Fundamental versus Technical Analysis – Part 1 of 3

No, I am not going to explain via numbers and ratios. That’s so left-brained! Let me try with a right-brained approach.

Fundamental Analysis

Investors who favour this analytical approach like to comb through the published financial reports of companies with glee as they try to fish out useful nuggets of information for their buy/sell decisions.

There are 2 major sub-groups of this school:

1)      Numbers R’ Us

2)      Lazy bums

Numbers R’ Us

This group loves to dive into the balance sheet, Profit & Loss, and Cash Flow statements. Not only that, they will read and decipher every word/number in the appendixes! Numbers R’ Us are hard-core number crunchers! They would create their own spread-sheets and track the ratios of their beloved companies quarterly and annually.

   

I am puzzled as the only numbers I am interested in are: 36, 24, 36.

However, I treat these people with respect as they are frequently the early ones who can “smell” something is “fishy” just by looking at the numbers – especially when they don’t add up!

When in doubt, they vote with their feet and stay out.

Another interesting trait is they trust their own financial detective skills – they take responsibility for their own investment decisions. Hence you won’t find them suing the banks or blaming the authorities if they have bought Lehman mini-bonds.

For eg, if they invest in an S-chip (China companies listed in SGX), they do so with eyes opened.

Lazy bums

This group of “fundamental analysts” are outright lazy or don’t know what to look for in the numbers…

So they rely heavily on 3^rd parties to do the summaries for them. So they download brokerage reports and read what financial bloggers have to say. Listen and watch CNBC or Bloomberg commentaries – what is said in the media must be true! No?

One obvious trait is they like to quote who said what or who wrote what. They are quick to follow advice; but when things go awry, they are equally quick to “outsource” responsibility!

Eh… Are they using Fundamental Analysis? Well, they can quote the P/E ratios, net asset values, P/B, dividend yields as good as their Numbers R’ Us brethren. Just don’t ask them how these numbers were derived!

For eg, if they invest in an S-chip, they go in following the “backside” of others.

The truth about Fundamental Analysis

When you look at the Sun, you are not looking at the “real” Sun. What you are watching is the image of the sun 8 minutes ago. That’s how long the light from the Sun takes to reach Earth!

It’s the same when you look into the mirror. You are looking what you were 2 nano seconds ago. 1 nano second for the light from you to reach the mirror; 1 nano second from the mirror back to your eyes.

There lies the truth about Fundamental Analysis! Unless you are an insider, everything in the market is old news to someone else!

All published statements or reports have a time lag. The question you have to ask is how high or low in the information food chain do you belong to?

In the middle ages, by looking at the Sun, it was the obvious “truth” that the Sun revolves round the Earth. It was Nicolaus Copernicus that pointed out that it’s in fact Earth that’s revolving round the Sun!

So next time you are doing your own fundamental analysis or reading a brokerage analyst’s report, you may want to pause and reflect:

Are you listening to the “obvious” truth (the spin others are giving you), or can you see beyond the numbers just like Copernicus?

Next post I will talk about Technical Analysis.

ABBA : Eagle

Boney M and Bee Gees are 2 of my favourite Top 3 bands while growing up in the late 70s and early 80s.

But ABBA will always have a special place in my heart.

Simple lyrics and candy pop melodies, much derided by detractors, became the hallmark of ABBA's songs. What these detractors did not realize: Simple is hard!

So popular was ABBA that for several years, they were only second to Volvo as Sweden's  biggest export earner!

My favourite ABBA song is Eagle.

Looking at my blog's template and my profile, you would understand why ;)

This song was also my inspiration for this poetry and prose post: If I have one wish.

What 5 balls? There's no balls - only you!

I know it meant well and putting things in simplistic terms is easier to comprehend.

However, this is a classic western cut-and-slice "squeaky wheel gets the grease" way of problem solving. Place things in neat cookie-cutters and trouble-shoot!

I prefer the oriental holistic way of looking at things. There are no balls. Only you.

