Trading Fund

 Hi Silverhairs

 In essence, this SHC Trading Fund will be set up in accordance with the following criteria:

 1.  Capital          –  made up of multiples of shares @ $100 each with a MINIMUM Twenty shares,

                               $2,000, and up to a MAXIMUM of One Hundred shares, $10,000

 2.  Shareholders  –  a SHCian can subscribe up to a maximum of THREE shares

 3.  Trading Account  –  Only one trading-account in the name of Silverhairsclub Trading Fund and

                                       this Account will be the depository of the Fund’s capital and trading

                                       profits

 4.  Dividends        –  will be cash distribution monthly or fortnightly

 5. Executor          –  a selected Committee member of the Fund will rotationally (monthly timeframe)

                                 execute "buy" & "sell" orders and subsequently inform, soonest as possible

                                 other participating members

  Interested members can form a sub-group meeting on 25th February during SHC monthly meet

at same venue.

  Abel Tan            

22 thoughts on “Trading Fund

  1. Hi Abel and interested participants,

    Please be informed that this Post and this trading fund is not supported by SilverHairsClub, SHC or myself. The use of the name SHC or SilverHairsClub is not accepted.

    However, the Post may continue, for the purpose of discussion only. All references to SHC or SilverHairsClub will be removed. Participants should be aware of the risks and any potential losses, as a result of participating in the trading fund. Abel, while I am not discouraging you or your participants, please be aware that there may be legalities in such a fund setup.

    Terence Seah

  2. Areas to ponder :-

    1. Is the scheme akin to some kind of tontine, which is banned, or fund management which requires a licence?

    2. Who will be the signatory of the trading (bank) accounts ? This person effectively holds not just the purse string but also the purse.

    3. The executor……..the fortune or misery of investors in this scheme depends on this guy. Whoever is rotated to make a investment decision…does he know enough?

    Money is funny. When you make money, nobody thank you but when money is lost, friendship goes out of the window as well with people becoming angry, emotional, blaming each other, cleverer with hindsight and wanting their money back ?

  3. Hi all SHC investors

    Abel has proposed this “Trading Fund” and I suppose that many will be interested in it. But is it”right” for us?

    What I mean is that it will have to be formed outside the SHC, and it will have to be organised legally by forming an “investment club” rather like the Beardstown Ladies’ (which was discredited subsequently about their fund’s performance).

    Although I support the idea of forming an investment club, I think the whole process is fraught with danger and risk; never mind the hard work of organising, implementing and making sure the fund performs, etc. As Tim says, when there’s money involved there’s bound to be lots of contention whether you make or don’t make money!

    I’d suggest that a separate meeting be arranged for those keen to pursue the route of an Investment Club or Trading Fund. Abel can make his presentation and case. And those interested can ask all their questions before making their own decision. This will then be independent and unconnected with SHC.

  4. Hi Abel,

    There are some pitfalls that you might have to think about.

    Only a registered fund or licensed fund mgr can take deposits from the public. While I recognise you are not taking funds from the public, ie you are actually getting a group of like-minded investors to share a private venture, involving investments in the sharemarket, you must be distinguishable from a coy taking funds from the public, ie no fees no registration, if applicable, agreement of how funds are to be secured etc.

    All these factors need to be discussed and agreed before implementation. Also you need to open a bank a/c without the registration of a society or contractual entity. You also need to do this for your CDP and sharetrading a/c.

    All these can be done but the implications need to be explained.

    More importantly your strategy and track record needs to be examined and agreed by all. Add to it documentation etc

    I had been observing these because I always like to let groups experiment, try and learn as a process.

    Many groups have done these before you and for other types of assets. I know some who have experience in this too.

    Privately I was happy that such endeavours were happening but statistically I also knew the pitfalls. So while I applaud these attempts, I also caution against them.

    Given the state of the markets, I think there are other ways to make some money with less risks.

    So I would urge all interested parties to put their questions on your proposal here before you meet.

    I wish you much success in your new venture with the new group if it goes ahead. I certainly don’t want to be a wet blanket to yur aspirations.

    Good luck, we all need it.

  5. Hi Abel,

    Just to confirm the meeting will be on 25 Feb 09 (Tue) SHC Monthly meeting at 7.30 pm, right!

