It can be very unsettling in a weak economy, what if all the still-falling property prices, tumultuous stock market, job loss, and stagnant salary for extended period. Given a relatively secure job in a tech leader company that has demonstrated commitment in US, I sometimes watch the markets with almost clinical detachment.
Sure, my 401k balance has fallen by 30%, albeit as diversified as it can ever get. I still check it from time to time (to make sure no one hacks my account, and sell everything off, without me knowing it - as some horror stories had it), but I don't really bother with it as much. To me, it's not really loss to me unless I have to do fire-sale now.
I do find a silver lining in it all. I have come to appreciate the market gyrations. I must admit, I haven't touched the stock market, or bought/sold anything since the tech bubble burst in 2000. In a way, I have kind of mentally tuned out since the paper profit from my company's stock options evaporated, and I don't find a compelling need to check the market.
The market up/downs this year have had me refocused. I was looking at the market, the market swings, and thought, it's not altogether a bad thing. If I don't get greedy, I can buy-low-sell-high and make some candy money out of it. And so I did.
Here's my little strategy would work out:
(1) So, I picked only a few solid companies that I certainly won't mind holding long-term, but have experienced huge price swings. (Well, most every company goes through that these days anyways, so the selection is big.)
(2) I limit myself to a small amount of funds. In that, I acknowledge that this is nothing more than casino gambling, and I want to limit my downside.
(3) I don't limit myself to day-trading. Trading costs are high these days. There's no point mandating myself to close out positions in day-trading. Afterall, I don't mind holding the selected companies in the long term anyways.
(4) I pick a price point to buy/sell for the next trading, after the market close today. Since I sleep late anyways, I would take a look at the sentiment/performance in overseas markets overnight, maybe once or twice. Before US market opens, I finalize the buy/sell price points, look at my cash positions, and decide on how much profits I'm comfortable to take.
(5) Since I have limited the funding, I have to be mindful that even if I take profit, it'll take T+3 to have the funds available again. That limits the amount of trading I can do, which is fine with me.
It's working ok so far, although I have only started since the huge market swings happen for the past few months. Initially, it wasn't as good, since I was greedier. These days, I compare the gains to, say, treasury or money market yields, and it's alot more attractive.
Naturally, there's risk involved, but I'm more comfortable in taking control of these small funds, and manage it myself, rather than delegating to some mediocre fund managers whom I have no control over their performance.
Huge market swings won't last forever. But it's quite fun, actually. I have only myself to be accountable to. It'll probably extend till beginning of next year. I'll have my share of fun, for as long as "my party" lasts. :)
Thursday, October 16, 2008
On heart-warming stories...
I have this habit of discussing current news and stories with my kids. Although they're only 6 and 8, they get the gist of the issues pretty fast. Oftentimes though, passing judgment and conclusion to a story or news is not as easy as it might seem, involving alot of gray areas and ambiguity that young kids might not be able to appreciate. So, I pick more discrete black-and-white issues for discussions, and leave the others till they're older.
News have mostly doom-and-gloom. I didn't realize it until one time, after we discussed about a bad cop news story. My kids asked me, "why are you always reading sad stories, mom?" I was taken aback. I had not realized that those were mostly what I read, and they're right. Perhaps that has alot to do with why I'm more suspicious to human nature these days, and prefer to err on the wrong side (eg. not allowing my kids to be alone with so-and-so, because you don't want to find out some years later that this so-and-so relative had abused your kid when you left them alone). These days, I try to find a balance; though I must say, it's not easy.
Recently, there're a couple of readings, which are rather uplifting. One is about how a boy found his inspiration to become a writer later; the other is about the "Oxford Project" that follows 100 people in small-town Oxford, Iowa, and their life stories. Sometimes, our lives are moved and touched seismically by seemingly small things and incidents. I know I have a few, although I try to be more forward-looking these days for my kids. Perhaps, when I get older and slow down in my life, I'll come to more fully appreciate and revisit those incidents in my own life. For now, the future are the kids', and I'm trying not to miss it. :)
News have mostly doom-and-gloom. I didn't realize it until one time, after we discussed about a bad cop news story. My kids asked me, "why are you always reading sad stories, mom?" I was taken aback. I had not realized that those were mostly what I read, and they're right. Perhaps that has alot to do with why I'm more suspicious to human nature these days, and prefer to err on the wrong side (eg. not allowing my kids to be alone with so-and-so, because you don't want to find out some years later that this so-and-so relative had abused your kid when you left them alone). These days, I try to find a balance; though I must say, it's not easy.
Recently, there're a couple of readings, which are rather uplifting. One is about how a boy found his inspiration to become a writer later; the other is about the "Oxford Project" that follows 100 people in small-town Oxford, Iowa, and their life stories. Sometimes, our lives are moved and touched seismically by seemingly small things and incidents. I know I have a few, although I try to be more forward-looking these days for my kids. Perhaps, when I get older and slow down in my life, I'll come to more fully appreciate and revisit those incidents in my own life. For now, the future are the kids', and I'm trying not to miss it. :)
Wednesday, October 8, 2008
On teacher's pay and the $125k a year proposal...
Of one of the oldest, ongoing discussions of all time, we've debated to death of what to do with our education system; and, how to improve it, or rather, how to halt the long term downward slide of American younger generation's education level (math and science, in particular), compared to their Asian and East European counterparts.
George W Bush thinks he has the one-minute solution, namely, the No Child Left Behind Act (NCLB). Given a White House with Karl Rove, it's constantly in campaign mode. All complex, real-world issues are reduced to two-minute soundbites that promise quick fixes. While most everyone agrees that standardized tests (a central theme of NCLB), the Act is riddled with holes like swiss cheese, and poor executed to the max.