Instead of focusing on not dropping the balls (symptoms or manifestations); we accept that we will drop the balls - we are mere mortals.

It's how we react when we dropped our balls that really matters.

It's more about what kind of material you are made of:

1) If you are made of rubber, you can bounce back from any setbacks.

2) If you are made of steel, you can withstand the scratches from life's shocks and surprises.

3) If you are made of glass, well, you know what happened to Humpty Dumpty...



Can we change the material we are made of? That may depend on whether you belong to the Nature or Nurture school of thought!

Life goals - be as vague and broad as possible

To complement my previous post on perhaps avoiding MBO and SMART goal settings for our life goals, I would like to offer some concrete examples. 


Vision or mission statement by Corporate

Ideally, a company should have a vision statement by the founder. If don't have, 2nd best is a mission statement.

Take a look. Are they broad and vague? Completely different from the 1 year and 5 year goals? Why? (Hey, I asked you first!)

If your company does not have a vision or mission statement, congratulations! It's likely to be lead by a first generation business owner - the vision is still in the owner's mind. Watch and learn!

A company becomes "ordinary" when they start to copy and implement management flavour of the month/year concepts... (usually the business owner's 2nd generation or newly recruited professional managers from outside)

Anyone from my generation still remember "In Search of Excellence" by Tom Peters and Robert H. Waterman, Jr. during the 80s? How many of these "excellent" companies are still around or "excellent"? Yes, Kodak was featured in the book.


Then and Now

When we were a young man/woman and fantasizing about what we want in our other half, what were our "goals"?

He ideally would be tall and cute like Beckham. Ambitious, career minded, have stable income, owns a car, can afford a nice apartment, blah, blah, blah.

She ideally can go from 0 to 100 km/h in less than 10 seconds, has a V12 engine, and comes in red, black, or yellow... LOL!

If you are married, roll-over and take a look at your other half. Anything close to what you have "planned". Stop laughing. It doesn't matter right? Once the right one comes along, you knew it instantly!

If still unmarried and wishing you were, you may want to reflect whether your "goals" are hindering or limiting your search... 


Not recognizing what we really want in Life

When I looked backed at my 44 years, did I planned all these? OK, you may challenge I had my 12 months to financial freedom goal.

Ah! Don't get me wrong. MBO and SMART goals are great for specific targeted things we want to achieve - that's the power single-minded focus!

But if success is measured by what we have to give up to achieve it, have you ever wondered what if some of those things you have "sacrificed" are those you would like to achieve your life goal?

During my posting to Shanghai, I've seen 3 expat divorces - two European couples, and one Singaporean couple.

Woman, if you prefer to stay in Singapore to further your career and let your hubby go to China without you, the chances of your marriage surviving is less than 50%.

Brother, if you go to China without your wife, your life goal is definitely not about having a complete and loving family...


My Life Goal

What about me? Talk so much. Show us the money you say?

My life goal is simple: I want to be happy. 

I am not an evangelist. You have to fill in the blanks yourselves.

  

Morning walk at Portsdown Road

I took a walk around a part of Queenstown that I’ve never ventured in for the longest time.

After walking along Commonwealth Avenue, I turned into North Buona Vista Road, passed the Ministry of Education, and right opposite ACJC, I turned into Portsdown Road.

Finally I can see the gleaming buildings of Biopolis and Fusionpolis up close.

But I’m not here for the new and the future.

I’m here to take my morning walk and visit the black and white bungalows of yesteryears. It was 10 am on a Sunday morning. No cars, no people. Everything was still and quiet.

It reminded me of Sweden where I can take long walks in the forest without ever meeting another soul.

Great for meditation and reflections.

Have I found a quiet sanctuary in crowded Singapore? Hope the quiet and solitude is not because today is also CNY’s eve…

A chance discovery! One North Park. They have a park here? Must check it out next time. Explore cutting through the park instead of taking Portsdown Road next time?

Shower in Gold

A gust of wind bellows against the trees. The yellowed leaves left their anchors on the branches and gently flicker down toward the road.

