Tuesday, July 30, 2013

Risk Management

In investing, risk management is always an integral and important part of investing.  We know we must always have your stop-loss ready, even before you enter a trade.  You can have no profit target, but you cannot have no stop-loss.  That's how important a stop-loss is.  And more importantly, you must stick to your stop-loss.  When it is time to sell, you have to sell, no matter what!  There is no what if, there is no this time it is different, there is no let's wait and see.

However, it is always said than done.  What I witnessed today is stunt reminder to how we evaluate risk.
Look at this screen capture.

The shares of Mosaic Co, a fertilizer manufacturer, droped USD$11.00!  Actually it dropped as much as USD$12.00 at market open.  $12 over a $50 stock, that's more than 20% drop!  In such a scenario, how do you handle your risk?  How do you handle your stop-loss?  Do you sell immediately suffering a large loss?  Do you hold to understand what has caused the sharp fall?  What will you do?  As an investor, you must prepare yourself for such an unexpected event, have a contingency plan ready before you enter the trade.

Remember:  Rule #1 of Investing is NEVER lose money.  Rule #2 is never forget Rule #1.

Malaysia Ringgit at 15-Year Low against Singapore Dollar!

This is the most catching title of today!  Malaysia Ringgit has fallen to 15-year low against Singapore dollars at SGD1.00=RM2.548.  Ok, this is the bank rate for large amounts, probably at your neighborhood money changer, the rate should be roughly SGD1.00=RM2.50.

There were news reports saying many Singaporeans are taking this opportunity of low rate to go to Malaysia and spend there.

Is it really cheaper?  Ok, exchange rate aside, Malaysia is cheaper in many aspects.  For example, a 3-D movie ticket in JB costs you RM22.00?  That's less than SGD9.00.  While the same ticket in Singapore will cost you SGD14.00.  Well, Malaysia is in general cheaper, not due to the recent fall of its currency.

If you do your maths, from 2.45 to 2.50, the difference is only 5 cents.  If you spend RM1000, then you only have a RM50 savings from the fallen exchange rate alone.  This lower rate will only benefit people who need to change from SGD to RM in large amounts.  For people like you and me, who only visit Malaysia once in a long while, and spend less than RM200, the exchange benefit is total insignificant. 

Sunday, July 28, 2013

Mobile Photography

It has been, again, long time since I last blog about microstock.  To say the least, not doing well.  We saw one of the major players Shutterstock's stock price went up from USD20.00 plus to USD60.00, making its founder Jon a billionaire, but as an ordinary contributor, I am not doing well.  Number of downloads has one direction to go, that's down.

Then I bumped into this announcement by one of microstock's best guy, Yuri' announcement of him pulling all his images out from all other microstock agencies and go exclusive with Istock.  In addition, he pointed to a new thread to microstock - mobile photography.

Almost every mobile phone in this world has a camera attached to it.  The image quality is getting better and better by each new generation of mobile phones.

Now there is even a microstock-like website - https://www.scoopshot.com/, where you can create a photo request, and people can respond to your photo request almost instantly.  Take a look at the website.  The photos are not picture perfect, but don't they look like the quality of images when microstock first started?

The Wolverine

Another installment of MARVEL heroes, another episode of the X-Men series.  This time, Wolverine goes to Tokyo, Japan.  He was invited there to say Good-bye to a Japanese army officer turned entrepreneur Mr Yashida, who he saved in Nagasaki.

We have quite a bit of twists and turns in terms of the plot, which is good, but overall the movie is a bit draggy.  More than once I would like to click the fast-forward button, if one were there.

Actors and actresses are mostly competent in their acting, except Rila Fukushima as Yukio.  First I don't know why they chose such an actress with that kind of look, especially her eyes.  The acting is more dramatic than all the others, very unnatural.

Overall rating:  3/5

Sunday, July 21, 2013

Outlook for DJIA, DJT, SSE & STI

It has been quite a while since my last blog post, now it is time to brush up and do my homework.

Stock Indice around the world has seen some good days recently, especially Dow Jones Industry, S&P and the phenomenal Nikkei.  In contrast, the all mighty Shanghai and Singapore stock markets are nothing but a bit lackluster.

What will happen next?  Obviously I won't know for sure, but let me look into my crystal ball and have my opinion.  Are they right or wrong?  Nobody knows, only when future becomes reality then we will be able to tell, so read my opinions at your own risk.

Dow Jones Instustry Average

We can see very clearly here DJIA is in an uptrend.  The slope of the uptrend actually has increased recently, from a gentle 30 degrees slope to a more steep close to 45 degrees slope.

Looking at the Fibonacci levels, we can expect DJIA to have another 20-30% upside potential, if not more.  US stocks in general are not expensive at this moment, with reasonable P/E levels.  Although we are again at an all time high of DJIA, but we are not seeing P/E at ridiculously high levels.

Dow Jones Transport

As a leading indicator of DJIA, DJT will give a glimpse into the future.  Here DJT is in an uptrend too, but the uptrend is not very strong.  The slope has been more gentle, and there is compression of the GMMA.  This signals we may have some head winds in the DJIA in the coming months, but the uptrend should still hold, but at a more gentle pace.


Shanghai is in a downtrend, with 1960 as its current support.  If this support level doesn't hold, we can expect to go down to 1837/1760 as its next support levels.

In the short term, I don't have a positive view on Chinese stocks.  Wealth is too concentrated in too few people.  The general public are still not very rich, at least not as rich as some foreign media depict them to be.  The reason some Chinese appear to be rich is because they do the same as some Wall Street bankers do.  When you go out of the big cities and visit their less developed areas, people are still very poor.


STI was in a nice uptrend, until recently.  Now it has fallen below its uptrend line.  Next, I will expect it to either go sideways or down.  Singapore alone is still ok, but its strong link with China will see its stock market to be dragged down by the poor performing SSE.

That's all for my crystal ball for today.