Net Worth Update (November 2012)

Highlights

• Received one bursary this month and credited into one of the savings accounts
• Increase in stock portfolio value due to trend reversal in Biosensors and improving global sentiments and outlook.
• Received $62.50 of SingPost dividends
• Part time income contributes to the increase in cash

Project Freedom (10): Trading with the BBC Breadth Indicator

What is a Market Breadth Indicator?
In short, a Market Breadth Indicator is a kind of Technical Analysis(TA) that design with the intention to gauge the direction of the overall market. 

Unlike most indicators in TA, which use only the information from a single stock to workout the indicator, Market Breadth Indicators are generated by analyzing the total number of companies in a given market. 

In general, it compares the advancing and declining issues in the market and uses specific formula to generate the ratio, such as TRIN (Arms Index),  and some use other filtering technique to smooth it out like various kind of McClellan Oscillators and Summation Index.

Actually, think about it, the price chart of SPY(S&P 500) and many other indices can also be viewed as a kind of Market Breadth Indicator too.

If those who want to know more about Market Breadth Indicators, there is an excellent book with good coverage and detail formula on this area: The Complete Guide to Market Breadth Indictors: How to Analyze and Evaluate market Direction and Strength by Gregory L. Morris (Sep 21,2005)


Why using Market Breadth Indicator?
For all classical Technical Analysis text books, they emphasis on buying the strongest stocks in the strongest sectors when the overall market is bullish, and selling the weakest stocks in the weakest sectors when the overall market is bearish. 

So, the very first step is to have a reliable indicator to know how is the overall market is performing. And, the best tool would be the market breath indicators - because they are calculated based on all components in the market.

The following picture using the school of fish as an analogy to illustrate the importance of Market Breadth Indicator...  It would be interesting to note that when the market is bullish, on various time from minute, day, week, to month...  most of the stocks would be up and vice versa in bearish market.  Of course, the market is formed by individual stock anyway. 

So, here are the two key important point for using Market Breadth Indicators:
1) using the Market Breadth Indicators is the very first step that can help traders/investors operations to be in sync with the market movement/ direction and have higher probability in winning!

 2) Market Breadth Indicators are less subected to noise and market manipulation.
In a previous blog entry on BACK TESTING...  The results have CLEARLY shown that Market Breadth Iindicators can withstand the test of time.



Why introducing the BBC Breadth Indicator?
Of all the Market Breadth Indicators in the public domain, all are calculated based on the one period advance and decline issues of the market.

Whereas the BBC (Bullish-Bearish-Consolidation) Breadth Indicator can used more advanced formulas and provide even simpler presentation for the user to understand the states of the market.

Take for examples, it can workout a Multiple-Time-Frames BBC indicators and display in the daily chart (or basically any time frame).



Charting Examples of BBC Indicator:(Note: click on each chart to ZOOM IN)

The following charts show various examples for the BBC Breadth Indicator.
In the following chart:

1) the top pane shows a tri-states (Bull, Bear & Consolidation) momentum indicator of SPY.

2) the second pane shows a tri-states Trend Indicator.(These Tri-states indicators were introduced in the previous blog entries).

3) the third pane shows the price chart of SPY.

4) the forth pane shows the Momentum BBC Breadth Indicator of SPY.  It was workout according the the above attached formula.  It calculates the total number of of Bullish, Bearish and Consolidation ticker, in Momentum wise, for the SPY (in this case, a total of 500).   Then it groups the number into Percentage of  BULL (Green Line), BEAR (Red Line) and Consolidation (Blue Line).

5) the last pane in the bottom shows the Trending BBC Breadth Indicator of SPY.    It calculates the total number of of Bullish, Bearish and Consolidation ticker, in Tredning wise, for the SPY (in this case, a total of 500). Then it groups the number into Percentage of BULL (Green Line), BEAR (Red Line) and Consolidation (Blue Line).

This can provide the user to have the winning probability in mind.  The best opportunities are when both Momentum and Trending Windows are opened and in Sync on one direction!
 
