Forex News Trading

One of the most popular ways traders determine entry and exit points in the forex market consists of trading off of major economic news events. The USD forex news generally gives the trader the most possibilities for profitable trades.

As an example, a trader expecting an improved GDP number for the Australian economy, might buy AUD/USD before the release of the economic data. Once the data is released, the exchange rate AUD USD will generally rise sharply if the number comes out better than expected.

The experienced trader will often take profits immediately upon the release of the data, taking profits regardless of their longer term opinion, and reestablish a position once the news is out.

Major News Items Which Influence the Forex Market

Of course, the online forex news is full of trading opportunities. Nevertheless, news trading relies on timely releases and reacting quickly to buying and selling opportunities.

Basically, realtime forex news is more consistent with a news trader’s objectives in initiating and timing entry and exit points when trading. A news trader is generally very selective in the type of economic releases or news items they choose upon which to make transactions.

Some of the more popular economic releases that traders choose for making forex transactions include:

• GDP – the Gross Domestic Product of any nation is of utmost importance to the value of their currency. The GDP represents the sum total of all products and services produced in the country and have a profound effect on the exchange rate of their currency in relation to the currencies of other nation’s currencies. The release of the GDP number of any major nation — especially the United States — presents trading opportunities for many seasoned professionals that keep a keen eye on the USD forex news. 

• Interest Rates – the value of a nation’s currency versus other currencies is strongly influenced by their central bank’s monetary policy. Interest rates exert enormous influence in the value of the currency as higher rates attract foreign investment, while lower rates send investors holding large amounts of money looking for a higher return elsewhere. A Euro currency forecast would not be complete without a careful analysis of the ECB’s monetary policy towards interest rate. 

• Employment Numbers – a nation’s level of employment gives a clear indication on the health of their economy. If a large sector of the population is employed, then the nation’s productivity increases raising the GDP of that nation. Many forex traders use employment numbers to determine whether to hold or short certain currencies. 

• Inflation Numbers – numbers such as the Consumer and Producer Price Indexes give traders an idea of how the central bank of that nation will implement monetary policy. Generally, high inflation is dealt with by central banks by tightening credit, while low inflation is commonly adjusted by a looser interest rate policy.

A seasoned forex trader will take into consideration all of the above fundamental indicators when making a USD Euro forecast for example. By the same token, many day and short term directional traders will take the opportunity of initiating trades based on the realtime forex news releases of these and many other fundamental indicators. 

For More Information Please Visit: forexguidehowto.blogspot.com/

Forex Market Research Techniques

Forex traders generally use the Online Forex News, as well as the realtime forex news to determine which currency pairs would be the most probable to yield a worthwhile profit before initiating trades in the forex market.  

As an example, some currency pairs may be more challenging to trade than others and may not be as suitable for less experienced traders, such as AUD/USD. The exchange rate AUD USD has recently traded with increased volatility due to rising commodity prices, such as the price of crude oil and gold.

In addition to volatility, other considerations that traders must consider consist of how deep the markets in the currency pair traded, and how wide the bid/offer spreads are. Also, how much the currency pair is subject to sharp exchange rate movements upon the release of key economic data.

A review of the USD forex news can give a trader a sense of what currency pairs may be the best to trade for their level of experience and risk tolerance. For example, EUR/USD generally is one of the most liquid forex currency pairs with long sweeping moves and in many cases very narrow bid/offer spreads.

Fundamental and Technical Market Research

After the trader has determined which currency pairs offer the best opportunities for profitable trades, they can then begin doing research to determine entry and exit points for their trades. Most successful traders employ a combination of both fundamental and technical analysis in their trading strategies.

The way traders sometimes combine these two techniques, is to use technical analysis for timing entry and take profit points by using price graphs and other short term technical indicators. Conversely, by using fundamental analysis, traders can more accurately determine mid term and long term trends for exchange rate movements.

Making a Euro Currency Forecast

As an example, a trader might make a long term USD Euro forecast based on fundamentals such as historical interest rate differentials, European Central Bank monetary policy and current events.

Recently, some European nations such as Greece and Ireland have received bailouts from the ECB and the IMF to shore up their beleaguered economies. These developments have weighed on the EUR/USD exchange rate.

