Predicting Metal in 2010

Indication from BT on future of metal pricing,

Gold

The yellow metal has had a good run, having posted nine consecutive years of higher average annual prices.

An investor-led surge in demand in last year, triggered by weakness in the greenback, saw gold prices break decisively above the long-held resistance level of US$1,000 per ounce to reach fresh records in closing months of 2009.

Physically backed gold exchange-traded funds are now worth a record US$70 billion, while a new Central Bank Gold Agreement has come into force as central bankers' gold appetite appear insatiable.

A key risk though is the unwinding of the massive short US dollar/long gold position, when the market has greater certainty on the timing of a turn in the interest rate cycle in the US, widely expected in the second half of next year.

'We are now soft-peddling on our price stance as gold starts to face headwinds of an end to the gifting season and a stronger trade-weighted US dollar,' said Nick Moore, who heads the commodities team at RBS. 'By 2013, we see gold averaging a record US$1,300 per ounce.'

'Gold is money - a very special form of money. It is gold's monetary function that drives its price beyond its relative value as a commodity . . . Applying a valuation to gold is tricky. There is no absolute independent measure that determines when gold is cheap, expensive or fairly valued.'

Based on production costs, gold is not cheap, says the report. But compared to other assets such as oil or stocks, 'gold appears to be at least fairly valued if not inexpensive'. The stock-to-gold ratio is one yardstick that is often cited, for instance. In 1900, the ratio was two - that is, it took two ounces of gold to buy the whole Dow Jones Index. It remained below five for the next 25 years, and then shot up to 15 during the market boom of the 1920s.

With the US in recession in 1980, that ratio fell to one. It picked up speed in 1990s and during the technology bubble, was an astonishing 35. Since then the ratio has been falling to its current level of about eight. Given that the long term average price of the Dow Jones Index is 5 ounces, gold is still somewhat cheap compared to stocks, which is the same as saying that stocks are still somewhat expensive compared to gold.

The target of gold price is about US$1,500 per ounce in 12 months time. Of course, any sharp intensification of the sovereign debt crisis in Europe could propel the gold price even higher, but the downside risks should not be discarded lightly either. Any dip below US$1,200 is a buy. We would expect investors to be richly compensated for the risk they take.

UBS' report also advises investors on their approach to gold. Investors, it says, should be clear about why they want to invest in gold. There are typically four considerations - portfolio diversification; thematic exposure through structured notes; yield enhancement using options; and opportunistic trading. Those objectives will exist alongside varying investment horizons.

It favours direct investments in gold rather than mining shares. A higher gold price may not have a strong impact on a company's share price. Shares are also affected by the broader market, as witnessed in the steep drop of mining shares in 2008.

In a portfolio, it does not advise allocations of more than 10-15 per cent in the long term. 'Even though the correlation with equities is rather low, especially in difficult investment environments, gold fails to deliver adequate returns over a multi-decade investment horizon. An allocation of more than 10-15 per cent harms the historical risk/return profile of a balanced US dollar portfolio.'

There are of course, risks to gold. High real interest rates, for instance, could trigger outflows out of gold and a fall in price, it says. For now the likelihood of this is believed to be low, given a still fragile economic backdrop.

In Singapore, buying physical gold incurs GST.

Silver

Traditionally, silver is the weakest of the precious metals and the most vulnerable to investor fatigue. But the precious metal is a geared play on gold and investor appetite remains strong.

Indeed, buoyant exchange-traded fund activity has just about absorbed 2009's large surplus but sizeable surpluses could persist in 2010-11 despite a rebound in industrial demand.

RBS forecasts that silver will spend long spells below US$17/oz in 2010-11, but will then move back above US$20/oz in 2012.

Copper

With the exception of lead, copper has been the best performing metal in 2009, by a large margin. Last year, London Metal Exchange cash prices rose by about 130 per cent in the US dollar, reflecting the impact of aggressive Chinese restocking in the first half of 2009, relatively low inventory levels, scrap tightness and a limited amount of idled capacity.

Morgan Stanley thinks that these factors could continue to drive prices again this year. Indeed, Chinese 'indigestion' from excess imports should subside this year, even as global growth prospects continue to recover.

