Chinese property prices rising again despite slowing measures

Average residential property prices in China edged upwards in July, the second consecutive month in a row since prices began falling due to government curbing policies.
The average home price in China’s 100 major cities increased by 0.33% compared with June, coming on top of June’s month on month rise of 0.05%, the data from the China Real Estate Index System (CREIS) shows.
Analysts have different views on whether stricter curbs will be imposed. ‘The investigators mainly enquired about the sales situation of existing and new apartments and the working procedures of financial departments, and read related files and data, but didn't give any instructions to us,’ said Chen Zhi, secretary general of the Beijing Real Estate Association.
‘In general the investigators are satisfied with the investigation results, according to my colleagues who were invited to attend an enquiry meeting in Beijing,’ said Liu Yuan, research director at Shanghai branch of Centaline China Real Estate.
The rises come despite government curbs as at a local government level officials try to get around the policies. It is reported that inspection teams have been sent to some cities to check whether local governments are enforcing property curbs.
On a year on year basis prices are still down by 1.77%, the fourth year on year fall since June last year when CREIS first began calculating the year on year change.
Analysts said the move by the central government is intended to find out major causes of the recent recovery of the property market, especially in the big cities like Beijing and Shanghai.
Increased demand for apartments, which has accumulated for around two years since the launch of the government curbs, could be the major cause of the recent market recovery, Liu believes.
He added that the credit policy easing, aimed at stimulating the economy, has also boosted confidence of the property sector.

Why You Should Now Invest in Silver vs. Gold

The price of silver is going to go much, much higher – much higher – over the next decade [relative to gold according to Jim Rogers and I concur. Below are 5 solid reasons why I believe that is the case.
1. Greater Upside Potential: 
Central banks do not own silver, they own gold, so silver is more volatile. When markets for silver/gold go down, silver generally goes more down than gold. However, for the same reason, when inflations occur or with rising industrial demand, silver, since it is more volatile, has potentially more short term upside than gold so if you are a risk-taker at heart, silver is a good choice. Its highs are very high, its lows are very low. If you can buy at a low and sell at a high, you win a lot. Gold, on the other hand, seems more stable, and it is an excellent hedge in troubled times.

2. Growing Industrial Demand:
silver is an industrially useful metal. It does have a volume of industry demand. It is used in plastic design, batteries, mirror coatings, electronics components, medical instruments, water purifiers, solar panels, to say nothing of making silver bullets to fight against the impending werewolf invasion. According to this Kitco report:

The amount of silver used for industrial purposes is forecast to rise to 665.9 million troy ounces by 2015, which would be a 36% increase from the 487 million used in 2010, according to a report from the Silver Institute.
The report identifies 11 still-new applications for silver, ranging from food packaging to radio identification tags to auto catalysts, which collectively could exceed 40 million ounces of industrial demand by 2015, said the Silver Institute.
The report also said that stronger silver industrial demand in the U.S. and Asia will be a key factor driving growth through 2015, with healthy developing-country demand especially in markets such as China and India.

Since silver has a substitution problem just like any precious metal – its available quantity is not unlimited – industry demand will put a premium on silver, unlike gold which has no industry demand worth noting and is priced on pure, ultimate human hype.
3. Lesser Supply:
In the last ten thousand years, huge amounts of both gold and silver have been mined [but] almost all of the gold is still in the market in a purchasable condition [while that is not the case with] silver…Silver’s industrial refuse (silver scrap) is not usually recycled because costs are high compared to the price of the silver recovered. This makes silver more scarce than gold, and that scarcity is increasing.
4. Less Potential Counterfeiting:
Millions can be made by counterfeiting gold but since silver is much less costly than gold, counterfeiting silver is not lucrative. Hence, when you buy silver, there is less risk of getting counterfeit bars and coins than there is for gold.
5. Depressed Silver/Gold Ratio:
 The so-called silver/gold ratio has historically… been roughly 15:1; that is, one ounce of gold trades for 15 ounces of silver. Right now, however, that ratio is well above 50:1; in other words, gold is trading at over three times the price it used to trade before with respect to silver’s price. [Interestingly], however, mints report that they sell almost equal dollar amounts of gold and silver which means that they sell 50 times more silver than gold. [As such, given that] demand for silver is larger by a big margin and that silver is undervalued right now from a historical perspective, [should the silver/gold ratio strengthen]…even by a small factor, silver’s price would increase substantially from current levels

Three Ways to Invest in Silver Before Prices Take Off

It's been a volatile week, but silver prices are expected to rise in U.S. President Barack Obama's second term. Silver futures prices ended the week with a 5.7% gain. Silver for December delivery rose 36 cents, or 1.1%, on Friday to settle at $32.60 an ounce. With the fiscal cliff the next major topic for Washington to tackle, investors are pushing into safe havens like silver and gold to balance market uncertainty.
With that in mind, here are three ways to invest in silver with prices on the rise.  

