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Singapore Savings Bonds SSB August 2020 Issue Yields 0.93% for 10 Year and 0.27% for 1 Year (Guest Post)

Singapore Savings Bonds SSB August 2020 Issue Yields 0.93% for 10 Year and 0.27% for 1 Year (Guest Post)

Here is a safe way to save your money that you have no idea when you will need to use it, or your emergency fund.

This post was originally posted here. The writer, Kyith Ng is a veteran community member and blogger on InvestingNote, with username known as Kyith and has 1051  followers.

The 10-yr and 1-yr Singapore Savings Bonds Rate since the first issue in Oct 2015

The August 2020’s SSB bonds yield an interest rate of 0.93%/yr for the next 10 years. You can apply through ATM or Internet Banking via the three banks (UOB,OCBC, DBS)

However, if you only hold the SSB bonds for 1 year, with 2 semi-annual payments, your interest rate is 0.27%/yr.

$10,000 will grow to $10,946in 10 years.

This bond is backed by the Singapore Government and its available to Singaporeans.

A single person can own not more than SG$200,000 worth of Singapore Savings Bonds. You can also use your Supplementary Retirement Scheme (SRS) account to purchase.

 

You can find out more information about the SSB here.

Note that every month, there will be a new issue you can subscribe to via ATM. The 1 to 10-year yield you will get will differ from this month’s ladder as shown above.

Last month’s bond yields 0.80%/yr for 10 years and 0.30%/yr for 1 year.

Here is the current historical SSB 10 Year Yield Curve with the 1 Year Yield Curve since Oct 2015 when SSB was started (Click on the chart, move over the line to see the actual yield for that month):

The Application and Redemption Schedule

You will apply for the bonds through the month. At the end of the month, you will know how much of the bond you applied was successful.

Here is the schedule for application and redemption if you wish to sell:
Click to see larger schedule

You have 02 to about 25th of the month (technically the 4th day from the last working day of the month) to apply or decide to redeem the SSB that you wish to redeem.

Your bond will be in your CDP on the 1st of the next month. You will see your cash in your bank account linked to your CDP account on the 1st of next month.

How does the Singapore Savings Bonds Compare versus SGS Bonds versus Singapore Treasury Bills?

Singapore savings bonds is like a “unit trust” or a “fund” of SGS Bonds.

But what is the difference between you buying SGS Bonds and its sister the T-Bills directly?

Both the SGS Bonds and T-Bills are also issued by the Government and are AAA rated.

Here is an MAS detailed comparison of the three:
Click to see bigger comparison table

 

Once again, this article is a guest post and was originally posted on Kyiths profile on InvestingNote. 

Become a part of our community and also see what other investors are saying about the current market right now: (click on the view now button)

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InvestingNote is the first and largest social network for investors in Singapore. Find out more about us here.

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Investing vs. Trading – What are the Similarities and Differences? (Guest Post)

Investing vs. Trading – What are the Similarities and Differences? (Guest Post)

The reason why I’ve decided to write about similarities as well as differences between investing and trading today is because, of late, I have noticed many newbies mix up between the two – some of them are looking to buy companies to hold for the long-term (but refer to them as “trading”), while there are some who are looking for short-term profits (but refer to them as “investing”.)

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This post was originally posted here. The writer, Lim Jun Yuan is a veteran community member and blogger on InvestingNote, with username known as ljunyuan and has 1230  followers.

I hope that, after reading through this simple post, you will have a better understanding about both investing as well as trading:

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Thought Process On Picking Your First Stock (Guest Post)

Thought Process On Picking Your First Stock (Guest Post)

I’ve had countless queries in the past and a couple of emails recently from readers who are interested to start investing and one of the commonly asked questions is ways to pick the correct stock to invest. The first stock purchase for an investor is always intriguing.

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This post was originally posted here. The writer, Brian Halim is a veteran community member and blogger on InvestingNote, with username known as 3Fs and has 2169  followers.

The emotions when you first purchase your stock are filled with mystery, excitement, fear and then there’s always the risk and reward. Many will soon get addicted to it and then will proceed with the next second and third purchase and so on.

