Marcos, Mubarak & Mahathir - Who's The Richest Man?

The mounting pressure from 18 days of historic protests finally drove Egyptian President Hosni Mubarak from office, after 30-years as his nation’s iron-fisted ruler. But the dictator should not shed a single drop of tear because the fortune he amassed is more than enough to finance his retirement comfortably. It would be nice and jaw-dropping if Forbes can compile the world’s richest dictators or politicians simply because it would put world’s richest man, Mexican Carlos Slim (worth about US$54 billion) and Bill Gates (net worth about US$53 billion) to shame.

Armed with suspended constitution for 30 years, Hosni Mubarak was in virtually every piece of business deal in the country thanks to guaranteed profit from monopolies, red-tape fees, bribery fees, nepotism and whatnot. The British Guardian newspaper estimated the wealth of Mubarak and his family at somewhere between US$40 billion and US$70 billion. That’s about US$1 billion to US$2 billion net profit annually on average, not bad for a job as a president ruling a nation with GDP per capita of just $6,300.

 

In fact, Mubarak knew it was game over when the protesters persisted even after he cut the nation’s internet access and use of forces to intimidate the tens of hundreds of protesters. And his delayed exit was definitely not to pray for a dignified exit but rather to buy time to move money around and hide significant parts of his fortune. If former Philippine President Marcos had US$684 million on deposits in various Swiss banks alone, expect nothing less than that from Mubarak’s Swiss accounts. The Swiss government has said it is temporarily freezing any assets in Swiss banks that could be linked to Mubarak.

Believed to have flown to the Red Sea resort of Sharm el-Sheikh, much of Mubarak’s wealth were from investment deals in British and Swiss banks or tied up in upmarket real estate in London, New York, Los Angeles and expensive tracts of the Red Sea coast, not to mention commissions from arm deals. Mubarak’s half-Welsh wife, Suzanne and their sons, Gamal and Alaa, accumulated wealth through partnerships with foreign investors and companies. Mubarak’s wife’s fortune alone was estimated at about US$5 billion.

Regardless whether Mubarak’s wealth is US$40 billion, US$70 billion or more, the fact remains that tracking the money trail would be almost impossible,let alone claiming it back to the people of Egypt. If the Philippine government couldn’t even bring back billions of dollars plundered by former dictator Marcos more than 20 years after his death, what more can the new government of Egypt do to recover it with today’s information technology?

 

Obviously top army officials were on Mubarak’s payroll judging from his ease of exit from the country. Mubarak may no be the President of Egypt anymore but his tentacles are still in the country. His worry is not about money but more on possible prosecution or assassination. But if you think Hosni Mubarak is the richest man on earth, wait till you hear what has former dictator Mahathir Mohamad plundered. How about US$100 billion?

Using the same rule of thumb that Mubarak “earned” about US1 billion to US2 billion annually, Mahathir’s wealth easily top US$22 to US$44 billion over his 22-year of iron-fist rule. However Malaysia has more natural resources than Egypt and economically, Malaysia is richer although not necessary less corrupted than Egypt. Just like Egypt, corruption in Malaysia is so entrenched that every institutions are tainted – from the monarchy, judiciary, executive, legislature to the lowest ranking policemen on the street. Hence Mahathir is easily worth more than that.

If there’s one factor that is separating Malaysia from Egypt, that’s unemployment. The present government of Malaysia may be more corrupt than previous Mubarak’s administration but Malaysia’s ruling party is smart enough to generate jobs in various government departments especially to cater for the ethnic-Malay, though the jobs created are not needed. If there’s one group that would take to the street just like the Egypt uprising, it would be the ethnic-Malay themselves.

 

As long as the Malaysia government can provide them with jobs, the scale of demonstration seen in Egypt would not happen in Malaysia. And as long as PM Najib Razak and his mentor Mahathir Mohamad can keep the pace in feeding these mouths and play the racial cards in their “divide and rule” doctrine,they can rule the country for many more decades and in the process continue to plunder the country.

By the time they’re ousted from the country the same way as Marcos and Mubarak, provided there would be an uprising of the same scale as Egypt in the first place, Mahathir and his followers could easily become the richest man on earth. And if there’s an uprising in Malaysia, do not expect any friendly police or military men in sympathy of the demonstrators. Again, Malaysia is very different from Egypt so an uprising of such stamina and scale is very distant.

Adopted From : FinanceTwitter.Com

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How Can You Track The Stock Market Large Trader

I have a backlog of emails and comments from the recent poll concerning integrating system and discretionary trading. Many thanks to readers for their interest. I'll look for further comments today and then will summarize them--and my reactions--in a post tomorrow.