    All those interested, kindly take note.

    See you there!

    Warmest Regards,
    Patsy

  6. Regarding this investment fund, I fully agree with Terence that it is not supported by SHCians simply because it deviates from the main objectives of SilverhairsClub, which is to promote healthy activities such as exercises, travelling, meeting to socialise and getting to know people and widening our circle of friends.
    Anyone interested in this money venture should not make use of SHC platform. Instead they should do it in their own personal capacity. SHC should not be drawn into any disputes which are bound to arise in this sort of money venture, both legally and morally.
    Moreover most of us are at an age where we wish to relax and enjoy our twilight years, free from the stress and anxiety that comes from such investments.
    So let’s keep the club going the way it is, for all to choose and enjoy the activities of our choice.
    I hope I have not offended anyone, If I have, I extend my sincere apology. I’m just expresssing my personal opinion.

  7. Hi Silverhairs

    This Fund is proposed as sharing a “winning formula” with
    interested SHCians. Granted, there are many proffessional
    Gurus in the stockmarket whose paid-advise are usually
    translated by ambitious adherents into bigger and higher
    risk-taking bets while this Fund being operationally less
    adventurous and hence less riskier will provide for
    stakeholders only coffee/lunch-money.

    As stated in earlier remarks, this Fund is NOT A GET-RICH-
    QUICK venture and NEITHER a WEALTH ENRICHMENT scheme as it
    is my opinion NOT TO EXPAND the Fund’s capital base beyond
    the maximum $10,000, in order to avoid inevitably the
    insidious emergence of GREED.

    What is the “winning formula”?? As stated previously, it is during moments of market fear, is to BUY and then SELL as soon as market euphoria appears for the stockmarket or
    individual stock’s votality is often caused more by
    investors/speculators’ irrational confidence rather than by
    logical deductions. Therefore, the trick is to be clinically focused and not fall into the syndrome of gyrated feelings between acute apprehension and over confidence. Another factor is NEVER SNEAR at paltry profits which moments later can disappear into losses.

    Friends, undeniably this Fund will comparably be a “kachang puteh” one from other trading funds as my intention is to treat the Fund as just another avenue of
    one’s discretionery diversions.

    Cheerio

    Abel Tan

  8. We all know that the first canon in any trading is : buy low, sell high. The challenge dawns when it comes to the time to make that decision. Has the market dropped low enough & assailed enough with bad news? Or will it drop further tomorrow and many more days thereafter if I enter the market today?

    I have been a big loser in this game. Can I therefore qualify myself as a naysayer for others? Of cos not.

    So whoever leads the Trading Fund Committee will have to be “right” more times than “wrong”, and he will need the absolute confidence, support & loyalty of his fellow investors…..as much as blind faith, that they wont blink at the first blip and would close both eyes to pray if it turns out to be a blooper. In short, they must not blame and shift responsibility to others for a choice they themselves made.

  9. Though the idea of investment in trading as proposed by Abel is out of his own goodwill for SHCians to have the opportunity to MAKE a little, it also depend alot on WHO will be able to monitor and provide comprehensive, around-the-clock research and information. All these informations, buying and selling, etc… is there a hidden cost?

    I’ve encountered bad experiences in trading with my CPF which happened that some of my shares that was strongly recommended to BUY by my Financial Advisor went plumeting. As for cash investment, one need to be more careful and study on the risk involved. Though the investment amount is not huge but it is still our hard earned money.

    It is just my personal experience and opinion. Hope that I did not offend anyone and if it does, please accept my humble apology.

    Good Luck to All.

  10. Hi, SHC investors

    I propose that the fund be only on “paper” i.e. there would be no money involved. Abel will first present his “system” at a meeting of all interested parties, address any questions and maybe give the historical performance of his trades.

    We can start with a fund size of $10,000 as proposed. The recommendations and trades will be posted on SHC site, and the results (gains or losses) would also be listed.

    What I’m saying is that this is going to be a learning and sharing experience. Not one where you need to plonk money and create a lot of organising, legal requirements and personal commitments and responsibility.

    In other words, we will see and learn how the trades are planned and executed, and there is only “paper” trading involved. This is an education (teaching a man to fish) and future decisions whether to trade on a collective or personal basis can be made by the individuals.

