Wednesday, January 16, 2008

Reminder to myself

Note to myself:

1. Do a yield calculation for all those counters that I had which gave constant dividend, using the price that I bought. E.g. Pac andes, HSBC, singpost

2. Do a yield calculation for all those counters again, but using the current market price

In times like this, moral conviction of your own investment is of utmost importance. Do I have what it takes to be a long term investor? To hold a counter so that it goes from profit to losses isn't something easy to bear.

Quite certain that HSBC is going to break 120. If it does, no point buying at that level. Keep that in view for now. I'll be blind (no market access) for the whole day, so I'd rather not queue first. I'll wait for my yield calculation to be done tonight. I need some conviction myself to buy when others are selling. This shall be one major test of my mettle.

C'mon bear, take me!

Tuesday, January 15, 2008

Did it struck you that the old STI is stuck at 3344?

STI crashed again...how to know? Look at the magnitude of the drop of my watchlist, haha, can sort of feel the thing. HSI fell 630 pts, below 26,000. We might be in for some trouble.

Bad mood today. But it's not because of the stock market. It can crash for all I care. Stupid SGX, go and die lah, trouble everyone because of the new index. I wonder how international community view us - so many days the STI still stuck at 3344. Literally 'sheng sheng si si'. I think now is more 44 than 33.

SGX released its 2H results today. Didn't bother to read in detail, but seems quite alright.

My chemical romance: I'm not Okay



I'll stop here. Bad mood might be infectious. Take care.

Monday, January 14, 2008

Brutal selloff today

What a brutal selloff day today. I'm not going to quote the new STI anymore because I think it no longer represents the broad sentiment. It's a big joke when I see that the mass market is selling like 5% or more, STI only drops 40 over points. It's just pure crap.

Stocks after stocks, support gets shorted down again and again. It's been sometime since I've seen such fierce selling. HSBC still didn't close to where I wanted it to be, so no action today. Hmm, the short sell that I made last Fri...if only I had the proper instrument, I would have profitted handsomely. YZJ dropped 0.140 from last close.

Ecowise finally broke out of trading halt..lucky them, missed the whole action today. They announced a tie up with Holcim, one of the world's leading cement and aggregates suppliers for the purpose of maintaining and operating an industrial materials recycling and processing plant to recyle and process copper slag in Singapore. Interesting development.

HSBC support might be nearer to 123. I think 120 is still a good level to go in. More selldown tmr? haha :)

I'm going to be extremely busy the next 2 weeks. Might not have time to watch the market, better queue now, haha

Sunday, January 13, 2008

Book reflections on "Everyman and His Common Stocks" - Laurence H.Sloan

Another review for another book, titled “Everyman and His Common Stocks –a study of long-term investment policy” by Laurence H.Sloan. This one is a classic 1931 edition which I’m reading. I love the classics of investment – it marvels me that the advice dispensed out 70 years ago is as applicable in the past as it is now. The typeface, the long poetic sentences and the very polite way of phrasing ideas all contributed to my pleasure of reading such classics.

Here’s what I think is important in this book:

1. The 5 most essential tools in which an investor needs is the following:

a. Accounting – this is the language of business, without which, the information that companies present to you will be lost. This is so important I think it’s like the alphabet to the English language.

b. Statistic – nicely described by the author as the chemistry of arithmetic. With statistic, we transform raw arithmetic data and change them into use forms to derive relationships and patterns, so that one can forecast within a reasonable limit.

c. Economic analysis – Basically to interpret general business facts (like interest rates change, steel oversupply, wheat crop dies…) and apply them to more specific circumstances

d. Forecast – forecast is different from prediction or prophesy. To buy a stock and hold, one must have forecasted it to appreciate in value. Forecasting, I think, might be valuation in more modern context. Forecasting draws on one’s knowledge of economic analysis and statistic.

e. Recurring sources of factual information, and esp of interim information – I think easily the most important point to neglect. Check that your forecast is right on track. There must be a constant process to revaluate your holdings so as to decide the 3 important questions – buy more, hold, sell.

2. The purpose of a long term investment plan is to take some risk so as to earn higher returns than that offered by life insurance, annuities, savings accounts and high grade bonds. It makes no sense to risk more yet earn less return than these supposedly safer instruments.

3. Credit is the blood of a bull run. Anything that diminishes credit will dampen or kill off the bull. It interests me to read that in 1930s, the FED is already using interest rate to control the widespread speculation. They said that 6% interest rate will kill ANY bull. Raising bank’s lending rate to each other, raising loan’s interest, rising bank’s reserve…I think these some of the things that can be played around. I think it’s as relevant in the past as it is now.

4. The author mentioned a combination of low PE and high yield as a sign of an attractive market to enter. The high yield will ensure that the investor will get some income while waiting for more substantial capital appreciation. I think this point had been mentioned in a lot of books that I read. Must be quite important.

5. The ideal and most valuable security is one that satisfies the following criteria:

a. It must give the investor the most income (definition of income: capital appreciation and dividend)

b. The income rises the fastest

c. The income had risen over the most substantial period of time

6. Ideal means it’s a model. Investor should always adjust their portfolio to hold stocks that closest resemble the ideal stock. If the stock do not satisfies the ideal stock, then there must be compensation for sacrificing that ideal. For example, holding a high growth stock with no dividends…the compensation is that the growth will one day translate into earnings, which will raise the intrinsic value of the stock. Price will therefore follow, allowing the investors who sacrificed the initial lack of dividend for a substantial gain in capital appreciation. If one is holding a non ideal stock with no compensation of the sacrifices made in holding it, a rational decision is to sell it. An ideal stock in the past might not be in the future too, so constant reevaluation and reforecast is necessary.

7. The author talks about a particular period where there is a bad crash. Before that, he showed the headlines of the period leading up to the crash. He’s trying to show that there is absolutely no direct signs that point that the market is crashing. However, to a thoughtful investor, the signs are there. While one cannot predict the exact peak or bottom of a market, one can definitely see a region where the market is topping or bottoming out. Here, the author mentioned about the news headlines are lagging behind the stock market by 4 months. That means that whatever good or bad news you hear in the media must be discounted to the present by 4 months, since it had already happened. E.g. GDP, employment figures…

In summary, I think this book provides a very good reading about the intricacies of the stock market. There is more inside, including a very interesting part about how the BBs in the past do bidding up, bidding down and ‘make market’ for stocks. The details are incredible, if you can look past old fashioned language.

