Fool me thrice, shame on whom?

Fool me once, shame on you.

Fool me twice, shame on me.

Fool me thrice, shame on whom?

Markets are funny.

QE1 did not work the first time. After the initial sugar rush, it fizzled out.

Same goes for QE2. Just look at the recent disappointing US jobs numbers.

Yet the markets “rallied” this week based on the hope Sugar Daddy Ben will follow Uncle Kangaroo and Uncle Panda in giving us their soda pop drinks for our sugar rush…

Or perhaps it’s a case of third time’s the charm? 

Guess what? After following the rules and saving for a life time, now the Central Banks around the world are throwing savers and pensioners to the wolves… 

You’re on your own if you are earning negative returns or interest rates after inflation. Good luck to you on learning the ropes of investing at your advanced retirement age, when “investing” up till now was about deciding how long your fixed deposit term should be… (That's why I am a big cheerleader of starting young. Hey boy! I don't mean sex lah!)

But it’s great if you are a risk on speculator or entrepreneur. Cost of money has never been this cheap!  Isn’t the volatility great? A speculator’s greatest fear is a flat and dull market. Just don’t get whip-splashed! 

And we wonder why trading volumes have dwindled in the major stock exchanges from Hong Kong, Singapore, to US?

I’ll wait for the dumb money to return in droves as they always do. 

Wait! 

I am very puzzled why the markets would lend money to US for 10 years at less than 2%... Would you?

But then I am keeping my spare change at our Singapore banks at what interest?

Hey! I am the dumb money!

So I am my own indicator!!!

Lovely ;)

The Two Paths - Freedom And Slavery

Source: Aesop, Fables

 
"Zeus once ordered Prometheus to show mankind the two ways: one the way of freedom and the other the way of slavery. Prometheus made the way of freedom rough at the beginning, impassable and steep, with no water anywhere to drink, full of brambles, and beset with dangers on all sides at first. Eventually, however, it became a smooth plain, lined with paths and filled with groves of fruit trees and waterways. Thus the distressing experience ended in repose for those who breathe the air of freedom. The way of slavery, however, started out as a smooth plain at the beginning, full of flowers, pleasant to look at and quite luxurious, but in the end it became impassable, steep and insurmountable on all sides."

Who is Prometheus? By the way, a movie with the same name coming our way soon.

I love Greek mythology as it has lots of similarity to Chinese mythology.

Unless you became an entrepreneur straight from school or inherited a family business, most of us would have walked on the smooth plain path towards slavery at some point in our career – although our parents and schools would very much prefer to sell it as taking the educated path towards “getting a high paying job”. 

Once upon a time, getting a high paying job in the government was the number one choice. Then big banks became the flavour of the decade. So was MNCs with their lure of overseas postings. I guess now its small start-ups with the potential to become the next Facebook? 

Wait! Rewind. Working at start-ups is not taking the easy path. It’s taking the rough path.

Only during the famine of winter do we realise we have been taken for fools. Especially if you have been “volunteered” by others to be jettisoned off the boat so the same others could remain afloat and “meet the numbers”.

Notice how the shares of public listed companies go up when the CEO announces they would chop off 10% of the workforce?

If you are one of those “investors” eagerly counting the potential increase in earnings per share for your stock, just remember when your number is up, other investors too will cheer the resolute and shareholder friendly decision of your chainsaw CEO.

What goes around comes around.

No whining please! We are Singaporeans!

Once great companies like Kodak, Nokia, Sony, Lehman Brothers are either bankrupt or are struggling to keep afloat. Is the company you are working for now better than them?

Working for the government safe? Countries can and have gone bust too. And there’s regime change. New political master must make room for their cronies supporters. Are you the willow who can bend in whatever direction the wind blows?  

Judging by the number of people who are willing to pay serious money to learn the way to financial freedom, I guess many have realised the path they have chosen is not the right one. 

Alas if they only knew that sitting in an air-con room for a few days or weeks is still the easy path…

The rough path means exactly that. You have to sweat, get some cuts and bruises along the trail, expose yourself to the wind, sun, rain, and snow…

You may want to read Aesop’s quote above again. 

Buy/Sell Until You Can Sleep Soundly

All of us are different.

Hence our risk tolerance and emotional stability would be different too.

A few years back, I saw a Youtube video on buying silver and one thing the video blogger said I liked very much.

He was answering the question how much silver should we buy:

Buy a 1 ounce silver coin he advised.
  
Can't sleep that night as you feel you need more?

Buy another 1 ounce silver coin the next day.

Repeat the process until you can sleep soundly at night. Ah...

I thought this makes a lot of common sense. No one size fits all magic formulas; but tailor-made to fit each and everyone of us.

It can apply to selling too.

For eg, if you feel you have owned too much equities in this current climate of doom and gloom, take some profits off the table.

Still can't sleep?

Sell some more equities until you are totally at peace when you sleep.

Mind you. This has nothing to do with whether you were right or wrong in your buying/selling decisions. 

Nor is the execution due to fundamental reasons or technical indicators.

And it's definitely not dollar cost averaging, cutting losses, or averaging up or down money management techniques. 

This is more about your psychological frame of mind.

If you have been investing or trading for some time, you may remember those nerve racking positions that caused you sleepless nights don't you?

Then you know what's it like to "lose our heads".

And it's not always about losses. Sitting on huge paper gains is just as stressful! No?

There must be someone coolly buying from me when I "capitulate" and sell at near market bottoms; and similarly, someone must be selling to me in glee near market tops when I buy with "irrational exuberance". 


Do you perform better (drive, work, study) when you are well rested or when you had only a few hours of sleep?