Conned by investing

Investors got conned, DIY investing is what you should master. Why?


-When they tell you to buy, chances are they want to unload desperately. And when they tell you to sell, they want to buy every single shares that you’ve got. So trust no one who screams buy or sell.

- The market doesn’t care how much you paid for a stock or what you think is a “fair” price. So, when stock brokers or investment banks publish analysis about “fair” price, you know what craps they are talking about. But that’s their job, so don’t blame them.

-The majority of market news is not only useless, but also harmful to your financial health. Despite the fact that you’ve access to information faster than it was 40 years ago.

-Professional investors have latest information and faster computers than you do. You will never beat them short-term trading. Don’t even try. And if you manage to, that’s pure luck and chances are you will not be able to do it again.

-How much experience a money manager or fund manager has doesn’t tell you much. They can underperform the market for an entire career. And many have, but they still keep their job, because their job was not to make money for other than you.

- Markets go through at least one big pull-back every year, and one massive one every decade. Get used to it. It’s just what they do in order to make money. And if you can’t stomach this, don’t lay a finger in the world of investing.

-Saying “I’ll be greedy when others are fearful” is much easier than actually doing it. The fact is when others are fearful, you’re doubly as fearful, and vice versa.

-There will be 7 to 10 recessions over the next 50 years. Now that we have told you this, don’t act surprised or dumb when they come. Being greedy when the market fall more than 50% is a wise move. This is the real buy n forget strategy.

-Don’t fall in love with companies you invest. Companies die and new ones emerge. Treat them as prostitute or gigolo whom you’re interested to get orgasm, nothing more than that.

- If you have credit card debt and are thinking about investing in anything, stop and think again. You will never beat 18% to 36% annual interest, some on daily or monthly compounding.

-However much money you think you’ll need for retirement, double it, or better still triple it.

Wealth means the number of days you can survive forward when you stop working right now - hmm, this is interesting!

How?
1. Pay yourself first
2. Don't buy an expensive car
3. Do compounding

Cheap property at auctions?

The dark side of property auctions

KUALA LUMPUR: Mr A, who has a “hot property” worth RM1mil, can suffer twice over when he cannot service his bank loan anymore.

While the bank has taken steps to auction his property, Mr A also has to worry about syndicates keeping the sale price down, causing him to pay the bank back more.

A property valuer may recommend a reserve price of RM700,000 but the owner is often deprived of getting the best value (anything above the forced sale value) because cartels pay off genuine buyers in a bid to keep the sale price low.

This scenario is played out at many auctions, said real estate agents.

They said syndicates monopolise the auction of titled properties.

“They form a cartel. They pay off genuine bidders depending on the value of the property,” said an agent who declined to be named.

Another agent claimed that the syndicates were willing to pay between RM1,000 and RM15,000 to genuine buyers to get the property at the reserve price, which is almost always below the market value.

They said registered bidders do take “under the table money” to withdraw from the auction and it is a “common practice”.

They said that those manipulating the auction process could be the lawyers, auctioneers, bank staff and court staff, adding: “The lawyer can also be in cahoots with the auctioneer and the bank.”

The National Consumers Complaints Centre (NCCC) received 128 complaints from property owners with regard to court auctions in 2012 and 149 last year.

NCCC legal and dispute resolution manager Santhosh Kannan said they claimed they did not receive any notice from the banks when they failed to service their loans.

“When we queried the bank, they (bank officials) claimed they had done their part (in sending the auction notice to the property owners) and the problem could be with the post,” he said.

As a result, Santhosh said many did not turn up for the auction of their property and lost them at way below market prices.

This hurts them further because they will have to pay the bank more to cover their loan, he said.

“They should get some money after the sale of their property and not lose everything,” he said.

“Ironically, after the house is auctioned off, only then do the complainants receive the notice (on the sale of the property).”

Santhosh called for better guidelines in running auctions, saying it was difficult for complainants to take legal action when they are “cheated”.

“How can they hire a lawyer when they do not have enough money to do so? It is a losing battle for them,” he said, adding that such cases occurred mostly among the lower and middle income groups.

The agents and NCCC urged the judiciary to check for weaknesses before implementing e-bidding.

Technical trainer Raja (not his real name), who claimed to have been victimised during the auction of his shoplot in Bahau by the Seremban High Court in 2008, said there was room for abuse in e-bidding.

He asked how a bidder registering with 10 different identities would be double-checked and how the court would verify bidders’ payment of the 10% of the reserve price.

But he agreed that e-bidding had advantages, as it could help avoid ugly scenes at the court premises by dissatisfied bidders.

“It is also good because bidders will not need to travel to the court for the auction,” he said and asked the court to ensure only up-to-date valuation reports were used.

source: thestar 30sep14