So here it is, another discussion, another attempt on improving our education system, resulting in heated online debates. This one suggests that we should give $125,000 a year to teachers, since they are poorly paid compared to engineers.
A bit of disclosure is in order. I totally agree that teachers in this country are poorly paid. (I can tell you though, that this is the same in other parts of the world.) I agree too, that in order to have first-class education system, you cannot be expecting teachers to scrap by with crumbs. And we should not be expecting the young, well-educated, and idealistic grads to do "sacrifice" for the next generation, by doing "social service/welfare" for being teachers to our children.
Ok, so we agree that low teacher's pay is one of the problems that riddles our education system, at least we can talk.
When I look at problems, I always relay back to my own experience (as a student, as a parent, and as someone who works in the commercial world). Say, I go straight to my boss' office, and tell me with a serious face, that I reckon my job is very important to the company, and that I deserve x amount in salary. What do you think my boss will say to me? What would YOU say to me if you were my boss?
What I can tell you is what I would say to this employee, if I were the boss. I need a few qualifiers though:
(a) You say your job is important? How important?
Ok, we have agreed that we put our kids' education in the teacher's hands, so it must be one helluva important job.
(b) You say you want $125,000 a year in salary? Why $125,000?
So you say since engineers earn $125,000 a year, me as a teacher should be earning as much.
Now, this gets tricky. How do you compare apples to oranges? Why aren't teachers compared to, say, social workers who arguably have a more stressful workload and no 2-month vacation a year, but get paid less? Why aren't teachers compared to CEO or CFO who earn exponentially more? Shouldn't teachers be paid like CEO/CFO?
You would see, that singling engineers' pay scale out as comparison to teacher's is as arguable as the subject matter itself. I don't see how anyone could pick a random out simply because they want someone else's paycheck.
(c) Say, there are 30 teachers in the school. If you're paid $125,000 a year, should the other 29 teachers get the same? If yes, is it fair? If no, how much should they be paid, and why someone should be earning $100,000 and you should get $25,000 more? In other words, how do you judge pay scale and performance.
One of the things I don't like about is the union. Sure, unions serve some purpose in ensuring workers benefits. But when it comes to performance evaluation, collective bargaining is one big, terrible idea.
In a way, unions take away all the incentives of the star teachers to excel, by ensuring that everyone - the mediocres, in particular - earns the same.
One tough question remains unanswered is, how to judge a teacher's performance. NCLB is correct in introducing the idea of accountability - so that the performance is decoupled by rigid work rules and hierarchy of unions. But NCLB fails utterly in relying on standardized test scores alone to test teachers' performance.
Sure, I grew up in a system of standardized tests. I grew up in Asia, and believe me, it's all about tests and exams. Back then, when I was a kid and a student, I didn't realize it to be such a big issue, since if someone flunks an exam, s/he gets kick out of school. Period. It's up to him/her to find their way in the society, or fall on the wayside. S/he becomes a social issue, but not an issue for the school. Out of sight, out of mind, y'see.
As a parent now, I'm not sure if I want to shovel one issue over the fence, and let the next system deal with it. What if it's my kid who can't catch up? I certainly would not want a system to rely on the test/exam scores, and that alone. But that's what happens with NCLB. Worse still, Bush scores political points with getting NCLB passed, without providing sufficient fundings.
Back to the issue of what the performance critera for teacher, it's still up in the air. In the commercial world, you have the Jack Welsh's GE way (ie. constantly sifting and cutting off the bottom 10% while rewarding top performers). Now we know it breeds anxiety, animosity, and low rationale (saved the top 10% percentile), and the top guys leave anyways.
For the past few years, the "360" approach is the rage. Basically, instead of relying solely on your own manager's evaluation of your performance, you're being evaluated by everyone whom you've worked with. That provides one extra element - ie. team work - which is not likely to show up in the Jack Welsh perf review. In the school settings, could we have tried surveying the input from parents and students (if they're old enough to judge) as well? In a way, parents are one best gauge on how well their kids have learnt or improved.
Of course, in real world, life is more complicated than that. The above suggestion assumes active parent involvement which oftentimes is glaringly absent in poor schools. How do we overcome that?
(d) And we haven't even talked about the definitive budget constraint that a school has. Sure, the GOP know-it-all hawks are going to tell the schools to cut spending and bureaucracy. Realistically, I doubt how many school districts can up the teachers pay from $50k to $125k across the board. It's just not gonna happen, even in the commercial world.
Well...it leaves many questions open, without addressing even a small subset of it.
George W Bush thinks he has the one-minute solution, namely, the No Child Left Behind Act (NCLB). Given a White House with Karl Rove, it's constantly in campaign mode. All complex, real-world issues are reduced to two-minute soundbites that promise quick fixes. While most everyone agrees that standardized tests (a central theme of NCLB), the Act is riddled with holes like swiss cheese, and poor executed to the max.
So here it is, another discussion, another attempt on improving our education system, resulting in heated online debates. This one suggests that we should give $125,000 a year to teachers, since they are poorly paid compared to engineers.
A bit of disclosure is in order. I totally agree that teachers in this country are poorly paid. (I can tell you though, that this is the same in other parts of the world.) I agree too, that in order to have first-class education system, you cannot be expecting teachers to scrap by with crumbs. And we should not be expecting the young, well-educated, and idealistic grads to do "sacrifice" for the next generation, by doing "social service/welfare" for being teachers to our children.
Ok, so we agree that low teacher's pay is one of the problems that riddles our education system, at least we can talk.
