Investment Update Aug 09

Dear all, I thought it might be more convenient to start a new post, troblesome to "scrull" around for some or maybe not at all emoticon

Thanks to the 43 or so SHCians who overwhemingly support the last Sat talk and meeting. It was a lively meeting and I am sure all have enjoyed it. We ran out of time and had to rush through at the end and ommitted the discussion on inevestor club. Also due to time, regretfully only half duly complete the feedback form.

It is encouranging to have positive feedback from Kenneth and LH Jie in their respective earlier postings; and also supportive comments from Terence and Tim. Thanks guys!

As suggested by Kenneth, a short summary for those who have not attended is duely.

The theme: Stock Market: Preparedness to meet Opportunity = Managed Luck and topics included

1. Positive Energy Attracts Opportunity

>> Happiness is the source of goodwill and positive energy. We are only as happy as those around us. By way of introduction, we tell one another how "good" we were feeling to the tune of James Brown’s song with same tiltle. High "5"s all around for re-inforcement. So now we can get lucky.

2. ST Index: 1998 to 2009 – Technical Analysis & Opportunities

>> We looked at the last boom and bust cycle and identified support lines and retracement patterns. From technical analysis, we have looked at possible retracement level around STI 2700-2750 points, following Fibonacchi’s retracement method and identifying strong resistenace turned support level. Next, we looked at possbile correction levels at 2420, 2244, 2112 & 1936 that we need to watch out for as prossible Fibonacchi’s turning points (buying 4D also suggested).

3. Investment Planning

>> We covered Basic Technical Analysis using Fibonacchi’s retracement; trend, resistance and support lines, top & bottom turning-point indicators, and divergence indicators to help us identify an opportunity when it arises and to prepare for entering or exiting a position (WHEN TO BUY). We then see how to enter a trade looking for candles confirmation and breaching of resistance lines; and how to exit with confirmation of breaching of support lines (HOW TO BUY). And of cource, a STOP loss plan (HOW TO CUT LOSS).

>> We tackled the question of "I only want to buy at $1 and then sell at $1.20 to make 20 cents, why should I be bothered with all these technical analysis?" with topic on Trading Psychology and see how FEAR, GREED, HOPE and EGO go trading shares. The picture becomes obvious that we need to cleard away all our emotion when investing or trading and follow the rules. If you don’t know the rules, go learn or rely on somebody in cahoot who knows the rule.

>> Next up, Fundamental Analsysis and Stock Pick which dealt with boring facts and figures about companies – price pattern and volatility, see the future and look at the past of the company, news and institution buyers. In USA, this is largely automated with a scoring system and available for subcription on the web. We are still backward, can this be a opportunity for SHC to develop and offer such services for Sgp and Asean market?Investor club members can share such info and save time (WHAT TO BUY).

>> Money & Risk Management – we talked about float and max 2% risk per trade (HOW MUCH TO INVEST). Allocation plan is such that the no. of successive losses is less than the 2% max risk. The idea is trade to survive (loose less money) rather than how much I want to make. Determine risk appetite, return, time frame, which instruments and apply risk managenet. We examine different investment scenerios as different types of risk management.

>> The emphasis on Online Trading and the basic skills needed to get started. I can start a class with POEMS and it is free to open a Phillip account (I will be happy to help) that comes with free access to the online POEMS. There is no rule to restrict you to only one trading account. You can have as many as you want and all free. Feedback needed if you want to attend. Commission is lower for online trading, so better learn.

4. Admin & Trading Rules

>> The do & don’ts in trading, the credit limit and what does it mean, the settlement date and forced selling, the wrong keying in of orders online and how to appeal, the opening of trading account and the service level of your remisier/ dealer. You can open as many Phillip accounts as you want and trade with the remisier who gives you the best service in making and protecting your money.

5. Investor Club – no time to discuss, postphone to next time. Feedback here is welcomed. For starter, I am suggesting we meet socially once a month and see how it goes.

Lastly, the feedback form is great for us to plan our talks better in future and to reach out to specific requests from the group. I have only received 19 on Sat and I would like to request those who have not done so to send an email to me foost@phillip.com.sg or sms XXXXXXX your email address so that I can forward you the soft copy for you to fill in and return via email. Or just drop you email address here in the post if your are too busy.

Please feel free to comment, ask or suggest. However, do give me some days if any lengthy respond is expected. And just call me if it is about the stock market price movements, it is time to watch for buying opportunities as most blue chips have started to pullback already. Crucial news from USA this Friday includes CPI, capacity untilization, industrial production and consumer sentiments.