Ok, next book: Security analysis. Concurrently reading "Investment Madness - how psychology affects your investing...and what to do about it" by John R.Nofsinger. I'm reading the latter book to understand why I did that stupid trade on Friday. Mistakes are such a valuable source of lesson to be learn from that it's such a waste not to capitalise fully on them.

Friday, January 11, 2008

Stupid mistake made!

Today STI still can't be seen from yahoo nor poems. STI broke 3300 resistance to close down 24 pts at 3287 with a volume of 2 billion.

Did a stupid trade today. Out of nowhere I suddenly went to short yzj at 1.71, but had to cover at 1.73 because what I had expected didn't happen. I wanted to see yzj break support at 1.71, but it didn't happen. Grey said that my entry and exit points are cocked up; I totally agree. I shouldn't have chased it from 1.76 all the way down to 1.71. If I missed it, that's it...in the emotional desire to short it, I increased my risk so much that the rewards isn't worth it.

I knew that my breakeven is 2 bids down, but that is my reward for pre-empting the breakdown of 1.71 support line. Heck, I should have shorted since 1.8 something when it broke out of the descending triangle...missed it, that's it. All the GREED, FEAR came out in me. I'm only glad that I realised it's a foolish deal and cut myself loose out of it before I lost more money and psychological edge. I felt immediately better. Why? First, I didn't hope. Second, I already know why cut loss in case it didn't happen to act according to my plan. Thirdly, I did cut loss.

Spending $170 for a whole year's worth of excitement should be worth it. I'm now more determined not to trade.

Market big sale today. Not a lot of stocks are left standing green, most are left in their pool of red blood, especially s-shares. Maybe pple are sick of QDII funds. Once bitten, twice they start to short, haha :)

HSBC dropping to 123.6 HKD. Dow -145 pts now on more writedowns to the tune of 15b USD by ML. Black monday next week.

Ecowise breakout

Esp for happy:

Nice breakout of ascending triangle formation by ecowise. Haha, actually break out happened yesterday but didn't realise that. Confirmed breakout with high volume (roughly 3 times average), with minimum target is 0.285.

Haha, Joshing went in at 0.250 (yst) and exited at 0.280 (today). Good trade.

Thursday, January 10, 2008

CSC better at PR now

Today is the debut of the new STI index by FTSE. Yahoo can't view it, Poems can't see it too...so much for a good start. The new index closed down 33 pts at 3311 pts with a volume of 1.9 billion. Despite the big u-turn by Dow of around 140 points, STI didn't manage to ride on the wave. Again, we are still stuck in the descending triangle. With each successive rally, we're forming a lower high. Bad signs?

A few information to share:

1. Lianbeng announced its half year statements today. I think it did pretty well, with revenue increasing by 23%, gross profit by 206.8%, profit after tax by 285.5%. I did a pretty fast calculation of the gross profit margin (gross profit/revenue) and net margin (gross profit - operating costs / revenue):

1st half FY07 - gross margin 15.62% - net margin - 7.65%
1st half FY06 - gross margin 6.27% - net margin - 2.44%

Funny. Never expected construction to have a margin of 7.7%. There's a huge difference in gross margin, enough that a serious investor in Lianbeng ought to find out. Is it possible that the growth in revenue outpaced the increase in costs of goods sold? I do not have the answers.

Compare the figures with the few that I know: Popular net margins 4.2%, FJ ben around 5%.

2. CSC is gettin better at investor relations. They announced that they had, in the past 2 months, awarded approx. S$120 million worth of foundation and geotechnical engineering contracts from both public and private sector. These include:

Public sector -
1. Tree lodge for HDB at punggol west
2. City view at boon keng
3. Bukit merah
4. Fusionpolis
5. Sections of MRT downtown line extension

Private sector -
1. Reflections at Keppel Bay, waterfront residential condo
2. Hotel and commercial development at Collyer quay
3. Mont Kiara @ Eleven, condo in KL, M'sia

These bring CSC's order book to 330 million. Projects are expected to be completed within 12 months.

China milk hit my target at 1.25, exceeded at little at 1.26 before retracing all the way back to close at 1.15. Retracement to touch upper channel trendline at 1.11/1.12? Low volume too.

Dow futures down 18 pts. Ben is speaking today, if I'm not wrong.

Wednesday, January 09, 2008

STI survived 3300! (for now)

STI opened below 3300 (critical support!) and went to close at 6.26 at 3344 with a volume of 2 billion. It's great that STI didn't end up below 3300, otherwise more bloodshed we'll see. Agri stocks are still powering up...crazy wilmar, up 0.400 today.

Singpost had lots of selldown today, in huge volume of 1.3 to 2 million size. It's like 2 big bosses fighting to sell/buy, it's crazy. Went down to touch low of 1.070 before rebounding to close flat at 1.100. If it didn't close down, I see that as a strength. Chinamilk broke out..still no news of why.

Let's see how Dow perform tonight. If it's not ideal, might see 3300 tested again. We live in dangerous times :P

Book reflections on "The little book of Common Sense Investing" by John C. Bogle

Just finished reading “The little book of Common Sense Investing” by John C. Bogle, founder of Vanguard Mutual fund group. I think this book should be read together with Dr. William Bernstein’s The four pillars of Investing and Nassim Taleb’s Fooled by Randomness.

I really recommend the little book series for everyone – it’s so much stuffed condensed into a 8 cm by 10cm by 2 cm book. Almost every sentence makes me think hard. A couple of points kept me thinking:

1. A few risks to be aware of when one is doing individual fund selection.

a. Market risk – the risk that the overall market sinks, so your returns will also drop

b. Individual stocks risk – if one does individual stock selection, there is a risk that the few stocks chosen might do very badly.

c. Market sector risk – This one is similar to individual stock risk, except that it applies to a broader market segment. If say, during the subprime, financials didn’t do too well, and you invested in financial stocks that didn’t have anything to do with subprime, the stock will still undergo a selldown because of market sector. I think can be equally applied to regional funds. Think Japan funds.

d. Manager risk – bad managers, bad selection, bad fund returns.

2. The point that they keep drumming over cover to cover is to buy index funds and hold for long. By doing that, we eliminate individual stock risk, market sector risk (not regional market risk though) and manager risk – leaving essentially market risk. But holding long term sort of reduces market risk too. While historical results doesn’t mean future results, what we can gather from the past is that stocks had always been rising up, so it’s a good bet that I’ll rise up. Keyword: Good bet. Nothing is for sure (except death).

