Where is your money?

Business Money
21

Good advice form Taiwanboy. MT I think you slightly misconstrued my words/meaning about gambling being corruption in the stock market. I know you’re a diehard liberal and money matters seem esoteric to you, but if you have the interest and the time, check out the motley fool at www.fool.com. These are a group of people working to make the US market, already the deepest, most transparent, best regulated and most efficient in the world, better for the individual investor. There will always be people trying to game the system, it’s just human nature. The actual number of companies engaging in illicit/fraudulant activity was actually a very small percentage. There was also a very loud, but overly ignored by the media group, saying that these companies were committing flagrant fouls. The short selleers who spotted Enron were rewarded handsomely by shorting the stock to death. Whenever investing in a company read what your arch-nemesis(short sellers) is saying about them. They, short sellers, have a reputation for putting together the highest quality research. From 1993 to 2001 The US drew in 4 times as much foreign cash(FDI) as the 2nd largest recipient(China). What does that tell you about other companies, how they are run and how their gov’ts regulate their investment climate.

For the individual investor with little time or skill for picking stocks an Index fund is the best investment, particularly the S&P 500 or the Wilshire 5000 total stock market index. I outlined in an earlier post about how to start properly investing your money.

Personally I think those who lost money when the bubble burst deserved it. You had a lot of very smart financial guys, ie Warren Buffet and Alan Greenspan, telling everybody who would listen that something was wrong.

I made money by investing in out of favor stocks, with good dividend yields. When growth/tech went out of fashion and value/dividends came into fashion, I saw a nice 20% rise in my tiny portfolio. I sold before they got popped too. It’s all out there, the tools you need to save and invest your money. There are internet support groups, newspapers, and family members who know.

A lot of people make a lot of dumb mistakes with their money. Why tie your entire retirement plan with the company you work for? What if they go bust? Don’t think it will happen? Talk to the guys who worked at Lucent, Enron, and Worldcom. Why are people investing in actively managed mutual funds when over 75% of them fail to beat the market indexes even before they start charging fees? The outragious fees charged on these accts is another very serious problem. Money market accts. are losing money in some cases due to the high fees they charge. Why do people use crappy expensive banks like Bank of America or Bank One when credit unions offer the same services cheaper. Why do people invest money that could be better used paying off a credit card at 18% interest.

People make a lot of bonehead moves in everyday life. Learn what not to do and then figuring out what to do is relatively easy. I’ll be getting back into the market in about another 2 years. I’m just paying off debt(that is currently interest free) and putting money in my Roth IRA. I was so happy when I found out that I was finally worth more dead than alive 2 years ago. If I get whacked my sister gets it all, so I will stay safely away from her for the time being. Just one less bonehead move I can make in my life.

CYA
Okami

22

Okami’s comments about business in Taiwan are only partially true. Heed them and you would miss a great opportunity to make money in Taiwan.

First, he says lao bans use options to reward themselves at the expense of earnings. This may be so for some companies. But it is not true at blue chips like TSMC and UMC, which use stock options to pay their employees to keep their cash costs down. Any share dilution is made up through earnings. Engineers at TSMC and UMC make about 40k per month in cash but they know they’ll be getting huge stock grants come Chinese New Year. US companies have long complained about this practice, saying it was anti-competitive because Taiwanese companies pay their employees nothing compared to what salaries are in the Silicon Valley. Thankfully, they have been allowed to keep the options grants at no detriment to shareholders.

Second, he says transparency is low. I don

23

Okami wrote:

“MT I think you slightly misconstrued my words/meaning about gambling being corruption in the stock market.”

No, that wasn’t my interpretation. I was merely agreeing that investing in the stock market is a gamble, as in there is no guarantee of a positive return. I’m not opposed to gambling. I love betting on the horses. But, I’m just saying there are plenty of people out there trying to sell sure-fire get rich quick schemes and most of them are bogus. Sure, you can do your market research after work, but lots of professionals study the market full-time with resources, training and information that is unavailable to you. And lots of them lose money. So, many part-time amateur investors are bound to lose money (at least in the short term), especially if they rely on outdated info like that found in Money Magazine, Forumosa and other popular sources. How many times have you watched on tv, or read somewhere, a panel discussion of stock market pros and their opinions are directly contradictory? Obviously some will win and some will lose.

Okami wrote:

“I know you’re a diehard liberal and money matters seem esoteric to you, but if you have the interest and the time, check out the motley fool at www.fool.com. These are a group of people working to make the US market, already the deepest, most transparent, best regulated and most efficient in the world. . .”