When I look at problems, I always relay back to my own experience (as a student, as a parent, and as someone who works in the commercial world). Say, I go straight to my boss' office, and tell me with a serious face, that I reckon my job is very important to the company, and that I deserve x amount in salary. What do you think my boss will say to me? What would YOU say to me if you were my boss?
What I can tell you is what I would say to this employee, if I were the boss. I need a few qualifiers though:
(a) You say your job is important? How important?
Ok, we have agreed that we put our kids' education in the teacher's hands, so it must be one helluva important job.
(b) You say you want $125,000 a year in salary? Why $125,000?
So you say since engineers earn $125,000 a year, me as a teacher should be earning as much.
Now, this gets tricky. How do you compare apples to oranges? Why aren't teachers compared to, say, social workers who arguably have a more stressful workload and no 2-month vacation a year, but get paid less? Why aren't teachers compared to CEO or CFO who earn exponentially more? Shouldn't teachers be paid like CEO/CFO?
You would see, that singling engineers' pay scale out as comparison to teacher's is as arguable as the subject matter itself. I don't see how anyone could pick a random out simply because they want someone else's paycheck.
(c) Say, there are 30 teachers in the school. If you're paid $125,000 a year, should the other 29 teachers get the same? If yes, is it fair? If no, how much should they be paid, and why someone should be earning $100,000 and you should get $25,000 more? In other words, how do you judge pay scale and performance.
One of the things I don't like about is the union. Sure, unions serve some purpose in ensuring workers benefits. But when it comes to performance evaluation, collective bargaining is one big, terrible idea.
In a way, unions take away all the incentives of the star teachers to excel, by ensuring that everyone - the mediocres, in particular - earns the same.
One tough question remains unanswered is, how to judge a teacher's performance. NCLB is correct in introducing the idea of accountability - so that the performance is decoupled by rigid work rules and hierarchy of unions. But NCLB fails utterly in relying on standardized test scores alone to test teachers' performance.
Sure, I grew up in a system of standardized tests. I grew up in Asia, and believe me, it's all about tests and exams. Back then, when I was a kid and a student, I didn't realize it to be such a big issue, since if someone flunks an exam, s/he gets kick out of school. Period. It's up to him/her to find their way in the society, or fall on the wayside. S/he becomes a social issue, but not an issue for the school. Out of sight, out of mind, y'see.
As a parent now, I'm not sure if I want to shovel one issue over the fence, and let the next system deal with it. What if it's my kid who can't catch up? I certainly would not want a system to rely on the test/exam scores, and that alone. But that's what happens with NCLB. Worse still, Bush scores political points with getting NCLB passed, without providing sufficient fundings.
Back to the issue of what the performance critera for teacher, it's still up in the air. In the commercial world, you have the Jack Welsh's GE way (ie. constantly sifting and cutting off the bottom 10% while rewarding top performers). Now we know it breeds anxiety, animosity, and low rationale (saved the top 10% percentile), and the top guys leave anyways.
For the past few years, the "360" approach is the rage. Basically, instead of relying solely on your own manager's evaluation of your performance, you're being evaluated by everyone whom you've worked with. That provides one extra element - ie. team work - which is not likely to show up in the Jack Welsh perf review. In the school settings, could we have tried surveying the input from parents and students (if they're old enough to judge) as well? In a way, parents are one best gauge on how well their kids have learnt or improved.
Of course, in real world, life is more complicated than that. The above suggestion assumes active parent involvement which oftentimes is glaringly absent in poor schools. How do we overcome that?
(d) And we haven't even talked about the definitive budget constraint that a school has. Sure, the GOP know-it-all hawks are going to tell the schools to cut spending and bureaucracy. Realistically, I doubt how many school districts can up the teachers pay from $50k to $125k across the board. It's just not gonna happen, even in the commercial world.
Well...it leaves many questions open, without addressing even a small subset of it.
On my big sis, her debts, and getting burnt by Lehman's bonds...
Talking about getting burnt by investing in the bonds from Lehman Brothers, my sister is one of those. I would certainly have hoped that, given my eldest sister (A) is well-educated and is a financial controller in her company, she would be more discerning that the average retired/near-retirement investors who lost most or all of their savings by investing everything in the bonds backed by Lehman Brothers, claiming to have principal protection by the retail banks who were pushing them. Amazingly, my sister did not read the fine print. She's now lost probably more than US$50,000 worth of her savings which is a fair chunk.
About my sister and her debts...
Me and my other sister (J) were upset at A. Oftentimes, A is a kind-hearted and very easy-going person, but at times seems so complacent as to the point of naive:
(1) She's single, but she bought more than 6 insurance policies, at least 3 of which are whole-life and the rest term-life. She buys one every time her friends approach her. Invariably, these "friends" are new to the insurance agent game, and are always pushing to families and friends. Invariably, she would buy from them. She bought all those whole-life policies "to do savings." She would buy these policies and file them away, without bothering to reveal them for details, or investment returns (for the "savings" portion).
(2) J and I ask her why she's holding 3 term life policies when there's no one who needs support from her, should she pass away. A has no answer for it. We ask her why she hasn't kept the money herself, and do the investment/savings herself. A can't be sure of herself to do those duties. Admittedly, she's a very good financial controller for her employer. It sets me to wonder why and how some people are always better at making/keeping money for others, but not themselves?
(3) Only just last year, a friend of hers approached her about this "investment idea" of the bonds from Lehman Brothers. It's "structured product," she's told. That's about as much as she can tell us. She doesn't know what these structured product does, but it sounds impressively, and it's from a big company, and her friend told her it's "principal protection." So, she poured her life savings into it. Amazing, isn't it, how she would do that without second thought?!
