Every weekday reading the Money section on Strait Times. I think it is hard for anyone to avoid stumble into Obituaries section.

I presume there is a hidden message: No matter make or lose in investing, we will be concluded at same point one day, sooner or later.


Enjoy investing!

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I am reading some marketing material and someone claimed that they have the best trading strategies in the Forex market to share with me.

They gave the quick summary as follow:

- The 7 steps that will boost any system's win %
- How to avoid being one of the 95% who fail
- Trade management used by the world's elite traders
- How to profit from random noise in the market
- How to avoid the high cost of broker commissions
- How to avoid high stress in trading
- How to have a full-time job and still trade
- How to get a home-run every time you trade

Here is what I thought when I read those lines:

- How to avoid being one of the 95% who fail
Loser outnumbered winner not for no reason. Being difference from the crowd seems to be the logical pre-requisition. However, the most lethal point is that most people think they are unique and difference from Mr. Tom, Dick and Harry sitting beside him. The fact is: We are the same creature of life with too much similarity of heritage weakness.


- Trade management used by the world's elite traders
Will elite traders tell you what they did if their system work?

- How to profit from random noise in the market
Random noise means random market direction? Well, the risk to catch random market is like playing with flying knifes. Trending market is more predictable and likely more profitable with acceptable risk.

- How to avoid the high cost of broker commissions
We have limited choice in Singapore market. Nonetheless, the saving in commissions will not make us richer then what we want to be. I would rather reward the broker with a competitive commission for good services. We shall not assume that we can make good profit and at the same time exploiting them as a discount broker.

- How to avoid high stress in trading
There is not point making money but suffering high stress. The most preferred way is to increase the level of certainty to lower the stress level. However, high risk high return, low risk low return, no risk no return.

- How to have a full-time job and still trade
Who need a full-time job when you have the ‘best trading strategies’ on the planet earth?

- How to get a home-run every time you trade
Me or Mr. Market make a home-run? If we can make a home-run for every trade, who is going to carry the baby at the end of cycle?

- The 7 steps that will boost any system's win %
These 7 steps are perfect plan for an arm chair trader. However, the actual market challenge is obviously much tougher then what everyone could imagine. Instead of strategies, we need action plan before it turn out to be tragedies.

Enjoy the roller coaster ride!

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I am a little surprise with the opinion expressed by a reader’s letter to BT’s Mailbag yesterday: “Don't school kids in personal finance”

Here is the letter (in blue color again) and my personal comment:

I REFER to your editorial, 'Lessons from the Mini-bonds saga' (BT, Oct 30). I have to disagree with your suggestion 'to teach the most important basics of personal finance to our children in school ...'
Me too, but on yours. :-)

My reasons are that first, personal finance is not a subject that can be taught to children in their early teens as it requires a certain level of maturity.
When a person is matured then it will be too late to mould the financial behavior!

Second, a little knowledge may be dangerous.
Yah, but no knowledge is even more disastrous!

And third, it is likely that instead of developing the likes of Warren Buffet, we may end up creating a 'greed is good' mentality.
The objective of personal finance education is not to ‘develop the likes of Warren Buffet’ and it should never be. I did not realize that personal finance education is to instill ‘greed is good’ mentality?!

Therefore, the teaching of personal finance should be deferred until the children reach the tertiary level.
How many of Singaporean never reaches tertiary level? Some not even secondary! Why are they being deprived of personal finance education? Personal finance is affecting the life and living of themselves and their family for whole life!

In the schools, they should be taught fundamental human values which can lead to the building of a caring and sharing society.
We should not just repeating the fairy tales and not explaining to them how their parents able to afford and put food on the table!

Personal finance is not about teaching kids how to trade forex with margin leverage, but can be as simple as instill disciplin to keep extra pocket money into piggy bank.

Please start early!

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Cosco used to be a market darling!

It is the top performing stock in last 5 years(of course, exclude this year), outperformed all blue chip, S-chip or even penny stocks in old day of euphoria.









