Big boy's toy, III -- numbers crunching

Going back to psychology 101 - Maslow's hierarchy of needs.



Based on personal experience, the itch and temptation are the strongest when we navigating through love/belonging and esteem stages. Materially, we are neither too poor nor too rich. I constantly getting peer pressures when they upgrade their house or car. In a modern society, the instant gratification will be granted the moment we produce our annual tax filling to a banker. They love our business.

I constantly getting questions why I don't upgrade my car. My constant reply to them was NO MONEY and they will just laugh. However, my real reason is this. Let's say, I woke up in a morning in extreme good mood and decided to reward myself and also to put all the nagging to rest, I decided to get a Lancer Evolution 2008. Look at this, what a beauty.




Then I walk into a showroom and they produced me this quote, a price tag of $ 323,888, insurance inclusive. Don't be concern with the insurance cost of $8,451, you can afford it. After all, a decision has been made!



I put down a deposit of $ 73,888 and take a loan of $250,000 ($323,888). To save you all the troubles, here's a link of a calculator on how much you should pay monthly for the next 9 years with 3% p.a. interest(I'm sure we all can get a better bargain than this but for the purpose of this exercise, just accept it). My monthly instalment will be $ 2,939.81.



http://www.maybank2u.com.my/calculator/form_hire-purchase-calc.html

Congratulations. I'm now a proud owner of my dream car but then........... I feel a little concern now. What?!! Why?%#@

For the next 9 years, based on 10% return p.a., my $ 73,888 will turn into $174,224.04. If I invest my monthly $2,939.81, it will turn into $ 518,888.70. If I add both of them together, this beauty cost me $ 693,112.74 and not $391,387.48($73,888+12x9x2,939.81). And definitely not $ 323,888. This trick works all the time, the flame of my passion will just extinguish everytime I run this exercise. Everytime.

........and the bond between my "legend" and I will just get stronger each time.

Big boy's toy, II

Nowsaday, it's more beneficial to talk about car rather than ended up with some other unhealthy activities, err the one that got TW into troubles. I learned a bit more about car as I'm spending more time in workshops fixing my old car over the last few years. Don't get me wrong though, my "legend" has beaten hell of a lot expensive cars when they provoked me. One of the things that certainly will turn me off when someone flashing me from behind or tailing me very closely when I'm maintaining a reasonable speed. I would say, most of those guys were embarrassed and I think their egos were bruised when I authorized my "legend" to reciprocate rudeness. If you want to know a character of a person, give them power and see how they handle it. I would say, most of the guys in the expensive cars will not take it well when you start to rev and they will definitely trying to beat you. Well, that's not my main intention of posting how to start a pissing contest. After all, a misfiring on an open street race can cause casualties. What is the point of racing when you are just trying to prove a point that you are faster than the other guy(a line from the Fast and Furious: Tokyo drift)?

Honestly speaking, one of the cars that I like and better engineered is Proton Satria GTi 1.8-litre(not my "legend"). They don't produce this line anymore and replaced with Satria Neo 1.6-litre. The original Satria GTi engine was 4G93p originated from Mitsubishi Lancer GTi. If you asked kaki motor, most of them will give you a thumb up on this car. One of our family old mechanics who has been very stingy on praises about Proton's car was impressed by this car too. I think a used Satria GTi would cost around slightly on the higher end of $ 20 k. One got to exercise cautiousness as most of these cars have been modified heavily - could be done rightly or wrongly - you may inherit with gold or shit. I was trying to get one of these but I've not been able to get approval from "minister of domestic affair" a.k.a. Mrs. Turtle.

You will be amazed by the power generated by this little tiny machine that matching a 2-litre Perdana V6. With some tuning, they claim the car can generate about 225 hp, power that's matching those bigger capacity cars. You will definitely can smoke those of lower end of Mercedes or BMWs. I'm not trying to start car class war here but demonstrating a point of what you can get by putting another $ 20 k plus to get the similar power that those guys paying through their nose for engineering, branding and marketing activities. However, we also need to be humble to accept the fact that there is a limit we can push - it will be pretty hard to beat a Lamboghini, Porshe, Nissan Skyline GT-R or Lancer Evolution. Don't waste your money, time and energy to chase after the mirage.

