Top Reads this Week (1 Sep) + Traders Fair 2019

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Rounding up top reads from around the web, including articles shared by fellow investors in the Financial Horse Facebook Group.


Disney’s new streaming service may be more popular than the company expects (Yahoo Finance)

In a survey of 1,000 U.S. consumers, UBS analysts found that 43% intend to subscribe to Disney+. Breaking those numbers down, 24% said they’re “extremely likely” to subscribe, while 19% said they’re “somewhat likely.” The survey also found that Disney+ is especially appealing to the younger demographic and males.

What’s more, of the 1,000 respondents, 67% said they would not cancel their current video streaming services. However, of those intending to subscribe, 57% indicated that they would cancel at least one of their other video streaming services.


At least S$5.3m swindled by impersonation scams so far in 2019: Singapore police (Yahoo)

Between January and May this year, the police received 92 reports of China officials impersonation scams, with at least $5.3 million being cheated.

Such scams typically involved scammers impersonating as staff members from courier companies. They also involved officers from other government organisations informing victims of the following:

  • A mobile number registered in their name was involved in a crime;
  • A parcel under their name containing illegal goods was detained;
  • There was a pending case in court against them;
  • They had committed a criminal offence and were required to assist in investigations.

7 Habits Everyone Should Adopt To Keep Your Money Safe From Scammers (The Financial Diet)

Set up real-time alerts for transactions on bank accounts and credit cards. You can choose from two methods — email or text message. If you make a purchase, you’ll instantly receive a confirmation alert. If you get a message when you didn’t make a purchase, it’s time to freeze your accounts. Call up a customer service representative at your bank who can walk you through the process. The sooner you catch a fraudulent transaction, the easier it will be to reverse the damage.


Why record low bond yields could keep heading lower as market fears ‘disaster scenario’ (CNBC)

Bond yields around the world careened to new lows as investors worried about recession, the lack of progress in trade talks between the U.S. and China and the latest developments in the U.K. around Brexit.

Strategists expect yields to continue to move lower, as summer ends and the September calendar opens up to a rush of economic reports and key central bank meetings later in the month. “The disaster scenario is if yields fall dramatically from here,” said one strategist. “Hypothetically, if the trade situation intensifies, if maybe Hong Kong goes badly and Brexit seems like it results in a hard exit … then what you probably get is a massive rally again in Treasurys.”


‘Powell walks into a minefield every attempt he makes’: strategist (Yahoo Finance)

President Donald Trump continued his attack on the Federal Reserve Wednesday, complaining the central bank can’t keep up with the rest to the world.

“There is a significant amount of resistance from the regional Fed presidents… in all of these pockets, those Fed presidents think the economy is in good enough shape, and we don’t need anything, but I think if the Fed doesn’t cut, the dollar strengthens,” Memani said. “The strengthening of the dollar is probably something that is going to be very bad for the U.S. economy. So, they have no choice, I think despite the resistance from three or four presidents, we are probably going to see a cut in September, maybe in October and maybe one in December.”

“The Fed made a policy mistake in 2018 by tightening too much. They are in the process of unwinding that, but that process will take some time,” Memani said. “For the yield curve to get its normal shape they’ll probably have to cut four or five times before the yield curve steepens up again. That’s not gonna happen, so get used to the idea that the curve is going to get inverted.”


A life insurance start-up backed by Jay Z and Will Smith is now worth nearly $500 million (CNBC)

Ethos offers term insurance, which pays out benefits if the claimant dies within a length of time that typically ranges from 10 to 30 years. The company uses data analytics to predict a person’s life expectancy, and claims the vast majority of its customers don’t have to take a medical test to be eligible for coverage.

The firm is now valued at nearly $500 million, its co-founder and CEO Peter Colis told CNBC in an interview, up from a more-than $100 million valuation it reached after a funding round announced in October last year. The company has also quadrupled its revenues since then, and increased its staff headcount from 30 people to about 90. The new funding brings Ethos’ total raised to more than $100 million.


China’s playing the long game, and is making key moves to hedge against Trump’s tariffs (CNBC)

“We think China is neither aiming to quickly reach a trade deal, nor trying to hit back at the U.S. as hard as it can,” says Yi Xiong, China economist at Deutsche Bank.

China is accelerating its efforts in other countries to reduce its reliance on the U.S. The country is also strengthening its domestic market. “China will still respond to US tariffs, but with smaller and targeted measures,” Xiong said.


Peloton IPO: Five things to know about the interactive exercise-machine company (Market Watch)

Peloton sells two types of fitness machines, a $2,200 exercise bike and $4,295 treadmill, and monthly subscription plans. It disclosed overall sales of 577,000 fitness machines, almost all of them in the United States, and claims 1.4 million “members.” Revenue has exploded higher as those numbers have grown in the past two years, more than doubling in the most recent fiscal year to move near $1 billion annually.

While gross margins topped 40% for both its product and subscription services, Peloton’s net losses grew at an even greater rate than its revenue in 2019, thanks to a surge in spending on sales and marketing as well as general and administrative costs. Its net loss in 2019 was $195.6 million, up from $47.9 million in 2018 and $71.1 million in 2017.

