Monday, February 28, 2011

Comfort items

I am going outfield next week, so this week I'm going to do some shopping to bring some comfort items to make my life in the jungle for the next few days more bearably. For those who are not in the know, going outfield means that you can't bath for around 3 to 4 days. You can't brush your teeth. You can't shave. You can't shampoo your hair. You can't change your clothes. And you freaking wear your socks that are soaked in sweat and dried up and soaked in sweat again and again for the whole duration of the exercise.

Disgusting cannot even begin to describe that feeling. It's like you know you're going to do something painful and the pain of waiting for it to come makes the thing even more painful. I'm sure when it actually starts, it'll pass on quickly. SO, I am going to do some shopping during the weekends to make my life much more bearable.

I listed out the items that I needed in order to make it easier for me to do the shopping:

1. Baby wipes - those alcohol laden tissue which can clean you up and make you feel extremely refreshed. This is ultra important.

2. Insect repellent - self explanatory. It's going to be hot and stinky and if there's insect bites, especially mosquito bites, I'll be very very pissed off.

I tried to come up with something else that can make my life even more comfortable and realised that there isn't anything else. Life can be very very simple. Just two items can make my life so much more bearable. I'm actually hard pressed to find anything else, which is very interesting to me. I wonder how I'll feel when I'm finally finished with my in camp stint. What other observation would I make of myself?

Wednesday, February 23, 2011

Life in green

If I've said this before, I'm sorry, but this is really what I feel. I like going to reservist. Some say it's a waste of time, others lament the amount of work waiting for them when they return back to their office. For me, it's precisely because in the army, I do not have to be responsible for my time that I find it so refreshing. How does that make sense? I'm usually a very time conscious person who fills my time to the brim with not much not much wastage. Time is accountable to me, because I have precious little to waste it. I know my exact per hour rate (due to the nature of my work), hence I always end up with a tinge of guilt whenever I'm not working as hard as I could be.

That's very stressful, isn't it? Pushing yourself to limits all the time. That's why I go for my batam trips. There's essentially nothing to do but to sleep, watch tv and read books. It's a leisurely pace in life that I so crave for. Because my usual life is so full of responsibilities and discipline, I find that reservist is a very refreshing and a desperately needed change in pace. When someone orders me to do this, I'll just do it. There's no thinking involved in my part because it is supposed to be done by those superior in rank to me. In fact, I'll do it very happily because there's a bunch of good ol' army buddies whom I've known since I was 18, 19 years old, all doing it together with me. It's a mix of nostalgia combined with a heady mix of brotherhood that I find comforting. We can all bitch about our life (or army life) and perhaps the most serious decision of the day is whether the lunch is good or bad. Reservist not only gives me a chance to rest my body but more importantly, it gives me an opportunity to rest mentally and to reflect and indulge in some soul searching.

I always come out feeling more ready to go and more refreshed than any holidays after reservist. Maybe during holidays, I still have to be with my spouse. Don't get me wrong, I'm not saying I don't enjoy her company, but separation makes the heart grow fonder. I think a healthy separation from the company of each other can do wonders for our relationship. During my reservist term, she'll be going out and spending time with her friends, or even herself. I think it's the 'me' time that is important. With so many distractions in the civilian world, it's hardly justifiable to have 'me' time anymore. I'll end up spending time with myself in the night when everyone else is asleep. This keeps pushing my sleep time later and later and making me more tired and tired until the whole sleep cycle is restarted with a bout of reservist in every year. This is important to me.

In my experience, this picture shows two extremes reaction. One of utmost disgust, another of thoughtful reminiscence

No doubt I'll be earning less in my reservist period compared to working, I think it's still very worth it. It's compulsory anyway, so I don't really have a choice, which is good. Sometimes I think having little choice is better than a lot of choices, because the former makes you think really hard about each choice available to you, rather than making snap decisions and move on to the next one with the latter. In army, this lack of choice is even more stark, because you're simply ordered to do things. I know how this sounds - it's a pitiful attempt at justifying mental laziness and rejecting any semblance of responsibilities to one's own life. But hear me out, a life where one has to make decisions on your own is a very tiring life (satisfying no doubt but still tiring). I feel no shame in wanting a period of time where I do not have to be responsible at all. Those who are happily employed might not be able to understand what I'm saying here, because you've no idea how much initiative I've to take just to have the same pay back every year.

But I digress...I'm not bitching about my work life here and enjoying the much needed break during my reservist term. I'll be gone for a month (since last Fri) and there might not be any new posts. You certainly won't see me in the cbox. This is a delayed post made on a fine Sunday afternoon, and by the time you read this, I'm already well inside my army camp, possibly doing some mindless task or bitching about the sluggish pace of life while wearing green without really meaning it.