3. Overall market returns is essentially annual dividend yield PLUS annual rate of earnings growth PLUS speculative returns.

a. Dividend yield is more or less stable throughout the years, forming a core

b. Earnings growth increases or decreases according to good times and bad

c. Speculative returns also changes according to sentiment of overall market

4. The author’s point is that on average, speculative returns do not form a good part of market returns. Investment returns – dividend yield plus earning growth – are the ones that drive stock market returns over the long term.

5. Fund return is not investor’s return. Another equation to introduce: Investor’s return is Market return MINUS cost. Costs include expense, sales load, operating costs of the funds. The author is recommending low cost, low expense ratio, no sales load, passively managed (is there such a word?) index funds. He raised a good point that returns can be compounded…so do costs. So as investors, we must really go and hunt for a low cost funds (think fundsupermart instead of from banks). Oh, watch out for high turnover % in funds too, as all these would add in to higher frictional cost, increasing the costs further.

6. If one is hunting for funds, be aware of buying funds in the top few rankings. A few things to consider:

a. Once in the top tier rankings, it means that the funds had already achieved high returns. If you buy into the funds now, then there is a possibility of regression to the mean – meaning you’ll be buying at a high price. Risky business. First guy this year statistically finishes bottom next year.

b. Smaller funds have higher returns than bigger funds. That is the killer for large asset funds. Once they grow big to a certain size, their returns will drop. Why? 1000 to 2000 is a 1000 pt increase or 100% returns. 1,000,000 to 1,001,000 is also 1000 pt increase, but it’s only 0.1% returns. Think about that.

7. Buying index funds with low cost means that you’ll be getting very close to the market’s return. While you’re getting average returns, this beats a lot of actively managed funds hands down in terms of long term returns. Gunning for average turns out to be not so average.

8. Again, magic of compounding comes in. 8% long term returns for market means you’ll double your money in 9 years. So start now, start early.

I've never really mentioned this, but let me say it here. This review reflects my views only, I won't even pretend to say that it's John C. Bogle's view point. I read the book, tried to recall the main ideas of what he's trying to say in the book, and write this review based on my impression on those ideas. In other words, I could be way off the mark.

Tuesday, January 08, 2008

China milk bucks the general trend

Dow closed green yesterday. STI tried to, but failed in the end. Today STI dropped 14.8 pts, closing at 3338 with a volume of 1.88 billion. STI was doing well until after lunch, where a selldown over at Shanghai and HSI causes us to drop from the morning rise.

A few news to share:

1. Capitaland wanted to buy over the rest of Ascott. When it resumed trading today, capitaland dropped in price while ascott rose by 0.50. Obviously, investors over at capitaland must be wondering why they are buying over ascott at this kind of property bullrun? Perhaps they think it's undervalued? I've no idea, not much interest in their business anyway.

2. For skyalps...EMS directors are selling their shares ahead of the rights exercise? Saw a couple of notice to shareholders about the disposal of shares by one of the directors. While selling shares is no big deal (unlike buying of shares), it's the sensitivity of the timing. What would investors think if they see a director disposing shares? haha

3. CEO of chemoil KIA due to helicopter crash over at Indonesia. Not the first time since the start of the year. There was another announcement where the CFO of Baidu in China, died in a car crash too. All the high management level, pls be careful...money isn't everything...my condolences...


China milk chart above! :) Volume keeps picking up for at least 2 days already. Wondering what's up?

Dow futures up 72 pts. At least that guarantee a good opening.

Monday, January 07, 2008

China xlx awarded 100 most important industrial enterprises

What a big market selldown. STI dropped a total of 84.73 points (2.46%), closing at 3353 with a volume of 1.62 billion. All the big caps fell and from the viewpoint of my watchlist, it seems that the small caps are not spared either. Amid the selldown, china milk is about the only positive counter in my watchlist. Wondering what's up with that counter...saw a period of time where the counter shot up to a intraday high of 1.13 before closing at 1.090, up 0.010.

A few news to share about china xlx:

1. I never knew xlx stands for Xin Lian Xin :)

2. China xlx is awarded Henan 100 most important industrial enterprises on 23 Nov 2007. I think this is a confirmation of the size and ranking within its own industry...a confirmation that the company is there. Other than that, I'll be a little cautious about all these rankings because of the supposed curse involved. Haha, the curse is that those who are ranked 1st in any ranking tend to be the last next time. Go google sports illustrated curse to see what i mean. Perhaps this company deserves a closer look in its financial statements, instead of just the technical charts.

3. One of their products was also exempted from quality surveillance inspection, a testament to the long term quality assurance, market share and comprehensive quality control systems china xlx have in place. It also passed 3 consecutive times for the past inspection test. Hmm, interesting..

Agriculture leads to fertiliser? Another theme to play on in the near future with rising agri commodities?


STI's chart is shown above. Looks more like a descending triangle than a symmetrical. Either case, it's critical not to fall below 3300, otherwise we could be seeing more bloodshed. I don't like the increasing volume while STI falls.

HSBC comes nearer and nearer. I think must use dbs vickers to observe the live prices for it. As long as it's near 120 to 122, I think i'll grab it.

Dow +40 so far.

Sunday, January 06, 2008

Buy and hold forever?

HH passed me an excellent article on buying and hold fallacy which I linked it here.

The idea of buying and holding is what long term investors would like to do. Before anyone just go to the stock market and buy anything stocks, and proceed to hold it forever, I think here's a few pointers to take note:

1. Buy and hold works good for companies which are fundamentally sound. I think before you adopt the buy and hold strategy, you must decide whether the company will still be around for long and whether the company can still make money in the future. It still boils down to analysing the business. But jeng told me an interesting thing, economy changes every 5 years or so, thus there is no need to look for 10 years data since the company might be a very different one 10 years later. A good example is GE, this is one company that continually changes according to the demands of the world. Did you know that Thomas Edison started a company that eventually became GE? That was way back in 1890s. Or locally what about Eng wah...who would have though that they changed their core business of movies and went into biotech last year?

2. Point one talks about survivorship of the company. Point 2 talks about survivorship of the industry. Who knows what might happen in the future? Would we enter a time where genetic manipulation is so rampant that we can engineer ourselves not to grow beard, thereby putting Gillette out of business? Or we ran out of oil and all the refineries like SPC, Exxon-mobil, Shell go bust? We cannot foresee what will happen in the future...perhaps the next biggest sector to look out for haven't been invented now. Think cryogenics and outerspace travelling.

