Which method(s) should I use?

Many of us including me are always wondering which is the best method to invest/trade? Which books should I read to learn more? Which guru's seminars should I attend so that I can invest/trade better? Which blogs should I visit?

SO the QUESTION is:

Which method should I use? FA? TA? value investing? value growth investing? dividend investing?

Actually regarding of which methods you use, just make sure it suit you and it works!!

How to know that it suit you? -> make sure you can sleep well every night without worrying about the buy/sell
How to know if it works? -> like what cw always said, measure your performance!

As a summary: 

不管是黑猫还是白猫，能够捉老鼠的就是好猫！

For those who felt lost in life

There was a motivating poster of a cat talking to a kid. 

The kid says, "the meaning of life is eat, sleep and sex." and the cat said, "that's what i found out too.

(Its a pity that I did not manage to find the poster as mentioned above. I got the quote from someone.)

2011 - Year end Review

Similar to most people, let me share my year 2011 review.

My first post is on 1 Apr 2011. April fool day! My blog is now 8 months old!

Thank you!
It was, is and will be a very fulfilling and exciting journey to record and share my journey in investing. In this year I had learnt many things (average in, XIRR, emotion, power of internal strength etc) and had summarise the some of the key things which I have learnt in a blog post earlier. (See http://opposethetrend.blogspot.com/2011/10/my-story-typical-know-nothing-to-know.html).

Beside what I have learnt, I have also made friends with many interesting people such as 50k saving per year, 100k passive income, BBB WJ, Keppel's Uncle with hot daughter in SMU, atas DBSS, audit director, leverage king, sexy mum, small fry, busty froggy, hot doctor, cookie monster, serious MW, drizzt, sexy SMOL, piggybank, pepe le pew, legendary steven ge, prof nick, FT pero, interesting BW etc (please forgive me if I miss naming anyone) on bullythebear's cbox. Although I may not have met them in real life, I have learnt a lot from them and realized that there are actually many like minded people around. Thank you!

Year 2011 portfolio performance
My readers may already know this. I have two portfolio. One account is joint account with my spouse, the other is my personal account and I put in money to these accounts monthly on the day which I received my pay. Thus I am 发薪日光光族! (see http://opposethetrend.blogspot.com/2011/11/or.html)

XIRR for joint account: +13.75%
XIRR for my account: -31.92%

Year 2012 wish list

1. Be happy for both my family and I
2. Stay healthy
3. Enhance my investment knowledge and share with others
4. Maintain and improve the XIRR for both of my account to +XX% for 2012
5. Find the right job and career path so that I can earn and save more money!
6. Stop spouse to use less SKII, splurge less on taxi/restaurants everyday and save more $$$ each month (opps..hope I can stay alive after this point..)

The first two points are most important for me - basic of life.
Point 3 to point 6 are the processes to help me enhance and maintain point 1 and point 2.

Happy new year!

Let me end this post with a picture of my taiwan trip!

Which stage are you in by end 2011?

 Remember this post? http://opposethetrend.blogspot.com/2011/05/sharing-on-how-to-be-emotionless.html


If you seen $XXX,XXX loses before, you will not feel "kan Jiong" on $XX,XXX losses.
If you seen $XX,XXX loses before, you will not feel "kan Jiong" on $X,XXX losses.
If you seen $X,XXX loses before, you will not feel "kan Jiong" on $XXX losses. 
If you seen $XXX loses before, you will not feel "kan Jiong" on $XX losses.

Thanks to the mini bear and my average down without proper risk management this year, I am in the stage bold in red above. :)

Which stage are you in by end 2011?

Interesting Question - Describe your job in a few words

I came across this interesting question "Describe your job in a few words".

If you can summarize your job in a few words, it will tell you more things about your job.

Let me start the ball rolling.

For me, it is "Everyday is draft email/paper, bounce through and fro through many upper level for clearance, in the end what you had wrote earlier is totally different from the final product. Zero worth and zero satisfaction, just work for money."

What about yours?

Running out of juice

It been a week since I last posted.

Been running of ideas on what to write for my blog. Does all bloggers have the same difficulty of running out of stuffs to write?

Dear readers, do you have any suggestions on what topics I can write for my blog?