Against the dark of the shadowed trees in the background, these fallen leaves caught the rays of sun behind me, sparkles and glitters in golden sunlit ecstasy as they sashayed passed me. Totally oblivious to my presence.

I stood rooted to the ground, watching this impromptu performance. A feeling of joy ever so brief erupted from my heart. So beautiful, so transient.

Hustle and Bustle

When I have recovered from my stupor, I continued pass the Tanglin Trust School. At Woking Road, I found a dirt trail amongst the black and white bungalows at the Wessex Estate along Woking Road.

Followed the trail, crossed the former railway track, and through the trees, I ended up at the Tanglin Halt Market and Food Centre! Long snaking queues at the few hawker stalls that were open. Lots of uncles and aunties making their last minute buys at the market stalls.

Back to reality. Back to my HDB heartland.Full of sound and colour!

My barrier – A railway track?

I couldn’t help reflecting the contrast between the two sides of the railway track. And why a simple railway track has prevented me from “crossing-over” all these years…

Was it the physical presence of the track acting as a natural demarcation, on was it more a social and psychological barrier of mine – between a bungalow area and a HDB area?

I wonder. 

Are there more railway tracks that prevent me from exploring the other side?

Do Management by Objectives (MBO) and SMART goals work for our personal lives?

I am getting philosophical recently… OK, it’s probably I have too much time on my hands? But what else can a Man of Leisure do besides play and mind fish with himself?


MBO

In corporate life, this is one of the most helpful management tool popularized by Peter Drucker – the father of modern management.

It provides a measurable yardstick to measure the performance of workers and managers, and in Singapore, our Ministers too!

Now it’s more fashionable to call them KPIs (Key performance indicators). A rose by any other name is still a rose.

SMART goals

Specific, measurable, attainable, realistic, timely. Yup, these are the kind of goals we give ourselves or were thrust upon us in corporate life to make us jump through hoops!

Skill in goal setting

This puts a tremendous onus to ensure the goals we are pursuing “makes sense”.

Let’s take the recent Ministers pay revision. In the past, it was single-mindedness focus on GDP growth. Now we are “twicking” it to make it more palatable to the masses.

So was the focus on GDP “wrong”?

Sometimes I wonder why we complicate things and love to re-invent the wheel. Let’s look at our Singapore’s pledge:

We, the citizens of Singapore,

pledge ourselves as one united people,

regardless of race, language or religion,

to build a democratic society

based on justice and equality

so as to achieve happiness, prosperity and

progress for our nation.

Focus on GDP is prosperity and progress – ticked off. We just need to add a happiness index? Of course to be happy, we need united, democracy, justice, and equality as the building blocks first?

I wonder do we have all the former qualities and only lacking progress and prosperity; or do we only have progress and prosperity and nothing else?

Single-mindedness focus good – but with blinkers on

MBO, KPI, SMART goals are used by hired hands to judge and measure other hired hands.

It’s great to move the whole organisation in the same direction towards a common goal.

However, that would mean any initiatives or opportunities that do not “fit” into our 5 year business plans or our KPIs will be tossed aside. Be honest. Would you waste your time on a task that does not help you in achieving your year-end bonus KPIs?

Kodak’s recent bankruptcy is a good case for reflection. It’s a “blue-chip” company too! As a shareholder, how would you measure the companies you have investments in? What KPIs would you set for the management?

And if you are a business owner, you probably must be lying awake thinking how many money making opportunities your professional managers are throwing away all because it’s not part of their KPIs…

Perhaps that’s why entrepreneur CEOs like Richard Branson of Virgin and Li Ka Shing of Hutchison Whampoa behave differently from professional CEOs.

When they see a business opportunity, they dive right in! Never mind it’s a totally different industry! If it makes money, they invest more. If it lose money, they pull out.

I wonder how many of Richard Branson and Li Ka Shing’s management team will dare tell them that they should stick within their core-competencies and not spread themselves too thin?