3. Buy and hold is good if you have a margin of safety. Holding when your entry price is very low gives the holder a sense of security and quiet confidence. Imagine buying at a high (trading buy) and holding it for long. Anyway, margin of safety doesn't guarantee good returns (though it usually does), it just increase the safety of our capital.

4. There is a time to sell for long term investors. The time to sell is when the stock reaches its fair value. I might have more to say when I know how to determine the fair value in the first place. My idea of it is to determine a fair value, say 100%, then proceed to buy at 40% to 60% (your margin of safety), then sell at 100% when the catalyst comes in.

But the article did raise a certain point which I find interesting. The hottest stock now - Berkshire - might not be the hottest in the future. Who knows? I guess instead of buying and holding individual companies and take the risk, perhaps a less risky approach is to buy index. Buy and hold index I mean. Then again, who knows? Historically stocks have always go up despite the fluctuations and market crashing events. We would never know if the stock market will always go up or it haven't come down.

To summarise, just keep an open mind. Question your assumptions periodically. Nothing beats an open enquiring mind.

Saturday, January 05, 2008

Review on "The Dividend rich investor - Building wealth with high-quality, dividend paying stocks"

Stupid advertlets...they never pay money to host their site, so when I logged into my blog, I kept on being directed to another site. Haha, looks like they owe money run away already...

Enough of that.

I finished reading the dividend book...managed to complete reading it in a day. I never knew I could squeeze so much time if I had to, though it is quite tiring. These are the few things I thought it's important:

1. Instead of calculating % yield (formula: dividend for whole yr/current market price of stock), we can calculate the % yield relative to cost price (formula: dividend for whole yr/price at which you buy). This means that after you buy the stock, the share price will not change anymore.

2. It is possible for the dividend paid out to be equal to the price of the stock after a period of time. That means that if you buy and hold while getting dividends invested throughout the years, it's possible to own a stock for free. I think it's almost like buying a property - rental collected will pay for the mortgage until it is fully paid for. In which case, the property becomes 'free', yet it can still generate income for you. Robert kiyo's favourite.

3. Be careful about buying stocks just for its high yield. High yield happens could happen because there is some trouble, so the share price drops, bringing up the yield. Yield could also be high because the dividend paid out is very high, perhaps due to divestment of business or some other one off event. If it's the first reason (share price drops), then we have to analysis whether the fundamentals is still sound. A good example would be the subprime issue, where a massive selldown cause a lot of dividend stock to reach sky high yield (10% to 12%, I heard for some REITS). This is where a cool head should analyse to see if the selldown of the stock is due to external or internal problems relating to the stock itself. If it's the second reason (high dividend payout), then usually the price will rise to accomodate it...if the price didn't go up despite the announcement of high dividend, ask yourself why. In summary, always find out why it has high yield before jumping in. It just shouldn't be the only criteria to invest.

4. The book said that ideally, before investing in divided yielding stock, we should check a few things.

a. payout ratio (formula: dividend payout/total earnings) - check payout % against industry's average to see if it's on the high or low side. This is to get some clue as to how sustainable the dividend is. If it didn't give any clue on that, at least you'll know whether it's on the high or low side of the industry.

b. cash flow - ideally should be 3 times the dividend paid out per annum. I do not know why 3 and not 2.5 or 4. Perhaps the rationale is to ensure the sustainability of the dividend again. I heard of companies with liquidity problems but they still borrow to give dividend. Or maybe high earnings, low cashflow, but still give dividend...

c. P/E ratio. Can't really remember what is said for this as my mind auto shut down when I see PE. I think the point is to link the yield to the earnings. You know, high yield could be low price, but if P/E is very low, might mean a bargain. MIGHT.

5. A few sectors give good dividends. Financials. REITS. Utilities. These are the 3 that I can remember. But each one have different characteristics...have to examine more in detail.

6. We can use dividend yield as a gauge to whether the stock is over or under valued. But firstly, we need to find out the historical high and low yields. If the yield currently is high (meaning price is low), then value hunters will step in to support the stock. If the yield is low (i.e. price too high), then it might be a overvalued, consider selling?

7. Dividend yielding stock give two kinds of returns to investors: dividend and capital appreciation. In bad times, where capital appreciation is put on hold (a more likely case is capital depreciation!), the only way to earn from the market is from dividend. Price might drop but it will be supported at some point because the yield becomes higher and higher while the price drops. Growth stock without dividend might not be so bear-proof. So even in bear market, total returns of a stock might be 1-2%, also better then nothing.

8. To find out how long it takes for x% returns to double your money, use the rule of 72. Take 72 divide by x - that will give the number of years to double your money (assuming reinvested and compounded annually). To find out how long to triple your money, use the rule of 115. Take 115 and divide by x.

Magic rate is 15%...because at 15%, 5 years is all it takes to double your money. 7.7 years to triple your money. No joke.

That's all I can remember.

Today I bought Security analysis from MPH, because when I tried to order from Berkshire business books, they told me it's out of print (and have to ask the publisher to print it!). That will take 1.5 months and above. It's not acceptable for me, so I grabbed it from MPH. It's not an easy read, from what I see.

Going to read "The little book of Common Sense Investing" by John C. Bogle. Know who is he? He's the founder of Vanguard Group, a fund house in US. Can't remember whether I've read this book...good to re-read this again even if I did. Perspective is definitely different for me this time round.

Friday, January 04, 2008

Capricorn is capricious today

Today is 4th January.

Don't feel particularly good about today...I seldom feel happy this day. I lived for 30 years, 16 years to educate me (6+4+2+4=16), 6-7 years don't know what I'm doing, minus 2.5 years NS, leaving only 4.5 years of purposeful, free life. 4.5 years of freedom, after 30 yrs of life...that's unacceptable, that's pathetic. I started investing 1.5 yrs back, probably going to do so till I passed from this place. Why didn't I start earlier?

Does it matter if I start earlier? Perhaps not. I couldn't possibly see myself as mature or sensible enough to do what I did back then. Investing earlier could possibly kill me. Not too late still, I think. It's never too late. If one is serious, 1 yr can be equivalent to 10 years of non-committal experience.

HH sent me this website for calculating your personal ROI to achieve a certain return by a certain time. If I aim to hit $1,000,000 by 50 yrs old, I need to start getting a return of 13.4% starting this year. Achievable? Yearly might be hard...but over a span of 20 years, I think an average of 13.4% is something I should aim for...in fact, exceed. Grim maths indeed.

