Warren Buffet’s Letter To The US Government

Warren is not only one of the richest persons in the world, he is also one widely respected as some a model of integrity in corporate America. A couple of days ago he wrote a piece that got featured on the opinion pages of the New York Times entitled “Pretty Good For Government Work”. Basically Buffet is thanking the American government for their commendable efforts during the recent financial crisis where they reacted quickly and effectively when they usually do not. I have included the letter in it’s entirety for you to read below. I think it is a good read especially as this is coming from Warren Buffet who is widely respected.

DEAR Uncle Sam,

My mother told me to send thank-you notes promptly. I’ve been remiss.

Let me remind you why I’m writing. Just over two years ago, in September 2008, our country faced an economic meltdown. Fannie Mae and Freddie Mac, the pillars that supported our mortgage system, had been forced into conservatorship. Several of our largest commercial banks were teetering. One of Wall Street’s giant investment banks had gone bankrupt, and the remaining three were poised to follow. A.I.G., the world’s most famous insurer, was at death’s door.

Many of our largest industrial companies, dependent on commercial paper financing that had disappeared, were weeks away from exhausting their cash resources. Indeed, all of corporate America’s dominoes were lined up, ready to topple at lightning speed. My own company, Berkshire Hathaway, might have been the last to fall, but that distinction provided little solace.

Nor was it just business that was in peril: 300 million Americans were in the domino line as well. Just days before, the jobs, income, 401(k)’s and money-market funds of these citizens had seemed secure. Then, virtually overnight, everything began to turn into pumpkins and mice. There was no hiding place. A destructive economic force unlike any seen for generations had been unleashed.

Only one counterforce was available, and that was you, Uncle Sam. Yes, you are often clumsy, even inept. But when businesses and people worldwide race to get liquid, you are the only party with the resources to take the other side of the transaction. And when our citizens are losing trust by the hour in institutions they once revered, only you can restore calm.

When the crisis struck, I felt you would understand the role you had to play. But you’ve never been known for speed, and in a meltdown minutes matter. I worried whether the barrage of shattering surprises would disorient you. You would have to improvise solutions on the run, stretch legal boundaries and avoid slowdowns, like Congressional hearings and studies. You would also need to get turf-conscious departments to work together in mounting your counterattack. The challenge was huge, and many people thought you were not up to it.

Well, Uncle Sam, you delivered. People will second-guess your specific decisions; you can always count on that. But just as there is a fog of war, there is a fog of panic — and, overall, your actions were remarkably effective.

I don’t know precisely how you orchestrated these. But I did have a pretty good seat as events unfolded, and I would like to commend a few of your troops. In the darkest of days, Ben Bernanke, Hank Paulson, Tim Geithner and Sheila Bair grasped the gravity of the situation and acted with courage and dispatch. And though I never voted for George W. Bush, I give him great credit for leading, even as Congress postured and squabbled.

You have been criticized, Uncle Sam, for some of the earlier decisions that got us in this mess — most prominently, for not battling the rot building up in the housing market. But then few of your critics saw matters clearly either. In truth, almost all of the country became possessed by the idea that home prices could never fall significantly.

That was a mass delusion, reinforced by rapidly rising prices that discredited the few skeptics who warned of trouble. Delusions, whether about tulips or Internet stocks, produce bubbles. And when bubbles pop, they can generate waves of trouble that hit shores far from their origin. This bubble was a doozy and its pop was felt around the world.

So, again, Uncle Sam, thanks to you and your aides. Often you are wasteful, and sometimes you are bullying. On occasion, you are downright maddening. But in this extraordinary emergency, you came through — and the world would look far different now if you had not.

Your grateful nephew,

Warren

Source: NY Times

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Things I Think Would Happen If Quantity Easing Round 2 By US Federal Reserve Comes About

In the recently released minutes of the Federal Open Market Economy meeting, there was signs that the US Federal Reserve might engage into another round of quantitative easing in an effort to jump start the American economy which is still sluggish and to try and solve it’s high unemployment which is around 10% now. Now this is kind of a big deal to everybody as I think that this round of quantitative easing would have some far reaching impacts.