By the way, I broke my "kiam Sapness" over so many years. The past two phones which I bought are $0 and $48 respectively and I always choose the cheapest plan available. I also refuse to get 3G plans because I don't want to end up like other people in MRT where everyone is frantically poking their phones every single second.  

Sadly, I went over to the dark side yesterday.

I had bought a new phone LG Optimus 2X at the cost of $88 and change my current plan of Ioneplus to 3G flexi Lite. My bill will increase by around $11 per month after this! I will be further from my financial goals by $11 per month!

However, I should also thank Standard Chartered Bank for sponsoring $80 for my phone. Thanks!

月光族 or 发薪日光光族？

There are people who are 月光族.

For me, I am very poor on the immediate day of my pay check! 发薪日光光族？

On the immediate night of my pay day every month, I would:

• Transfer around 60-65% of my pay to my Joint account and personal saving account for investment and saving - pay myself first.
• Give 15% to parents as allowance.
• Take out a sum of few hundreds cash as food expense and put in cupboard.- this would be my pure food expenditure in hawkers, coffee shops, ntuc groceries for the months. Amount taken out would be dependent on how much I had left from last month.
• The rest will remains in daily account for stuffs like occasional credit card spending for entertainment, utilities, singtel, conservatory charges etc. 

Thus effectively, 80% of my pay is gone on the immediate day of my pay. Even if I want to overspend also cannot.

I live a poor but happy life! Delay Gratification!

I am 发薪日光光族.

Are you 月光族 or 发薪日光光族？

(sometimes I wonder how great would it be if I can be like my siblings, earned at least double my earned income but yet either don't give parents money or delay very long then give a bit and refuse to offer their place for my parents to stay. I would be able to save much more and reach my FF goal faster. I am just stupid. )

My story -Typical know nothing to know a little thing investor

When I first started work in June 2008, I listen to my friend aka financial adviser and bought ILP because I just started work and I know that I need investments and protection but I was total noob in finance. (This ILP still haunt me today. Pls see: Best Bargain: Must buy: ILP)

Then I read up more and think that investing by myself is better. (Rich dad Poor Dad changed my mind. Previously, I hated anything to do with finance.) Hence, I bought unit trust in March 2009. I tried different kind of funds including method such as RSP.

I was lucky as March 2009 was market bottom and sold them in Oct 2009 for a bit of profit when I realised that I am actually feeding my profits as annual expense to the rich fund manager. Then I switched to stock.

In Oct 2009, I don't know anything about TA and FA. I listen to radio, see tv, see CNA market forum, see news etc and whacked my first stock golden agriculture at 0.45. In the next few days, the price drop to 0.42 and I felt worried and kan jiong. In the next few days it went back up to 0.46 and I sold it for low $xx profits as my emotion cannot take it.

Since then I started to buy and sell many stocks, but only dare to hold for a few days to few weeks because I do not have any plans or method. I have no confidence in my buy and easily panic as it is my hard earned money. In addition, I am easily influence by the media. The worst investment which I made during that period was blinding following BB Peter Lim, that mistake is still haunting my portfolio.

Since then till today I keep reading up books on FA and TA, learning all the methods which I could in stock investing. Somehow when I go through financial blogs, I discover LP's cbox and started to chat and learn from the people there.

I thought I had already learn many methods in investing such that it will make me a better investor. However, my performance is not good at all. I tend to buy and sell quite fast. I also tried forex but loss badly and read up on warrants but luckily did not tried that. I also wanted to try CFD, I got the account form but end up I never sign up.

Slowly slowly I realised that knowing the methods - TA and FA is not enough and in fact there is no holy grail in the methods. No matter how well verse you are in TA and FA, there is no way which you could predict the market movement.  Hence I started to give up listening to all these noises.

I learnt that I need to manage my portfolio well and do asset allocation. This directly and indirectly link to the emotion in my mind. I learnt and know that how much money I should and can put in each individual stock such that I will not panic when the market drop heavily. I learnt that I should and can only do average in but not average down. I learnt and know that when Mr Market is in panic, I should not panic. Instead, I should start whacking some good stocks slowly according to my asset allocation plan. When Mr Market too optimistic, I know I should start selling and should not have seller remorse.