Before this bad mood infects everyone else, I better stop. My horoscope says that I'm a Capricorn. Capricorn Capricorn...Capricious? Crapicorn? I better stop here.

Dow -110 now. STI went up 40 pts on a sudden reversal (up 1.20%) with a volume of 2 billion (this is much higher than the 1.3 to 1.5 billion volume). HSI also went up a lot...600 over points.

Thursday, January 03, 2008

Construction stocks bucked the trend of falling STI

STI tanked down today...dropping 1.85% (64 pts) to close at 3397 with a volume of 1.5 billion. All the big shots are shot down...DBS, SGX, Kep, CityDevlop, SIA...dragging STI down in the second day of trading for this new year 2008. Could the party be over now? Don't want lah, I'm still hanging over...

Construction stocks is definitely heating up. While STI dropped, construction stocks are the ones that bucked the trend. Those in my watchlist, CSC, Koh Bros, LB, YN all went to close positive. LB and CSC are broke out of downtrend with higher than average volume, despite the overall bad market sentiment. Could be looking at contract wins...waiting for trading halt.

My portfolio was pretty okay despite the selldown today. Basically from -500 to -1000 only. I think my counters are well supported (also goes to show that I didn't buy at high anymore). I'm actually quite unfazed by all these movements, which is so much different from the past. I think that's a good sign.

HSBC dropped to HKD 129.50. My plan is to add in more when it reaches 120. As for CSC and YN, I plan to sell half upon breakeven and depending on market sentiment, I intend to cut all. Don't care so much about the gains, I'm focusing on protection of capital and holding cash for the big big sale ahead.

I think that's about it. Good luck!

POEMS Money Market Funds (MMF)

Seems like quite a few are interested in the Money market fund (MMF) that POEMS offered. Want to share what I thought about it, including some details after tracking it since May last year.

A short introduction on MMF. It's something like a unit trust that do not guarantee the principal. However, it invests in low risk short-term deposits and high quality debt securities. You can do an EPS to POEMS and they would put the money into the MMF. Basically once the money is in, they would buy as much units as your money allows (there is a minimum of $1000 before they can start buying though). The bid price in which you enter can be seen by clicking ACCT MGMT then ACCOUNT DETAILS...look for the MMF (Bid price). I've been tracking the MMF bid price since I had money inside...that was in May 2007. Here's the data:


It's a pretty long one I know :)

Take note that I only update the table if I see that there's a change in the bid price. Otherwise, I won't update it. I've tallied up the monthly % increase since May, so here's the results:

May 0.17%
June 0.18%
July 0.17%
Aug 0.20%
Sept 0.16%
Oct 0.15%
Nov 0.15%
Dec 0.14%

This means an average monthly % increase of 0.17%. If I annualised it by dividing by 8 and multiplying by 12, I'll get a rate of 1.98% per annum.


To look at historical performance, have a look at this website. It shows the performance since inception. 2% per annum to me is a much better deal than putting it in savings account, earning you a miserable 0.25% per annum. Of course, putting money into MMF won't make you rich (gosh, it can't even beat inflation at 3% average), but it does serve as an alternative savings account. I tried before, it's highly liquid...within 1 to 2 working days I can withdraw the funds by clicking an online form in POEMS website. According to them, if instruction is given to withdraw funds before 0930, the money can be sent to you on the same day. If not, it's the next working day.

Beats fixed D to me too, because there is no lock in period nor high minimum deposit (only $1000 to start the thing going).

Pls decide carefully before going in...I'm just sharing what I know about this product. Talk to your broker/financial advisor before jumping in. There are certain risks involved in putting your funds in MMF (I didn't put in all my funds).

Construction stocks making a comeback?

Constructicons making a comeback? Check out some of the charts I did this morning on the construction counters :)





Really really hoping to sell it soon :) All the rally had died down since this frenzy in buying up in the morning. Could be seeing a few more rounds. When the top 4 volume consists of construction stock, you should know that this sector is coming. Why? I think must be news of contracts... let's see if it proves right.

Wednesday, January 02, 2008

CES won a contract in Vietnam...could it boost construction stocks?

STI closed down 21 pts at 3461 with a volume of 1.4 billion. First trading day of the year we already have a negative day. Market volume is still quite low, nothing much to see actually, perhaps except for Chip Eng Seng which won a residential development contract in Vietnam. Construction stocks pushed up a little because of the news. That was pretty much it.

Actually from my watchlist, I can see a number of stocks go low then close flat. I think it's a good sign that they didn't get lower. Must see how Dow performs...so far not good.

I just saw that Swiber could be having a nice pennant formation. A nice long flagpole followed by a retracement which forms the pennant. Could have huge upside if it breaks 3.52 convincingly. Weekly chart might be able to support that idea of a breakout of flag formation. Looks good :)

CSC also looks fishy. Why is there a spike up in volume today? Symmetrical triangle...if it breaks 0.330, I think we can see it going towards 0.345 range.

Below is the chart of CHoffshore. Interesting chart, can study it, but I'm not buying anything for now, haha :P

Dow is now at -109 now, haha :P Looks like tmr we can see more downside of STI. Remember the rule of Jan's first 5 days? It'll determine the whole year's results (most likely).

Tuesday, January 01, 2008

Chairman's message for FY 2007

Dear Shareholders,

Today is the first day of a brand new year 2008. I thought it's an excellent day for me to reflect what had happened in my life for the year 2007. Time flies so fast...

Let's recall what happened on 2 Jan 2007. I closed the year 2006 with a $3500 total returns. Considering that I started investing/trading in April, I'll say I had an excellent year in 2006. In 2006, I lost 18k and regained all of it back, mainly by trading with HSI warrants. In 2007, I closed the year with a loss of $485. This is the year that I suffered a huge loss of 30k (again, because of my warrant trading). It's very good that I managed to narrow down my losses to a mere $485, and I'm very glad that I learnt a lot of lessons during those troubled times.

(I did not include my hsbc portfolio in my returns as I think it will prevent me from doing stupid things. HSBC is part of my super long term portfolio...I thought it'll be good if I separate it from my 'play' account. For HSBC, I'm currently losing nearly SGD $400)

Overall, my returns since inception is still positive $3000.

