Course trainees were upset that option trading instructor’s doctorate came from an unaccredited university
By Sandra Davie 13 March 2009
A group of 49 people scored a legal victory over a self-styled expert on option trading who turned out to have a dodgy doctorate from an unaccredited American university.
A dozen of the course participants said they had paid Mr. Clemen Chiang between $3,600 and $4,000 last year for a three-day course on option trading - a complex and risky investing technique which often amounts to betting on share-price trends.
Several had also forked out another $960 for training software and a handful paid $1,600 to $12,000 more for online tutorials referred to as ‘webinars’.
Mr. Chiang, a 34-year-old Nanyang Technological University engineering graduate, has been running these seminars for a few years at his Freely Business School in North Bridge Road.
He would tell students his own success story of how he made millions, and he drew hundreds of participants.
He claimed to have a PhD in option trading, a rarity in the finance industry here.
But when it came to light last year that his doctorate was from the unaccredited Preston University in Alabama, the group of 49 wanted their money back.
Yesterday, the Small Claims Tribunal found that Mr. Chiang had misrepresented his qualifications. It awarded all participants a refund of close to 80 per cent of their fees for the seminar and a full refund for the cost of the software and ‘webinars’.
Mr. Chiang, who still calls himself ‘Dr’, attended the hearing but did not speak to The Straits Times.
The Small Claims Tribunal is part of the Subordinate Courts and can hear claims involving the sale of goods or services not exceeding $10,000.
Outside the tribunal, several participants said they felt cheated when they read a Straits Times expose on degree mills last August. The report named Mr. Chiang as having a PhD from an unaccredited university.
Sales representative Terence Tan, 41, said: ‘I signed up because of his PhD. Option trading is a complicated thing. I thought this guy should know what he is talking about since he had a PhD in it.
‘So imagine my shock when I found out that his degree was not from a recognised university.’
Like some others, he felt the course fell short of providing a good understanding of option trading.
Engineer William Hui, who paid $8,000 for himself and his wife to attend Mr. Chiang’s course, said: ‘He should have called it ‘Millionaire mindset’, because for a whole day, it was just about how much money he made, his Sentosa Cove bungalow and his wife’s Hermes Birkin handbag costing over $10,000.
‘When he finally went into his so-called method of trading in options, I found it lacking. And then he tried to sell his software for another $960.’
Mr. Chiang still claims to have a PhD on several of his websites, but makes no mention of Preston University, which American education authorities have called a ‘degree supplier’ offering ‘fraudulent or substandard degrees’.
Last August, he told The Straits Times that he was also pursuing another PhD at the University of South Australia.
When asked then why he had opted for a degree from an unaccredited institution, he said he wanted to complete a PhD in double-quick time.
Because Preston University was listed as a partner of a private school registered with the Education Ministry here, he said he thought it was an accredited institution.
It was only later that he realised that Preston was not accredited in the United States, he said.
Like other business people who had bought fake degrees, Mr. Chiang said then that it helped to pave the way in business.
Checks last year found more than 200 people - including prominent businessmen and financial consultants - flaunting degrees, MBAs and doctorates from degree mills and unaccredited, substandard institutions.
Despite the recent powerful rally by S'pore blue chips, yesterday's pullback is making analysts wary of calling a bottom
By LYNETTE KHOO April 8, 2009
(SINGAPORE) The roller-coaster ride on the Singapore stock market continues. Thanks to the recent rally, most blue chips have put on weight, with many index stocks seeing double-digit gains over the past four weeks.
But yesterday's sharp pull-back suggests that the blue chips led rally may be a false dawn, with analysts wary of calling a bottom at this point.
'The lead economic indicators have not shown any sign that there is a bottoming or a recovery, or there are no concrete signs of that,' said SIAS Research vice-president Roger Tan.
Some 25 of the 30 index stocks rose by double-digit percentages between March 9, a year's low for the benchmark Straits Times Index (STI), and April 6.
The banks, with a hefty combined 26.7 per cent weighting on the STI, were among the biggest winners. After giving up some gains yesterday, shares of DBS and OCBC were still higher than their closings on March 9 by 36.9 per cent and 32.7 per cent. UOB was 27.8 per cent higher. Property counters also rebounded from their lows on March 9. Despite yesterday's losses, CapitaLand shares have gained 43.6 per cent since March 9, City Developments 43 per cent and Hongkong Land Holdings 21.5 per cent.
