10 Investing Insights from Street Smarts by Jim Rogers

I just noticed an investment book available in the bookstore written by Jim Rogers, named Street Smarts: Adventures on the Road and in the Markets. This book is a summation of his rewarding life as both a traveler and an investor. Rogers offers surprising and provocative observations on how the world works, and what trends he sees in the future. Below are some tips and thoughts from his new book, Street Smarts.

1. If you were smart at the start of the 19th century, you made your way to London. If you were smart at the start of the 20th century, you moved to New York. And if you are smart at the start of the 21st century, you will find your way to Asia.

2. We are in a long secular bull market in commodities worldwide. Like all bull markets, it will end in a bubble. But the bull market still has several years to go.

3. It is good to lose money, to go broke at least once, and preferably twice. But if you are going to do it, do it early in your career. Do it early and it is not the end of the world. . . it teaches you how much you do not know.

4. The way you become a successful investor is by investing only in what you yourself have a wealth of knowledge about. Everybody knows a lot about something. Cars, fashion, whatever it is. . . just take a look at your daily life. Concentrate on what you know. . . you will see a major change coming long before anybody on Wall Street will.

5. Most successful investor do nothing most of the time. Do not confuse movement with action. Know when to sit and wait.

6. If I were to tell you that you could only make twenty-five investments in your lifetime, chances are you would be extremely careful about investing. Invest very rarely.

7. If you want to make a lot of money, resist diversification. Brokers promote the motion that everybody should diversity. But that is mainly to protect themselves. The way to get rich is to find what is good, focus on it, and concentrate your resources there.

8. New York is the economic and cultural capital of what is now the largest debtor nation in the world, the largest debtor nation in the history of the world. The world’s largest creditor nations are in Asia. That is where the assets are. That is where the dynamism and energy are.

9. Alan Greenspan’s greatest strengths were those of a politician. The way capitalism is supposed to work is that when people get in trouble, they fail. Smart, competent people come in, take over the assets, reorganize, and start again from a sound base. Greenspan’s way was to prop up failure. He and the politicians were taking money from competent people, giving it to the incompetent people, and telling the incompetent people, “Here, the government is on your side. Now you can compete with the competent people with their money and our support.”

10. I am dying to find a way to invest in both North Korea and Myanmaar. The major changes in these two countries are among the most exciting things I see right now, looking to the future. Another think I am extremely bullish on for the next twenty or thirty years is Chinese tourism. The Chinese have not been able to t ravel for decades, and now they can. Both inside and outside the country, Chinese tourism will explode.

Source: http://crownpublishing.com/feature/10-investing-insights-from-street-smarts-by-jim-rogers/#.WI6vRVN97IU

Do We Need Medical Insurance?

Chinese New Year is around the corner, I believe most of the Chinese are getting ready their mood to enter ‘rooster’ year.

Unfortunately, one of my best friends who needs to bring his wife to fly to capital for a medical checkup this afternoon, where the local doctor suspected his wife has a lung issue upon inspection. It can be lung cancer, the worst case. His wife is not able to buy any medical insurance because she had a breast tumor 15 years ago.

Anyway, if affordable and possible, it is wiser to get a medical insurance. No doubt the insurance company is making big money from your policy. From the look at it, at least 50-60% of your installment will be used to pay up the agent’s commissions, ground staff wages, taxes, processing fees, etc. The rests I suspect they will used for investment diversification in hope to get higher return.

Remember we always hear insurance agent said, you will get XXX% return upon XX years? Or you do not have to pay the installment after XX years, the endowment itself it will be to sustain? Yes, it is possible, but chances are getting lower and lower in the near future. Why? Because the investment return is getting averagely lower from the market. Just look at mutual funds & KLCI index return, then you know what I talk about.

Anyway, why we need to insure with medical insurance? There’s a few benefits of doing so, even though we reluctant to let insurance company take our hard earn money every month and year.

1.       General hospital? – Yes, you can still go to general hospital, but free stuff is not always what you expected. I remembered my father did his heart bypass twice, he has to make appointments and queue, for months. In fact, his situation is not able to wait further, but he has no choice because there are just too many patients quieting for their appointment. So the alternative will be private hospital, which can serve you almost immediately, depending on which hospital you are visiting. Then it come to cost.

2. Medical treatment expenses – A medical operation will cost how much nowadays? For my father’s CAGB case, it costs around RM25K-35K. It’s not a small amount. The rich is not going to pay for it using their own savings, then what do they use?