If we ask Richard Branson and Li Ka Shing did they “plan” their achievements, they would probably have laughed.

I am so glad to have worked in IKEA. To me, IKEA is one of the most successful companies in adopting Management by Stumbling Along (I think the management will disagree with me). 

Without it, I would not have this insight.

Life goals

With the realisation of the limitations of KPIs, MBO, and SMART goals, now why would I “limit” my life with such goals? I already had enough of them in my former corporate life. Bring work home? You must be kidding!

No New Year resolutions; no life goals. I am just happy to flow with the wind.

And maybe one day as I walked towards the Western Paradise and passes by the Gates of St Peter, St Paul would invite me in for tea? I guess he would not mind me being a heathen. 

Flow with the wind is perhaps euphemism for in God we trust. Wink.

What about character and soul?

Having returned for the past 2.5 weeks, I’ve explored some of the new regional shopping places (to me) like Clementi Mall and Jurong Point (got new extension).

One thing that struck me was the people! I visited Jurong Point on Sunday and its crazy! Reminded me of shopping in Shanghai – where did all these people come from?

Another observation was the cookie-cutter shops. The shops all look alike from other malls and shopping centres!? It’s the same old same old “Macdonald” like formula: put a supermarket at the basement, put a food-court near the top floor, have a Japanese restaurants section here, fill-up the rest with corporate “me too” apparel chain stores there…

I visited NEX at Serangoon last year. It was the same just with times 2 the effect! 2 supermarkets, 2 food-courts, double the amount of retail space…

Ah! Now I can see the result of this drive to increase our population size. To support the building of regional shopping malls in every town? They are even building a shopping mall at the NOL building in Alexandra road now!

Somebody must be collecting good rentals and making a bundle from sale of the land. Soon we may become like HK and Tokyo. Any “empty” space like a car-park, a town square, a green lung, etc; will soon be targeted to “unlock” its monetary value or potential!

Having once worked at Cable-car tower and at Robinsons Centrepoint, I am amazed how the former car-parks at Cable-car tower and near the former Specialist Shopping Centre have been transformed! Go forth and multiply, my dollar friends! More good years!

The property developers must be smiling to the bank – kaching! $$! Talk about windfall for themselves and their shareholders!


Cheering the small retail independents

Thank goodness I am living in Queenstown. There are still 2 old styled shopping centres, even after renovation, have retained their character and soul.

The shops are mostly independent small retailers. Small is beautiful.

Queensway shopping centre is known for spectacles, sports-wears, shoes, and jeans.

Holland shopping centre is known for home furnishings, tailored dresses, and in recent years – foot massage and manicure/pedicure.

These 2 old shopping centres have lots of charm and character. It has soul.

Don’t take my word for it. Free come and see for yourselves!

For new visitors, it’s like looking for “treasures” along the narrow and sometimes confusing maze of small shops. That’s the fun of it silly!

I’ve never liked the "centralised" town centre concept of the newer HDB towns. I prefer the “decentralised” and less organised style of Queenstown. Of course I am biased! Having live in Queenstown all of my life.   

I am not going to take them for granted. Better enjoy them while I can!


Up up and away!

It won’t take long before some elite pencil pusher will figure out that tearing them down and replacing these 2 old shopping centres with newer and more modern “commercial” retailers can bring in more kaching! Can build condos on top of the shopping centres too! More $$!

Buildings will go higher and higher. The sky’s the limit you say! More floors = more money. It’s a bull market! (The trick or key ingredient is to have increasing population growth!)

Soon I may see less of the sky and the sun. Living in the shadows could be my future fate.
It’s my fault since if I want to see the sky and the sun, all I have to do is to buy penthouses on top of the buildings. Ah! The joy of having the world at your feet! (So that’s what you do - look down at me from your penthouse)

That’s if I can afford it.


But what about character and soul I asked? There you go laughing I just don’t get it…


I guess I have to stick with my songs and stories.

New Blogger's threaded comments don't work for IE PCs

Another virgin post!

And its about solving IT issues!

Me? You got to be kidding!