    SHC should be more than just a “fun and games” club. It should also be a platform for us to share our knowledge on issues that affect seniors whether it be health, money or other retirement issues.

  11. Hi Silverhairs

    With due respect, permit me once again as a gentle reminder to state that with Prudence, Patience and Perseverance plus absolute Transparency and coupled with
    Sincerest co-operation among participants, this Trading Fund will not be aborted later through afterthought misgivings.

    My proposal is, in order to avoid legalistic hazards, the Fund will be operated “informally”, whereby TWO (rotational monthly), chosen among the select-committee will “front” the trading contracts with nearly all trades focussing on the daily/weekly Top-ten high volume stocks,
    specifically on mother-shares rather than warrants. The stockbrokering company (chosen by participants’ majority choice) will be informed periodically of the monthly rotation of dual-names in trading contracts and EITHER one will execute trades and subsequently soonest as possible,
    inform stakeholders. The appointed Duo-of-the-Month will be responsible to collect trading profits and disburse them personally to stakeholders at monthly SHC meetings as well as the distribution of trading-records via the month’s Statement of A/c from the stockbrokers.

    The Fund will NOT buy more than $15,000 of value per contract and will NOT hold more than one Buying position at any one time and will also NOT trade more than twice(2 buys & 2 sells) daily because a third trade is usually prone to carelessness due to ego “Well, if I’m wrong, I’ve got foreign-capital to loose”.

    Who will decide the choice of stock to punt? The select
    committee will decide on concensus. My selection is based
    not so much on calculations as on “market mood” which is nearly all the time speculative, particularly the top volume “play” stocks. When a stock is “pushed down” by unfounded rumours it NEVER FAILS to rebound and this scenario can happen within a few hours or a few days, though longterm the stock is trending downwards. The discipline is to “collect crumbs for half a plate”.

    Interested parties can gather to initiate this project on
    25th February at the same venue of SHC monthly gathering.
    Trust, Transparency and Tolerence is my motto for this Fund.

    Cheerio

    Abel Tan

  12. Haha, Kenneth, I’ll take up from where you left off, also on a paper talk.

    On paper, your idea makes a lot of sense. Fact that no money comes out of the pocket into an investment removes all emotions from the “investment”. One is not anxious, one can wait. One will not feel the pain of a loss but will probably jump straight into the real investment if one wins on paper.

    If I read Abel correctly, his modus operandi depends on reading the market rightly, helkped by an uncanny hunch and feel. Then aim, shoot and quickly grab and go before the wounded prey comes alive and starts to bite.

    In a paper investment, you are not bothered whether the paper tiger snarls or comes a mauling. Or be the pussy that you want it.

    Frankly, I am in empathy with Abel on this mode of investment. Call it intuition, acumen, experience whatever…you sniff a good deal (or a good bet), you load it with money and wish. It can be a hit or a miss. In my case, it was missy I spent my time with in the past. Lately tho I am hitting the trail that seems to lead me to that pot of gold at the end of the rainbow.

    Or will I come back months later to tell you that it was a mirage?

  13. Abel,
    Have only this to say as a cautionary advice:

    CHOOSE YOUR PARTICIPANTS WISELY AND CAREFULLY

    (98percent of human beings do not appear to be what you think they are when it comes to $$$$$$$$ – no offence intended/directed at anyone in particular.)

    Cheers,
    Ivan

  14. Ah Liu #12

    “Paper trading” has its advantages… the main one being that no real money is involved. Yes, there is the chance that a successful paper trade can lead one to wild, speculative behaviour. But I don’t think that that is the main disadvantage: it is not having an emotional reaction whether the trade is successful or not.

    But I was looking at paper trading as a way to learn a “trading system”. Here, Abel would illustrate his trade by posting it (after he has made it, of course) with a short explanation/chart, and follow up with the closing trade and analysis of profit/loss. It could be a real trade of Abel’s but for our purpose it is only an example.

    Everyone can then see and maybe learn a thing or two, even the sceptical ones. And, best of all, it does not have any money involved.

    I would like to see other SHC investors share their views and successful investment ideas as well. So not all investment sharing need to have a monetary outlay.

