How War Affects Gold

If the United States goes to war with Iraq, what will that mean for the stock market and investors' portfolios? The answer depends largely on whether the war would be a quick, decisive victory for the United States or prolonged and costly in terms of dollars and American casualties, experts say. During the Persian Gulf War, stocks fell in the months after Iraq's invasion of Kuwait in August 1990. In mid-January, on the first day of trading after the U.S. air campaign against Iraq began, the Dow jumped 4.6 percent. "Generally, wars, especially when we are successful in the war, have been very good for the markets," said Roger Ibbotson, chairman of the financial research firm Ibbotson Associates in Chicago. Even when the United States was fighting in Afghanistan late last year, stocks rebounded, he said. War might still be averted by diplomacy, and that, too, would send stocks soaring, experts said. But if that doesn't happen and war comes, here's how it could affect certain stocks: Defense stocks have been rising because of increased government spending, and that would continue during a war, experts said. "It seems clear that in the next five to 10 years, there will be more spending on defense," even without a war, said Peter Ricchiuti, a professor of finance at Tulane University in New Orleans. "It's a more dangerous world than we thought." Oil stocks, particularly shares of oil producers, are also likely to get a boost at the beginning of a war as investors seek safety, said Kate Warne, senior energy analyst with Edward Jones in St. Louis. "In general, people tend to buy them in times of world uncertainty," she said. Shares of health care and consumer staples companies probably would hold up well during a war, as they have in other times of uncertainty, Lauer said. "No matter what happens, people will have to still brush their teeth and go to the grocery," Lauer said.

Gold has done well in the past two years as investors, particularly those overseas, have seen it as a haven from jittery markets and currency concerns, Tjornehoj said. In war, gold stocks and mutual funds probably would continue to do well, he said. Industries that experts consider likely to be hurt during a war include those that make big-ticket items such as autos, refrigerators and other appliances. "War tends to make people put off big decisions. It's the uncertainty here," Ricchiuti said. A war would also be likely to keep consumers close to home. "Anything that is travel and leisure is very subject to a hit," which includes airlines and hotels, said Gary Gensler, a former U.S. Treasury undersecretary. Experts say investors should not let the threat of war influence investments. Instead, the first thing they should do is build a diversified portfolio to meet long-term goals. "Step two is to go back to basics and buy for the long term," Gensler said.

If history is anything to go by, one iron rule can be applied to the stock market at times of war: conflict is good for shares, but only once investors become convinced that they are on the winning side. And yet, after three weeks of tumbling prices, stocks rallied as it became clear that a third world war would be averted, and that the Korean conflict could be contained. Of course, there are major differences between Korea in the early 1950s and Iraq in 2003. Arguably, the backdrop today is better than it was half a century ago. There

appears to be no danger of a military clash now between the world's major powers, and there is only one superpower remaining, the United States.

While equities languish, precious metals such as gold have seen their value soar as investors seek a safe haven during uncertain times. Gold is trading at nearly $370 an ounce for the first time in more than six years, and experts believe it could hit $400 or more in the next few months. Platinum has hit $670 an ounce, its highest since September 1986, while the Swiss franc, traditionally seen as a safe bet, is approaching four-year highs against the greenback.

Fractional reserve requirements

Vary from country to country At least 1 dolllar of real gold in the vault to back $9 of debt . In Present, money represent debt. And the total money in existence = total value of debt + real physical assets When someone signed a new debt, money is created In case of people running on the bank (everyone wanting to withdraw money, central banks will help them out) Hence the private banks are able to confidently issue loans to people No debt = no money Government debt + size of banking system > 5x government revenue (problem) Current account surplus = more export than import = more foreign capital flowing = easier to service debt Hence even though Government size + banking system > 5x government revenue (problem) Germany 9x Italy 7.5x Germany is easier to service debt Japan's current account even though there is a surplus, it is shrinking.

Japan US
Japan : trade surplus of 56b US: trade deficit of 374b Japan will be able to pay for goods But US is exporting inflation to pay for goods First 5months of2010, trading oil with saudi arabia $7.6b trade deficit First 5months in 2009 $3.5b trade deficit Agriculture is one bright spot for US economy US produces enough for selfsufficient But if US can import oil, there will be a huge drop off in agriculture Because oil is largely used in agriculture (machines, transport etc) Budget deficit = outgoing > incoming Adam Khoo: The expats will soon rule Singapore ! http://www.adam-khoo.com/304/the-expats-will-rule-singapore/