Last week, I noticed something new in some blogs that belonged to the Blogger family - threaded comments!

What's that? It's a new trick where we can "reply" directly to a specific comment in a blog. That's super cool!

I thought its something new found under gadgets, but I couldn't find it. So I've forgotten about it until this weekend when I tried to view the comments of blogs with the new threaded comments feature...

When using IE9, the moment I clicked on the comments, it returned the blank screen of death or the brower hangs  :(

I even wrote to one blogger asking her to check her comments settings!?

It's a man's thing. If something is not working, it must be others at fault. So embarassing!


For Internet Explorer readers

If you are an IE user, click on CW8888's blog and click on the comments and you will understand: http://createwealth8888.blogspot.com/ 

(CW8888, don't mind me using your blog as example hor!)

The solution if you are a reader is easy - switch to Firefox or Safari and the problem is solved!

It seems some Chrome users have experienced similar problem with IE users too with the new threaded commenting in Blogger. Which is surprising since Chrome and Blogger belong to Goggle. The developers don't talk to each other?


For webmasters using Blogger

Either disable threaded commenting (for now) by changing Embedded comment settings to either Full screen or Pop-up settings... Wait till Goggle engineering has fixed the problem before restarting Embedded threaded comments again.

Or you can heck care! You could also be are a Firefox or Safari fan; and if not now, when better to give IE the "twist" of your bayonet? LOL! 


What did I learn?

New IT bells and whistles are good; but there could be bugs. Let others be the guinea pigs first!

It applies to IPOs too. No track record means I am either buying into an investment theme (flavour of the month) or making a stag trade (find someone to offload our newborn quick!).

Hmm... Maybe I should stick with the old Chinese wisdom: The longer the distance, the better to test the horse's stamina ;)

Oh yeah! For those skeptical listening to a person making a virgin IT problem solving post (good for you!), here's the official link where I got my information:

Official Blogger help forum

I love books!

Books

I love the smell of the pages as I flipped through them
dozing off with one on my bosom in bed
using it as my knight in shining armour to squash the scary spider (splat!)
the dust reminding me how long I’ve cheated on my promises

The yellowing of the pages and mildew spots mirror that on my face
nothing beats a friend that sticks with you through our trials and tribulations
never mind if the pages were dog-eared or if I’ve gone forgetful
it’s time to give you a hug my special friend!

Experience is great! But it's a double-edged sword too

Our mind or human brain is a very interesting.

From our interactions with the outside world, we do play a part in the wiring of our human brain? Awesome!

Connecting all the brain cells are neuron pathways. When we repeat a task, a behaviour, or a habit, these neuron pathways get strengthen each time.

In layman's speak, the more we do, the more we can do it "with our eyes closed".  

Can you remember the first time you tried cooking following the recipes from a cookbook?

Didn't we follow the written instructions to a tee? Instruction to add 5 ml and we really measure 5 ml exactly?

What happens when we have cooked the same dish several times? 5 ml becomes a dash, a pinch, a sprinkle - all according to our personal taste  ;)

After several years investing/trading in the markets, do you still see a difference between P/E 12 versus P/E 12.7? Or technical support level 2600 versus 2630?

When newbies are busy measuring, analysing, and maybe arguing with themselves, you would have already come to a quick assessment of the situation and acted.

You don't need to have all the information to fit into nice cookie-cutters.

That's the wonderful feeling that comes from: Been there; done that.

Warning! Experience comes from action. Not passive listening, reading, reflection (that's talking to me too!), dreaming, fantasizing, etc.

Can you see why motivational seminars fail to reap the growth you’d hoped for, or why discussion groups get lost in the lack of progress you find at work?

Change comes to the human brain with action, and passion for further change follows in a step-by-step fashion.

I'm sure we have relatives (and I am one of them) who have great passion to change for the better - be it stop smoking, stop gambling, stop womanizing, stop overeating, stop overspending so much, start a business, learn a new skill, etc. How many have acted on their passion?