Will keep you post on the next talk… cheers, ben

16 thoughts on “Investment Update Aug 09

  1. Hi Ben,
    We do not encourage leaving behind the mobile# and wuld prefer dat u do so pte thru’ email if there is a nid to. Hence, we will delete ur mobile# away from d post. Thanks.. Dolly

  2. Hi Ben,

    What a great summary especially for those who did not attend (not able to, in my case)!! Would have attended for sure.

    A monthly social meeting on this is a good suggestion. By the way, your cell phone number lacks a number (unless yours is a 7-digit) and also, we are not supposed to post it here. Nonetheless, keep us posted and hopefully future talks will coincide with my trip.

    Take care,

  3. Hi Dolly, sori “bu zhi zhe bu zhui”. Thanks for informing. Anyhow, I hope to get more feedback to plan what we will do for next meeting. Let’s keep going…

  4. Hi all who are eyeing the equities market,

    Today, all market indices are up with almost all stocks trading up. Anybody looking at buying Singapore bank stocks on a Friday afternoon? Kind of reluctant as there is so much talk of profit taking. But then it seems the markets may be taking 3 steps forward and 2 steps back.

    Just like to hear what you are thinking off.

    Terence Seah

  5. Hi, all SHC members.
    Hope that those who attended Ben,s talk gain some insight into trading the stock market.
    Be cautious that S,pore,s market is following the US market after closing. So there is a lag in timing and opportunity to earn a profit. When the US market is ‘up’ the next morning S,pore would follow up.
    But not for long as BIG traders would having sold before retail traders have a chance to net some profit.

    I am not keen in equities.
    For those keen in FX, I have been tracking the EUR/USD pair for several weeks now. I seems to known its direction when it is about to change, up/down.
    FX is easy to trade. Be aware of the many courses conducted by so called experts who themselves MAY not be trading.

    Again, the EUR/USD is currently over-valued at 1.43**.
    Today is Friday and, as I have noted many traders will
    sell what they are holding, so this may trigger a downward pressure on the EUR. The USD index is also near the bottom, at about 78.50 as I am writing.Bootom was near 73.**.

    Hope this is good tip for the start.

    T S Lim

  6. I am all at seas amid the vagaries of this equity market. It is not supposed to go up but up up and away it goes.

    I have to conclude therefore that so long as there’re pessimists and naysayers whose words are published and read, and they still predict doom and gory, the market will continue to bask in glory tending to a happy ending story.

    Yes, at each blip, go out and grab, close yr eyes if you’re scared and why bother if you’re blind as the bat?

  7. Hi Terence, those who attended Ben’s talk would be expecting STI correction, probably to initial support levels around 2200-2400 where it would be ‘safer’ to accumulate if one so desires.

    Also, historically, 4th quarter of each year has never been a good time to invest in stocks. A good time would be in the 1st quarter. (Buy in 1st quarter, sell by 4th quarter is a general rule most fund managers follow)

    Just my 2 cents contribution only, caveat emptor 😉

  8. Tiang Soon #6

    You look like an experienced forex trader who actually trades for a living. I am sure a lot of SHCians would also be keen if you were to conduct a talk on FX trading.
    Let us know if it is possible…

  9. Hi, all SHC members.

    Has anyone sold the EUR/USD pair at 1.4305?

    It had dropped to 1.4260 after the 8.30 ECO news on CPI.
    That is a 45-point drop some 25 mins.
    1 point at $1 for one mini-lot equals to $45 profit.
    To earn more sell more lots.
    Deposit with a FX broker $1000 can get one started.
    That’s why I like FX, with a small capital and a high return.

    T S Lim

  10. Hi Jonathan,

    I am not a pro equity trader, altho I must say that my observations are also 4Qtr trending down and 1Qtr trending up.

    Somehow, these days, the Bloomberg, ChannelnewsAsia and the CNBC news readers are continuously exciting its viewers and getting our adrenalin rushing with good news from Corporate America. Can all the stock markets be wrong at the same time? From Sydney to Tokyo, Seoul, Shanghai, Hongkong, Singapore to Mumbai.

    Based on the herd theory, does it mean that this is a good time to sell?

    I tend to support the theory that the world equity markets are still 30-40% below its high, and that there is still plenty of liquidity under the pillow and that there is this urge to invest with the hope of getting back the lost 30-40%.