Definitions
'NASDAQ Global Select Market Composite' A market capitalization-weighted index made up of U.S.-based and international stocks that represent the NASDAQ Global Select Market Composite. The NASDAQ Global Select Market Composite consists of 1,200 stocks that meet Nasdaq's strict financial and liquidity requirements and corporate governance standards. The Global Market Select Composite is more exclusive than the Global Market Composite. Every October, the Nasdaq Listing Qualifications Department reviews the Global Market Composite to determine if any of its stocks have become eligible for listing on the Global Select Market. The price on both exchange is the same. What's the difference between the Dow Jones Industrial Average and the S&P 500? The major difference between these two indexes is that the Dow Jones Industrial Average (DJIA) includes a priceweighted average of 30 stocks whereas the Standard & Poor's 500 (S&P 500) is a market value-weighted index of 500 stocks. The editors of the Wall Street Journal, which is owned by Dow Jones & Co, pick the stocks comprising the DJIA, while an S&P committee picks the 500 stocks in the S&P 500. (See Calculating The Dow Jones Industrial Average.) The Dow is comprised of 30 of the largest companies in the U.S. across a range of industries except for transport and utilities. The criteria for a company to get on the Dow is vague; the companies are leaders in their industry and very large. The components in the DJIA do not change often as it takes an important change in a company for it to be removed from the index, and if the index comes up for review, the Wall Street Journal editors often replace more than one company at a time. Dow Jones 65 Composite Average' A composite index that measures changes within the 65 companies that make up three Dow Jones averages: the 30 stocks that form the Dow Jones Industrial Average (DJIA), the 20 stocks that make up the Dow Jones Transportation Average (DJTA) and the 15 stocks of the Dow Jones Utility Average (DJUA). The Dow Jones 65 Composite, like the three sub-indexes, is price-weighted. All of the Dow Jones averages are price-weighted indexes. For this type of index, stocks with higher prices will influence the direction of the average more than lower prices, regardless of the actual size of the company. Most broad market indexes are market-cap weighted, such as the Nasdaq-100 and Standard & Poor's 500. The combination of the Dow Jones Industrial, Transportation and Utility averages used to be a broad measure of the U.S. economy, as those sectors were once the lion's share of economic production. This is no longer the case, as industries such as healthcare, technology and finance now include some of the largest companies in the world. While the DJIA has, in recent years, included some modern companies in its "industrial" average (such as Microsoft and Intel), most of the Dow Jones 65 stocks are focused in old-line businesses, and do not appear to represent a broad measure of economic performance. Difference Between Dow and Nasdaq Both the Dow and the Nasdaq, then, refer to an index, or an average of a bunch of numbers derived from the price movements of certain stocks. The DJIA tracks the performance of 30 different companies that are considered major players in their industries. The Nasdaq Composite, on the other hand, tracks approximately 4,000 stocks, all of which are traded on the Nasdaq exchange. The DJIA is composed mainly of companies found on the NYSE, with only a couple of Nasdaq-listed stocks. 'NYSE Composite Index' An index that measures the performance of all stocks listed on the New York Stock Exchange. The NYSE Composite Index includes more than 1,900 stocks, of which over 1,500 are U.S. companies. Its breadth therefore makes it a much better indicator of market performance than narrow indexes that have far fewer components. The weights of the index constituents are calculated on the basis of their free-float market capitalization. The index itself is calculated on the basis of price return and total return, which includes dividends.

