Introduction
I try
to trace back my path - how does it come about that today I am
such a serious investor and managing close to RM 10 million fund
for relatives, friends, associates, or anyone interested in
sound investment strategy.
Background
Being
trained as professional and being analytical, I was intrigued by
the theories of the Pattern and Trends on market behaviors more
than 20 years ago, especially technical analysis, Elliott Waves theory (Refer
an extract from “Elliott Wave Principle” by Frost and
Prechter) and others.
The theories touch on human behavior and the
use of mathematical models to explain, analyze and anticipate
human behavioral patterns. In earlier years, I remember, there being no
easily available data, nor internet, I took great pain to gather
old newspaper and extract stock market data into spreadsheet like
Multiplan, Superstar, Lotus 123, plot the graphs and examine the
evolving patterns.
The
learning and study were for self consumption. I invested in
books, software relating to the technical analysis, seminars,
subscribed to data service provider and downloaded all KLSE
share data every day, year after year. It is a hobby I enjoy
very much, like others who take serious lessons and great pain
to learn to play golf. I put in real money in accordance to the
theories, I won, I lost. That is part of learning, and the
learning continues ..
From
Stock to Unit Trusts
Some
years ago, I knew the limitation of applying the Pattern and
Trends theories on stock market, i.e. on individual counters /
companies. The reason is that the volume of each stock is small,
thus the stock is easily subjected to “manipulation”. The Pattern and
Trend theories work for large market, whereby it is truly the
mass behavior that is in action, whereby no individual syndicate
group could easily influence or steer the outcome, rather it
is the collective behavior of all types of players : investors,
economists, politicians, insiders, syndicates, men and women on
the street.
I was
then in Sarawak, and there were friends who introduced unit
trusts to me. I was convinced that unit trust / mutual funds are
units of large portfolio of many different counters, thus they
do represent larger participation of market players for Pattern
and Trends theories to be applied. But then the unit trust
agents could not satisfy my requirements : I need historical
data of the fund, to see the patterns and trends, and day to day
updated data, so that I could do my homework to determine “buy
at zone of low price, and sell at zone of high price.” Since I
was about to get transferred from Sarawak to Kuala Lumpur (eight years ago), I thought KL unit trust agents will be more
sophisticated and “educated” to give me what I wanted and to
take care of my investment.
I was
again disappointed, after interviewed close to a dozen of
different funds agents. (It is not appropriate for me to
elaborate here why typical unit trusts agents are not trained to
help clients to buy low and sell high, as fund mangers have
different objectives which could be different from the investors
like you and me.)
At that
time, a particular agent / manager noticed my seriousness as a
knowledge investor and offered / invited me to become a
consultant or agent. (A thought never occurred to me, as I was
quite happy then to learn and apply the theories for
self-consumption.). Then I thought : “why not! After all I
will continue to put in hard work in research, data collection
and analysis, I could share that with friends.”. More new ideas
spinned off from there : I could use the knowledge and skills to
build community, to help people to invest. I could develop a
group of serious learners of the theories to later tackle the
even larger market like in US, in later years when I retire
…… After all, my current profession is in the business of
human development : training, lecturing, facilitating, coaching
and mentoring.
Three
years of Unit Trust Monitoring
I
signed up. I passed the necessary examination. I qualified to be
a unit trust agent / consultant for more than three years now.
I
shared my knowledge with friends, many who had bought unit trust
earlier at high prices, had actually gave up, but convinced with
my approach. They signed up paperwork with me (some I have kept
for more than two years and I did not submit any of
the signed application for equity unit trust as the price is not yet within buy zone.
But I introduce them other investment instruments that give sure
and consistent positive return. (Refer
my e-newsletter for Community of Investment learners). I am
committed to my own Quality Policy – helping myself and my
friends to buy low and sell high. Unlike typical unit trust
agents, whose livelihood maybe dependent on the commissions, or
who have received different training and applied other
strategies to advice clients to buy high or low and keep for
long years, I do differently for my own circle of friends and
new friends. I have no intention to discredit other agents’
approach, just that they are using different strategies and rationale.
What is important to me is : find the best strategy to help
myself and friends to buy and sell within an period of time that
can bear the maximum positive return of investment, and never
accept "suffer loss first and hope for the future"
strategy!
