Money, money, money....

If you are interested to learn more about investing or trading in the stock market, I recommend a Bill Cara's blog. Currently, following his suggestion, I am reading Martin Pring's book entitled "Technical Analysis Explained". It is a thick book but I think it is worth getting one considering it is an investment. I cannot give a rating yet since I have only started on it. ;>

Anyway, while reading the comments in his commentary and community chat today, I came across an interesting video on "Money as a Debt". The running time is 47 minutes, so maybe you can order susu kacang to drink, sit comfortably and enjoy the show. Incidentally, this video comes from this website called socialistworld.net. And I found some interesting articles on current affairs related to Malaysia as well. You can read the article here. Seems like you cannot protest to the government about price rise.

Money, money, money....no money, cannot afford to buy things. Have you wondered how money is created? Not on the trees. Maybe wikipedia can tell you though the accuracy of the article is challenged by certain quarters.

How important is money to you? Money pays for your education and other bills. Yet money cannot buy happiness. You can read all the stories of wealthy people such as celebrities, dignitaries etc. who, despite their great wealth, still lead messed-up lives. Money attracts bad people like flies. When you have too much money, you become distrustful of people around you, even the closest ones like your family members. You always feel insecure and worried that people will take your money away or worse, take you away. Too little money also brings you a host of problems. Cannot pay for this and that. Not many friends maybe. Get sick but cannot pay medical bills. Always worried about no money.

Then again, I think it is easier to live with little money than too much money. If cannot afford to buy and pay, then buy less, and use less. Not many friends but the few friends that you have will be your best friends. You can trust their sincerity and will enjoy their warmth of friendship. Since you got no money, you tend to work harder and maybe move your butt around more. So maybe your health is better because of all the 'exercise' to your body. You tend not to eat 'expensive' food which may not be so healthy. The part about worrying about money - that is a mindset one has to correct. Remember the parable about the lilies and the birds in my earlier post?

So, I think stay in the middle path is better - not too rich and not too poor. What does ABBA say about money?

Hindsight is 20/20

If I had invested my savings in this stock, I would be a millionaire by now. It started the year at $13 and hit $130 before the market plunge; that means the stock grew by 1000% in less than a year, you kidding me?

Ah-ah, I will chicken out before I even start as a matter of fact. So even if I knew the stock existed, I probably won't bet my ass on it. That's what my friend told me today - hindsight is 20/20. Easy to comment on something that has already passed.

Anyway, 90% of investors get burnt in trading market....which is good news for the other 10%. 90% losers lose their money to the other 10% winners. Nice way to think about the odds, huh? So what are the things to consider when picking a company stock? Here's a probable list:

1. Fundamentals/financial statement
2. Competition
3. Research & Development - market leadership, example, iPhone
4. Management
5. Analyst/ratings
6. Seasonal/Cyclical factors - Cold weather, Airline, Hotel industry
7. Geopolitical - lawsuit, terrorist, supply

It is easy to forget your reasons for buying a stock especially when the market is so volatile and unpredictable, like now. One day they tell you some company good earnings results or speculate further rate cuts. Another day they tell you some financial institution is losing so much money from their exposure to the subprime loans. Well, some analysts are looking at Walmart's good quarterly result as something positive about consumer spending. Good consumer spending means economy is growing. However, it could mean that many people cannot afford to buy expensive stuff already and are now going to Walmart instead.

So, don't get emotional when buying or selling stocks. Yeah, when the market plunges like it did this week, many investors panicked and sold their stocks. You can think of it this way - buy a little at a time so that you don't burden yourself too much emotionally. It's like carrying your books around. You don't want to carry all the books together. Instead, you carry more more books as you go along. Similarly, sell a little at a time. You carry a bucket of water - you want to release the water a little at a time as you go along. You don't want to carry that heavy load everywhere you go. With that, let me state a few sensible rules about trading:

Rule #1: If you don't understand what you are buying, you are destined to fail

Rule #2: From the beginning, never ever use your emotions

Rule #3: If you don't know when to sell, don't buy

Rule #4: There is no such thing as low or high (the share price). What is low to you may be high to me vice versa

Anymore to add?