It’s incredibly difficult to answer this short question to any investors who are asking as there’s legitimately no right or wrong answer. Nevertheless, I’ll try to provide some framework guidance which hopefully can be productive and useful to any investors who’s starting to venture out on their own.

Step 1: Organize a list of companies in your respective region that are big market cap
Your very first step as a beginner should always be looking at the bigger market cap in your respective region. This means looking at the likes of blue chip companies such as Singtel, DBS, OCBC, Sembcorp and SIA in your STI index if you are looking at the Singapore market. In the US market, you will get a list of acquainted well-known companies such as Apple, Boeing, Facebook, Starbucks, Visa and many more.

Don’t buy them yet at this point because there’s many rotten apples hidden in the fundamental of these companies, even for blue chips.

At this point, all you want to do is to get a grasp understanding of:

  • What is their business model?
  • What products do they sell?
  • What competitive advantage do they have over their competitors?
  • How much market share have they acquired?
  • Management capability and their historical financial performance

Most, if not all of these information, are easily available in the annual reports or financial statement of the company where typically management would provide operational quantitative updates on how they are doing or coping with the situation.

All you really need to do at this point is just to spend some time gathering the information and writing some notes down and that’s it. No action should be taken yet at this point because the information you have is public, which means anyone else will have the same information as you do so that’s not really helping you to gain any advantage.

You may also want to segregate the list of companies that are appearing in your newsfeed or newspaper because not all the time they are good. The fact that you read in the newspapers that people are queueing up at McDonald’s does not immediately qualify them to be a good stock.

Always be selective when reading and takes information with a pinch of salt. This way, you will have more questions than answers which is good because it leads you to explore more on your questions.

Step 2: Areas of Competency
Your areas of competency is your competitive advantage over the next other person that you have a lead on.

This lead can be achieved through years of working in the industry and getting to know-how the inside operations of how certain things might work in detail. For example, if you are in procurement, you would know how aggressive your competitors are pricing in their bids for the tender or if you are working in supply chain logistics company, you would better understand the details on transit times, delivery performance, freight claims and customs requirement.

Thus, when you select companies that are in your areas of competency, you are able to value-add your experience to the companies you are prospecting and make better informed decisions from there.

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‘What is the Best Price to Buy Shares of this Company?’ (Guest Post)

‘What is the Best Price to Buy Shares of this Company?’ (Guest Post)

Recently, I have been getting quite a number of emails seeking my inputs on the “best price” they should purchase shares of a company. For the benefit of everyone, I would like to share with you my personal opinion on this question in my post today – from the perspective of both a short-term swing trader and a long-term investor.

This post was originally posted here. The writer, Lim Jun Yuan is a veteran community member and blogger on InvestingNote, with username known as ljunyuan and has 1100  followers.

 

To begin, in my personal opinion, there is no such thing as a “best price” you should buy shares of a particular company. Everyone (whether you are a short-term trader or a long-term investor) have their own preferred prices to buy/sell a company’s shares based on their own analyses – which explains why, at any price point, there are buy and sell transactions (because at any buy price, there will be people who feel comfortable to buy, and at the same time, there will also be people who are looking to sell – hence a transaction takes place between the buyer and seller.)

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Components of Passive Income

Components of Passive Income

According to Wikipedia, “Passive income is income resulting from cashflow received on a regular basis, requiring minimal to little effort by the recipient to maintain it.”

It is a source of income that most people in this world strives to achieve because of the attributes that I will be going through below.
Almost few people to none started off with having passive income as their first main source of income but this should become each and every single individual’s first choice source of income in the years to come.

Here, we’ll go through some of the components and traits of passive income and dissect why it is so special.

This post was originally posted here. The writer, Brian Halim is a veteran community member and blogger on InvestingNote, with username known as 3Fs and has 2110  followers.

Component 1: High Effort Now, Low Effort Later
If you re-read the definition of passive income from Wikipedia in my opening paragraph, the key word that stands out is “minimal to little effort”.
This is probably one of the most, if not THE most singled out factor on why passive income is so attractive to many people who’s striving to achieve it.
But don’t get it mixed all up.
Low effort later does not means low effort put in the beginning.
In fact, it requires a huge amount of effort to start the ball rolling for the first few years until the system that you’ve built have become a giant on its own. Take rental properties for instance.

