Archive for July, 2009

Reuters via Tacloban Times – News today that local born Wilson Justo, currently residing and operating out of Australia, completed the first stage of a major new housing development in the bustling port of Pinamopoan, on the northern coast of Leyte Island in the Philippines.

His plan is said to include a number of luxurious villa style mansions, to be built overlooking the ocean. As is often the case with big property magnates, to promote the development, he has taken the title on the first building himself to use as a residence for local members of the Justo clan.

On the strength of this first property, he is currently seeking funding to convert more of the older style residences in the area to modern dwellings. Sources close to the project say the aim is to turn the town in to a Monaco of the East, with a casino and resort style hotel on cards if sales go well.

GFC

Welcome everyone to the new 21 Wilson Street!

Over the past year, our world has been shattered by the Global Financial Crisis or better know as the “GFC”. It has been considered the most severe crisis since the Great Depression. Everyone has felt the slash of the GFC whether you are the US Government, an individual living in the remote country of Africa or a business operating in Asia or Europe!

However, there are a lot of things that we have learned out of the GFC! Can you think of any? I have listed below few things on top of my head. Feel free to add anything in the comments.

Things I learned from the GFC:

1. The higher the risk, the higher the losses and forget about the return!

The basic premise of investing is that “the higher the risk, the higher the return”. During the GFC the priority of investors is to get out from deals immediately to limit losses or prevent bankruptcy! Numerous companies didn’t survive. Lehman Brothers and Merrill Lynch to name a few.

2. Savings is important

Saving for rainy days is not enough. You should save for the storm. Some jobs have disappeared and unemployment around the world has risen to near all time high. Workers who have been fired can’t easily get new job. Savings of equivalent to one year of salary is ideal as they say but sounds unattainable.

3. Loyalty to employers is an illusion!

I have heard from friends that some people in their companies who were really hardcore and technically the best in their profession were still sacked. At the end of the day business is still business, they will do everything to survive even firing good people. Thus, during boom time employees should not be blamed from jumping to another company when it offers higher pay and good career options!

4. Regulators sucks!

The main cause of the GFC is the subprime mortgage lending issues in the US and some complex financial transactions that regulators fail to regulate. Most brilliant people work in the private companies and they would design things to escape regulations! But when bad things happen, they are ready to make bailout which means paying for their dumbness!

5. Cash can be a risky investment

In the investment world, cash is cash and it has no risk. But if you keep your cash in bank you may still end up losing it with most banks in the past year asking bailouts others didn’t survive. Most governments offered deposit guarantee to certain amount.

6. Keep it Simple

Warren Buffet said don’t enter into a business that you don’t understand. Most people and businesses that have gone bust were inexperienced in the deals that they have entered into.

7. AAA credit rating is unsafe

Who would imagine US and British governments are in the brink of defaulting on their treasuries? How much more other governments?