I,
then, only use the unit trust as an vehicle for investment -
studying types of investment instruments to use, at what timing,
doing necessary switching or simply redeem all to part all money
in banks or EPF, if necessary..
Financial
Literacy and Investment Education
More
and more, I also realize that most people mindsets are
influenced for years, unknowingly with strategies that make them
investment losers, or with short term gain and long term loss.
And I emphasize more on education and financial literacy.
There
are articles or experiences I share with the community in this
website, some are free, some for subscribers, some for club
members of this QuaSyLatic.
There
is internet
tuition class I organize for serious learners on investment.
Many, who have paid the tuition fee do not have the will and
discipline to do the necessary homework, hence could not benefit
from the virtual class. And they prefer me just to help them
make money, not learning. Well, learning is a discipline and it
is not every body's cup of tea.
Then I
provide Investment
Mindset Coaching, again to friends who want to be serious
and disciplined investors.
I hope
you share my stories of my compelling belief of the theories and
enjoy their application – like scientists whose action and
behavior are guided by their belief and set of sound principles
and theories.
I
encourage you to be serious and humble learners, as I am still
learning. After long years of learning, I learn that it is not just the
techniques and equations of the mathematical model, the real
challenge is better understanding of our minds – our desire,
greed or anxiety, as that really influence our interpretation of
the theories. In another word : don’t try to outsmart the
market, but listen to your own voice. There is no enemy in the
market, the “enemy” is ourselves.”. We are not trading the
markets, but our "beliefs" of the markets.
As
at June 2006, market became volatile again. Hence much action is
required, switching, preserving capital or profit or cutting
small loss, etc,. I found I have to ask many of my investors to
close their accounts, as my system of trading and investing may
cause them nightmare. Many of them have difficulty to make decisions
when I present options for them. They want to make money, yet
they are very scared, as they lack knowledge how the markets
operate.
They
are other who have their own opinions on the market, and / or
being advised by other investment agents / advisors with
different views, and thus feel confused or anxious to find the
"truth" when such opinions differ from mine. It is
best that these investors find an approach that is congruent with
their own thinking and psychology and not invite too many
cooks. Again they are advised to stick to one system and not
create confusion and anxiety for themselves.
I
begin to focus on my own trading and investment, serve only
those investors who feel comfortable with my system of investment.
Happy
Learning.
QuaSyLaTic
13th
November, 2001. 17th June, 2006
Currently I devote more of my time and
energy in carrying educating people on investment literacy, as
per
QuaSyLaTic Investment System
Training"Give a man a fish, he finishes in a
day. Teach him to fish, he harvest the whole life long."
May. 2003 |
Extract
from “Elliott Wave Principle” by Frost and Prechter
Some two thousand years ago a man voiced a
few words whose truth has rung down through the centuries:
~~~~~~~~~~~~~~
One generation passeth away, and another generation
cometh, but the earth abideth forever. The sun also ariseth, and
the sun goeth down, and hasteth to his place where he arose. The
wind goeth toward the south, and turneth about unto the north;
it whirleth about continually, and the wind returneth again
according to his circuits. All the rivers run into the sea; yet
the sea is not full; unto the flow from whence the rivers come,
thither they return again.... The thing that hath been, it is
that which shall be; and that which is done is that which shall
be done; and there is no new thing under the sun.
~~~~~~~~~~~~~~
A corollary of this profundity is that human nature does
not change, nor does its pattern. Four men in our generation
have built their reputations in the economic field on this
truth: Arthur Pigou, Charles H. Dow, Bernard Baruch and Ralph
Nelson Elliott. ......
Reflecting on the
above ...
. "human nature does
not change, nor does its pattern.". We may have changed or
advanced greatly in technology and sophistication of the
economic systems, but do not be fooled by the outward material
manifestation. Human nature and behavior are still influenced by
greed and anxiety - when bulls come, we get excited with more
good news and we want to make real quick bucks (and we get
burnt), when bears linger on, we loose hope, we hear more bad
news and we retreat, later we regret not positioning well in the
market for arrival of the bulls ..... Such patterns and trends
repeat in different shapes and forms.
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