Elections and its effects....

I believe everyone is preparing for this. Elections, not only inside the market but also outside. What could be the political change that may affect businesses, lifestyle and maybe culture? However, what i'm writing today would be more on the concerns on the Malaysian market. As of today, the market is running a really strong bull run. Of course it would. The higher it goes, the higher they can SELL it down right? With the elections coming in, i am very much bearish and i have missed probably almost the entire bull run this round. 

In the past history when the elections was held, after a major market correction, the market rallied to historical highs in three to five years. During the years 1990, 1995 and 1999, the election was held after a major correction occured. KLCI performance patterns in 1990 and 1995 look identical as there were small rallies after the election which then pulled back to pave the way for a bigger bull run. However, 1999 the index rallied after the election, climbing 40% in three months.

In 2004 and 2009, the index was at multi year highs and after the election, the market fell nearly 20% in two to three months before it rebounded and rallied into an uptrend again. The extent of the decline in 2008 was more severe because of the US financial crisis whereas in 2004 the pullback was less but still significant at 14% before it started to be bullish again.

Now in 2013 the KLCI chart pattern is similar to that of 2008’s, reflecting the formation of a classical head and shoulders chart pattern.

In 2008 the index fell about 18% in about a month before it rebounded. But the US financial crisis brought the market lower later. The target for the head and shoulders pattern breaking below the neckline at 1350 points was 840 points and the index did fall to this low in Nov 2008.

In 2013, the head and shoulders is currently (March 2013) forming with the neckline at 1600 points. A break below this neckline would confirm the head and shoulders pattern which has a target of 1490 points, a 6% decline from 1600 points.

With the head and shoulders pattern forming and the GE going to be held anytime soon, the chances of the KLCI moving into a correction are high, especially if the index breaks below the 1600 points.

The index may see falling to 1490 points within two months. The pattern was almost similar during the 1990 and 1995 election years and therefore there is a chance that 2008 and 2013 might also be the same.

However, bear in mind that a strong bullish market follows after a correction but as of now, with elections drawing near, i'm gearing up for the bears. Having said that, since the flow of money is still coming in, i would ride the bull first but be aware of the bears and IF after the elections and BN wins, i will go LONG all the way. If not, then SHORT all the way. My heart is with the rakyat, but my money follows the market. :p

Greed and reality

It's tough to identify whether it is greed that drove you to make a certain decision or was it because of ones consciousnesses. Hence that's why we hit many errors in life. As i did mention about greed in one of my earlier posts, this can be a very destructive force. Many people have greed in them but only the successful ones manage to control it. I too had my share of greed which led me to certain downfalls in my journey.

Greed is an act of always wanting more. There are not limits for greed. The sky and beyond hold no limits to greed. That's where the problem comes. One may have already reached a certain target but because of wanting more, they hold on to something seeing that it is either benefiting or profiting that person all these while. However, like one of my mentors mentioned, "a rocket can only go higher IF there is enough fuel to carry it". Hence, we do not stop and analyze the very basics at times taking for granted it will keep benefiting or profiting from that same object. Yes, it's really tough to see beyond the hidden areas when greed clouds the eyes. Next to no time, whatever that was previously benefiting and profiting that person, plummet right down further than anyone can dream of. That's when the fuel had run out and gravity is pulling it down faster than anything else.

Now, that comes to one thing. HOW do we know if it's GREED that is talking to us? Or our rational side of us? It's always tough to know especially when u need to make a decision quick and sometimes you feel that you're missing the train fast. It helps to take a step back first and take a look at the overall picture from a further view. Nevertheless, my personal favourite is, follow your plan. In any aspect of life, there has to be a plan before doing anything. Like a tennis game, you have to have a plan on what kind of strategy you would like to use to defeat the opponent and stick to it. Of course, during the game you may need to change the strategy now and then but that still boils down to a plan. Most of the people fall into greed and HOPE for the better. Of course at times, it helps but out of the 100 times, probably 2-3 times worked. So, what are the odds here huh?

Hence, to avoid greed, we should always have a plan or strategy before going in and not following your emotions. Yes, i know it's tough. There will be "voices" saying "you're gonna miss it man, it's a big one!". Sit back, analyze it from a further picture and then decide. Especially when one makes a crucial decision, they have to totally focus on all aspects that might or might not happen. Everything.

It is not easy but after a long run, it will definitely be more benefiting/profiting to anyone than letting GREED make decisions for you.

No matter how much you HATE IT...ACT!

It’s something that may not seem like a big deal all of the time—and in some cases it may not be—but think about the habit of putting things off when you know you shouldn’t.

