Posted by Icon8888 > 2016-02-20 17:13 | Report Abuse

It is impossible to explain to a man born blind how red and green will look like

If somebody has never experienced compounding before, he wouldn't understand how it works

Posted by Desa20201956 > 2016-02-20 17:18 | Report Abuse

Compounding is a lie unless you are talking about fixed income....low rates of fixed income like AAA bonds.

When people talk about compounding and use Warren Bufett as example, it is also a LIE....It is some thing no one can do, only other people can do ....it is just a guilt thing making everyone feel guilty.

Warren Bufett is a statistical outlier, a one in a million and probably not repeatable. Some other people can repeat that kind of performance but most likely not WB. If you ask WB to be young again see if he can repeat it? I bet he cannot repeat it.

The only way to have compounding from equities is to be large like EPF, invest across all continents, across all asset classes and stay invested at all times


3iii > Feb 20, 2016 05:04 PM | Report Abuse

Desa20201956 I am interested to learn more from you why you think that "compounding" is not possible in the stock market for some people. Your personal experience has certainly led you to conclude so. Please do share generously.

Posted by Desa20201956 > 2016-02-20 17:21 | Report Abuse

ask a young man to compound from the stock market is a Big Lie.....it is an even bigger Lie to ask a young man to compound by buying half bankrupt penny stocks like the ones Icon focuses on.



Icon8888 > Feb 20, 2016 05:13 PM | Report Abuse

It is impossible to explain to a man born blind how red and green will look like

If somebody has never experienced compounding before, he wouldn't understand how it works

Posted by 3iii > 2016-02-20 17:25 | Report Abuse

Desa20201956 It just doesn't sound right to say that compounding is a lie. What you probably mean is that for many, compounding their wealth in the stock market maybe very elusive. There must be reasons for this.

However, investors the like of the majority shareholders of PBB, Nestle, IOI, YTL, Genting Group, Utd Plantation, and many more, have been compounding their wealth over many long years. Do you disagree? What makes them so different that their actions cannot be copied by others?

Posted by Icon8888 > 2016-02-20 17:30 | Report Abuse

I am now 80 plus. I have been compounding since I was thirty years old.... And it is more than 5% per annum ...

Posted by Bercham11 > 2016-02-20 17:30 | Report Abuse

Anybody who has a EPF account will definitely experience the magic of compounding.What is so difficult to understand?

Posted by Desa20201956 > 2016-02-20 17:31 | Report Abuse

Portfolio Theory.

Icon, Chong...etc and all the millions of gurus and sifus of the stock market.

everyone calls himself a sifu....Have they thoroughly read a book on modern portfolio theory?

Have they even taken a course on Finance or read thoroughly the recommended books by CFA? or even familiarize themselves with the modern thinkers on Portfolio Theory?

I dare say all these i3 sifus have read some popular books they obtained from their local book stores....but actual Textbooks would be too dull, too boring for them.

Posted by Icon8888 > 2016-02-20 17:31 | Report Abuse

For people that made a lot of money from stock market, for example, KC, they don't have to worry about money

If you ask him to Poh lan pah Rich man, he will ask u to fly kite

That is the power of compounding

Posted by Desa20201956 > 2016-02-20 17:31 | Report Abuse

the best way to talk about compounding in Malaysia is EPF.

Bercham11 > Feb 20, 2016 05:30 PM | Report Abuse

Anybody who has a EPF account will definitely experience the magic of compounding.What is so difficult to understand?

Posted by Desa20201956 > 2016-02-20 17:33 | Report Abuse

but you are siaw ren....what does a siaw ren know about how the eagle flies?


Icon8888 > Feb 20, 2016 05:31 PM | Report Abuse

For people that made a lot of money from stock market, for example, KC, they don't have to worry about money

If you ask him to Poh lan pah Rich man, he will ask u to fly kite

That is the power of compounding

Posted by Icon8888 > 2016-02-20 17:33 | Report Abuse

A retired accountant is different

He has to Poh lan pa

Hand stop mouth stop

Posted by 3iii > 2016-02-20 17:35 | Report Abuse

Those who have been invested in ASB fund have been compounding their capital averagely about 8 to 9% per year for many years.

The stock market has returned averagely about 10% per year over the long term; however, the market in the short term can be extremely volatile.

Those who seek to compound 7% or 8% per year averagely for the long term in the stock market should be able to find suitable investments in our local stock market.

Those who are looking for higher returns may find that their effort and hardwork maybe rewarded with higher returns but often also, they might be disappointed.

Posted by 3iii > 2016-02-20 17:37 |

Post removed.Why?

Posted by Desa20201956 > 2016-02-20 17:38 | Report Abuse

let me give you an example. Lets say 30 years compounding.
The end result after 30 years is heavily dependent upon the performance of the first few years. The first few years you go negative, you can forget about the other 30 years.