SPY Chart with BBC Indicators:




^STI Chart with BBC Indicators:







Sector Chart (XHB) with BBC Indicators:

China SSE 380 index (000009.SS) with BBC Indicator

QQQ Chart: Using BBC indicators as the Galaxy Chart's Companion: 
One way to use the BBC indicators is to put them in work together with the Galaxy Chart.  For example, the BBC chart can show the overall strength of the market (in this case, the QQQ), while the Galaxy Chart can pinpoint down to which particular stock within the QQQ is leading or lagging the overall ETF perfromance.  This works in ANY TIME FRAME in run-time.

Other Points to Considers:
* Most market breadth indicator are equal-weighted.  BUT, most index are Capital Weigthed.  Some are Dollar Weighted, Dow Jones Industrial Average and Nikkei 225.  And, most ETF are Portfolio Weighted with component changing in quarters.  These are the factors that need to take into consideration when working with Breadth Indicators.

By the way, here is a link for the Typical Market Breadth Indicator and it covers most ETFs that are having USA companies too.



Wish that it has inspired you and good luck.
KH Tang



And, if it doesn't, never mind... the follow quote from "Edgar Cayce Handbook for creating your future" may....

"Are we to live only for ourselves, using others to our advantage, or are we to care

about someone or something beyond ourselves?  The first choice may lead to

greater comfort and convenience, at least temporarily.  The secand calls

for the definite inconvenience of taking on the burdens of others. 

-- Only the second choice leads to happiness!"

<Go To Home Page>


 

How Much Can A Middle Class Family Save?

According to an article published on Yahoo News, "People who earn S$4,000-S$7,000 are considered middle and upper middle classes." I could not find the household income range for a middle class family and thus, I will take the $7,000 (highest salary range for a middle class individual) as the combined income of a typical middle class family.  This makes more sense as the combined income of 2 upper middle class individuals would amount to $14,000, which is considered quite well to do.

Hypothetical scenario:

• Newly wed couple in their mid thirties making a combined $7,000 a month. Combined savings of $50,000 left after wedding, renovation and honeymoon.
• CPF contribution (20%) is $1,400 per month or $1,000 if only one person is working. (Salary ceiling for CPF contribution is  $5,000). 
• Parents allowance of $500 per month
• Bought a second hand car with monthly expenditure of $1300 (including  monthly installment, yearly insurance, road tax, petrol, hdb parking, ERP + coupons, maintenance)
• Bought a resale flat and take up a loan of $300,000 at 2% per annum interest for 20 years -Monthly installment is $1,518 in this case. For an income of $7,000, monthly contribution to ordinary account is $1,610 or $1,150 if only one person is working (cash top up of $368 monthly)
• Electricity bills = $150 per month
• Internet + cable tv + handphone bills = $200 per month
• Familly insurance = $300 per month
• Monthly food expenditure = $900 - $5 for each meal per person. Assuming 30 days a month and 3 meals per day.
• Has a new born baby - assume monthly child expenses to be $500 per month at this stage. Note that this expense will increase over time due to enrichment courses, school fees, etc as the baby grows older.
• If the couple wants to sponsor child's future university fees in 20 years, saving $300 per month for 20 years would amount to $72,000. (current university tuition fees is around $30,000 to $40,000 excluding other miscellaneous fees such as textbooks, hostel fees, etc)

I did not include caregiving expenses or additional allowance for parents should they take care of the couple's child. So to simplify things, let's just assume the husband is the sole breadwinner and his wife is a full time housewife. By assuming one person is working, CPF contribution will reduce by $400 while cash payment for mortgage will increase by $386 and so, there is essentially not much of a difference. 

Tabulating the raw data above:

Assuming income and expenses remain stagnant, the family will be able to save $1,482 every month. Also, assuming that they started out with $50,000 and are able to generate a 3% return consistently on their savings, they will be able to accumulate $578,064 by the end of 20 years. Personally, I feel that this amount is far from enough for a comfortable retirement in Singapore.

