Mr David Tepper, Head of Appaloosa Management is set to collect a cool US$2.5 billion pay package for the year after staking huge bets that global banks would recover in 2009. That's about over a third of the US$7 billion profits generated by the firm in 2009.
The hedge fund said it made returns of over 120 per cent for the year to the beginning of December. He bought Bank of America when the shares were trading below US$3 a piece and Citigroup at US$1.
At the end of last year Appaloosa had a track record of generating an average of 30 per cent returns a year since it's inception in 1993. It's assets under management have tripled in just three years to US$12 billion. Pretty impressive.
Mr Tepper has built a reputation on judging value in panic situation.
My respect to him, he's got guts!
"Without courage, wisdom bears no fruit" - Baltasar Gracian
Sunday, December 27, 2009
Saturday, December 26, 2009
Asset Bubbles
"The instinct of ownership is fundamental in man's nature" - William James
Many bankers and economists voiced concern about asset price distortions in an environment of plentiful liquidity which may be sowing the seeds of financial instability, especially in emerging markets.
China's property and stock markets are a "bubble" that will burst when inflation accelerates in 2011, former Morgan Stanley chief Asian economist Andy Xie said. China's residential prices rose last month at the fastest pace since July last year, spurred by the 4 trillion yuan stimulus package and record lending.
Inflation is a concern, so is the depreciating value of our money when governments keep printing money.
In Hong Kong, a shop just 1,212 sq ft in one of the city's busiest districts was reportedly sold for a record US$108 million which work out to about US900,000 per sq ft. The shop houses luxury retailer Emperor Watch and Jewellery. How many watches and jewelleries they need to sell to justify the return on investment? Money laundering?
Here in Singapore, prime good class freehold landed bungalows rose 18.6 per cent for the year, setting fresh record high of S$1,447 per sq ft. More wealthy buyers are willing to fork out more for such properties, 17 were sold for above 20 million each this year. The rich poor gap is widening everywhere, the rich getting richer and the poor suffers.
My parents bought a 3 room HDB flat at S$11,000/- 35 years ago which is now worth more than S$200,000/- . A friend bought a 15 year old 3 room HDB flat in Queenstown, near the MRT station 2 years ago at S$300,000/-, I thought he was crazy to pay such a high price for a 65 sqm old flat. He recently sold it for a 20k profit nett, free lodging for 2 years.
Will there be a asset bubble? With Gold price hitting above US$1,000/-, Oil price above US$70/-, a plate of mee siam costing S$3/- with only half an egg and costly taxi fare, I don't see property prices crashing down. A crash will be a good buy!
A friend complained recently after having lunch at a restaurant in ION Orchard, he asked for 3 glasses of plain water, 2 of the glasses were refilled later. He was shocked when he was billed S$5/- for plain tap water, S$1/- each for the paper tower and S$3/- for a small plate of peanuts,++ (7% GST and 10% service charge.
The properties in Orchard are expensive and with big developers bidding high prices for them, the rental for the shops and restaurants is not going to be cheap.
Who benefits most from such high property prices? Who else but the biggest land owner! The government of course, adding much to their coffers and higher property prices would also mean higher property taxes as well, the government is getting so rich. We the citizen, need to work very hard.
Many of my friends are concern whether their children can afford to buy a property when they grow up with prices increasing at such an alarming rate. One solution by the government is in building ever smaller HDB flats, a 5 room flat have shrunk from 125 sqm to as small as 105 sqm now. More 3 room flats are built to be affordable and not comfortable, live with it if you are poor.
We are one of the most densely populated country in the world yet our planners are still trying to squeeze more people into this tiny island. To be more competitive? Higher growth? Better living standard? I think it's more stressful for the ordinary citizen.
Many bankers and economists voiced concern about asset price distortions in an environment of plentiful liquidity which may be sowing the seeds of financial instability, especially in emerging markets.
China's property and stock markets are a "bubble" that will burst when inflation accelerates in 2011, former Morgan Stanley chief Asian economist Andy Xie said. China's residential prices rose last month at the fastest pace since July last year, spurred by the 4 trillion yuan stimulus package and record lending.
Inflation is a concern, so is the depreciating value of our money when governments keep printing money.
In Hong Kong, a shop just 1,212 sq ft in one of the city's busiest districts was reportedly sold for a record US$108 million which work out to about US900,000 per sq ft. The shop houses luxury retailer Emperor Watch and Jewellery. How many watches and jewelleries they need to sell to justify the return on investment? Money laundering?
Here in Singapore, prime good class freehold landed bungalows rose 18.6 per cent for the year, setting fresh record high of S$1,447 per sq ft. More wealthy buyers are willing to fork out more for such properties, 17 were sold for above 20 million each this year. The rich poor gap is widening everywhere, the rich getting richer and the poor suffers.