Sunday, February 20, 2011

The youth and the stock market

Quite a lot of people are joining the stock market at a younger and younger age. While it's important to know about such things eventually, I wonder about the wisdom of joining it at such an early age. Isn't there something else to focus on, like socializing and indulging in pointless but memorable pursuits? I started doing this stock thingy when I'm 26 or 27. I've the bulk of my earlier years doing plenty of pointless but memorable stuff. I remembered playing lots of RPG games, reading extensively on all sorts of topics (except finance) and simply just day dreaming.

Would I exchange all these stuff for an earlier retirement? I doubt so. It's just part of growing up, I suppose. I fear that the younger the youths are joining such financial pursuits, the faster they would lose their youthfulness and idealism. The financial arena is not for idealistic individuals because they would be washed out in no time. Will today's youths be losing their idealism at an earlier age too? Who else could be idealistic if not for the youths?

The youth are greatly limited by the lack of capital. I don't know about them, but when I'm in my early twenties, even if I've the interest in the stock market, I would perhaps have less than 10k in my bank account. And what could I possibly do with 10k in my bank account? Buy s-shares? Buy those pennies and hope that my skills in picking out a gem would ensure that my 10k would multiply? It's not impossible, it's just terribly hard and the odds are against you since without the necessary capital, every shot counts even more so and the tolerance of mistakes are significantly reduced. Or perhaps driven by the lack of buying power, one would be driven to use leverage to enhance the gains (and the losses)?

I think like a kitten, the youth should spend time on playing.

So, what's the point of dabbling in the stock market when one is so severely limited? I believe that without a minimum capital, it is better not to start investing/trading. That minimum should be around the range of 50k. Why 50k? With that amount, a position of 10k can be placed each time, so one would have 5 bullets in total. With 10k, one can buy most of the blue chips, which are a lot safer than pennies, though the gains are not as substantial. With 5 bullets, perhaps 3 would be average, 1 would be spectacular in profits and 1 would be in the loss, so one would come out of it alright. But what happens if you don't have 50k to begin with? Then stop kidding yourself that the positions are for long term investment and stop deluding yourself that the amount of dividends would contribute towards your passive income for attainment of financial freedom. Even if you struck gold, the amount gained would be insignificant.

A lot of youths start to believe in their own investing/trading powers after reading up on a few books by their gurus. That is the problem isn't it? Clouded by youthful optimism and confidence, they march straight into the jaws of a shark, still thinking that they can escape unharmed. I think it takes life experience to sieve out skills from luck, because a skilled person would have the same outcome as a lucky person. It also takes life experience to sieve out the market truths and the myths. Literature cited time in the market is better than timing the market. I'll say it depends on which stock you're holding. The wisdom it takes to determine when an advice is appropriate to a situation will take time to develop. I'm just not sure whether when I'm in my twenties, I would want to learn about such things. I feel that a part of something in me would be lost and gone forever. You can get all cynical and skeptical after being 'tainted' by the market, especially if you've lost a lot of money.

Seriously, I would recommend most youths to simply concentrate on their studies or get a part time job and in the meantime, just read extensively about finances in general and not to focus so much attention on the stock market. There is a time to do everything and once that time has passed, you'll be wondering how your youthhood is like. Would it be full of adventure and memories or would it be that you've made a ROC of 10% but an absolute amount of $1000? What is $1000 to a youth with no proper earning power yet and what is $1000 to a working adult?

Wednesday, February 16, 2011

Seasons of life

I seem to be going to a lot of baby showers recently. Either that, or I'll be visiting people who had just given birth in hospitals. It seems that this is the season where a lot of my friends are having children. Not too long ago, I'll be invited to a lot of wedding dinners. Seems like there's a season for everything.  If we divide a person's life into 4 seasons - spring, summer, autumn and winter and place milestone events of one's life accordingly, we can see a closer relationship to what kind of seasons our lifestage is currently at.

Spring - In this phase, people are getting married. I was invited to a lot of wedding dinners a few years ago, so that must be the peak of the spring season. Interestingly, as I was married last year, I'm the last few people among my friends who are married; most had already been married a few year earlier than me. I doubt I'll be getting a lot more wedding invitation now. Maybe just the occasional once or twice a year, as the bulk of my friends had already tied the knot. Spring is filled with hope and anticipation, full of wonder as to what the new year might bring.

Summer - This is the phase that I'm currently at. Recently, I've been going in and out of KK hospital and buying gold bracelets / anklets for babies to celebrate their 1st month into the world. Some are already having their 2nd kid. Again, since I had a late spring, I'll likely have a late summer as well. I kind of expect more and more of such occasions until maybe 5 years later, where the reproduction system and the desire to have kids die of with the passage of time. Summer is filled with fun activities but also equally filled with sweat from the higher temperature. Everything is still sunny and bright.

