Singapore Recession Job Loss Tracker

Since DBS started the massive layoff, many companies in Singapore began to give out notices that they are going to start their retrenchment exercise soon.

I will start tracking all the relevant layoffs number in Singapore as an overview for future reference. If you know of any retrencment that I may have overlooked, please let me know.

Total retrenchments announcement: 4
Total Employees: 2,323

1. YKK SG (October 1, 2008) - 123 [AsiaOne]
2. Allied Technologies Limited (October 1, 2008) - 21 [AsiaOne]
3. Merrill Lynch (October 22, 2008) - 20 [AsiaOne]
4. DBS (November 7, 2008) - 900 (6%) [TodayOnline]
   
5. Citigroup (November 18, 2008) - 300 (3%) [AsiaOne]
6. NOL (November 20, 2008) - 1,000 (9%) [TodayOnline]
7. 
   

Invest like Warren Buffett

1. Analyse the Business, Not the Stock
Do not focus on market action or macroeconomic action, just concentrate on evaluation the business.

2. Long Term Investment
Look for businesses with favorable long term prospects, whose earnings are virtually certain to be materially higher 5, 10, 20 years and hold them for long term. If you are not willing to own a stock for 10 years, don't even think about owning it for 10 minutes.

3. Exploit Mr. Market
Market prices fluctuate around business value, much as a moody manic depressive swings from euphoria to gloom when things are neither that good nor that bad. The market gives you a price, which is what you pay, while the business gives you value and that is what you own. Take advantage of these market mispricings, but don't let them take advantage of you.

4. Margin of Safety
The difference between the price you pay and the vaue you get is the margin of safety. The thicker, the better.

5. Buy at reasonable price
It is better to buy a great business at fair price than a fair business at great price. Bargain hunting can often lead to purchases that don't give long lasting value.

6. Know your business
Avoid buying business that you are not sure of.

7. Only invest in business that meet these standards
When you see one, buy a meaningful amount of its stock. Don't worry so much about diversification. If you get the one big business, it is better than buying a dozen of mediocre businesses.

Recession Master - John Templeton

John Templeton is one of the master of investment in the early crisis. One of his famous investment stories, was during World War II, when he became convinced that the 10 year great depression was over and everything would boom. So Templeton bought 100 shares of every single listed stock that was selling at less than $1 for a total of $10,000. 4 years later, he sold all of them at $40,000 which is around $1 million in today's value.

His motto during that time was: Never sell on war news. War is bearish for money, and thus bullish for things, including things represented by stocks. His motto may seem easy to us, but courage is another important factor for his success, especially during a war coupled with an economic depression.

The key investment strategies that Templeton used can be summarized in one word - Flexibility.

To elaborate this key idea, let's take a look at his stock selections criteria.

1. Search many markets
Templeton's investment selections range over many markets; a flexible viewpoint is necessary to assess companies in unfamiliar markets, moreover, recognizing their values.

2. Regulation-proof
Always ask yourself whether a company is in an industry that is a natural candidate for government control. For example, in almost all countries, banks are a natural target for government intervention so are mining companies. Regulations will affect the industry and share prices, so the more regulated the industry, the more inflexible their business will be. Templeton offered women's hats as a perfect regulation-proof industry.

3. Inflation-proof
A company must be flexible enough to cope with inflation to be a sound investment. Advertising agencies have this ability. Their income is a percentage of the customer's gross advertising expenditure, so as prices go up their income rises accordingly during an inflation.

How do apply Templeton's insights onto the current economic recession?

1. Looking beyond the regular big names that fund managers labeled as "quality". A small specialty company with fat profit margins selling for a low PE ratio is often a safer investment if you are sure the facts are authentic. Don't just buy bargain stocks, buy BEST bargain stocks.

2. Other than the fashion industry, I am unable to think of any deregulated industry.

3. Health care sector is an inflation-proof industry. Just like the advertising agencies, the inflationary cost are often pass to the patients. Furthermore, the economic recession does not affect the business in the health care industry.

John Templeton success is also due to his ability to maintain an good mood, avoid anxiety and stay disciplined. He is not interested in consumerism, even though he is rich, he still drove his own car, never flew first class and lived in his peaceful ocean-side home in the Bahamas. Be contented with life, and you will find it more meaningful.

Planning out of the Singapore Recession

"If you plan ahead well enough, you don't have to hope for the best. The best will happen." - anonymous

I came across this quote yesterday morning and thought about how well we, Singaporean, can plan our lives. We are very skilled at planning and we are doing it all the time. We plan where to go for our dinner, we plan which school to send our children to even before they are born, we plan which road to take to avoid the ERP and also which car park to park our vehicles to save money. A lot of effort is put into planning those nifty little things in our lives so that we can prepare our future well in advance to achieve the best gains. We predict out future cannot be secure unless we control the events and people around us, more so when these so not fit into our plans.

