Investment Strategies 02 (Jun 10 - Jun 13)

[Chinaman]

Excellent TOL boss, clap clap clap..cos i been thinking this way also.
my opinion in 'blue'

TOL:-
Therefore, I need to do more of the following:-
1) Have a longer time frame ie. Position Trading rather than Scalping ( long term investment, high chance of winning )
2) Contrarian rather than Momentum but only when the money is sitting in the corner (when other fear u greedy, still the best strategy)
3) Staying within my Circle of Competence (Dunno dun touch, invest in yr cup of tea or put money where yr mouth is...to me ppty is my hobby)
4) Avoiding trades that are too lop-sided. If it's too good to be true, it is. ( control yr emotion, avoid jumping onto the wagon )
5) If you feel that it's cheap, just buy; dont nickel and dime. (Yup, recently, pick up singtel, sgx and uob )
6) If it's too expensive, sell and leave some for the next guy. ( recently sold chinamingzhong, suntec reit, UE)
7) Filter out the Noise; Everyone is an "expert" nowadays (Stay calm, talk easier than done, sometimes i weak in this area..hehe)

[kennynah]

boss W : good writeup thanks for sharing..

TOL:-

Have you observed your investment "style" over the past few crisis eg. Subprime, European Contagion, Middle East Crisis, Japanese Earthquake etc. ?

Weren't you trying to get as much info as possible about the event ? And then trying to make an "educated guess" on where things are heading ?

*****
*****

Therefore, I need to do more of the following:-
1) Have a longer time frame ie. Position Trading rather than Scalping
2) Contrarian rather than Momentum but only when the money is sitting in the corner
3) Staying within my Circle of Competence
4) Avoiding trades that are too lop-sided. If it's too good to be true, it is.
5) If you feel that it's cheap, just buy; dont nickel and dime.
6) If it's too expensive, sell and leave some for the next guy.
7) Filter out the Noise; Everyone is an "expert" nowadays

[winston]

Not too sure I agree with his recommendation. If interest spikes upwards, the short term treasury would be hit. And if there's a crash, people would also be selling their gold to pay for the losses in the other assets.

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If You Don't – or Won't – Short Stocks, Read This
By Porter Stansberry with Braden Copeland
Thursday, March 24, 2011


About a year ago, I gave my subscribers radical advice on what to do with their money.

The safest trades I could find at the time were short sales. (That included two hard drive makers, which dropped 32% and 49% by the time we closed the trades. We made 55% shorting Barnes & Noble. And our latest short, muni bond insurer Assured Guarantee, is up 25% in about two months.)

But I know a lot of my readers aren't interested in shorting stocks or just aren't willing to learn how. I think that's foolish. Even so, I gave them an alternative…

The safest thing to do right now is to split your savings between short-term Treasurys and gold.

That's the equivalent of a "cash" position, as the gold will hedge your dollar exposure and the short-term Treasurys will mitigate the volatility of gold. You can do this through exchange-traded funds (ETFs).

The Barclay's iShares 1-3 Year Treasury ETF is an easy way to own short-term Treasurys. The symbol is SHY. And GLD is the most liquid gold ETF…

Understand, this totally safe approach will not generate much income. SHY is paying a 1.6% annual coupon, and GLD pays nothing at all. You'll be earning less than 1% on your assets – but they will be safe.

Even though stocks performed well last year, if you followed our advice to go with cash and gold, you would have seen a double-digit gain in your portfolio.

Gold is up about 30% since last February. Assuming a 50% allocation, your total return would have been around 15%. That's essentially the same return as the S&P 500. But you could have gotten it without any exposure whatsoever to the stock market.

And I still think it's good advice.

Given my fears about an imminent devaluation of the U.S. dollar, it may seem odd I'm telling readers to hold the "cash" portion of their portfolio in SHY. But that's why I also recommended the matching 50% allocation to gold.

If you're not going to short stocks, you should take a "neutral," liquid position. That's what a 50% gold/50% cash portfolio will do for you. It will allow you to wait out a crisis without losing money to inflation or devaluation. The gold will hedge your exposure to the U.S. dollar, and the cash will provide some protection against the volatility of a soaring gold market.