Invest in Silver with Pan American Silver Corp.

Pan American Silver Corp. (Nasdaq: PAAS), a silver-mining company, reported a 13% increase in third-quarter silver output with 6.3 million from the previous year on Thursday thanks to its recently-acquired Mexico Dolores mine. For the year's first nine months, silver output hit 18.2 million ounces and the company said it's still on track to meet its 2012 full-year guidance of 24.25 million to 25.5 million ounces. Pan American's quarterly adjusted net earnings were $37.6 million ($0.25 per share) on $251.8 million in record revenues but this is a decline from the previous year's $51.5 million ($0.48 per share). The company also announced a fourth-quarter dividend of 5 cents per common share to be distributed in early December.

Invest in Silver with Silver Wheaton

Silver Wheaton Corp.(NYSE: SLW) released its third quarter earnings report on Nov. 5, posting a 26% increase in its attributable silver equivalent production to 7.7 million ounces in the quarter.

But its profit fell 11% to $119.7 million (34 cents per share) and revenue dropped 13% to $185.2 million thanks to a 14% dip in silver prices from the previous year.

Invest in Silver with iShares Silver Trust

iShares Silver Trust ETF (NYSE: SLV), which tracks physical silver, recently hit the $10 billion mark in assets as it trades more than 10 million times daily, reported ETF Daily.

What's interesting about SLV is the fund will take its managed money and purchase silver bars kept in London vaults.

It also appeals to options traders.

Recently as silver prices declined after reaching highs in September, SLV is at its $30 support mark, and this means buyers.

With buying comes higher prices. In the last five trading days, the ETF is up 5.28% and year-to-date, it has increased 17.04%.

These numbers are higher than silver futures and with this ETF, you can have a sense of physically owning silver while still having liquidity.

Look for silver prices to remain volatile but the outlook is good with lots of opportunities to participate in the ride.

Where to buy East European real estate

Now is proving to be an ideal time to buy real estate in Eastern Europe. The current East European real estate prices are affordable, yet home values are increasing at a pace that makes a house or apartment a legitimate investment property.


Whether you're looking for a permanent home, a vacation getaway or a revenue-producing rental property, now is a great time to buy property in Russia, Turkey or Romania. East European real estate can be found for as little as 40,000 euros and industry experts expect market values to increase dramatically in the next 20 years.
Buying Turkish villasTurkey villas are quickly becoming the newest hot spot for Mediterranean vacationers. Turkey is usually less expensive, than the better known vacation destinations like Spain, France or Italy. Turkey is known as having some of the most beautiful coastline where the Mediterranean and Aegean seas come together, making a beach-front Turkey villa an ideal place to live or vacation.
The cost of living in Turkey is between 40-60% less than the rest of continental Europe. Paired with the rising appreciation of 10-15% in the large cities like Istanbul, Ankara and Izmir and 20% or more in the suburban areas, Turkey villas are proving to be an excellent investment. 
Buying Turkish villasTurkey villas are quickly becoming the newest hot spot for Mediterranean vacationers. Turkey is usually less expensive, than the better known vacation destinations like Spain, France or Italy. Turkey is known as having some of the most beautiful coastline where the Mediterranean and Aegean seas come together, making a beach-front Turkey villa an ideal place to live or vacation.
The cost of living in Turkey is between 40-60% less than the rest of continental Europe. Paired with the rising appreciation of 10-15% in the large cities like Istanbul, Ankara and Izmir and 20% or more in the suburban areas, Turkey villas are proving to be an excellent investment. 

