Migrated to http://blog.silvermalaysia.net

Hi,
 I have migrated my blog to http://blog.silvermalaysia.net
You can proceed to there to read the blog.
thank you.

Genneva Gold Sdn Bhd Newspaper Announcement 27th Feb 2012

Week 57.1. Genneva Gold Sdn Bhd Newspaper  Announcement 27^th Feb 2012

I just get alerted by someone that there is an announcement by Genneva Gold Sdn Bhd in the local newspaper few days back. It’s stated that 

Genneva Malaysia Sdn Bhd does not in any manner, directly or indirectly, at present or in future gives an undertaking or guarantee the re-purchase of gold products sold to its purchasers (no buy back guarantee)



 I would like to keep this short and nice. I never invested in Genneva Gold because I never believe in such scheme. However for those who already invested please do take note. For those who are interested to know more there is a session court hearing at KL Session Court on 1^st and 2^nd March 2012. 

http://www.bnm.gov.my/microsites/fraudalert/0301_status.htm#genneva

There are many info in the web which you can search for it. Happy a nice day.

Fraud: Canada LAND deal

Week 56.2 Fraud: Canada LAND deal

Well, if you see the newspaper on 23^rd Feb 2012 URL below, there is a fraud on some LAND deal in Canada.

http://thestar.com.my/news/story.asp?file=/2012/2/23/nation/10788631&sec=nation#13299546510361&if_height=401

http://thestar.com.my/news/story.asp?file=/2012/2/23/nation/10789835&sec=nation

http://thestar.com.my/news/story.asp?file=/2012/2/23/nation/10787151&sec=nation

I wonder why people want to part away their saving on certain real estate which they cannot see by themselves. Whenever a land deal or oversea property agent approached me I shoe them away. I never buy anything which is not under my control. Property and LAND is complex matter, even local property and land already got some many complex issues let alone oversea one. On top of that, each country will have different law etc. If you are not rich at least above RM5 million and not knowledgeable in particular country, don’t do oversea properties. Let say you work in UK b4, then you can consider buying properties there after 1-2 years staying there and done the homework there. If you stay in Malaysia, 1 2 get rich fast buy property in AUSTRALIA, UK etc where you hardly go there before, don’t buy.

Good properties no need to advertise one.  People will queue to buy one. Everybody knows that. For oversea property, what you buy most likely it’s the left over. Think about it why do they advertise in Malaysia for properties from Australia, just advertise in Australia enoughlah.

Note 1: Don’t be greed. Anything return over 15% pa be skeptical. UOB Physical Gold gives a return of 12% pa depending on when you brought it.

Note 2: if you buy something make sure you have some control over it. If it is oversea land deal, property I will forget it.

Note 3: Feedback cycle should be very short. Let said I buy from Kitco (for example) some Precious Metal, if they don’t deliver after receiving my money, I will just email everybody everywhere then they cannot do any business any more. FYI, Kitco always delivered my goods. For properties deal or land deal, they can always drag you with lot of reasons since it so complex. Waiting for authority approval lah, bank loan approval lah etc…. Next thing you know the land is mortgage to bank, company bankrupt.

Note 4: This advice may be helpful to you and applicable on many occasions. If someone tell you something nice (oh! I make/you will make tones of $ buying these) be skeptical, if someone tell you something bad (oh! I / you will lose tones on $ on these) be trustworthy.

In precious metal, it’s very simple. You give me $, I give you the metal. That is. Period. No collateral, debt whatsoever. Deal is done. Nothing beat precious metal in that sense.

Accounting Issue

Week 56 Accounting Issue

To be competitive in business sometimes a competitor can be a friend. One way to help out each other is to barter between traders. For example, seller A may buy in bulk item A, seller B item B etc. Then both A and B can exchange their goods among themselves thus each have more variety of goods to sell. Win Win.

Sometimes goods are exchange not on 1 to 1 bases, for example 12 oz of morgan bar with 10 oz of PAMP lady fortune.

Due to time, location constraint, something one seller will help to collect the item on behalf of 3-5 people from the same seller. Many will not meet each other physically, thus it will involve some bank-in bank out transaction.

Since most of us are sole-proprietor, all these actions will raise many accounting question from IRS upon auditing. Thus, it's be best to have it recorded in email in case some question is asked upon you. It will be years before the question is asked and if you act then, for you

Worst come to worst, IRS said it is your sales since there are many cash deposit, $transfer into your bank account but you just helping your friend only. (TOLONG ORANG SAJA.) etc. Please pay the TAX.