For example: you have a deadline in two days. You know you need to put in extra hours in order to get it done on time, but … ‘I can always just do it tomorrow.’ Or any of the infinite reasons we come up with that basically boil down to “I don’t ‘feel’ like it.”
We can’t ignore how we feel, but should how we feel always dictate whether or not we take action, when we need to take it?

No evidence needed but common experience. When you fail to take action when you knew you should have, how do you feel? You feel worse, not even considering the actual consequences. There are enough things out there that can make us feel bad. There’s no reason for us to do this to ourselves.
It’s very easy to give in to feelings. Heck, there are plenty of times when we should, but we’re not slaves to them either. We just need to keep in mind that feelings come from thoughts, and we have the power to change our thoughts whenever we want. Change your thoughts, change the way you feel.
Instead of focusing on “I don’t feel like it,” focus on why you should get it done … now. Think about how good you’ll feel once it’s finished, and how it can free you up to do other things you want or need to do, and how proud you’ll be of yourself for acting in spite of not “feeling” like it. You shouldn’t deny yourself these little victories that mean something, yes?

The Law of Momentum states, “A body at rest tends to remain at rest while a body in motion tends to remain in motion.” So what?
So get into motion! Don’t think, just do it! Train yourself to get going even if you don’t “feel” like it, like that feeling you get jumping out of bed as soon as the alarm goes off. You may be a little groggy at first, but after a few minutes, you’re up and at it. Moods change quickly once you’re in motion. It’s biological and psychological.

If you’re still having a hard time getting over that hump, what are you thinking that makes you not “feel” like it? It’s going to be too hard? Too painful to complete? Take more time than you want it to?
Even if any of that is remotely true—which it usually isn’t because we tend to make things out to be worse than they really are when we’re stressed—no one’s helping themselves with disaffirming thoughts. Instead of “I don’t want to do this,” how about “I’m going to treat myself when I’m done.” Positive associations instead of negative. You can make the best of it or the worst of it. We choose. It’s as simple as that.

Take one step at a time until the Law of Momentum kicks in. By then, you’ll forget that you didn’t “feel” like it, and you’ll be well on your way to finishing … and feeling great about it.
No matter how much you hate it....ACT!

A General and the presumably losing army

Well, i was told a story by a friend of mine some time back and i feel that i will be using that for my life to be in future...I am not sure about you others but, i believe it goes for everyone too. The story goes..

"In one of the histories of China, there were two sides of armies. One of them was the attacker but with lesser men in it. The other was the defender who had more men, better ground advantage and what's best, they are IN the castle. The attacking side, seeing that they are greatly disadvantaged with a river to cross, high strong walls to break through and men outnumbered but 1:3, were greatly demoralized. Some of them could not even eat nor sleep properly thinking of that disadvantage and soon, it grew into fear that spread around the army like a virus.

The general of the army saw this..and gathered all his men the night before the attack. With all his men lined up in formation and all waiting for the general to speak, mostly quivered and expected the worst. Then the general spoke with a strong clear voice:

"Forget the food that you're holding at your hand, you know that's crap! Forget the tents that you build for you know they are leaking and still makes you cold in the night! Forget the clothes you're wearing, for they will not protect nor keep you warm also!..Tomorrow, we will attack them! And we will win! And we will eat their best food, live in their big castle and also wear their best clothes! Don't fix your mind on what you currently have and use that to live for that will wear down or deplete and you will die a more torturous death than the enemies sword! We will attack them and we will win!"

His armies roared and it was so loud, it kept their enemies shaking even inside the castle..The next morning, they crossed that big river, attacked and they won....

I knew what my friend wanted to tell me right away....

Moral of the story/what my friend meant was:
"forget the thought of what you have, salary (for we all know it's never enough), places we stay (rented rooms, small apartments...sounds familiar?) or clothes/lifestyles that we have now..for we all know that will wear out...do something that you really want and put your head up high for that...even if the odds are greatly against you.."

Fear, Greed and the stubborn ones

Now, we all have fears, it expands differently to everyone. Some are fearful of heights (like me), some are fearful of feathers (very rare but i know people who are), some fearful on risks and some fear of losing. When i mention losing, it can be anything from losing a car to losing someone they love and even up to losing money. What is this fear? Is it something we develop in our minds? And if something is created by our own minds, it is definitely possible for it to be cleared from our own minds too right? Hence what is FEAR actually?