Looking for property in RomaniaProperty in Romania isn't being built fast enough to keep up with the high demand for homes. Now is the best time to get into a home or apartment because the value of property in Romania is expected to quadruple in the next 10 years. Some have increased by 25% in just the past four years.
Still, property in Romania is known as being relatively inexpensive when compared to American prices. Couple this with the fact that many Romanian banks now offer a 100% mortgage and property in Romania is well within the reach of many Americans looking for real estate in Eastern Europe.
Buying East European real estate can be easily found to use as a permanent home, vacation spot or even a rental property. Whether you're looking at homes in Russia, Turkey villas or property in Romania, real estate in Eastern Europe is well within your reach.

You can't afford not to invest in China, despite the country's problems

The dramatic fall from grace of former political high-flier Bo Xilai, the two-week walkabout of leader-in-waiting Xi Jinping, rising tension with Japan and the launch of the country’s first aircraft carrier mean the run-up to November’s leadership transition could hardly be more fascinating – or worryingly uncertain.

Meanwhile, for investors in the Chinese stock market, 2012 has been yet another extremely disappointing year. The Shanghai Composite index stands around 12pc lower than a year ago, has lost a third of its value in three years and two-thirds against its pre-crisis peak.

It is all a marked contrast to the feeling in the immediate aftermath of 2008’s financial crisis that China could single-handedly pull the developed world back from the abyss. And it begs the question of whether economists and investors are being as irrationally gloomy as perhaps they were overly optimistic before. It matters because no one wants to be the dumb foreigner backing the China miracle even as the country’s own residents are heading for the hills.

One reason to believe the pessimism may have been overdone is the traditional investment splurge that has followed leadership transitions ever since the new market-oriented regime began following the death of Mao in 1976.
The shift in sentiment has been dramatic. Some of those attending the recent World Economic Forum meeting in Tianjin, a fast-growing port city half an hour by high-speed train from Beijing, were struck by the note of pessimism and cynicism about China’s prospects. 

Top Investments 2013 For The Innovative Investor

At the end of every year, investment analysts come up with predictions for the New Year. All of these predictions may or may not come to pass. Now, the investment analyst is not exactly a prophet. When people make investment predictions, they are simply trying to draw conclusions based the data and information available to them. Sometimes, these predictions and investment recommendations are based on a bit of history because, as the saying goes, history has a way of repeating itself.
These are hot investment ideas because 2013 is the right time to invest in these areas. Oil and gas is an obvious choice and the investor needs to invest very early in the year for best results. This is because every year, the price of crude oil rises during the winter months. This is simple demand and supply at work. The demand for crude oil rises during the winter months and naturally, the price goes up. The same thing applies to natural gas, heating oil and low power fuel. Investors who put their money into oil and gas are likely to make money very early in 2013.
Another great investment idea for 2013 is silver. This metal is called the poor man’s gold but the truth is that silver is a more valuable metal than gold when it comes to the industrial uses of both metals. Silver is needed in cell phones, TVs, computers, cameras, iPads and MP3 players. These electronic devices have a booming market already.  This means that there will be a higher demand for silver in 2013, which makes it a great investment idea. Investors also would do well to invest in lithium. This metal is used in the automobile industry and it is used to manufacture batteries. The metal is relatively scarce and makes it a great investment idea. Remember, 2013 is just around the corner. Be prepared to make some money in the new year.

The 3 Best Real Estate Investing Techniques for 2012

What are the three best real estate investing techniques for 2012? After carefully analyzing market reports, studying recent trends, and looking at where we are making the most money in the business right now, three investment strategies emerged as the most accessible and the most profitable for the new year. By focusing your efforts on these three real estate investing techniques, you can make 2012 your best year ever! That's right, even in this down market, there is tremendous opportunity for you to make big money investing in real estate.

Technique #1- Foreclosures

Industry insiders predict another wave of foreclosures will hit the market in 2012. Improper handling of foreclosures over the past several years led to Federal investigators to review banks' foreclosure practices and in many cases, they found problems. This created tremendous delays and stopped many foreclosures from going through in 2010 and 2011. Banks and the Feds are settling on a solution right now in Washington, and it should be completed very shortly. When this happens, expect a new flood of foreclosures on top of the massive amount of foreclosures already. What's the secret to finding the select few extremely profitable foreclosure deals? Top producing REO (real estate owned) agents.  They are the fountain of youth for foreclosures.  In any market, there are a select few REO/Foreclosure agents who rise above the rest.  They close 300, 600, 900, or more transactions per year. From time to time, these REO agents have foreclosures listings that require a fast cash investor buyer to purchase quickly. If you are on their speed dial for such situations, you're in for a big money-making deal.