The STI has risen some 27 per cent from March 9 before yesterday's 2.4 per cent dive left it at 1,802.39 points.
In the view of SIAS Research's Mr Tan, this rally was not supported by fundamentals, and was due in part to some pent-up demand from investors who were waiting on the sidelines.
'The last few weeks of upward trend was an extension of what I call a 'hope and fear cycle'. With the economic data coming out and the G-20 meeting, governments will do more and these promises brought back the hope that markets may bottom out or recover earlier than expected,' he said.
DMG & Partners Securities' senior dealing director Gabriel Yap described the low of 1,456.95 points touched on March 9 as 'one of the few inflexion points that could be part of a series of range-trading rallies'. At this point, the technical charts still look bearish in the near term, Kim Eng technical analyst Ken Tai noted.
He fears that this may be a bear trap, as was seen in the last leg of the bear market in 1998, where the market rebounded by 49 per cent within three months only to fall by the same magnitude over the next six months.
'At this point, I'm not turning outright bullish,' he added. 'The recent rebound is part and parcel of short-covering . . . rather than the work of genuine investors, which I think are not in the market yet.'
Mr Tai expects the bear market to last for another six months or so, with the STI forming a U-shape recovery. He thinks that the worst is over for the market, so investors should 'look for stocks to buy, not to short'.
But the ride from here will be bumpy.
Some of these bumps may include corporate earnings as the quarterly reporting season kicks in this month, and the stress test of banks in the United States at the end of this month. Recent gains have made the market more vulnerable to a short-term correction, they say.
Mr Yap of DMG said he is already expecting a 28-35 per cent fall in first-quarter earnings year on year for Singapore companies. A below-expectations set of results would stoke the market on the downside.
'This downturn, which lasts 17 months, is the longest since 1937 and 1981. Where we go from here will depend on the news that will come out,' he said. 'But you must be positioned whether it is a bear market trap or it's a turnaround for the market.'
Investors should be more willing to add risk to their portfolio by adopting a higher beta-sensitive portfolio going forward, Mr Yap said, citing highly interest rate-sensitive stocks such as banks, property and Reits, and oil palm stocks such as Noble Group, Olam and Wilmar.
Mr Tan of SIAS Research predicts that a worst-case scenario could see the STI sliding towards 1,300 again.
'But there is no need to avoid equities,' he added. Investors who are taking on a long-term view can consider dollar-cost averaging. This is where an investor works his way into a position by slowly buying small amounts and spreading the costs over a longer period of time.
Alternatively, investors can consider buying put warrants to hedge against the downside, he said.
Mr Tan still advocates a defensive strategy with telcos and banks and recommends buying the STI exchange-traded fund, which capitalises on potential gains in blue chips and involves lower risk than buying into individual stocks.
Region warned of painful aftershocks in job market
By ANTHONY ROWLEY IN TOKYO April 8, 2009
EAST ASIA faces a 'painful surge in unemployment' as the lag effects of the global slowdown hit home, the World Bank said yesterday in its latest East Asia and Pacific Update.
Suggesting that unemployment so far is the tip of an iceberg, the bank said that the worldwide downturn will 'have a serious impact on the welfare of millions of people in the region'.
In an assessment that also highlighted dangers such as rising protectionism, a collapse in Asian intra-regional trade and rising poverty in countries including Malaysia and Thailand, it singled out China as a ray of hope - saying that the economy there is likely to bottom out around mid-year.
Policymakers in emerging East Asia face an enormous challenge dealing with actual and looming unemployment, the bank said.
The number of officially registered unemployed people in emerging Asia climbed by almost one million to about 24 million people in the year to January 2009, it noted. 'Employment always tends to lag slowdowns in activity, so recent numbers are likely to be only the beginning of a painful surge in unemployment throughout the region.'
As unemployment climbs, migrant workers will be among the first to lose their jobs. 'This will mean lower remittance flows to the poorest countries in the region and, if the migrants return home, a worsening of unemployment in those countries as well as further downward pressure on real wages,' the bank said.
