Successful? Why, yes I am.

Thursday, August 16, 2007

Stock market correction

I learned something new today. When the stock market drops more than 10% its officially labelled as a correction. The ASX is now sitting somewhere around 5700 points. The market hit a high of 6400 back in July 13.

I still think now is going to be an excellent time to buy some cheapish stocks.



Analogy time!

Okay, theres no back story to this so straight to the point.... ever wondered how having a good vocabulary allows you explain yourself, your story, your background to others more easily. Infact forget others, just yourself, having a higher vocabulary range allows thoughts and actions to be more easily defined and put into context.

Ok so what? Well this is analogous to how numbers, equations, mathematics, gives us added ability to understand the physical and natural world better, simply because we can interpret those into numbers which simply stated go from 0 to 9.

Take telecommunications, my field of profession, has many complex equations to understand how nature and the enviroment will affect say, the transfer of data via radio waves. Same goes for understanding fibre optic signals etc.

I'm beginning to realise that having a good foundation in vocabulary and numerical mathematics (in my case telecommunications, but I also want to learn about finance) has huge benefits in terms of accelerated learning. Taking a quick side-step from all this, in the telecommunications field, we have this thing called the 7-layer OSI model. It basically outlines what the data has to do for it to travel between two PC's for example across a network. These seven layers incorporate what the software must do, what the network protocol does, and how it goes on the physical medium.

The lowest layer in the 7-layer OSI model is the physical layer. This is basically the bare minimum that is required for data to traverse over. Eg: copper network cables, fibre optic connection, air for wireless connections. Now think of having a good vocabulary and number skills as having a superior physical medium. Now what I want to know is what things are there above this that one can learn and improve to better understand the environment around him/her?

One thing that has been on the back of my mind for the past month or so, is understanding psychology of humans. For example, listening to Dale Carnegie's audio book 'How to win friends and influence people' and also reading Stephen Covey's book 'The 7 habits of highly effective people', they both recommend being empathetic towards others. To be genuine when around others, first understand then be understood, etc etc.

The list goes on, so basically psychology OR understanding human behaviour is a somewhat important skill that should be developed. Im going about this via reading and then trying to read and see examples by observing people around me. At this stage Ive identified psychology to be one layer that would sit somewhere above vocabulary/numerical. What else can one identify?

Perhaps Im going about this all wrong? Perhaps layering is not the best way to look at this? Its about identifying basic 'things' (I could not come up with a better word) that one can work one in improving ones-self.

Oh and in this particular instance all this layering applies to career and relationship. Different layers would apply for wealth and spirituality.

I know I keep saying this, but Im going to try and return to this topic after Ive thought it through a little more. Watch this space.

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Saturday, August 11, 2007

Ross Gittins

Another good easy to read and understand article by Ross Gittins, the Sydney Morning Heralds economics editor.

Click here

I have a strong dislike for lying politicians.

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Tuesday, August 07, 2007

Why our internet costs are so high

An excellent article found on Find the full story here

I hope our politicians and policy makers read this.

Be frugal with electricity use

Simple policy by which to live by;

If not in room, turn of the lights.
If not using computer for more than 1 hour, turn it off. Leaving your PC running all day while your at work, is firstly consuming unnecessary electricity (unless your downloading stuff), second your actually diminishing the life of the PC.
If you have speakers attached to your PC, turn it off while not using. Same goes with printer, scanner etc.
Be wary of phantom lights around the house. Phantom lights are basically standby lights notifying you, your television or DVD player is still on. These lights stay on when you happen to turn off these devices via the remote. Get into habit of turning them off from the switch on the device itself or from the main wall socket.

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Monday, August 06, 2007

The ASX down another 100 points this morning!

The ASX down another 100 points this morning! Wow, its currently sitting on 5900. Damn.. the market was sitting on 6400 about two weeks back and now this.

Oh how I wish I had some spare cash to buy.

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Sunday, August 05, 2007

Free Market System?

We live in the information age. The global economy. Capitalism rules!

Over the past decade for example, import tariffs on cars has steadily dropped. I think its almost down to zero nowadays. As a result imported cars have become cheaper. The federal government introduced new law called 'Work Choices' basically instead of having an award wage, each employer can negotiate their salary, terms and conditions individually (now I'm light on details basically business and business owners also have more power to easily sack people etc.)

From an economic standpoint, the whole reason for bringing in such laws is to allow Australians to compete in say, manufacturing against up and coming economies like China, India, Brazil. Labour costs in Australia (and I would assume also in other western countries) is quite high compared to other less well off Asian countries. It is in-fact a strong contributor to the high standard of living Australians enjoy, because generally speaking, everyone is very well off.

I personally admire the U.S. free market system. It actually stems from the whole free world thing. You work hard, you will see just rewards for your efforts. As a result, high production output and then good consumption has lead to the U.S being the worlds largest economy.
The rise of China and India economically speaking is a very good thing. Economically speaking it means the global economy will be less driven by U.S. activity alone. The saying goes, 'if the U.S sneezes, the rest of the world gets a cold'. (No more global recessions, we can rely on India and China thanks.) There are 2 BILLION people in India and China, can you imagine how good it will be for the rest of us, if they start buying our products!!

Take China, a communist country. The first definition found on google for communism is as follows;
An economic theory which stresses that the control of the means of producing economic goods in a society should reside in the hands of those who invest their labor for production. In its ideal form, social classes cease to exist, there is no coercive governmental structures, and everyone lives in abundance without supervision from a ruling class. Karl Marx and Friedrich Engels popularized this theory in their 1848 Communist Manifesto.
One thing I find somewhat interesting is that if the whole world were a true free market system, we'd end up living like communists. Hey! whoa! hold on there!!