Nevertheless, according to the daily forex news, inflation concerns due to increasing productivity in nations such as Germany and France have prompted the ECB to raise interest rates, which would be beneficial for the value of the Euro against the U.S. Dollar and other currencies.

Using Technical Analysis for Entering and Exiting Trades

Once the trader has decided on a mid to long term direction, they often use technical indicators such as oscillators to determine optimum entry and exit points in the currency pair’s price action.

An oscillator such as the Relative Strength Indicator, will give the trader an idea when the currency pair is either overbought or oversold, giving the trader a good indication of when to initiate or liquidate a trade.

Incorporating both technical and fundamental analysis to a trading plan seems to be the most effective way used by successful traders for their Trading Strategies. A good foundation in both forms of analysis will yield the best results.

Bullish and Bearish Indicators for Trading Forex

 Fundamental and Technical Indicators

Generally, seasoned traders cannot rely solely on the fundamental online forex news to determine entry and exit points for forex trading positions, but use a combination of technical indicators for optimum buying and selling opportunities in trading.

In many cases, more than one indicator is used, — whether fundamental or technical — with another indicator or group of indicators confirming each other to ensure the likelihood of a profitable trade.

Bullish Indicators

As an example, a Euro currency forecast or a USD Euro forecast might include the following technical indicators to provide the trader with optimum trading opportunities on the upside:

• Upside breakout of trend lines – Often, a trend line with a downward slant showing declining highs, which breaks out to the upside breaking through key resistance, indicates a good possibility of a trend reversal with a continuing bullish move.

• Divergences in the RSI and MACD – The Relative Strength Index or RSI and the Moving Average Convergence Divergence or MACD indicator make up two key technical indicators which signal a change to the upside in the overall trend when showing regular divergences versus the price after a period of overall downward price action. On the other hand, bullish hidden divergence indicates that a continuation of an upwards trend may soon resume.

• Strong nearby levels of support in the price chart – if the price chart shows a long sideways trend with strong levels of buying at certain prices, especially when near to the current price level, these indicate a likely move to the upside.


Individually interpreted, these indicators could give false positive results. Nevertheless, when taken in combination, they often provide a more solid basis for establishing a long position.

Bearish Indicators

Bearish indicators mirror bullish indicators and will often also be included in a USD Euro forecast or in a Euro currency forecast. Technical indicators generally negate fundamental events in the online forex news, with the trading maxim “price discounts all”.

• Trend lines which break out to the downside – generally, when a trend line begins to slope downwards and breaks key support levels, gives an indication that the bearish move will continue.

• Bearish divergences in the RSI and MACD – The Relative Strength Index or RSI and the Moving Average Convergence Divergence or MACD indicator make up two key technical indicators which signal a change to the downside in the overall trend when showing regular divergences versus the price after a period of steady upside movement. On the other hand, bearish hidden divergence indicates that a continuation of a downwards trend may soon resume.

• Strong nearby levels of resistance in the price chart – if the price chart shows a long sideways trend with strong levels of selling at certain prices, especially when near the current price level, these indicate a likely move to the downside.

As with the bullish indicators, when individually interpreted the bearish indicators could give false positive results and are much more effective when interpreted in combination. Although technical indicators do not rely on the online forex news, many traders use the realtime forex news to initiate and exit positions. Visit here: forexguidehowto.blogspot.com/

While keeping an eye on realtime forex news may provide traders with insight to short term exchange rate moves, technical traders rely on other key indicators to establish long and short positions in the forex market.

Easy Retirement

This is an extract of what I read in today's newspaper. More and more people start to carry this type of alternative concepts about retirement especially in this 21st century. You can't say its wrong. As a matter of fact, its a rather SMART way to go. But lie within is a huge hidden risk.

The titles in above newspaper read:

1. you don't need much during retirement, coz your liability has reduced
2. living frugal is not hard, mentality is the key
3. you don't need to prepare to retire ?

By the time you retire, you probably don't have any more house loan or car loan to serve. Your body does not allow you to earn that much anymore. Chicks don't get attracted even if you sit in a Porsche. The bigger house you live in the harder it is for you to take care of it. In short, many people plan to 'maintain' their CURRENT lifestyle when they play for their retirement. The fact is you WILL NOT live the SAME lifestyle even if you are financially able to.

