D+218

In my previous post, I wrote about financial Statement acting as 'report card' to a person after his/her schooling days. I find it very useful and reasonable that this system could be the best judge to a person's success in life.

Although success in life also includes a happy love life as well as achieving your non-monetary goals, I shall not discuss them in conjunction with money. I always have this mindset from the Chinese saying: "钱不是万能的，但生活没有钱也是万万不能"

Simple translation would mean money can't buy you everything in life, but we can't survive if without money. I'm pretty sure every people would have heard this statement somewhere, sometime in their life. But what can someone take away from the meaning of this statement? That has to depends on your mindset.

In many of the times, that sentence was only relayed the first verse or "钱不是万能的". I could understand why people always have this mindset. One example could be someone whom despise the Rich and felt that they do not have anything other than their money. So, this person may preach to others that a person should always stay happy and not go for being rich.

Now, Does that idea sound familiar to you? Or maybe you know somebody who may have that mindset. I'm sure there are plenty of people believing in the statement but are struggling in life due the their financial difficulty. I recalled watching TV series and too many a time, the drama would show a happy family with 3 children living happily but the dad is struggling to make ends meet. Thus, The family would lead a poor but 'happy' life.

I guess that would only happen in TV dramas. No offense to anybody here, but i believe that if the family is financially struggling, there ought to be quarrels about money issue. Unless the children are taught to be mature, they would rise questions like "Why my friend's father give him pocket money of $10 a day and i only get $2?"

I told myself, that i would never want that kind of scenario happen to my family, my wife, my children. In fact, I would like to challenge the thinking that "who says being rich in life would be poor in relationships?" or "who says a rich family would not be a happy family?" I aim to prove this statement wrong be being happy and rich in my life!

That's what being success in life would mean to me.

As promised, I've posted my own financial statement which i picked up from Robert Kiyosaki's book. It's a simple chart and i believe anybody is able to do it

I'm currently in a position of a very unhealthy financial situation. I have 4 fixed expenses monthly and i do not have a constant income due to me being unemployed. Although things are going to change once i got back to RWS. My Income would then be able to come in to balance out my 'Profit and Loss statement'. Right Now, I'm currently having a NET LOSS.

As for balance sheet, you may ask why i classified Noble group stock as a liability since it should be considered an Asset. The reason being, Here, the definition of being an ASSET is anything that PUTS MONEY INTO YOUR POCKET! and for the Noble stock, I've made a LOSS which would make it a liability since IT TOOK MONEY OUT OF MY POCKET!

Robert Kiyosaki mentioned in his book that not all stocks you bought are considered ASSETS unless you make it an asset. This, i find it rather true and i agree on his statement. A stock that does not make you money should be considered a liability! What do you think?

Below, I did up the movement of cash or the usage of cash for a normal person.

As you can see, the Orange arrow denotes the Monthly income for the person. This is income normally derived through working a full-time job. Upon getting his/her paycheck, most people would start to enjoy and spend money to what Robert Kiyosaki considered as liabilities. Something like Tour, Dining, Shopping for new shoes, clothes, Etc. All these items are money spend which ultimately takes your monthly income away from you! True or true? TRUE!

Then again, I'm not saying that you should not spend on things that i mentioned above. After-all, what life would you be leading if you don't even do those activities? So, an alternative solution in solving the problem is to adopt the cash movement of a Rich person.

You would have noticed that the liability column is the same as an poor/middle class person. But the major difference, which the rich does while the normal people does not is to buy Assets that would earn them what we known as PASSIVE INCOME!

I do not know how much of understanding you have when people ask you about multiple streams of income but unless you are a professional sports star, lawyer, or any person whom is paid highly in their field of expertise, I would reckon that a single stream of income is insufficient and is the most dangerous thing a person can do to him or herself.

Too many a times have i heard of people getting retrenched and have to start all over again in climbing the corporate ladder. But little did they know that even if you had scaled to the highest on the ladder, you are still on a SINGLE INCOME stream. In other words, all it takes is for you to lose your job and you'll have NOTHING to fall back on! True or true? TRUE!