I'll be revamping my portfolio spreadsheet so that I can track my ROI% better. Now it's a total mess, haha! Let's see some of the statistic of my trades for this year:

1. My warrants trades for 2007 gives a ROI of -5%, amounting to a total loss of $11,400

2. Out of 25 warrant trades, 16 trades gives positive returns. That means I bet correctly with a hit rate of 64%.

3. However, my total gains for my winning 16 trades is $3596 while my total losses for my 9 losing trades add up to -$15,027. What does this mean? It means that I didn't know how to cut loss properly. If I had controlled my losses and had the discipline to cut my losses before it snowballed, I would have been able to have a better ROI% for my warrant trades. Expensive lesson for me, I must say.

4. Worst trade in terms of ROI% is HSIsgaeECW070330R - a HSI call warrant. It clocked up -65.3% losses with a monetary value of -$3,330.

5. Worst trade in terms of monetary value goes to Longcheer holdings. Excluding dividends, a loss of $10,092. Total returns (including dividend) is -$9,534. Nearly -40% ROI...ouch :(

6. Best trade in terms of ROI% is YN W121214 - yongnam issued rights warrant which I haven't sold off yet. 203% ROI returns, with a monetary value of $183. For the best realised trade (meaning I have sold off and realised the profit), it goes to Straits Asia Resource. 115% ROI with monetary value of $6657.

7. Best realised trade in terms of monetary value still goes to Straits Asia. Best trade so far is Swiber....$22,400, with a ROI of 120%. Swiber single-handedly wiped off a big chunk of my 30k losses.

A very humbling 2007 for me....where I learnt the hard way what is the difference between skill and luck. A few hard knocks is actually a good thing as it inculcates a healthy perspective of the stock market, provided that you did not give up and treat it as all as a good experience.

Blogging is one of the most memorable thing I've done in 2007 too. Bully the bear started off as my online diary. At that time, I was started a blog to sort out my thoughts about trading. At that time, I just started on technical analysis and was exploring how to view all the charts to make my warrants trading better. I don't believe that if I keep using all the chart and write about it daily, I couldn't get better. I was proven right...I did get better over time simply by reading charts consistently and persistently. But my knowledge is fragmented and it was until my fren LS asked me to go to Decipher's course that I really began to integrate all the pieces into a more coherent framework. That was way back in January 14.

I started losing more after Decipher's course. This is because I thought I'm so good already, so I ya ya papaya and started trading based on rules that I barely know on the surface. Skill vs luck...my luck ran out and my skill wasn't there, so I started losing pretty badly. I think I reached my emotional trough somewhere around Feb 12. Some close frens thought I'm writing a suicide note or something. That woke me up. Money is just money. I'm poor but I'm wealthy.

After that I started revamping my portfolio...sold off longcheer plus a host of other stocks that are lousy but I'm still carrying. Without the baggage of my past mistakes, I started reading up intensively. I'd probably read close to 30 books in 2007 on all areas related to investing. Life was never the same after that.

Bully the bear blog grew in viewership and unique visitors. From a low viewership of around 100 plus in May, it grew to a peak of nearly 10,000 in December 2007. A lot more features are also included, including ads and an increasing number of interesting blog sites to visit. The chatbox is the most wonderful things I've done...I made quite a number of friends and met a few too :P It's the sharing and good comradeship in the chatbox that made Bully the bear such a addictive place for me to blog again and again daily. Thks everyone!


I better capture a screen shot of bully the bear website on 1st Jan 2008. I think it'll be very interesting to see how the site evolved over the years.


More things to come for bully the bear blog in 2008 :) That's for sure! haha :P I invite everyone to stay on and let's huat together in 2008! Have a wonderful and fulfilling new year!

La Papillion
Executive Chairman

Sunday, December 30, 2007

Fengshui outlook for 2008

Just came back from a chalet..damn tired, didn't sleep for 1 night :)

This is from a friend of mine...a rather long convoluted message about 2008 based on Fengshui. I suppose with the chinese new year coming, there should be more of such things coming along in the next few weeks. No need to believe or disbelieve, just read for fun :P Pardon the bad English though, haha

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The Chinese calendar, commonly known as the Farmers’ Calendar, or the Hsia Calendar, is a fascinatingly accurate system, which not only records the passage of time, but is also a tool for fortune-telling. The famous traditional fortune-telling system – The Four Pillars of Destiny – is exactly referring to reading a person’s destiny from his birth data as presented in the Hsia calendar format. The unique feature of such calendar is that all information about time – year, month, day and hour are presented in terms of the five basic elements – metal, water, wood, fire and earth, which are believed to be the basic components of everything in the Universe. The relationship between the five elements accurately helps one predict what is to come by way of one’s fortunes and thus, one can by using this knowledge, multiply the good luck or minimize the bad luck in one’s life.

The Year of the Rat, 2008, in the Hsia calendar, is symbolized by two elements – with earth sitting on top of water. According to the cycle of birth and destruction, which governs the inter-relationship between the elements, earth is the conqueror of water. . Therefore, earth sitting on water is a symbol of control. But the water of the Rat year is very strong and the earth floating on top of water has no foundation and cannot control the ocean of water. As such, instead of conquering water, it is more like confrontation between earth and water elements. The Earth on top is Yang earth which symbolizes a mountain, and mountain gives sense of stability and firmness. But such floating earth in the ocean is weak in foundation and the stability appears to be fragile. This elemental relationship will bring a year which apparently is more stable but there are a lot of underlying tensions and confrontations.

The Chinese calendar year goes on 60-year cycle. This means that we have experienced the same year of yang earth on rat in 1948. This was a year when the confrontation between USSR and the west intensified with the Blockade of Berlin started and the formation of the Western Union by the Brussels Treaty to confront the threat of USSR; this is the predecessor to NATO. In May this year, the State of Israel was established and also the confrontation between Israel and Arabian countries began leading to the Arab-Israel war. .

The Chinese character for “Yang Earth” represents a big mountain. . It is associated with the quality of a firm and steady person. People born in a day of “Yang Earth” .is often calm and steady and faithful, practical and “down to earth”. . Some examples of famous earth people born on a “Yang Earth” day are Hillary Clinton, Danzel Washington, David Beckham, Mahmoud Ahmadinejad, Michael Jackson, Dick Cheney, Eric Clapton and Ben Affleck .