As mentioned, this is only a hypothetical scenario for a middle class family. The family might have more than 1 kid or not give birth at all. There might be unforeseen circumstances such as illnesses, retrenchment, etc. There could also be positive events such as salary increment, job promotion or even striking lottery. So just take this with a pinch of salt.

Cheers!

Some Updates

• Received one of my bursaries
• Attended 2 job interviews: One will notify me by end of next week while the other will be in December
• Project deadlines are all due this week and exams are coming in two weeks
• Slight problem in the HDB Additional Housing Grant and might have to fork out more cash. Will elaborate more when things are all settled

Take Advantage Of This Rocket Zooming Up To The Sky: The Philippine Stock Market

Take Advantage Of This Rocket Zooming Up To The Sky: The Philippine Stock Market;

From Bo Sanchez. 

TRULYRICHCLUB

I Hope You’re Riding On It NOW… People ask me if I invest in the US Stock Market. Yes I do. But sometimes, I wonder why I do it. Well, okay…. I do it to diversify. I invest 20% of my funds there. (I use Charles Schwab as my online broker. They have an office in Hong Kong and you have to fly there to open your account. Jeepers.)

But honestly, I really ask myself why I have to do this because of this incredible fact: I earn SO MUCH MORE in the Philippine Stock Market than in the US Stock Market.

By a huge difference! Why? Because the entire world’s economy has gone down to the drain. It’s in the estero! America hasn’t recovered yet from its fall. Europe is so bad, in some European countries, 50% of their young people have no jobs. My gosh, 50%!) Even China slowed down intentionally for the past two years so they could prevent inflation.

So where is the Philippines in all this? Ahh, you’ll be shocked…

The Philippines Is An Economic Darling!

There are only three countries now that are the economic darlings of the world: Philippines, Indonesia, and Thailand. (Yes, we’re not used to this kind of good news. Because in the past, we always appear in the “worst” lists! Worst airport, worst traffic, worst corruption, etc…)

According to a study released by Knight Frank and Citi Private Bank, the Philippines is expected to be one of the FASTEST GROWING ECONOMIES from 2010 until 2050.

Did you fall off your chair? I did too the first time I read that news. Do what I did—put some ice on the bump on your head and you’re good as new.

Here’s more shocking news. (Before you read the next line, hold onto your chair really tight.) Are you ready?

In a separate report made by HSBC, the Philippines could become the 16th largest economy by 2050.

Whoa! Friend, there’s no doubt about it. In the next 20 years, Philippine Stock Market will rise like a rocket. It will zoom all the way to the sky.

Here’s my big question to you: Are you riding this rocket NOW? Or are you still dillydallying, postponing, delaying, and simply watching this rocket take off from afar?

It’s NOT too late. Come! Join me. Ride with me. Ride with this rocket. Ride with the THOUSANDS of TrulyRichClub Members who I’m guiding to invest in the Stock Market. My gosh, my kids will see…

My 2 Boys Will Live In A Prosperous Philippines 

Which is the reason why I opened a Stock Market account for each of my boys—who are now 12 years old and 7 years old. (My 12 year old knows how to buy and sell his own stocks. When I’m lazy, I tell him to buy and sell for my account and for his mother’s account. Yep, total child abuse.)

Instead of putting their money in the bank, my boys now have stock market investments. Isn’t that cool? Instead of earning less than 1% in the bank, they’ve been growing their money at an average speed of 16% to 20% per year. Their money is now P380T each. They’re set for life. (Girls are lining up. My boys are their ideal husbands. I have to shoo them away and tell them to come back ten years later.)

Warning: Don’t mind the gyrations of the Stock Market. All that is noise! Disregard the small dips, small losses, small crashes here and there. We’re here for the LONG TERM! Keep your vision straight. Don’t get distracted. Stay steady. Like clockwork, invest, invest, invest small amounts every single month. And YOU will rise with this rocket called the Philippines. 

Yes, I’ll Teach You How To Do It I repeat: I’ve helped THOUSANDS of people now invest their money into the Stock Market. I can help you too. How? Join the TrulyRichClub—and twice a month, I’ll send you my Stocks Update eReport—telling you what stocks to buy and what stocks to sell. 