(4) Sometimes, though, I think A's complacency and laid-back attitude come from her religious belief. She strongly believes that God will provide for her, and in helping others. Not that they're bad traits, but it got her burnt time and again. I don't think she ever learnt her lesson.
(5) Twenty years back, she lost all her savings "playing" gold margin. The idea is simple enough. Gold price could either go up or down. You put certain deposits in your margin account with the brokerage. If you bet it to go up, and the price goes up, you win; but if price goes down, the deposits will be pulled out to cover margin loss. Likewise, if you bet it going down, and it does go down, you win; if it goes up instead, it's your margin loss. As long as you have enough money in the margin account, you can stay in the game (as you can stay on at the gambling table); but if all money in the account is used and you don't have any money to cover margin calls, they cut you lose and you definitely lost. She won a little bit initially. That got her started. (Isn't that how every gambler gets started, to have small gains initially?) In a perfect world when she bet against the market, she might have stayed on for a bit longer. BUT, what she didn't realize at the time was that, the so-called "price" quote from the brokerage does not always sync with the open market. The brokerage constantly "tweaks" or delays their price quote, knowing which of their customer(s) would not be able to make the margin calls, and the brokerage would be able to cut them out and pocket the profit itself. Gold margin is a 24x7 market. During the height of her "game" in gold margin, she hardly had a good night sleep as she's constantly calling in to the brokerage's hotline to check the price... until they cut her lose for coming up short with the margin calls. In the end, she lost close to US$200,000 in all - her total savings.
(6) Twenty years on, she's doing it again. This time though, it's not just these "structured products" or various life insurance policies. Afterall, investment loss (unlike margins and derivatives when the loss can be unknown for a long time) is only limited to the amount you put in. Apparently, A never learnt her lesson. This time, though, it's worse. The "holes" that she dug herself include not just these investment products, but her so-called boyfriend (bf).
(7) Now, I have to say something about this bf of hers. He's a sales. He used to earn big money in the 1980s doing import/export (I/E) from Asia to US. That was before China got in the direct-manufacturing game, and all big Western buyers go straight to the Chinese manufacturers for finished products. The middleman profits were very handsome back then, and he didn't need to do much hard work. In the 1990s, he split from his previous employer and tried his luck to be his own boss, dabbling in blackmarket watch dealing in/out of China. He paired up with a couple of shady mainland Chinese to start a shop at the border of China/Hong Kong. My big sis started dating him around the time when he started out on this. The money was good for a while, and then the mainland Chinese guys decided that they knew all his merchandise source, and since they knew how to sell now, they wanted to kick him out. What followed were a couple of armed robbery to the shop, and all watch inventory were "cleaned out." He got kicked out of the venture, with the mainland Chinese guys maintaining that he still owed them half of what's lost in the lost inventory. All he got left were some very old inventory from the previous I/E venture.
(8) For the past 5-6 years, he wanted to make a "comeback," first in the watch dealing, then the I/E side. He sunk all his own savings, sold off all his properties, saved the last one he's living, but re-mortgaged it too. But you know where it's heading... my big sis, being kind-hearted and gentle as she is, she sunk ALL her savings to his various dealings too. In a way, she's not an investor type. She didn't even so much as asking for info on how business dealings. All she knows was to supply the cash to him. When all her own savings were gone (all sunk to his failed biddings), she asked us (all siblings) to chip in. I told her at the time, it's not for him, but it's for her own use. No matter, she sunk all the borrowings from the family to him.
(9) It's only until last week, that J and I realized that A has even used all our parents' savings (the part held in her name for them), and even overdrafted, using parents' savings as collateral. Oftentimes, she's also paying for the mortgage payment of this good-for-nothing boyfriend too. She ended up using 96% of her monthly salary to repay loans.
(10) This was the time when she thought these "structured products" might be able to make some money for her. (Can you believe a more naive reason for investment - but it's more like a gambler's excuse?) Now she's lost it all.
(11) I'm not sure what's going to happen to A now. She has maybe another 10-12 years in working life before retirement. And she's still praying for God's providence. She's crying out loud, on why God chose such a "difficult path" for her. J and I told her time and again, that that's prayers. She has chosen this path, and she insisted that God agrees with her, and delivers her the resources to go down that path. Not so - and God has shown her repeatedly that He does not condone the way.
It's always hard when news headlines hit close to home. I would never have thought or hoped that I would have stupid investors from within my family. But things happen, and God will show us, we're all humans, and we all make the same or similar mistakes. I'm still praying for my big sis to learn her way, change her attitude, and repay all her debts; although I'm not sure how. I'm not sure if it's helping her at all, by having her hit a jackpot or something and repay all these debts miraculously. She would have learnt the lesson the hard way...much harder than her last, 20 years ago.
About my sister and her debts...
Me and my other sister (J) were upset at A. Oftentimes, A is a kind-hearted and very easy-going person, but at times seems so complacent as to the point of naive:
(1) She's single, but she bought more than 6 insurance policies, at least 3 of which are whole-life and the rest term-life. She buys one every time her friends approach her. Invariably, these "friends" are new to the insurance agent game, and are always pushing to families and friends. Invariably, she would buy from them. She bought all those whole-life policies "to do savings." She would buy these policies and file them away, without bothering to reveal them for details, or investment returns (for the "savings" portion).
(2) J and I ask her why she's holding 3 term life policies when there's no one who needs support from her, should she pass away. A has no answer for it. We ask her why she hasn't kept the money herself, and do the investment/savings herself. A can't be sure of herself to do those duties. Admittedly, she's a very good financial controller for her employer. It sets me to wonder why and how some people are always better at making/keeping money for others, but not themselves?
