2009/11/08 10:32

Dear 太公: I have read the book you recommended to me. I lament the information in this book is not understood by the general public. Otherwise the main street may have a chance against the Wall Street. I'd like to ask three follow up questions: The first question is whether Vanguard still the top index fund company today? If so, because I am a Canadian working in the U.S., I might only be able to choose Vanguard's FTSE All-World ex-USA Index Fund (which provides exposure to 2,000 large-cap and mid-cap stocks from 48 countries in the developed and emerging markets, with an expense ration of 25 basis points). Is it prudent to make a fund like this the core of my portfolio? The second question is whether investing with more than one investment company, assuming the cost stays the same, also a gainful way of reducing the risk? The third question is whether, in a practice, the real estate market is efficient like the stock market? Lastly, I want to thank you again for your care, which I did not fully realize then.

1. Please well taste what Warren Buffett's idea of "margin" and "making simple things complicated." That's the core part of my real estate investment and my diplomatic strategy. I hope you enjoy this Buffett’s teaching.

   Looking other UDN bloggers, such as Xuser, are talking about the Chinese translation of the name of "driver" and make it so big an issue in political arena, I hope you can find a better use of your time.

2. For the first question, please find out how consistent the Vanguard Fund has had in its past performance. Is it satisfactory to you.

3. To stay with one index? Better for you to have an answer about "diversification" and "return." Yes, seems everyone is talking about the positive effect of "investing diversifiable." But one the other hand, tell me why you want to diversify your investment? Is it telling me that you are not so sure about one of your investment decision?

4. Everyone says "the more risks involved, the more yield you can get." Is it true?

    In this book, you will find out it is a fallacy, at least Warren tell you that upfront and candidly. Please well think about what he means "no risk, more profit." I am with him 100%, particularly when I am talking about the diplomacy ROC should take.

5. For the last question, the stock market is NOT efficient. In fact, no market is "efficient" at a certain time or, may I say, in a short time frame.

   Compare RE market to Stock market, I'd like to invite you to a concept of "calculated risk" which makes the difference between gambling and investment. I have never gambled since my high school, not even buying a lottery. All I do is just a "calculation under my scrutiny" to make sure I am the winner. Nowadays, it is true that real estate market is very abnormal by the Federal manipulation. But there is still no such a "sentiment" factor to be concerned in my RE investment. It is still much much safer for me to play and control my RE investment than Stock with much better "calculated" high return in terms of percentage. There is two ways to make a poor into a rich. One is to well manage your money to get "quick return, biggest yield."