The two biggest benefits to investors of the NYSE Composite Index are (a) its quality, since all its constituents have to meet the stringent listing requirements of the exchange, and (b) its global diversification, with non-US companies accounting for more than one-third of market capitalization. NYSE-listed foreign companies have their headquarters in 38 different countries, with the most foreign issuers from Canada, China, the U.K., Japan and Mexico. NYSE International 100 Index An index, weighted for float-adjusted market capitalization, of the stocks of the 100 largest publicly-traded companies traded on the New York Stock Exchange. Because foreign companies generally trade on the NYSE as American Depository Receipts, the Index effectively measure the performance of large ADRs. 'Nasdaq Composite Index' A market-capitalization weighted index of the more than 3,000 common equities listed on the Nasdaq stock exchange. The types of securities in the index include American depositary receipts, common stocks, real estate investment trusts (REITs) and tracking stocks. The index includes all Nasdaq listed stocks that are not derivatives, preferred shares, funds, exchange-traded funds (ETFs) or debentures. Unlike other market indexes, the Nasdaq composite is not limited to companies that have U.S. headquarters. It is very common to hear the closing price of the Nasdaq Composite Index reported in the financial press, or as part of the evening news. 'NYSE Amex Composite Index' An index made up of stocks that represent the NYSE Amex equities market. The NYSE Amex Composite Index is a market capitalization-weighted index, so the weight of each stock depends on the price of the shares and how many are outstanding. The index is used to quickly judge the overall movement of the NYSE Amex equities market. It was previously known as the American Stock Exchange (Amex) Composite Index and can be found under the symbol XAX. NYSE Euronext acquired the American Stock Exchange on October 1, 2008, and branded it as NYSE Alternext US, which was then changed to the NYSE Amex Equities in 2009. It is primarily an equity market for emerging growth companies. 'Footsie' A slang term for the Financial Times Actuaries 100 index (FTSE 100). The FTSE 100 index represents roughly 80% of the market capitalization of the London Stock Exchange (LSE) as a whole. While other indices have gained popularity within the LSE, such as the FTSE All-Share Index, the FTSE 100 is still by far the most widely used stock market index globally. The Footsie consists of 100 blue chip stocks that trade on the London Stock Exchange. The index is maintained by the FTSE Group, which is jointly owned by the Financial Times and the London Stock Exchange. The FTSE gets its name from the acronym of its two parent companies. The index is weighted by market capitalization, so larger companies make up a larger share of the inde The FTSE 100 Index, also called FTSE 100, FTSE, or, informally, the "footsie" /ftsi/, is a share index of the 100 companies listed on the London Stock Exchange with the highest market capitalization. It is one of the most widely used stock indices and is seen as a gauge of business prosperity for business regulated by UK company law. 'Standard & Poor's 500 Index - S&P 500' An index of 500 stocks chosen for market size, liquidity and industry grouping, among other factors. The S&P 500 is designed to be a leading indicator of U.S. equities and is meant to reflect the risk/return characteristics of the large cap universe. Companies included in the index are selected by the S&P Index Committee, a team of analysts and economists at Standard & Poor's. The S&P 500 is a market value weighted index - each stock's weight is proportionate to its market value.

The S&P 500 is one of the most commonly used benchmarks for the overall U.S. stock market. Euronext operates in EU NYSE operates in US NYSE acquired AMEX and Euronext NYSE Euronext announced that the AMEX would be integrated with the Alternext European small-cap exchange and renamed the NYSE Alternext U.S.[6] In March 2009, NYSE Alternext U.S. was changed to NYSE Amex Equities. On May 10, 2012, NYSE Amex Equities changed its name to NYSE MKT LLC.[7] So now AMEX is under Alternext which is, NYSE Alternext is an equity trading market that was opened May 17, 2005 by its parent institution Euronext (now NYSE Euronext) to address an opportunity posed by small to medium sized firms that were anticipated to desire easier access to an equity market.

Technical indicators

Parabolic SAR
Doesnt not work well in ranges, will get whipsawed It is mostly used for identifying enter/exit positions Rather than showing trends

\ the indicator works extremely well when a stock is trending, but it can lead to many false signals when the price moves sideways or is trading in a choppy market.

*maybe only follow this Parabolic SAR when the gradient is more than X? The parabolic SAR is extremely valuable because it is one of the easiest methods available for strategically setting the position of a stop-loss order. As you become more acquainted with technical indicators, you'll find that the parabolic SAR has built up quite the positive reputation for its role in helping many traders lock-in paper profits that have been realized in a trending environment. You can also see that professional traders who short the market will use this indicator to help determine the time to cover their short positions.

MACD
Above 0 12EMA is above the 26EMA Below 0 : 12EMA is below the 26EMA Hence when the MACD line is = 0 It is when 26EMA intersects 12EMA The more positive is the MACD, the larger the distance between 12EMA and 26EMA When MACD is going down, it means 12EMA is losing acceleration, and converging with 26EMA Signal line = 9day Exponential of the MACD line The signal line can be considered as a lagging indicator. It tracks the MACD movements, with a little delay. MACD line above signal line = bullish MACD line below signal line = bearish Significance of MACD converging to the signal line : means that the MACD is not able to keep up with its previous 9days' momentum Because if its able to keep up with its bullish momentum. If MACD is accelerating as 1unit/day Then the gap between MACD and Signal will always be constant. It will not converge Hence the convergence shows that MACD is losing acceleration

RSI
(check out the formular) Upper band - overbought Lower band - oversold RSI reflects momentum, and when its reaching the extreme levels RSI and Bollinger used together

Stochastics
3different type 1. Fast 2. Normal 3. Slow (popular one) %k line %d line is a SMA of %k line