Rental properties can be a great source of passive income once you have invested enough money into the properties and get the rental up and running. There might be a few maintenance works or administrative paper works that as landlord you might still have a role to play at times, but the amount of time spent comparatively to salaried workers working is mostly negligible.

The high efforts in this case allude to the amount of capital that you have to save up over the years before being able to afford your own investment property.

Component 2: Physically Discretionary
There is a quote from the famous Warren Buffet that says “If you don’t find a way to make money while you sleep, you will work until you die”.
I’ll do a follow-up to that piece of advice by adding “Count your ROI while you sleep until it’s worth a positive number”.
The idea behind this quote is basically saying that you don’t have to exchange your physical time for money for it to be worth. Built a system such that you’ll continue to get paid even while you are resting, eating or even sleeping.
This is almost not possible for salaried blue or white collar workers because they actually have to turn up to office or sites from 9 to 6 in order to get an exchange for their pay-check.
It’s okay to have this as a starting point as most people did (including myself) but the system has to gradually switch gear.
Okay, we’ll exclude the anomaly of current existing situation because everyone is equally WFH-ing.

Component 3: Regular Basis

The third component of passive income is to have the source coming in on a regular basis.
I wanted to say this usually happens regardless of rain or shine but again the anomaly of the pandemic we are facing today throw this into uncertainty.
For example, we’ve seen some companies in the retail or hospitality sectors that are slashing or deferring their dividend payout to shareholders because they wanted to conserve some bullets to weather the storm.
Nevertheless, when things return to normalcy, strong companies should see a return of their fundamentals and dividend payout should also return back to the norm.

Conclusion
Passive income is probably one of the most exciting project in my lifetime that I’ve managed to figure out early in my career.
For all the plus and minuses, I like what it has to offer in terms of predictability, stability and liberty for freedom.
It’s probably a concept that I would be teaching my own children too in future because I wanted them to rationalize this concept as an option when they grow up and start their career.

Thanks for reading.

Once again, this article is a guest post and was originally posted on 3Fss profile on InvestingNote. 

Become a part of our community and also see what other investors are saying about the current market right now: (click on the view now button)

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InvestingNote is the first and largest social network for investors in Singapore. Find out more about us here.

Download our free app here:

apple   android

Also, join our telegram channel here: t.me/investingnoteofficial

We’re here to keep you in touch with the latest investing & stock-related news, happenings and updates!

Which is My Best Option to Fund My Condo Purchase? (Guest Post)

Which is My Best Option to Fund My Condo Purchase? (Guest Post)

A long time reader wishes to purchase a condo that is valued at $1.65 million. Currently, the family is staying at a 5-Room HDB valued at around $500,000 that is fully paid-up. This HDB can potentially rent for a gross rental income of $2,500 a month.

image-1

This post was originally posted here. The writer, Kyith Ng is a veteran community member and blogger on InvestingNote, with username known as Kyith and has 995  followers.

He considered 3 options.

Option 1:

  1. Sell current HDB
  2. Use the sales proceed + CPF + cash to buy the condo
  3. Do not leverage up

Option 2:

  1. Sell current HDB
  2. Use the sales proceed + CPF to purchase
  3. Also loan $300,000

Option 3:

  1. Keep HDB
  2. Use CPF + some cash to buy a condo
  3. Also Loan $900,000
  4. This will incur an additional ABSD of $198,000 since this is the second property they would own.

Other assets the family own include:

  1. CPF OA: $900,000
  2. Cash: $500,000
  3. Stocks and Bond: $1,500,000

So he asked for my second opinion. I can’t give much advice since I am not his planner. But I think I can provide him some guidelines how he can go about to identify which option is most ideal for his situation.

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Monday 18 May 12PM: LIVE Market Commentary with Terence Wong from Azure Capital

Monday 18 May 12PM: LIVE Market Commentary with Terence Wong from Azure Capital

Key Market Updates: Get a better sense of the market from a professional fund manager’s point of view.