In such an environment, the elements of any renewed price strength in 2010 will be the persistence of tightness in the scrap market, especially in China, resulting in upward pressure on demand for primary feedstock. Concentrate supply, in turn, is also expected to struggle in the face of the long-term trend of falling head grades and the impact of rising labour militancy in a number of key copper regions.

A forecast shortfall in refined supply in the face of improved demand for refined copper in the OECD and strong growth in China is, in turn, expected to put renewed downward pressure on the stock-to-usage ratio and upward pressure on price.

Platinum

In a year when gross auto sector platinum purchases have fallen by almost a third as a result of the Great Recession, it is remarkable that total demand for platinum is likely to be down only 4-5 per cent owing to strong growth in Chinese jewellery demand, essentially for restocking and further stock building.

Last year's spike of over 80 per cent in the US dollar price means that jewellery demand could be eroded in 2010 in this very price-sensitive sector.

Although some recovery in consumer purchasing of platinum jewellery is expected with an improvement in economic growth, analysts do not expect to see a repeat of the inventory-driven surge in Chinese demand either in that country or elsewhere.

The small surplus in the 2009 supply-demand balance should turn into a deficit on higher industrial demand and a higher base in jewellery demand.

Looks like the highs of 2008 are unlikely to be repeated.

How to get staff loyalty?

Frequently talk to your staff on any subject

It is important to build rapport with your staff and any subject in the conversation will kick start the day

Some of the dialogue to start with:

• Do you understand where the company is going?
• Do you see how you fit in?
• Do you care enough to take action?
• How loyal are you to your projects and your team?
• What are the aspects of your work that you like most?
• What would you like to learn?
• What are your aspirations?
• Which of your talents gives you the greatest satisfaction?

Create work opportunities

What’s interesting in a job? Individual expectations naturally vary, some surveys reported on several common factors for job satisfaction:

• Task variations
• Workplace human relationships
• Fair treatment and procedures
• A equality between how much effort staff put it and the rewards they receive
• There must be certain level of autonomy and control for employees to work within their capability and independently. They want meaningful work that makes use of their talents and interests, and that offers good compensation — not just financial rewards, but also importantly recognition, authority, or leadership.

Very important to know their personal goals and make sure that they have the tools to achieve them. Set aside some time in annual reviews to collaborate on goal-setting. What would they like to do more of? Get their feedback and their interest. What would make their jobs more interesting? Every job has elements that are repetitive, but these can be distributed amongst staff with different work tasks and different type of projects that give employees freedom to indulge an interest or acquire another skill that can prove helpful to our rig building design and business.

Create career paths

Company need to develop an extended career plan for staff — even if that plan means the individual must leave the business to achieve a certain professional goal. The reality is that some of your key people will either choose for transfer or depart for a variety of reasons, no matter how much they seem to like their jobs. McKinsey and Microsoft realized this and created online alumni networks to keep in touch with departed colleagues.

No blame culture

Most staff don’t leave their organization but they leave you — i.e. the boss, says entrepreneur and author Jo Owen, author of “The Death of Modern Management.” If you want engagement and commitment from the staff, you must show that you care, delegating more than just the "mundane" tasks that you would not want to involve. A senior manager who is quick to point the blame for mistakes their staff made is highly corrosive and not going to help staff morale. You will be quite surprise to realise some big organization with senior management highly qualified but do not "walk the talk" and they are quick to point the mistakes at their subordinates. Delegating effectively means sharing credit and taking blame. The staff will like you very much if you show that you do not finger point and better off “take the rap” on the staff behalf. Do that, and the staff will all way out to work for you and this is imminently required for success. They’ll do it with you and for you even they need to take some calculated risk at times.

Acknowledge individuals

There are many ways to deserve great respect among your team. If you’re a manager, make sure you make yourself available to people when they need to speak to you. Do not close your door to them, this create a sense of communication barrier. Specific and personal thanks goes a long way. Try moving from “Good job, team” to “Thanks, Tom, for working O/T last night.”