(3) Only just last year, a friend of hers approached her about this "investment idea" of the bonds from Lehman Brothers. It's "structured product," she's told. That's about as much as she can tell us. She doesn't know what these structured product does, but it sounds impressively, and it's from a big company, and her friend told her it's "principal protection." So, she poured her life savings into it. Amazing, isn't it, how she would do that without second thought?!
(4) Sometimes, though, I think A's complacency and laid-back attitude come from her religious belief. She strongly believes that God will provide for her, and in helping others. Not that they're bad traits, but it got her burnt time and again. I don't think she ever learnt her lesson.
(5) Twenty years back, she lost all her savings "playing" gold margin. The idea is simple enough. Gold price could either go up or down. You put certain deposits in your margin account with the brokerage. If you bet it to go up, and the price goes up, you win; but if price goes down, the deposits will be pulled out to cover margin loss. Likewise, if you bet it going down, and it does go down, you win; if it goes up instead, it's your margin loss. As long as you have enough money in the margin account, you can stay in the game (as you can stay on at the gambling table); but if all money in the account is used and you don't have any money to cover margin calls, they cut you lose and you definitely lost. She won a little bit initially. That got her started. (Isn't that how every gambler gets started, to have small gains initially?) In a perfect world when she bet against the market, she might have stayed on for a bit longer. BUT, what she didn't realize at the time was that, the so-called "price" quote from the brokerage does not always sync with the open market. The brokerage constantly "tweaks" or delays their price quote, knowing which of their customer(s) would not be able to make the margin calls, and the brokerage would be able to cut them out and pocket the profit itself. Gold margin is a 24x7 market. During the height of her "game" in gold margin, she hardly had a good night sleep as she's constantly calling in to the brokerage's hotline to check the price... until they cut her lose for coming up short with the margin calls. In the end, she lost close to US$200,000 in all - her total savings.
(6) Twenty years on, she's doing it again. This time though, it's not just these "structured products" or various life insurance policies. Afterall, investment loss (unlike margins and derivatives when the loss can be unknown for a long time) is only limited to the amount you put in. Apparently, A never learnt her lesson. This time, though, it's worse. The "holes" that she dug herself include not just these investment products, but her so-called boyfriend (bf).
(7) Now, I have to say something about this bf of hers. He's a sales. He used to earn big money in the 1980s doing import/export (I/E) from Asia to US. That was before China got in the direct-manufacturing game, and all big Western buyers go straight to the Chinese manufacturers for finished products. The middleman profits were very handsome back then, and he didn't need to do much hard work. In the 1990s, he split from his previous employer and tried his luck to be his own boss, dabbling in blackmarket watch dealing in/out of China. He paired up with a couple of shady mainland Chinese to start a shop at the border of China/Hong Kong. My big sis started dating him around the time when he started out on this. The money was good for a while, and then the mainland Chinese guys decided that they knew all his merchandise source, and since they knew how to sell now, they wanted to kick him out. What followed were a couple of armed robbery to the shop, and all watch inventory were "cleaned out." He got kicked out of the venture, with the mainland Chinese guys maintaining that he still owed them half of what's lost in the lost inventory. All he got left were some very old inventory from the previous I/E venture.
(8) For the past 5-6 years, he wanted to make a "comeback," first in the watch dealing, then the I/E side. He sunk all his own savings, sold off all his properties, saved the last one he's living, but re-mortgaged it too. But you know where it's heading... my big sis, being kind-hearted and gentle as she is, she sunk ALL her savings to his various dealings too. In a way, she's not an investor type. She didn't even so much as asking for info on how business dealings. All she knows was to supply the cash to him. When all her own savings were gone (all sunk to his failed biddings), she asked us (all siblings) to chip in. I told her at the time, it's not for him, but it's for her own use. No matter, she sunk all the borrowings from the family to him.
(9) It's only until last week, that J and I realized that A has even used all our parents' savings (the part held in her name for them), and even overdrafted, using parents' savings as collateral. Oftentimes, she's also paying for the mortgage payment of this good-for-nothing boyfriend too. She ended up using 96% of her monthly salary to repay loans.
(10) This was the time when she thought these "structured products" might be able to make some money for her. (Can you believe a more naive reason for investment - but it's more like a gambler's excuse?) Now she's lost it all.
(11) I'm not sure what's going to happen to A now. She has maybe another 10-12 years in working life before retirement. And she's still praying for God's providence. She's crying out loud, on why God chose such a "difficult path" for her. J and I told her time and again, that that's prayers. She has chosen this path, and she insisted that God agrees with her, and delivers her the resources to go down that path. Not so - and God has shown her repeatedly that He does not condone the way.
It's always hard when news headlines hit close to home. I would never have thought or hoped that I would have stupid investors from within my family. But things happen, and God will show us, we're all humans, and we all make the same or similar mistakes. I'm still praying for my big sis to learn her way, change her attitude, and repay all her debts; although I'm not sure how. I'm not sure if it's helping her at all, by having her hit a jackpot or something and repay all these debts miraculously. She would have learnt the lesson the hard way...much harder than her last, 20 years ago.
Tuesday, October 7, 2008
On pension funds losing $2 trillion in value from stock market plunge...
Perhaps alot of folks care/know about the value of their 401k only on quarterly basis when the statements arrive in the mail. Not so for me. I've gone paperless statement for a while now, and I make a point to login to check the value of my 401k maybe twice a month or more. So, I know how they've been doing, and they haven't been doing well. It's been down more than 20% since the beginning of this year. So, it comes as no surprise when I read today in the news, and then heard on NPR in the evening news, that pension funds like 401k have lost about that much (in percentage) so far, with value of $2 trillion in value.
