CIMB called.

Week 36.2 CIMB called.

During the Sept24-26 fire sales, I need to restock back my silver for later sales. So my bank account activity is increasing up to a trigger point. Then, I received a call from CIMB bank officer. Hello “Gold Chan”, what is your account got so much deposit-in one? For what purposes arh?

Aiyah, got to explain already. Later I send them a business registration form to them and the case was closed for a while. As a beginner I don’t know what law I had violated, only time will tell. I need to register a business account fast, but there are quite a bit of restriction on business account. For example, for maybank, you must do all the transaction in the branch where the account is opened.  CIMB is much better. Someone told me if you do any bank transaction above RM50,000/- per day, your name go straight to Bank Negara, you will get a surprise call lah. For you guys, better beware lah. For those reseller, you all take care huh. Chap San.

However, there are some issues I need to address before I will proceed with the business account. A personal account is the best in terms of portability and flexibility. That’s why I stick to it for so long.

To change is to improve, To be prefect is to change often.

Last Week Nightmare

Week 36.1 Last Week Nightmare

Silver dropped from USD40/- all the way to USD26/- per oz. It was a nightmare for me. All though, this time I’m not as heavy loaded as last time in May 2011. I ‘m still greatly affected by this price movement.  Few of my resellers are greatly affected by this rapid price movement.  One of them promised to buy 80 oz at RM146/oz, then the price drop about RM20+ /oz. Yet he still committed to buy at that price. However, I hedged a few hundred oz more myself at that price (big loss for me lah). Brought some at USD39/oz, if I waited later, probably I would have brought at USD36/oz. Anyway, in summary regardless what you do, you still be wrong lah because the price is manipulated.

Well, as an appreciation to his commitment, I gave away most of my stock to him for resell to ensure that he covers back his expenses. Towards that weekend, I think both of us did not sleep well and try to sell as much as we can to average out our cost. In the end, this two weeks we end up working for nothing even though the sales was good, it just mainly average out our cost.

On top of that, I managed to lease some silver bar from my ex-customer for resell. On and off, I managed to source some silver from all my ex-customer. It’s just a tiring process, getting it from their home etc later got to distribute to a few customer. After deducting the lease charges and time spent, it‘s not that profitable after all.

One of my customers told me about CME margin call and Shanghai margin call has resulted in price dropping to USD26/oz. I was the one who told him about margin call in May 2011, yet now I completely forgotten about it since late August, I was busy with price drop and how to sell. Nevertheless, now is the time for me to reflect on how to do better in the future.

As part of the post mortem, comments from few of my customer, it’s big commercial Short are using this opportunity to reduce their short position by doing 1 short, 2 long on every single price drop.  For more details, you may read the URL below

http://www.gotgoldreport.com/2011/09/stunning-plunge-in-comex-commercial-silver-net-short-positions.html

Once again, it may be an opportunity of your life-time to accumulate silver at low prices. RSI-14 daily chart now is at 27 now based on 30^th Sept 2011. Time to buy now.

The Power of Forex

Week 35.1 The Power of Forex

Last week can’t really recall exactly when, I decided to collect some cash from few of my customers first and then use the cash to do the bank wire. It’s the same thing. I ended up in the bank late at around 3-4 pm. Then the clerk today me, that I have to wait longer because she need to download the forex rate again into her computer because the rate has changed. I ended up paying RM55/- extra due to the forex changed. Has she have type a little bit faster I would have safe the RM55/-.

Then I checked, apparently if I did my TT in the morning, I could easily safe about RM200-RM300/-. There is no need for me to work so hard selling at all. Since USD is on the rise, it may be wise to do your bank wire ASAP.  Vice-versa. However, other factors also have to be considered. For example, if there are pending undelivered orders, it may be wise to wait for the order to be shipped out first before paying for the second order.

Best Investment 2 your spouse

Week 34.2 Best Investment 2 your spouse

One of the best investments in your life is to get a good and compatible spouse. In most cases, he or she will be with you forever. Till death tear us apart. Since most Precious Metal investor are already married. This advice is dedicated to those whom I can still safe lah. Adding more joy/ meaning to your remaining years of life.

If you are young, don’t waste your time and money investing in Precious Metal. Invest more time in finding the right mate. OK. ROI is very high. That why leng lui don’t need to invest in PM or property because they will have it once they married.

http://www.astro-fengshui.com/courses/fengshui.html

In Joseph Yu, Feng Shui correspondent course basic and intermediate. There is a chart which specifies the general compatibility of a couple. I believe you don’t have much time to research on it. General rule of thumb is that the age difference between two couple must be odd following the Chinese Calendar. You have to consider that Chinese Lunar Calendar when sometimes the Chinese New Year starts in February. So don’t date your university mate or class mate no matter how leng chai or leng lui they are because they are of similar age.