False
Evidence
Appearing
Real

How do we overcome this? From my experiences, not only in my trades, to overcome this is to take action..but NOT with a blind action. It has to be planned and structured. I used to be really afraid of water too when i was young. I would really shout and scream when i was in the water. I could remember my instructor pretty much gave up on me. HA HA. but when i slowly grew a little older, i started at the shallow part of the pool and slowly try to kick, or swim or do something to keep myself afloat. True enough, i became better and i started swimming and swimming and now i enjoy the water so much. Now, if i were to let my fear keep me away from the water, i don't think i would even know how to swim now. Same goes to any other fears! So, is there some kind of mental block in you that tells you, "it's tough" or "it's impossible"? Remember that fears are created by your own good-self. If one can create fear in themselves, one can definitely clear it from them. It's just a matter of whether you want to do it or not.

Next comes the GREED. Also another destructive habit of humans. We humans are never satisfied. It's always a craving for more. One may have a honda, which then aims for an acura or a lexus, then an Audi, then a Beemer and etc. You know where i'm getting to right? It's good to have a goal to push yourself to wards it but greed is totally a different thing. Greed is the constant wanting of something bigger at the expense of everything. People keep wanting more money, they try to do things that are not familiar with them and do things more aggressively. Until to a point that when they can't get it, they turn into darker ways like stealing, robbing, money laundering, corruption. In trading, greed rewards no one but it can kill everyone. The hope of the market returning to your position when it is already going the other way or hoping for it to reach highs/lows that may not be achievable but on paper looks "lucrative"? Again, to stop this, there has to be an action for this where it definitely has to be planned and also to use the word "enough". Yes, this word is very subjective to different individuals as different individuals have different points of view. Some feels that earning 100 bucks a day is pretty good. Some says that's measly money. Some want 1 grand a day. Now, what these people are looking at are their targets. What is "enough" for them. And investment return can only be judged by the investment capital that is poured in. For example:

Lets take the standard Fixed deposit rate of let's say 3% per annum. If you want to earn more than 10k after a year, you definitely can't do that with just do that with 10-20k of capital right?it does not make sense. To get 10k net profit a year with 3%, your capital has to be around 320k-330k, right? So that's exactly it. People tend to get greedy and they want the most (or even more) with really little commitment. It just doesn't go hand in hand.

And the worst of all, the stubborn ones, whom are constantly in denial. "that won't happen to me, i'm sure". That's what they always say. People in this group tend to fall faster in all aspects. Things tend to fail around them but they do not realize they are the cause of it. Instead of embracing what went wrong could be their doing, instead they live in denial or start pointing fingers on EVERYTHING but themselves. They don't understand things happen for a reason, even if it's a bad thing. In trading, if you have a position and the market is going the opposite direction, the stubborn ones are the ones who will lose big time. They will hold on to their trade in FEAR of loss and stubborn to open up their minds to see the reality, the market keeps taking more and more money out of that person. It's the same for everything. For example a failed relationship. It takes two to clap. When things turned sour and it's beyond reconciliation, the next step is to end it and move on. Just like a trade, if the market goes opposite direction from yours, cut the losses and move on to the next trade. This is because, like a failed relationship, holding on to something bad and hoping it will get better is totally not going to happen and will eat the heart and soul out of you every day. Of course there is a way to stop this but that way will be the toughest thing for the stubborn ones to do..which is accept the reality no matter how harsh it will be and then from there, pick up the sticks and stones and rebuild again.

So for whichever the category one may be in, there always is a solution. It's only bound to the question of "to do or not to do?" 

The start of a roller coaster journey

I believe it is in everyone and everyone dreams of it. This blog shall be my journal on my journey of a tough and challenging life. Success is always in everyone's mind but what has one done anything about it? I am starting this blog although i have yet reached my goals or being successful in my passion. But somehow, i don't know what, deep in me, i know i will succeed in time to come. Hence, i created this blog to pen down this journey from the start, till the end. Every detailed events of it, will be here.

I graduated late as i did not really take studies seriously. I worked as an IT consultant for several years. Pay was not really good but because i worked overseas, the one thing i had advantage was the exchange rate. Now, i am self-employed, learning and building my way up. Far from being successful but i had to start somewhere.

My family members are all professionals. Sounds good right? But why do i feel strange about that and nothing to be proud off about this? All my family members are typically the scholars, working professionals like teachers, lecturers, physicians, doctors and scientists. One thing i notice about these "super scholarstic family members" of mine. They have one sandbox mentality, which is study hard and get a good job. Seriously, that's what they only talk about.