  15. Kenneth, diversity in views is welcomed and your point, taken.

    In this stock market, the research on companies and analysis of fundamentals, historical earnings, order books etc are quite irrelevant as the pall of gloom hovers over almost all stocks. No share will dart out to soar. Most will continue to languish in the backwaters with some actually sinking in the cesspool.

    So a roundtable discussion of the principles of stock investment on paper wont help much in current settings.

    To my mind – and probably to Abel’s mind as well – to make money you will hv to keep a hawkeye watch every minute over days, keep eyes & ears pricked to the freshest of news. Then with a deep breath, bet on the stock you feel is ripe for a dead cat bounce, and exit quickly if some money is made. Avoid contra deals for a while.

  16. Hi Silverhairs

    As clarification, the Trading Fund will trade specifically on a “contra-basis” unless the Fund’s capital is at least $5,000 or more, an amount affordable at times to pick up the shares for possible further enhancement of profits. The Fund’s capital, deposited in the stockbrokering firm acts as
    insurance in case of sudden market collaspe.

    Probably up to half of the Fund’s contra-trades will be “opened” and “closed” in the same day, adhereing to the adage “a bird in hand is worth two in a bush” and trading profits per contract will probably in more than threequarters of trades average less than $300nett, as the Fund aims to be among the first to exit the “escape-hatch”.

    Buying at the lowest price is merely a coincidence, albeit a lucky one. Time and again, it has shown that buying at
    lower levels (not the lowest bottom price) as the stock swiftly plunges with unfounded rumours and then as it rebounded later, probably swiftly too, the volatile resurgence can exceed more than 10% from its lowest bottom price. Most contra-players are contented with 5-8% profit margin.

    Please take note that conta-trades have only 3 or 4 days
    time-frame and no stock has ever rebounded more than 15% from its lowest bottom price, unless propelled with exceptional bullish news, during this 3/4days “window” period. Only novices will recklessly push up the stock’s price, allowing the opportunity for institutional ivestors to shed some fats thus making their portfolios leaner.

    Once again my gentle reminder to those interested to treat this venture as an added item among your discretionery diversion, liken to playing mahjong with only 10cents/20cents limit per “doubles” stakes, a $5 or $10limit bets on Spore Pools soccer or a 2tickets/3tickets
    ($5 each tkt) bets on horseracing.

    With due respect, BIG bets(speculative/gambling) never last long because one will inevitably fall into the looser’s
    syndrome of “one more time” but betting with one’s monthly
    salary.

    Abel Tan

  17. Hi Abel,
    Could we understand a bit more regards your trading profile.
    1) Do you engage in bi-directional trades or just long trades.
    2) Are you trading Cash or CFD.
    3) Do you practice “cut-loss”.
    4) Any criterias for “entry” and “exit” to each trade.
    Most obliged if you can throw some light.
    Roger

  18. In a volatile market, contra deals hit hard both ways.

    In an insipid market like it is today, it barely moves in the 4-5 days when you’ll hv to close yr contra position. So chances are, you will pay for commission with no gain; worse, if the market turns south. Moreover, a $5k base may be too small an artillery to withstand an assault, and if that invested stock for some reason, dives, the account-holder will personally be liable for the delta if the $5k is exhanusted. His co-investors will have to be very gentlemen, not shirk or hide under the bed but co-share this delta. It’s anyome’s bet that they will without quarelling?

    Whatever, the pointers I have raised so far are just pointers. Perhaps, a talk will clear the air and an opportunity for Abel to prsent his investment plan more comprehensively & completely.

    Ultimately, pls weigh all pros and cons before you get in, and after you’re in, dont laugh when money is made and say you bluff when money is lost………

  19. Hi Silverhairs

    This trading fund will be nearly all the time “short term” bets on a 3-days/4-days contra-window punt. Even without any major bullish or bearish news affecting the stockmarket or a particular stock, there will be almost daily at least one or two stock being speculated upon because syndicates, rumoured as high-risk Hedge Funds and once in a while, gangging-up with one or two stockbrokers, the motive for the former being desirous of entrapping the unwary to profit from, and for the latter as income from churning of brokerages. It is a known fact that speculators are the “darlings” of stockbrokers.

