Project Freedom (11): What's "Project Freedom".

Good day,

 

Let's start with some questions:

Do you play Chess?  Any kind of Chess...

How long does it take to train a person to be a World Chess Champion?



Well, the answer to the latter question would not be simply a matter of time to learn.  Just like if everyone were given a chance for education, and not everyone would pass the exams within a given period of time.

 

Now, anyone who uses computer likely has heard of the real story that the long-term world chess champion, Garry Kasparov, was beaten by Deep Blue (a chess-playing computer developed by IBM) in 1997.

  

And, here are some benchmark information on the Deep Blue Computer in 1997 and today's computer technology:

"In June 1997, Deep Blue was the 259th most powerful supercomputer according to the TOP500 list, achieving 11.38 GFLOPS on the High-Performance LINPACK benchmark."

http://en.wikipedia.org/wiki/Deep_Blue_%28chess_computer%29

"As of 2010[update], the fastest PC processors six-core has a theoretical peak performance of 107.55 GFLOPS (Intel Core i7 980 XE) in double precision calculations."

http://en.wikipedia.org/wiki/FLOPS

And, from the "CPU Benchmark site", I found that my current laptop (i7 3632QM) can run about 78% of the i7 980X. Which is 7 times the execution speed of the Deep Blue!!!

Now, lets look at another scenario, if everyone were to carry the same program that was in the Deep Blue on their latest notebook PC today and play chess, who would win???

If the CPU power is the same, then the outcome would be a draw over many games.


Now...
With the above metaphor, lets look into other questions:

If there is a Computer-Aided-Trading Software that can consistently beat the market, and it is made available to the general public at some extremely low cost.  What would happen to the stock market?  Would it bring more positive impacts or negative impact?

My guess is that the software would lost it's effectiveness in making the amount of money as when eveyone has the edge means no one has an edge.

As of today's market, over long run, more than 95% of the general public are making a lost in the market.  So, if and when there is such thing available, it would benefit more than 95% of the people while disappoint the few...


So...
The next question would be: Is it possible for human being to workout such a program that can automatically adapt itself to all kind of market fluctuation and yet continue to make profits even at current environment?

For the previous chess example, it can be computerized because the chess has finite chess pieces and each chess piece has finite moves.  So, even the number would ended up as an enormous huge over many steps into the future move, it can be easily handle with today's computing technology.

And, if one were to go through all the trading books and courses, he would most likely be conditioned by them to believe that success of trading is and art which consists of roughly 30% Trading system, 30% Risk/Reward Management, and 40% Psychology.

Personally, I know that anything had been logically done by a human brian, it had gone through certian processes and can be programmed into software.  In order to write the software, a model of the stockmarket chess board has to be built first....

Take for example.... 
The following diagram shows a Stock Market Chess Model.
Note: Those item marked with "*" was posted in previous articles.  (Click and Zoom In)

And the following shows the OUTPUTs from the model.

Genting Singapore Chart (Click and Zoom In)

 

Google Chart(Click and Zoom In)

 

Apple Chart(Click and Zoom In)

 

.
The Galaxy Chart with Dow Jones Industrial Average and it's components:(How it works) <-- link="" p="">

Of course, the model is not perfect, as no model will be as stock market is a living things projected by the mass consciousness of human minds.

On the other hand, as illustrated from the outputs from the model, using it to protect personal financial wealth can be easily achieveable.

And, this is what I mean by "Project Freedom".


Bless You
KH Tang

"Whatever I desire for me,
I desire for all humanity"
- Barrie Konicov

 

---------------------------------------------- Added on 30 Aug 2013 --------------------------------------------

My Vision and Believe in Faning Out OGTS.