3iii > Feb 20, 2016 05:25 PM | Report Abuse

Desa20201956 It just doesn't sound right to say that c

Posted by Desa20201956 > 2016-02-20 17:40 | Report Abuse

Poh lan pa

icon...those 3 words are etched in your memory for whatever reason are your words....they got nothing to do with me.

Posted by Desa20201956 > 2016-02-20 17:42 | Report Abuse

these are special cases because they earn a lot of monopoly money from the government.


3iii > Feb 20, 2016 05:35 PM | Report Abuse

Those who have been invested in ASB fund have been compounding their capital averagely about 8 to 9% per year for many years.

Posted by Desa20201956 > 2016-02-20 17:44 | Report Abuse

Portfolio Theory.

Icon, Chong...etc and all the millions of gurus and sifus of the stock market.

everyone calls himself a sifu....Have they thoroughly read a book on modern portfolio theory?

Have they even taken a course on Finance or read thoroughly the recommended books by CFA? or even familiarize themselves with the modern thinkers on Portfolio Theory?

I dare say all these i3 sifus have read some popular books they obtained from their local book stores....but actual Textbooks would be too dull, too boring for them.

Posted by kcchongnz > 2016-02-20 17:47 | Report Abuse

Posted by Desa20201956 > Feb 20, 2016 04:47 PM | Report Abuse
of course, I am an accountant. A CPA to be exact.
There are lots common wisdom and a lot of lies.
Telling a young man to compound his wealth in the share market is a conventional wisdom and is also the biggest Lie there is.

=======================================
Tell us frankly, are you really an accountant?
Posted by Desa20201956 > Feb 20, 2016 04:51 PM | Report Abuse
There is no compounding unless it is globally diversified, diversified across all asset classes and stay invested at all times and a target return of say 5% pa......then we can talk about compounding.

Posted by Desa20201956 > Feb 20, 2016 05:38 PM | Report Abuse
let me give you an example. Lets say 30 years compounding.
The end result after 30 years is heavily dependent upon the performance of the first few years. The first few years you go negative, you can forget about the other 30 years.


I seriously doubt your knowledge and ability in accounting, even simple accounting.

Posted by tabularasa > 2016-02-20 17:49 | Report Abuse

Desa,
A very good point. I remember a presentation given by a fixed income fund manager last year (charity event in which KYY/Salvatore Dali spoke) - he basically says that an average return of 7% in fixed income can beat an average return of 10% in equity, due to the fact that return on bonds are consistency compounded, whereas equity will have its ups and downs.

For the record, I have always invested in 100% equity. Time to change sell some shares for a fixed income fund? Any good one to recommend?

A fellow chartered accountant


Desa20201956 let me give you an example. Lets say 30 years compounding.
The end result after 30 years is heavily dependent upon the performance of the first few years. The first few years you go negative, you can forget about the other 30 years.

Posted by kcchongnz > 2016-02-20 17:50 | Report Abuse

Posted by Desa20201956 > Feb 20, 2016 05:31 PM | Report Abuse
Portfolio Theory.

Have they even taken a course on Finance or read thoroughly the recommended books by CFA? or even familiarize themselves with the modern thinkers on Portfolio Theory?

I dare say all these i3 sifus have read some popular books they obtained from their local book stores....but actual Textbooks would be too dull, too boring for them.


Well if you wish, we can debate about modern portfolio theory or any matters relating to CFA here. You an accountant, and me an engineer, a civil engineer.

Posted by 3iii > 2016-02-20 17:50 |

Post removed.Why?

Posted by Desa20201956 > 2016-02-20 17:55 | Report Abuse

Chong
The only thing you know how to do in a debate is insulting.
Address the points I raise. Forget about me.
You know why Index Funds are so popular? They are popular because it is only when it is sufficiently diversified that people can start to talk about compounding.
========================================================
I seriously doubt your knowledge and ability in accounting, even simple accounting.

Posted by Tom > 2016-02-20 17:56 | Report Abuse

dikhead desa。。。。。p“kyy”lp

Posted by kcchongnz > 2016-02-20 17:59 | Report Abuse

Posted by Desa20201956 > Feb 20, 2016 05:55 PM | Report Abuse
Chong
The only thing you know how to do in a debate is insulting.
Address the points I raise. Forget about me.
You know why Index Funds are so popular? They are popular because it is only when it is sufficiently diversified that people can start to talk about compounding.
========================================================
I seriously doubt your knowledge and ability in accounting, even simple accounting.


Talk about insulting.


Posted by Desa20201956 > Feb 19, 2016 05:35 PM | Report Abuse
If I didn't know I could have mistaken you for a unit trust salesman.........lol
KYY is a business, tycoon. Businessmen and tycoons play by a different rule book.


Ok, let us get into business.