Basically the idea of save or accumulate enough so that you can STOP WORKING one day is solely base on the assumption you don't really LIKE what you are doing. You are just doing it for the sake of money or future retirement. Hence when you no longer need that money, you will want to stop working. But what if you REALLY LIKE what you do for a living ? Would you stop even if you have enough money for the rest of your life ? Be it Bill Gates, Warren Buffet or that happy old man by the street ... the answer is obvious. You will keep on doing what you like even if you retire or don't HAVE TO DO IT.

And if you have been doing something that you like for so long, the chance is that you don't really need to worry about living expenses since a long time ago. Incoming cash flow will persist and hence you don't really need to worry or prepare for a retirement. Coz you don't want to retire !!

What do you think about this easy retirement methods ? In contrast to the fundamental of save, invest and accumulate until you have enough to fight against the inflation etc. ?

Which do you prefer ?

21st century Economy Politic Quadrant

The Economy-Political Quadrant may seems like telling where to keep or invest your money despite good or bad time.

It indeed works very well during 20th century. Unfortunately comes to 21st century, not only has the year changed, personal finance arena has changed drastically as well.

Gold has been speculated so much that it MAY no longer be the standard of money.

There used to be only 'property' in the city. Now there are satellite towns, suburbs ... agriculture lands and even dust bins ( recycle ) have become valuable estates too. While property remains the right category to invest into whenever economy is booming, but predict the right future seems like tougher than buying lottery.

Government bonds used to be de-Facto action when a country is stable. But in today's world, a country is as smart as a taicon's finance. One day they are the LARGEST, the next day they are GONE.

Stock market used to be the back bone of a country's economy. However, the market of derivatives has become so HUGE that the REAL and PHYSICAL is NO LONGER more real than VIRTUAL

So in 21st century, the element of Stock-Property-Funds-Gold is really questionable. However, one fundamental that doesn't change is that

you will have to identify what to do at what time that is BEST for YOU !

Hope you will find your own very best Economy-Political Quadrant soon !

Should I buy that nice little dress/gadget ?

You may think the $1 spent is the same $1 earned. Its really NOT ! One of the fundamental flaws human cannot control their own spending habits is because they DO NOT UNDERSTAND the value of money at the first place. The $1 spent could be equivalent to as much as $7-$10 earning !!

For example if you earn $4,000 a month and you manage to save $400 every month. By year end you would have saved aside $4,800. This money is intended to be put aside earning interest as part of the MeM (Money earns Money) mechanism. So its not just $4,800. It will be more than that as time goes. The longer it is kept there the more powerful compounding factor is working for you.

Says you take out $1,000 from this saving at year end for an unplanned luxury expense. Its not just $1,000 you have used. You have actually dug a hole in your saving - a 21% hole. If you saving return is 3%, it will take more than 7 years for this hole to be refilled back to its original amount. So you have practically used up your future 7 years on this saving for this unplanned expense.

On the other hand, if it took you 2.5 months to save that $1,000; Out of your equivalent earning of $10,000. For every $1 you use from your saving, you will have to earn $10 to get that $1 back. So when you use that $1,000 its not just $1,000 you have to replace but actually a $10,000 worth of your earning.

Does this particular unplanned luxury expense really worth your future 7 years and/or your $10,000 earning power ?

They money you get in ( earn ) does not necessary carry the same meaning to you as the ones you get out ( use ). Especially when there are so many deductions and taxes in this modern world.

It is best to put aside another $100 saving every month for 'unplanned luxury expense' category. That way if you really have to use it, you will still have $200 left ( after a year of saving ). More if somehow you are able to put that aside and go for a better future good.

If you have no such ability for this new saving category, try to increase your income or else settle with NOT use beyond your means.

At the end, this is the ONLY concept that determine if a person is an investor or a consumer all his life. Everyone want to buy Porsche and LV bags, some did it diligently, some others cost in their lives.

Book Review : Top Money Tips - by KC Lau

One of the biggest achievements of this blog is to receive an invitation from KC Lau to review his book released late last year. The sense of being noticed is quite ... rewarding indeed.

I highlighted before the most interesting point in the book is How To Get Your First Car For FREE ! Most people like it a lot but soon there are also a few other not so positive comments about this particular tip. Which is rather important actually because it brings out TWO very important fundamental in personal finance planning - "its all about what you think" and "Personal Finance is boring".