I found one of the old magazines for your reference.






A word of caution, car modification "hobby" can be highly addictive - just like smoking and or gambling. Once you start, kicking this "bad" habit can be very difficult. You will normally start with some very basic stuffs like face-lift, making a few noises by modifying your exhaust systems or adding K&N high-flow filter or cold air induction. As you get thrilled with the power of your 'beast", you want more. You definitely want more. Welcome to the wonderful world of horsepower thirst junkie -- you will want to rebuild your engine, adding ECU, upgrading brakes, suspension, turbo-charged your engine, and the list can goes on. You may ended up looking for bigger capacity engine. Most of the guys that I know normally ended up selling their cars at a discount because of law of marginal diminishing return is working against them. Just two weeks ago, one my regular mechanics asked me whether I'm interested to buy from one of his customers a modified MIVEC turbo-charged V6 engine come with very nicely painted car plus body kits, 17" sport rims, adjustable suspension, etc ....... at a ridiculous bargain price. The owner basically just wants to recover some of his modification cost only.

It's getting late now, will continue the story another day. Good night.

A big day -- unemployment down, dollar up, gold down

It was a big day yesterday, I watched the US markets till mid-night before I switched off. Unemployment trend is peaking and there is an obvious sign of turning down. Good news on the US economic data translated to stronger dollar. You can see from the obvious hockey stick chart. The dollar bears got squeezed hard yesterday. I have closed out my gold related shares yesterday and looking to re-enter later on.

Dow Jones Transportation index which has been stubornly lagging behind the Dow Jones Industrial index started to move strongly. Banking, small caps, semiconductor, and etc started to move. Commodity producing countries like Brazil, Canada, Australia got hit. Export oriented countries like Japan, Taiwan, Hong Kong(China linked) got a boost. However, I would accumulate on weakness on commodity stocks after the guys exited their dollar hedging trades. At some point, the market will change their mind saying, hey stronger US economy = stronger global economy = stronger demand for commodity, let's start buying commodity again. Let's see how people going to react on Monday. Plantation stocks and defensive/dividend yield stocks may come under a bit of pressure. Will keep an eye on finance, small cap, consumer, semiconductor, O & G, airline and even automotive related stocks.

Big boy's toy, I

Just a weekend topic diversion. I saw very nice tag line on Astro the other day, don't ask the price, you can't afford it. Most of us would dream to drive in a Lamborghini, Porsche or cheaper versions Mercedes SLK or at least a Nissan Z350. We would love to have that feel of going from 0 to 100 in 4.3 seconds or at least 6 seconds to leave your "competitors" in dust. To do that, power is definitely a big factor, the muscle cars can do it in 4 seconds are in the range of 500 hp plus while the "babies" like Mercedes SLK 350 or Nissan Z350 have only 230 hp @ 6000 rpm ranges.

I always wanted to ask those guys in these cars what is their net worth, not to insult them, but at least inspire me to work hard for it. Since I have no friends like that to ask I would have rely on my estimate: at what level of my net worth, I would buy a toy like that. At the back of the envelope calculation revealed to me it has to be between 20-30 million to own a supercar or 5-10 million to own one of those "babies".

Since average working man or women will find it very difficult to achieve those numbers, do we have other alternatives? Before I posting more opinions, let me qualify myself first, I'm not an expert in this area nor as a personal finance consultant. I'm sure that I'm a lot more "senior"(not "older") than most of my readers, coming out to share about this topic. This is one of the areas that can leave a hole in your pocket if you are not careful. Just skip if you don't like what I post OK? just come back another day on stock market topics. Jangan mareh. Got to get back to my desk and work now, see you over the weekend. TGIF.

Bursa rejects request to cancel error trade for Ge-Shen at 4c each

Long time ago, when I first learned about the law, one very important principle of law that I will never forget: Ignorantia legis neminem excusat . Nope I don't speak Latin, just pretend. That phrase simply means ignorance of the law is no excuse. You can't say I don't know about content of a contract that you have just signed on the dotted line or you don't know Singapore government is going to rotan you when you are vandalizing their public property.