Foreclosures can be a mine field. Just because a property is a foreclosure does not automatically make it a deal. In fact, if you pay too much in this market, you can really lose your shirt! Savvy foreclosure investors know that great foreclosure deals are the needles in the haystack. They exist and may be all around you, but they are a small percentage of the overall foreclosure population.

Technique #1 - Assign Lease Purchase Options to Rent-to-Own Tenant Buyers

That's a mouthful, isn't it? Assigning lease purchase options to rent-to-own tenant buyers is a little-known real estate investing technique that is very profitable and the absolute fastest way to put quick cash in your pocket.  Literally, within a few weeks, you could have $3,000, $4,000, even $6,000 extra money in your bank account.
Here's how it works: There is a large number of prospective home buyers who can't qualify for a mortgage. Lenders have tightened up, creating a huge backlog of people who want to stop renting and own their own home, but simply can't because they can't qualify for a loan.  Enter the "Rent to Own."
At the exact same time, there are hundreds of thousands of properties on the market right now that are not selling. In many cases, the reason why the home is not selling is that the homeowner is unwilling to drop the price low enough to compete with the short sales and foreclosures in their neighborhood. Month after month, these listings sit with no showings and no offers.
A rent-to-own home (or lease purchase option) gives the person the option to purchase the property while they are renting, and in some cases, allows a portion of each payment to go towards the purchase price.  For those unable to qualify for a mortgage, it is the ideal scenario. Therefore, the rent-to-own is in very high demand right now.  
Overtime, these property sellers get tired of making payments on a home that won't sell. If offered, they actually would be quite open to a lease purchase option, whereby the person agrees to lease the property with the option to buy it in the future. The problem is, no one is offering to do a lease purchase option on their home. Buyers' agents rarely bring rent-to-own tenant buyers to listings. Homeowners do not know how to find and handle the details of a rent-to-own transaction.

So...

1. If rent to owns are in demand, and


2. Homeowners across this country would be open to a lease purchase option,


3. How do you turn these two factors into money? 

Since tenant buyers and property sellers are both motivated to move quickly, these transactions can be completed--start to finish, in a matter of weeks. If you are short on cash right now and need a quick boost to your bank account, use the real estate investing strategy of assigning a lease purchase options to rent-to-own tenant buyers; it'll probably be the fastest money you've ever made in real estate.
In simple terms, you bring the two parties together. For most rent-to-own deals, the option to buy the property requires an upfront payment from the tenant buyer of $4,000 to as much as $10,000 or more, depending on the property. By getting the property seller to agree to a lease purchase option in writing, you then assign your interests in that agreement to the tenant buyer for a fee; an amount that could be as much as their upfront payment or a portion thereof.

Technique #3 - Short Sales

This report would not be complete without mentioning short sales.  More than 1 in 4 mortgage loans in this country are underwater.  For borrowers in this situation, many will require a short sale.  The sheer amount of prospective short sales is gigantic.  Plus, there is terrific money to be made in short sales if you have taken the time to properly educate yourself on how to approach them.
Others get their real estate license, so that they can list the short sales they don't buy and still collect 3% commission as the listing agent.  On a $500,000 home, a 3% commission is a very respectable $15,000 payday. The beauty of the short sale is that the property is still owned and controlled by the homeowner. This creates tremendous flexibility for the savvy real estate investor.  Some investors negotiate the best deal they can with the short sale lender, buy the property and resell it for a profit.
Short sales have undergone dramatic changes over the past several years. Those investors who are on top of their game have adjusted accordingly and are making big money with short sales, both as investors buying and reselling them as well as collecting fast commissions as the listing agent.

10 Ways to Know If the Housing Market is Improving

To know if the housing market in any given year is improving, you've got to compare activity not only month-over-month but also year-over-year. Real estate markets move in cycles. Sometimes the market is up and sometimes the market dips. The mortgage meltdown of 2007 taught us in a big way that real estate prices do not continually rise. The housing market can crash. That 2007 crisis shattered dreams and threw the housing market into a panic.
Based on my experiences, here are my top 10 ways to know if the housing market is improving:

#1 Sign Housing Market is Improving: For Sale Signs in the Neighborhood Vanish

Too many for sale signs in your neighborhood means there are too many homes for sale and generally not enough buyers to buy them. Excess inventory pushes down sales prices.