Unemployment is growing amid cuts in production and investment across Asia as exports fall. Intra-regional trade has dwindled, with the collapse in China's exports to non-Asian countries having triggered declines in exports from South Korea, Taiwan, Hong Kong and Singapore and some Asean countries.
Peering through the gloom, the bank said that China's bold fiscal and monetary stimulus measures are likely to put a floor under its economy by mid-year, after which China will start to draw in more imports from other parts of Asia and beyond.
'China's imports are likely to rise at a faster pace than before, but most of the increase will be accounted for by raw materials, capital goods, services and increasingly sophisticated consumer products. Exporters of such goods are likely to benefit substantially,' the bank said.
'On the other hand, exports of electronic and other components to China for assembly and shipment to the rest of the world will probably remain depressed until growth in the developed world resumes, and even then a return to the pace seen earlier this decade seems unlikely.'
Recovery among developed economies is likely to be delayed until next year, the World Bank believes.
Although China has so far announced fiscal stimulus measures amounting to around 12 per cent of GDP over several years, these will close only about half of the output gap created by the collapse in exports, the bank said.
ASIAN markets succumbed to widely anticipated profit taking as market players locked in gains.
The Straits Times Index gave up 45.59 points to end the session at 1,802.39 as bluechips, which had run up sharply in recent weeks were sold down. The market started off on a softer note following overnight declines on Wall Street - where stocks fell ahead of the Q1 2009 results season - but the selling intensified during the final hour of trading as index futures in Hong Kong and Wall Street started to slide.
Pessimism over the property and offshore & marine sectors respectively saw Capitaland lose 24 cents to $2.57, while Keppel Corp fell 32 cents to $5.46. DBS gave up 35 cents to $8.83, while UOB fell 46 cents to $10.48. But, SingTel gained seven cents to $2.53. So where are markets headed from here? The answer depends on who's making the call. Wall Street's overnight decline was widely blamed on Calyon Securities' analyst Mike Mayo's view that US banks still face fallout from excessive risk taking. He warned of rising loan losses by the end of 2010. Meanwhile, billionaire George Soros and prominent Hong Kong-based fund manager Marc Faber also warned of another potential market melt-down.
On the other hand, another prominent Wall Street analyst Meredith Whitney said that US banks would, by and large have made 'a little bit of money' in the first quarter. Still, the medium term trend for the market is likely to be determined by the guidance which major financial institutions give when they release their first quarter results, rather than their Q1 earnings per se.
Goldman Sachs, in a strategy report on Monday, believes Q1 2009 was the economic trough. 'We believe the S&P 500 bottomed in Q1,' it noted in its April 6 paper. 'But the aggregate profit cycle likely troughed in Q4 2008, led by financials. Other sectors are in the EPS contraction phase.'
The global investment house believes that the stock market will begin to disregard losses from provisions and write-downs by mid-year 2009. 'We expect the market to trade on a pre-provision and write-down EPS basis when we have greater clarity on financials-related fiscal policy and as financials losses begin to decelerate. This development, when it occurs, will be a clear positive for the trajectory of the US equity market.'
It was a similar theme in a report by Citi, which said that global equity valuations were 'generally cheap' enough to withstand this onslaught of bad news. 'Indeed, we think that markets have entered the 'Twilight Zone', where earnings are now falling faster than share prices, the market is re-rating, and sector themes are much less clear,' Citi noted in its Monday strategy report. 'Investors should not get too bearish when equities fall sharply, or too bullish when they rise sharply. While it is sensible to gradually raise exposure to risk assets through the Twilight Zone, there is no rush. The time to turn a wholesale buyer of cyclicals and seller of defensives is when the earnings cycle bottoms. We do not expect that to happen until H1 2010.'
At a regional level, Citi favours 'the higher-beta European and Asian markets to the more defensive US'.
Despite yesterday's pullback, some chartists believe that the ST Index has more immediate upside. In a report yesterday, UOB KayHian said that the current pullback should not pull the index below 1,779: 'In fact, we believe that immediate downside should be limited to about 1,800. Thereafter this should be followed by a final wave five move past 1,879 towards 1,920.'
Many who dived into the market in recent days will be hoping the investment house is right.