To ride this rocket up to the sky, click the link below:  

Yes Bo, I DON’T want to be left behind by this rocket;  

I want to start investing in the Stock Market 

Teach me how! 

Happy investing! 

May your dreams come true, 

Bo Sanchez 

PS. If you won’t do it now, when will you do it? Next year? Believe me, you’ll forget. Because life is busy. DO IT NOW. Click the link below…  

Yes Bo, I DON’T want to be left behind by this rocket;  

I want to start investing in the Stock Market

Teach me how!

How This “Financially Ignorant” Young Woman Almost Doubled Her Money In 2 Years

How This “Financially Ignorant” Young Woman Almost Doubled Her Money In 2 Years 

TrulyRichClub Updates...

TrulyRichClub

Everybody loves an underdog story. And this is an amazing underdog story.

This is about Rowena, a young woman who works as a video editor in our TV and Radio ministry. Two years ago, I challenged ALL my employees to invest in the Stock Market. Today, 90% of them are now investing—from my managers to vice presidents to messengers and janitors. (Give me 20 years and all my employees will become huge multimillionaires!)

Please read Rowena’s amazing story below…

Two years ago, I started investing P3000 to P5000 in the Stock Market. (It becomes P5000 when my very generous Dad gives me money. Thank you Dad!)

But I was totally ignorant about the Stock Market. So I just followed Brother Bo’s TrulyRichClub’s instructions each month, buying the stocks he recommended through his Stocks Update eReports.

And in two years, from October 2010 to October 2012, my Dad and I put in a total of P102,000 only. But it’s shocking for me to know that my Stock Market investment now stands at P193,325. That’s 89.53% increase in two years. Or an amazing 44.77% a year!

-- Rowena Mallari, Video Editor

Perhaps you’re someone who saves your money in big banks. If so, you’re earning LESS than 1% a year. To be exact, about 0.75% MINUS 20% withholding tax! It’s actually lunacy to keep your long-term investments in the bank. Yes, put your short-term money and emergency funds in the bank. But NEVER your long-term investments.

NOTE: Just to tell you how insane 44.77% is, I read the returns of the best and brightest, most sophisticated Mutual Fund Managers of BIG COMPANIES in 2011. The highest achieved was only 8.18% growth; A second mutual fund company got 8.17%; a third mutual fund company got 2.66%; and a fourth mutual fund company got 2.39% for the year. But Rowena Mallari—who doesn’t know anything about the Stock Market except what she got from my Stocks Update eReports—got 44.77% growth. Crazy but true.

Do You Want To Be A Multimillionaire? You’ve Got To Start Today…

Warning: I’m not promising that Rowena will also get 44% next year or the year after. The Stock Market doesn’t work that way. It’s always like a rollercoaster ride. But here’s my point for telling you this underdog story: You can be like Rowena and become a multimillionaire in 20 years.

How? Like Rowena, join the TrulyRichClub and use my Stocks Update e-Reports that will guide you how to invest in the Stock Market.

To join the TrulyRichClub and start creating your millions, click the link below:

Yes Bo, It’s High Time For Me  

To Start Building My Millions Now 

May your dreams come true,

Bo Sanchez 

PS. Don’t Delay! So many people POSTPONE investing. From experience, people who postpone never do it. But I know that you’re different. Start now. Click the link below…

Yes Bo, It’s High Time For Me 

To Start Building My Millions Now

Now You Can Be A Multimillionaire… Even If You’re A Driver

Now You Can Be A Multimillionaire… Even If You’re A Driver

Join Truly Rich Club

Arnold is one of our company drivers. He’s married with four kids. They live in a little barrio in Tarlac. He goes home twice a month and works here in Manila.

One morning a year ago, my regular driver wasn’t available, so I asked Arnold to drive me to a meeting. I was busy reading at the back of the van when he interrupted me. He said, “Sir, nagsimula na po ako sa stock market.” (Sir, I already started in the stock market.) I looked at the rear view mirror and saw his big, toothy smile.