Not that I need to heed to any financial advisers or analysts' call (since they're mostly just as clueless as everybody else), but I always diversify. I learnt this from my parents who've invested in stock markets and forex for a very long time now. And I always diversify. I have some in US blue chips, some in mid cap growth, some in index funds, some in international and emerging markets, some in forex, and some in cash (for everyday use and cash buffer). The rest goes to the business venture (I don't like excessive borrowing for business needs).
These days, though, things are not looking good from all fronts. Anywhere you turn, it's going down the tube. I don't panic easily. I usually like to top up when the market goes down. I agree with the idea of dollar-averaging the portfolio, as long as you keep rebalancing the portfolio on regular basis.
I practice all these on my own. I don't panic. And when you look at the markets now (as any other turbulent times like the 1987 Black Monday), you realize that the ones who panic are the traders and mostly institutional investors - the ones who are supposed to keep their cool; the ones who are supposed NOT to panic; the ones who are big enough to move and shake the markets. For all those that they're preaching, they did a particular lousy job. And for that (like Fidelity), we pay them handsome management fees on the pension funds.
If it's not for tax purpose, I would not - never - have invested in funds (pension funds, 401k, IRA, and *particularly* mutual funds). I do not trust these so-called fund managers. I find most of them to be mediocre, at best. For the amount of fees that I pay them, I reckon I would have done a better job in managing my own funds.
Lousy.
Not that I need to heed to any financial advisers or analysts' call (since they're mostly just as clueless as everybody else), but I always diversify. I learnt this from my parents who've invested in stock markets and forex for a very long time now. And I always diversify. I have some in US blue chips, some in mid cap growth, some in index funds, some in international and emerging markets, some in forex, and some in cash (for everyday use and cash buffer). The rest goes to the business venture (I don't like excessive borrowing for business needs).
These days, though, things are not looking good from all fronts. Anywhere you turn, it's going down the tube. I don't panic easily. I usually like to top up when the market goes down. I agree with the idea of dollar-averaging the portfolio, as long as you keep rebalancing the portfolio on regular basis.
I practice all these on my own. I don't panic. And when you look at the markets now (as any other turbulent times like the 1987 Black Monday), you realize that the ones who panic are the traders and mostly institutional investors - the ones who are supposed to keep their cool; the ones who are supposed NOT to panic; the ones who are big enough to move and shake the markets. For all those that they're preaching, they did a particular lousy job. And for that (like Fidelity), we pay them handsome management fees on the pension funds.
If it's not for tax purpose, I would not - never - have invested in funds (pension funds, 401k, IRA, and *particularly* mutual funds). I do not trust these so-called fund managers. I find most of them to be mediocre, at best. For the amount of fees that I pay them, I reckon I would have done a better job in managing my own funds.
Lousy.
On market gyration and turbulent economy...
It's always exhilarating to witness turbulent times as a spectator. Of course, it helps that you're not in the blood sport yourself.
Tech stock bubble...
Such was a time to see the coming of age of the internet era in the late 1990s. I could feel the charge of energy in the air when you're in CalTech, Pasadena, Stanford, and MIT, Boston. There was so much excitement, initially for bringing about changes to the world, and then the big money came. Back then, one of the favorable past-time was to have the little yahoo ticker app installed, and see the ticker slide by right on your own machine (PC, Mac, you-name-it). For a while, even just the thought of a (paper) millionaire is enough to deliver orgasm to folks. Everyone wants to start their own company, much like every Senator in Washington thinks they are president material. It feels good even just to see it, to feel it, and be part of the movement. I feel privileged.
I didn't feel particularly burnt when the tech stock market bubble bursted in 2000. Afterall, they had only been paper profit. It's like playing monopoly. It's fun going to a party, after every party ends, and so should this.
Housing bubble...
And then there was the housing bubble. At the time, after the tech bubble burst, I recall almost every so-called analyst and financial advisers would say, housing is the way to go. It's long term investment. You can go wrong with it. Over time, property value always goes up. Even Bush was advocating the "ownership society" from the White House.
We bought our first home in the late 1990s, not for speculation, but for our real need. We paid it off, bought a second home in mid 2000s, and rented the first one out, but all based on our needs at the time (since we need more room for the kids). We never went for the extravagant. Afterall, I don't like big houses. I prefer smaller dig, but with each space fully utilized. I don't like have lots of rooms that only gather dust, with no one using them.
And we sold our first home in mid 2006, almost right at the peak of the market. I never tried to time the market. But it's indeed providence, that there's this buyer in the same building, who's so keen on buying out all units in the multi-family and convert it into a single-family, all for themselves; and he would hassle us every year to sell, ever since we moved to our second home. So, I reckon, the price was right, and we sold.
By end 2006, housing prices started plateauing and falling. Do I feel sorry for the guy who hassled us to sell to him? Not particularly. Afterall, he has an MBA and a good job (CFO) for a decent company; but so does he have 5 mortgages (4 for the various units in that same building, including his own home there, and 1 vacation home in Maine). Does he overstretch himself? I certainly think so. But that's the kind of market craze that drives people to do irrational things, even though this guy thinks he has all angles covered (except when the property market turns).
We still live in that same second home we bought. It has enough space for us for now, and I'm happy with it. My mom keeps reminding me that we would need more space as the kids grow. But for now, they can wait for a while.
Does it feel good to see the housing bubble, reap some nice profit (sold the first home for 3 times its original price, can you believe it?!?), then witness its deflation? It's almost surreal, and I know the collapse of the housing market would have hurt alot of people, including the guy who forced our hand to sell to him. But for the most part, they asked for it.