These not only explains a clearer picture as to why people shouldn't be always looking for job security if they want to leave the rat race, or the financial liquidity trap. This also allows people to go on and do what they really dream of doing or owning. For example, If i dream of owning a BMW, i would not use my direct income to purchase it. I would rather use my direct income to BUY assets enough to generate sufficient money for the purchasing of my BMW!

Now that I've shared a clearer picture as to the difference in the cash movement of the Rich and the Middle/ poor people. You should be the judge of your life and choose.

Which path do you want? Only you can decide and steer your ship towards that goal.

I shall end today's post with one of my strongest, deeply root-ed mindset:

"钱不是万能的，但生活没有钱也是万万不能"

D+212

First of all, I have to say that I'm very close to joining back RWS as retail assistant, a job that i quit in April due to my examinations. All that's left is the signing of some documents before I'm reinstated.

Although i have received some offers from Recruit Express, no one offer could fit my expectations and their offers are consider 'low' as compared as what i currently have from RWS.

But that's my solution for the short-term. This whole week, I've been going for interview and meeting up with my BMT mate, Jun Jie.

He is currently a financial planner and he called me up. I agreed. We sat down for 3 sessions separately and i've met his direct mentor in a causal cum recruitment interview. I told them my views about this industry and that this, alongside, Network marketing is one of the best passive income job around.

If i have to choose, I'll probably choose to be a financial planner. Both jobs requires selling skills and face rejection from clients like you see people on the road everyday.

So, I believe that if I'm able to join this industry, I'm sure I'll be able to learn a lot. Here, I'm sharing a meaningful sentence that i came upon when i was reading through Robert Kiyosaki's book.

He says that in our schooling days, we have Report Cards to tell us how we are faring. Most people doesn't know that this 'report card' system follows them through even after they enter the workforce.

And Robert's rich dad call it the Financial Statement of oneself. In short, every person, organization has their own financial statement, including you and I. A brief financial statement includes a Balance sheet statement as well as a Profit and Loss statement.

If you do not already know how are you faring in your finance department, try doing up your own balance sheet, P & L statement to look for yourself.

For the benefit of those who do not know what a Balance sheet and P & L statement is, here's what Robert's foolproof explanation.

1) A Balance sheet have 2 columns, the Asset column and the Liability Column. Anything that PUTS MONEY INTO YOUR POCKET is call an asset. And anything that takes money out of your pocket is called a Liability.

P.s. For people who have taken accounting lessons, I know this definition is open to plenty of debate but i believe you'll understand where I'm coming from once i complete the whole picture.

2) A Profit and Loss Statement have 2 rows. First is known as the Income and the other row is known as Expense. Again, the definition for Income is anything that gives you money is known as Income and anything that takes money from you is known as an Expense.

Now that i've finished the idea, I would strongly recommend you do up yours as well. After summing up your current financial report, you'll probably see for yourself that you actually have a 'high' liability column as well as Expense row. If you're not, Congrats!

In fact, This simple classifying of numbers i would say is basically known as your 'report card' for your grades in 'life'. A lot of people remained on the 'passing' grade after leaving school and enter the work force. But because nobody ever explained anything about financial knowledge to them, they missed out that thought why they did not even have a plan.

As for Robert's rich dad, he would have graded anybody who have not achieve financial freedom at 45 as a 'failure' on the report card.

I'm not very sure if you're able to see the reason why he said that but i do. I agree with all due respects in fact.

How many of you have the experience of , "Now that i've graduated, what's next for me?" feeling? Because i once had this feeling. I felt so lost in life that i do not know where i'm heading.

I hated that feeling. I call it 'wasting my bloody time' feeling since everyday passes by without me actually achieving something towards my goal. OR to begin with, I do not even had a GOAL!

Life without goal is the most depressing moment anybody can experience. For me, I'm glad that i had walked out of that shadow that many people have not. And I now only wants to follow my plan that is to achieve FINANCIAL FREEDOM! True or true? TRUE!

So, Learning the simple idea of 'report cards' to financial statement in life is something that i would classify as a fruit that can only be gained from self-learning.

No way that these stuffs are going to be taught in school in a million years!