My parents bought a 3 room HDB flat at S$11,000/- 35 years ago which is now worth more than S$200,000/- . A friend bought a 15 year old 3 room HDB flat in Queenstown, near the MRT station 2 years ago at S$300,000/-, I thought he was crazy to pay such a high price for a 65 sqm old flat. He recently sold it for a 20k profit nett, free lodging for 2 years.
Will there be a asset bubble? With Gold price hitting above US$1,000/-, Oil price above US$70/-, a plate of mee siam costing S$3/- with only half an egg and costly taxi fare, I don't see property prices crashing down. A crash will be a good buy!
A friend complained recently after having lunch at a restaurant in ION Orchard, he asked for 3 glasses of plain water, 2 of the glasses were refilled later. He was shocked when he was billed S$5/- for plain tap water, S$1/- each for the paper tower and S$3/- for a small plate of peanuts,++ (7% GST and 10% service charge.
The properties in Orchard are expensive and with big developers bidding high prices for them, the rental for the shops and restaurants is not going to be cheap.
Who benefits most from such high property prices? Who else but the biggest land owner! The government of course, adding much to their coffers and higher property prices would also mean higher property taxes as well, the government is getting so rich. We the citizen, need to work very hard.
Many of my friends are concern whether their children can afford to buy a property when they grow up with prices increasing at such an alarming rate. One solution by the government is in building ever smaller HDB flats, a 5 room flat have shrunk from 125 sqm to as small as 105 sqm now. More 3 room flats are built to be affordable and not comfortable, live with it if you are poor.
We are one of the most densely populated country in the world yet our planners are still trying to squeeze more people into this tiny island. To be more competitive? Higher growth? Better living standard? I think it's more stressful for the ordinary citizen.
Saturday, December 19, 2009
Competitive Edge
"Challenges are what make life interesting; overcoming them is what makes life meaningful. - Joshua J. Marine
Is having an edge that important to a trader?
What's your edge in trading? A question I asked many traders.
Unfortunately, most traders don't even know or understand why having an edge is so important to their success. Those who make good money consistently obviously know subconsciously what their edge is even though they might not have given much thought about it.
As a scalper and spreader, speed in trade execution is one of the most important factor contribution to my success, I need fast reliable Internet speed and a good trading platform. It gives me the confidence, which is a very important psychological booster to any trader.
With the advance in technology, I'm losing this edge to the Algos and the big boys who can afford superfast supercomputer such as the "Roadrunner" by IBM introduced in 2008. It operates one petaflop per second or one thousand trillion calculations per second! Unbelievable!
How fast is a petaflop? That's roughly equivalent to the combined computing power of 100,000 of today's fastest laptop computers. You would need a stack of laptops 1.5 miles high to equal Roadrunner's performance.
It would take the entire population of the earth - about six billion - each of us working a handheld calculator at the rate of one second per calculation, more than 46 years to do what Roadrunner can do in one day.
I heard from those AFACT members who have recently attended the Algo course about the amazing speed in execution by the RTD Tango Algo platform, more than 600 lots executed within seconds with a default of only 1 lot. There's no way we human can compete with the machine, it's probably 100 times faster than what we can click with our mouse.
Does that mean that we traders especially the scalpers and spreaders cannot make a living from trading?
Of course I don't think so, we now know our competitors, we need to take steps to change our strategies, probably taking more risk and working harder for our money. There are still plenty of day traders and position traders putting in sitting duck orders for their trades to be filled.
We must be ready for the challenges ahead against the big boys who can afford the fastest machines and the best programmers. List the the various factors that together contribute to be our competitive edge and work on it.
For traders who don't know what is their edge, the trades they put in have only 50% chance of making money. It becomes a gamble. I suppose many are in this category of struggling to survive, can't make enough to cover expenses. Over time they become demoralise and throw in the tower, what a waste.
Is having an edge that important to a trader?
What's your edge in trading? A question I asked many traders.
Unfortunately, most traders don't even know or understand why having an edge is so important to their success. Those who make good money consistently obviously know subconsciously what their edge is even though they might not have given much thought about it.
As a scalper and spreader, speed in trade execution is one of the most important factor contribution to my success, I need fast reliable Internet speed and a good trading platform. It gives me the confidence, which is a very important psychological booster to any trader.
With the advance in technology, I'm losing this edge to the Algos and the big boys who can afford superfast supercomputer such as the "Roadrunner" by IBM introduced in 2008. It operates one petaflop per second or one thousand trillion calculations per second! Unbelievable!
How fast is a petaflop? That's roughly equivalent to the combined computing power of 100,000 of today's fastest laptop computers. You would need a stack of laptops 1.5 miles high to equal Roadrunner's performance.
It would take the entire population of the earth - about six billion - each of us working a handheld calculator at the rate of one second per calculation, more than 46 years to do what Roadrunner can do in one day.
I heard from those AFACT members who have recently attended the Algo course about the amazing speed in execution by the RTD Tango Algo platform, more than 600 lots executed within seconds with a default of only 1 lot. There's no way we human can compete with the machine, it's probably 100 times faster than what we can click with our mouse.