If you think a tip is interesting, then most probably it will be useful to you.

If you think its a lousy tip, then most probably it will bring you nothing.

You can buy the book in most national book stores like Borders, MPH, Popular etc. I had documented my first hand experience with MPH. Very soon, the books were sold out and went into subsequent prints.

Most reviewers have already listed down the content outline of the book so I wouldn't repeat that.

What I would discuss is Why do you want to buy physical book ? Especially when there are alternatives like eBook and Blog on Internet for FREE ? Other than reasons of branding and that you are a fan of KC Lau then ofcourse you would buy his products to know him and his ideas better. There is still a very important factor that we buy books because of the information in it. Which may raise doubts in value for money comparing to other FREE sources.

1. Physical books are tax deductable up to MYR 1,000. Sometimes after I read a book, I resell it out getting back half the price. So I am claiming $2X from my income tax while actually paying out $X only. ( Sometimes I resell at higher price and earn a profit there too )
2. I like the convinience that I can pick up any book when I go to toilet, waiting for lover to finish shopping, queueing in hospital etc. By the time my smallest NetBook boot up and connect to Internet, I already finished reading half chapter in the book. When my turn is up, I can just flip the book and go immediately. Even if I put my notebook to standby mode for that extra split seconds only, the nurse, lover usually will change their mood from normal to complaint mode - "we thought you are waiting for us, not us waiting for you !"
3. Be it with Google or Yahoo, sometimes I find the info I want, sometimes I don't. Sometimes the info I found was there but quickly disappear the next time I look for it. Sometimes I remembered putting a bookmark but just couldn't seem to find it. Very often I am directed to pay for something anyway. With a book, I always know where to find the info once I get in touch with it, and I can start stop at any part of the book the way I like it. Its always there when I want to refer it ...

So fundamentally

1. The information on physical book is usually different than those available FREEly on Internet. Quite frequently information printed on book is more reliable too, proof read by proffesionals.
2. Even if the information is the same, book better organizes the info in a pre-determine way. The format could be better or worse but its consistency on where info is, ease us looking for it now and later.

Now back to the book "Top Money Tips for zzzzns".

What first attracted me is the reflection of this book on the author. Honestly till today I do not know who KC Lau is and has no personal relationship whatsover. But I can sense that the intention of the author of this book is PURELY wanting to share all he knows. Suddenly what he knows and what the book says become less important. It is very hard to find a person who are willingly share all he knows in personal finance world today, not to mention for the good for the community. ( rather than like what most of us do - keeps complaining only ).

I waited long enough to write this review just to make sure what I wanted to share was not already shared by other reviewers. And I hope some of you who has read other reviews can comment on this.

Frequestly after I read a book, I do not remember what the book says. But I can firmly share what I get out of it.

1. I pay more attention to car insurance, saving there could be significant enough as time goes
2. I make more money from Internet, perhaps thru some of the links the book suggested ...
3. I came up with the idea to resell the books I have read and no longer need to keep
4. I reminded myself not to be too self center in finance matters as many other approaches are possible too
5. ...

Would I buy this book ? Well yes and for the first reason I mentioned as my appreciation to someone who is so dedicated to share in personal finance matters.

Should you buy this book ? Well, if you agree with my reasoning why buying physical book is still a good thing then yes you should.

Would I recommend this book ? Now that is a question required scale answer. From 0 to 10 where 0 is Strongly NO and 10 is Strongly recommended, I would give this book a 7 - also a heavenly number :)

Where does the other 3 go ? Hmm ...

1. The writting skill can be more balance. Some chapters are exceptionally shorter ...
2. A small part of the book has too many numbers even though that was meant to be a quick mental exercise.
3. I personally could not fully agree with certain part of insurance concepts ...

It is also from the 1) and 2) that I got the impression on Author's sincerity. As for number 3), most of my insurance concepts may not be suitable for today's general public yet. Especially if you are not that well verse in insurance industry yet, then this book's explaination on insurance is much more suitable for you. You will have to understand the basics rule of thumbs first and then only come to me for some potential myth or paradox and fun discussion. Else that may lead to more damage and destruction.