Business discipline

Week 55.2 Business discipline

To be in business you must actually measure the profit in real terms and not what is displayed on a paper. There are four things you need to consider: Purchases, Sales, Expenses and Stock check.

Purchases

All the purchase you need to properly record it.  Normally, the purchase amount is big in volume thus very difficult to get wrong. Frequency of purchase is 10-100x lesser than sales transaction. Thus, an easy filing will be sufficient.

Sales

For every purchase made there may be 10 – 50x sales transactions as the sales tends to be smaller in nature. Thus, proper recording is much more tougher because most transaction buyer would like to see the product 1^st, then select the required quantity, pay in cash and go. Thus, may be difficult to write up a receipt up front for some deal. Then dealing is done in public places due to security reason. Most deal has to be quickly done to avoid attention. Buyer and seller has to quickly show them the goods, pay the $ or count the cash normally stack of RM50 then quickly move away to avoid attention. One must be very discipline in recording all the transactions.

Expenses

Just paste every damn single receipts U got over the last 3 days at most 1 week into a book. Then you will be able to keep track of it. All expenses payment should be best made electronic such as Touch&Go, credit card to purchase petrol. Have a monthly automatic credit for phone, electricity etc bills into your credit card or bank account. Just keep all your statement best if in electronic form.

Stock Check

This is the most difficult thing to do, once you have properly done all the purchase, sales and expenses recording, it’s now time to do a stock check. To do a good business, you must have variety of product and you cannot be holding some many stocks for each product. It is quite common you have at least 20-50 products in hand for sales. Taking inventory is time consuming. Then, since the product is so valuable you cannot be putting it in single location. It has to be in multiple location, thus stock check is hassle.

Then most of the time, you will have to take out extra stock for sales because customer may want to buy extra in case you just bring just enough stock, you end up losing some sales. In most cases, after you do the stock check, you will guarantee out some stock is missing. Try to do stock check every month then you can keep track of losses and respond more frequently. The problem made worst if you hire someone to do the business. Even worst and who to blame, how do you account for item lost. So, start with yourself 1^st, if you cannot handle yourself, let alone handling others.

Most of the time, item could be lost while U R travelling to do your COD. Collect the item from one place and COD 3-5 places on the same day. Sure something will get loss one.

So after you check the stock losses, then only you can determine your actual profitability and not the feel good profitability. If there is excessive stock loss every year then it’s time to quit and start buying and selling in bulk such as sell by tubes.

Week 55.1 Trading days are gone.

Week 55.1 Trading days are gone.

The good old days were gone. Now everybody is knowledgeable about silver and knew where to source for the best price. Hundreds of silver traders flooded the market in forum, website etc.  Thus, prices is slashed until some selling at loses. The law of diminishing return is starting to prevail. We no longer can do any trading already. We have to become an investor again. Just keep in mind next time when you sell probably it may be lower than your replacement cost in order to get it sold.

Sometimes the truth can be very disappointing, let move to something else. You think so easy meh, after so much shock (good feel) for 1-2 years in silver trading. Got to start over again, this time the hunting begins but there is no sure luck for any success.

Looking back I could have done much better if I have a mentor and less hesitation.

As for the silver market, now it’s the time to hold on to your silver and go into hibernation. Once the price goes up, when people are buying, it’s time to sell. When is it, maybe in Sept – Dec 2012 according to my experience.

OK so what is the next hunt, how does the animal look like. It’s no longer a simple commodity like silver. It has to be something much more. Some form of web services lah.

Till then CU.

Religious Item

Week 51.1 Religious Item

For me I have a policy where I don’t sell or promote to friends in work place or places of workshop such as temple, church, mosque etc. Unless they asked me then it’s another story. Part of the reason is I never able to convince any friends to do the things I want to do even if I subsidize them, let alone selling things to them. Even a simple commitment to do some extra work they just brush off to do their own things. I have done enough in the past, thus selling to others is the best. 

In religion it’s a place where we seek the truth depending on who and what we believe. Thus, there is a lot of trust put on you by the people whom trusted you. I believe in law of cause and effect, thus religious place is a place I prayed and go. I have seen and hear some stories on those who stolen some temple fund and what happen to them few years down the road. It’s really very bad. Well, if you do happen to sell some precious metal with religious symbol on it, try to sell it at reasonable price. For religion is something you practice, it’s not right to make a rip-off on your customer on something their belief.