The Rat belongs to the strongest water element and it is the first of the 12 animal signs. So it also represents the beginning of a new 12 years cycle. As such, the Rat year can bring a new beginning of international relationships and social order; this could bring new regimes with new government in some countries. Indeed, there will be many major elections happening between 2007 and 2008 with change of leadership in many countries including U.S.A., United Kingdom, Russia, France, Taiwan…..The rat is also considered as a “Flower of Romance”. So years of the rat will stimulate more romance and sex scandals. The Rat is in clash relationship against the Horse. . This is a clash between water and fire elements and will often bring accidents related to both fire and water, air and the sea. The Rat is the most powerful ocean water and it will bring heavy flooding or even tsunami disaster. The most famous water disasters in history, such as the South Asia tsunami on 26/12/2004 and the sinking of the Titanic on 14/4/1912, both incidents happened on a date with prominent appearance of the Rat. Looking at past history, in 1228 a year of Earth Rat, there is big flood in Holland killing 100,000 people, and in 1588 another year of Earth Rat, the Spanish Armada encountered storm in Ireland and 5000 people died in this heavy storm. In 1888, year of Earth Rat, there is “Great Blizzard” in the east coast of the USA and 400 people died. The clash between fire and water will also bring accidents related to fire and the airline business is in the category of fire element. As such, it is observed that the year of the Rat seems to experience more air disasters. A typical year with many aviation disasters is the previous Rat year in 1996. During this year, there are over 20 major airplane crashes including the U.S. TWA Boeing 747 crashed in July, 1996 killing 230. Looking at the immediate last Earth Rat year in 1948, there were also quite a numbers of airplane crashes including the hijack of a Cathy Pacific airplane in June, 1948.

Yang earth on the rat also symbolizes unstable earth, this will also bring earth disasters such as earthquake, landslide, collapse of buildings. The Earth element is also associate with homosexuality. It so happens many famous homosexuals is born on the day of earth – this includes Leonardo Da Vinci, Michael Angelo, Tchaikovsky, George Michael, Boy George, Andy Warhol, Tracy Chapman, K.D. Lang. Rosie Odonell etc. As such, there could be more issues in this aspect in 2008. It is not really clear how earth element is linked with homosexuality. Perhaps earth is an element of more neutral nature, compare against the other four, water and fire, wood and metal.

The clash between the Rat and Horse is a serious clash between water and fire elements. This will often bring injury and bloodshed. Therefore people born in years of Horse have to be particularly careful in 2008. As it is water clashing against fire, the danger could be associate with water and fire disasters such as traffic accidents in the air or at sea. Therefore, for people born in the year of Horse, it is recommended that they carry the pendant of an Ox which will help to attract away the Rat, so as to minimize the negative influence of the clash. Anyhow, people who are born in the year of Horse will experience a more turbulent year with more movements and traveling, changes. It is suitable to engage in such movements, such as moving house or moving offices. Traveling is also good but one should avoid going straight towards the North direction as it is the direction of the Grand Duke in 2008.

The Rat also forms a penalty relationship with the Rabbit. Such penalty may cause disharmony, worries and irritations, or hidden sickness. Therefore people born in the year of the Rabbit is also recommended to carry the pendant of the Ox to minimize such penalty influence in the year of the Rat.

The Five basic elements also represent different parts of our body, earth in general relates to stomach, pancreas, muscle and cells. As such, the health problems related to earth could be stomach problem, food poisoning, and diarrhea. Disorder of earth elements can mean problems of muscle and cells, this can bring obesity, diabetes, and cancer …these are all sicknesses caused by imbalance of earth elements. Diabetes is a sickness caused by disorder of insulin which is produced by the pancreas which is also symbolized by earth element in Chinese medicine. . So diabetes problem is also caused by imbalance of earth element. As such, these kinds of health problems will also come in focus in the Earth water year of 2008.


In recent years the most imminent issue threatening the survival of human race is Global warming. The polar ice caps have been melting down in an alarming speed and there are forecasts that many coastal populated cities will be submerged under the sea by the year 2050. In 2007 we have experienced dramatic change in climate and there are more weather triggered disasters. It is expected such serious impact of Global warming will intensify in 2008. The pair of elements, yang earth sitting on the rat can be interpreted as the image of floating mass of ice on a big ocean. And this is an alarming sign that the melting of Arctic and Antarctic ice will become more and more alarming in 2008. If we examine the fateful moment of one of the biggest water disaster – the Titanic, we can see the Titanic collided with a floating iceberg at mid night of 14th April, 1912. and when we translate this fateful day and time into the Chinese calendar, we can see the mid night hour on this day is actually Yang earth over the Rat, with yang earth representing the floating iceberg. And this is identical to the elements of 2008. It is anticipated there will be more flooding and water disasters associate with climate change in 2008. Such alarming signal not only shows up in the Chinese calendar, it is also reflected in feng shui. In 2008, the feng shui flying star number 1, symbolize water element, is in the centre. This centre number often reflects the focus of events prevailing in the year. Take for example, in 2005 we have Flying star 4 in the centre and the number 4 symbolizes the chicken. So this the year the threat of avian flu began. In 2006 the star 3 in the centre represents conflict and earthquakes, 2007 the number dominate the centre is 2 which is sickness and it has brought the alarm of avian flu in focus again. So we have to assume the number 1 in the centre in 2008 will bring more problems with flooding and water disaster. Global warming is an issue concerning the entire human race and every one of us has the duty to take up effective measures to preserve our environment and support the move to reduce CO2 emission.

Regarding the economy, fire element is often the driving force behind the stock market. In the year 2008 there is yang earth on the Heavenly stem with water underneath. The dominating element is water. As such, it is a year of cooling down after the heated economic atmosphere in 2006 and 2007. Fire is the symbol of the financial market and strong fire will stimulate optimism and speculative mentality. Without fire investors will play cool and conservative. However, the strong water element is the symbol of money to the earth industry. With strong water showing up, the property market is still active and profitable. Despite the absence of fire element in the year 2008, the spring and summer months still shows strong wood and fire influences bringing upward surge in the stock and property market. But investors will be more cautious and practical and there will not be dramatic fluctuations such as in the magnitude of yin fire year in 2007. In general 2008 is a year of cooling down with more stability and calmness in the stock market. .

The strong water of the Rat year favors earth and metal industries, as earth conquers water, so the Rat is a symbol of money to the earth industry, which includes property, mining, hotel, chemicals, insurance… As for metal industries, metal gives birth to water, so the strong water element in the year indicates productivity and strong activity in metal industries – this include machinery, computer, high tech industries, skincare, health business. The Wood industries, which include textile, fashion, books, publications, paper, forestry, furniture is also into a profitable year as wood conquers earth, so the earth showing up in 2008 symbolize the money of wood industry. But the profit will only be superficial as the earth element is weak.