Lastly, for people who read this review until here. You must be a very patient person. If you haven't bought this book yet and feel like getting one now, then I will add another reason to it both to thanks for your patient and see if my review is effective or not. For the next 5 books people buy through this article, they can get this book at MYR 21 only !! Instead of the normal price at MYR 29.90

Click here to buy "Top Money Tips For zzzzn" for RM 21 ONLY !!

Thank you to those who have taken above offers, surprisingly quite a few buyers actually didn't even realize the existence of malpf blog at all.  Seems like the 'cheap' price is more an attractive point than the review writen here.

I hope this does not violate any regulation ...

Risk revisit

The toughest concept for this blog to get across is the preception of Risk.

This blog preaches that "High Return High Risk" is NOT the entire truth but comes with a twisted myth.  Basically that statement only apply to those who don't know much.  The more you know, the less risk it is.  The correct way of intrepreting Risk will affect another general miss-conception - diversitifaction - "Don't Put your egg in ONE basket".  Putting your eggs all you want but you will have to start with ONE and that better be the best one.

These intrepretations offer explaination to today's situation why so many investors couldn't make it even if they Diversify and believe High Return comes with High Risk.

This is not a new concept actually,

"Risk comes from not knowing what you're doing."  ~ Warren Buffett

"Volatility is NOT Risk." ~ David Dreman

This is not a debate on what the real meaning of Risk is.  Its a matter of how we should look at it so that we can do something about it.

If you believe in High Return High Risk, then when you enter into a potentially high return investment vehicle, you naturally accept that comes with high risk.  This psychological preparation puts you into a 'its ok to lose' state.  More than often people in this state will sit, wait and pray the worse wouldn't happen.  ( which you have just violated the 2 most fundamental flaw in NLP )

On the contrary if you believe Risk is something you don't know, then naturally you will try to find out more about this investment vehicle.  You may eventually pick the right vehicle or you find out how to deal with some of its limitation.  Either way, it puts you in a better position than the earlier scenario.

One of the greatest example of all time is that someone didn't think gambling is all that risky, as a result the whole school of technical analysis was introduced and is one of the hottest study one can get nowadays.

Gambling is risky, yes.  Avoiding it is temporary safe, yes.  By not knowing more about it, you risk getting into it without knowing it.  By thinking risk is when you don't know, you can learn why gambling is risky.  As a result you may come up with some new principals in life about gambling.  If you found out how to deal with this risk, then you would also have a set of solution dealing with 'this kind of risk'.  You may still NOT WANT TO get involve and this time, you can be very sure and understand why you do or do not do something.

"If you risk nothing, then you risk everything." ~ Geena Davis 

George Soros - good guy or bad ?

who the hell are you to comment about me ?

There are a few questions why George Soros is not in my radar in this blog.

Well, because it isn't time yet.  But as usual, since you ask, I will jump the queue and talk a bit about him.

There will be 2 topics in this blog that will lead to Soros.

1.  The Art of investment.

2.  Investment is a game for the Rich.

Unlike Fundamental Assessment like Buffets and Technical Analysis by some other successful investors, Soros is one of those few who do not fall exactly into either of that 2 categories.

As mentioned before, our today's money system is by large at fault but no one really can fix it.  Fundamentalists basically try to filter out the noises by sticking to good and strong businesses.  Technicalists try to follow the trend making some money when they see the big guys move.  

Soros however is the type who perfectly understand how volunerable of our finance system is but do not get bother by it, not even the social problems it may create, and then further exploit it to gain maximum out of it.  He is slightly different than "If you cann't beat it, join it" because at his scale, he sometimes create the chaos or problems himself.

Soros still do fundamental assessment NOT before but usually after he invests.  Fundamental results only add strength to his already decided investment to keep longer.  Soros only look at trends at the area where he doesn't invest too much on because he usually create the trends, why 'chase' the trend you created yourself ?

It takes money to earn more money, no one else practise this principle better than Soros.  People who don't like Soros could easily agree to this point.  Like our famous si chedet.

Despite the chaos and how many claim him as a speculator, Soros way of investment is actually quite systematic.  Although it is not as procedurals as Fundamentalists, but nevertheless quite a system by itself.  Since his system is not quatifiable so its called a investment philosophy more than a system at times.  That is also where I call it The Art of Investment - to cover all the other things Science is not covering.

