Hi, All SHC members.
TS Lim here.
Any one invested in properties or parking yr money in AUS dollars should get out by NOW.
Australia is beginning to face to same credit crunch.
Keep yr money in cash in local banks.
Annoucement for the 18 NOV. gathering.
I will be at the 1st session from 5PM to 6 – 6.30PM.
Not from 4 to 5.30 PM.
This is to allow those working to at least hear something what spot FOREX trading is about.
Also the American market starting this week will open at 10.30PM iso 9.30PM, due to daylight saving.
Cheerio,
See U all there
T S Lim
Hi TS! I’m looking forward to hearing your opinions on FX on the 18 Nov. C u at the 5pm session. Your opinion – the AUD is being thrashed right now, about 0.97 against the SGD. In the mid to long term (six months to 1 or 2 years) will it ever see 1.12? or hopefully 1.25? hahahah… yeah lah, got caught in it at 1.28.
Hi, Jacq.
As I was just trading an hr ago the AUS ahd cut the interest rate from 6 to 5.25%.
There will be further cuts, if financial institutions face credit problem.
Aus companies earn from China’s industries. They are now in the downturn. So AUS is facing the same fin. crisis.
The situation looks bleak until mid 2009, or longer.
Cheerio,
TS Lim
Hi Tiang Soon
Your warning on the Aussie dollar is relevant to those who have an exposure to Aussie assets and currency like in FDs.
But if we are to take out our FDs now we will face a loss of around 30% like in Jacqueline’s case above. I think we should hold on to our deposits as long as we don’t need the money urgently (in the short term). I cannot see how the Aussie dollar is less valuable than the US Dollar which is bankrupt anyway, or the Japanese Yen which is a convenient vehicle for the forex carry-trade.
What do you think?
Hi, investors/traders SHC members.
The whole financial market is now very credit tight.
Major countries are holding to USD. The USD index is trading about 85% from its low of 73% last yr.
Both ZN and AUS have high interest rate of 6.5 and 5.25% respectively.
AUS people are trapped in high loan rates for houses and properties. Many are in debt and are staying in caravans or in relatives homes.
Further, AUS depends on China for export which has slowed
down and may even come to a stop when the trade contracts end.
Determine for yourself yr risk.
Many investors, in both currency and commodities trades, have loss of over 70%.
That,s why I DO NOT TRADE BY HOLDING OVERNIGHT.
Cheerio,
TS Lim
Hello Tiang Soon,
How do you view dual currency deposits AUD/SGD pair?
I wouldn’t be in time for your talk on 18th Nov.
Regards
Christina Chan
Hi, Chris.
I’m not clear what U mean dual currency?
Is it U intent to speculate whether the SGD will appreciate agst AUS dollar?
U can give me a call, 98236137, and I can help explain a bit more for U on spot currency pairs, since U are not able to be in the 1st session on 18 NOV.
Cheerio,
TS Lim
Hi Chris @ #5,
The dual-currency pairing is not a deposit. It’s an investment. When you invest, you must have a view of where the investment would likely be heading (ie. profit target) and what your downside risks are.
If you think the AUD/SGD is likely to trade in the 0.95-1.05 range, then you have to decide which is a comfortable entry level for your risk appetite.
Factors that would affect this investment are your initial capital, strike level, tenor and yield.
#6,
Thanks TS, it is very kind of you.
Christina
Hi Eleanor,
I was always under the impression that Dual currency was a deposit.
I recieved a quote from my banker when A$ was about
.98. He offered a strike rate of 0.922 for 2 weeks and mentioned that the yield of 13%. His strike rate is rather stretched as I told him that I want to remain in S$. How did he derive at the yield of 13%? Please advise.
Christina Chan
Hi, Chris.
This type of statement is usually spoken by bankers and pro-traders.
To explain as simple as possible for lay person to understand
usually the currencies are pair, like USD/JPY, EUR/USD, AUS/USD, etc.
There is a bid (sell) and a ask(buy) price for each pair.
What he is telling U is that if U bet that in 2 weeks’ time
the AUS $ hits 0.922 there is a 13% profit for a certain amount of money U have top put in.
This is one of several types of betting U one can play.
THIS TYPE IS PURE SPECULATION and VERY RISKY, like buying lottery tickets.
I don’t trade this type.
Novices should avoid this type of currency betting !!!!
Cheerio,
T S Lim
Hi Tiang Soon and Chris
First, Dual Currrency is an investment and not a deposit. I did mention in another post that it is NOT covered by the government’s Deposit Insurance for bank deposits.
Tiang Soon: You mentioned prof-traders in one posting and pro-traders now in #10… can you tell me the definition and the difference?
Day trading of Forex is what you do… as opposed to swing trading and, Dual Currency is another cup-of-tea entirely.
However, I don’t think that Dual Currency is “pure speculation and very risky like buying lottery tickets”. Maybe Eleanor can explain it in very simple terms so that I can understand why and how I could consider Dual Currency investments.
How would this be better than just keeping my money in a fixed deposit or CD?
Hi, All SHC investors and traders.
There is too many diversed inputs to a simple question from Chris.
Therefore, confusion arose.
Refer to my explanation to Chris in #10 and read slowly.
Do not complicate something simple to be difficult.
I say again, I have been consistently earning a monthly salary from trading.
I am trading for a living, SO CAN U.
Kenneth, I do not know much about U.