3. Emergency funding – Most of the medical treatments are drop by suddenly, just like my best friend’s case. He is ready to spend tens of thousands of dollars for inspection and treatment if necessary. If one has not enough savings then how? Where to find the emergency fund at this last minute? General hospital is the only hope? 

4. Peace of mind – Once you got the medical insured, you can have a peace of mind. Because if anything happen to you, at least most of the expenses will be covered by the insurance company (provided you buy the right plan).

I’m not an insurance agent, but my experience tells me that it is wiser to get one which suit your affordability and need, the earlier the better. Once you exceed 35 years old, it is getting very expensive, because the risk of hitting the treatment and medical costs in the future are comparatively higher.

For which medical plan to get, do consult the right agent. Please make sure the agent is experience and helpful, not those just want to get commission and then disappear. Please avoid pretty young lady or part-time agent, they cannot help much, trust me. If you do, please make sure they introduce their 

manager to you. And please do not be greedy, subscribe the plan that you can afford to pay. The insurance agent may try to up sell what you need!

Happy Rooster Year, folks!

How to Find a Solution?

I read a story sharing about looking for a solution from a super rich old man's blog few weeks ago. I quite like the idea of this story and would like to share with you here.

"A rich father left 17 gold coins to his 3 sons and the rest of his asset to charity because he knew he could not take any money with him when he passed away.

When the man passed away, his 3 sons opened up the will.

The will stated that the eldest son should be given half of the 17 coins.

The middle son should be given one third of the 17 coins.

The youngest son should be given one ninth of the 17 coins.

As it is not possible to divide 17 by 2, or 17 by 3 or 17 by 9, they started to fight with each other.

So, in believing there was a solution, they decided to find it. They went to see a wise man, who lived in a nearby cave. He listened patiently and thought for a while. He gave one of his gold coins to help them solve the problem. With the addition of 1 coin the total number of coins was 17 + 1 = 18.

He gave each of them their share as according to the will.

The eldest son was give half of 18 = 9 coins

The idle son was given 1/3 of 18 = 6 coins

The youngest son was given 1/9 of 18 = 2 coins.

Totaling 9 + 6 + 2 = 17 coins.

The wise man took back his coin and everyone went away happily."

Moral of the story? The attitude of negotiation and problem solving is to find the 18^th coin i.e. the common ground. Once we are able to find the common ground, the issue is resolved. It is difficult at times.

Credit: http://koonyewyin.com/2016/12/03/lets-find-a-solution/

Property vs Stock Investment – Part 2

Property investment indeed brought up a lot of millionaires or even tens of millionaires from 2009 to 2015. The property price in Malaysia and Singapore has skyrocketed, at least doubled if you bought before 2009. Thanks to Asia economy booming.

I bought my first house in my hometown back in year 2009. And I couldn’t stop seeing house price going up every day. I want to buy my second house between 2011 and 2013, but I unable to make decision due to the skyrocket price. Similar to many people mindset, IF I KNOW and IF I DARE to refinance to buy 2 or 3 more houses / shophouses during this booming period, perhaps I can have a more comfortable life right now.

In the end of 2014, I relook into property investment again, and I bought my second unit in my hometown, not far away from my 1^st unit. In fact, I’m not sure whether I bought the right house for second unit until today. It is still under construction and time will tell.

Needless to say, the first house I bought has doubled the price in 2014. I still keep it until today. I have the intention to sell it mid of last year due to business difficulties. I couldn’t help again as I see the price gradually dropping due to oversupply. The price falls about 10% from the peak. Even though it is the worst now and I did see a little sign of market recovering, I’m still observing it whether I need to cash out anytime soon. Who know, I may want to cash out my 2^nd unit 1^st upon completion by mid of this year.

In summary, property investment is more complex than what I think. Why I said so? Because I’m not station in my hometown. I feel distance management is an issue, especially you would like to understand more about the situation, tenancy management, renovation, etc.

With this market condition, do you still hear people making money from property investment nowadays? Perhaps there are, but definitely not the people I know. Or perhaps we need extraordinary or new skills to do so. But I'm not here to offend property investors. Just that I'm looking into investment that I feel more comfortable.

I'm desperately looking for good investment return to beat inflation and for early retirement. I relook into local stock investment again end of last year.

To be continued…