Credit market squeeze...
By now, of course we know how this plays out. The housing market downturn triggers the subprime mortgage market to collapse. That fires off the credit market squeeze since the derivatives that base on the value of subprime collaterals have all but evaporated. The Fed was sleeping at their watch. Rating agencies sucker up to the banks, investment banks, and all kinds of financial institutions, and giving AAA ratings to all tranche of securitized instruments like candies to kids at Halloween.
Another stock market plunge...
It's still hurting now. Yesterday, Dow plunged another 800 points at one point, after falling some 770 points a few days before. The crisis looks to be spreading to Europe. (Should there be any surprise?!?) Stock markets around the world fell precipitously. (And Asia still think they're immune to a recession in Europe and even US? They must still be dreaming.)
~~~~~~~~~~~~~
Do I feel exhilarated just to recount what has gone through in less than 10 years, with bubble (burst) after bubble (burst)? Most definitely.
Sometimes, though, it's an interesting thought, to see gyrations and turbulance in economy like these as opportunities, and the "invisible hand" at work, in redistributing wealth from one group to another, and from one part of the world to the next. I sure hope this redistribution is making the wealth more evenly distributed. So far, though, the signs are not good. Wealth looks to be more and more focused on a shrinking group of individuals. Oftentimes, it takes money to make money. If average joes want to play in the big league, they would need the capital. With borrowed capital, when times like this come, lenders are going to turn off the faucet.
We'll have to play safe. I hope my kids will read these one day, after they grow up, and learn something from history, since history does repeat itself. It might not be in the same form; but one way or the way, it would. That's a law of nature.
Tech stock bubble...
Such was a time to see the coming of age of the internet era in the late 1990s. I could feel the charge of energy in the air when you're in CalTech, Pasadena, Stanford, and MIT, Boston. There was so much excitement, initially for bringing about changes to the world, and then the big money came. Back then, one of the favorable past-time was to have the little yahoo ticker app installed, and see the ticker slide by right on your own machine (PC, Mac, you-name-it). For a while, even just the thought of a (paper) millionaire is enough to deliver orgasm to folks. Everyone wants to start their own company, much like every Senator in Washington thinks they are president material. It feels good even just to see it, to feel it, and be part of the movement. I feel privileged.
I didn't feel particularly burnt when the tech stock market bubble bursted in 2000. Afterall, they had only been paper profit. It's like playing monopoly. It's fun going to a party, after every party ends, and so should this.
Housing bubble...
And then there was the housing bubble. At the time, after the tech bubble burst, I recall almost every so-called analyst and financial advisers would say, housing is the way to go. It's long term investment. You can go wrong with it. Over time, property value always goes up. Even Bush was advocating the "ownership society" from the White House.
We bought our first home in the late 1990s, not for speculation, but for our real need. We paid it off, bought a second home in mid 2000s, and rented the first one out, but all based on our needs at the time (since we need more room for the kids). We never went for the extravagant. Afterall, I don't like big houses. I prefer smaller dig, but with each space fully utilized. I don't like have lots of rooms that only gather dust, with no one using them.
And we sold our first home in mid 2006, almost right at the peak of the market. I never tried to time the market. But it's indeed providence, that there's this buyer in the same building, who's so keen on buying out all units in the multi-family and convert it into a single-family, all for themselves; and he would hassle us every year to sell, ever since we moved to our second home. So, I reckon, the price was right, and we sold.
By end 2006, housing prices started plateauing and falling. Do I feel sorry for the guy who hassled us to sell to him? Not particularly. Afterall, he has an MBA and a good job (CFO) for a decent company; but so does he have 5 mortgages (4 for the various units in that same building, including his own home there, and 1 vacation home in Maine). Does he overstretch himself? I certainly think so. But that's the kind of market craze that drives people to do irrational things, even though this guy thinks he has all angles covered (except when the property market turns).
We still live in that same second home we bought. It has enough space for us for now, and I'm happy with it. My mom keeps reminding me that we would need more space as the kids grow. But for now, they can wait for a while.
Does it feel good to see the housing bubble, reap some nice profit (sold the first home for 3 times its original price, can you believe it?!?), then witness its deflation? It's almost surreal, and I know the collapse of the housing market would have hurt alot of people, including the guy who forced our hand to sell to him. But for the most part, they asked for it.
Credit market squeeze...
By now, of course we know how this plays out. The housing market downturn triggers the subprime mortgage market to collapse. That fires off the credit market squeeze since the derivatives that base on the value of subprime collaterals have all but evaporated. The Fed was sleeping at their watch. Rating agencies sucker up to the banks, investment banks, and all kinds of financial institutions, and giving AAA ratings to all tranche of securitized instruments like candies to kids at Halloween.
Another stock market plunge...
It's still hurting now. Yesterday, Dow plunged another 800 points at one point, after falling some 770 points a few days before. The crisis looks to be spreading to Europe. (Should there be any surprise?!?) Stock markets around the world fell precipitously. (And Asia still think they're immune to a recession in Europe and even US? They must still be dreaming.)
~~~~~~~~~~~~~
Do I feel exhilarated just to recount what has gone through in less than 10 years, with bubble (burst) after bubble (burst)? Most definitely.
Sometimes, though, it's an interesting thought, to see gyrations and turbulance in economy like these as opportunities, and the "invisible hand" at work, in redistributing wealth from one group to another, and from one part of the world to the next. I sure hope this redistribution is making the wealth more evenly distributed. So far, though, the signs are not good. Wealth looks to be more and more focused on a shrinking group of individuals. Oftentimes, it takes money to make money. If average joes want to play in the big league, they would need the capital. With borrowed capital, when times like this come, lenders are going to turn off the faucet.
