonder...

By Kelly Bit
     Dec. 8 (Bloomberg) -- John Paulson’s lousy 2014 is getting
worse.
     The billionaire’s firm posted a 27 percent year-to-date
loss in its event-driven fund after a 3.1 percent decline in
November, according to two people familiar with the matter. The
Paulson Recovery Fund has declined 14 percent this year and a
version of the event-driven strategy that can buy new share
issues such as Alibaba Group Holding Ltd. has fallen 17 percent.
     Paulson & Co. oversees about $19 billion in hedge funds
that can bet on credit markets, mergers and corporate events.
The firm has lost money in recent months on Fannie Mae and
Freddie Mac securities and a failed health care company merger.
Energy investments such as Whiting Petroleum Corp. and Oasis
Petroleum Corp. that Paulson held as of Sept. 30 have also
tumbled in recent weeks as oil prices slumped.
     Armel Leslie, a spokesman for New York-based Paulson & Co.
with Peppercomm, declined to comment on the returns.
     Paulson, 58, has experienced big wins and losses in the
past few years because of concentrated bets on mergers, gold,
the European debt crisis and mortgages. After starting his fund
to profit on corporate mergers in 1994, he made $15 billion in
2007 by wagering against the U.S. housing market.

                        Mixed Fortunes

    The billionaire has had mixed fortunes since, with assets
at the firm rising to a peak of $38 billion in 2011. That year
the event fund declined 36 percent because of his bullishness on
the economy that drove wrong-way bets in favor of U.S. financial
companies. The following year he lost a fortune on gold and
speculating against Europe before a comeback in 2013 driven by
company mergers and investing in stocks.

......................

http://www.bloomberg.com/news/2014-12-08...-loss.html