While we call ourselves the first class planners in the world, many of us fail to plan for this financial crisis. We are so absorbed  with our daily job and planning for the little things in life that we do not have time to think of a plan for a Recession. When this crisis gets bigger and bigger, we start to blame everyone except ourselves for failing to plan for this recession.

Singaporeans, who live by the sheltered way of life forget how to plan for a financial crisis and prevent themselves from creating a recession-proofed plan. Many have been wounded and more casualties are expected in the coming months. Do not be despair as the Sun continues to shine above the storm. When the storm is over, the Sun will bring us hope again. 

As we wait for this hope to come, this recession is a good reminder to us that preparation for a plan to handle any crisis is important even though it may seem mundane. The recession-proofed financial plan that we create at present time is a stepping stone to a new financial future that we will have. Knowing the Sun will shine again someday, it is the same as for the storm.

7 Steps to Trading like Warren Buffett in the Singapore Recession

Have you ever wonder,  how did Warren Buffett achieve almost 0% loss in trading all these years? Can you imagine how would he trade the Singapore stocks, at this period of economic recession? Well, there is no need for you to wonder and there is no need for you to imagine, all your answers can be found here. This post will show you the 7 simple steps you can take to achieve Warren Buffett's style of trading in this economy crisis with 100% principal guaranteed return on your capital. 

Step 1 - Understand Warren Buffett's two golden investment rules. 

  

    Rule No. 1: Never lose money
    Rule No. 2: Never forget Rule No. 1

Write these golden rules down on a piece of paper and paste it in a prominent place where you can see everyday. The answer to 100% principal guaranteed return in the Singapore recession lies in these rules. 

NEVER LOSE MONEY! These are 3 keywords I want you to remember by hard. 

Step 2 - Stop thinking about inflation.

Do not take the inflation figure given by the government blindly, it is not that simple. Every individuals have different spending habits, therefore, everyone have a unique inflation number.

You need to stop worrying about inflation. There is no point you keep thinking about it, when in the first place, you don't even know how to protect your money from investment losses in this recession. 

Too often, you will become greedy and start making stupid investment mistakes, like investing in a 5 years structure deposits or risky companies bonds (eg. Lehman Bond) thinking they are good and "conservative" instruments to hedge against the inflation. Stop thinking about inflation and you will stop falling into the "conservative" investment traps.

Step 3 - Understand the market cycles and think long term.

Have a long term investment plan. If you cannot see the big pictures, you don't deserve to make money. Having a long term investment plan is key to making profit. 

Read up and understand the market cycles. The word "cycle" is there for a reason. There are many different cycles for different industries and different markets. Understand these cycles can definitely help you make wiser investment decisions. Eg. Early 2008, we already know the situation is quite bad and recession is inevitable. Based on historical market cycle, once recession starts, stocks market will become bearish for at least 1-2 years. If you know market is on a down trend based on the cycle, stop buying and start selling. And based on the cycle, you know it is time to get back into the market once it stabilizes after 1-2 years when the trend starting to move upwards again.    

Singapore is in recession now, you can start to plan your entry hopefully by mid or late 2009. And plan your exit strategy once you hit your targeted earnings by 2012. 

Step 4 - Achieving 100% principal guaranteed return

This step is not about making a killer return nor is it about making any money. This step is about achieving 100% principal guaranteed return with your money.   

Shop around for the best fixed deposit interest rate promotion in town and place your funds in it without any investment obligation. Deposits which are a year or less are the most ideal. Do this for long term.

The advantages of placing your funds in fixed deposits:

• 100% capital guaranteed backed by our Singapore Government
  
• Flexible and can be withdrawn anytime without penalty 
  
• No surprises with the guaranteed interest
  
• No worries

I am not crazy, this is the surest way to make money and never lose money in the long term without locking your money. There is no need to worry about inflation, because it will be cover in the next step. Protecting your initial capital by placing it in fixed deposits.

Step 5 - Invest your earnings/profits.

Every time when your fixed deposits mature, withdraw 80% of the interest earned and renewed your deposits with the remaining 20% of the interest earned for another term. 

The interest that you withdraw will be the fund that you can invest. Do this for long term and you can build your portfolio without losing any capital. Placing the 20% of the interest earn back to your deposit is optional because you can choose to spend it if you want to. Although the amount may seem insignificant at first, placing these money back is just a way to show yourself that your initial capital is still growing in the long term. Once you add the interest back to your initial capital, do not take them out for investment anymore!

If your initial capital is small, you have to wait for a few more terms before you accumulate enough funds for investment. Rome is not built overnight, you must be patience. The idea here is to invest without touching your initial capital and invest only what you can afford.

Step 6 - Only buy companies that you are familiar with.

Now that you have accumulated enough funds for investment, start buying companies that you truely understand. Don't listen to fools and invest blindly, it never works in the long run! You need to understand the business cycles of these companies and how their cost and profit are derived. 