I eat salt more than you eat rice 

I've never liked it when seniors "pull rank" on me based on their extensive experience.

Exerience is great as we can cut-to-the-chase and zero-in onto the critical make or break decision making points. However, this works only if "this time it's the same".

If we do not have the self-awareness to recognise a paradigm shift - or this time it's different - we may fall into the mental trap of using yesterday's solutions to solve today's problems.

It's our neuron pathways again. We all prefer to use the established broadband pathways and not the less frequently used 56K dial-up pathways ;)

That is why I like to keep an open mind to listen to the "crazy and sometimes far out" ideas of the youth. Never mind often I feel like saying: "Are you sure that will work?"

But once in a while, I will recognise my folly and do a mental sommersault and re-calibrate.

You may want to read my post celebrating youth as a counter balance: Youth - your strength is you don't know what cannot be done!


Confused? That's the fun part of living in shades of grey!

Float like a butterfly; sting like a bee

This famous fighting style by Muhammed Ali came to mind while exchanging ideas in my previous post with qian bei (senior) Coconut.


Float like a butterfly

Before fantasizing about yields or returns on investment, qian bei CW8888 said it best with his: Return of Capital. 

Yup, if we don't get our money back, everything else is just words written on water. The classic White men's promise to the native American Red Indians... Even if all the treaties were written in black and white. Something for Singaporeans who have a fetish for more regulations to ponder over ;)

Nowadays, investors/traders have to watch over their shoulders to keep an eye on counter-party risks. Have you heard of counter-party risks 5 years ago?

What if my broker goes kaput? What if there's a run on my bank? Even countries and governments can default? If you own sovereign bonds that default, try bringing the textbook to the publisher and ask for a refund! What bonds are "safer" than stocks @#@%$&!!*

Or try suing the ratings agency. Their defence will be: "I say say only you really believed?"

Or since you have not paid us directly for the ratings, there - here's your money back. Pay nothing; refund nothing back. Fair what!

Tip: You may want to keep an eye on those synthetic ETFs with French and German banking counter-parties. Some of these banks are ripe for a credit downgrade in 2012.


Sting like a bee

Going through 2011 unscathed in a way is "winning". But I not so sure about relative benchmarking used by others. Fund managers use it to "protect" their rice bowls I understand. But as private investors/traders? You mean STI down 20% and your portfolio "only" down 5% you very happy?

Being the practical me, I rather use absolute benchmarking. That means my portfolio must beat inflation - period. Call a spade a spade. No such thing as "ponding".

For Chinese and Cantonese readers, you may want to listen to my speculation song.

愿望系做个预算 梦幻系自我去编

无谓去找个道理把你欺骗

Always treading water is fine if we are happy with the current spot or just focusing on burning calories. But isn't it a bit tiring expending all this energy and going nowhere?

I would much prefer to be swimming towards somewhere. Even if I don't have any clear goal or destination. Who knows I may meet a mermaid?

Opps! I think I am going off tangent again...

Back to boxing. Even if we can float like a butterfly and avoid getting hit by our opponent, that won't win us the match!

We still need to hit consistent winners (go for win on points) or make a big knock-out punch (go for KO)!

Again using investor qian bei CW8888's example. If he cannot find multi-bagger and high yielding winners like Keppel Corp, can he "retire" at 55? This is going for KO.

For traders, its more about finding the right "vehicle". 5% here, 10% there - just like the Malay saying: Sedikit demi sedikit, lama-lama menjadi bukit! (a little a little, wait become a hill!) This is going for points win. 


Knowing you knowing me

Yee...So violent!

Eh... Investing/trading is not a gentleman's sport. Can't stand the gore and violence? Perhaps its better to stay outside the ring.

And if you don't fancy getting your nails broken or hands bloodied - outsource. Get a hired hand. But remember to act like a land owner. If the hired hand don't perform, next! 

I think those that were very quick to ask for the resignation of the SMRT CEO should have no problem here. (you decide whether it's a "like" or "poke")

Youth -Your strength is you don't know what cannot be done!