#2 Sign Housing Market is Improving: Starter Homes Sell Faster

When demand is on the rise, homes sell quickly and the days on market are reduced. A starter home that is attractively priced in good condition and a desirable location should typically sell within 30 to 60 days.

#3 Sign Housing Market is Improving: Distressed Sales Disappear

When you no longer have to ask if the home for sale is a foreclosure or a short sale, the market is turning around. When traditional sellers feel the market is stable enough, they will put their homes on the market because those sellers will have equity.

#4 Sign Housing Market is Improving: Interest Rates are Attractive

When financing is scarce, the cost of lending that money goes up. When plenty of money is available to lend, interest rates fall. Lower interest rates equal a higher purchasing power for buyers and stimulate the housing market.

#5 Sign Housing Market is Improving: Sellers Buy Move-Up Homes

During troubled times, typically the only sellers who sell a home are those who must due to circumstances beyond their control such as a job transfer, divorce or they can't afford to make their mortgage payment. Many of those sellers do not buy another home. The move-up market becomes stagnant. In a more balanced market, it's not only a good time to sell but also a good time to buy a home.

#6 Sign Housing Market is Improving: The Job Market Recovers

When you hear your neighbor's car pulling out of the garage in the wee hours of the morning after months of no activity, you'll know that your neighbor got a job. When the unemployment rate drops and people return to work, the housing market is recovering.

#7 Sign Housing Market is Improving: Median Sales Prices Stop Falling

It doesn't matter whether you track home sales by per-square-foot price, average or median prices, when the market is depressed, they all fall. Compare median sales prices this year to median prices last year. Steady increases mean the market is improving.

#8 Sign Housing Market is Improving: Closed Businesses Reopen

Little shows more faith in a budding economy than when entrepreneurs strike out and open a new neighborhood business. When you spot the boards coming off of a closed up shop and a new sign goes on the building, it means a recovery is underway.

#9 Sign Housing Market is Improving: Real Estate Companies Hire Agents

In down real estate markets, real estate agents tend to leave the business in droves and real estate companies downsize. When business is improving, real estate companies expand and hire more agents because their phones are ringing with Floor calls from buyers.

#10 Sign Housing Market is Improving: More Buyers are in the Market

The National Association of REALTORS' Housing Affordability Index tracks the percentage of buyers who can afford to buy a home. The higher the percentage, the lower the income that is required to qualify for a mortgage.

American Real Estate Investors Seek Opportunities in European Debt Crisis

While the world is anxiously watching to see how the European debt crisis will unfold, many real estate investors in the United States are eagerly seeking opportunities to reap profits from the Continent’s distress.
The asset sales in Europe could dwarf the work of the United States Resolution Trust Corporation, which was charged with disposing of the troubled mortgages resulting from the savings and loan crisis of the 1980s, said Russell Platt, the chief executive of Forum Partners Europe, an investment firm with headquarters in London. “Most of the firms looking at this came of age during the R.T.C.,” Mr. Platt said. “You can see why a lot of folks are rubbing their hands and saying: ‘This could be very interesting.’ ” 
Private equity firms, whose investors include pension funds, university endowments and foundations, have been vying to buy portfolios of European bank debt consisting of troubled commercial real estate mortgages. By acquiring these loans at deep discounts, they hope eventually to earn generous returns of 12 to 18 percent, investors and advisers say.
As the sovereign debt crisis continues, European banks are expected to sell such distressed assets in an effort to increase their capital and protect against future losses. Morgan Stanley estimates that such institutions may have to cut their exposure to commercial real estate by up to $760 billion. 
Commercial mortgage-backed securities, real estate loans that are packaged together and sold to investors, are not as common in Europe as in the United States. Instead, most European mortgages remained on the banks’ books, which has been a drag on profits.
“Getting the banks healthy is critical for getting the European economy healthy again,” said Gifford S. West, head of European operations for DebtX, a loan-sale advisory firm.
In 2011, CBRE, the giant real estate company, tracked more than 20 European loan portfolio sales with a value of 20 billion euros (about $26 billion at current exchange rates). The pace so far this year has dropped, with 14 transactions totaling 7.5 billion euros. Another 11 billion euros’ worth of loans are currently being marketed, CBRE said. Many individual loan sales are also taking place in private.
So far, the pace of sales has been modest. Last year, the region’s institutions received an infusion of capital from the European Central Bank, easing the pressure to trim their balance sheets. 