Let's choose Singapore Airlines as an example. The business cycle of SIA goes inline with the economy cycle. When market is booming, people are more willing to travel. In the current Singapore recession,  I will expect the demand to drop. The main cost for airlines is the aviation oil. Now that the oil price has dipped significantly, the profit margin of SIA may be better. However, SIA has been cutting its airfare because demand has been decreasing due to the recession. Based on these understandings, I know it is still not the best time to invest in SIA yet and the best time to enter will be next year when the market is expected to hit rock bottom and the economy recovery is expected after that.

Start trading in companies you are familar with and planned all the entry and exit strategy in the long run to achieve good return on your investments.

Step 7 - Tracking and reviewing your performance monthly.

It is important that you keep track of all the profit and loss from your investments so that you do a proper appraiser of how you did monthly. Please do not be over engrossed with figures, a simple tracking will do.  

Do not have emotion with these investments. Think logically and review your strategies and plans every months. Learn your mistakes in these reviews and be happy that your initial capital is still intact. 

That's it!

The 7 simple steps that you can take to trade like warren buffett in the Singapore recession. My hands are tired and I am going to rest for today.

Please leave me a comment and let know how to improve these steps.

Thanks,

Ren

Singapore Recession, DBS Retrenchment

DBS, one of the largest government-linked company in Singapore, has started to fire off the first round of the mass retrenchment exercise in this economic crisis. 900 poor staffs were being layoff, 600 from Singapore and the other 300 from Hong Kong.

Ironically, despite the government's plead to cut jobs as last resort, our big brother here, is showing us how we should respond to an economic crisis. Even if your companies are still in a good shape, retrench not as the last resort, but as a short term measure to please the markets.

"Hey Market people! Let us pop some champions this weekends and do our little celebration dances! Whoo hooo!" 

Do you think there will be more confidence in the market after the retrencement exercies? Not likely. In fact, the consumer confidence for DBS will deteriorate further when the news of more retrenchments start to roll in. Think of it as shooting yourself in the foot.  

So, how many more people do you think will be retrench in this economy crisis?

Let's turn back the clock and take look at how it was done during the last few crisis.

• Year 1985:- 20,000 jobs cut during the Singapore SGD Crisis
  
• Year 1998:- 29,086 jobs cut during the Asia Currencies Crisis
  
• Year 2001:- 25,838 jobs cut during the 911/Tech Crisis
  
• Year 2003:- 16,400 jobs cut during the SARS Crisis
  
• Year 2008:- 6,072 job cuts to date in this World Economy Crisis

Obviously, the worst has yet to come. 

If this Singapore Recession is gonna be worse than the rest of the crisis, we have a lot of pink slips yet to be send out. We need 10,000 more "volunteers", just to be on par with the SARS crisis!

Looking at these figures, it is inevitable some of us will be layoff in the next few retrenchment exercises. Don't run away yet!  

10 Questions to ask yourself in the Singapore Recession:

1) Are you ready to face the worst? 

2) Can your family survive without your income for the next 6 months?

3) Have you started your "Rainy Days" funds?

4) Do you have other alternate source of income?

5) How much is your outstanding credit card bills?

6) Are you able to repay your mortgage(s) if the worst has come?

7) Are there sufficient education funds for your children?

8) Are you over-insured or are you under-insured?

9) Did you cut down on your expenses? 

10) Is your car too big? (haha)

Readiness is the best weapon in this crisis. Talk to everyone in your family, including your pet. Get everyone to mentally prepare themselves for the worst and help one another ride through the crisis that has yet to come.

Ren

Singapore Recession?

Singapore is in Recession, but walking down Orchard Road and Clarke Quay yesterday painted a totally different picture.

After I have finished my coffee at Orchard Road Pacific Plaza, I decided to take a cab to Clarke Quay for my dinner. At the taxi stand, there was a long queue of people waiting for cabs. Recession eh? A Singapore recession does not stop these people from taking the expensive ride home.

I waited forever for these cabs to come and after 15 minutes of waiting, I gave up. According to the number of people in the queue and the time required for a cab to arrive, my calculation told me it would take 2hr for me to get on the cab in this Singapore Economic Recession. I crossed the road, walked to the nearest bus stop and took a bus. It took me just 30 minutes and $1.14 to get there.

When I arrived in Clarke Quay, I was greeted by the normal touting from those restaurant's greeters. My destination was CENTRAL, so I smiled and politely refused them all and continue my journey. It was Friday, and I was foolish enough to assume this economic crisis, like the SARS crisis, would remove a huge portion of the dining crowd to restaurants. So I did not make any reservation to any restaurants last night. You may have guessed it, all the restaurants were fully booked and I have to wait at least 45min (with no guarantee) before I can get a seat. Foolish me, have no choice but to wait ...

After 40minutes, I finally got my seats and my dinner.

In conclusion, even though Singapore recession is here... people are not afraid to spend! My suggestions to you in this "recession", is to continue to take public transport to save money and protect the environment, and make a reservation if you do not want to waste precious time waiting in this economic recession.

Ren