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Watch & hear Azure Capital’s CEO Terence Wong in this market commentary webinar during lunchtime, as he will be sharing his updates & views on the current stock market conditions as an investment professional.

Ask him anything on the Singapore market, from the largest blue chips to the smallest caps.

Venue: Attend online anywhere

Limited slots only.

Register for this webinar now:

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Watch the previous webinars here:
May 4: https://youtu.be/Pt5xYa6s3b0
Apr 20: https://www.youtube.com/watch?v=oc47JTU2wwo&t=760s
Mar 30: https://www.youtube.com/watch?v=9BuhdzhZdRY&t=438s
Mar 16: https://www.youtube.com/watch?v=zD9VXxDGNZU&t=1575s


InvestingNote is the first and largest social network for investors in Singapore. Find out more about us here.

Download our free app here:

apple   android

Also, join our telegram channel here: t.me/investingnoteofficial

We’re here to keep you in touch with the latest investing & stock-related news, happenings and updates!

The Curious Case Of SIA’s Price Action After Ex-Rights (Guest post)

The Curious Case Of SIA’s Price Action After Ex-Rights (Guest post)

I am not sure if there are any fellow investors who find the price action of SIA (Singapore Airlines) pretty weird yesterday, the first day it went ex-rights. The stock actually appreciated more than 20+%!

screen-shot-2020-05-06-at-10-41-35-am

This post was originally posted here. The writer, Royston Tan is a veteran community member and blogger on InvestingNote, with username known as Royston_Tan.

SIA RIGHTS: THE CURIOUS CASE OF ITS PRICE ACTION

SIA went ex-rights today and there was some pretty weird action in its share price which I can’t seem to understand. I have previously written this article: SIA Rights Issue: Debunking the complication behind the Math. In that article, I tried to “simplify” the seemingly complicated SIA rights issue announcement and more importantly, look to calculate what might the trading price be for the Rights and the MCBs when they start trading on the bourse.

SIA’S VALUE WENT UP BY 26% OVERNIGHT?
SIA’s share price closed at S$5.91 yesterday. This morning, it went ex-rights. First I believe that the “Rights” here includes both the 1) Right Shares as well as 2) the Rights MCBs.

SIA previously calculated that the Theoretical ex-rights Price (TERP) was S$4.40/share based on the last traded price of S$6.50 before the announcement of the intended rights issue was made. This TERP only includes the Rights Share component, based on the issuance of approx 1.78bn shares.

I shown that the calculation of the TERP price was as such:

At S$6.50/share with 1.18bn of outstanding shares, the market cap of SIA is S$7.67bn.

With the issuance of 1.78bn rights shares, the total number of shares will increase to 2.96bn. Total amount of capital raised = 1.78bn * S$3.00 = S$5.34bn.

So post rights issuance market value of SIA = (existing market cap (S$7.67bn) + new cash raised (S$5.34bn)) / total number of new shares (2.96bn) = S$4.40/share.

Based on the last closing price of S$5.91 which indicates a market cap of S$6.97bn, the TERP should be (existing market cap(S$6.97bn) + new cash raised (S$5.34bn))/the total number of new shares (2.96bn) = S$4.16/share.

This morning, SIA’s share price open at S$4.20 which is around the calculated TERP. However, it traded up to as high as S$5.04 and as of this writing, it is at S$4.77.

The current price of S$4.77 is even higher than the TERP price of S$4.40 base on a pre-ex-rights price of S$6.50. The current S$4.77 price would indicate a pre-ex-rights price of S$7.44! WoW. Overnight, SIA’s price/share has increased from S$5.91 to S$7.44 which is an appreciation of 26%! What is going on here?

Seriously, I am not sure what the market is thinking at this moment pertaining to SIA. In the analysis above, I have also excluded the impact of the MCBs which should indicate a much lower TERP of S$4.16/share. Granted that these MCBs are not convertible to shares immediately. I have previously calculated that the ex-right price after all the conversions would have been in the arena of S$3.71/share based on the last closing price of S$5.91.