The less prosperous industries in 2008 will be businesses of water and fire elements. Water industries refer to shipping, communication drinks…etc. The strong water appearing in the Rat year will bring stronger competition in the water areas and this will very much weaken the profitability. Fire industries refer to finance, stock market, energy, electricity, entertainment, and airline businesses. As fire conquers metal and produces Earth element, so to Fire industry, metal represents money and earth represents productivity. In 2008 metal element is absent and earth element is weak. . That is why it is a relatively weak year for the industries related to the fire element.

The property market is symbolized by the earth element. This industry had stronger activities in the past years of monkey and rooster in 2004 and 2005 as the metal elements represent productivity of earth industries. There had been some slowdown in 2006, as the fire ad earth year brought stronger competition and eroded profitability. However, in 2008, the water element of the rat will bring some money luck to the earth industry, despite there is no strong activities in the property market owing to absence of metal element.

With respect to the hi-tech industries sector, as represented by the NASDAQ. I have postulated that this industry is mainly represented by the metal element. As such, the prosperity of hi-tech industry requires the strong appearance of water and wood, which are symbols of productivity and money of the metal industry. In 2008 the water element, meaning activities to hi-tech industries is very strong. As such, it is anticipated that the year is favorable for hi-tech or internet types of business. But the absence of wood in this year could mean there are more activities without real substantial money gains.

In summary, the industries that will perform well in the year of the Rat will be industries related to earth and metal elements – such as property, hotel, mining, insurance, machinery, engineering, health, computer, and high tech industries. The sectors relating to water and fire will not be doing so well. Water industries include shipping, communication, drinks, and fire industries are stock market, finance, energy, electricity, entertainment business. The wood industries – such as textile, publications, fashion, furniture, etc are into a year with some superficial prosperity but not substantial.


In general, the yang Earth Rat year, with earth on top failing to control water below, is symbol of apparent calmness on the outside but such calmness lacks a solid foundation and the mountain can tumble and devoured by the ocean of fierce water. Some kind of new world order began to emerge but it will take time to consolidate into stability. . Still there will be international conflicts and uprisings and unrest but such events may be less turbulent than 2007. The new beginning of the 12 animal cycle led by the Rat will be first step to cool down or slow down the acceleration of Global warming problem.

The animal sign which is most unfavorable is the Horse which is in direct clash against the Rat. Such clashes will usually bring about turbulence, movements, accident or changes... So people born in the year of the Horse will anticipate more traveling, or movements such as changing jobs or moving house. It is necessary to carry the pendant of an Ox as protection to attract the Rat away. For the Horse people, the clash against the Rat could bring accidents related to the water and fire element, such as explosion, fire disasters, and air and sea traffic accidents. For people who are under clash with the year, it is ok to travel more, making changes such as moving house, or change job. However, for people born in the year of the Horse, it is recommended not to travel directly towards the direction of the Grand Duke, which is the north direction, and it is also not recommended for them to travel by sea. The other animal’s signs facing unfavorable positions are the Rabbit and the Rat. When Rabbit encounters Rat year will form “Two Penalty” relationship. . Such penalties will usually bring disharmony, irritation, worries and frustrations. Also people born in year of the Rat are offending the Grand Duke which is also not auspicious and it is necessary to carry Ox pendant to minimize the negative effect. The imbalance of fire and water elements brought about by the Horse and the Rat may bring fire and water diseases, such as high blood pressure, heart burn, irregular heart beat, inflammation, diabetes, and kidney problems. As such, it is necessary to take heavy dosages of anti-oxidant, omega 3 oil or COQ10 which is good protection against cardiovascular diseases, hyper-tension and inflammation problems. .

The animals combining with the Rat year are the Ox, the Monkey, and the Dragon. These animals are into a year of harmony. However, such animal astrology is not totally reliable as the system is not recognized as a formal type of fortune-telling. For more reliable assessment of ones fortune in the year of the Rat, it is recommended that one checks the full Four Pillars of Destiny, which requires full birth data information of the Year, Month, Day and Hour of birth. As the animal signs can appear in all four pillars in a person’s birth data, the clash and penalty relationship with the Rat will not only cause impact on people born in the year of Horse and Rat and Rabbit. Such clash and penalties can also impact any one who has such animals in the birth month, or day or hour.

Some examples of famous people born in the year of the Horse and under clash in 2008 are Paul McCartney, Danzel Washington, John Travolta, Condoleezza Rice, Richard Li, Angela Merkel, Victor Yuschenko, Kiefer Sutherland, Warren Buffett and Katie Holmes. There are people who are not born in the year of Horse, but they are also under clash because they are born on the day of Horse, so they will also face a challenging year. Some examples of these people are – Chris Martin, Lura Bush, David Furnish, Elizabeth Taylor…...

People born in year of the Rat is said to be “offending the Grand Duke” and it is also recommended to carry pendant of the Ox. Examples of Rat people are Prince Charles, Prince Henry, Gwyneth Paltrow, Cameron Diaz, John McCain, Olivia Newton-John…..

For people who are born in the year of the Pig, the Rabbit, and the Goat, the Rat year will bring “Flower of Romance” so one can anticipate a more sociable year with more opportunity to develop friendship with the opposite sex...
Feng Shui energies also change from year to year. Therefore, it is necessary to watch for the re-allocation of good and bad energies at the beginning of each year, so that we can take necessary precautions if some bad energy happens to arrive at important locations of our residence or offices. In the year of the Rat, the bad energy called “Five Yellow” – symbolizing obstacles and misfortune, arrives at the South. If your South of the house is an important area such as bedroom or entrances, it is recommended that one hangs a metal wind chime there to dissolve this bad energy. The worst months will be in February, August, and November. Another bad star number 2, symbolizing sickness, will arrive in the Northwest in 2008. The traditional method to dissolve this 2 is to hang a string of six metal coins in the affected area in the Northwest of the house The Grand Duke this year is in the North, hence it is not favorable to “move earth” or make substantial construction work in this direction. It is also not recommended for one to sit with back against exact South as you will be sitting against the unfavorable energy called “Three Shars” or “Three Killings”. As well as the “Crash position” against the Grand Duke. The bad star 3 is a star of conflict and robbery. This is present in the West of the house. It is necessary to put a piece of red paper in the West to minimize such bad influence. Also the bad star 7, representing scandals is in the Southwest, the traditional solution for this bad star 7 is to place 3 or 4 of bamboo plant grown in clear glass vase of water in the Southwest location.