That’s just nonsense. If by liberal you mean I believe in looking out for the old, the helpless, the environment, etc., then sure I believe in that. But I also believe in looking after myself. I’m no fool. As a 40 yr-old attorney, I’ve been earning a good salary for years and have invested in the stock market, and real estate, for over a decade. Like most people, I’d like a nice house, money to raise children and send them to college, a cush retirement, financial security, etc. One doesn’t have to be a cold-hearted Republican to believe in such things. I’m no expert, but I’ve done my fair share of investing research. I agree, Motley Fools is a good resource. And the US may be the most transparent, best regulated market in the world, but there are plenty of important factors that investors are oblivious to when making investment decisions (such as the amount of stock options granted by a company to name just one).

Okami wrote: "Personally I think those who lost money when the bubble burst deserved it. "

OK, wise guy, looking at your entire stock market portfolio, what is your return over the past 3 years? If you actually earned a positive return, then congratulations, but I’m sure you are in the minority. Plenty of intelligent adults lost a bundle by relying on expert advice.

I’m still investing in the stock market, and I know that over the long term stocks will generally provide the best return, if one diversifies and does ones research. I’m just saying to do your research, be prudent, and don’t believe all the hype from people who say how easy it is to get rich quick, like the friend of the guy who started this discussion, who spoke of earning 40% per year. Incidentally, while it is a simplification, many people use the rough Rule of 72 to calculate doubling time of money at a particular interest rate. Divide your annual avg return into 72 to find how many years it will take to double. At 40% it will take 1.8 years. Therefore, an investment of $10,000 will become $1,280,000 in seven years. Not bad. What’s he doing sitting around talking to you for?

24

Stevie Boy, you say you don’t want to deal with money-market funds because you “do not trust the market.” But all of these things are a market. A “market” is anywhere that buyers and sellers come together. It doesn’t matter whether you’re talking about buying stocks, bonds, commodities, real estate, or toothpaste.

Generally speaking, people who expect the economy to get worse, buy bonds. People who expect the economy to boom, buy stocks. People who want to be safe either way (i.e. not make as much money if they’re right, or lose as much if they’re wrong) buy both.

Of course there are good stocks and bad. Same with bonds (which come with their own rating system, which evaluate’s how trustworthy that company or government’s promise to pay is). Since most of us are knowledgeable about, at most, a few companies or markets, it is a good idea to have a professional help you build your portfolio. I can’t comment on your specific questions, because I don’t know those markets.

Do you have any idea how many people bought stock in Marvel Entertainment Group, because they liked Spider-Man as a kid? Or how many people lose their shirts because some friend encouraged them to buy Company X? That’s not the way you should be making investment decisions.

A money-market fund can serve as a kind of ready-made portfolio. That’s why I mentioned this possibility specifically.

Gambling is similar to investing in one way, in that both involve risk of loss in exchange for the possibility of greater returns. Both offer many possible degrees of risk. Certainly many people approach the stock market with much the same spirit that they approach horse races.

They are different in several ways. First of all, investing serves a useful social function. Second, in gambling, the house always wins. If you gamble long enough, chances are you will lose more than you gain. But investments don’t behave that way, unless there’s an economic collapse. Of course you MIGHT lose big-time, but that’s not built into the system the way it is with a casino.

25

First for HongKongPhooey:

I agree that there is a price where Taiwanese stocks become attractive. I disagree where you make the comparison of TSMC and UMC (Taiwan

26

:smiley:

27

Considering that I am just starting out- Blue Chip is the way to go. A year from now, hopefully I will have a second bundle waiting for investment. At that time I can re-evaluate. I dont think now is the time to be adventurous because I am a virgin! Maybe I’ll put 25% into a GIC and the rest into a blue chip like the one’s mentioned above. Now, I dont have millions and I cant see any reason in breaking up the sum into too many pieces.

28

I know that specifics are not fun to talk about…but…
How about Hydrogen Fuel Cells? They are “A fuel cell that
works like a battery but does not run down or need recharging”
Heh heh heh
WHERE IS YOUR MONEY???

29

Buy Taiwan stocks now.

TSMC (NT$44, ticker: 2330) and UMC (NT$19.30, ticker: 2303) are set to snap back in a major way. SARS has no impact on their earnings yet they are over sold due to SARS fears.

30

I’m still investing in the stock market but this, Okami, is part of why I feel such investing is not totally predictable but involves some gambling based on flawed information.

From NY Times article:

Regulators Reach Final Settlement Against Wall St. Firms

WASHINGTON, April 28

31

Mother Teresa, this is my take on it.

