Tuesday, May 30, 2017

Is The Market Really Crashing By End 2017?

No, this is not my prediction.

In fact, this is the prediction by the author, Harry S. Dent Jr in his book, The Sale Of A Lifetime - How The Great Bubble Burst of 2017 - 2019 Can Make You Rich

In the book, he categorized the stock market cycle into 4 seasons (just like the weather) and boldly predicted that end-2017 till late 2022 will be the market winter season (i.e. the greatest danger period for market crashes and recession/depression). He cited a couple of guiding principles in identifying the market bubbles and also some justification for his prediction, which I am not knowledgeable enough to question.    

Will his prediction comes true? 

No one know and only time can tell. 
The Sale Of A Lifetime
In any case, many of my financial blogger friends have already been "secretly" loading up the war chest and waiting for the perfect storm to come. In fact, some of my financial blogger friends whom went through the the previous Financial Crises did a massive killing during that period (2007-2008). It's almost 10 years now and probably about right....time to release the kraken.

What do you think? 


Tuesday, May 23, 2017

Why is Forex a market of the Future (Guest Post)

What forex shortage stands for? For Foreign Exchange, you may know this type of trading also under following names: Forex Trading, Currency Trading, Foreign Exchange Market, or shortly FX. This market is just about buying one currency and selling another currency. So the general task is to buy cheap and sell expensive. FX market is open 24 hours a day, 5 days a week - only weekends are off. Main financial centres of FX are London, New York, Tokyo and Hong Kong.

How to trade Forex

Trading forex means trading currency pairs. You as a trader, for example, buy euros with dollars and you expect that the value of dollars will go down in comparison to euro. If your prediction is correct you earn money by reverse sale. The principle of currency trading is very easy to understand, however trading itself not so much, therefore you need to apply forex strategies and money management strategies that will help you get the edge of profitable trading.

Most traded currencies

If a certain currency is traded more often than others you can usually trade it with more tight spread (thanks to a huge liquidity). The most traded currencies are USD, EUR, JPY, and GBP. The most liquid currency pair is EUR/USD. In almost 87% of all trades, we can meet with the American dollar. No wonder when the almighty dollar dominates in the world's largest economy, the United Stated of America.

Interesting facts about Forex trading

Did you know that forex is...
  • Is considered to be one of the finest markets in the true sense of the word (market economy principles).
  • Is accessible with just the internet connection, no installing is required.
  • Is a market with no commission policy. That means you do not pay a fee for creating a trade (broker makes money only on a spread).
  • Is highly liquid, there are 5,3 trillions of dollars traded daily
  • Is only about you. You do not need any employees, you have no overhead costs (besides from your computer). Forex trading is one of the freest business.
  • Is tradeable from anywhere in the world as long as you have internet access.
  • Is easy to understand, the principle is quite simple.
  • Is a market of the future. Already nowadays forex is the biggest and most popular financial market in the world. More and more people use its advantages.
  • Is market with unlimited possibilities. There are no limits to your profits. Most brokers offer margin-based trading, therefore you can earn a lot of money even when your capital is not sufficient yet.
  • Is almost for everyone you can start even with low capital, or you can trade on a practise demo account.

Forex trading in practice

When we trade forex we should focus on several things. For start, we definitely shouldn't overlook forex news and announcements, because they are very important when it comes to making a decision whether the price of one pair will go up or down. There are several websites which will provide you with this kind of information, one of them is definitely marketwatch.com. You will find there some trading ideas and tips which you can use when you trade. You should also keep an eye on the economic calendar which will provide you following information: an event which is planned on a certain date, an actual current price of the currency, a forecast of the price (and how the event will most likely affect it) and some others.

The forecast is usually marked with labels that indicate how important the news will most likely be - low (low impact on the market), medium (medium impact) and high (high impact). I definitely do not recommend trading news that are marked as "low" without using any other technical analysis, because they are not very solid. If you want to trade based only on a fundamental analysis, look for medium and high importance tags. You also might firstly consider having a look at the previous announcements to see how they affected the price of the currency. Because sometimes not even news with high importance are able to break the price to the opposite direction. The best way to learn how to trade the news is an extensive practice. For this purpose, you can take advantage of a free practise account for forex trading.

BIO: contribution from
Michael is a devoted economist who firstly recognized the forex market 5 years ago. He is also known as a financial nerd. He loves making analysis and reports to see how far he moved in trading over the years, he also loves writing and sharing his beliefs with the internet.

Saturday, May 20, 2017

Which Is Your Potential Wonder Woman Stock?

Being a movie buff, can't help but to integrate my hobby into this seemingly not-related blog. But I am sure I can get away of it, let me explain...