What is going to happen if the share price of SIA stays at S$4.77 when the rights are converted to shares (on the 8 June)?

Let’s assume that an investor bought 1000 shares of SIA yesterday at S$5.91/share. The total outlay will be S$5,910 (excluding comms etc). For 1000 shares, he will be entitled to 1,500 right shares. He can exercise the rights, paying S$3/rights, and convert them into actual shares.

His total outlay will be S$10,410 (S$5,910 + S$4,500) and he is now the proud owner of 2,500 SIA shares. At S$4.77/share, that will equate to a market value of S$11,925 which is a quick profit of S$1,515. In addition, he will still have 2,950 Rights MCB which should be worth some value when they are tradeable.

I last calculated that value to be approx S$0.37/Rights MCB. 2,950 of them will equate to another S$1,091 in value. Total profit could be a hefty S$2,606 based on an outlay of S$10,410 or a quick turnaround of 25%! Even if I am wrong in the calculation of the Rights MCB value, it cannot be negative.

Hence an investor who bought SIA shares at S$5.91/share before the ex-right date (which is May 6) will be able to pocket at least S$1,515/share if the share price remains at S$4.77/share when his rights are converted to shares. Alternatively, if he is concern that the share price might decline from the current level, he can hedge and lock in the profit by shorting the counter (perhaps through CFDs or borrowed shares) until his rights are converted to actual shares.

if SIA’s share price is lower at that point, his hedges make money. If SIA’s share price is higher at that point, he can offset the losses on his hedges with his actual shares which are now worth more.

There could be other factors in play that might explain the price action of SIA such as potential redemption of short positions driving its share price up or the market all of a sudden became extremely positive over this rights issue. Bloomberg claims it could be due to hopes of easing lockdowns.

Already there are casualties in the market. The daily leverage -5x counter of SIA has been suspended as the underlying price has appreciated more than 20% from their theoretical adjusted price of S$3.71 which means that losses are now in excess 100% for this leverage product.

SIA RIGHTS: KEY TIMELINE

6 May: Ex-rights

13 May to 21 May: Rights and MCBs are being traded on the bourse

28 May: If you still own the Rights or MCBs (as original SIA shareholders who are entitled to it or if you purchase on the open market), this will be the last day for subscription. You can pay for your rights through the ATM if your SIA shares are held under your own CDP or pay it through your custodian broker account.

8 June: Rights share will start trading (if you have subscribe to your rights by paying S$3/rights, you will now have additional SIA shares)

9 June: If you have subscribe to your Rights MCBs at S$1/MCB, your rights will be converted into bonds which are also traded.

CONCLUSION
This has really been an eye opener and frankly a development which i did not expect.

SIA’s market cap has just appreciated by 26% overnight!

For readers who have more insights pertaining to this “unique” situation, do feel free to share your thoughts here.

Once again, this article is a guest post and was originally posted on Royston_Tans profile on InvestingNote. 

Become a part of our community and also see what other investors are saying about the current market right now: (click on the view now button)

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InvestingNote is the first and largest social network for investors in Singapore. Find out more about us here.

Download our free app here:

apple   android

Also, join our telegram channel here: t.me/investingnoteofficial

We’re here to keep you in touch with the latest investing & stock-related news, happenings and updates!

Most Traders Will Tell You To Stay Away From Indicators (Guest Post)

Most Traders Will Tell You To Stay Away From Indicators (Guest Post)

Learn how to switch gears and use different indicators for different market conditions. Indicators are a derivative of price. They simply indicate to you what has happened, not what will happen. So you’ll never be a profitable trader if you solely rely on trading indicators to make your decisions.

This post was originally posted here. The writer, Rayner Teo is a veteran community member and blogger on InvestingNote, with username known as Rayner and has 329 followers.

Volatile stock markets are an option trader's dream — here's how ...

Most traders will tell you to stay away from indicators.
They give you reasons like:
  • It lags the market
  • It gives you late entries
  • It can’t predict what the markets will do

Nope, those are excuses.

Want to know the real reason why traders lose money with indicators?

Here’s why…

You got conned into the “indicators game”

Many traders don’t know how this game is supposed to be played.