 

Net Worth Update (January 2013) - $60k mark

Current Net Worth
Assets	Dec-12	Jan-13	Change	% change
Savings Account 1	$5,225.48	$5,596.71	$371.23	7.10
Savings Account 2	$5,045.70	$5,008.16	($37.54)	-0.74
Savings Account 3	$10,028.20	$11,035.04	$1,006.84	10.04
Investment Linked Fund	$7,475.68	$8,150.06	$674.38	9.02
Schroders Commodity Fund	$10,321.04	$10,485.42	$164.38	1.59
Stock Holdings	$9,365.00	$10,115.00	$750.00	8.01
Phillip Money Market Fund	$7,740.56	$10,004.18	$2,263.62	29.24
Physical cash	$1,000.00	$1,000.00	$0.00	0.00
Market Value Of BTO Flat (to be built in 2016/2017)	$750,000.00	$750,000.00	$0.00	0.00
Total Assets	$806,201.66	$811,394.57	$5,192.91	0.64
Liabilities
Home Loan	$617,500	$617,500	$0.00	0.00
Net Worth (including flat to be built in 2016/2017)	$188,701.66	$193,894.57	$5,192.91	2.75
Investible Net Worth	$56,201.66	$61,394.57	$5,192.91	9.24

Highlights

• Received a bursary valued at $2,900 and deposited a large portion of it into the Phillip Money Market Fund (currently yielding 0.5% per annum)
• 8% increase in value of stock holdings due to the recent spike in Biosensor's share price
• Expenses for the month totaled to $210 (average $6.80/day)
• Income from tuition, paid surveys and other part time jobs contributed to the increase in cash

Net worth target of $70,000 by December 2013 is definitely achievable now. In fact, I think my investible net worth will cross the $70k mark by mid 2013. February will be another good month due to Chinese New Year Ang Pows, second disbursement of bursary valued at $400 and a potential contribution from my girlfriend's performance bonus to our joint account.

Lastly, I have updated the "Net Worth", "My Asset Allocation" and "My Stock Portfolio" pages. For your information, I will be updating these pages on a monthly basis.

Maximize Stock Returns Through Share Financing

Share Financing

Share financing is a loan facility offered by banks and brokerages to boost your purchasing power of stocks. You can pledge your stocks as collateral and engage in leveraged trading up to approximately 2 times the value of your pledged shares. As a member of the mass market, I do not get to enjoy the lower rates that Banks offer to priority/private clients. However, what I can do is to search for the best deal in the market and plan my moves accordingly so that I can leverage more effectively when the time comes.


Best Deal in the Market  (Pls post a comment if any reader has a better deal)

After some research and comparison, I feel that OCBC's share financing account offers the best deal. By pledging shares, OCBC allows you to leverage up to 2.5 times. Also, it offers one of the lowest rates at 3.5% to 7.5% for different quality of stocks. For other banks such as DBS & CitiBank, they offer a rate of around 4.5 to 6% regardless of the quality of the stocks that you pledge. To enjoy the lowest rate (3.5%) from OCBC, you have to pledge stocks which are components of the Straits Times Index. If your portfolio comprises stocks of differing grades, the blended interest rate will be calculated based on the relevant interest rates which correspond to the various differing grades. However, the interest rates they offer are pegged to the prime rate and thus subject to periodic adjustments. To assess this risk, I extracted the prime lending rates for the past 20 years from the MAS website and tabulated them as shown below:

Period	Prime Lending Rate		Period	Prime Lending Rate
1993	5.34		2003	5.3
1994	6.49		2004	5.3
1995	6.26		2005	5.3
1996	6.26		2006	5.33
1997	6.96		2007	5.33
1998	5.9		2008	5.38
1999	5.8		2009	5.38
2000	5.8		2010	5.38
2001	5.3		2011	5.38
2002	5.35		2012	5.38

As we can see, prime lending rate has not been changing much since year 2001 and has been hovering in the 5.3% to 5.4% range. It should be safe to say that the prime lending rate will not change drastically in the next 5 years even in the event of a recession.

Also, the margin percentage (Total share value/Loan Amount) for OCBC is 140%. This means that a margin call will occur if the margin percentage falls below 140%.