While compiling all those numbers for the SEC and prospective investors, Peloton realized that it did not have a good handle on its accounting and reporting, and it hasn’t fixed the issues yet.


What Key Recession Indicators Are Telling Us Today (Forbes)

Should you worry about recession risk if you’re a stock investor? Recent research suggests perhaps not. A strategy of moving to Treasury bills when the yield curve inverts, tends to underperform simply staying in the market even before considering trading costs and potential taxes. This suggests that the market is pretty efficient. Yes, a recession may be coming or be more likely that normal, but the market may already reflect that information.

However, what can be somewhat predictive of market returns over the medium term is valuation levels, and for the U.S. at least those are flashing a warning signal independent of any recession risk. So, we can conclude that recession risk in the U.S. is increasing, though it is unlikely we are in a recession yet. At the moment, the chance we see a recession in the U.S. is about fifty fifty, the same as successfully calling a coin flip. The chances of recession in the U.S. today are higher than normal, but not yet certain. Plus if you’re looking to make a stock market call based on recession predictions, you may end up doing your portfolio more harm than good. If you are worried about the U.S. economy, now may be a good time to check that you are well-diversified, as that can be a smart move in any market cycle, especially after the U.S. market’s great run in recent years.


There’s a ‘bubble’ in passive investing, says investor made famous by ‘Big Short’ (Market Watch) 

Michael Burry, the doctor-turned-investor profiled in Michael Lewis’s book “The Big Short” for his call on the trouble lurking in mortgage-backed securities before the 2008 financial crisis, has a new big idea: ‘The bubble in passive investing through ETFs and index funds as well as the trend to very large size among asset managers has orphaned smaller value-type securities globally.’ Many market observers have for years expressed concern about the rush of money into passively managed funds, though few have gone so far as to call it a “bubble.” Academic research published in June shows that three index-fund managers together manage more than $1.8 trillion, and that they could control as much as one-third of all voting shares of S&P 500 companies in the coming years.

Critics worry that such concentration of money in passive investments could amplify any market selloff, but ETF managers point to the big declines in December as proof that ETFs can withstand market shocks.


NBA star-turned-businessman Shaq reveals the worst investment he ever made (CNBC)

O’Neal described the worst investment he ever made — an unnamed paper company that allegedly promised him fraudulent deals. “When I first came into [the business industry], I lost a lot of money in the ‘get rich quick schemes.’” he said.

However, after having learned from his past mistakes, the four-time NBA champion said he started “listening to people” and working with “people [who] are much smarter than me.” “Once I stopped focusing on [money], I became a little bit more successful,” O’Neal told CNBC.

The four-time NBA champion has now developed his own principles in investing. O’Neal said he has to genuinely “like the product” and “understand it” to promote, invest and “really believe in it.”


Financial Goals you should have in your 30s (One Big Happy Life)

  1. Have a one year spending plan

A one year spending plan puts you in full control of your money because it lets you decide how and when to spend your money based on your plan for your life over the next year. Even if unexpected expenses come up, you’re able to adjust your spending plan and see right away what impact those changes will have on the rest of your year. Having this information is so empowering because then your finances stop being this black hole and instead becomes something that you can anticipate and tweak over a relatively short term.

2. Have a 6 – 12 month emergency fund

3. Pay off all your high interest debt

4. Have sinking funds for large purchases

5. Pre-fund your retirement account

6. Have all the insurance you need

7. Have a 5 year plan

8. Build an income that allows you to meet your financial goals while still having a lifestyle you love

9. Start taking better care of your health


Malaysia ex-PM use ‘elaborate’ plan to loot fund: prosecutor (Yahoo News)

Chief prosecutor Gopal Sri Ram said in his opening remarks that the prosecution would show how Najib took steps to channel 1MDB money into his accounts using a “circuitous route” to prevent detection of the source of the funds and then later pretending that the fund was donated by an Arab prince.

He told the High Court on Wednesday that prosecutors will also show that fugitive financier Low Taek Jho, better known as Jho Low, was Najib’s “alter ego” and that the two acted as one in the scam. Low, 37, has been charged in both the U.S. and Malaysia for his alleged role as the mastermind in the 1MDB scandal.

“An elaborate charade was employed. It was acted out in four phases in which several characters played a part but it was the accused who played the pivotal role. His objective was to enrich himself,” Sri Ram said.


Singapore parents to enjoy lower pre-school fees, better vaccination subsidies (Yahoo News) 

The Singapore government announced on Wednesday (28 August) a series of enhancements to help parents cope with the cost of raising their children, as well as to encourage couples towards parenthood.

These include higher subsidies for pre-school education, extension of vaccination subsidies to all general practitioner (GP) clinics, and a fee waiver for a child’s first passport.

The measures are a follow-up to Prime Minister Lee Hsien Loong’s National Day Rally speech earlier this month, in which he outlined significant enhancements in the early-childhood sector, in order to give every child a good start in life and to support families with young children.


Traders Fair 2019

Traders Fair is happening at MBS on Saturday, 26 October 2019!

There are talks and workshops all the way from 10am to 6pm, check out the full line-up on their website.

Registration is free so if you are interested in trading and finance, you can sign up here!


Looking for a comprehensive guide to investing? Check out the FH Complete Guide to Investing for Singapore investors.

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