Quantitative easing for a lack of a better word means “printing money”, and this is for all intents and purposes true. What the Fed means when they say they are going to engage in quantitative easing to purchase another round of government bonds and the like is that they would create money out of nothing into their bank accounts and use it purchase government bonds, which then leaves the bond issuer with more money, and in extension the whole economy with more money. This increase in money supply is the thing that now brings the effects I am going to talk about later. Read the rest of this entry »

Invest Fair 2010 In Singapore

Living in Singapore has one very unique advantage of those staying in other parts of the world – you can attend most of the fairs, seminars, conferences and exhibitions organized as Singapore is very small and so it’s very easy to travel around. For example in Malaysia, most of the big talks and conferences are held in Kuala Lumpur, which leaves the majority of Malaysians wanting to attend those events to need to travel extremely long distances just to attend. Read the rest of this entry »

Kishore M Reprimanded By The Monetary Authority Of Singapore

I’m sure that those of you who regularly read newspapers in Singapore would know who Kishore M and his company PowerUp Capital. He is one of the many people who frequently post advertisements in the newspapers regarding his seminars that mainly focus on Forex trading. Personally I believe that the reason Kishore M is so famous is because of how he markets his strategies than the actual strategies itself. I have read many bad reports concerning Kishore M online. Read the rest of this entry »

Want To Be A Good Investor? Then Learn To Save Money

“Invest” according to The Free Dictionary is to “To commit (money or capital) in order to gain a financial return”. What this tells us is that for us to actually invest, and in extension to be good investors, we have to learn how to save money so that we actually have money to invest.

Most, if not all investing activities would require you to commit a minimum amount of money. For example in stocks, you would need to have some savings (free cash) for you to start investing. Read the rest of this entry »

List Of Malaysian Finance-Related Bloggers

Finance-related blogs abound on the internet, however most of them either focus on general financial issues or are focused on countries such as the USA or the UK. If you’re from Malaysia and would like to read about finance-related stuff, check out my list of finance-related bloggers below. These finance-related bloggers blog from anything from the stock market to real estate to affiliate marketing and to personal finance – as we should not limit ourselves to just one avenue to attain financial freedom and financial success Read the rest of this entry »

Get $10 Worth Of Flippa Credits For Free Now

Flippa is a relatively new marketplace website for buying and selling websites and domain names. To celebrate their one year old birthday, they are giving out $10 worth of Flippa credits free – check it out here.

One way of making money is the buying and selling of websites and domains. This is also called flipping. So usually what a “flipper” does is to buy a domain, add value into the site such as having unique content, unique theme, pagerank, traffic and so on and then just sell it on a marketplace. Flippa is such a marketplace for you to do this. Read the rest of this entry »

A Stock Game – The Best Way To Gain First Hand Experience Of The Stock Market

After doing much research and educating yourself, you might feel that you want a more “first-hand” experience of the stock market but yet do not want to risk any of your money by opening a live account. The solution for this is the stock game/stock demo/stock market simulator. Stock games can be categorized into 2 kinds – Those that are offered by banks and brokerage houses, and those offered by other companies that are neither banks nor brokerage houses. The stock games offered by banks and brokerage houses are more useful of the two as you actually get to demo the actual trading platform used in trading which gives the stock game a much more realistic feel about it. The stock games offered by other non-banks or non-brokerage companies are more of a portfolio manager that ranks you against other players. The first kind of stock games are the more useful ones with more benefits and should be the one you choose to gain first hand experience of the stock market and not the second kind.

All stock games will give you a certain amount of money to start the account and allow you to trade. The stock game will then keep track of your portfolio to show whether you are making money or losing money. Also, most stock games only allow you to trade on one market which most of the time is the NYSE (New York Stock Exchange). However, I have identified one stock game that allows you to trade specifically on Bursa Malaysia which I have listed further down below. If you are a Malaysian and is interested in trading the local stock market, be sure to check that out Read the rest of this entry »

List Of Stock Charting Software That Works With SGX And Bursa Malaysia

There are two ways of analyzing stocks – Technical analysis and Fundamental analysis. I myself prefer using a fundamental approach to analyze stocks based on value investing. However, if you want to do technical analysis on a stock you need a good charting software with all sorts of technical indicators such as the Elliot Wave, Fibonacci Ratios plus many others to help you analyze a stock and predict it’s future price movement so that you can make a profit. Here I have a list of stock charting software that not only caters to the US stock market but also both Singapore and Malaysia stock market so that you can do you technical analysis. Some on the list are free while others require you to pay for them. If you do not know where to start, I recommend that you try out ChartNexus and Jstock first as they are can run on 3 operating systems (Windows, Mac OS X, Linux), free and serves their purpose. Read the rest of this entry »

Book Review: Why Are We So Clueless About The Stock Market

Recently I just finished reading an investing book about stocks written by Mariusz Skonieczny of Classic Value Investors LLC titled “Why Are We So Clueless About The Stock Market”. The book is about 165 pages full of easy to understand explanations and concepts concerning value investing in the stock market such as business moats, return on equity and how they relate to how you should value a company. The examples used in the book to demonstrate concepts is surprisingly easy to grasp whilst still conveying important concepts to the stock investing. Read the rest of this entry »