Autumn - This is the phase where the children of my friends are getting married. It can also be the marriage of my own children. I'll extend the season to include the birth of grandchild. Obviously I'm not at that kind of age yet, so I've not attended a single such events at all. But I can see that my parents and my in-laws are already into the autumn season. Some just entered the autumn (children getting married) while others are deep into the season (birth of grandchild). Autumn has a tinge of melancholy amidst happiness, as the encroaching coldness and bitterness of winter draws near.

Winter - This is the phase where one is attending the funeral of your friends/spouse. I wonder how that will feel, with the pool of friends slowly diminished by the encroaching touch of death. Will it be scary, will it be lonely and will it be gloomy? Winter is cold and lonely, always wishing for the warmth of people around you.

But if there's no despairing winter, there won't be hopeful spring. Life is a cycle filled with seasons, isn't it? I think seasons can equally be applied to investing. I leave it to readers to draw a parallel between the two.

Tuesday, February 15, 2011

Money management skills

These days, I tend to focus on the planning part of executing a trade. I'm no longer the trigger happy person I was when I first started in the market. I guess it's no longer exciting to me, and I don't have such a high expectations of it, so the stress is no longer there. I used to think of wanting to get a few hundreds every week from trading. I think all these targets are making it hard to think properly and you always want to do some action instead of patiently waiting out. I removed all such targets from hence on.

Besides learning about the technicalities of a trading system, I think the more important part is learning how to manage your money. You must have heard a lot of people saying about money management and all, but what does it really mean? To me, these are the key elements:

1. The amount of capital allocated to each position

2. The risk/reward, the cut loss and take profit point for each position

I find that over time, there's nothing new I want to add to my trading system. It works fine for me, both financially and psychologically, so I know that is the correct trading system for me. The only thing I want to keep on improving would be on my money management skills. Money management is really about allocating a limited resource (money) to where it's treated best.

It's interesting that only after the bulk of my free cash is spent on my highly expensive flat, and that I've really limited resources to trade, that I actually spent a lot more effort looking for the best bang for my buck. You can even call me a reluctant trader, in the sense that if certain conditions are not right, I would not even look at it. If it hits the right conditions, I'll reluctantly put in a small position to test it out. If it hits another lower point and the conditions are right again, I'll enter reluctantly again. This mindset of sieving out what's wrong about a trading position is new to me. I think in the past, I'm looking for what's right about the trade, and there are lots of reasons to enter something. You see what your mind wants to see.

So in the middle of a trade, I might want to free up my resources tied up in a position to have cash, not because the trade has run its course, but rather I saw a more attractive potential position coming up. I'm arguing with myself whether the extra bids I can get from waiting out the full potential of the position I'm already in is worth the wait and therefore the risk. It's the opportunity cost of holding a position and locking up your capital, especially so if the position is profitable. That is, again, new to me because I used to have the resources to do up to a few trades at one time, but now I'm reduced to maybe 2? So, in a good way, I'm being forced to evaluate all my positions to get the best out of my portfolio, instead of an individual trade.

That, I think, is the epiphany that struck me when I was browsing through my charts late at night.

Saturday, February 12, 2011

CMA post action report

I entered a trading position on capmallsasia a few days ago. I'm surprised that I closed it in 3 trading days since it hit my target price. These days, I really can't be bothered with that few extra bids that I can get by staring at the screen constantly. I just leave it with a queue order, if it hit, I'll be happy with it. If not, I'll queue again. Lazy way to trade, really.

I've been eyeing this counter since CJ mentioned buying it months ago. It had been interesting academically then but it only became interesting to me when a buy signal is triggered recently. I got in a 1.84 when it hit my overnight queue order and had been rising for the last couple of days before the party stopped. I cashed it out when it hit my tp of 1.96 3 trading days later. Since I had covered the full MA channel for this trade, I'll say it's a pretty good one.

Of course, on hindsight, it could have been better if I waited 2 days later because the price went up to a high of 2.05 before coming back down to 1.91/1.92 at last close. It's really important to leave when the party is still on. I do not want to leave when everyone is leaving. And so because of this, I would always have to leave some run behind for others, which is perfectly fine with me. If I had 2 batches, I would have cashed out a batch at 1.96 and another one at 2.00, near the value zone of the weekly. But since I had only 1 batch, I don't want to change my tp on the go and adjust while I'm still in the trade. That happens so many times before - I changed my tp in the middle of the trade, and it came crashing down on me. No more of such things in the future.