The reason being, i could reckon that even the teachers are not Financially educated to be able to pass these important yet forgotten knowledge to their students! True or true? TRUE!

Moving on to the second part of my post, I'll share with you here what i've picked out from the T3b forum.


This is a method that i had just picked up which i believe many other traders would also know if they have not already done so.

What that's not the main topic here. The main topic here is about what is to follow in the coming week.

In preparation to gear themselves into the next 'wave' of action, many t3b students are showing signs that the market is slowly turning into a bear market (downtrend). Which one way of seeing it is as explained above.

However, there are also some arguments that this concern is redundant and that a double dip recession is not going to come.

My view is: depending on how the market numbers being reported, we could see a bear market developing more clearly come end July since it's the financial reporting for most companies in the US for 2Q10.

As for the immediate term, the market could still turn bullish if the recovery continues, beating reports that claim that the recovery is 'not strong'. Deep down, we know that the crisis is not yet over and although the volatility has slightly subsided a little.

This is only the beginning of the turning point. Whether this new path leads North or South, we'll only have a clearer picture as time goes by.

Oh, before i forget, Congratulations to those whom had followed Our mentor, Keane's recommendation of getting their cash in Renminbi because, i just read that CHINA IS going do adopt a flexible exchange rate policy after pegging their currency to the US$ for the past 2 years!

So, for forex traders, this could be a good news! As for stocks, the Chinese stocks are expected to open higher and gain more in tomorrow's trade. So, don't be too surprised if the HSI turns bullish over the next few days as a result of this measure.

And if this factor is an important piece to the puzzle of solving the current Economic crisis, which is something that i believes it is, I would not write off the possibilities of an outright economic recovery.

I'll scan and post up my self made balance sheet and P & L statement once i've finished and you all be able to get a clearer picture in getting your own 'report cards' in LIFE!

Cheerios and happy trading!

Here;s my declaration to the Universe:

" I am willing to INVEST my Time and Money in the way RICH people do!"

D+206

Yesterday, I received an email from Chopard Ng. Chopard asked me a number of questions and i thought that maybe you might be confused about what's going on with your investments right now.

I presume that Chopard is also a t3B member from the way you asked question in the email. I shall not disclose any information from his email here for confidentiality reasons.

What made me happy was that i received an email from a fellow trader asking me for advises and i totally do not know where you've gotten my email address from other than from my blog.

But then, what made me disappointed was that you wrote in a manner that you might have some doubts over whether the t3b system actually MAKES you money.

I understand that i may not be in the best position to give you advises especially if i am not already in the level of our mentor, Darren and Derick. But from the little words i read from the email, I could sense that you, my friend had derailed from the plan.

I use the word 'plan' because i believed that Investing is a plan, but not a product or procedure. what we should be wary of is not to develop emotions with the products or procedure. Here's an example to explain what i mean.

Keane lee once taught us that we should not develop 'feelings' with our stocks. But everybody laughed at the level of 'childishness'. But i believe what he actually means is to NOT be attached to only stocks.

An Investment is a plan. A plan that takes you from point A to point B. I call it a plan to take me from what i am now, to what i seek which is financial freedom. I'm sure everybody aims to be financially free rather than to buy and trade stocks for the sake of the trill.

Investing can come in different types of vehicle. Some examples are, Real-estate, Options trading just to name a few. And what I and Terence as well as all the t3b members had chosen was the vehicle of stocks investment.

Whichever method we use in choosing what stocks we buy is also known as the procedures of the 'Plan'. We can use t3b's methods, or we can use others' method like P/E ratio analysis. There's many methods that each individual can choose from. But always remember this important lesson.

We do not fall in love with the vehicle (types of investment), Product (stocks) or the Procedure (trading methods). A example of somebody whom does the above description would be someone who only buys stocks that he like.

For the greater good in achieving your financial freedom, we have to stick to the 'Plan'. Regardless of which vehicle of investment, we will invest as long as you have done your risk-reward calculations and deem it a 'low' risk investment opportunity.

Moving on to my views on what happened to the US market last week.

The DJI closed with a consecutive positive gain which i felt personally that it could be the results of news trading. There were very contradicting analysis on the market. US federal Chairman, Bernanke, claims that the US economy is recovering and we are unlikely to see a double-dip recession.