Overall, now I know that I need to have a strategy. A carefully planned strategy such that I will have asset allocation according to my risk level and what I will do if market goes up and what I will do if market goes down. There is no point to predict market movement. The so called gurus also made so much mistakes, how can a layman like me do prediction? Nowaday, I started to buy slowly and sell slowly. Although it is hard, I force myself to stick to the rules which had planned.

However, I still have 2 past mistakes which is still haunting my portfolio. The school fees incurred in this process of learning is painful. Hopefully, Mr Market will give me a chance to repent.

I hope I am on the right track and I think my XIRR will tell me how I fare in future. All the best to me!

Lastly, thanks to all those had gave me guidance and I will continue to learn as much as I could so that I can improve! Thank you!

Repenting or?

Are you repenting?

OR?

Food for thought: Why TA seems to work for many people?

It work because many believe in it.

Self fulfilling prophecy

why next time?

Long long ago there was a very lazy man, X. He wanted to spend the minimum amount of time in working and just work the bare minimum such that his boss had no reason to sack him. Typically, he worked from 9 to 5 everyday and went fishing or sit by the seasides to enjoy the beautiful scenery everyday after work. He just wanted a decent amount of pay such that he could pay off all of his necessary expenditure with little or no surplus every month.

There was another man, Y who is same age as X.  However, he is totally opposite of X. He is a high flyer in a company, currently holding director position in a company. He spent enormous effort to work hard and work smart in office to please his boss. Typically, he worked from 8 and overtime till 11pm everyday. He want to work hard to get promotion and earn tons of money.

X and Y are secondary school friends and did not see each other often. 

One day, Y past by X when Y is on way to meet his client at 8pm while X is fishing by the seaside, enjoying his life.

Y: Hi X, why are you here again? I think I saw you many times around this time when I am rushing to meet my client.

X: I am fishing and I go fishing everyday after work. Sometimes I just sit by the seaside and enjoy the scenery.

Y: I heard that you are still doing that low paying job after so many years. Why aren't you striving hard to earn more instead of wasting your time fishing everyday? Don't you want to buy big cars, own big houses, with lots of cash and investments so that you can retire without any worry in future when you are old? Look at me, I worked so hard everyday, trying to earn a lot so that I can have lots of money. Next time, I can buy a house by the seaside and enjoy the beautiful scenery when I retire.

Guess what X reply?

X: Why wait till retire? I am already enjoying the seaside scenery everyday.

Economic news?

Remember this news?
http://opposethetrend.blogspot.com/2011/09/good-news-bull.html

What about this?
Remember that yesterday and last friday, STI was in red?

What about today?

So is market going up or down?

I guess many people are thinking of bull or bear or sideway everyday?

But do you really have control over these?

Is there a simple formula news A + news B - bad news C = market up?

NO!

It is too complex. Even the so called economic experts or guru couldn't get it right.

It is impossible for layman like us to get it right?

Since you cannot control the market, cannot control the news, what can you do?

CONTROL YOUR OWN PORTFOLIO AND YOUR MONEY!
Place yourself in a way that suit you and could take advantage of both the up and down.

Money, Time, Freedom, Health

Money, Time, Freedom, Health

The items above are interrelated.

When you are young, you have health, limited or lots of freedom (depends on parents), no money (sometimes parents give you lots of money to replace their time with you, thus depends on parents too).

When you just started work, you wish to have more money so that you can have the freedom to do what you want, generally you have good health. Thus you work very hard for money and have to sacrifice health and time.

When you start to grows older and older, you will have more and more money, but your health starts to deteriorate. In addition, in general, the higher the earned income you got as an employee, the greater the responsbility you have and the less time you have.

By the time, you earned a lot and retired, you may not have good health to enjoy the lots of money in your bank. One day, just leave with regrets in life - why didn't you spend more time with families as well as do more things you like, instead spend too much time to pursue money?

Life is ironic, isn't it?

The moral of the story is: Strike a balance so that you will not regret when you die in future.

Best Bargain Must BUY: ILP

I had just received my ILP half yearly statement today.

I bought this policy from my friend when I first graduated from Uni when I have zero financial knowledge.
I was told that is good as it incorporate both investment and protection. It sound so wonderful to me then.

Let me share how "wonderful" this ILP is.

It is the "best" investment that I had ever invested in.