Might want to be cautious when the indicator is trading in opposite direction from the market

ADX

+DI How strong or weak the uptrend is How strong the buyers are -DI How strong/weak the downtrend is

Paints the buying and selling pressure in 2 different lines If ADX line is above 40 and rising, indicative of a strong trend Avoid trend strategies when ADX line is below both the + and - DI Not much action in the market at all at that point

he ADX is a combination of two other indicators developed by Wilder, the positive directional indicator (abbreviated +DI) and negative directional indicator (-DI).[2] The ADX combines them and smooths the result with an exponential moving average. To calculate +DI and DI, one needs price data consisting of high, low, and closing prices each period (typically each day). One first calculates the directional movement (+DM and DM): UpMove = today's high yesterday's high DownMove = yesterday's low today's low if UpMove > DownMove and UpMove > 0, then +DM = UpMove, else +DM = 0 if DownMove > UpMove and DownMove > 0, then DM = DownMove, else DM = 0 After selecting the number of periods (Wilder used 14 days originally), +DI and DI are: +DI = 100 times exponential moving average of +DM divided by average true range DI = 100 times exponential moving average of DM divided by average true range The exponential moving average is calculated over the number of periods selected, and the average true range is an exponential average of the true ranges. Then: ADX = 100 times the exponential moving average of the absolute value of (+DI DI) divided by (+DI + DI) The ADX does not indicate trend direction or momentum, only trend strength.[3] It is a lagging indicator; that is, a trend must have established itself before the ADX will generate a signal that a trend is under way. ADX will range between 0 and 100. Generally, ADX readings below 20 indicate trend weakness, and readings above 40 indicate trend strength. An extremely strong trend is indicated by readings above 50. Alternative interpretations have also been proposed and accepted among technical analysts. For example it has been shown how ADX is a reliable coincident indicator of classical chart pattern development, whereby ADX readings below 20 occur just prior to pattern breakouts.[4]

ADX above 20 = trend

Force index (momentum indicator that takes volume into account)

The force index is calculated by subtracting yesterday's close from today's close and multiplying the result by today's volume. If closing prices are higher today than yesterday, the force is positive. If closing prices are lower than yesterday's, the force is negative. The strength of the force is determined either by a larger change in price or a larger volume; either situation can independently influence the value and the change in force index. Subtracting ytd close with today close to get ROC Force index = ROC *Volume Although it might be positive, but if it is not making new highs, then the trend is not strong Need to look at volume also.

Dollar tree Petsmart Martin Bing (Technical Analysis Explains) Rogermontgomery.com Bershire Hathaway Letters Stochastics 20/3/5 Why price isnt = intrinsic value Populated with uninformed people Market inefficiency Price isnt equals to value Price = what people are willing to pay

Value = what it is worth Missed out on ipco because I didnt follow the news/waiic Made an error on minzhong because I didnt follow the insider trading. Or didnt suspect anything

Common misconception
Stock price only move when there is trading. The correct fact: Stock price move even when there is no trading. It falls when people think it should fall. For example the day before ex-dividends date they buy ($15). Then hold the stocks through the ex dividend date, they will no longer be able to sell at the price they bought ($15). Because no one willing to buy at that price anymore. Hence the opening price will be at the lower price. ($10 for example)

Value Investing
P/E ratio average = 15 = price per share Price = valuation of company = how much it is worth = 15 Takes 15 Years to recover the value of the company Besides looking at PE Look at PEG PEG = PE divided by growth Under 1 = under valued Above 1 = overvalued Most good companies are more than 1 . Doesnt mean that more than 1 = 1 overvalued Ford P/E 2.95 PEG 0.28 But highly in debt General motors Yahoo 6.39 If not for USD as the world reserved currency, They couldnt bail out GM and ford

SIP
Foreign shares, Certificates, Exchange Traded Funds (ETFs), Exchange Traded Notes (ETNs), Futures (Extended Settlement contracts), Covered/Structured Warrants, Stock Options and Callable Bull/ Bear Contracts (CBBCs)

Singtel100
The reason that it has a gap is becoz singtel 10 and 100 arent as liquid as the "normal" singtel so expect to pay more or sell for less if u own the smaller ones

Can I buy 500 singtel 100 twice? then later I sell them together as 1000 Singtel? The answer is yes. If you log into CDP, you will see that the holdings are aggregated into Singtel (not Singtel 100 or Singtel 10) ES = extended settlement http://www.sias.org.sg/beginnerguide/02_09-ESC.php Accompanied by Bpe, Mbe, infront which I dont know what it means