Is it a good time to re-enter? That's the thing, I'm unsure now. The weekly says there's more room to run (though I don't like the last candle on weekly), the daily says hold it first. I'm hesitant because if you take the movement from 1.83 to 2.05, the pullback that we see the last couple of days can hardly be called a 'retracement'. It could be the more macro environment pulling its weight on this stock, who knows? I'll be watching 1.88/1.89. If that happens and there isn't something better that comes along, I might just return for second round.

Friday, February 11, 2011

Recognizing short signals

I think it's important to learn how to short, even though you may not wish to do it. Most stock exchange would frown upon shorting and measures had been set up to prevent people from doing naked shorting. That's all well and understandable. However, I think for those who are always on the 'long' side, it's equally important to learn how to recognize short signals.

In the past, I'm more interested in looking out for buy signals because that's essentially what I do. I buy first and sell later. I don't sell first and buy later, which is essentially the meaning of shorting. That makes me very good at buying and finding the right entry. But to fully complete a trade, you must learn how to buy and to sell. I would say that there are so many books on teaching people how to get into a good entry but not many on how to sell properly. Of course, getting a good entry is half way there, but getting a good exit is the more important half. It's the half that determines whether you turn a profit into a loss. It's the half that makes a losing trade a winner too.

Anyone knows the link between this picture and this post?

But understanding when to short need not mean that you have to actually short it. In recognizing a short signal, you can either choose to short it, stay on the sides, sell your position or choose not to buy. I think choosing not to buy is the most important use of recognizing a short signal, especially for those who only do long trades. If you choose not to short upon seeing a short signal, the very least you can do is not to initiate a buy position. That is both sensible and financially rewarding, isn't it? Alternatively, you can choose to sell or trim your holdings knowing that the price will come down again. That's taking partial profits.

So, do not just concentrate on one side of the equation. Find out more about on shorting so that you can recognize a short signal when you see one. In that way, you can smell a change in the wind direction when it happens. Remember, just like seeing a buy signal doesn't mean that you have to buy it, seeing a short signal doesn't mean that you have to short it either. The more important use of recognizing such signals is to choose not to act 'oppositely' to it. If you see a buy signal, you do not short. If you see a short signal, you do not buy.

Knowing when to commit yourself to a trade can often be the lifesaver, rather than stop/cut loss. Prevention is better than cure yea?

Wednesday, February 02, 2011

Chinese new year

I never really like Chinese new year. I know I sound like the proverbial beast 'nian' that roams ancient China during this time of the year. The way to frighten off this beast is the excessive use of red everywhere and the setting off of firecrackers to create loud noises. I must say it certainly 'frightens' me off as well. That is not the most irritating thing to me, since there isn't any firecrackers setting off anyway here (it's illegal to have it). Oh, there's also nothing to eat too except for fast food. Town area is practically zombified. But the worst thing about Chinese new year is the incessant playing of Chinese new year songs. It's like having to listen to someone scratching the blackboard with his nails, except that it's never ending and omnipresent! Imagine you're in a heady daze squeezing through the crowd of people feeling stressed up and frustrated, and in the background, you hear the ever chirpy Chinese new year songs....horrible.

Maybe it's just me. A chinese new year humbug, so to speak. My family doesn't really celebrate it either. There's no sign of any decorations nor even the buying of chinese new year goodies placed at home. It's really just another normal day, except for the reunion dinner where we'll always eat steamboat at home. It's about the only time of the year where I'll be watching more tv than usual (my usual is not watching it). After enduring the fake happiness and fake chirpiness of the actor and actresses singing their usual routine of songs, I'll watch out for the annual chinese horoscope reading of the 12 signs by some master. Not that I really believe in it actually. It's just a ritual, a tradition and as rituals and traditions goes, you don't really want to question why you do certain things, otherwise you'll spoil that magical moment.

This year, however, promises to be different from all the other new years I've lived. Firstly, I've got two reunion dinner to attend to. Thankfully, it's not going to be a pig-out event on Chinese new year eve because I've already 'completed' my side of the reunion dinner on last Sunday. The schedule of different families, each with their own commitments, make it hard to find a suitable time where everyone can be present to have dinner. Hence, to facilitate everyone, it's just held earlier. So, I'll be spending today waiting for the reunion dinner at my wife's home. That's the highlight of the day actually.

Secondly, I've to give ang pao instead of receiving them. I think this is going to be an experience. I certainly don't mind giving them. Hmm, maybe all that would change after this 'honey-moon' period. I never really bother changing the new crisp notes from the bank with the serial number all running consecutively. Money is just money right. (anyway, don't they say it's just for goodluck?) As long as the notes are presentable, I think that should do it. Besides, I drew it out from the atm machine, so these are pretty new. If you drew it from atm near big branches, the notes might even be in running serial number, so you can save yourself the long queue.

Enough ramblings, have yourself a merry chinese new year!