Consequently, banks have been slower than expected to put their bad loans on the market and write down their losses. “We all sort of thought there would be a greater flow of deals,” Ms. Ricks said.

But in Europe, at least, no one these days expects the values of mediocre properties to rise without efforts to improve them physically or manage them better, said James Wallace, who writes a trade blog on European debt for the CoStar Group, a research company in Washington. “Extend and pretend is over,” he said. “People don’t say that anymore in Europe.”

As a result, participants in this market expect the pace of loan portfolio sales to accelerate. “We anticipate the next 24 to 36 months to be busier than the last 12 months,” said Graham Martin, the London-based global leader of KPMG’s portfolio solutions group, which advises banks on these transactions.

Advice for New Investors

I would like to give some advice to new investors.
Don’t Be Greedy
I started with a small amount of money. Naturally, I wanted to grow that money quickly. I thought I should earn 50% a year like Warren Buffett said he could do with less than $1 million. I’m dazzled by Peter Lynch’s idea of 10-baggers. That’s fine if you stick to their teachings. But my greed led me to compromise on quality of business. Statistical cheapness blinded me and persuaded me that the business is fine.
So, I think for starters, no matter how small the amount of money you have, the priority is always to protect principal, not to grow money quickly.
I think a diversified portfolio of statistically cheap stocks can be fine. But you can’t achieve adequate diversification with a small amount of money. So you should focus on quality of business. Personally, I’m comfortable with buying only one great company.
Invest Like You’re Saving for Retirement
My attitude toward stock investing is like saving for my retirement. I don’t plan to use any money I put into my portfolio in the next 30 years. That frees me from the concern about volatility. I can totally ignore market price. Once I find the right stock at the right price, I’ll buy. And I want the stock price to keep going down. So I can buy the stock cheaper whenever I have more money or the company can repurchase shares cheaply.
I think this is the advantage of individual investors. Money managers with the wrong clients have to pay a lot more attention to short-term performance. You don’t have that restriction if you add money to your fund with no plan to use the money soon. Think like you’re saving for your retirement.
Investing is a Learning Process
Buying inactivity is also a result of my research process. My process was initially started with screening for statistically cheap candidates.
The disadvantage of this approach is that I’m influenced by fluctuations in the stock market. There can be the pressure to do research quickly. I can be afraid that the stock price will go up and I will miss an opportunity. But rushing a research always results in an inadequate analysis.
Also, valuing a stock when we know the stock price isn’t a good idea. We’ll be influenced by the anchoring idea. It’s like when you ask people if a Big Mac provides more or less than 1,200 calories, most people will say less. When you ask them how many, they would say “1021.” If you instead ask if there are more or less than 500 calories in a Big Mac, they’ll say more. And when you ask them how many, they’ll say something like “715.” There’s a high chance that our stock valuation would significantly differ when we know the stock price is $60 from when we know the stock price is $15.
So, I think intelligent investors will do research without the impulse to buy a stock. They learn about the business, expand their circle of competence. They get ready to make a decision when the market price is cheap relative to their idea about the value of the company.
Geoff often tells me that his greatest investments are those in companies that he learned about before and then 5 years later, something happened to the stock price.
Don’t Rush to Buy
I used to have a lot of ideas when I started. I always had new ideas even when I was already fully invested. But it wasn’t that I was smarter or those were good days. Those ideas were simply junk. Those were just beliefs of an inexperienced investor. I was influenced by numerous human misjudgment tendencies.
I started reading investment books in those days. I learned techniques to value a stock and how to do research. I was overeager to apply what I had just learned. Perhaps buying a stock meant becoming an investor or mastering what I had learned. Therefore, most of my early researches were inadequate. But I ignored those shortcomings and believed that I had good ideas.
My advice here is to limit yourself to buying only one stock in the first year. That will delay your buying decision and force you into following your stocks longer and comparing investment candidates. That will also save you the opportunity cost of buying the wrong company.
Don’t worry about having cash that is not working. Assuming you wait 2 years to buy a stock that would double in 3 years, you still earn 14%. And 14% is an admirable rate of return for any investor.
Write Down All Your Thoughts about a Company
Finally, I used to have problems with following some stocks I did research on. Many times I read my own research after a while, and I realized how incomplete my reports were. Many questions arose while I read the reports. But when I did some research to answer those questions, I realized I already knew the answers before.I think that’s because I’m not a good writer. I couldn’t turn all my thoughts into a concise, comprehensive report. My solution is that if I can’t write a report, I’ll take notes. I have a checklist including questions about a company to answer. And for each question, I just write down every thesis and all the evidence and then organize them into a draft. I also write down all questions that I can’t answer with my current knowledge as well as hypotheses about the company. It’ll take more time for me to read all my notes in the future, but at least, I can record all my thoughts about a company and follow them in the future.
So, I think buying inactivity, focusing on business quality, learning, taking notes, and investing like saving for retirement are the ingredients for intelligent investing.