Have you read or scanned over a research report? You have to look over it and think why is this person writing this. Some of the companies they were hyping had no revenues; I’m not even talking about profits. They were just a companies that sold nothing. How can you profit from that? Some of the companies they were bringing public would never have existed had people not become irrationally greedy.

People were already bringing up the obvious conflict of interest with the investment bank putting out the research for the company they’re selling. Are you going to buy a car on only the info provided by the person selling it? I think not. You’re going to test drive, get your own inspection, kick the tires, try it out on your own, and do your own research. How is investing any different? Investing is not making a decision and sitting back and letting things run their course. What do you do if they hire a CEO that specializes in driving companies bankrupt and destroying shareholder equity through mergers and aquisitions? Sadly, this has happened.

The best thing about this is that it opens those companies up to individual and class action lawsuits. Companies tend to remember litigation risks like this for a long long time. The only people who will get rich out of this are the lawyers of course.

People tend to get blinded to any alternative mode of thinking once they have made a decision and carried it through. A lot of psychological research has gone into this. Just check any argument in forumosa. No matter how many facts or figures one side brings out the other will not listen to any of them.

CYA
Okami

32

I don’t know what you all are doing with your money, but if you followed my advice on April 29 you would be doing pretty well.

TSMC (2330) is at NT$56, up 27.27 percent from NT$44 on April 29.
UMC (2303) is at NT$23.60, up 22.27 percent from NT$19.30.

I hold the ADRs, and my cost basis is US$3.04. At US$4.11, I’m up 35.19 percent.

I also own TMTA, with a cost basis of US$1.07. It’s now at US$1.57, up 46.72 percent.

My only dog so far is AMD, cost basis US$7.28. It’s down 5.63 percent.

You can read my earlier comments as to why I chose the high-tech sector for investment. I’ll be re-evaluating my position once 2Q earnings come out.

There may be some more upside until then, or the market could take a breather. I don’t expect we’ll retrace our foot steps.

The best times to invest is when the market is worried by nonfundamental factors such as SARS, and that means everyone should have been buying in March and April. This strategy has worked especially well for me in Taiwan.

taipeitimes.com/News/worldbi … /10/115264

“Investors often overreact to news events that have little bearing on the market’s fundamentals, leaving shares greatly over-sold. But eventually those gains are recovered, usually within a short amount of time. … The best times to buy and sell may be when investors are behaving irrationally.”

33

To answer the original question:

philipmorrisusa.com/home.asp

guinness.com/guinness/en/gat … 69,00.html

www.scotchwhisky.com/

34

[quote=“Alleycat”]To answer the original question:

philipmorrisusa.com/home.asp

guinness.com/guinness/en/gat … 69,00.html

www.scotchwhisky.com/[/quote]

HA HA HA
:imp: :smiling_imp: :imp:

Still cant decide…meanwhile NT150,000 buys CAD $5,832 :frowning:

was looking into www.ethicalfunds.com

my Pa insists I get invloved with companies who are researching Hydrogen Fuel Cells…

To be continued

35

[quote=“stevieboy”]

my Pa insists I get invloved with companies who are researching Hydrogen Fuel Cells…

To be continued[/quote]

you might be interested, i saw a news article on Yahoo yesterday yesterday that they might harm the ozone layer, try a search

36

Can foreigners just go out and buy stocks through a broker here in Taiwan? I have an ARC. Is that enough? HSBC said that I cant buy mutual funds when I called them.

37

The outlook is that the DDP will want to create optimism leading to the presidential election next year. If the Chen Shui Bian wins again, there will be lots of profit taking. If the KMT wins, they will try drive the shares higher.

What do you guys think?

38

Possibly. I think that profit-taking is the most likely outcome in either case. The TAIEX will be at 6~7000 by the time the election takes place, mainly driven by the DPP plays, like Mega FHC, Evergreen group etc. That will nearly be double the figures seen earlier this year, something which has usually seen the taiex pulling back in the past. Hold now and sell the day before the election. You should make a profit.

39

I’m a happy camper. I bought a couple blocks of Hon Hai (my wife actually made the purchase in her account for me) after they distributed dividends a couple of weeks ago. Bought at 125, closed at 145 today. Wooohooo. It should easily gain 20% by the end of one month (150) but I tell my wife I’m going to sell at 500.

40

Sell much sooner than that, for instance when the stock has puled back for 4-5 sessions in a row. Taiwan is a traders market and Hon Hai is a traders stock.