I know this advice will sound pretty radical for new subscribers used to Wall Street's "buy-and-hold" mantra. I strongly suggest you disabuse yourself of the notion that the only way to make money is to always be invested in stocks. It just ain't so.

Still, most of my subscribers won't sell stocks short. No matter how much success we have shorting stocks nor how easy it is to do, most people just won't do it. Like I said, that just plain foolish. And I've begged my subscribers to reconsider over many, many years.

But if you're one of those people who will not, under any circumstances, sell short, I advise you to move 50% of your assets into gold bullion and 50% into cash or cash-like vehicles.


Source: Daily Wealth

[winston]

TOL:-

You have only 24 hours a day to invest.

So where are you spending your time and energy ?

Are you spending your time trying to get the best deal for your chequing account, the best commission for your trading account, the best interest rate for your foreign currency OR are you spending your time trying to make 20% or better yet, looking for that Multi-Bagger ?

[winston]

“Sometimes it’s not what you own, but what you don’t own that makes you successful.”

— Donald G. Smith

[winston]

Beat the Stock Market by Following Five Simple Rules By Keith Fitz-Gerald


Those five rules are:
1. Set goals and monitor your progress.
2. Concentrate your assets.
3. Structure your portfolio and rebalance at least yearly.
4. Use trailing stops to limit risk.
5. Don't chase the train if it's already left the station.


http://moneymorning.com/2011/03/31/beat ... ple-rules/

[winston]

"I Wanted a Big Boat and Money Wasn't an Issue" By Jeff Clark

It was like the start of a bad joke...

Four men were huddled around an outside shower at the marina. One man said to the other, "Yours is really quite small."

"Well," the other man replied, "mine may not be the biggest one here, but it's certainly bigger than yours."

They were talking about their yachts.

I'm on a secluded, tropical island in the British Virgin Islands this week for spring break. My family is just one of 20 or so families hiding out on this particular piece of paradise.

We got here the hard way... three airplanes, a water taxi, and a burro. Everybody else, it seems, yachted in.

The marina is full of magnificent boats, ranging in size from large, to extra large, to "you can land a helicopter on this thing" large. Nearly all the owners are in their mid 30s to early 40s. They're all rolling in dough. And so far, pretty much everyone I've met is in the investment business – hedge funds and banking are well-represented.

"That's one gorgeous boat," I said, striking up a conversation with one of the only island guests who looked slightly older than me. "Is it yours?"

"It is for the next two weeks," he replied. "This is my last trip aboard the Bacchus I. After this vacation, she'll be in the hands of some young-money guy from New York."

He then went on to tell me the history of his boat... how he bought it in 2001 with profits he made as an investment banker during the Internet heyday.

"It was a stupid purchase," he said. "I paid top-dollar for it at the top of the market – the consequence of making too much money at too young an age. But I didn't care. I wanted a big boat and money wasn't an issue.

"I regretted it almost immediately," he continued. "My business slowed down, but the payment slips kept coming in.

"Then in 2007, this young hedge fund manager was looking to trade up. He offered me top-dollar for the Bacchus I. But I turned him down. Once again, business dropped off and I regretted holding on to the old girl."

"But you're selling her now?" I asked.

"Oh yeah," he replied. "I love this boat, and we've had some terrific adventures. But if I've learned anything in the past decade, it's that when young finance money is looking to buy, us older guys should be willing to sell."

It's a smart strategy for dealing with boats. It's also a pretty good strategy for dealing with stocks.

When the young pups on Wall Street are able to keep up with the spending habits of the old dogs, it's a caution sign that money is flowing a little too easy, and a correction is in order.

We saw it in 2001 following the internet IPO craze. We saw it in 2007 with the flood of money into hedge funds. And we're seeing it now with banking – where big-money bonuses are going to those who can best manipulate the Fed's zero interest rate policy.

Borrow money from the Fed at zero percent. Loan it back to the U.S. Treasury for 10 years and earn 3%. Use up to 30 times leverage to juice the returns even more. Then cash a giant bonus check and buy a yacht.

It's too easy.

And as any old sailor will tell you... whenever the seas are too calm, you just know a good storm is on the way.

That doesn't mean the stock market can't work even higher over the next few months. Indeed, it probably will. Keep an eye out for clouds, though. The sailing is bound to get rough.