Ten Commandments for Buying Gold and Silver

1. Never buy premium if you can avoid it.
2. Buy silver first, then gold.
3. Never buy exotic coins or modern rarities or anything you don't understand.
4. What governments can't find, they can't steal.
5. Never break the law.
6. Always take delivery.
7. Buy bullion for business, numismatics for fun.
8. Buy small gold first, then large.
9. Know your dealer.
10. Never swap bullion coins for U.S. $20 gold pieces.

FOUR BULLION PORTFOLIOS

Please note that our recommendations vary depending on your concerns and the market. If you want to invest in gold and silver to protect your assets and have something easily divisible and spend-able to hedge currency depreciation or collapse, then:

For $75,000 buy
Two-thirds US 90% silver coin or 1oz. Silver Rounds; $5,000 worth of Sovereigns, 20 Francs, or 1/4 Eagles; the balance in Krugerrands, American Eagles, Mexican 50 Pesos or Austrian 100 Coronas. (For over $75,000 simply do multiples of this portfolio.)

For $25,000 buy

Two-thirds US 90% silver coin or 1oz. Silver Rounds; half of the remaining third in Sovereigns, French 20 Francs, or 1/4 oz. American Eagles; and the balance in one oz. Krugerrands, Austrian 100 Coronas, Mexican 50 Pesos, or American Eagles.

For $10,000 buy

Two-thirds US 90% silver coin or 1oz. Silver Rounds, with the balance divided between a fractional coin like British Sovereigns, French 20 Francs, Mexican Pesos (10, 5, 2.5, or 2) AND Krugerrands, Austrian 100 Coronaes or Mexican 50 Pesos.

If you have $5,000 or less to spend
At least half in silver (either US 90% silver coin or 1oz. Silver Rounds) and half in British Sovereigns, French 20 Francs, Mexican Pesos (10, 5, 2.5 or 2) or some other inexpensive, fractional gold coin.

If you want to invest in precious metals to simply protect your assets and don’t think you’ll ever need to actually barter with them, then:

For $75,000
Get bags of US 90% silver or 1oz. Silver Rounds for 2/3 of your order; the balance in Krugerrands, American Eagles, 100 Coronas, or 50 Pesos. (For over $75,000 simply do multiples of this portfolio.)

For $5,000 through $25,000
Put at least half of your money in US 90% silver coin or 1oz. Silver Rounds; the rest in one ounce Krugerrands or American Eagles, or in Austrian 100 Coronas or Mexican 50 Pesos.

If you have $5,000 or less to spend
Half in US 90% silver coin or 1oz. Silver Rounds, half in one ounce Krugerrands or American Eagles, Austrian 100 Coronas, or Mexican 50 Pesos.

How I Find Stocks – Then and Now

Quan here.

The way I find new stocks to research has changed over time. My approach changed from greedy to aggressive to curious and finally to practical.

For the story of another investor and blogger’s change from mechanical screening to human screening – read Richard Beddard’s blog post about his Human Screen.

This is my story.

Greedy and Aggressive

I used to think that good investors can make 50% annual return. I had read a quote from Warren Buffett saying this was true. This was before I knew anything about investing. So I wanted to find stock like that. Stocks that could return 50% a year. So, I looked for companies with low P/E, and a big drop in the share price from its past peak. If I found some famous value investors holding it, I’d start analyzing the company

Curious

I didn’t know when I realized my mistake. It’s not like I had a terrible experience with the first stocks I bought. I never lost 90% of my money in some value trap. But, for some reason, my process for finding new stocks to research started to change. Perhaps I changed the way I looked for stocks after exchanging emails with Geoff. I sold a lot of stocks I owned after talking with Geoff.

