Posted by contemplator > 2015-07-30 12:08 | Report Abuse

It is impossible to predict what will happens tomorrow, yet this is a very interesting article indeed. Thanks for sharing your thought.

It will be wise to always prepare for the rainly day because the rain will eventually comes.

Posted by goldisgold > 2015-07-30 14:02 | Report Abuse

Interesting highlights. For info, 2008 financial crisis was a non-issue to Malaysia's real economy as far as I know. It only rattled the financial markets.

Posted by choop818 > 2015-07-30 16:47 | Report Abuse

I hope that your next article will give us concrete solutions on how Malaysians can weather the impending financial storm. In other word, where should our wealth be when the storm hits our shore.

Posted by desmond0802 > 2015-07-30 18:15 | Report Abuse

Indeed a good articles for sharing , especially for the words of don't put all the eggs in one basket and ration for me now 60:40 the 40 is cash for emergency . The ratio will chanGe over the time dependIng on global economic outlook

Posted by desmond0802 > 2015-07-30 18:17 | Report Abuse

Impossible for giving a concrete answer, we need to adjust ourself according to suit ...

Posted by MrWealthy4321 > 2015-07-30 22:07 | Report Abuse

tqvm

Posted by calvintaneng > 2015-07-30 23:54 | Report Abuse

I just finished reading Keynes's Way of Wealth.

John Maynard Keynes invested in currencies, commodities and stocks in the US during the Roaring Twenties which led to a decade of Great Depression from 1929 to 1939.

In 1928 Keynes's commodities' portfolio crashed by up to 70%. He should have taken it as a warning sign that stock will collapse in Oct 1929. He didn't see the danger and got caught in the October 29th 1929 Stock Market crash.

However, Keynes was an expert stock picker who held on to his stocks throughout the great depression decade and still emerge a winner. Among his star performers are dividend paying utilities which are very defensive.

The trick is to find defensive investments now. What are they?

1) Defensive utilities
2) Basic food. In bad times people must still eat.
3) Low cost landed houses in Iskandar or Johor. These houses priced around Rm100,000 now command 6% to 7% rental easily. Highly defensive as there is not enough.
4) Repair, recycle industries that save cost.
5) Low cost transport. Bicycles, buses cheap Kancil cars.
6) Other businesses that support life at the very basic level.
7) Basic health care
8) Education.
9) Move to places where jobs are. Iskandar for example. Hundreds of thousands Johoreans are traveling to Spore for work. Johore businesses are doing roaring sales on week ends due to influx of Sporeans because S$1 = Rm2.80

10) Lots of recession proof industries in Iskandar.
a) 30 over universities and higher school of learning
b) 20 over High Class Hospitals
c) Entertainment like Legoland and Pinewood studio. Holly thrived during the Grear Depression. People seek an escape from harsh reality.
d) Relocation of Spore SMEs to Iskandar. Eg is Ascendas Tech Park
e) Influx of imvestments Rm166 billions that will create jobs
f) Pengerang Oil and Gas. Oil and Coal survived the Great Depression
g) Influx of people. Japanese in Tmn Molek and Chinese in Danga Bay plus millionore from Spore in future.
h) So Landed Properties like single, double storey houses in Iskandar are highly defensive.
i) Many others.

Regards,
By Calvin Tan Research
Jurong West Singapore

Posted by choop818 > 2015-07-31 00:06 | Report Abuse

Desmond, do you mind sharing what eggs you have in your basket? Are your eggs easily moveable?

Posted by calvintaneng > 2015-07-31 00:08 | Report Abuse

These survived the Great Depression.
Cocacola, McDonald and Wrigley Chewing Gum.
Oil and coal industries
Cement industries as US implemented huge public works to create employment
Psychiatrist. More people need mental doctors. This one did well in year 2008 when Lehman Brothers' collapsed. www.mindreality.com
Healthcare.
Hollywood. Surprise. People will pay 15 cents (A princely sum then) to see a movie. To escape from the harsh times.
Basic food like fried dough.
Others that meet basic life survival.

Posted by choop818 > 2015-07-31 01:09 | Report Abuse

Calvin, how would you position yourself before the the storm hits. Unlike Keynes, you have the foresight to take cover. How would you protect your assets?

Posted by calvintaneng > 2015-07-31 01:15 | Report Abuse

choop818

That is a very personal question.
Thank you for asking.
But I need to sleep now.
Will answer another time when I am more awake.

Good night.

Yes, I once could not sleep in year 1994 when I got caught.

For more than 20 years now I slept soundly every night.

Will tell you the secret another time.

Posted by choop818 > 2015-07-31 01:52 | Report Abuse

Good night. Hope you'll share your secret on your preservation of capital in time of crisis.