4 comments:
Trading ‘expert’ ordered to refund fees
Course trainees were upset that option trading instructor’s doctorate came from an unaccredited university
By Sandra Davie
13 March 2009
A group of 49 people scored a legal victory over a self-styled expert on option trading who turned out to have a dodgy doctorate from an unaccredited American university.
A dozen of the course participants said they had paid Mr. Clemen Chiang between $3,600 and $4,000 last year for a three-day course on option trading - a complex and risky investing technique which often amounts to betting on share-price trends.
Several had also forked out another $960 for training software and a handful paid $1,600 to $12,000 more for online tutorials referred to as ‘webinars’.
Mr. Chiang, a 34-year-old Nanyang Technological University engineering graduate, has been running these seminars for a few years at his Freely Business School in North Bridge Road.
He would tell students his own success story of how he made millions, and he drew hundreds of participants.
He claimed to have a PhD in option trading, a rarity in the finance industry here.
But when it came to light last year that his doctorate was from the unaccredited Preston University in Alabama, the group of 49 wanted their money back.
Yesterday, the Small Claims Tribunal found that Mr. Chiang had misrepresented his qualifications. It awarded all participants a refund of close to 80 per cent of their fees for the seminar and a full refund for the cost of the software and ‘webinars’.
Mr. Chiang, who still calls himself ‘Dr’, attended the hearing but did not speak to The Straits Times.
The Small Claims Tribunal is part of the Subordinate Courts and can hear claims involving the sale of goods or services not exceeding $10,000.
Outside the tribunal, several participants said they felt cheated when they read a Straits Times expose on degree mills last August. The report named Mr. Chiang as having a PhD from an unaccredited university.
Sales representative Terence Tan, 41, said: ‘I signed up because of his PhD. Option trading is a complicated thing. I thought this guy should know what he is talking about since he had a PhD in it.
‘So imagine my shock when I found out that his degree was not from a recognised university.’
Like some others, he felt the course fell short of providing a good understanding of option trading.
Engineer William Hui, who paid $8,000 for himself and his wife to attend Mr. Chiang’s course, said: ‘He should have called it ‘Millionaire mindset’, because for a whole day, it was just about how much money he made, his Sentosa Cove bungalow and his wife’s Hermes Birkin handbag costing over $10,000.
‘When he finally went into his so-called method of trading in options, I found it lacking. And then he tried to sell his software for another $960.’
Mr. Chiang still claims to have a PhD on several of his websites, but makes no mention of Preston University, which American education authorities have called a ‘degree supplier’ offering ‘fraudulent or substandard degrees’.
Last August, he told The Straits Times that he was also pursuing another PhD at the University of South Australia.
When asked then why he had opted for a degree from an unaccredited institution, he said he wanted to complete a PhD in double-quick time.
Because Preston University was listed as a partner of a private school registered with the Education Ministry here, he said he thought it was an accredited institution.
It was only later that he realised that Preston was not accredited in the United States, he said.
Like other business people who had bought fake degrees, Mr. Chiang said then that it helped to pave the way in business.
Checks last year found more than 200 people - including prominent businessmen and financial consultants - flaunting degrees, MBAs and doctorates from degree mills and unaccredited, substandard institutions.
Reality check for market rally
Despite the recent powerful rally by S'pore blue chips, yesterday's pullback is making analysts wary of calling a bottom
By LYNETTE KHOO
April 8, 2009
(SINGAPORE) The roller-coaster ride on the Singapore stock market continues. Thanks to the recent rally, most blue chips have put on weight, with many index stocks seeing double-digit gains over the past four weeks.
But yesterday's sharp pull-back suggests that the blue chips led rally may be a false dawn, with analysts wary of calling a bottom at this point.
'The lead economic indicators have not shown any sign that there is a bottoming or a recovery, or there are no concrete signs of that,' said SIAS Research vice-president Roger Tan.
Some 25 of the 30 index stocks rose by double-digit percentages between March 9, a year's low for the benchmark Straits Times Index (STI), and April 6.
The banks, with a hefty combined 26.7 per cent weighting on the STI, were among the biggest winners. After giving up some gains yesterday, shares of DBS and OCBC were still higher than their closings on March 9 by 36.9 per cent and 32.7 per cent. UOB was 27.8 per cent higher. Property counters also rebounded from their lows on March 9. Despite yesterday's losses, CapitaLand shares have gained 43.6 per cent since March 9, City Developments 43 per cent and Hongkong Land Holdings 21.5 per cent.