Another report soon came up with the analyst claiming that Bernanke is Wrong! He claims that the Bear is already here as many people are still believing that the market are still in the 'correction' stage. There is a very popular article that I've read claiming that:

Back in 1930s, people then doesn't know that it was the GREAT Depression then! They thought that it was also 'market correction' not the index fell so low and it did not recover until half a century later!

So, could Bernanke be just fanning more investor's confidence by claiming his stance or is he really speaking the truth? Definitely, He cannot outright declare that the economy is heading for a double-dip recession! So, that is the question we have to think on.

My view is that we have to keep monitoring on whether is US economy actually recovering. Personally, I am not too worried since i believed that the economy that could come out and save the current crisis is China. China has been facing strong pressures to adjust their exchange rate to USD$.

Singapore's market follows closely to the Chinese economy as well and as such, if the stocks that we invest in have major business dealings in China, I believe that the stock is fundamentally strong against the current situation.


Above is the chart for a stock call: SIA engineering. I wanted to highlight this stock because of it's fundamentally strong foundation. Although i had not really done in-dept research as to how much exposure this company has in terms of the European and American continent.

But what i wanted to show here is more of a diagram or example of a fundamentally good stock.

I shall end this post with a declaration to the universe:

"I will stick to my investment PLAN and not fall in love with the investing vehicle, products or procedures!"

D+205

I sort of went MIA (Missing-In-Action) for the past week. Reading the new book i've bought, watching TV series that i had kept until now to watch with my free time. And not to forget, meeting up with friends and also going out with my girlfriend.

Life after exams is Heavenly! I enjoyed this "wake up and think what should i do next feeling". BUT, to maintain my monthly expenses, I know that i need to have a income in the short term. It's been less than 1 month since my exams ended and I myself knows that not having any income from July is going to hurt my wallet badly.

I experienced the feeling of no income with fixed expenses, and i know that i cannot rely just on 1 stream of Income. I'm still into stocks trading but by no means am i withdrawing my financial freedom funds just so that i can go have fun.

I've learn that the reason why many people failed to get rich is because they often prioritize something else first. But if you ask any person, whether they want to be rich, They would undoubtedly agree!

Robert Kiyosaki used 3 different aspects and wanted his students to prioritize. The components are:

1) Comfortable
2) Stability
3) Rich

There is NO right or wrong answer here but it's just that more often than not, People are not doing what the say, or rather, simply prioritizing other factors in front of being rich and that's what they get.

A Poor or middle class person would have prioritized in the above order but a rich person would have prioritized differently:

1) Rich
2) Comfortable
3) stability

Noticed that the stability comes last when it comes to a rich's person's mindset. In the book "Rich Dad, Poor Dad", Robert was fortunate to be able to understand that the rich do not work for money. And that in order to have him understand this principle, His mentor, which is his rich dad, wanted Robert to work at one of his shop for FREE!

Most people would have laughed at the scenario or even label it as crazy. But judging by that comment, You're as good as saying: "I will prefer a stability over being Rich unconsciously".

T Harv's lesson once shared that your mind would leads to your thoughts which would then leads to ACTIONS and finally, the results.

These days, i reckon that many people would have gained the financial knowledge or partial knowledge on finance. But before you see the results showing that you're on path to financial freedom, You have to overcome the one step that many had failed.

This step is ACTION! All the thoughts and thinking meant NOTHING if there is no actions taken. It's as good as saying, I know that this stock is going to 'fly' but i choose not to buy it.

Even understanding what it takes to attain financial freedom is not enough if you do not have the resolve to get you translating your thoughts into ACTIONS! And i agree that doing so requires a massive amount of your mental strength.

Here, I'm going to share with you my way of strengthening my Mental muscle. Whenever i find myself feeling doubtful as to a decision what i know deep down, It is going to benefit me, I would ask myself this one question in my mind:

'If you think achieving Financial freedom is important, How and what are you willing to give in order to achieve that?'

or another sentence that i used in strengthening my motivations when i was preparing for my examinations was:

"If you think getting a first class honors for my exams is important, What are you willing to do in order to achieve that?"