Whenever we have a new colleague, especially one fresh from school (even better if he/she never studied supply chain like me!), I would ask them for their feedback (after their probation) on their first impression of our company, our department, our retailers, our suppliers, etc.

You'll be surprised how many ideas I've "borrowed with pride" from them! Ah! The benefit of fresh eyes!

Just a simple test for the skeptical. Go away for a 2 weeks holiday and when you return, you can "see" everything in your room clearly. Try spotting something "not right" if you live in your room day in day out ;)

Whenever I am a Project Leader for a task, I will always include at least one young, inexperienced but highly motivated colleague to the project team. Why? You've guessed it!

Youth don't know what cannot be done!

The challenge dealng with "experienced" team members is whenever an idea is brought up, it's either:

1) In 1985, we tried it and failed. So forget it...

2) It cannot be done! You don't understand this industry...


Study then Do versus Do then Study?

If you are starting out in your financial freedom journey, you may want to reconsider the Singapore path: study, collect paper, do.

Have you noticed that Singaporeans just love to study and take courses? 

Oh! I interested in this. I'll take a course! Or seminar. Or workshop. Or self-study by reading lots of books. Then I try it out?

Eh... What if after all the time and money invested, you discover you don't like it at all?

You may be interested in this old post: How would I know I don't need anything?

There is a difference between studying for a MBA and hoping it will make you a CEO and being a CEO and studying for a MBA to understand the business better. Same same but different!


Investing/Trading - Don't limit yourself by reading too much

I noticed that in forums some "younger" investors/traders have shared they read this and that book. Often these books are from the more well-known gurus. The book list looks suspiciously like the "recommended text list" of our school days... 

More mature or experienced investors/traders can tell which books or authors are "poison" to their investment styles or temperament. Sometimes it can be a good thing when our cups are full. We decide how much of the old tea to throw out to make space for the new brew. We are discerning.

But if your mind is a sponge, watch what you put into your brain!

Of course read a few basic primers. However, most of the learning is through actual real money trades or investments. In fact, I wish you would make all the stupid mistakes within the first year. Even better if you bust out your account!

Isn't it better to learn what's capitulation with $10,000 than when you have $100,000 or $1,000,000?

Actual personal track record will help you decide for yourself (not listening to others) whether it's better to use cut-loss or average down. Both works! But the right technique will only match the right temperament and depending on how deep is your pocket. Can you discover which is best for you by reading or copying others?

Use a trading journal or investment diary.

Once you have better understanding of yourself, you can find and read all the books best suited for your "style". Attend the "right" seminars and workshops, etc.

Why pay good money to attend options, property or forex seminars - when you discover you are not comfortable with leverage?


Walk on the grass - make a path for yourself

In summary, don't be too quick to label yourself a lamb. Try walking on the grass instead of the well-worn path others have walked before you.

Who knows? You may discover you are a shepherd! You can even write books and give seminars to others who are willing to pay to listen to you ;)

Don't limit or short-change yourself. You are only young once!

Learning (leveraging) from young finance bloggers (Drizzt and Dividend Warrior)

There is a reason why I like to keep company with young finance bloggers in cyberspace.

It’s not that I am “lao hero” (having my mid-life crisis) and unwilling to admit my age. OK, maybe, but that’s not the point! (And you can stop staring; it’s all real lah! No botox, no collagen!)

That’s because I am a creature of habit and past experience. Experience helps me to find short-cuts and “cut-to-the-chase” so to speak. But I am also aware that it can be limiting in the sense I may brush off new ideas or opportunities that are foreign to my past experience…

Let me share how I was inspired from 2 young finance bloggers recently. They have helped formed one of my investment “watch-list” for 2012.

Dividend Warrior

His recently foray into US dividend stocks – despite the forex currency risk (MAS will let SGD appreciate slowly to contain imported inflation) and the US withholding tax (bites into dividend returns) - caused me to reflect on a conversation I had with an insurance agent during 1998.

