Hi Fellow Automated Millionaires,

Just yesterday Bloomberg.com stated that MSCI Emerging Markets Index lost an amazing 59 percent year to date. The margin of safety for BRIC funds is getting more and more big which means the risk of buying into BRIC funds is getting lower and lower.

So what is Margin of Safety? Benjamin Graham (Mentor of Warren Buffett) states that Margin of Safety happens when a fund/stock becomes undervalued as compared to what it should be valued, the difference is the margin of safety. When the margin becomes bigger and bigger, the risk of buying into fund becomes lower and lower as the prices will definitely goes back to its original value in a longer term view.

This is what exactly happen to Warren Buffett's company shares - Berkshire Hathaway A shares in 1999 - 2000. In the book "How Buffett Does It" by James Pardoe, it wrote: "Berkshire Hathaway experienced its worst year ever in 1999, while Nasdaq was reaching new highs during the Internet frenzy of the late 1990s. Buffett's "outmoded" style of patient investing in low-tech companies deemed obsolete. His resfusal to buy hot high-tech stocks made him irrelevant. Hence, resulting in March 2000, the price of the A shares fell by 50 percent to $40,000 a share from a previous high of $84,000 a share. Nervous shareholders dumped their Berkshire Hathaway shares. They were acting on emotion as a storm was battering Berkshire Hathaway."

Isn't that very familiar to now situations of BRIC funds? Most investors are dumping BRIC funds. Why? Because they are emotional. Hence, we tried to educate to all our clients that we are your logical mind :) So what happen to the Berkshire Hathaway A shares in the end? In 2004, the share price rebounded, skyrocketing to an amazing $97,000 a share! That is a compounding annual returns of 24.79%!

Hence, using a Buying Insurance on Investment technique aka Regular Saving Program will protect ourselves against price volatility. In the book Richest Man in Babylon says "To attract good luck, one must take actions". Take actions now or persist your actions now to be good luck!

Happy Investing!

Yours Sincerely,
Max Tay