Art doesn't mean NOT Science.  It just mean there is something to it that we cann't fully explain yet.  In Art, we cannot guarantee the same results even if you follow exactly what was done.

A true art is usually not complicated.  A good piece of art is usually simple.  Sometimes it could be Not Easy but nevertheless Simple.

All Soros does is to catch up with the latest happening in the world and then make investment decisions base on it.  Done !

There is no limit on the knowledge to acquire be it finance, politic or social.  When the data is inside our head, certain patterns form in it.  Then we try to relate these patterns to what we want to do - investment.  As time goes, certain linkages are form between the information and our investments.   These linkages are the formulas in our head.  These formulas usually cannot be written down clearly.  One of the reasons is by the time you write down on a piece of paper, certain event has happened that you may need to change your formula already.

All of us have this ability, like when interest rate is lower, everyone know more cash will flow in the market.  The difference is that a more experience guy would have more dimensions in his head to consider about the forest fire in Australia, the hail storm in northen America, the finish of China Olympia  ... all lead to exactly where the cash will flow to at what time.  At least he thinks so.

So the 'system' Soros use is very simple, its the same as all the other speculators who lost a lot of money.  The only differences is Soros has a very persisted way of keeping himself updated with the correct information.  While other loser speculators acted based on one or 2 piece of 'precious' info.  Secondly, other speculators are not as rich as Soros so even when they do the same thing as Soros, they will still lose out as his is the game of Money earn Money.

So like him or hate him, if you want to be him you better seriously get ready to digest what is happening to the whole world - every single piece of data.  Then you better be already very rich when you pratise what he is doing.  Else you may just be speculating into prey in this money earn money game.

The reason I don't talk much about Soros is because the line between speculation and investment in his method is very loose.  And statistically it is proven people will always stay at the wrong side of the line.

Lastly, be reminded that Buffet is the top 2 richest guy in the world and Soros stays within 20-40th in the rank (37th in 2007/8).

zzzz Personal Finance Web Sites

This is not a web site review, just some personal notes scribbled down by some zzzzn web browsers. You should consider all content here fictional :)

Meshio has been the top of zzzz Personal Finance web site for quite some time now. The main reason is that Yow Chuan, the founder, is really a smart guy. Not only does he provide all rounded services and products, his blog also covers the most complete info for 'personal' level. He is one of the few zzzzn who possess both great skills in personal finance and internet marketing.

Meshio's foundation is insurance. InsuranceOnline.my is one of the best online insurance portal ever created for zzzzn. You can buy most of the 'cheap' insurances online right there. Or at least know the existence of these plans. I am not sure why its not strongly promoted from meshio blog. The only draw back of this portal is not an instant processing site nor does it accept payment online using credit card. ( which I believe is due to restriction from the governing bodies )

FinancialPlanningzzzz is another well compiled site with a lot of great fundamental stuff about finance planning. However, its not specifically target on Personal finance. Author's background is accounting and shared a lot on stock investment later on. Unfortunately this site has not been updated for sometime now.

forexguidehowto spotted the 3rd place from google search on zzzz Personal Finance at the time of this article. It is also the only site that still does not have its own easy-to-remember domain name. Unlike the other 2 web sites, this site did not try to compile a full list of info but rather focus sharing on the pit falls, paradox ... stuff that may either totally wake you up one day or totally disgust you on another. The stuff on this blog may makes more sense after one has done some finance planning and looking for ways to further optimize the plan.

YKConsultancy is the only site that is not blog oriented. It doesn't have updated contents and you cann't get any services there neither. So its just a dying site waiting for its expiration in 2010.

I remembered saying KCLau is the mother of all zzzz Personal Finance bloggers. Don't get the wrong impression that this blog has 'dropped' in the ranking, its just the way google rank stuff where paid article write up is dis-credited in google algorithm. Till this very minute, KC Lau is still the key person getting all zzzz Personal Finance online writters together to provide better content for everyone every day. If zzzz's Personal Finance industry is to evolve into an open and transparent sharing ground, kclau is still our best hope to get us there.

liewcf, the father of zzzzn bloggers, does not really write much about personal finance but he was interviewed by Personal Money and that article is still circling around since 2005. Now you see how powerful he can be ? Not to mention one of his creation, zzzzBlogger, also appears on 1st result page.