Now, we have these information:

• Lending Rate = 3.5% to 7.5% depending on the quality of stocks pledged
• Lending Rate is 3.5% if pledged stocks are all components of the Straits Time Index
• Rates would most probably not adjust drastically in the next 5 years
• Margin percentage = 140%
• Leverage Power = 2 times of pledge stocks

Strategy

During the next downturn/major correction, I will acquire stable dividend stocks which are components of the Straits Times Index and yield at least 5%. By purchasing STI component stocks which yield at least 5% and pledging them as collateral, I will be able to borrow money from OCBC share financing account at the lowest rate of 3.5% and also, the dividends will be sufficient to cover the interests. This means that any potential capital gain when the market recovers will be 'free'.

The maximum leverage power I have is 2 times the value of my pledged shares. To utilize this facility without over-leveraging and risking the dreaded margin call, I will borrow only 50% of the value of my pledged shares. For example, assume that I bought $100k worth of stocks during a market recession. I will then pledge these shares as collateral and borrow another $50k to buy more. Now, the total share value is $150k and the loan amount is $50k. My margin percentage(Total share value/Loan Amount) is now 300%. Recall that we have to maintain a margin percentage of 140% or more if not a margin call will occur. So assuming prices continue to drop another 50%, the value of my shares will then be $75k while loan amount is still $50k. Margin percentage is now 75/50 = 150% (still above threshold for margin call). In this example, I acquired stocks at depressed prices during downturn and the chances of the prices dropping another 50% should be unlikely. Risk of margin call is low in this case.

In a nutshell, this strategy is to accumulate STI component dividend stocks during market downturn and pledging them as collateral to enjoy a lower rate for buying more stocks on margin. Dividends should be sufficient to cover interests and investors get to earn the capital gains.

One Single Email Will Make Your TrulyRichClub Membership All Worth It…

TRULYRICHCLUB UPDATES from BO SANCHEZ.... 

One Single Email Will Make Your TrulyRichClub Membership All Worth It… 

One Single Email

Last month, while walking in a mall, a man came up to me and gushed, “Bo, you don’t know me but I’m a TrulyRichClub member. My name is Gerry. Because of you, my investments are growing. I really thank God for the day I picked up your book in the bookstore—and that started everything. Soon after, I joined the TrulyRichClub, and my life has changed. I’ve been investing for two years now and I’m so happy…” “Thanks Gerry,” I said, “But you did it. I just guided you.” 

“I can’t imagine how TINY you charge for the TrulyRichClub. For such a small monthly fee, we get SO MUCH!” he spread his arms like an eagle. “I mean, aside from the stock market guidance, you send us your talks, newsletters, Godwhispers, etc..…” I smiled, “Actually, there’s one more gift that I will give all TrulyRichClub members some time in the future. 

And a lot of people don’t know this. But this ONE gift will be so crucial, members will say, “Even if I didn’t get all that monthly stuff I received, if Bo just gave me this one gift ALONE, it would have made my TrulyRichClub membership all worth it.” “Huh?” Gerry raised his eyebrow. “What in the world is that?” “Let me explain. In 2008, when the stock market was still zooming up like a rocket and everyone was deliriously happy with 90 percent of stock market “socalled” experts were telling every man, woman, child, dog, and cat to BUY, BUY, BUY… My mentor—the same wise man guiding us today—was singing a different song. He was telling everyone to pull out everything. He warned everyone that the market has overheated and it will topple very soon.” 

“Did people believe him?” Gerry asked. I shook my head. “Most people didn’t. His friends didn’t believe him. His peers didn’t believe him. So when he pulled out his money from the stock market, people called him crazy. And when the market went even higher, they ridiculed him.” “Wow…” Gerry asked. “Four months later, the stock market CRASHED.

All of them got wiped out, losing 40 percent of all their money. But while everyone else were crying tears of despair, my mentor got all his hordes of cash and quietly returned to the stock market, buying great companies for a song making one of his grandest profits of his life.” 

