Me & My Money Series (Sunday Times)

Thread Rating:
  • 4 Vote(s) - 4.25 Average
  • 1
  • 2
  • 3
  • 4
  • 5
CityFarmer Wrote:If my understanding is right, CDP under SGX is also a nominee company. It can also fail. IIRC, there are investor protection schemes available, but not clear on detail. I assume in US, similar schemes available.

CDP is a wholly-owned subsidiary of SGX. It is not a nominee because it does not own any of the shares of the listed companies. All it does is keep a spreadsheet (share register) for each company showing who owns how many shares. That spreadsheet is not an asset in any sense of the word because it cannot be pledged or sold.

If CDP fails, its successor can rebuild the spreadsheets by contacting each company's corporate secretary, who would have the same spreadsheet showing the list of shareholders and their holdings. That spreadsheet (the share register) must always tally with CDP's.

Holding your stocks via CDP means your name appears on the company's own share register. Nobody can take your ownership away from you without your permission.

Holding your stocks via a nominee means the nominee appears on the share register, the nominee in turn keeps its own internal register that marks you as a beneficial owner. If the nominee fails your dispute is with the nominee and its creditors.

There is some sort of investor protection scheme in Singapore with regards to broker failure. But clearly it didn't work in the case of MF Global, so I don't see why anyone should assume it will work for him in future. For all practical purposes investors should assume that there is no protection at all.

In the US there is US$250k of protection against broker fraud, but the scheme is operated by the brokers themselves so it is not that easy to get paid. The Madoff victims tried to get compensation from this fund (operated by the SIPC) but were not successful. The explanation was that since the Madoff brokerage never did any trades for the Madoff victims, no fraud was committed! The fraud was a Ponzi, not a boiler-room pump-and-dump operation. So again, best to assume that there is no protection.
---
I do not give stock tips. So please do not ask, because you shall not receive.
Reply
(23-10-2012, 07:20 PM)d.o.g. Wrote:
CityFarmer Wrote:If my understanding is right, CDP under SGX is also a nominee company. It can also fail. IIRC, there are investor protection schemes available, but not clear on detail. I assume in US, similar schemes available.

CDP is a wholly-owned subsidiary of SGX. It is not a nominee because it does not own any of the shares of the listed companies. All it does is keep a spreadsheet (share register) for each company showing who owns how many shares. That spreadsheet is not an asset in any sense of the word because it cannot be pledged or sold.

If CDP fails, its successor can rebuild the spreadsheets by contacting each company's corporate secretary, who would have the same spreadsheet showing the list of shareholders and their holdings. That spreadsheet (the share register) must always tally with CDP's.

Holding your stocks via CDP means your name appears on the company's own share register. Nobody can take your ownership away from you without your permission.

Holding your stocks via a nominee means the nominee appears on the share register, the nominee in turn keeps its own internal register that marks you as a beneficial owner. If the nominee fails your dispute is with the nominee and its creditors.

There is some sort of investor protection scheme in Singapore with regards to broker failure. But clearly it didn't work in the case of MF Global, so I don't see why anyone should assume it will work for him in future. For all practical purposes investors should assume that there is no protection at all.

In the US there is US$250k of protection against broker fraud, but the scheme is operated by the brokers themselves so it is not that easy to get paid. The Madoff victims tried to get compensation from this fund (operated by the SIPC) but were not successful. The explanation was that since the Madoff brokerage never did any trades for the Madoff victims, no fraud was committed! The fraud was a Ponzi, not a boiler-room pump-and-dump operation. So again, best to assume that there is no protection.

Thanks d.o.g. Learn new knowledge today.

For those interested on investor compensation scheme by SGX, refer to link below

http://www.sgx.com/wps/wcm/connect/sgx_e...t_Friendly

The compensation is for investors who suffer monetary loss arising from broker's defalcation or broker’s insolvency.
“夏则资皮,冬则资纱,旱则资船,水则资车” - 范蠡
Reply
It certainly helps when you start a business with a S$100,000 interest-free loan! Tongue

The Straits Times
www.straitstimes.com
Published on Oct 28, 2012
me and my money
Diamonds are her business

Young jewellery retailer looks to property to help build up her retirement nest egg

By Magdalen Ng

Starting your own business is hard enough at the best of times but being young makes it even tougher, according to entrepreneur Vihari Sheth.