Below list did not show up on 1st result page but worth mentioning as they have great content and most probably relevant to you if you manage to read until here ...
FinancialIndepedant is a real time blog on how, champdog, a young man makes his way to finance independance and until today, he is still on track !!

CarsonDing was promoting unit trust in his blog but recently focus more on gold as gold is the best remedy during recession. Carson is one of the few who shares with you his prediction without fear of being wrong at times.

zzzzFinance is the advance site for personal finance but a MUST read blog for investor, speculator. Imagine even foreign fund managers sometimes pick up tips from here too. The only draw back is most of the methods shared in this blog are not excersiable within zzzz but rather at international level. This is also one of the unique site where it employs Play Boy style of layout.

I think Alchemist is a student writting down what he learned. Up to now, there are some technical analysis talks there.

Dave's Corner is one of those long time blog but I didn't make it to stay with. Mainly because it is talking more on money making ideas and most ideas are not permanently exercisable. But you can get to know what he is up to recently !

FatherSez writes about kids finance and truthful sharing on his learning.

So ... what are your picks ? What are the great web sites you like and not mentioned here ? Do share in comments area so other readers can benefit from it too !!

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Why do Rich People commit suicide during recession?

This is one of the articles publised in our latest FREE ebook ( eMoney Tips Apr 2009 edition).  Click here to download now !   There are many more interesting articles in there. 

Just want to leave comment ?  click here !

Allow me to start by expressing my sincere condolences to …

Adolf Merckle (March 18, 1934 – January 5, 2009) was a businessman, and one of the richest people in Germany.[1] He was educated as a lawyer but spent most of his time investing. He lived in Germany with his wife and four children. Merckle made a speculative investment based on his belief that Volkswagen shares would fall, when, in October 2008, a support of Volkswagen by Porsche SE sent shares on the Xetra dax from €210.85 to over €900 in less than two days, resulting in losses estimated in the hundreds of millions of dollars for Merckle. Adolf Merckle committed suicide on January 5, 2009 by throwing himself in front of a train near his hometown of Blaubeuren

Patrick Rocca seemed to have it all. A poster boy for Ireland’s Celtic tiger economy, he lent Bill Clinton his helicopter whenever he was in Ireland for a round of golf and rubbed shoulders with Tony Blair at gala dinners. Mr Rocca, 41, died from a single gunshot to his head at the family home in Holmeleigh, an exclusive residential enclave on the edge of Dublin’s Castleknock Golf and Country Club. His end was as swift and dramatic as the reversal of fortunes for some Irish banks, including Anglo Irish, which the Government is nationalizing and in which Mr Rocca was said to be heavily invested. He waited until his wife took their children to school before he shot himself in the head.

Outside Chicago, real estate mogul Steven L. Good was found dead in his Jaguar, apparently from a self-inflicted gunshot wound. Good was the chairman and chief executive officer of Sheldon Good & Co., a major U.S. real estate auction company. The death comes amid great turmoil in the country's real estate industry. In his role as chairman of the Realtors Commercial Alliance Committee, Good commented on tough conditions last month at a business conference.

René-Thierry Magon de la Villehuchet, also known as Thierry de la Villehuchet for short (born in Saint-Malo, France in 1943, died in New York City, New York USA 23 December 2008) was a French nobleman, money manager and businessman, and one of the founders of Access International Advisors (AIA Group). The AIA Group is a research analyst investment agency that specializes in managing hedged and structured investment portfolios that involve commercial physical and biological research.[1][2] On 23 December 2008, de la Villehuchet reportedly committed suicide.[3] He was found dead in his company office on Madison Avenue in New York City.[4] His left wrist was slit[5] and de la Villehuchet had taken sleeping pills, in what appeared to be suicide.

The list just goes on and on …

Don’t get me wrong, it is not like ALL rich men go kill themselves when things go wrong. People who lost their life during this Great Depression are mostly NOT rich people actually. Neither is there any disrespect to these people here. These souls were all once great men and some were even indirect great mentor to me personally. It takes a very special and strong characteristic for a person to reach this big, this rich and this successful in life! A very strong driving force indeed. Unfortunately, sometimes this same characteristic drives them over the edge also.