It used to have the most warrant issued in the market, and, all call warrant only, no put warrant! Everyone is expecting Cosco to conquer one resistance after another, therefore everyone will punt for the call warrant only.





Today, Cosco still have 28 warrants issued under their name as underlying share. The market offered call and put warrants too. However, the volume is dry as Sahara Dessert.

The world is changing, the investing world landscape is changing even faster.

Just be prepared to adapt.

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There have been six major bear markets over the past 80 years. The average decline in the Dow Jones Industrial Average of the previous five disasters - from peak to trough -was 43%. We're a lot closer to the bottom than the top.

With the Dow Jones up more then 400 points overnight, a lot of people are now confident they can pick the bottom. They run afraid of sitting in cash, collecting a pittance, when the market starts to rally again in earnest.

If you hate to hold cash instead of stock, you may consider most boring cash rich index stocks with generous and sustainable dividend distribution. And, always, set you cut lost level before hitting the buy button.

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Unwinding proceeds not enough to cover original collateral
By SIOW LI SEN
Source: Businesstimes.com

(SINGAPORE) Investors of the Merrill Lynch Jubilee Series 3 LinkEarner Notes are said to be walking around shell-shocked after receiving letters telling them that their investments are worth zero.

The current financial crisis meant that the proceeds from the unwinding process were not enough to cover the original collateral value of the notes which were complex products involving credit default swaps and derivatives.

The Jubilee Series 3 notes are the first structured products linked to the bankrupt Lehman Brothers to be unwound here.

A total of S$26.29 million and US$1.4 million had been sold by six broking houses at minimum amounts of S$20,000 or US$10,000.

Beside the Jubilee Series 3 notes, DBS High Notes 5 and Lehman Minibonds have gone belly up. Over half a billion dollars worth of these products were sold over the last two years to thousands of people.

According to the letter dated Oct 6 sent to noteholders from Merrill Lynch, it said that 'as the credit event redemption for both the SGD notes and the USD notes is zero, no amounts are due and payable to noteholders on the credit event redemption date.'

The credit redemption date is Oct 17, 2008.

Merrill said bids were asked from five dealers for the debt obligations of Lehman Brothers and securities which were notes whose performance is credit-linked to a pool of 120 underlying securities.

'Because Lehman Brothers Holdings Inc has filed for bankruptcy, these ...debt obligations are trading significantly below their face value... are currently valued below 20 per cent of their value value,' it said.

'The current US financial crisis has led to unfavourable market conditions in the broad credit markets which has led to significant decline in the value of the securities,' it said.

Although the proceeds came to several millions of dollars, they were less than the market value adjustment of S$20.9 million, so consequently the credit event redemption amount was determined to be zero.

Martin Lee, a financial adviser, said many investors have difficulty understanding that they will get nothing from the proceeds.

'It shows how complex the product is,' said Mr Lee.

Tomorrow, many investors of the failed structured products will gather at Hong Lim Park to listen to former NTUC Income chief executive Tan Kin Lian, who has handed a petition to the government on the matter.

The Monetary Authority of Singapore last night said it has received the petition from Mr Tan and said that it understands the anxiety of investors and is committed to ensuring a quick and fair resolution of their complaints.

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An excerpt of newsletter from Investment U which I subscribed through their advertisement in Google Ads is quite interesting.

They have highlight 4 high risks of investing world as follow. What really attracts my attention is a sentence read: Investing can be one of the most frustrating experiences in life.

When UBS Investment Research yesterday described this as the 'Toughest Market in 35 Years', I pledge everyone to open their eyes to observe how this naughty market unrolls the next chapter. There are plenty to learn from here then book.


The Four High Risks of Investing

What are the four dangers? In his new book, Alex identifies the following.

1. Being too conservative, so that your hard-earned savings don't keep up with inflation.

2. Being too aggressive, so that you end up losing your shirt or blowing up part of your portfolio.

3. Trying to time the market. Study after study has shown that no one can consistently time the market.

4. Unwisely turning your money over to a money manager who loses your wealth, slowly or quickly.

Investing can be one of the most frustrating experiences in life.

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