“That’s super…” “So here’s the special gift I’ll be giving you and all members of the TrulyRichClub. Today, the stock market is growing smoothly. But this is nothing compared to what will happen at a future date. The stock market will explode upwards. Everyone will be partying. And one morning, my mentor will call me up. I’ll hear him tell me, ‘Bo, it’s time… Get out.’” 

In less than five minutes, you’ll receive a short email from me—our usual Stocks Alert. But this time, instead of telling you to buy this particular stock or sell that particular stock, I’ll be telling you to sell the entire enchilada. Gerry’s eyes were larger than golf balls, shocked at what he just heard. I smiled again, “I don’t know when that will happen. 

Perhaps a few years from now. But just for that one single email, everything you’ve paid for your TrulyRichClub membership all these years will be all be worth it.” 

May your dreams come true, 

Bo Sanchez 

PS1. Take Charge Of Your Financial Future. Don’t leave your 2013 to chance. Do something today that will give you financial freedom in your advanced years. I believe investing little amounts each month in the Stock Market will give you financial freedom in the later years of your life. To take charge of your financial future, click here now. 

PS2. By the way, the TrulyRichClub isn’t just all about the Stock Market. It’s also about having an abundance mindset. Why? Believe me, all the technical stuff I’ll teach about The Stock Market WON’T WORK if you don’t have an abundance mindset. So in the Club, you’ll also receive a lot of Audio Talks and eReports from me about having an abundance mindset. To take charge of your financial future, click here now.

Who Are The Supercar Owners?

KPO Cafe Bar

Whenever I walk past the 'KPO Cafe Bar' situated beside Orchard Central, the fleet of supercars parked outside the bar never fails to impress me. I have seen cars like Audi R8, Lamborghini Aventador, Ferrari 458 Italia, Nissan GTR, BMW M3, Maserati GranTurismo and different models of Porsche, BMW, Mercedes, etc parked outside the bar. It subsequently piqued my curiosity on who are the people who own them and I started stealing glances of the customers drinking inside the bar and on the open air balcony.

Here are some of my observations:

• People dressed in their business attire can be seen drinking at the bar as early as 4-5pm
• About 30 to 50% of the customers are Caucasians
• Majority of them are in their early 30s to mid 40s

A first hand GTR already costs $350,000 including COE. Monthly maintenance is probably more than $4,000 including petrol, road tax, car insurance, ERP, etc. And we're only talking about a GTR which costs $350,000 here. What about an Audi R8 Spyder which costs twice as much? So who are these supercar owners? What do they do? How can they afford a supercar?

I feel that there are only a few possibilities:

1. They are successful executives (lawyers, surgeons, bankers, etc)
2. They are successful business owners or 2nd generation business owners
3. Supercar belongs to father/family
4. They are overleveraged 

However, from my personal experience, not every wealthy person owns a supercar. For example, the owner of a venture capital firm that I interned at drives a humble Toyota Camry despite having a personal net worth of more than $30 million. The father of my good friend who earns more than a million dollars a year and stays in a Good Class Bungalow owns a Audi A4 and a Volvo S80.

Living in a country with the world's highest concentration of millionaires and the largest proportion of wealthy expatriates where 54% of them earns US$200,000 or more,  I will have to work harder, save harder and invest smarter.

PAG-IBIG FUND HDMF

PAG-IBIG FUND 

Last couple a months ago. One reader of this site ask me to discuss about PAG-IBIG FUND. I find a YouTube video were President & CEO Darlene Berberabe discussing and explaining all about PAG-IBIG Fund.

I think it is worth to shared here in my site for those who want to know more about PAG-IBIG FUND.

PAG-IBIG stands for

PAG = Pagtutulongan

I = Ikaw

B = Banko

I = Industriya

G = Gobyerno

Please watch the video below for more related information.