Wednesday, 18 April 2012

SGX, Golden Saving Rules and Water

The Singapore Stock Market is the World's Biggest Bargain

Having spent three years there as a child, I have happy memories of Singapore.

In those days, most of the locals lived in "atap" palm-frond-roofed huts and bathed by standpipes.

Today's Singapore is completely unrecognizable to me.

It is a modern country that is now among the world's richest. There is barely a palm-frond roof to be found anywhere.

Singapore is also ranked first on the World Bank's Doing Business list (the US is fourth), second on the Heritage Foundation's Index of Economic Freedom (the US is 10th ) and fifth on Transparency International's Corruption Perceptions Index (the United States is 24th).

So why is the Singapore stock market trading on an 8.3 times P/E ratio, according to the Financial Times?

The Upside of the Singapore Stock Market

After all, its economy is in fine shape, and is growing faster than any of the major Western economies.

In fact, with its GDP per capita estimated at $50,700, Singapore is now richer than the United States.

It's all proof that as the world's leading trade entrepot, Singapore is aggressively moving up the global value chain as its citizens become richer and better educated.

And unlike the US, Singapore's recovery from the 2008-09 recession was rapid, with 14% growth in 2010.

Since then, it has entered a mini-recession, with GDP declining at a 2.5% annual rate in the fourth quarter of 2011. Still, overall growth in 2011 was a solid 4.8%, and the country is expected to grow by another 3.1% in 2012, according to the analysts at The Economist.

Inflation is a moderate problem, running around 5%, although it is expected to decline.

Yet the most impressive statistic about Singapore is its current account surplus of 18.4% of GDP; the budget is also in modest surplus, as it is most years.

With a GDP of only $266 billion in 2011, Singapore is a relatively small economy. But its exalted position in wealth, economic freedom and clean government and business make it a country that is a highly attractive place to invest in.

That's why its current modest P/E ratio is so surprising.

The recession has affected bank earnings (Singapore is a center of private banking, with excellent secrecy laws) but its industrial companies appear to be doing well, so patient investors should find themselves very well rewarded indeed, as the market enjoys an upward re-rating.

Investing In the Singapore Exchange (SGX)

Since Singapore itself is one of the world's major stock exchanges, its companies do not have full listings on the US exchanges. To date, compliance with the Sarbanes-Oxley legislation has deterred them from doing so.........

read more

The 10 Golden Rules of Saving on Everything

1. Never buy new what you can buy used. That brand-new sparkle comes at a high price, on everything from cars to furniture to clothes. Let somebody else take the hit. Instead of heading to the department store, head to the consignment store, thrift shop, yard sale, or sites like Craigslist or eBay.

2. Never buy this generation when last generation will do.
Ignore the commercials that entice you to buy the latest and greatest. From cars to computers, buying yesterday’s technology can save you 20-50 percent. Early adopters are often paying for nothing more than bragging rights – why not wait and brag about how much money you saved?

3. Always ask for a lower price. People say you get what you pay for. We say you get what you ask for. In addition to negotiating more traditional things like houses and cars, our writers have succeeded in scoring lower prices on hotel rooms, doctor’s visits, cable bills, and car repairs, as well as asking for and receiving lower rates on loans and higher rates on savings. Check out Confessions of a Serial Haggler.

From now on, consider the price of services or big-ticket items as what they are: an opening bid.

4. Stop paying for name brands. What’s in a name? Often nothing more than a higher cost. Paying more is OK if the higher cost means higher quality. But it’s not OK to pay more simply to help pay for some company’s annoying commercials.

One of many examples: More often than not, generic patent medicines like aspirin and cough syrup aren’t similar to their brand name counterparts. They’re identical. There’s only one reason anyone would pay up to 50 percent more for an identical item - some commercial told them to.

Check out 7 Things You Should Always Buy Generic for more on this topic, and stop throwing money away.

5. Share with your friends and neighbors. It’s probably not practical to share a car with your neighbor, but what about his ladder, or your lawn mower? If it’s something neither of you need to use on a regular basis — and you get along well enough — get together with one or more people on your block and form a neighborhood co-op. In addition to reducing the cost of common household items by 50 percent or more, you also reduce clutter.

And if you use something really infrequently, rent it instead of buying it.

6. Try to substitute imagination for money. People often pay for pre-packaged ideas by habit when they could easily come up with lower-cost ideas that are also better. Instead of buying cards and gifts, make your own. Instead of taking your date to a restaurant, take her on a picnic. Instead of meeting at a bar, have your friends over. Instead of heading to hotel, camp out.

Use your mind instead of your money and your life will be more interesting and less expensive.

7. Try to make it or fix it yourself. Just because something’s available in a store doesn’t mean that’s the only place you can buy it. Check out 6 Alternatives to Expensive Household Cleaners, Do-It-Yourself Laundry Detergent and Household Products Vinegar Can Replace.

And that’s the tip of the iceberg. From Homemade Halloween Costumes to Home Repairs to growing your own food, you can save a bundle by using your hands instead of cash. And you can find help with just about anything online.

Additional benefit? You feel more independent, because you are.

8. Always use the Internet. While using the Internet to comparison shop should be obvious, there are new techniques and technologies evolving constantly. For example, PriceBlink: This browser add-on automatically searches for a lower price and/or coupons on anything you’re looking at or searching for online. Don’t ever buy anything online or off without first searching the web to see if you can find a coupon or discount. But the Internet is a double-edged sword…

9. Never subscribe to “deal” websites. While it’s smart to be able to find online coupons and deals on the things you want, it’s dumb to allow websites to fill your in-box with dozens of potential impulse buys. Tell the Internet what you need: Don’t let the Internet (or TV commercials or your friends) tell you what you want.

10. Sell before you buy. Before you buy anything you want, make it a habit to first sell something you don’t. Your garage and closets are full of stuff you no longer use. So before you go to the store or click that online “checkout” button, stop. Put off the purchase – first, take some clothes to the consignment shop, or take a picture of something you’re no longer using and put it on Craigslist. It only takes a minute.

As soon as it sells, apply the money to the purchase you were going to make. Now you’ve saved on something you wanted, and gotten rid of something you didn’t.

read more

The world's most overlooked investment

As Executive Editor of Investment U, I'm dedicated to providing you with the most sound investment philosophies and unique contrarian investment ideas on a daily basis.

And as our Chief Investment Strategist Alexander Green wrote earlier this year, our newsletter's aim is to provide you with "the best investment you can make in four minutes each day."

In that light, I made some time to sit down with legendary resource expert Rick Rule at our 14th Annual Investment U Conference two weeks ago. Rick is the Chairman and CEO of Global Resource Investments LTD - part of the Sprott Group of Companies.

Rick is known to be a fierce contrarian. So of course I was curious - as I'm sure many of you are - what he sees as the most contrarian investment right now.

His answer may surprise you.

The most obvious contrarian investment that I see isn't one that people are pessimistic on, it's one that people ignore totally," Rule said. "It requires patience, but that commodity - the most underpriced commodity that I see in the spectrum - is water."

read more