Put staff in the big picture

Every manager thinks about from recruitment onwards. Employees look to team leaders to remind them why their work is important in the big picture, and to create job excitement and what the company is doing. There’s no quick way to achieve this. It’s your job to align business values and goals for employees. Explore ways to make people feel like their work has an impact on the overall business, such as keeping them in the loop on what happens next for a project they’ve completed or acknowledging when their work has generated more businesses or revenue.

Medical "code of conduct"

Straits Times 13th Jan 2010

It was good news that the SIN government taken steps in updating the Changes in doctors' code of practice and conduct.

THE Medical Registration Act, strengthened on Monday with tougher enforcement and oversight, comes 12 years after it was gazetted though the period seems rather long without much updates. During that time, patients' expectations of doctors' competence and "ethical" observance rose sharply with an outpouring of medical information in books and online. Although much simplified for layman use, a lot of it comes from doctors themselves and reputable hospitals and medical schools. An impression began to be formed that some doctors here who had malpractice and other complaints made against them were getting off lightly. You see some cases of patients suing doctors but not much impact on these professionals though.  Another grievance was that complaints took too long to be investigated and results were not made public.

The new penalties and professional requirements written into the amended Act are thus forbidding, in the circumstances. Fines for doctors in breach are raised by a whopping 10 times to $100,000 ( but I think this sum is not going to hold much weight or cause any stir compare to the money they earn yearly ) and they can be suspended for longer than the present limit of three years. Most significant is a refinement of the law of evidence: Health Ministry investigators can remove documentary and other evidence from a doctor's office without notice. This will eliminate negative inferences, as the practice has been for the doctor complained against to produce the records. The Medical Council's count of statutory members and outside personnel hearing cases will also be augmented to expedite clearing of complaints. And to keep matters focused, lawyers will have a role in disciplinary tribunals adjudicating on complaints.  

Without prejudice to doctors, the majority caring of patients' welfare, the lay public will see the enhancements as an overdue balancing out. Doctors' actions undoubtedly will be scrutinised more closely and the development should properly be regarded as a social advance, of benefit to patients (their rights) and doctors (their professional standing).

The process of advancement is incomplete, however, until transparency is made an ingredient. Hearings and outcomes of complaints before the Medical Council are closed-door affairs. This has to change. Citing patient confidentiality is not as convincing an argument in serving justice, as giving cause to the unquestioned virtue of full disclosure. Justice has to be seen to be done and I think our health minister is working hard on this and have full confidence in him and no doubt about his capability looking back at his actions for the past two years on health cost and fee, H1N1, etc.

Singapore 2010 brief outlook

Should history repeats itself, Singapore's stock market will undergo a major correction around June 2010 - 16 months after crisis began.  That is according to DBS Bank's analysts, who have noted that after the last two major recessions, the initial stock market rallies that followed lasted exactly 16 months each.

Mr Timothy Wong, managing director and head of group research at DBS, expects a bullish first quarter 2010, in which the Straits Times Index (STI) will hit about 3,080 points. But somewhere in the middle of the year, the markets will experience a sharp pullback.  If there is no major correction of 20 per cent or more in the first half of the year, there will "probably" be one in the second half.

The STI will likely rally again after the correction to finish the year at about 3,500 points for 2010, that is the likely indicator.....
Stocks in the services sector, including transportation, hospitality and high-end properties, which will be boosted by the opening of the integrated resorts in singapore this year.

Oil price has risen above US$80 per barrel and will more likely see those in the oil and gas sector businesses reaping some benefits.

The mood in the market now is optimistic rather than euphoric, but on the flip side, markets could be shaken by a sudden surge in inflation which already showing some sign.

MAS Singapore may return to the pre- recession stance of gradual Singdollar appreciation only in its following meeting in October, when inflation has picked up more significantly. A more expensive Singdollar helps to mitigate inflation here as it offsets the higher prices of imported goods.

As economic growth gathers steam and inflation returns, most of the other central banks in Asia will also start to raise rates this year.

For the property sector, the SIN Government is keeping a watchful eye on runaway prices in these sectors.