My answer was Time and effort. As such, I quit my RWS job and focused only on studying and aiming for the highest. I know that it is not an easy task for everybody to just DO it but i can assure you, It's like going to the gym struggle:

It's the procrastination of whether to go or not that is the hardest part to get by. But once you have gotten pass that stage, You will feel happy that you had made the right decision to go to the gym and results would be a fitter, stronger and healthier body!

So, if you haven't learn anything about what i've posted, at least ask yourself this question:

"What do i want in life? Is it a stable job with high monthly income or a path to financial freedom and richness?"

Lastly, I would like to reinforce this statement that i've shared above:

" Mind Leads to Thoughts which leads to ACTIONS and finally we gets the results!"

D+199

If somebody ever ask me what is the most valuable bargain that i had gotten for myself, I'll have to admit that the $17 i paid for the Rich Dad Poor Dad book. Not only had i gain a lot more financial knowledge, I had also learn many new things that i couldn't understand when i went through T. Harv's seminar.

And today, I'm glad to announce that I've bought another book from the Rich Dad series. Prices doesn't matter if this book is able to teach me something more than what the price of the book is worth. To me, the $17 that i paid for this book had already made it's return. It's like buying and taking a vitamin pill to enhance your health. In this case, it's my financial health that I'm referring to.

Without beating around the bush, I'll move directly to what i thought about the Financial market after Friday's situation in the US.

The Dow Jones closed below the 10000 mark for the first time after showing initial signs of recovery for the past 5 trading sessions. And this sell-down sentiment is mainly due to the less than expected results being released on the labor growth section on Friday. Of cause, since I'm been blessed with the Macroeconomics skills that i had picked up from studying in UOL, I shall briefly share with you some fundamentals of Macroeconomics.

The fundamentals of Macroeconomic is derives as gross domestic product (GDP) or we call it output can be derived from various major components.

Equation: GDP = C + I + G + X -M where:

1) C refers to Consumer spending
2) I refers to Private investments
3) G refers to Government spending
4) X refers to Export
5) M refers to Import

Different economies have different weightage in sustaining the GDP growth. US economy is being sustained by 70% coming from the consumer spending (C) whereas Singapore's economy is dependent highly on the Exports (X) section.

What happens during a recession is that consumer spending (C) and Private investment (I) will fall due to lower confidence and people being cautious on their spending and savings behavior. We also know that Exports and Import demands would fall due to the very same reason as what happens to the private sectors.

Thus, In times of recession, the Government spending (G) is the only component that is keeping the GDP in positive figures as the economy moves forward. This explains why in times of recession, the economy growth rate is always being slowed down or at times, even deteriorate. We know that the economies have to sustain the same growth rate despite the withdrawal of the contributions from other major components. In short, Government spending has to increase in order to save the economy or we shall face higher unemployment rate as an consequence of recession.

If you need an example of where to government spend, Singapore's example is that the HDB lift upgrading programme had been brought forward to boost government spending as well as what we are seeing in some of the MRT station which is the implementation of the 'barrier' on the platform. In Singapore, it is known as Government stimulus package. All these expenses were budgeted annually by the government but due the the recession in 2007, the government had to bring forward what was being planned to be implemented slowly in the latter years.

Applying the concept to the current situation, The current Budget deficit crisis in Greece, Spain, Ireland, Portugal and many more economies are caused due to the increment of their government spending back in 2007, and the recent article published in the news that the US faced a debt of USD$18 trillion is the record highest in their history. Basically, we can comment that the economies had been over-heated just like a car engine. And the reason why analyst are monitoring this situation is because the US are signaling to the world that they couldn't save the global economy once again.

And so far, there is no clear way out of how the global economies are going to withdraw their government stimulus package in times like this and still sustain the confidence of the consumers and investors. I had said this previously and i shall say it again:

"We are facing many more signs that could lead us back into a double dip recession if the withdrawal of the government stimulus package isn't done properly."

As for fundamentals, i can write 10 post on it but i guess i should stop here. I'm sure you guys doesn't want to hear how this crisis started but rather, how you could benefit or make money during this crisis. So, here are my views.