Posted by somchik > 2015-07-31 10:05 | Report Abuse

invest in company like hovid that produce medicines ,in time of depression more people got ill, need soothing tea to relax, in company that got concession like awc ,profitable govt contracts and expanding,and keep cash for bargain hunting, good luck

Posted by GoodCompanies > 2015-07-31 11:16 | Report Abuse

Commodities has been dropping or should i say collapsing since 2012/2013. This is not 'new'. However the article pointed a coincidence previously, but will it be the same this time around?
In my opinion, stocks will not crash. It will go sideways for a long time..with wild gyrations as usual.
The way i see it, the global economy will be fine if India and Africa enters the markets..opens up in big ways.
Otherwise, we may have too much overcapacity and overinvesments..

Posted by michaelwong > 2015-07-31 11:24 | Report Abuse

Thanks very good article as a reminder to stocks investors . I was one of those victims with my cash resources almost wiped out remaining about 10 % left over . This is a lesson to believe and learned while investing in stocks market and early exist is a wise moved to prevent one from completely drain out .
Thnks to the writer's for sharing this article ! Never too late to see the truths and beliefs what is forthcoming .

Posted by speakup > 2015-07-31 11:37 | Report Abuse

another dooms day prophet....

Posted by calvintaneng > 2015-07-31 11:42 | Report Abuse

Yes, Hovid is defensive. Only thing is price a little stretched. Try to get on correction. One of the best investments now is in low cost houses, single storey and double storey houses in Iskandar's fringe like Ulu Tiram, Pasir Putih, Masai, Tmn Scientex which are still relatively cheap.

If you can get a house for rm100,000 (low cost) you can easily get a rental of Rm500 to Rm600. Yield is 6% to 7.2%

One Johor buddy got one 2 room flat for sale in Tmn Cempaka. Only 15 minutes to JB CBD. He is asking Rm50k for it. The house has a tenant at rm350. So 350x12 = Rm4200 a year. It has a yield of 8.4% - far better than many Reits.

I see opportunities in low cost foods in JB CBD -Especially those that operate 24 hours(not mamak store please). Also a 24 Hour Supermarket near JB City or near 2nd Link Would be ideal. At wee hours without traffic jams Singaporeans can sneak in and load up with shoppings.

Wow! I have so many money making ideas!

Next time I must charge a small consultant fee

Posted by Kevin Wong > 2015-07-31 14:03 | Report Abuse

Investors must stay invested in quality and growth stocks at all times, while timers and traders must be contrarians at all times.

Posted by gungho92 > 2015-07-31 14:45 | Report Abuse

good ! just be ready to prepare your cash for rainy days. nobody knows when it will come. just sit back and watch the show. do not be fully invested at all times. dont matter if its bull or bear market. just make sure to spare your cash ! start saving up guys !

Posted by CFTrader > 2015-07-31 15:06 | Report Abuse

Make sure it is 35:35:30 ratio of your portfolio.

Posted by MrWealthy4321 > 2015-07-31 15:46 | Report Abuse

Tqvm for reading

Posted by enning22 > 2015-07-31 16:17 | Report Abuse

why are you seeing the commodities price readjusting to more reasonable price as collapsing,to0 subjective lah, be more objective,that will do you more good.

Posted by choop818 > 2015-07-31 17:11 | Report Abuse

Value is a confidence game. Value of certain assets go up because we are confident that they will go up. Similarly, they will go down when we start to lose confidence in them. In a severe financial crisis, our perception of the value of our assets changes drastically and if we all feel the same way, it is going to create a waterfall effect on their prices. The big question is, is there such a `safe haven' where your wealth remains intact in the ensuing scenario?

Posted by r°Moi > 2015-08-01 08:12 | Report Abuse

.


In time of uncertainty..


Switch to quality... and one which is one step ahead... AIRASIA ; )


BUY AIRASIA...


Oil prices will remain low

Posted by Kevin Wong > 2015-08-01 08:31 | Report Abuse

Best wishes and good luck everybody!

Posted by thebadguy > 2015-08-01 16:45 | Report Abuse

Hello calvin. You forget to take into account maintenance cost of the house. Also, your 8% return is assuming you bought the house cash. Otherwise you still need to pay bank interest for the loan.

However of course there is house appreciation value. But your calculation is too simple.

Posted by calvintaneng > 2015-08-01 16:52 | Report Abuse

Yes. Simplicity is the key word. Warren Buffet invests in simple things like burger, chewing gum and supermarket.

You see. The 2 room flat is rented out for only Rm350. Or about Singapore S$125

Rental can easily be raised to Rm400 to Rm500. Even at Rm500 it is only S$178

So yield can increase. 8.4% yield is only a simple guide.

Peter Lynch used to say. You must be able to describe your investment in a short sentence. So low cost flat or houses do yield 6% to 10% generally

Posted by thebadguy > 2015-08-01 17:06 | Report Abuse

Low cost flats/houses yield 6% to 10% generally - Maybe, arguable but I can accept that.

However what you implied was that RENTAL from low cost flats will yield 6 to 10% and that is wrong. Simplicity or not. Because there is much more to take into consideration. The return from rental, if you can break even with maintenance and bank interest (0%) could be considered as good because that would mean you are owning the asset for free.