CW = call warrant, followed by date PW = put warrant, followed by date Buying bonds/T-bills Can buy through DBS ibanking Competitive and non-competitive bidding, based on yield. 40% will be allocated to non-competitive The issued SGS will be based on the highest successful yield bids. If yield>coupon rate, then the bond is sold at less than 100% (discount) The balance will be credited back into the bidder's account Buy/Sell Volume his was what I wrote in answer to a very similiar question when this forum first started... If I want to sell a share, it will be added to the sell volume. Hence, a high sell volume means that there are a lot of sellers. On the other hand, buy orders make up the buy volume. The spread is the difference between the buy and sell price. No activity happens when the buyer does not want to pay the seller's price. Hence, you will always see buyers trying to buy at the cheaper price of the spread and sellers on the other side of the spread, trying to sell at a higher price. Only when both parties agree, then there will be a trade. Buy vol No. of buyers!!! Buy vol. means total number of lots of shares the queued potential buyers want to buy at the price under "buy" column. Similar: Sell vol No. of sellers!!! Sell vol. means total number of lots of shares the queued potential sellers want to sell at the price under the "sell" column. Sometimes I notice that the buying volume is very high, says 1000 lots at 28 cents. Then later when I refresh the screen, the buying queue becomes 200 lots at 28 cents but I do not see the volume transacted increase by 800 lots. Why is this so? Can someone please explain. Someone trying to play trickS for sell vol high & buy vol low - it will made you rush in to sell low while for sell vol low & buy vol high - it will trigger you rush in to buy high absolutely. but if that guy is not fast enough someone may actually take him up on his offer. only works for low volume counters to fool the unsuspecting. I do think that institutions can also do this pretty convincingly. Assume that they are now keen to push up Jaya warrants. They show hugh selling volumes and folks like you and I then think we are smart to see the selling vol and naturally will sell as quickly as we can. These guys then happily collect from us and then rev up the shares by then buying aggressively. When they have created such momentum, the unsuspecting retail investor catches on at a high price and guess what? They then sell it to the retail investors who will be carrying the baby. These guys are really good at this psychology game and I will definitely not want to pitch against them. They have the money to back them up. I don't have that kind of ammo. Hence, I would rather try to spot undervalued shares or shares where it appears that someone is collecting. This way, I can make better gains and be in more control. End message is that do not believe all the numbers that you see. You can now understand why suddenly, a whole of shares for sale disappear from the screen or why suddenly, the buying volume disappears. When this happens on a share you are riding, you know that you have been taken for a ride !

Yuncong Need to look at indexes and GDP growth too, (countries, sector etc)

Hitting 52 week high. Need to be cautious Channelnewsasia forum Edomo forum If drop 30%/50%, sure rebound He likes to draw lines at the resistances

REITS are usually highly geared? No lippo is 25% cap malls all these about 30 only reits with higher credit ratings can raise more than 35% or was it 30% ppl like cap malls and all the big fuck can raise up to 60% but usually keep it at 40% sorry 30% btu anyway from a company perspective usually if you can raise funds first choice is debt followed by equity cause debt is cheaper than equity but keppel can no longer raise debt cause 40% quite dangerous hence they turned to rights issue (equity) But you need the uninformed in order to make money Thats why for reits The first sign is The company say like oh we looking around at xxx properties You know that means either they gonna acquire debt If debt capacity not enough Means rights issue So if the asset they are looking to buy You dont like Better pull out before they go forward If their gearing is too high Like sph reit The gearing only 27% Means got capacity So high chance wont kena rights issue Sector Rotation Just look at the current stage and invest at the sector that is currently performing. Because when you invest for 69months, it will reflect the high earnings it earned over the period. For example, during the early recover period. The performing sector is the industrial sector. When you start investing in it, the share will appreciate over the 6-9months when they release their quarterly reports. Likewise for interest rates. Increase i/r = Bearish = invest in gold/housing/material

= inflation But I thought when i/r goes up, housing price will go down?

Buy stocks need to look at indices also WACC for Firm value COE for stock price So whats the use of WACC To calculate firm value for maybe M&A Or angels investor investing They want to know how much is the total value of the company Bad points of dropping price Bad ratings due to bad market value Bad M&A value Bad goodwill Cant borrow money

Pre-market and after hours trading If the highest bid is $1.1 Can I buy get $2? Or it will automatically change to $1.1 What happens during the pre and after hours trading How can we access them? And observe the volume http://www.poems.com.sg/testing/HelpCentre/tradehrsSS.asp?value=hour