They believe the answer lies in the “right” combination of indicators that will make them rich.

So they buy the latest trading indicators to help them crack the code.

And after many failed attempts, they wonder why they lose money with trading indicators.

Do you want to know why?

Here’s the truth…

Indicators are a derivative of price. They simply indicate to you what has happened, not what will happen.

So, no matter how many different combinations you try, you’ll never be a profitable trader if you solely rely on trading indicators to make your decisions.

Trading indicators are meant to aid your decision-making process, not be the decision-maker.

Trading indicators: Do you make this mistake?

Look at the chart below…

Now, you might be thinking…

“Look how strong the signal is.”

“All three indicators are pointing in the same direction.”

“The market is about to move higher.”

Sorry to burst your bubble.

But that’s the wrong way to use trading indicators.

Why?

Because the RSI, CCI, and Stochastic indicator belong to the same category (otherwise known as Oscillators).

This means the values of these indicators are calculated using similar mathematical formulas — which explains why their lines move in the same direction.

So don’t make the mistake of thinking a signal is “strong” because multiple indicators confirm it. Chances are, they are indicators from the same category.

You blindly copy what others do

Here’s the thing:

There are profitable traders out there who use indicators in their trading.

And you’re probably thinking:

“Since they are making money with these indicators, why don’t I just copy them?”

So, that’s what you do.

You follow the same indicators, settings, instructions, etc.

But, you still lose money with trading indicators.

Why?

Because what you see is only the surface, not the complete picture.

Here’s an example:

Let’s say Michael is a profitable trader who relies on trading indicators to time his entries and exits.

Now, the reason why Michael finds success with indicators is not that he found the “perfect” settings or whatsoever.

Rather, it’s because he knows how to switch gears and use different indicators for different market conditions.

So if you were to blindly follow what he does, then when the market changes, your trading indicators will stop working and that’s when the bleeding starts.

 

How professional traders use indicators (it’s not what you think)

At this point, you’ve learned that trading indicators shouldn’t be the basis of your analysis and why you shouldn’t copy other traders.

So now the question is, how do you use trading indicators the correct way?

The secret is this…

You want to classify trading indicators according to their purpose, then use the appropriate trading indicators for the right purpose.

So, what’s the purpose of trading indicators?

Well, you can use them to:

  1. Filter for market conditions
  2. Identify areas of value
  3. Time your entries
  4. Manage your trades

Let me explain…

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What You Should Do if You Lost Your Job Or Lost Your Income Temporarily (Guest Post)

What You Should Do if You Lost Your Job Or Lost Your Income Temporarily (Guest Post)

Which direction should you take, the urgency of how you should perform things, will depend on how great or how dire is your current situation. Here are some things that you need to evaluate…

This post was originally posted here. The writer, Kyith Ng is a veteran community member and blogger on InvestingNote, with username known as Kyith and has 967  followers.

How prepared is Washington for a recession? - Lens

I started work after we came out from SARS in 2004. So I have been through the mental aspect of not knowing if you have a job when you graduated from university.

2008 was different in that I was already working but in my old company, the email will announced new hires every week.

This COVID-19 thing is a bit different. Not sure if it is because as an almost 40 year old, there are more people being furlough or retrenched.

I have not been retrenched before. Friends have shared with me that my old place is an iron rice bowl.

In the current workplace, we are doing OK, at least for now.

I am not going to be that guy to tell you what you should do.

I have read a few stuff out there and while they point you to resources such as the Ministry of Manpower, what are your rights, where to get support aid, they do not show you money-wise how you should pivot.

I came across some of these stuff in podcasts in the past. I think they might prove useful for you at this time.

  1. A part of the content explores what you should do if you are laid off.
  2. There is also the part of the content where you are not laid off but you need to fortify your work position.
  3. Lastly, there is a little bit exploring about coming up with backup plans

Let’s minimize on flowery words and get straight to the content.

Take Stock of Your Current Situation

Which direction you should take, the urgency of how you should perform things, will depend on how great or how dire is your current situation.

Here are some things that you need to evaluate:

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