As a gesture of appreciation, allow me to share a piece of my research in this and the next post. In the past, I have only shared this with specific prop traders I have worked with in a coaching vein. The idea of the research is to identify two (related) things that every short-term trader should know:


1) When are institutional participants active in the market? 2) When are we likely to have large price moves during morning trade?


Let's start with the basics. As a gross distinction, imagine that we have two kinds of traders in the marketplace. The first are market makers (locals) who provide liquidity. They are in the markets throughout the day, and they are in the markets every day. Having worked with prop traders who function as liquidity providers in the electronic futures markets, I can tell you that their participation in the market is relatively consistent from day to day. For simplicity's sake, I treat their involvement (volume) in the market as a constant.


The second group of traders are directional traders who enter the market when they perceive that we are trading away from what they deem as value. They may fade highs and lows, identifying value as somewhere between, or they may trade breakouts, placing value away from recent trading ranges. They generally enter the market on longer-term bases than the locals (scalpers). While directional traders include small individual traders, their volume is dominated by CTAs, hedge funds, mutual funds, and other large, institutional traders.


If we make the assumption that the participation of locals is relatively constant from day to day, then we can attribute surges or plunges in volume relative to average to the increased or decreased participation of large, institutional traders. When markets are trading with below average volume, they are dominated by liquidity providers. Because those traders generally work orders above and below the current market price, they are selling offers and buying bids. That tends to make them short when markets rise and long when markets fall. They profit, on average, when moves do not follow through and trend. This is why local-dominated markets (i.e., low volume markets) tend to trade in narrow, choppy ranges. There just aren't enough large, directional traders participating to move the market far from current levels of value.


Conversely, when volume is significantly above average, we have active participation of the large institutional traders. They are perceiving that value is away from where the market is currently trading, and they exert a directional pressure on the market as they lift offers or hit bids. When markets get very active, you'll often notice that the average quantity of ES contracts at each level in the order book (your depth of market display) often drops. This is because locals are pulling in their horns. They don't want to get run over by the large institutions, and they--on average--lack the firepower to hold the market to ranges where they would benefit from selling offers and buying bids. With locals pulling back, directionally biased institutions create short-term trends.


This, then, is why volume is so closely correlated with volatility. The presence of large institutional traders is what makes for trends. Knowing how volume compares to average tells you a great deal about *who* is in the market and *how* the market is likely to move. When volume is very low, there is little market movement. At those times, there may not be enough opportunity to justify the slippage and commissions of trading. In short, volume = volatility = opportunity. Knowing volume is knowing how much markets are likely to move, because you're tracking who is in the market.


Now for the details. You may want to print this out and keep it by your side when trading. That's what I do.


Going back to the past 105 trading sessions, the median morning trading volume (8:30 AM CT - 11:00 AM CT) in the ES contract is 442,369 contracts. The median trading range (high - low range) for morning trade is .47%. That is a little less than 7 ES points.


The correlation between morning volume and size of the morning trading range has been .73. That's quite high. If we divide our sample into quartiles based upon volume, the highest volume group of days (with a median 569,000 contracts) average a trading range of .71% (about 10 ES points). The next highest volume group of days (median of 485,000 contracts) averages a trading range of .51% (about 7 ES points). The third, next-to-lowest volume group (median of 407,000 contracts) averages a trading range of .38% (about 5.5 ES points). The lowest volume group (median of 280,000 contracts) averages a trading range of .35% (about 5 ES points). In other words, you get twice as much movement (range) in morning trading when you compare the highest volume days to the lowest volume ones.


Think: Can you see how this information helps you set profit targets for morning trading? Can you see why, yesterday, I took profits once the morning market had moved about 6 points from low to high?


Tracking volume *is* tracking the stock market's largest traders. When you see volume expand significantly and when you see that the volume is asymetrically distributed at the bid or offer, you know that large market participants with a directional bias are taking over the show. That is why, yesterday, I alerted readers to a pending breakout move. I'm not clairvoyant; far from it. But I could see that large traders were leaning one way and locals would not be able to fade that in the short run.


When there is low volume, there is relative consensus about market value; when there is high volume, there is uncertainty. Uncertainty is what moves markets and facilitates future trade. As we will see in my next post, the current period's volume and volatility is positively correlated with those in the next period. Knowing participation *now* informs us about the near-term future.


Brett N. Steenbarger, Ph.D. is Associate Clinical Professor of Psychiatry and Behavioral Sciences at SUNY Upstate Medical University in Syracuse, NY and author of The Psychology of Trading (Wiley, 2003). As Director of Trader Development for Kingstree Trading, LLC in Chicago, he has mentored numerous professional traders and coordinated a training program for traders. An active trader of the stock indexes, Brett utilizes statistically-based pattern recognition for intraday trading. Brett does not offer commercial services to traders, but maintains an archive of articles and a trading blog atwww.brettsteenbarger.com.