But high-end home prices will jump by 10 per cent to 15 per cent, due to more limited supply, the integrated resorts drawing in investors, and spillover demand from Hong Kong, where luxury home prices have skyrocketed. Similarly, luxury items will see some boost in demands in China,Hong Kong as well Singapore. Maybe getting into luxury car importer business is one good choice for some keen entrepreneur..

Life is an Integrity

The future may be made up of many factors but where it truly lies is in the hearts and minds of men. Your dedication should not be confined for your own gain, but unleashes your passion for our beloved country as well as for the integrity and humanity of mankind. ~ Li Ka Shing

When I do good, I feel good. When I do bad, I feel bad. That's my religion. ~ Abraham Lincoln

You must consider the bottom line, but make it INTEGRITY before profits. ~ Denis Waitley

To give real service you must add something which cannot be bought or measured with money, and that is sincerity and INTEGRITY. ~ Douglas Adams

Goodness is the only investment that never fails. ~ Henry David Thoreau

Sin lies only in hurting other people unnecessarily. All other "sins" are invented nonsense. (Hurting yourself is not a sin - just stupid.) ~ Robert A. Heinlein

I have never looked upon ease and happiness as ends in themselves - such an ethical basis I call more proper for a herd of swine. The ideals which have lighted me on my way and time after time given me new courage to face life cheerfully, have been Truth, Goodness, and Beauty. ~ Albert Einstein

If moral behavior were simply following rules, we could program a computer to be moral. ~ Samuel P. Ginder

It's discouraging to think how many people are shocked by honesty and how few by deceit. ~ Noël Coward

It is curious that physical courage should be so common in the world and moral courage so rare. ~ Mark Twain

Six essential qualities that are the key to success: Sincerity, personal integrity, humility, courtesy, wisdom, charity. ~ William Menninger

To speak ill of others is a dishonest way of praising ourselves. ~ Will Durant

Don't bother just to be better than your contemporaries or predecessors. Try to be better than yourself. ~ William Faulkner

Live so that your friends can defend you but never have to. ~ Arnold H. Glasow

When you choose the lesser of two evils, always remember that it is still an evil. ~ Max Lerner

It is easier to find a score of men wise enough to discover the truth than to find one intrepid enough, in the face of opposition, to stand up for it. ~ A.A. Hodge

To reach a great height a person needs to have great wisdom and sacrifice..

It is hard for an empty bag to stand upright or an empty vessel makes a lot of "bang"…….

Try not to become a man of success but rather try to become a man of value. ~ Albert Einstein

Fight over patents - Nokia

Nokia fired another salvo in its patent-infringement battle with Apple. Early Jan2010, it filed a complaint with the United States International Trade Commission alleging that Apple's products infringed multiple Nokia patents. The infringements relate to user-interface, camera, antenna and power management technologies that Apple uses in its products. Apple declined to comment on Nokia's filing with the ITC.
Nokia first sued Apple in October claiming that the iPhone infringed 10 Nokia patents like GSM and Wi-Fi. Apple countersued claiming that Nokia was infringing on 13 patents pertaining to the iPhone.
The legal wrangles point to the keen competition in the smartphone segment where every handset maker is trying to make devices as cool and sexy as the iPhone.  How long will the faze of iPhone going to last with the technology consumers after having flooded the market for almost two years and with more Telcos bringing it into the region, seems like it is going to continue selling for a while until some maker like Sony, Google, HTC fight hard to bring in one good "iPhone equal".
Analysts fault Nokia for being slow to unveil slim touchscreen phones in the last two years when all its competitors were doing so.
However, do not discount Nokia. Of the four billion mobile phones in circulation today, one billion of them are from Nokia.
It has the widest range of cellphones, from the simple candy bar entry level phone to the sophisticated N900 running Linux. It is also active in areas where its competitors are almost absent.
In India and in developing countries in Africa, Nokia's handsets there help farmers and villagers get weather updates, the price of rice and learn English through the use of SMS.
It has rolled out Nokia Money for people in these countries to help them transfer funds or pay bills and suppliers using SMS. These efforts are not cool or sexy but they are much needed by people in developing countries who cannot afford smartphones or newfangled apps.