The STI has risen some 27 per cent from March 9 before yesterday's 2.4 per cent dive left it at 1,802.39 points.
In the view of SIAS Research's Mr Tan, this rally was not supported by fundamentals, and was due in part to some pent-up demand from investors who were waiting on the sidelines.
'The last few weeks of upward trend was an extension of what I call a 'hope and fear cycle'. With the economic data coming out and the G-20 meeting, governments will do more and these promises brought back the hope that markets may bottom out or recover earlier than expected,' he said.
DMG & Partners Securities' senior dealing director Gabriel Yap described the low of 1,456.95 points touched on March 9 as 'one of the few inflexion points that could be part of a series of range-trading rallies'. At this point, the technical charts still look bearish in the near term, Kim Eng technical analyst Ken Tai noted.
He fears that this may be a bear trap, as was seen in the last leg of the bear market in 1998, where the market rebounded by 49 per cent within three months only to fall by the same magnitude over the next six months.
'At this point, I'm not turning outright bullish,' he added. 'The recent rebound is part and parcel of short-covering . . . rather than the work of genuine investors, which I think are not in the market yet.'
Mr Tai expects the bear market to last for another six months or so, with the STI forming a U-shape recovery. He thinks that the worst is over for the market, so investors should 'look for stocks to buy, not to short'.
But the ride from here will be bumpy.
Some of these bumps may include corporate earnings as the quarterly reporting season kicks in this month, and the stress test of banks in the United States at the end of this month. Recent gains have made the market more vulnerable to a short-term correction, they say.
Mr Yap of DMG said he is already expecting a 28-35 per cent fall in first-quarter earnings year on year for Singapore companies. A below-expectations set of results would stoke the market on the downside.
'This downturn, which lasts 17 months, is the longest since 1937 and 1981. Where we go from here will depend on the news that will come out,' he said. 'But you must be positioned whether it is a bear market trap or it's a turnaround for the market.'
Investors should be more willing to add risk to their portfolio by adopting a higher beta-sensitive portfolio going forward, Mr Yap said, citing highly interest rate-sensitive stocks such as banks, property and Reits, and oil palm stocks such as Noble Group, Olam and Wilmar.
Mr Tan of SIAS Research predicts that a worst-case scenario could see the STI sliding towards 1,300 again.
'But there is no need to avoid equities,' he added. Investors who are taking on a long-term view can consider dollar-cost averaging. This is where an investor works his way into a position by slowly buying small amounts and spreading the costs over a longer period of time.
Alternatively, investors can consider buying put warrants to hedge against the downside, he said.
Mr Tan still advocates a defensive strategy with telcos and banks and recommends buying the STI exchange-traded fund, which capitalises on potential gains in blue chips and involves lower risk than buying into individual stocks.
Region warned of painful aftershocks in job market
By ANTHONY ROWLEY
IN TOKYO
April 8, 2009
EAST ASIA faces a 'painful surge in unemployment' as the lag effects of the global slowdown hit home, the World Bank said yesterday in its latest East Asia and Pacific Update.
Suggesting that unemployment so far is the tip of an iceberg, the bank said that the worldwide downturn will 'have a serious impact on the welfare of millions of people in the region'.
In an assessment that also highlighted dangers such as rising protectionism, a collapse in Asian intra-regional trade and rising poverty in countries including Malaysia and Thailand, it singled out China as a ray of hope - saying that the economy there is likely to bottom out around mid-year.
Policymakers in emerging East Asia face an enormous challenge dealing with actual and looming unemployment, the bank said.
The number of officially registered unemployed people in emerging Asia climbed by almost one million to about 24 million people in the year to January 2009, it noted. 'Employment always tends to lag slowdowns in activity, so recent numbers are likely to be only the beginning of a painful surge in unemployment throughout the region.'
As unemployment climbs, migrant workers will be among the first to lose their jobs. 'This will mean lower remittance flows to the poorest countries in the region and, if the migrants return home, a worsening of unemployment in those countries as well as further downward pressure on real wages,' the bank said.