    Why do some traders or newcomers struggle in contra-play?? My take is they SNEAR on small profits for their reason being, it is UNWORTHWHILE to make less than $100 from betting more than $10,000, but nearly always less than $20,000 for smalltimers, OVERLOOKING the fact that not a single dollar is put up as front money and the less than $100 can be acquired within hours or a few days later.
    The more successful trader adhere to the discipline of “grab your money” as soon as profits appear.

    Why do at least a third of profits are a paltry sum?? The reason is one had bought at a “higher” lower-levels price, explanation: one bought @ $1.05 (the lowest bottom price was $1.00, after the stock collaspe from say $1.20), the stock will rebound to at the most $1.11/$1.12. Traders whom had bought at $1.01-$1.03 prudently would unload at $1.05 and above. So one will exit at $1.08/09.
    If one contra at $1.08 on 10,000 lots, the gross profit is
    $300. Depending on brokerage fees, one would net between 55% to 65% off $300. Such ikan-bilis are not so difficult to gather. The problem is one’s THIRD gathering is prone to carelessness as one casts the net “wider and deeper”.

    Some stocks pendelum between a set price-range(until re-patterned by bullish/bearish news) courtsey of the high-risk Hedge Funds and their cohorts, thus giving rise to almost daily of punts which provide opportunities too for the “homework dilligent” smalltimer, liken to a experienced mahjong player who has hone his skill.

    Understanbly, it is unimpressionable without “hard” specific calculations but “soft” peripheral guidances, somewhat psychological too, though twin with underlying confidence, to promote this venture.

    My reason for making a comeback to the stockmarket after being clobbered to smitrens during 1997/98 is that “lessons have been learnt” and that once a focused discipline is strictly adhered to, taking just small steps can see me evade the potholes and being contented that crumbs can still be collected.

    This proposal is introduced perhaps out of altruism on my part.

    Abel Tan

  20. Hi Silverhairs

    It is confirmed there will be a sub-group meeting during SHC gathering on Wednesday, 25th February to brainstorm the desirability of establishing a Trading Fund among interested SHCians.

    Once again, to recap and highlight the following suggestions in my proposal as follows:

    1. The Fund will operate nearly all the time on a “contra” basis.

    2. TWO names among participants, rotated monthly will
    “front” the trading contracts

    3. MINIMUM capaital of Fund is $2,000, divided into TWENTY shares of $100 each

    4. Each SHCian can subscribe up to a MAXIMUM of Three shares, $300

    5. Fund’s capital will be deposited with stockbrokers whose selection is by participants’ majority choice

    6. Fund will punt focussing on the daily/weekly Top Ten
    volume stocks

    7. Fund will trade only on STIndex stocks or Mid-cap stocks as listed in The Straits Times “Money Page” and in the category of Mother-shares only and not warrants, rights, etc

    8. Fund will NOT trade more than Thirty lots(30,000 shares) per contract and with value CAPPED at $15,000

    9. Fund will trade only on a “Ready” basis and NOT on CFDs, ES or other deriavatives

    10. Distribution of dividends to Fund holders will be EITHER Fortnightly or Monthly and payable by cash from “Front”-Dual names at SHCians’ monthly meet.

    Friends, this proposal is suggested in good faith and really, with due respect, by complete adherence to Trust, Transparency and Tolerance, this Fund should have an eternal life.

    Abel Tan

  21. Hi Abel,

    Would like to join the discussion and also participation in the fund for fun and sharing of knowledge,etc.

    But as Rogers as mentioned we are not clear on some issues, such as top up requirements, cut-loss, etc.

    So I guess the meeting will be a good start.

    Cheers

  22. Hi Silverhairs

    The stockmarket has weakened since Tuesday 17th February.
    Incidentally my trades, shared with a bosom friend, the past week were (1) on 17.2.09-bought 15lots Straits Asia @79.5cts and sold on 18.2.09 @ 81.0cts, Gross Profit-$225; (2) 17.2.09 bought 10lots Noble @ $1.08 and sold on 18.2.09 @$1.11, Gross Profit-$300.

    On Friday 20.2.09, we bought Cosco @ 78.0cts 20lots and is prepared to sell at 79cts on Monday 23rd February. If the market weakens further, we shall buy Cosco again @75cts, 20lots.

    The bet is “When is the last rainy day?”

    Abel Tan

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