    Hi Tiang Soon, may I encourage you to initiate a new topic (Post) on the currency market.

    Terence Seah

  11. Hi terence et al,

    It maybe easier perhaps to visualise that we are now on the 5th level (50% retracement from Mar 09) of a 10-level building. We can buy when price is at the floor and sell when it is at the ceiling of EACH floor. Last Frisay’s prices of most blue chips were already way past the floor and heading to the ceiling so not a good time to buy even if you want to risk buying on level 5. It is better to watch for selling opportunities now in case you want to sell.

    Overall, the sentiment is the market is due for major correction soon. If you believe in this, then it will be better to buy when prices comes down to level 4 (or level 3, which is another different story). This is what Jonathon is talking about. Again, even on level 4, buy only when price is at the floor. This is important as you will have more options – take profit if the price hit the ceiling on level 4, or have more time to cut loss if the price moves down to level 3. Of course, if you are holding on for longer term, this will yield hoigher future profits.

    The market is not only due for correction soon, is also full of uncertainty for the worldwide economies. This explains why economic news in the USA has major impact on the prices of our blue chips. As nobody knows what kind of news to expect in the near term, the price of individual stock will be very volatile but moves sideways in a band.

    However, in this scenerio, retail investors and some fund managers will shift attention to quality mid cap and small cap plays. This is also an opportunity to study the values and identify strong stocks for investment. Recent example is SATSvcs (but price has gone to the ceiling aready, so no buy for now).

    With shares, you are investing the values of companies or (group of companies as in ETFs) compared with forex where you invest in macro economics of the country (highly dependent of fresh ecomonics news). You decide which you are more comfortable with – in risk taking and return expectation. If you want your money to work hard for you, you have to learn how to do it, irregardless.

    Hope this is helpful, cheers!

  12. Hi all watching the stock market,

    The STI has dropped to 2552 (79 points) as I am writing this, nearing the support level – 2542. If this is broken, we will see movement to the next level of 2430.

    SGX (the strong one) has broken its support at 8.33 at 1600H today and dropped to 8.29 now.

    Looks like sell opportunity is closed. Interesting to watch out for buying opportunities and if this is the start of the down trend.

    Cheers..

  13. Hi gals and guys,

    We got lucky and have managed to booked the Presentation Room at Phillip City Tower Level 6 (same place lah) from 1.30 to 4.30pm on Sat, 5 Sep 2009.

    We shall have our next meeting then and there are some feedback that I would like to address in the agenda.

    1. Online Trading has been well requested and learning this skill will be an important step to manage your money and trade better. I will conduct a 30-min training session using live POEMS, I will see if we can have access to the terminals there for some hands-on during a short break. Those who wants to open POEMS account (free) beforehand, plse email me separately (foost@phillip.com.sg).

    2. Stock Picks & Fundamentals – I shall talk about this in more details. We can also share and identify some attractive small & mid cap stocks and get organised to do some research on them as a team (investor club).

    3. Review the stock market (STI) and anticipate potential upcoming correction levels.

    4. Analyse the stocks you want to know more about. From feedback, some listen to “tips” and buy without knowledge; some got burnt badly before, are stuck with loads of shares and don’t know how to move on to take advantage of the opportunities that are opening up now.

    5. Re-visit money management, timing market entry & exits and stop loss (auto with POEMS ProTrader).

    6. Initiate discussion on Investor Club. Suggestion to call it SHC Top & Bottom Club (like sell top and buy bottom as motto)?

    7. There will be a 30min break for socialising and chatting as we now have 3 hours. I know the last time was rush rush.

    I have been asked if I can handle the buying and selling shares as a Phillip Security Consultant. Yes, contactually I am a Remisier with Phillip but have the flexibility of operating a mobile office as a consultant. Yes, I can open your trading account with online POEMS free of charge (even if you already have one) and yes, I can meet you anytime and place to do it. And yes, I will answer your questions, meet you, advise on shares and guide you to trade online to save on brokerage fees (0.28% vs 0.5/0.4%) if you so desire (especially for SHCians, to help you save money).

    Lastly, any further feedback for the agenda are welcome. I know few have asked for coffees and soft drinks the last time. There is a great coffee shop at City Link about 50M from the City Hall MRT entrance and good local coffee O only 90cents. Maybe can buy during break (we will have a break this time, note the time is longer).

    Same thing as usual, plse leave you name behind if you are coming so that we know how many will be there.

    Thanks for your kind co-operation and looking forward to “siow liao lah” positive energy greeting again.

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