Ms Sheth, 26, started Vihari Jewels six years ago, when she was barely 21.

"There is this issue of trust, and it is not easy gaining the trust of people and getting them to part with hundreds of thousands of dollars when you are at that age," she says.

It took about three years before the business started to gain traction and it is now making a big impact.

The firm joined a group of home-grown designers asked to showcase their wares at the Singapore Jewel Fest, which ended last Sunday.

Vihari Jewels unveiled the 110-carat Yellow Drangon diamond, which is valued at between US$11 million (S$13.5 million) and US$15 million.

Ms Sheth, who comes from a family of diamond traders, studied at the Gemological Institute of America in California.

Starting her own jewellery retail business had been her dream ever since she followed her father around to trade shows and exhibitions overseas.

"When you are young, you tend to make mistakes, but what is important is that I don't make the same mistakes that I made five years ago," she says.

And her philosophy on investing is similar: "When you are younger, you should try everything there is out there in small amounts and see what works best for you. Experience always makes a person smarter."

Q: Are you a spender or saver?

I am actually a saver.

Each month, I try to save 50 per cent of my income and am very disciplined about it.

Most of this money I put back into my business.

Once in a while, when I see something I like, I will buy it. But on a day-to-day basis, I'm not much of a spender.

Especially since I am a vegetarian, that effectively cuts my food spending by half, right?

Q: How much do you charge to your credit card every month?

I don't charge a lot to my credit card, anywhere from $500 to $1,000, and I use only one card, the American Express Black card.

I withdraw $2,000 to $3,000 cash every month.

Q: What financial planning have you done?

I am invested in some foreign currencies, such as a few good Australian dollar fixed deposits.

I have also bought some good-rated bonds and also trade in gold, iron and silver.

As I travel very often to Europe and India for my work, I have an annual travel insurance policy, life policy and medical expenses policy.

I am covered for about $250,000.

Q: Moneywise, what were your growing-up years like?

My father is a self-made businessman and has always been very generous with his spending.

We have grown slowly and steadily. We lived in a rented apartment in Selegie Road when my father first arrived in Singapore.

He has always told us not to compromise on spending for yourself and your health.

He also taught us to make sure we are making money when we spend it.

My mother has a good eye for property, so she manages the property-buying for our family.

She was the one who told me to buy my first property. When she told me to buy it, I did. I wasn't even in Singapore at that time.

Q: How did you get interested in investing?

When I was younger, I would sit in on meetings that my father had with his private bankers.

I would hear them talk about returns and triple-A-rated bonds and that is where I started to learn about investments.

I got interested in investing once my brother started college in Boston and was studying finance.

He would tell me about how money grows money and that I should start investing it rather than let it sit in banks.

The first investment I made was a diamond, which was in my expertise. It is a product that I understand well.

I believe a diamond's rarity and uniqueness gives it a great investment value.

Q: What property do you own?

My first property is a 1,200 sq ft apartment at Spring Grove, on Grange Road.

I bought it for $1.8 million and it is currently rented out for $4,200 a month.

I also recently bought a property which is under development for a commercial space.

I am looking to buy another property, but probably something which I can also live in. The current apartment that I own is too small for me.

I am just waiting for prices to come down a bit, which I think they will. But of course, at some point, I will have to take the plunge.

Q: What's the most extravagant thing you have bought?

It would be a limited-edition Hublot watch I bought for about $200,000 quite recently.

I have about 10 collectible watches, some of which were given to me by my father.

I don't think I will regret buying this watch because it is a limited-edition piece, and I believe it will command a higher price in the years to come.

I don't even think you can get it in Singapore yet.

Q: What's your retirement plan?

I am only 26 and haven't thought much about retiring, but from the little that I have considered, I plan on buying a few more properties.