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Five Things To Do To Be Rich

Ever wonder why there can only be one “Genius-Investor” Warren Buffett, one“Microsoft” Bill Gates, one “Currency-Speculator” George Soros, one“Superman” Li Ka-shing or even one “Super-Blogger” Darren Rowse in this globe? Because all of them posses their own unique style in conducting stocks-investing, technology-empire-building, risk-profit in speculating, property-empire-building and blogging.

That’s the main reason why you can’t have another copy of the same success these peoples have. The closest you can get is being able to make some money or fortune learning their techniques or business-model but you are still subject to your own in-built characteristic.

You can read all the investing books from Amazon.com Inc (Nasdaq: AMZN, stock), attend all the seminars you can afford and ask a million investing questions because Warren Buffett is your neighbor next-door but you can never duplicate and apply all the teaching in your way of investing. So let’s start with the top 5 things you should do to make money investing stocks or trading option (in no particular order):

First Thing to Do

You Should Study the Companies’ Fundamentals – I wish I can tell you the number of times a company’s fundamental had saved me from un-anticipated stocks’ direction after I opened my trading position. As I normally put top priority on fundamentals to gauge whether to long or short a position, I study their sales growth, income growth, past earnings, net-profit margin, price-earning ratio, debt-equity ratio, institutional ownership and other data. It’s a proven Warren’s theory that the price of a stock will ultimately reflects its’ real value.

Having said so doesn’t mean my studies will always make me money else I would be one of the richest persons alive. If Warren Buffett made some losses along his investment journey, it’s only logical for you to make losses due to unforeseen reasons. As long as your net figure is positive, you’re on the right track.

Second Thing to Do

You Should Do Technical Analysis – unless you’re a clone-copy of Warren Buffett, chances are you will take ages to make huge money investing based on purely fundamentals. Technical analysis is the second key to make a decision to open a position (stocks investing or option trading) after you’ve opened the door with the first key(fundamental). Simply put it this way – if technical analysis is a hype it won’t survive till today, don’t you think so. Learning the basic technical indicators such as MACD, RSI (Relative Strength Index), Stochastic or even with just Support and Resistance could make you money multiple times.

Third Thing to Do

You Should Read the Pulse of the Market – this is perhaps the most general but always the neglected factor which most investors ignore. In times of uncertainty, for example the Federal Reserve’s meeting, you don’t expect market-makers or professional investors jumping into the stocks market do you? During global crisis where there’s a possibility of a war in Middle East, you don’t expect the market to be bullish do you?

On the contrary, you might be able to make money during uncertainties or crisis as the market emotion is full of fears. Would you long or short energy stocks during oil-crisis? And when the upcoming giant China sneezes, you don’t want to walk into the stocks market do you? It’s always wise to ride on the wave though there are times when you can maximize profit by being contrarian.

Fourth Thing to Do

You Should Know When to Lock Your Profit – so far there’s no report of investors losing money because they take profit off the table. Throw anyone into stock market and he or she will knows how to “buy”. Every level is a buying opportunity (subject to technical analysis discussed earlier), the problem with most investors (this include novice speculators and traders) are they do not know how to “sell” which translate to holding the stock forever infinitely in a yo-yo cycle.

If you do not take action to sell and realize the profit, you are as good as throwing your money into ocean. An extra day is an extra risk. Remember the saying “Bull and Bear makes money, Pig get slaughtered”

Fifth Thing to Do

You Should Minimize Your Emotion – how many times have you screamed at yourself for selling too early (you’ve entered the fear zone, mind you)? How many times were you cursing yourself again for “not” selling when you’ve met your target profit-level only to see the stock price reversed but you decide to hold on as you “believe” it will goes back to pre
vious level (you’ve entered greedy level)? Human emotion is something which can never be changed no matter what since the creation of stocks markets decades ago. Guess how the market-makers and professional investors make money?

While there’s no total solution to eliminate emotion, you can minimize it by using tools – that’s entering your selling price and go away. You can use “trailing stop” (only applicable to certain equity market instrument) to maximize your profit, hence eliminate your fear or greed.

Conclusion

There’re of course more things you should do (I’ll leave that for another post) but above are the top 5 things you should do to at least win the battle against the market-makers, professional investors and the crowds. Win enough battles and you might win a bigger war. Of course above are just my investing and trading methodologies. It varies from person to person’s style and you have the full right to disagree.

There’s no right or wrong strategy, as long as you’re making money – your strategy is the right strategy. Happy Investing!


Adopted From : financetwitter.com

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