The STI would probably open lower come monday after what had happened on Friday. Since Friday's trading day was a positive gain, it would make matter worse. I would say that it is actually a pity as the signs of recovery actually appeared as denoted by the blue ribbon at the bottom of the charts.

Furthermore, The STI had recently broke the peak of 2800 which just few days ago, was giving investors and traders the confidence that the recovery is strong. But the impact of the news released on friday, I would say, is going to have a major impact on the global recovery. As such, here are my insights and analysis.

The SGX stock represents the image of what the Straits Time Index (STI) and if you're fast, you might get a piece of the pie when the market sell-down come Monday's opening. This is also subject to individual's risk appetite. My take is, if you're going to short the SGX counter, monitor the news closely as to whether if there might be a twist in the current 'story' enactment.

I welcome feedback as to whether you would like me to post more economics fundamentals here since i understand that i could get boring at times.

Lastly, I would like to end this post with a sentence i picked up from the Rich Dad, Poor Dad book:

"Winners ain't afraid of losing and people who are afraid of losing can't be winners."

You can play it safe by keeping your money at the bank or you can make a go for the investment opportunity. It's your choice. You choose.

D+198

First of all, I have finished reading the book, Rich Dad Poor Dad by Robert Kiyosaki. Here are some points that i had reinforce my mind on and i particularly had deeper understanding as to the sentence:

"I always Pay Myself first!"

If you have not read any books on such financial teachings, you might find this sentence weird. So, I'll start by explaining what this sentence actually means. In life, we are used to paying bills, taxes, shopping expenses and etc. But what we didn't notice is that we have been paying into others people's pocket. One example used in the book was Robert's analogy that an average American work from January to May (5 months out of 12) just to pay his income tax to the government. This shows that government is taking away more than a quarter of an individual's income through taxes.

And most people, after paying for their taxes, had to spend money paying bills and mortgage which eventually leaves them with very little to spare for themselves. If you need an example, just ask yourself, how often have you heard people saying that 'i do not have enough money to spend?' or 'I have not travel overseas for a very long time.?'

My definition of middle income group is people whom are earning higher than what average people are earning and normally has more money to spare after all the taxes and bills due to their higher wages. But in the end, we still hear these people commenting that i have to save 3 months to buy a Gucci.

In the end, i would say that a average person might have his income divided into 3 major payment like this:
Income and service (GST) taxes: 30%
Bills and mortgages : 60%
Personal savings (for whatever expense you want): 10%

Coming back to topic, how does the sentence "I always pay myself first" links to the case here? I would say that among the '3 major expenses', what we pay least is to ourselves! We work so hard for government, for bills and house loans and etc, leaving us with always very little money to 'pay' us! True or true? TRUE!

So, how do we "Always pay ourselves first'? Of cause, we couldn't cut the weightage for the taxes but we can always manipulate the bills section. In fact, most people are accustomed to always pay off their bills first but let's take a step back and think, does it hurt you if you don't pay the bills on time? NO! It'll be the companies that are worrying and what i suggest is to let them be. They'll send you another notice once you missed your payment period and by then, I would say that only then, You pay them.

This is the same theory as an company wanting to delay paying their creditors as much as possible and hope to receive from their debtors as soon as possible so as to increase their cash flow in the running of daily operations.

As individuals, we can also adopt this practice and in our scenario, we should use the whatever money we have from delaying the payment to 'pay for yourself' or in other words, buy an asset, (e.g. stock) and earn some income so as to pay off the creditors and still have partial of your money initially set aside to pay your creditors.

It makes no sense if you're delaying payment to your creditors just so that you feel happy holding money for a addition of 10 days and then paying out the set aside amount again. What you should be doing is, to use this working capital to earn some more money before paying your bills. You never know how much usage this money can make within this period of 10 days.

People can make $1000 into $2000 within 7 days through investing but I'm not going into the investing details here. What I'm trying to bring the point across is that we should always maximize the 'payment'' to ourselves and minimize/ delay the payment to others.

I know that my writing may not bring the best out of what i meant to say since I'm not a professional writer but if you still have trouble understanding what I've written above, just simply ask yourself, Would you choose to

1) Pay your bills with your income directly or
2) Delay paying your bills, use the money you initially wanted to pay your bills and do a short investment, and return with more money than just paying off your bills.