Let me explain. In economics, free economics especially, resources (ie: labour, capital, assets etc) move where there is demand. Simply speaking, its all about supply and demand. If the whole world were a true market system, where there were no international boundaries, no tariffs, no duties, no subsidies, no fixed exchange rates etc, everyone and I mean EVERYONE would end up making the same pay, everyone would be able to afford the same thing as the guy next door.
I also think as a result, goverments would cease to exist. There would be no requirement for such antique legacy systems. Democracy? nope, don't need it.

Free market system which would really be just another form of global communist society.

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Saturday, August 04, 2007

Value of dollar?

I read an excellent blog post at Binary Dollar and it was about the 'cross over point'. That is when your investments earn enough money that they surpass your expenses. You could classify this by saying your financially free.

One thing of interest I found (in the comments actually) people generally speaking probably do not take into account inflation when investing for the future and what dollar value their assets will be worth after the term of investment.

Analogy: Take car ownership. When calculating weekly costs of a car ownership, you put in such things as fuel, insurance, wear & tear/servicing etc. BUT people do not include depreciation.
Apparently in Australia now half the cost of owning a vehicle is now gone in depreciation. Reason for this is simply because so many new vehicles are being sold, the demand for used ones falls rapidly. The average value of a brand-new car is almost 50% after three years of ownership!
If you think about it, same thing needs to be applied to housing/property.

Anyhoo, getting back on topic of dollar and its purchasing power, whole point to investing is obviously to grow your money/assets but also to beat inflation. That is, your purchasing power should never diminish! Im going to have to work out some new graphs and put them up here for comparisons sake.

Keep in touch for follow up post on this topic


Friday, August 03, 2007

Subprime lending

The whole subprime lending catastrophe (well not quite catastrophic) thats happening in the U.S. thats causing world wide share market fall, Im wondering how long it will last?

There's an excellent article by Ross Gittins in todays SMH ( about how it doesnt really affect the economy in any major way. That is we're still working, still producing and still consuming, so no cause for alarm about having a possible recession. Apparently he said that the 1987 sharemarket crash did not, I repeat DID NOT, result in a recession. Very interesting.

Ive gotta focus on increasing my income so I can actually have more to invest. Sitting on median salary is not cool.


Thursday, August 02, 2007

Policy: Car - Wheel alignment once a year

As I experienced a flat tyre today, I was unable to simply get the tyre patched up, because one side of the tyre had worn out considerably and thus illegal to fix according to the tyre service centre. So I have to buy two new tyres as another one was also showing signs of wear.

Heres a new policy in relation to keeping your car well maintained and potentially saving you some cash. Get your car tyres/wheels aligned at least once every year. It should ensure your tyres last longer.

$250 out of pocket.. signing out!


Wednesday, August 01, 2007

Oh I wish I had some spare cash!!

To invest that is. The ASX has dropped almost 4-5% in the last week following drops on the U.S. market.

Here's what happened to the top ASX 50 shares.

AGK AGL ENERGY $15.10 down -$0.37
AIO ASCIANO $9.20 down -$0.32
ALL ARISTOCRAT $13.40 down -$0.25
AMC AMCOR $6.71 down -$0.14
AMP AMP $9.77 down -$0.29
ANZ ANZ BANK $27.52 down -$0.78
ASX ASX $46.55 down -$2.50
AWC ALUMINA $6.92 down -$0.38
AXA AXA ASIA $7.04 down -$0.31
BHP BHP BLT $35.96 down -$1.04
BSL BLUESCOPE $10.33 down -$0.62
BXB BRAMB LTD $10.85 down -$0.23
CBA CWLTH BANK $52.25 down -$2.01
CGJ COLES GRP $13.80 down -$0.71
CNP CENTRO. $7.75 down -$0.21
CSL CSL $86.00 down -$2.95
FGL FOSTERS $5.83 down -$0.08
FXJ FAIRFAX $4.77 down -$0.07
GMG GOOD GROUP $5.92 down -$0.16
GPT GPT $4.50 down -$0.01
IAG INSUR.AUST $5.52 down -$0.18
LLC LEND LEASE $18.16 down -$0.47
MAP MACAIRPORT $4.15 down -$0.22
MBL MACQ BANK $73.70 down -$8.80
MGR MIRVAC GRP $5.09 down -$0.05
MIG MACQ INFRA $3.06 down -$0.21
NAB NAT. BANK $37.08 down -$1.28
NCM NEWCREST $23.84 down -$1.06
NWS NEWSCORP $26.49 - $0.00
ORG ORIGIN ENE $9.50 down -$0.33
ORI ORICA $26.62 down -$1.33
PBL PUBL&BROAD $18.02 down -$0.50
QAN QANTAS $5.59 down -$0.15
QBE QBE INSUR. $28.54 down -$1.43
RIO RIO TINTO $91.20 down -$1.88
SGB ST.GEORGE $32.80 down -$1.70
SGP STOCKLAND. $7.62 down -$0.11
STO SANTOS $12.94 down -$0.36
SUN SUN MET $19.04 down -$0.36
TAH TABCORP $15.92 down -$0.33
TCL TRANSURBAN $6.82 down -$0.36
TEL TELECOM NZ $3.96 down -$0.09
TLS TELSTRA $4.49 down -$0.11
TLSCA TELSTRA $3.02 down -$0.10
TOL TOLLHOLDGS $13.75 down -$0.48
WBC WESTPAC $25.55 down -$0.65
WDC WESTFIELDG $18.89 down -$0.16
WES WESFARMER $37.50 down -$1.49
WOW WOOLWORTHS $26.55 down -$0.74
WPL WOODSIDE $42.20 down -$1.09
ZFX ZINIFEX $18.61 down -$1.30

If the market continues to slide, or even it starts to go up, now is an excellent chance to get some 'cheapish' stocks. Just my opinion.