Oh, before that, in case you are not aware, Wonder Woman is the upcoming DC Universe superhero movie (to be released on 1st June 2017 in Singapore). Personally I am so looking forward to it, if you are interested to know why, feel free to drop by my other movie-theme blog, Movie SG.

Now,  let's get back to my way of integration between Wonder Woman and Stock. As shared in my Movis SG blog, early reactions of the US movie fans are tremendously positive, Wonder Woman look set to be the BEST DC movie ever, at least there is a huge potential there. So, if you liken the DC Universe as a particular industry/segment (which has been experiencing an extended period of dull/uninteresting moment) in the stock market, what is the particular stock which has huge potential to break out? Note: I am only talking about "potential" here, it might or might not happens.

For example:
If you liken DC Universe as "Singapore Hospitality Trusts", your Wonder Woman stock could be "Far East Hospitality Trust". Why? I happen to blog about this earlier, check out my answer here.

What about you? Which is your DC Universe and Wonder Woman stock, and why? 


Wednesday, May 17, 2017

My mutated DCA - Follow-up Action

As per my earlier post on my mutated DCA (Dollar Cost Averaging) "strategy" on Singtel (click here to read more why I called it "mutated"), I've expanded by "scope" to include another counter, Asian Pay Television Trust (APTT), of which I've written previously (click here) the reason I am interested in this counter.

Ya, I know, the price (at 55 cents) is higher than my indicated target entry price (50 cents or below) but after considering that it will be a DCA play and it's only a minion (don't misread) shares, I am alright with that.  

By the way, I only get 900 shares today as I want to take advantage of the special $10 commission promotion. Didn't I tell you my portfolio is minion size? lol

Singtel will still be in my DCA list, my intention is to rotate my DCA purchase among a selected list of counters (so far shortlisted 2).  


Note : DYODD (Do Your Own Due Diligence) 

Saturday, May 13, 2017

The Goal Is To Have No Goals, But To Have...

Today's post was inspired by one chapter in Rod Judkins's book, The Art Of Creative Thinking. So, it's kind of unconventional, many people might find it illogical, which is understandable because you can't have too much logical thinking in creativity. 

Anyway, the point of this particular chapter of the book is discussing why people tends to over-rate the "goal setting" and its "side-effects". For example, if you've set a particular goal, especially those S.M.A.R.T. goals* (e.g. achieving financial independence in 2020), you might fall victim of the following side effects:

1. When you have goal, the route to it becomes a labour. Put it another way, it is too linear and anything linear is hardly fun or interesting. 

2. The imagination becomes closed to other possibilities. A goal limits your actions. There isn't room to explore other pathways. 

3. The goal usually need to be precise and has time-limit. This is exact reason why goals backfire - they encourage us to focus narrowly.

So, what should we do if setting goal is not the right thing to do? As per the author, rather than identifying goals, it is better to identify areas of focus. Two key points by the author in differentiating goal and area of focus:

-  A goal defines an outcome but an area of focus establishes what to spend time on.

-  A goal is a result, an area of focus is a gateway.

So, if the goal is to "achieve financial independence", then the area of focus would be "things/stuff that you like to spend more time with before and after you've achieved the financial independence"?

Not sure whether I've illustrated the points correctly, what do you think? 


*S.M.A.R.T. Goals are defined as goals which are Specific, Measureable, Achieveable, Realistic and Time-specific

Wednesday, May 10, 2017

5 Types Of Retail Investors In Social Setting

Retail Investors
First, happy VESAK DAY to all Buddhist friends and for the rest, enjoy the mid-week Public Holiday!

Being a newbie retail investor myself, it is fun to make some casual observation when interacting with peer retail investors either in group chats or social media like Facebook, InvestingNote etc. So, decided to make this fun post about my personal observation of the types of retail investors "buddies" when in social setting. For those who have interacted with me before, please do not 对号入座 OK? This is just a fun post :-)

1. The "Kang Tao" Hunters:
Most of the time, "what's the kang tao*?", "any kang tao?" texts/messages will be from them. To be frank, occasionally, I belongs to this type of retail investor too :-) Nothing wrong with that, I guess it's a quicker way to gather information/tips (whether the information/tip is valid or not is another issue). Of course, the Kang Tao Hunters will not take all information as face value, they will still do some "homework" to validate the information.  

*Kang Tao is Hokkien word for opportunities!

2. The "Kang Tao" Providers:
When you have Kang Tao hunters, you need Kang Tao providers to close the gap. So, naturally the second type is Kang Tao Providers. They usually willingly provide their Kang Tao and feel good/proud about it, especially if they've done their super-duper in-depth due diligent. Many a time, this type of retail investor also fall under Type 3 (see below).  