Before i end this post, I shall hereby declared that my rich dad poor dad book is up for lending! SMS me if you're interested!

I shall share my insights as to what happened on Friday's US market as well as Singapore's market in my next post. I'll also end this post with the same declaration to the Universe as i had started this post:

"I always PAY myself first!"

D+196

As we draw nearer and nearer to the World Cup event, It seems that a 4 year wait to arguably the World biggest sporting event is finally over. We can rejoice and watch soccer regardless of which international team we support.

But in truth, do we actually only support and watch soccer for the love of it or are we trying to make money out of it by betting on the matches. As we all know, gambling is a habit which is hard to cure. There are some people whom had gambled all their life and calling them to quit is like asking them to stop eating or drinking. It's almost impossible. Even casual gamblers would also come out in betting 1 or 2 matches especially to add onto the spices in watching the games.

When dark horses wins, these people were more than happy because of their pockets getting fatter and fatter. Can you imagine if South Africa team were to beat teams like Brazil, Argentina, England, France, Italy etc to win the World Cup trophy, how many of the bookies, gamblers would have laugh all the way to the bank?

I respect football and i don't find gambling on teams and then supporting the team you've bought is actual love for the game. You can be a England team Supporter but when it comes to football betting, you'll bet on whichever team that has the slightest chance to beat your favorite England team. Then when they wins, your wallet becomes heavier.

Well, you will be surprised as i am when you find that I'm able to link this World Cup event to the financial stock market.

It is statistically shown in the past that when this event command a bigger arena to people that wanna pool their money to make some winnings. So much so that the stock exchange actually sees a unexplainable decline in trading volume during these World Cup period. As such, Analyst comes out with different explanations like World cup comes, trading and stock exchange will under-perform. As there's this saying: "A picture speaks a thousand words"


The chart above shows the Straits Times Index (STI) in 2006, where the last world cup took place. And as you can see, there was a sharp dive in the index near the end of May and the start of June. The index then continued to rebound in July, Coincidentally, where the World Cup event happens to end. And this pattern can also be found in the 2002 chart below.



Of course, you may ask why is there a down-trend after a rebound in July and I've linked the main reason as possible events leading to SARS which eventually sees the index declining and Market being swept into a recession as i had remembered when i was still a secondary school student during that period.

So, historically, we have seen that STI generally declines during the month of June and just today, I've received an email from my broker that volume in June for the world cup event dropped by average of 20% during the past 3 world cup from 1998 to 2006.

My view on this is that if you are a person with higher risk appetite, you may want to consider shorting the Singapore Exchange stock (SGX) which is directly linked to the Straits Times Index.
Of course, Entry and exits rules applies if you are up for it.

Of course, we are still in a volatile situation which so far, still keeping us in the 'recovery' stage from a recession. So, if the STI suffers another sell-down, recovery back in such turbulent times could be slower or this 'sell-down trend' could even lead to the start of a recession for all you know.

So, consider that if we're Short selling the market, And in the event that the market turns into a recession (defined as a consecutive 2 period of under-performing results), we are in the trend for a longer run!

But even if the market rebounds, setting a profit protection could also net you some gain during this joyous event where everybody is happy just to be able to see your favorite international stars battling out for the prestigious trophy.

Of course, this is a trend that can be monitored and i shall continue monitoring the situations and keep everybody posted here. I shall also end this post with a declaration to the Universe:

"My money works hard for me and Make me more and more money!"

D+194

I skipped a day of post but nevertheless, I shall post what i initially wanted to share on Sunday's post.

Firstly, I bought the book Rich dad, Poor dad by Robert Kiyosaki. I'm going about 25% through on the first night and i find it very motivating to read this. Although i believe many would have heard the synopsis of this book, I shall briefly share in here what I've learn from reading it thus far.

There is this saying that is exactly similar to the teachings of Mentor, T Harv Eker. Robert (Kiyosaki) said:

"Money without financial Intelligence is money soon gone" True or true? TRUE!