Why do you mix up diversification with compounding? A new accounting concept?

Posted by kcchongnz > 2016-02-20 18:05 | Report Abuse

Posted by Desa20201956 > Feb 20, 2016 05:44 PM | Report Abuse
Portfolio Theory.

Icon, Chong...etc and all the millions of gurus and sifus of the stock market.

everyone calls himself a sifu....Have they thoroughly read a book on modern portfolio theory?

Have they even taken a course on Finance or read thoroughly the recommended books by CFA? or even familiarize themselves with the modern thinkers on Portfolio Theory?



What modern portfolio Theory got to do with Diversification?

What do you actually understand of Modern Portfolio Theory?

Posted by Icon8888 > 2016-02-20 18:16 | Report Abuse

I have been reading Harry Markowitz when I was still growing pubic hair... No big deal... Useless theory about diversification

KC can explain diversification better.

only katak bawah tempurung like Desa is proud of quotng it ...

Posted by Icon8888 > 2016-02-20 18:20 | Report Abuse

Efficient frontier, long and short.... Zzzzz

People like KC (and I , and many others) has real life battle exoerience. Desa read a few books and think he knows all

Po Lan lah - he knows all

KC and I ride horse also cannot catch up...

Posted by Desa20201956 > 2016-02-20 18:47 | Report Abuse

Jill , evidence like Nestle or any performing performing stock or any performing stock picker/ investors is just that....it is not theory, it is called pick and choose, it is data mining.

No guarantee of repeatability,

A few good years, millions become sifus Internet sifus.....I just give them my two fingers as I know all these sifus are armed with nothing but a few tips they gotten from some popular books from their local book stores.

Posted by Icon8888 > 2016-02-20 18:51 | Report Abuse

I think u r simply sour grapes

U mentioned before u were out of market long time

Apparently u missed the past few years boom

That made u jealous until green

I read u like reading a book

Posted by PlsGiveBonus > 2016-02-20 18:53 | Report Abuse

Basically I can get some 8-9% annual return solely on dividend itself, but obviously not from the local plc, you get 8-9% Local currency which the inflation rate is higher than your return and your return received also a depreciating currency which is getting very cheaper, is your return higher if it was compare to return of 7-8% at USD currency? Also the fee and individual tax incurred when you realize your return, it is overall a waste of effort to buy when local market isn't getting any cheaper now. The reason behind the strong local market is also a " buying time" strategy planned by our financial institution, they can have many different tax to support the local market, I will not be surprised if the authority decide to increase the tax to 50-75% just for the sake of supporting a falling market system, who is the winner when the market is strong? The director of this country. Who is the director in this local market? Some special privilege individual. It will finally make sense we are still paying tax to feed the higher up in a different way.

Posted by Desa20201956 > 2016-02-20 19:01 | Report Abuse

Not to say all these sifus don't serve a function in society. They all do. In America, on a per capita basis, America got even more sifus, Consultants, advisers, and salesmen and what not.

I got angry only because they started to insult me first instead of addressing the points I raised.

If you read through this thread again, you will notice I started politely...only pointing out the reality of life instead of just some cliques like compounding..

I have things to add to the discussion , if you don't agree, that is your problem....

But from there to insult by saying I am not Accountant or what not is just unacceptable behavior. Or Poh lan pa....it is just unacceptable behavior.

Posted by Desa20201956 > 2016-02-20 19:09 | Report Abuse

I dare say all these i3 sifus have read some popular books they obtained from their local book stores....but actual Textbooks would be too dull, too boring for them.

Look at you, icon.....talk about Modern Portfolio theory, you fall asleep already.......proves my point isn't it?

Posted by PlsGiveBonus > 2016-02-20 19:17 | Report Abuse

Keep calm and pay more taxes
The more money you keep the tax collector will come knock on your door.
Can you pay gold if the tax collector come to you? May be yes.

Posted by Icon8888 > 2016-02-20 19:18 | Report Abuse

I am against u because u Poh lan pah

I found that despicable

Period

Posted by Desa20201956 > 2016-02-20 19:21 | Report Abuse

Asb, Asm. making 9-10% pa

That takes me to my favorite topic.

Every Tom dick and Harry company keep issuing private placement shares at a discount, Special issues at a discount.....finally it is the ordinary shareholders who has to pay for these excesses and leakages.

Posted by 3iii > 2016-02-20 19:24 | Report Abuse

1. Compounding. 2. Buy wonderful companies at bargain prices. 3. Reasonable (not oversized) return expectatuon 4. Diversify (do not over-diworsify) 5. Improve your investing knowledge and develop a sound philosophy.

I cannot disagree with these principles.

Posted by Desa20201956 > 2016-02-20 19:26 | Report Abuse

Talk about Portfolio theory, you fall asleep already.
Your favorite topic is Poh Lan Pa....