After some time dating just before you fell deeply in romance, you should consult some life fortune teller such as Bazi compatibility between two couple. For Indian, there are also some services available in temple. If compatible then get married and have kids etc.

If not compatible and you decided to carry on for the sake of love or due to lack of choices then be prepared for some tough life like constant argument or disagreement. For guys, let hope you not be Anakin Skywalker who has fallen into the dark side of the force. (YES MASTER).... and become a yes man for the sake of peace. Nevertheless, it’s a learning process that everybody will go through. Just hope you can come out as a better person.

For something that can never be agreed upon, let alone to be told, thus shall remains forever in your heart as a secret. OK. I buy few hundred oz, where arh! to hide it, so that she won’t suspect anything.

There is No Smooth Ride

Week 34.1 There is No Smooth Ride. Food for thought.

Well, do you think you can have a smooth ride despite abiding to all the rules and regulation? One silence day, the authority will come after you for certain regulation you unaware off. It’s not easy to run an honest business especially if you are weak in human networking. If you are too small then it’s not profitable to go after you. If you are very big, then you have the muscle power to fight back and the established networks to assist you in any matter. If you are medium size, your meat is just nice for a bite.

Thus, there is a need to increase the number of small players in the market. This is for the benefit of the general public to own some silver for years to come.

Well, if you have any problem with some authority, drop me any email wkchan1991@gmail.com and let share what we have in common. Perhaps, we can help each other out from our experience.

Gold vs Stock

Week 33.1 Gold vs Stock

Ref: http://thedailygold.com/chartstechnicals/gold-is-0-7-of-global-managed-assets/?p=887/

In the above article, it stated that gold is just 0.7% of global managed assets. However, it’s difficult for me to assess how much is the global managed assets without any references, that why I come up with this article.

Ref: http://www.bespokeinvest.com/thinkbig/2011/8/22/percentage-of-world-market-cap.html

Singapore is 1.11% as of early 2011.

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

SGX had 774 listed companies with a combined market capitalisation of S$650 billion

Thus, total world stock market capitalization is

S$650/ 0.0111 = S$58,559 billion

USD to SGD exchange rate is 1.20

Thus, total market capitalization as of 2010 is $58,559/ 1.2 = $48.8

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

Dec 2010 market capitalization is USD1.4 trillion.

Thus, USD1.4 trillion / 0.0285 = USD49.1 trillion

Thus, the total of the world stock market early 2011 capital is USD49 trillion for simplicity of calculation.

Ref: http://en.wikipedia.org/wiki/Gold_reserve

Total above ground gold reserve is 165000 tonnes in end of 2009. Assume 2500 tonnes production in 2010.

Ref: http://www.kitco.com/ind/Chaize/may112010.html

Note: peak production is approximately 2600 tonnes in 2001.

Total above ground is 167500 tonnes or 167500 x 32150 oz = 5,385,125,000 oz

Let us summarize it to 5.4 billion oz.

Can all the above ground gold buy all the stock in the world?

The price of gold must be =   49,000/5.4  = USD9074/oz

Bear in mind we have not consider the value of the properties, car and etc owned by individuals, government owned assets and also the amount of money already printed in circulation. That also does not include all the derivatives.

Conclusion:

a)      Gold is still cheap or stock market is over-priced.

If we take the mid-path, gold will easily raise to USD3000-5000/oz, stock market capitalization to drop to USD25 trillion.

b)      In the future, a basket of commodities will be used as standard for currency backing. Not gold alone. It will be precious metal, oil and other commodities.

Best Investment is your BED.

Week 32.2 Best Investment is your BED.

Often in life in the pursuit of material gain, we forget to reward ourselves. So, best investment must be able to provide us with some rewarding reward directly or indirectly.

One of the best life-time investments is getting a good bed. A good one may cost RM3K and above depending on the range. Certainly, RM3000 will not buy you much silver these days but it will get you a good bed, pillow, bed-sheet etc. In one purchase, it may cost you more than RM3000 already. Thus, before you buy your silver buy a good bed first. Why?

It’s an investment for 5 to 10 years and 1/3 of your life is spent there. Why not invest on the best for something that you will be using every day?

Start your day tomorrow with a good sleep tonight. Dreamland!

Hopefully, for those who are married, a good bed will lead to more productive and fulfilling relationship. Haha…