Nokia is still a force to be reckoned with but its window of opportunity is small and it must move fast.

Is it the right IPhone rival ?

I thought it was time out for Apple's Iphone "monopoly" in the cellphone market capitalisation and was quite happy to hear that Google's is out to challenge the almighty Iphone. Sad to read today's paper that Google's first attempt at retail has encountered a speed bump.

Scores of buyers of its first 'own brand' smartphone, the Nexus One, seem to have experienced 3G connection problems.

The much-hyped phone is sold directly through its website at google.com/phone. Google started selling it just four days ago to consumers in the United States, Britain, Singapore and Hong Kong. Already, some eager users gotten their hands on it have been posting their problems on the Google Mobile Help Forum.

Their complaints centre on the phone constantly switching between 3G and the slower EDGE (Enhanced Data Rate for GSM Evolution) networks, resulting in tardy responses when they surf the Internet. Voice and SMS functions are unaffected.

At press time, Google had yet to reply to these complaints.
Google's touchscreen phone, touted as a rival to Apple's iPhone, is made by Google's manufacturing partner, Taiwan's HTC. It seems that HTC is clueless about the cause of the 3G connection issues. Technology publication nexus404.com reported that one user had contacted HTC about the problem but was referred to US mobile network operator T-Mobile instead. Although the phone is sold by Google on its Web store, HTC provides customer support in Singapore from its care centre.

The phone - which costs US$577.31 (S$807) and comes with a 12-month warranty - was not sent to local telcos for testing, but Google had given an assurance that the handsets would work here in Singapore.

I think the way Google launches it product fail in its marketing effort in making the "right note" to buyers and either they are rushing in time to soft launch or not looking more seriously in the advertisement and proper retailer backup support with proper media promotion on it's handset, already showed sign of poor product marketing tactic and this may lead to users losing confidence when snag appears, although such could be easily rectified with less uproar if handle in proper professional manner.
Wake up Google ! Get the right partner and not HTC ( Hard to Connect ) perhaps.... :)

Will money bring Happiness ?

Extract from ST paper By Irene Tham
Are Singaporeans happier when they have lots more money?

A study shows that people who have a university or postgraduate qualification and earn $5,000 or more a month are the happiest.  Is this really the case ?
However, they are also dissatisfied with their achievements and enjoy life the least, compared with those who are less well-off.
Indeed, it is the Singaporeans earning less than $2,000 a month who enjoy life the most, concluded the three academics behind the study.
Senior lecturer Tambyah Siok Kuan, associate professor Tan Soo Jiuan and professorial fellow Kau Ah Keng - all from the National University of Singapore Business School - presented their findings in a book, The Wellbeing Of Singaporeans, which came out recently.
The survey in 2006 polled more than 1,000 people, aged 20 to 69.
They were posed questions such as whether they enjoy life, how happy they are, and how much they feel they are accomplishing what they want in life.
It could hold quite some weight that some may live in a million-dollar homes but if they owe the bank a lot of money, you are not going to enjoy life very much. Conversely, some who lives in an HDB flat may be able to enjoy life more as they are less committed financially and able to spend within their means and what they earned.
According to Tanjong Pagar GRC MP Indranee Rajah in the report, the ability to enjoy life and the feeling of achievement ultimately bring about happiness.
'It all boils down to expectations. Happy people can field the pressure and strike a balance between competitiveness and complacency,' she added.
The fear of not being able to sustain the high life 'can be a source of strain or unhappiness', she noted.

Psychotherapist Stephen Lew, 30, from the Positive Psychology Centre, said happiness is a state of mind.
'Happy people know and use their strengths. Naturally, they are better able to enjoy life, which leads to happiness,' he said.

Sonja Lyubomirsky in her 2007 book, The How Of Happiness says 40 per cent of a person's happiness is within his control, said psychologist and University of California professor of psychology. The rest is genetically determined, she claimed.

Maybe we should start an internal survey in your workplace and find out what leads to joy in the hectic workplace and is challenges and achieving goals providing you the fighting spirit to hang on to tough work place, eg. in Shipyard as compare to downtown office life in Orchard road