Are U a Trader/Investor currently?
Cheerio,
T S Lim
Hi Kenneth,
Thanks for bringing the truth of what is happening in Financial world from the book that you have read ‘The Shadow Money Lenders’. I must also thank Ivan for his help.
Maybe you can share a little of what you think will happen in the near future and how it may help some of us in some ways.
I am still trying to complete the book as it is a little heavy going thus will appreciate your usually uncanny summary of complex financial speculations in simple lay man terms.
Also on the issue of forex, does anyone have any fundamental theory on where the Aus and NZ dollar is heading. As Lim did inquire recently how can these 2 currencies be weaker now against the dollar. The idea of this question is, should we not make the most of these current weakness of these currencies that may rebound any time soon (just my theory)?
Cheers
Hi Tiang Soon #12,
This forum encourages participation. Diversed inputs are necessary and need not create confusion. I hope you will respect other viewpoints and clarifications.
Terence Seah
Hi TS,
Thanks for the explanation.
Christina Chan WH
HI, all SHC members.
I have posted for downloading a magazine on those topics USD and AUSD.
It is under Lim Tiang Soon’s Profile #19
Instructions are given.
Enjoy and Cheeerio !!!
T S Lim
Hi Tiang Soon, Ronald and all SHC investors!
I cannot claim to know about finance or forex trading… and neither is it my intention to create confusion.
I am speaking as just an ordinary Singaporean trying to make sense of the current turmoil that is hitting the markets. And wondering how we can brace ourselves for the coming financial tsunami (as many financial experts have described it). The book The Shadow Money Lenders gives an insight into how the current mess was created by the greed of banks and financial institutions, Beyond the sub-prime loans, the banks and FIs created CDOs, CLOs, SIVs and other “structured” products which over-leveraged the credit markets. And now plunged us into this deep crisis!
I am just seeking answers to what to do with our money, savings and investments: whether in shares, property, structured deposits, foreign currency, CPF even.
Today, we read from our MM that we have to keep our eyes open, and if we get into “risky” positions then it is entirely OUR FAULT! Because we are educated, below 65 and know how to call our broker and buy a share…, we should only blame ourselves for being greedy trying to make a 5 percent return on our deposits.
So, all Singaporeans must be content to get your 0.75% interest from the largest bank in SEA and do not go for “risky” products that they try to foist upon us. Keep your money in CPF and get the extra 1% and be happy!
What I’m trying to highlight is that we need a personal financial plan especially to prepare for our retirement: a plan that would be easy-to-understand, implement and take into consideration the risks, costs and threats to our financial well-being.
And, I’m also just wandering the financial “forest” and trying to see the trees… to decipher what the future may hold, how best to make the most of what little I have, how to capitalise on what little knowledge and resources I have. So, I’m also just seeking and striving to learn…
We, as ordinary Singaporeans and SHCs, must find our own personal ways to address the financial needs of our retirement and our future. And, we can do that by sharing and giving our thoughts and comments on the issues.
Hi Chris and Kenneth,
Apology for the late reply.
Kenneth @ #10 is correct in saying that dual currency is not like buying lottery ticket. Do not be confused with spot currency trading.
Dual currency involves currency option. That is why strike and interest rates are involved. The interest earned represents the premium for the option. In Chris’ example, 13% is the premium (not profit) for a 2-week SGD/AUD option at strike 0.9220. If Chris were to opt for a 0.9500 strike when spot was trading at 0.9800, the premium would be much higher than 13%.
Kenneth, you may wish to read up on Knock-in and knock-Out to learn more on option trading. I can share more with you at the 18 Nov gathering, if you wish.
Hi, all SHC members,
Eleanor Chan, has answered Chris question 100% correctly.
I had stated in one statement that it this is one type of trade which is an OPTION.
I had played this type and I know its risk.
The premium one paid will reduce or increase with time.
I call this type of trade as akin to buying a lottery.
All novices should keep away from options, whether in equities or FX.
Options are for hedging a position in either stocks or FX.
Under Lim Tiang Soon Profile I had posted a Nov. Currency Trader Mag. in my mail,
at tsoon2008@yahoo.com.sg
GO to yahoo.com.sg website and click mail,
User : tsoon2005
Password : 1abcde
Click on the link and download the mag.
Enjoy,
T S Lim
Hi guys!
Now we’re sharing!
Eleanor: i’d love to have the discussion with you on Dual Currencies… but I cannot attend the coming Monthly Meeting. A rain-check…maybe.
Each person has his/her own way to address his/her personal investment need… it may be by using stocks, unit trusts, forex, options, dual currencies, or just simple fixed deposits in a bank.
The objectives and time frames are also different for different age groups. And risk appetites may also differ.
I don’t have a trading mentality and prefer the safer route of longer term investing. But I don’t discount the use of shorter term strategies and actively explore other means of making my money work especially in these volatile, dangerous times.
Forex and options trading can give a reasonable return if you know how… and implement risk control and money management. The danger of over-leveraging and greed persists as with all investments.
So each person (or SHC member) has his/her favourite approach to achieving his/her financial goals. And some have built a better mouse-trap… so let’s just open our minds and share.
Hi TS & Eleanor,
Thanks for the explanation, I have a better understanding of Dual Currency now. The initial premium was 15% at the strike of 0.95. But I insisted on staying in Sin so the
strike was lowered and the corresponding drop in premium.