Policy Title: Manulife Flexi Aggressive portfolio.

Started from Aug 08, deducted $200 every month.
Change to $150/mth on Dec 09

Total premium paid to date: $6250
Current cash value as of July 2011: $1801.45
% gain/(loss): -71.18%

Where can you find such marvellous investment? Even my healthway which is currently at 40% loss cannot fight the 71.18%. Furthermore, you have no control over it.

This is the best investment cum protection plan that you can ever have. Please remember to sign up for it and get free 71.18%!

IPOs - reflection

Recently, there are quite a number of IPOs coming up. Malacca trust, kitchen culture holdings, 800 super holdings etc.

When I first started 2 years ago, I thought IPOs was very exciting. Within a day it can rise so much and fall so much. Howver, I didn't dare to buy any of these IPOs as I am scare. After seeing some of the IPOs ran up so high on the first day of trade, I sort of regretted why I didn't participate in them.  (but do note, it is on hindsight.)

Recently, I have a different mindset as I realise something. TA and FA rely on historical data which IPOs lack. TA rely on historial phychological support/resistance while FA looks at the fundamental, numbers, business of the company and whether it show good historical durable comparative advantage.

IPOs do not have much historical data. IPOs do not show how the market perceive the price vs value of the company.

Although IPOs is very exciting, but I think it is not the cup of tea for me.

I still prefer:
money management 10-15% per stock/sector-> current market sentiments (be greedy when other are fearful, be fearful when others are greedy) -> FA screen -> TA good price to enter

(Haha, I am really a science student instead of art student, do things must one step follow by another step.)

how much money do XXX really owe? anyone can guess what is XXX?

Current Debt Held by the Public Intragovernmental Holdings Total Public Debt Outstanding 06/28/2011 9,731,228,079,037.89 4,613,217,240,768.50 14,344,445,319,806.39

知足常乐

What kind of person are you?

(1) work very hard, limited worklife balance, strive for promotion and earn a lot?
(2) work bare minimal, strive for a happy work life, earn decent?

(of course there are other options other than the above 2 options)

No matter which choice you take, it boil down to the question, how much is enough? 500k? 800k? 1 million? 10 millions?

Different ppl have different wants and hence indirectly affect their choice of lifestyle. In fact, the wants will change with time, place and with your own's goal.

Thus my advice is:

人生苦短，生不带来，死不带去，知足常乐吧！

Could you remember how happy you were when someone passed you a sweet when you were very young?
Or could you remember how hard you work in your office to get more promotion?

Sharing on how to be emotionless

This afternoon many of us are chatting on cbox.

Suddenly came out with a logic on being emotionless in trading.

If you seen $XXX,XXX loses before, you will not feel "kan Jiong" on $XX,XXX losses.
If you seen $XX,XXX loses before, you will not feel "kan Jiong" on $X,XXX losses.
If you seen $X,XXX loses before, you will not feel "kan Jiong" on $XXX losses. 
If you seen $XXX loses before, you will not feel "kan Jiong" on $XX losses.

That's why big shark can easily eat you and cause you to feel "kan Jiong". (They are not "kan Jiong" but you are.)

Thus, I think money/portfolio Management is more important. It is crucial to take calculated risk and put the amount that you will not feel so much emotional strains on each stock that you have. As such, you will not "kan Jiong" on buying as you scare of losing profits. Similarly, "Kan Jiong" on selling as you felt pain on the losses and wanted to cut loss.

I am at "If you seen $X,XXX loses before, you will not feel "kan Jiong" on $XXX losses." Where are you?

Reflection of my Journey

Sometimes I just wonder whether I should give up out this journey of freedom. There are so many good investors around like MW, CW, AK, LP, momo etc....and I am so far from them both in term of captial as well as knowledge.  Sometime really wonder, is their level really attainable given my lousy annual pay as well as many room for improvements financial literacy?

There are many ocassions which I wanted to give up but I did not give up. I could sell all shares I got and give up investing then just depend on earn income be those typical 月光族.

However, giving up mean you surrender before the enemy comes and finish you off, sign of coward and lousiness.

I am in education line and I told my students not to give up. If I give up, it means I never did what I peach. I must push on and never give up despite whatever doubts and difficulty I have. Jia you! GOOD LUCK to OT83!