I know Arnold. He’s a quiet guy who usually doesn’t start conversations. Especially with his Boss. But the fact that he did meant the guy was genuinely excited about what he was telling me.

I asked, “When did you start?” “December po. Naghuhulog ako ng P2,000 bawat buwan.” (I started last December. I add P2000 each month.) “That’s great,” I said. “So how much do you have now?” “P17,000.” He said it with so much pride, you’d think he said he won the Lotto. Arnold continued, “P11,000 lang po ang naipasok ko, pero ang pera doon sa the Stock Market ay P17,000.”

This conversation happened more than a year ago. Today, I bumped into Arnold again in the office. I asked him, “How much do you now have?” Arnold beamed at me with that same pride in his voice and said, “Sir, P67,500.” If I could only take a picture of his smile, I would. It was a smile of wealth.

Look. I know that some of you will laugh at P67,500. You may think this is loose change. But for a Driver from a small barrio, he feels massively rich already. It’s the first time in his life that he’s holding that much money.

So I told him, “Arnold, in less than 10 years, you will be a millionaire. And in 20 years, a multimillionaire.”

“Thank you, sir!” he said. In our office, I’ve already taught ALL our employees to invest in the Stock Market—from our managers to vice presidents to messengers and janitors and drivers. When you enter the office, you could feel a rising sense of hope in them.

I want you to experience this sense of hope and excitement too. Take charge of your finances. Don’t leave it to chance.

Start now! If you want me to help you, I’ve created the TrulyRichClub to guide its members to build their wealth. I’ll teach you how to do it. I’ll send you my Stock Updates every two weeks to tell you what Stocks to buy and sell. To know more about the TrulyRichClub, click the link below:  

Yes Bo, teach me how to build my wealth  

Tell me more about your TrulyRichClub. 

May your dreams come true, 

Bo Sanchez

PS. Take charge of your financial future. To know more about the TrulyRichClub, click the link below:

Yes Bo, teach me how to build my wealth  

Tell me more about your TrulyRichClub.

Choosing Stocks in Other Countries?

Choosing Stocks in Other Countries?

TrulyRichClub Stock updates from Bo Sanchez

TrulyRichClub

In the last Stocks Update, I mentioned that there are three countries that are the economic darlings of the world today: Thailand, Indonesia, and the Philippines. International Gold Member Randy Eupalan, who lives in Thailand, wrote to me asking if I could guide him to invest in Thailand.

If you live in Thailand or Indonesia, I think it will be good to put a portion of your investments in their stock market. Unfortunately, I don’t invest in these two countries, so I can’t tell you the specific companies you need to buy—the way I do it in the Philippines. But the same winning strategy that is making THOUSANDS of TrulyRichClub members richer now in the Philippines can work ANYWHERE!

I’m not kidding. My friend Phakist Halim, Feast Builder in Indonesia, will privately be building a TrulyRichClub-Indonesia branch—and he’ll be helping Indonesians invest in their booming stock market. I repeat: The strategy of (1) selecting companies and (2) investing every month is the SAME, no matter where you live.

How do you select companies? Mike Vinas wrote about the 4 P’s (Price, Product, Promotion and Place) already. Let me confirm this with the criteria below…

1. It’s a proven business. In my words, giants. Over time, they’ve showed their greatness, consistency, and durability.

2. It’s a cash-rich business. They produce excess cash in their balance sheets. Lots.

3. It’s a profit-consistent business. They have a track record of earning well, with good profit margins.

4. It’s a dominant business. They’re successful and powerful brands, so they can charge higher prices.

5. It’s a future-positioned business. You know that they’ll be there for at least the next 30 years.

Do you notice? All our SAM Stocks in the Philippines get an A++ with the criteria above.

So happy investing!

May your dreams come true,

Bo Sanchez

P.S. I don’t want you to remain trapped financially because of your fear and ignorance. Join me. The earlier you get in, the better. You can still catch up. Build your retirement fund. Build a solid financial future. Clink the link below:

Yes Bo, Teach Me How To Invest In The Stock Market

And Gain Financial Freedom.