For your information, I don't even know what it means, I can only guess. I am not Hokkien, I am Cantonese....oh....originally Cantonese from Ipoh actually., now in KL.




Posted by Icon8888 > Feb 20, 2016 07:18 PM | Report Abuse

I am against u because u Poh lan pah

I found that despicable

Period

Posted by PlsGiveBonus > 2016-02-20 19:30 | Report Abuse

Time to teach this financial system a lesson,
It is already failed by having so many empty promise, the tax the ipo the tppa the debt the derivative, the virtual product, many non existence financial product, they are getting too big to cover with hand now and it will start to leak, when the hole getting bigger it spill all over the place, and washing away all those scams.

Posted by duitKWSPkita > 2016-02-20 19:30 | Report Abuse

Desa bro,

Don't underestimate them. They are professional and technically sound in this matter...

Be fren fren la.. Don't debate la. If all wan to challenge I also can challenge 2016's amendments in CFA syllabus...but serve wat purpose???

Posted by Icon8888 > 2016-02-20 19:31 | Report Abuse

I don't care whether u r from Ipoh

You are despicabke and you son shame of u

Posted by smartly > 2016-02-20 19:35 | Report Abuse

aiyo, why u all waste so much time arguing...?

argue until cow come home, green face, vein burst also no one will kesian you, hurting yrself only, at the end you win so what ??

can earn you big money or not ?

put this effort to recommend more good stocks lah !!!
make everyone here happy mah, mind you !!!!!

Posted by coolinvestor > 2016-02-20 19:41 | Report Abuse

I am a CFA graduate. However I was an engineer by profession. Took up CFA and passed levels 123 over a period of 5 years. Failed 2x hence need 5 years. Compound interest n modern portfolio theory are 2 different things.

Compound interest occurs when the interest that accrues to an amount of money in turn accrues interest itself.
Hence u start younger u gain better chances

Modern portfolio theory(MPT) is a theory on how risk-averse investors can construct portfolios to optimize or maximize expected return based on a given level of market risk, emphasizing that risk is an inherent part of higher reward. Also called "portfolio theory" or "portfolio managementtheory."

These are cut n pasted. No need to argue about this things. Unless u are a multi-billion fund u just do not have the resources to calculate proper variables needed n generated. We just make do with Wat we have

Posted by PlsGiveBonus > 2016-02-20 19:41 | Report Abuse

1930 great depression
I bet no one has the fortune to witness it before
But now we can witness it once again

Posted by Kevin Wong > 2016-02-20 19:41 | Report Abuse

There are those who believe that its impossible to time, trade, outsmart mart...they stay almost fully invested in quality/growth/value counters at all times. Some have no patience, while many believe they could jump in and out of market, make short term speculation...
Well...so long make $$, happy and harm none...than your method is correct and sound.

Good luck everybody!

Posted by Desa20201956 > 2016-02-20 19:42 | Report Abuse

Jill
All these Internet sifus like Icon and Chong....granted they read a few popular books on investments and have some thing to contribute.
But from there to insult me is another thing.
Talk about stock market and compounding.....got only hazy ideas about beta, alpha and the many many measurements about risks and returns per risk, no idea.
How people measure performance of funds? No idea.



Posted by 3iii > Feb 20, 2016 05:04 PM | Report Abuse

Desa20201956 I am interested to learn more from you why you think that "compounding" is not possible in the stock market for some people. Your personal experience has certainly led you to conclude so. Please do share generously.

Posted by Icon8888 > 2016-02-20 19:42 | Report Abuse

Engineer usually do well in stocks

Accountants tunnel vision

Posted by PlsGiveBonus > 2016-02-20 19:47 | Report Abuse

Bank is running out of money
Who will defend the recession when bank has no money?
Yes, everyone will play their role
Pay more tax or pay more tax, you got no choice.

Posted by Icon8888 > 2016-02-20 19:51 | Report Abuse

All these theories I read until can memorize

After that test it out in bursa. Found them irrelevant . throw them aside

Desa treated them like precious

That is the different between an beans conunting accountant and a stock warrior with real battle field experience (which is me)

Posted by Desa20201956 > 2016-02-20 20:03 | Report Abuse

Icon and your Poh Lan Pa....that is all you seem to know.
But I know you as the half bankrupt penny stocks specialist.
Telling grand mother stories
End of story

Posted by Desa20201956 > 2016-02-20 20:26 | Report Abuse

Desa: says....Compounding is a lie unless you are talking about fixed income....low rates of fixed income like AAA bonds.

Cool investor: says....Compound interest n modern portfolio theory are 2 different things.

Says practically the same thing.
But I get insulted, not an accountant, don't even know simple accounting, Poh LAN Pa.

Well.......if this is not attacking the messager and not the message, I don't know what is.