We'll have to play safe. I hope my kids will read these one day, after they grow up, and learn something from history, since history does repeat itself. It might not be in the same form; but one way or the way, it would. That's a law of nature.
Monday, October 6, 2008
On modern etiquette...
Does anyone really care about etiquette? Should we really care about etiquette? What are modern etiquette anyways? Do we have a modified set of etiquette or should we cling to the old?
Those are always some of the questions I have when I browse the Martha Stewart Living magazine. Not that I would spend a buck on buying a magazine like that. But it's free subscription from credit cards, so I'll get a few issues every so often and see how fussy Martha Stewart, the domestic diva, has made her mark in America household.
Sure, everyone likes a spotless, neat household, much like a baby just came out of a bath. It reminds me of Johnson&Johnson baby lotion which smell I've always loved since childhood. But how many modern women really spend days at home preparing seat markers for dinner parties, gift basket in the guest bathroom, or thank you card after a dinner? Do they do that for EVERY festival there is (Valentine's Day, Easter, July 4th barbecue, Labor Day cookout, Halloween, Thanksgiving, Christmas, New Year, and oh, the summer retreat on the beach...then repeat the list again on endless loop)? Do women have better things to do that sitting around waiting for guests to come, and kids/husbands to come home?
By jove, just the thought of that makes me sick. Perhaps I've always been a city person. I've always been a working woman, now a working mom. Don't get me wrong: I like the niceties. I like those cute little things. But much as I enjoy going to weddings, than to hold my own wedding back then, I cannot fathom myself spending days on end, planning, and working through the details, for occasions.
If it's the occasions that count, can't we just get together and have a good time? Do we really need the Martha-Stewart-kind of fussy details to enjoy the occasions? I think not.
~~~~~~~~~~~~~~
But but, Martha Stewart does not embody modern etiquette. What Martha Stewart sells is her way to cling to the rituals more for 19th century domestic women. To me, modern etiquette is plain decency and respect to other people.
Do you talk loudly to your cell while in the train? Do you brush those dandruff off your shoulder when wearing a navy blue blazer? Do you have food tidbits left between your teeth after meals? Do you show your navel when you're not in a bikini (and no, not even the young Britney Spear, thank you)? Do you show your underwear or G-string band at your jeans' waistband?
And, what is your ringtone? Wonder why I asked this question? One time, there was this woman in mainland China on a train in a modern Chinese city, and her ringtone surely would ring a bell.... it's a rooster crowing...very loudly. Amazingly, the local Chinese don't even register this as any problem. It's the foreigners on the train who were visibly alarmed. Sometimes, thinking back, I wonder if that (the rooster) was her alarm clock back home.
That brings us to the question. Who are we to judge what etiquette should be "proper"? As that local Chinese woman and her fellow countrymen on the train obviously shows, ringtone isn't one of them, but it's certainly mine.
So it is then, that I have my set of etiquette, that local Chinese woman can have hers, but mine would have very little overlap with Martha Stewart's. So much for that, Martha.
Those are always some of the questions I have when I browse the Martha Stewart Living magazine. Not that I would spend a buck on buying a magazine like that. But it's free subscription from credit cards, so I'll get a few issues every so often and see how fussy Martha Stewart, the domestic diva, has made her mark in America household.
Sure, everyone likes a spotless, neat household, much like a baby just came out of a bath. It reminds me of Johnson&Johnson baby lotion which smell I've always loved since childhood. But how many modern women really spend days at home preparing seat markers for dinner parties, gift basket in the guest bathroom, or thank you card after a dinner? Do they do that for EVERY festival there is (Valentine's Day, Easter, July 4th barbecue, Labor Day cookout, Halloween, Thanksgiving, Christmas, New Year, and oh, the summer retreat on the beach...then repeat the list again on endless loop)? Do women have better things to do that sitting around waiting for guests to come, and kids/husbands to come home?
By jove, just the thought of that makes me sick. Perhaps I've always been a city person. I've always been a working woman, now a working mom. Don't get me wrong: I like the niceties. I like those cute little things. But much as I enjoy going to weddings, than to hold my own wedding back then, I cannot fathom myself spending days on end, planning, and working through the details, for occasions.
If it's the occasions that count, can't we just get together and have a good time? Do we really need the Martha-Stewart-kind of fussy details to enjoy the occasions? I think not.
~~~~~~~~~~~~~~
But but, Martha Stewart does not embody modern etiquette. What Martha Stewart sells is her way to cling to the rituals more for 19th century domestic women. To me, modern etiquette is plain decency and respect to other people.
Do you talk loudly to your cell while in the train? Do you brush those dandruff off your shoulder when wearing a navy blue blazer? Do you have food tidbits left between your teeth after meals? Do you show your navel when you're not in a bikini (and no, not even the young Britney Spear, thank you)? Do you show your underwear or G-string band at your jeans' waistband?
And, what is your ringtone? Wonder why I asked this question? One time, there was this woman in mainland China on a train in a modern Chinese city, and her ringtone surely would ring a bell.... it's a rooster crowing...very loudly. Amazingly, the local Chinese don't even register this as any problem. It's the foreigners on the train who were visibly alarmed. Sometimes, thinking back, I wonder if that (the rooster) was her alarm clock back home.
That brings us to the question. Who are we to judge what etiquette should be "proper"? As that local Chinese woman and her fellow countrymen on the train obviously shows, ringtone isn't one of them, but it's certainly mine.
So it is then, that I have my set of etiquette, that local Chinese woman can have hers, but mine would have very little overlap with Martha Stewart's. So much for that, Martha.
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