So, I decided to expand my circle of competence. I ignored stock price, and started my learning experience. I wanted to learn about how companies actually make money. I did research on companies without any intention to buy those stocks. I thought I just need to gain understanding of companies. One day in the future, something might happen to the stock price and I could quickly decide whether to buy. And I wanted to give priority to better businesses.

I then took a quick look at 10-year results at MSN money. I looked at balance sheet to see whether the business require high capital investment. I looked at earnings and cash flow to make a quick calculation about profitability. If my feeling was that the company is profitable, I would start doing further research.

As a result of using screener with only one variable (profit margin), I jumped randomly from an industry to another. One disadvantage is that I usually started my research with completely no familiarity with the company. But the advantage is that I expanded my knowledge. I studied about sports and entertainment and a little bit about cable network after analyzing WWE. I studied some medical device companies likes.

Landauer (LDR) and Masimo (MASI). I analyzed IT service companies like Ebix.

As my knowledge widened, I sometimes found companies in business close to the businesses I already know. For example, ISCA is similar to WWE. Bio-reference (BRLI) is nowhere similar to MASI but they both provide tests. Netflix can be seen as similar to ESPN or a cable operator.

Practical

My approach now is more practical. It’s now more about finding a stock to buy than finding a business to learn about. I have a checklist to decide whether to do research on a company. Whenever I see some company names on the street, on a blog, or anywhere, I’ll run the checklist to see if I’m interested in analyzing the company.

I’m more interested in obscure companies with special, unique products. I like hidden champions with no analyst coverage. There can be higher chance that the stock is mispriced. And unique product can mean high profitability.

I want familiar companies or companies in familiar industries. My business knowledge is broader now than in the past. But I didn’t really expand my circle of competence. My knowledge is just a set of several disjointed points scattered over the business space. But that’s a good start. I’ll now expand the points into circles. I’ll start with companies I’m familiar with.

Finally, I like companies with stable demand. To me, it’s just impossible to estimate the normal earning power of a company without stable demand.

So, that’s my qualitative screen. I don’t screen stocks by any metrics. If I know a company scores well on some metrics, I can start my research with some bias. And I don’t pay attention to price. I just look for some companies that I can own, and wait for someday to buy

22 Investing Books in One Word Each

 Last time, I was asked to describe each investor in one word each . This time, I will describe investment books in one word each.  
 #1 Security Analysis: Comprehensive This is the first investing book I read. Without any experience, I did not grasp all the ideas. However, I found Ben Graham’s ideas in most books I read later. That’s why I think if one has the chance to read only read, I would suggest Security Analysis .
#2 Common Stock and Uncommon Profits: Perfect I used to focus more on business as Buffett said he want companies that can be run by idiots. I now realize that for a long-term investment, people factors are very important. In my search for perfect investments, I found a great framework in Common Stock and Uncommon Profits . If we analyze a company and all answers to Phil Fisher’s 15 questions are positive, I think it is very likely that we’ve found a perfect investment.
#3 The Intelligent Investor: Defensive I read The Intelligent Investor not long after Security Analysis. I felt that Ben Graham wanted to devise a system for average investor. He spent a big part of the book talking about the approach defensive investor. So, my impression of the book is defensive.
#4 Value Investing: From Graham to Buffett and Beyond: Simplify Geoff has a different view. He thinks Bruce Greenwald makes value investing more complicated in this book. I agree with him in the sense that Bruce Greenwald is an economist and he wants to describe value investing in formula. But I think that formulas help newbies see the approach of value investing more clearly. That can be misleading though.
#5 The Aggressive Conservative Investor: Disagree Martin Whitman said that small investors should buy a stock at the hope of someone buying out later. Therefore, he looks at private owner value. I have a different view. Warren Buffett buys a whole company but never change the management. I see no difference between buying a share of a company and buying the whole company if we trust the management and capital allocation. Therefore, I value a company as something to hold it forever, not as something that other people will buy at a higher price.
 #6 You Can Be a Stock Genius: Intelligent I described Joel Greenblatt as “tricky.” Intelligent can be a better word. What’s the better word to describe his tactics to take advantage of special situations?
#7 The Curse of Mogul: Media This is a good book about in the media industry. The book talks about competitive advantage in the whole media value chain. It focuses on the idea that the value of media companies is in their distribution and challenges the conventional belief that “content is king”.

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Read more here: http://markets.financialcontent.com/mi.newsob/news/read/21719046/22_investing_books_in_one_word_each#storylink=cpy

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