3. The Disclaimer-ers:
The disclaimer-ers belong to the type whereby they will put a disclaimer in everything they said, especially in relation to some kang tao discussion. Either they have some bad experience OR they just want to make sure that their reputation are in-tact when the fact go against they view. In any case, nothing wrong to be "safe than sorry"!   

4. The Quiet Listeners:
These are the type of retail investors hardly talk/chat but they will read/absorb the conversion quietly at the cosy corner of their office or home. Until one very bright moment, they will decide to say something along the line "Great view there", "Thanks for sharing" etc..

Errr... I occasionally belongs to this type too :-) 

5. The In-depth Analyzers:
All other retail investors will like this type of buddy as they will provide a very detailed analysis of their view, be it macro-economy or specific stocks. It also means that, most of the time, they  are the more seasoned retail investors and contributed the most in the conversation. 

Lots to learn from them! 

Alright! This is my fun take on the 5 types of retail investors (in social setting). Of course, at times we switch types along the way, depending on the topic in the conversation. Also, there is no right or wrong type, just like your blood type! :-) 

Oh! Did I missed out any other type(s)?


Sunday, May 7, 2017

Lollapalooza Tendency - Mother Of All Psychology Tendencies/Biases

As per my earlier post, I am currently reading the book entitled Charlie Munger : The Complete Investorby Tren Griffin (click here to see more). While I am still half way through the book but there is one psychology bias or tendency that caught my eye, and it's called : Lollapalooza Tendency

The reason it caught my eye is because the word seems exotic and odd sounding! :-) And when I googled the term, the first in the search result is an annual music festival at United States! Not helping...hahaha.

In any case, I believed this is a term coined by Charlie Munger to remind the investors the importance of psychology biases when comes to investing. 

As per the book, it (Lollapalooza Tendency) is briefly explained as:
"The tendency to get extreme confluences of psychological tendencies acting in favor of a particular outcome"
Of course, the "outcome" here might be a good or bad, depending on the situation. 

If I were to give a metaphor, it's like all the Power Rangers (the red, blue, black, pink and yellow rangers) merged together and transformed into Megazord, which can defeat monster(s) that the individual Power Ranger is unable to cope. So,

Lollapalooza Tendency = Megazord

Does it (the metaphor) make sense to you? Hahaha

On a more serious note, I do agree that the psychology biases are something every investor need to be wary of as it is much more difficult to learn and apply into what Charlie Munger called a trained response, when comes to making investment decision (do take note that non-action is also deemed as a decision). 


Wednesday, May 3, 2017

What Make Benjamin Graham's Principles Of Value Investing So Hard To Follow?

Recently, I chanced upon a value investing book while browsing at Bangkok's Kinokuniya. After browsing through a few pages, I decided to get the ebook version and continue reading. 

Reason? It's very layman term and useful for noob like me. 

The title of the book is Charlie Munger : The Complete Investor (authored by Tren Griffin). As I am still at the beginning of the book, there are much to learn from the author. However, I would like to re-share the 4 fundamental principles of value investing by Benjamin Graham (as shared by the author) here and my view of why they are so hard to follow especially for retail investors? 

PRINCIPLE 1 - Treat a share of stock as a proportional ownership of the business. 

PRINCIPLE 2 - Buy at a significant discount to intrinsic value to create a margin of safety

PRINCIPLE 3 - Make a bipolar Mr. Market your servant rather than your master.

PRINCIPLE 4 - Be rational, objectives, and dispassionate

My view : 

As you can see, in order to follow the first 2 Principles, you need to equip yourselves with sufficient financial and business knowledge and apply them in your investment decision. How many of us can really dissect and make sense of the Annual Report thoroughly? Ok ok, there are quite a number of my financial blogger friends already doing it with flying color, but the catch it : most of them  with Accounting background, so they see and breathe numbers everyday.  

The last 2 Principles are even tougher as they are dealing with your emotional response when comes to perceived winning or losing, your psychological response/biases etc.. As you know, when dealing with feeling/emotion, fear and worry usually won at the end, unless you have went through enough "training" and able to have a "trained response" (as they called it), minus the emotion.    

Don't get me wrong, I am still a believer in Value Investing. Just wanted to emphasize its toughness in practice. Ok, granted, most of you already knew that. So, just treat this post as "I am talking to myself" :-) 

In fact, that explains why Value Investing is only ONE of the successful investing approaches and not the ONLY approach. As the saying goes : all roads lead to Rome.

Do you agree with my view? Feel free to comment below.


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