Singapore Entrepreneur - Market Correction Finally?

Speak of the devil! Just when I posted yesterday about a possible market correction, the stock markets across the world plunged today. Could it be the long awaited correction? It could jolly well be. It is so dishearting to see the indices all in the sea of red. But looking beyond that, it looks like a healthy correction. At least prices are trying to align with fundamentals. Continue to monitor the situation before taking the plunge immediately. It could a small window of opportunity to dive in or it could be another bear trap.

Singapore Entrepreneur - Aspiring Entrepreneur's Forum

I have chanced on a forum website set up by some aspiring Singaporean Entrepreneurs. I posted a couple of messages there. It's rather heart-warming to see the spirit of Entrepreneurship in Singapore is still very much alive. Feel free to visit: http://www.ssuf.biz/

Singapore Entrepreneur - Is the World Economy Recovering?

The International Monetary Fund (IMF) has forecast the global economic growth at 3.1% for the year 2010, compared to a dismal -1.1% in the year 2009.

Asia, led by its growth engines China and India, is slated to outpace its US and Europe counterparts. This year, China alone is expected to emerge at 8.5% growth amidst a global recession. This feat is mainly attributed to its government stimulus package and continual strong domestic demand. Developing economies like ASEAN stands to benefit from these powerhouses.

On the other side of the globe in US where the epicentre of the financial tsunami is, growth has been laggard for this year. No clear signs of recovery has emerged. Same is felt in most European economies. High unemployment rate is still being faced in these countries. It will certainly take at least another year of two for the US and Europe climb back its their pre-crisis levels.

Although the decoupling effect theory has been in the talks for some years, the impact of the US economy on the rest of the world will, nevertheless, still be great.

In this year alone, we have witnessed the equity markets rising to as much as 80% from their lowest points. Asian markets have seen the most spectacular gains in anticipation of their quick recovery.

But are all these rises sustainable? Could we see another bubble or start of a W-shape recovery, as depicted by some analysts?

One argument point about the unprecedented recovery of the global market is that most governments' stimulus packages have taken effect. So whatever improvements we have witnessed are all artificial and may not be sustainable. How much more can governments continue to "feed" their economies until they can be back on their feet again?

Nonetheless, Asia is still slated to emerge strongly from this deepest recession in 70 years. Economists and analysts have unanimously agreed that any next bet would be on Asia. The spectacular rise over the last few months in Asia markets is mainly attributed to new investment monies entering from US and Europe.

In Singapore, many counters have risen from undervalue to fair or overvalue. In the short term, analysts are divided over which direction the Straits Times Index (STI) will head.

My analysis on the current trend is that most counters have been fully valued. All earnings have already been factored into the current price. Today's STI Price over Earnings (P/E) ratio stands at about 21x. It is no longer cheap as compared to the above chart (courtesy of Bloomberg), showing the historical STI P/E. The direction of the index will really depend on the earnings announcement for the last quarter and also any development in the US economy. A small correction may be eminent in the near future. It should be healthy for the market to cool off speculation. For long term investors, the current price is still reasonable for future growth. As for short term investors, be on your toes when looking into the suitable price to enter. Don't get caught up by a sudden correction.

Singapore Entrepreneur - What's My Strategy

In May, I wrote about my investment strategy which worked during the doldrums in the stock market for the past one year. My returns for the past one year is on par with the Straits Times Index which has since regained about 60% from its low in Oct 2008.

Today, we are seeing a relentless rally of of regional markets, including Singapore's. It seems the long anticipated correction is not ready to show itself anytime soon. Anyway, I have again tweaked my investment strategy since those counters I have been investing for the past year have been constantly on the uptrend which saw very small swings in recent months. I now stay on the sidelines and await a dip in the counter and grab them at current low price. I then hold them longer, between one and three months. With the current momentum, I believe the STI will continue to grow albeit a correction may be round the corner.

Singapore Entrepreneur - Some Corporate Tips

I have been preoccupied with my work that I have been unable to update my blog for the past 2 months. Usually, we are quite busy in the last quarter of the year as most corporates are clearing their budgets before their financial year closes. Existing projects must be completed and signed for clearing of invoices and new projects are quickly awarded to exhaust their remaining funds. If these finance departments do not finish up their funds for the year, the board of directors will start questioning on unfinished funds and will consider cutting budget for the next financial year. So, as a Division Director of an enterprise, who would want budget to be cut? This is a common practice amongst corporations. Vendors like us would certainly stand to benefit from such a culture.

Although it sounds like business is good at this time of the year, there are many internal issues that need to be sorted to face the surge in projects. It is a good problem to solve. But if things are not managed and planned properly, then disaster will befall. Sales people must keep the other departments informed of incoming or potential deals, technical people must prepare for logistics and resources and project budgets must be well-defined. When orders start pouring in, it is expected that things may get quite messy and people getting frustrated. Such unpleasant matters must be managed and contained. Regular meetings must be conducted to keep everyone updated and team leaders to keep tabs on members. Ultimately, with a proper system carried out, usually problems will be solved along the way. But most importantly, customers must not feel neglected and marginalized. If a problem cannot be fixed in time, it should be made known to the customer. It should be discussed and proposed to the customer on any alternative solution. This is called managing customer's expectation.