My original agent resigned and being an orphan account, this new agent took over and invited me for a drink at my neighbourhood hawker centre (must be new or low budget agent). He was making a spin on seeing how the Asian stock markets have crashed in 98, I “should” make an investment in ILP (investment-linked-policy) for European and US equities. Trying his best to “educate” me on diversification…

I bought nothing and less than 9 months later I received a notification he quit and I’ve been an permanent orphan account ever since. I smell or what?

After the 97 Asian financial crises, the emerging markets came roaring back! Especially the worst hit Asian countries like Korea, Thailand, and Indonesia. If you benchmark US and European equities against these 3 Asian countries from 1998 till today, what do you see?

The “safe” bet is not always the “best” bet  J

From this paradigm shift, I realised my current core portfolio holdings are in companies with revenue exposure mainly to Asia ex-Japan. Thanks to Dividend Warrior, I am now getting some of my unused dry gun-powder to deploy in the beaten down US and European equities for 2012.

Do note I’ve not invested the funds yet. I am doing my pre-purchase research and fact findings now. So when the other shoe finally drops this 2012, I can pull the trigger without missing a beat!

Drizzt

What stocks to buy in US and Europe? One sector I am looking at is Technology. For e.g., multinationals like SAP and Cisco are very cash rich and derive their revenues from all over the world. The US and European economies may suck for the next several years, but that does not mean a US or European listed company will underperform in lock-step.

Oh my god! Didn’t I say I am a top down macro guy? Why am I getting involved with bottom-up stock picking?

That’s where Drizzt’s blogs came mighty useful – he has another technology productivity blog too!

Although I am a technology laggard, I am able to glean some interesting macro trends to the future. Never mind the fact I am clueless as to why today’s youngsters love their tech toys so much?

Since I’ve realised that I cannot match today’s younger investors when it comes to technology stocks, I decided to “outsource” by investing in a mutual fund that invest in US and European tech stocks. It’s easier for me to focus on evaluating the fund manager instead. I stick to what I know best – dealing with people J

Borrow with pride but I do it my way

As you can see, I just needed a catalyst, an "Eh, why didn't I see it before?", a "That's interesting...; an "Ah ha" moment!

The rest I will take my personal responsibility. This is something I can't outsource.

There! Now you know why I keep company with the young finance bloggers.

Don't you dare stalk them! Wait they run away how?

Memory - CATS

It was not so long ago that I was frequently the youngest member of the department. Now I am one of the more "senior" ones... Even amongst bloggers and cyber forum members, I belong to the 2nd most senior category...

Never mind. My mental age now is 28 - there's still so many things I've not done or experienced. Lots of new virgin experiences to be had. I still see the world with wonder and curiosity in my heart :)

I don't care what people say (actually discovered I do).

I still see myself as "the sexy thing" in the mirror.

No worries mate!

I am the great cheerleader for myself. If I don't love myself, how can I expect others will?

OK, maybe I should switch from Dettol soap to Dove soap? Moisturize?

LOL!
  

Please don't call me uncle!

Last weekend, I went to the thousand hands Kuan Yin temple at Waterloo Street to say my thanks.

Then I went to Sim Lim Square to look see look see. I am looking for a 11.6 inch notebook to complement my 7 years young Dell desktop PC. Something light that I can carry along during my walk here walk there excursions in Singapore and overseas.

Guess what?

Every freaking shop I went into, the sales assistants all asked: "Uncle, what you want?"

OK, I've been called Uncle before. But not by everyone! Once in a while can tahan (take it); but this is too much!

I am especially sensitive since I am currently undergoing my mid-life male menopause.

I think I must go to Queensway and print my own personalised T-shirt:

At the front: "Uncle your head!"

At the back: "Call me yan-eh" (handsome)

How? Power?


Qian pei (seniors), I need your advice. At what age did you all finally accept and is at peace with being called Uncle?

Now I understand why my female colleague in Singapore never talked to me for 3 months when I jokingly called her "Auntie". Ouch!

The joke's on me now :(