My new friend smiled and pointed at the name on his yacht... "Bacchus" – the Roman god of wine and intoxication. "Says a lot about the times we're in, don't you think?"

http://www.growthstockwire.com/2685/-I- ... -an-Issue-

[Chinaman]

This 1 is a reminder for me.... control my emotion
1. Don't chase the train if it's already left the station.
2. Dun jump onto a charging up wagon.
3. Dun forget to harvest
4. Patient is gold

[winston]

Are You A Smart Money Investor? By Jeff Clark

1. Smart money buys when others are fearful.
2. Smart money sells when others are greedy.
3. Smart money sees trends others don’t.
4. Smart money ignores the headlines.
5. Smart money plays the big trend, not the gyrations.
6. Smart money doesn’t count its money before it’s made.
7. Smart money ignores official government reports and relies on its own research

With that description of smart money, the next logical question to ask is, what are they looking at now?

Therefore, I think they’re asking themselves questions like these:

Is real inflation likely to rise or fall over the next few years?
Is it more probable that interest rates will remain depressed or move higher?
Is the U.S. dollar likely to be stronger or weaker in the next few years?
What is the best way to hedge against egregious debt and runaway government spending?
Which assets are most likely to make money over the next few years? Which should be avoided?
Is it time to invest in real estate again, or will it take the rest of my life to see big profits?
Will the global economy be on solid footing during the next few years?
Is oil – or something else – the best energy investment?
Are gold and silver in a bubble, or will they push higher in the coming years?

http://www.caseyresearch.com/editorial. ... 404ED0411A

[winston]

You Don't Need to Work Hard or Be Smart to Make Money By Brian Hunt, Stansberry & Associates
Saturday, May 28, 2011

Can you really make money by acting "dumb" in the market?

Ask a thousand financial advisors this question, and a thousand will tell you it's impossible. They'll say you need to study the fundamentals. They'll say you need to know where the economy is going… They'll say you need to pass a bunch of tests like they did to make money in the market.

As Steve covered in yesterday's essay, it's easy to get caught up with things that are "supposed" to matter to your finances. You're "supposed" to be concerned with unemployment numbers and GDP estimates. After all, that's what they talk about on CNBC.

But decades of experience and huge amounts of computer testing have proven to us that simply focusing on what's happening with the "big trend" is what matters when it comes to making money in the market. By simply sticking with trends – by acting "dumb," as your financial advisor sees it – you can actually make a fortune in any asset.

For example, folks in the media obsess over every little daily move in the gold price. A $50-per-ounce decline in gold merits a 10-minute news segment nowadays. Investors like Warren Buffett will tell anyone who will listen that owning gold is a dumb idea. After all, it doesn't pay any interest. You're just sitting on a lump of metal.

But if you simply "act dumb" and look at gold's long-term trend, you'll see there's no need to get worked up over a $50 move… or what the price of gold "should" be. Gold was at $300 per ounce in 2002. It has gradually climbed to $1,500 per ounce today. This obvious idea is the most important thing when it comes to making money when trading.

It's the same story with gold's cheaper cousin, silver. Silver was $5 per ounce back in 2003. It's now $37 per ounce. It's easy to get worked up over the big moves we've seen in the past few months… or to get "spooked" out of your entire silver position.

But when you step back and look at the big picture, you see silver is in a huge, long-term uptrend. Silver could actually fall to $25 per ounce (a big 32% fall from here) and still be in a bull market.

Yes, it's important to know the decline of paper currencies against gold and silver is what's driving this uptrend. But ultimately, making money here comes down to simply sticking with the trend.

There are always going to be big moves in any asset. There are always fundamentals to keep in mind. But when sizing up investment choices, make sure to take a deep breath and consider the "big trends." Short-term declines and "news noise" will always get you worried. It's just human nature. Sticking with big trends is what makes you money.

Following this advice amounts to "acting dumb" in the eyes of a mainstream financial advisor. But it's a simple idea we've proven works over and over.

Nobody ever knows exactly what will happen to stocks, the economy, the upcoming election, or interest rates. But we DO KNOW trends tend to last far longer than anyone expects. Right now, the trends in gold and silver are UP. Trade accordingly…

Source: Daily Wealth