Citigroup CEO thinks Another Financial Crisis Unlikely

Vikram Pandit, CEO of Citigroup thinks that the chances of another financial crisis hitting the global economy is unlikely, mainly due to world banking system that has been overhauled since the last global financial crisis in 2008.

He remains confident that the "Europeans will figure it out" and that there is no need to worry about a financial crisis. This seems to be a far cry from the doom and gloom that has been over the markets for the past few months.

He remains bullish about Asia as he thinks that the Asian growth story will continue to be robust, even if it is impacted by any global economic slowdown. It is quite surprising that Citigroup's CEO is so optimistic about the trends going forward.

IMF Warns About Perils Ahead for World Economy

The IMF warned that there are perils ahead for the world economy if certain issues continue unanswered. This includes:

1. Rising Food Prices

2. Joblessness

3. Middle East turmoil

4. Weak finances in advanced economies.

All these could possibly derail the current economic recovery. Regarding the surge in food prices, World Bank President said that "We are one shock away from a full-blown crisis".

In addition, new ailments like overheating in emerging economies could also add to the existing list of problems.

Some other comments from IMF includes the following:

"There was a sense around the table... that we are still in a fairly fragile situation," said Tharman Shanmugaratnam, chairman of the IMF's policy-setting monetary and financial committee.

"We have to be extremely watchful, but we also need to develop the capabilities... to anticipate scenarios that could turn out to be ugly, and require that countries, including especially systemically significant countries, take actions early to prevent another crisis."

Time to be cautious in investing?

Losing Sleep Over "New" Financial Crisis?

Anyone losing sleep over the "new" financial crisis that seems to be impacting the stock markets in recent weeks?

I am amazed at how I hardly feel anything nowadays when it comes to stock markets going down south.

Yes, my stock portfolio gets affected but it doesn't affect my daily life as I don't check the prices of my stocks everyday.

Perhaps it is because I have been through a few up and down markets so I am a little bit less emotional now even when my portfolio does take a hit whenever bad news come along.

3 Bubbles to Watch Out For in 2010

Future bubbles are getting more and more difficult to predict. At least it seems so.

The Federal Reserve in the United States even with their huge regulatory arm and research departments could not forsee the bubble that resulted in the Global Financial Crisis of 2008.

Alan Greenspan and Ben Bernake constantly downplayed the risk of the subprime bubble that eventually led to a full blown global financial crisis. It seems from this scenario that central banks might not be effective as a central agency to forecast risks and bubbles that are likely to form. Even if they are successful, certain events might still crop up along the way which are totally unexpected and not forecasted by these public servants.

A bubble forms when there is over enthusiasm and an appetite for risk that is not commensurate with returns.

As we move into 2010, bubbles are likely to form again. Here are a few bubbles that I can think of which might bring about the next market correction or "crisis".

1. Gold Bubble. Gold has been increasing in price for the past few years. It seems that a gold bubble is likely especially since investors are so positive about the prospects of gold. The US dollar is indeed falling but that ought not to justify the performance of gold. A gold bubble in the making?

2. China Bubble. We have all heard it for so many years. Everyone is so positive over the economic outlook of China. They have achieved double digit growth and their yuan is undervalued. Could there be something lurking under this China growth engine to pull the entire world economy down? Shoddy accounting practices...dubious growth figures...over optimism..you bet!

3. Commodities bubble. We have heard that the price of garlic is going up in China. In 2008, commodities were also hot. Jim Rogers has been championing the rise of commodities. Oil prices have also been going up. Is this the next bubble in the making if investors continue to be so optimistic about commodities.

Bubbles will continue to be a permanent feature in the stock market. Where there is asymmetric information and money earning opportunities that seem unlimited, bubbles will always form. It is impossible for anyone to forecast or predict when or what the next bubble will look like. We can however be aware that bubbles do form and when valuations depart from the normal logic or state of things, we can be certain that something is about to burst.

There is no harm in investing during a bubble. Just make sure you stay nimble and get out before the bubble bursts!

Singaporeans Keen To Invest Again

It seems like Singaporeans are pretty keen to invest again.

Everybody is now back in the stock market and even the uncles and aunties are shouting BUY BUY BUY! (okay, maybe in another month or two)

Is there cause for panic?

The markets have recovered very well in the recent rally and while there seems to be room for more upside, investors will not be able to get the gains like 2009.

We need to be very SELECTIVE in our stock picking for 2010 in order to make money.

Remember: When everyone is BUYING, it is the best time to SELL. Whenever people are SELLING (2008 and 2009), it is the best time to BUY.

STI is hitting its new 52 week highs and I am quite positive that the market will at least trend up further for this coming quarter.

One must however watch his basket closely as 2010 could prove to be another year which will give us BIG surprises.

The eurozone has unemployment figures that are simply staggering (around 10%) and close to 20% in Spain.

Of course, unemployment rate usually lags behind when an economy starts to recover. But only time will tell.

I hope to write on some potential bubbles that can hit us for the year 2010. Maybe when I find the time to do so =)

Now I am just watching my basket closely and liquidating when the price is right.

The Collapse of US

Real Trouble coming soon. Don't say that I did not warn you guys =)

I believe the US dollar will start to devalue pretty soon and I really cannot imagine what will happen to the entire world's economy. I believe that it will really be a sight to watch as all this unravels in the near future.

So the Bull (or Bubble) is Here ($1500 to be coming soon)

So it seems that the bull market is back in full force. Or maybe it is simply too early to tell. It could be the greatest Bubble for all we know.

I guess most people have missed the bull run up as share prices of alot of stocks have already risen dramatically over the past few days. Seems like the swine flu and the global financial crisis no longer strikes any fear in people.

It is good to see my portfolio recover some of its paper loss. But of course I am lamenting the fact that I have missed this great opportunity to ride the bull up. I was not too disciplined in doing my dollar cost averaging as you can see.

Anyway, the month of May will be a bountiful month for me in terms of dividends. Below are the list of stocks that I am holding that have declared dividends:

1. ChinaAOil (SGD 0.02 per share)
2. First REIT (SGD 0.0188 per share)
3. Innotek (SGD 0.05 per share)
4. KingBoard (HKD 0.01 per share)
5. NOL (SGD 0.04 per share)
6. ST Eng (SGD 0.128 per share)
7. Suntec REIT (SGD 0.02918 per share)
8. KepLand (SGD0.08 per share)

I estimate that I should be getting about S$1500 plus in dividends for the month of May.

Hmmm.. so maybe its not too bad also..some extra cash in my pocket.

Global Financial Crisis

By right, the global financial crisis ought to be the perfect time for me to start loading up on cheap stocks and shares. The only problem that I am facing is the psychological fear of losing even more money.

I have been loading up on some small cap stocks as well as REITs that provides good yield. Perhaps I would start loading up on more blue chip stocks to balance my portfolio. My philosophy to investment is now this : "Nobody can predict the future".

It makes no sense reading business news or watching the business news. Everyone has no clue where the economy is heading not to say where individual stocks are headed..

If banking stocks drop further, I will probably load up on DBS.

Other Blue chip stocks that I am eyeing are SingTel, SingPost and NOL.