Since young, i was really someone that "cannot listen to instructions". I hated rules and i like to explore on things even if it's risky. I hated school, i hated studying and basically just want to try out anything i feel is good. My mom's a teacher and boy, how mad she gets about me. That's the thing about lecturers, teachers, etc, they are from the education system and they do not think anything further besides "study hard and get a good job". When i have an idea, just about anything, they will gun me down, pour cold water over my shoulders by bringing up failed scenarios on people trying to pursue what i want to do. It's like, they gun you down even before you even try to stand up and make sure you just follow what they want you to do. (does this ring any bells to any of you?). I understand from their point of view and why they do that. It's just the way they think and was brought up. They were from scholastic environments but they never had any entrepreneurial or investment sense at all as they do not dare to think of taking a single bit of risk.

Now, that's the problem, our parents live at the time where "get a good job" is something good at that time. Probably so. However, we all know now at current times, things happen so fast. Retirement age on the "employment" sector had been raised by our government. But has it REALLY being raised? On paper it says 65-68 years old retirement age, but why do we see people at the age of 40-50 getting laid off for new personel which are younger? Market cycles circulate so fast these days that it's almost impossible for one to follow. So is having a job safe now? Of course at the start one may need one, but i always believed that "work because you WANT to, not you NEED to". There is a big difference there.

Living under my scholastic family's roof, i too somehow got fixated with that kind of thinking and hence i took a job overseas as an IT consultant. Boy do i hate it so much. It's everyday codes, updating on new methodologies, more codes. "i have to get out of this, there has to be another way", that was what had always been in my mind. Then the next inevitable hard frightening truth comes in, "HOW?" I've been studying IT since my university days, i don't know anything and i can't get out from it. Thoughts flooded in, "i have to start all over again which will take a long process". I believe it's in everyone's mind. I got pretty scared, thinking of the time i won't have money (pay), the extra hard work that you have to do because you're way behind other people, it's just so frightening. Basically it's a total paradigm shift from what i was "brought up" with. I tend to hear some of my peers complaining about how their life sucks because their IT jobs require them to stay back late, or work from home till late at night. Not to mention them, i myself had my share of that as i was also in that same line of industry.

It was then, like many other people, tries to find other ways and the cheapest way was to get some books and like many other people too, my first book was "Rich Dad Poor Dad" by Robert Kiyosaki. That book itself had me reading it like a zombie from day and night. Taking the MRT, while having lunch or even when going to meet my clients, i'll whip out that book and read it. Being hungry for "a way out", this really opened my mind. It was then i felt, "WTF have i been doing with my life". I was 28 that time with no assets, big student loan, an old car (but no loan on it) and hated my job and definitely not much of a savings (or shall i say, shameful to even call it "savings"). It was there and then i realized that i was in a way lucky because i worked overseas with a pay that after conversion, was pretty ok (but AFTER conversion only). Hence i told myself that i may have an advantage because of this from many people back home.

It was then i started to become money savvy, i learnt from scratch. read books, search from the internet, asked and talked to people (no matter what an idiot they may think i am but hey, i'm still getting info from you right?). At that very moment, as i dug further in the rabbit's hole, i found myself clueless on what i'm clueless about but from then on, i made it a point that i saved 2/3 of my salary and started venturing into properties and stocks. The time my eyes opened, that was a time of recession. (the 2008-2009 sub prime recession in the states that shook the entire world) but i couldn't do much as i did not have much savings like i mentioned earlier on.

That particular time, a good friend of mine mentioned about a property back in my home country. It was a commercial shop lot and it was going for a million bucks. Blimmey! that was the deal of the century! Why i said that because that location was beyond excellent. It's always packed with people, day and night. It's so populated there that everyone goes there for business or leisure. It's easy to get tenants and mind you, rentals for these shop lots that area could easily earn you a 5 figure salary! But alas, i did not have enough money and i was deprived of that chance. it was snapped up in less than a 2 days. That commercial shop lot, is worth easily 5 million now. IN A SPAN OF WHAT, 4-5 YEARS??? it's like earning 1 million a year!

I realized how backward i am. And i started learning up as much as i can. Properties, stocks, commodities and even index futures. Don't get me wrong, i'm still far from being an expert as i have mentioned, i'm still far from being called  "successful" but i would like pen down and share my experiences through this blog. I started trading financial securities due to the hunger of success, it crashed me hard but again, due to my conversions of my salary, i withstood that. That crash in my trades made me realize one very important statement and it is "if you find education EXPENSIVE, try IGNORANCE!". That's why i lost BIG TIME in my trades at the early stages. I traded with very little knowledge (in other words it was more like betting). Slowly, recuperating from my losses, i slowly learnt more and more and more in properties, stocks, investing, etc. I haven't reached the heights i have expected but this is my journey to my passion and one day, i know i will be continuing on this blog as someone successful. In the 3rd quarter of 2012, i took my first very big step and change in my life. I quit my job and pursued my passion.

I'm a trader and investor now and this, is my journey.