When I first learned to play chess, the first rule my teacher taught me was touch-move, you must make a move on the piece of chess that you touch. No if, no I'm sorry, a decision is made live by its consequences.

When I first learned to gamble, I locked my last $ 100 in my room. What the hell is that for? In case you lose all your money, you still have enough money to take a bus to go home.

What's my point you begin to wonder. What Bursa did to reject a request to cancel an erroneous transaction was a right one.

(TheedgeMalaysia)KUALA LUMPUR: Bursa Malaysia rejected a request on Thursday, Dec 3 to cancel an erroneous transaction involving 200,000 shares of Ge-Shen Corp Bhd as the shares were transacted at four sen each.

The transaction was executed at 9am.

At 11.42am, Ge-Shen share price was down six sen to 27 sen with 301,000 units done.

If we want to execute a trade via online, so be very careful. It's an important lesson for all. Alternatively, just call up the broker to do it for you -- if it is involving a large transaction.

Speaking of living by consequence caused by own doings, Tiger Woods made a big mess out of his life. We are in no position to judge him, but he handled this much better than Bill Clinton. Hope he can do what he does best, get on the green in two -- from five foot tall grass, though I was wondering why got ourselves landed in tall grass in the first place?

Dec. 2 (Bloomberg) -- Tiger Woods, the world’s top-ranked golfer, said he let his family down with “transgressions” and hasn’t been true to his “family values” amid reports of extramarital affairs involving him.

Woods, 33, made the comments in a statement posted on his Web site today, less than a week after a single-car accident outside of his home led to scrutiny of his private life.

“I have let my family down, and I regret those transgressions with all of my heart,” Woods said. “I have not been true to my values and the behavior my family deserves. I am not without faults and I am far short of perfect. I am dealing with my behavior and personal failings behind closed doors with my family. Those feelings should be shared by us alone.”

Dubai scare -- an opportunity or a threat ?

(FinanceAsia)Everyone thought Dubai was past its debt problems after Abu Dhabi bailed out the leveraged emirate last February. Everyone was wrong.

Last Wednesday, the government of Dubai asked Dubai World's creditors for a standstill agreement on interest payments on the company's $59 billion in debt. Government-owned Dubai World controls many of the emirate's corporations, including DP World (the world's fourth largest port operator), Emaar (developer of the 160-storey Burj Dubai) and Nakheel (developer of the Palms).

"Dubai, with sparse oil reserves, built its fortunes on real estate and financial services in recent years, borrowing heavily to finance mega projects, including three man-made islands shaped as palm fronds," said John Sfakianakis, chief economist at Banque Saudi Fransi. "Dubai was above all an interesting real estate play that benefited the early entrants, but which turned out to be a bubble that burst."

This latest development is in sharp contrast to what analysts said in February after the central bank of the United Arab Emirates (UAE) stepped in to underwrite the first $10 billion tranche of a $20 billion bond programme to shore up Dubai's debt. Back then, analysts said the worst of Dubai's problems had past and that the support by the central government was "unequivocal".

http://www.financeasia.com/article.aspx?CIaNID=117735

When I made a small highlight about Vietnam stock market was down and in a bear market territory, it's a signal of beginning of corrections for emerging markets. Dubai scare should not come as a surprise since they have been on top of the world, building tallest building to tell the world that they are the greatest. They feel they are invincible as they got a lot of wealth(ass-u-me government will bail them out). Everytime you think like that, just like the person build the Petronas Twin tower, the mighty will be grounded. Dush!, falling hard.



Now the global lumping effects will spread, label anything to do with emerging-property assets as high risk unjustifiedly: look at property counters like UEM Land, SP Setia, etc...... I see an opportunity to pick up a few of them for short term trade, do you?

Turtle Portfolio Update - December 2009

Added $888 saving for the month of December '09. Capital stands at $21,732, Return on Capital = 9.35%.

We are moving into favorable months after getting through October, bailing out is not something on my mind at all. On very short term outlook, this week should be very favorable statistically. After holidays break senior traders should be back at their pits, we should see some actions soon.