Then I will collect rent from all of them to live on when I retire. I think I should probably need $5,000 to $6,000 a month.

Q: Home is now...

My parents' place, which is a condominium apartment in Meyer Road.

Q: I drive an...

SLK AMG 200 Mercedes hard-top

songyuan@sph.com.sg

WORST AND BEST BETS

Q: What has been your worst investment?


It would be some equities that I bought a few years back.

It was the worst decision of my life. I didn't know anything about what was going on, and the stocks crashed. The share prices fell from about $6 to 60cents.

I lost about $30,000. Now, I never invest in equities or anything that I don't fully understand.

Q: And your best?

It would be my business. I started out with $100,000, a loan from my father. Interest-free, of course.

But it is something that I know and love, so whatever money I make, I put more of it into the business and it has grown well for me.
My Value Investing Blog: http://sgmusicwhiz.blogspot.com/
Reply
I don't know about the diamond business but is it possible to multiple the 100k loan many times over in 5 years? From that 100k loan to a 200k watch, multiple properties and SLK seems to be pretty fantastic returns!
You can count on the greed of man for the next recession to happen.
Reply
(29-10-2012, 08:42 AM)LionFlyer Wrote: I don't know about the diamond business but is it possible to multiple the 100k loan many times over in 5 years? From that 100k loan to a 200k watch, multiple properties and SLK seems to be pretty fantastic returns!

Featured in Asia Tatler.
http://www.asiatatler.com/singapore/peop...hari-sheth

Rich kids normally have unusual advantages due to family contacts and wealth.
At least, in this case, she is contributing to the economy of the society.

Though, it is downright non-inspiring to those who are not in her league... haha Tongue
Reply
i wish i were borned in such a family-Diamond trading family too. i know i can do well in such trade too because to be a certified jeweler is one of my dream. i had even talked to jewelers about how to be a certified jeweler. Most of them told me you don't make much money as certified jeweler unless you become a jeweler yourself.
Well i am still quite interested in "gemology" though i don't own or wear any gem.
Actually the value of diamond is a "Myth" spinned by the diamond-owning mines that "Daimond is Forever"
As for GOLD, i think it is much more complicated relationship throughout civilisations.
Well, we all know nothing is forever on this Earth.TongueBig Grin
WB:-

1) Rule # 1, do not lose money.
2) Rule # 2, refer to # 1.
3) Not until you can manage your emotions, you can manage your money.

Truism of Investments.
A) Buying a security is buying RISK not Return
B) You can control RISK (to a certain level, hopefully only.) But definitely not the outcome of the Return.

NB:-
My signature is meant for psychoing myself. No offence to anyone. i am trying not to lose money unnecessary anymore.
Reply
200k watch! I guess it will probably be a tourbillion. If not, it really does not worth that amount.
Reply
(29-10-2012, 10:04 AM)mrEngineer Wrote: 200k watch! I guess it will probably be a tourbillion. If not, it really does not worth that amount.

Most pro that watch has a lot of diamonds since she is in the jewels business...if anyone wants to buy a 200k watch, most pro it be a PP!
Unless that someone treat 200k as loose change...
The thing about karma, It always comes around and bite you when you least expected.
Reply
200k would have bought her a very good Patek (possibly a custom one), which would have value retention much better than the Hublot (tourbillon or not). Maybe the Hublot would have good value over the next few years as it rotates in fashion, but not one which transcends generations. Just my humble 2cts on 200k watches.
Reply
(29-10-2012, 12:23 PM)thefarside Wrote: 200k would have bought her a very good Patek (possibly a custom one), which would have value retention much better than the Hublot (tourbillon or not). Maybe the Hublot would have good value over the next few years as it rotates in fashion, but not one which transcends generations. Just my humble 2cts on 200k watches.

Guess you are a true watch connoisseur.
Any advise for someone who wish to buy watches that can leave for legacy?

Does Patek has higher retention value as in "transcends generations" than other brands? Must they be of value >$100k before its value retention is there?

Reply


Forum Jump:


Users browsing this thread: 10 Guest(s)