Unemployment is growing amid cuts in production and investment across Asia as exports fall. Intra-regional trade has dwindled, with the collapse in China's exports to non-Asian countries having triggered declines in exports from South Korea, Taiwan, Hong Kong and Singapore and some Asean countries.
Peering through the gloom, the bank said that China's bold fiscal and monetary stimulus measures are likely to put a floor under its economy by mid-year, after which China will start to draw in more imports from other parts of Asia and beyond.
'China's imports are likely to rise at a faster pace than before, but most of the increase will be accounted for by raw materials, capital goods, services and increasingly sophisticated consumer products. Exporters of such goods are likely to benefit substantially,' the bank said.
'On the other hand, exports of electronic and other components to China for assembly and shipment to the rest of the world will probably remain depressed until growth in the developed world resumes, and even then a return to the pace seen earlier this decade seems unlikely.'
Recovery among developed economies is likely to be delayed until next year, the World Bank believes.
Although China has so far announced fiscal stimulus measures amounting to around 12 per cent of GDP over several years, these will close only about half of the output gap created by the collapse in exports, the bank said.
Investors sell down on anticipated profit taking
By VEN SREENIVASAN
April 8, 2009
ASIAN markets succumbed to widely anticipated profit taking as market players locked in gains.
The Straits Times Index gave up 45.59 points to end the session at 1,802.39 as bluechips, which had run up sharply in recent weeks were sold down. The market started off on a softer note following overnight declines on Wall Street - where stocks fell ahead of the Q1 2009 results season - but the selling intensified during the final hour of trading as index futures in Hong Kong and Wall Street started to slide.
Pessimism over the property and offshore & marine sectors respectively saw Capitaland lose 24 cents to $2.57, while Keppel Corp fell 32 cents to $5.46. DBS gave up 35 cents to $8.83, while UOB fell 46 cents to $10.48. But, SingTel gained seven cents to $2.53. So where are markets headed from here? The answer depends on who's making the call. Wall Street's overnight decline was widely blamed on Calyon Securities' analyst Mike Mayo's view that US banks still face fallout from excessive risk taking. He warned of rising loan losses by the end of 2010. Meanwhile, billionaire George Soros and prominent Hong Kong-based fund manager Marc Faber also warned of another potential market melt-down.
On the other hand, another prominent Wall Street analyst Meredith Whitney said that US banks would, by and large have made 'a little bit of money' in the first quarter. Still, the medium term trend for the market is likely to be determined by the guidance which major financial institutions give when they release their first quarter results, rather than their Q1 earnings per se.
Goldman Sachs, in a strategy report on Monday, believes Q1 2009 was the economic trough. 'We believe the S&P 500 bottomed in Q1,' it noted in its April 6 paper. 'But the aggregate profit cycle likely troughed in Q4 2008, led by financials. Other sectors are in the EPS contraction phase.'
The global investment house believes that the stock market will begin to disregard losses from provisions and write-downs by mid-year 2009. 'We expect the market to trade on a pre-provision and write-down EPS basis when we have greater clarity on financials-related fiscal policy and as financials losses begin to decelerate. This development, when it occurs, will be a clear positive for the trajectory of the US equity market.'
It was a similar theme in a report by Citi, which said that global equity valuations were 'generally cheap' enough to withstand this onslaught of bad news. 'Indeed, we think that markets have entered the 'Twilight Zone', where earnings are now falling faster than share prices, the market is re-rating, and sector themes are much less clear,' Citi noted in its Monday strategy report. 'Investors should not get too bearish when equities fall sharply, or too bullish when they rise sharply. While it is sensible to gradually raise exposure to risk assets through the Twilight Zone, there is no rush. The time to turn a wholesale buyer of cyclicals and seller of defensives is when the earnings cycle bottoms. We do not expect that to happen until H1 2010.'
At a regional level, Citi favours 'the higher-beta European and Asian markets to the more defensive US'.
Despite yesterday's pullback, some chartists believe that the ST Index has more immediate upside. In a report yesterday, UOB KayHian said that the current pullback should not pull the index below 1,779: 'In fact, we believe that immediate downside should be limited to about 1,800. Thereafter this should be followed by a final wave five move past 1,879 towards 1,920.'
Many who dived into the market in recent days will be hoping the investment house is right.
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