I once shared here the reasons why this sentence is so true. For those who have trouble understanding this sentence. I hope this examples would help. Have you ever wondered why some superstars earning millions in their prime could be left bagging for money come retirement age or in their latter stage of their life?

Notice that i purposely chose celebrities because they are mostly the ones whom got rich from fame instantly without having basis of financial knowledge even though there are also some that are actually financially educated. Take a model for example, A young lady in her 20s could shot to fame and start earning millions for maybe the next 15 years until her late 30s if she's pretty enough. But that's not my point here.

My point here, as well as what Robert and T Harv are stressing is:

"It is not the amount of money you earn, but the amount of money you keep!"

Unfortunately, most people are not taught about financial Knowledge in school, and thus, not knowing how money works. Many believed that earning more money is the way out of troubles. But that i believe is that if an individual's mind is not tune to keep the huge amount income they've made, they're bound to lose it. Be it through spending on a high life, buying luxury cars, condos, you name it.

Here's a food for thought if you still disagree on what I've just said in the previous Paragraph.

Ask yourself, what is the first thing you think of if you today found that you had won a lucky draw prize of SGD$1 million dollars. What is the first thing on your mind?

You're welcome to email your answer to me, or post your answer on the tag board and I'm more than willing to tell you how you fare on your degree of financial knowledge.

Of course, If you wanna know more about how rich people thinks differently from the 'poor' people, I'm more than happy to lend you this book after i had finished reading it.

Moving on to i dare say, my area of interest and expertise, I've come to a few articles recently about some analyst saying that some stocks are 'dirt cheap' due to the recent market correction.

And here are my views on this, An objective mind would tell you to weight the pros and cons of the current situation of buying the 'cheap' stocks now. Firstly, the reason why analyst found some stocks that are undervalued now is due to the fact that these companies had strong foundation and base to survive the current credit crisis in Europe.

I received an email today on a recommendation of Noble group stock which company primarily deals with commodities. (E.g. Oil) In this email, It raised the target price of this stock to 'Outperform' due to the fact of the company's strong position in it's capabilities to capitalize the current situation (where oil prices are falling) to buy over some Oil field! It states that the company's balance sheet signifies a huge amount of capital set aside in aiding the day-to-day cash flow activities, thus, re-assuring their creditors that there will not be any cash flow problem in the the short-term.

So, the Micro factors are very favorable and it is now down to the Macro factors, I had stressed time and again that the market's volatility is here to stay unless there is signs of recovery in the credit crisis with the on-going measures being taken by the various Central banks.

I've also received an email from my broker today for the notification of the stock that there is going to be a buy-over for parkway's stock. The company generally invest in the health-care industry and they are the investors for the polyclinics group, Sing-health. I've attached the chart below:


In the email, it stated that the buy-over price for the shares is $3.78 per share. The market opened with a huge 'gap-up' from the previous trading results but is still poised for earnings if any trader could get the stock below the buy-over price. The fluctuation on this stock for the whole trading day was enormous and it isn't too difficult to know that people stopped buying once it hit $3.78 mark as displayed by the highest point of the blue bar.

Just last week, the stock was trading near a low of $3.00 and come monday, it have rebounded to $3.72. So, I would say that that's some neat profit if anybody have bought into this stock when it was hitting low last week.

Although I'm very envious of those whom had profited from this recent event, It is also noticeably to say that our trading methods discourage the entry of this stock especially of the big down bar just 3 trading days ago. Most of the t3b students would have left their positions but seeing this happens come monday may also be hard to take it too.

So, What i want to share here is that although in tradings, some 'crazy' events like this happens when people ditched their stocks and the next thing, the stock 'flies' and recovers. We SHOULD be reminded that having such thoughts of holding stocks when the stock broke the red bottom (trough) line as well as the big down bar come is still dangerous and not something that t3b students are recommended to do.

I would like to end today's post with a sentence from one of my t3b mentor, Derrick.

"You think that next time the stock break the trough line, you should not SELL since it'll rebound back anyway. You can get away from these 'mistake' 1 time, 2 time or maybe even 3 times but it just need one dig down bar (with no signs of recovery instantly) and your capital is being wiped off cleanly."