Den of The Lion Investor

Earlier on, I visited the website of Powder River Petroleum to find out more updates about their lawsuit by Oilpods. Powder River has already been placed into receivership for a host of charges bought against them.

One of which includes operating a ponzi scheme and cheating thousands of Asian investors.

The receiver has uploaded at the website quite a fair bit of information on what is happening .

However, the links don’t seem to be coded correctly. As I’m a bit technically inclined, I managed to find the correct links to download the documents. Here they are for easy access:

Petition

Plaintiff’s First Amended Petition

Affidavits of Newsome, Chang, Lim Romine

Order Appointing Receiver

Plaintiffs Motion for Temp Restraining Order and Permanent Injunction

Plaintiffs Motion to Reduce Bond

Temporary Restraining Order

Initial Receivers Report

With regards to unit trusts, CPF monies can only be used to buy funds which are included under the CPF Investment Scheme (CPFIS). The number of funds that can be purchased with money in the Special Account (SA) is much fewer than the number of funds that can be bought using money from the Ordinary Account (OA).

These funds have to meet strict criteria set by the CPF Board to continue remaining in the CPFIS. One of these criteria is that their total expense ratio (TER) has to be lower than a certain stipulated amount.

The following funds have not met this criteria and will no longer be able to accept new CPF monies into the fund:

• LionGlobal Southeast Asia Fund
• Fidelity Asian Special Situations Fund (USD)
• Fidelity European Aggressive Fund (EUR)
• Fidelity South East Asia Fund (USD)
• Fidelity Taiwan Fund (USD)
• Fidelity FPS Global Growth Fund (USD)
• Fidelity Target 2020 Fund (SGD)
• Henderson Global Technology Fund
• Henderson Global Balanced Fund
• Henderson Pacific Dragon Fund
• Henderson European Fund
• Henderson European Property Securities Fund
• Henderson Japanese Equity Fund
• Henderson Global Property Equities Fund
• Henderson Asia-Pacific Property Equities Fund

If you are currently holding any of them with your CPF money, you can still continue to hold them. Just note that you won’t be able to buy more of them very soon.

If you have existing CPF-OA Regular Savings Plan (RSP) arrangements for the above mentioned funds, you might want to make sure they are terminated and select other funds which are still in the CPFIS instead.

Many people have asked whether it is possible to make money by trading forex.

Every day, you can see advertisements promoting forex trading (or other instruments) seminars with the promise of making a full-time income using the techniques they teach.

I have not paid money to attend any of these seminars so I am unable to tell you for sure whether the methods taught at these seminars actually work. Personally, I don’t believe that attending a two or three-day event will make anyone a consistently profitable trader. It takes much more than that.

What I can tell you for sure is when the claims on the advertisements are untrue to the point of being ridiculous.

Here’s one:

Generate 20-40% returns monthly.

Let’s work out an example. If you start with just $1000, the numbers below show the money you have at the end of every year if you can achieve a 20% return every month.

1 year $8,916.10
2 years $79,496.85
3 years $708,801.87
4 years $6,319,748.72
5 years $56,347,514.35
6 years $502,400,097.98
7 years $4,479,449,738.82
8 years $39,939,223,824.27
9 years $356,102,131,442.61
10 years $3,175,042,373,780.32

At the end of 5 years, you will have $56 million dollars.

At the end of 8 years, you will have $39 billion dollars.

At the end of 10 years, you will have $3.1 trillion dollars.

At the end of 20 years, you will have $10,080,894,075,300,600,000,000. There is an outside chance this could be an amount greater than all the money in the world put together.

If anyone makes these kinds of claims to you, be wary - very wary.

Hopefully, MAS will one day start regulating such kinds of advertisements.

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Soon after the recent OCBC preference shares issuance, OCBC has decided to issue more preference shares to further balance its capital base.

This time round, they will be issuing 10,000,000 preferences share at a price of $100 each. If demand is good, this might be increased to 15,000,000 shares.

Out of these 10,000,000 OCBC preference shares, 2,500,000 will be offered to retail investors while the rest will be offered to institutions.

The retail application will be available via ATM application of Singapore’s three local banks starting from 9am today, until 12 noon on 26th August. The ATM subscription will be subjected to balloting if demand exceeds supply. Since the minimum subsciption this time round is 100 shares (compared to 200 shares previously), more people might be able to apply for it.

The preference shares will provided a dividend of 5.1% per annum which will be paid semi-annually in March and September till 20th September 2008. They are perpertual securities with no fixed maturity dates. They may however, be redeemed by OCBC on 20th September 2008 and each dividend date thereafter (subject to MAS’s approval).

After 20th September 2018, the dividend rate will no longer be fixed at 5.1% p.a. Instead, the rate will be tied to the 3-month Singapore dollar swap offer rate plus 2.5%. Dividends from that point onwards will be payable every 3 months.

The 3-month swap offer rate is a rate that is slightly higher than the 3-month SIBOR. You can find out the historical SIBOR rates from MAS’s financial database. Refer to “interbank 3-month”. For current rates, you can refer to a copy of The Business Times.

The OCBC preference shares are expected to list on SGX from 28th August 2008.

The Edge Singapore has revised its cover price and subscription rates from $3 to $3.80 with effect from July 7, 2008.

In their announcement in The Edge Singapore on June 30 and July 7 issues, all existing subscribers would be eligible to renew their subscriptions in advance at the old subscription rate and the offer was supposed to end on August 9, 2008.

The Edge Singapore has decided to extend this special offer by another week to August 15, 2008.

If you are an existing subscriber of The Edge, you can renew in advance at the rate of $52 for 52 copies.

Here’s a copy of The Edge Advance Renewal Form.