Does that mean that we traders especially the scalpers and spreaders cannot make a living from trading?
Of course I don't think so, we now know our competitors, we need to take steps to change our strategies, probably taking more risk and working harder for our money. There are still plenty of day traders and position traders putting in sitting duck orders for their trades to be filled.
We must be ready for the challenges ahead against the big boys who can afford the fastest machines and the best programmers. List the the various factors that together contribute to be our competitive edge and work on it.
For traders who don't know what is their edge, the trades they put in have only 50% chance of making money. It becomes a gamble. I suppose many are in this category of struggling to survive, can't make enough to cover expenses. Over time they become demoralise and throw in the tower, what a waste.
Sunday, December 13, 2009
Feng Shui
"The best luck of all is the luck you make for yourself" - Douglas MacArthur
I'm just a half believer, still sceptical about the motives of the so call "Shi Fu" or Master in able to change my luck, avoid disaster or helping to turn a failing business around, fees upfront.
Being a trader, I still believe in a certain element of luck, a small percentage, probably if I feel lucky, most certainly I would make money on that day. I love to buy stones, crystals, glassware, Idols, etc that I think would bring luck to me, place them around the house and my trading table. My wife think I am nuts.
On my recent holiday trip to Taiwan, the tour guide brought us to this Feng Shui Shop and of course the soft and hard sell to change luck for the better. I was told Singapore has very good Feng Shui, and our MM is a firm believer, many projects were made with the consultation of a very famous Taiwan Feng Shui "Shi Fu"
Having bless to live in a good Feng Shui country, we need to have good Feng Shui at home too and to have good personal Feng Shui, always have a smiling face because that's the shape of the Chinese gold nugget, luck will be with you!
"Everything in life is luck" - Donald Trump, he is a damn lucky fellow!
I'm just a half believer, still sceptical about the motives of the so call "Shi Fu" or Master in able to change my luck, avoid disaster or helping to turn a failing business around, fees upfront.
Being a trader, I still believe in a certain element of luck, a small percentage, probably if I feel lucky, most certainly I would make money on that day. I love to buy stones, crystals, glassware, Idols, etc that I think would bring luck to me, place them around the house and my trading table. My wife think I am nuts.
On my recent holiday trip to Taiwan, the tour guide brought us to this Feng Shui Shop and of course the soft and hard sell to change luck for the better. I was told Singapore has very good Feng Shui, and our MM is a firm believer, many projects were made with the consultation of a very famous Taiwan Feng Shui "Shi Fu"
Having bless to live in a good Feng Shui country, we need to have good Feng Shui at home too and to have good personal Feng Shui, always have a smiling face because that's the shape of the Chinese gold nugget, luck will be with you!
"Everything in life is luck" - Donald Trump, he is a damn lucky fellow!
Thursday, December 3, 2009
US$45,000.00 profit in ONE MINUTE
"Obstacles are things a person sees when he takes his eyes off his goal" - E. Joseph Cossman
Met up with Super Scalper at a dinner reception on Monday night and since he specialised in the SGX Taiwan futures contract, I asked whether he managed to Yum the Friday opening trade.
Cool as a cucumber, he revealed that he made around 4,500 ticks in the Taiwan December contract on Friday in less than a minute. That's US$45,000.00!!!! Wow! Using the fastest trading platform, he uses the auto spreader to buy up to 280 lots of spread when the December was sold down. Risk Free! with heavy bid in the November.
Super scalper is one of the sharpest trader I knew on the floor, his brain works like a computer in crunching numbers between cash and futures prices against the spread at the end of the settlement month. Being a spreader myself for more than 20 years, I lose out to him miles away. He hardly hold a position for more than 5 seconds.
Super scalper trade without charts, wakes up at 6 am to read the news and check the US market to prepare for trading at 8.45 am. Very focus, concentrate only on one contract using the movement in the Taiex (Taiwan) as a guide and sometimes arbitrage against it when the opportunity arises.
Met up with Super Scalper at a dinner reception on Monday night and since he specialised in the SGX Taiwan futures contract, I asked whether he managed to Yum the Friday opening trade.
Cool as a cucumber, he revealed that he made around 4,500 ticks in the Taiwan December contract on Friday in less than a minute. That's US$45,000.00!!!! Wow! Using the fastest trading platform, he uses the auto spreader to buy up to 280 lots of spread when the December was sold down. Risk Free! with heavy bid in the November.
Super scalper is one of the sharpest trader I knew on the floor, his brain works like a computer in crunching numbers between cash and futures prices against the spread at the end of the settlement month. Being a spreader myself for more than 20 years, I lose out to him miles away. He hardly hold a position for more than 5 seconds.
Super scalper trade without charts, wakes up at 6 am to read the news and check the US market to prepare for trading at 8.45 am. Very focus, concentrate only on one contract using the movement in the Taiex (Taiwan) as a guide and sometimes arbitrage against it when the opportunity arises.
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