In Precious metal silver is silver, gold is gold. Even if you put any god picture into it, it does not make it more valuable in term of precious metal content. Just don’t get so carry-away when people sell you Kwan Yin silver bar, dragon silver bar, Jesus cross silver bar/coin etc. If you want, just get 1-2 pcs to show your belief and that it. Beyond that is not worth-while.

Running out of money

Week 50.1 Running out of money

From my conversation with many of the silver seller, it’s seems that most customer already running out of cash to purchase silver despite the current attractive pricing. There is very little activity among the seller. I guess most silver customer already ran out of cash to buy bullion.

It’s also reinforce my old experience on gold, once a person already converted a fraction of his asset to precious metal, further conversion will be minimal as a major portion of his cash is already spent. With the current pricing which is still lower than year 2010 price, it further reduce the interest among the buyer.

The next sales cycle will be just around the corner when annual bonus is given out to working people. However sales will never return to the great sales in Sept 2011. So, when will be the next great sales, well when silver price rise up again to USD35, USD40/oz then we will see some major activities. I believe most sales will come from those who converting their pro-folio from gold to silver.

FYI since 20-Dec 2011 (can’t recall the exact date), UOB main branch already run out of stock for gold. Well, I wonder when will all these cash rich gold-buyers diversify into silver. We are right here waiting for you.

At the same time, I begin to run out of ideas on what to write on precious metal after more than 50 articles. Till then CU around.

3F. Family, Friend and Fools: Moving Forward….

Week 49.2  3F. Family, Friend and Fools: Moving Forward….

In some of the entrepreneur talk, the concept of 3F was introduced. One of the popular questions asked is from whom do we get our customer or funding? The answer is 3F, family, friends and fools.

However, something very peculiar in Precious Metal is that most of the investors are unable to convince their family and friends to agree on buying physical precious metal. The only want they able to convince is someone who they don’t know. According to my sales statistic: 0% family/relative, 1% friends and 99% someone who I don’t know.

It’s also good to reduce 3F to 1F as one can maintain their friendliness relationship among their friends and relative.

How do one move forward from here?

Studies had shown that people will only come if there is a system in place.

Example 1: Let date and then have baby. Thus, nobody will come.

Let date, then get MARRIED, then have baby. Lot of people will come.

How will the system in place for Precious Metal in the future look like? I ‘m not sure but it must be cheap, reliable and flexible for general public to participate. Certainly it will require a lot of effort from various parties. I guess being profited from the sales of precious metal, seller should start some form of initiatives.

Cheap: Must not be limited to those who have physical store for buy and sell. Hopefully, every investor can sell.

Reliable: Some mechanism need to be in-place to prevent fraud and most importantly prevent Buyer/Seller backing off from their agreed deal.

Flexible: Certainly there will be liquidity problem when everybody tried to sell and some inadequate stock problem when everybody wants to buy. Some form of efficient pricing like stock market should be in-placed to allow easy disposal of precious metal at a fair price.

2011 in review

Week 49.1 2011 in review

Prior to May 2011 I believe that silver price will go up non-stop then the price slashed down from USD48/oz to USD32/oz. For the first time I got caught up with it. Soon it recovers back to USD40/- then 2nd heart attack price dropped to USD26/oz. Then just before the year 2011 ended, the 3^rd heart attack dropped to USD26/oz again. Wow! so tough in this business.

1^st silver heart attack I was heavily loaded but managed to recover a bit when the price back to USD40 by selling below cost. 2^nd silver heart attack, again I was caught but I managed to roll over quickly to cut my losses. Just in time for me to recover from the 2^nd silver heart attack. It is just enough to profit a bit even though the sales volume is high. Prior to the 3^rd heart attack, I settled most of my debt and not as heavily loaded as previously two attacked. At the same time, new player came in Oct/Nov 2011 with slashing prices here and there since Oct 2011. In the 3^rd heart attack, I’m not as heavily loaded as previously, thus I was not affected that much. Now it’s extremely difficult to do business in silver already. It’s difficult to compete with their pricing on certain products for various reasons. 

As the year 2011 ending, I managed to get some good sales during Christmas 2011. It’s small compared to what I used to get but now it’s considered reasonable lah. Well, it’s a consolation prize for me-lah.

At the same, I realized all my 2011 predictions went wrong. So, it’s not wise to do long term prediction. Week or bi-weekly prediction is much better and accurate. As things slowed down, I got to move on to other things nevertheless I will certainly be back when the sales recovered. However, the profitability will be much much less than previously.