Of course each of them would have a very personal reason for what they did and the absolute truth is that we will NEVER know what really happen! However, knowing some of them personally and even served some of them before, they probably won’t mind if these of their recent LAST stories can be used to instill some good for the rest of us.

Some people would say the cause is Greed. Some would say just a bad day, One Big Bad Turn. Some surviving financial experts even blame the deceases with all kind of cursing words. However, the most neutral comments come from psychologists who study human and society behavior and most of them said, “A block in mind that is stronger than all other beliefs at that particular moment”. There are many possibilities for the ‘block’. It could due to pride, lost of confidence or many others. But the fundamental is THEY THINK They Lost More Than They Could Afford in whatever they care most !

Well, whether they think wrongly or they really lost that much or they lost what they care most …

… that is all due to Lack of a Personal Finance Plan!

One may have great passion, great forecast and great business plan which include one of the world’s best financial plans for what they do best, but unfortunately NOT a PERSONAL one. As a matter of fact, most of their decisions were correct and that was how it got them to where they were – a large empire! Sometimes in business it takes guts to overcome risks. And every cycle in a business major decisions making may mark a new era or fall flat on their faces to start all over. Like a rolling snow ball. It gets bigger and bigger rolling downhill but it only takes one small valley to slow it down or sometimes completely shatter it.

Take a step back, it is actually NOT fair to claim they DO NOT have personal finance plans at all. They do have insurances and investments, what more could they possibly should have had? Sometimes it’s the little difference that makes a big impact.

Its due to Lack of a REAL SOLID Personal Finance Plan !

Income shouldn’t matter in your personal life long plan because they changes and may change out of your control! If you follow the model shown below, income is NOT a part of personal finance plan. Income is a pre-requisite but it is not a PART IN your personal finance plan. So no matter how much or how little income you are earning now, you can practice personal finance planning and you should. The first step to start is to setup an automated way to save your income, either in percentage or a fix amount depends on how consistent and the type of your income. ( read more in forexguidehowto.blogspot.com ). So no matter how much you are earning, if you do not have this first step setup, you are most likely NOT have a REAL SOLID Personal Finance Plan yet even if you have bought insurance, mutual funds, stocks and properties.

So if you are still responding, “I could have easily earned more in my business/investment” when someone is “selling” you personal finance vehicle, you are most probably do not have a REAL SOLID ground at a PERSONAL level yet. You are still focusing too much on Income and not your life long plan.

If you are still comparing and deciding whether to buy a property or mutual fund, gold or insurance etc. You may still not able to distinguish the difference between income and personal finance plan.

If you still think multi-millionaire is your main target now and thinking hard all sort of ways to get rich without setting up the First Step mentioned above, you are still missing one big point in your life. One that may save your life and retain the happiness of the people who love you … ONE day !

So go now to setup a standing instruction transferring part of your income into another account that you have limited withdrawal capability. Then forget about it most of the time in any particular year.

Livermore told anyone who'd listen to follow his Wall Street strategy -- increase your position as the market moves in your direction, and quickly cut your losses. But he often failed to heed his own advice. He lost two fortunes, accumulated a third, and lost that, too. In 1940, in the bar of the Sherry-Netherland Hotel in New York City, he shot himself to death, leaving $365,000 in debts and a rambling, 8-page suicide note to his second wife. "I am a failure. I am a failure. I am a failure," it said.

The 65-year-old Frenchman, an aristocrat and professional investor, was deeply shamed and depressed, friends and family said. He felt he had ruined the lives of his clients, many of whom were friends. His brother, Bertrand, called his brother's suicide an honorable act. "At first he thought he'd be able to get the money back," Bertrand said in a Paris phone interview with The Associated Press after his brother's death. "Gradually he realized he wouldn't be able to. He trusted Madoff completely."

old note :

This is an article written and will be published in a FREE ebook in the making in respond to kclau .... once the ebook is released or my submission is rejected, the content of this article will be released in this post. Stay tune .... while enjoying the other contents.

Thank you for your time !

One of the Darkest day for KLSE:KNM

I recommended before KNM is a worth buying stock because its current price is below its worth. But today marks one of the darkest day for such a recommendation. Let's face it straight flat to the face and see what happens ...

First of all, the support lines for KNM is 0.40 followed closely by 0.395 as shown in graph below.





KNM has been re-bouncing or more correctly lingering around 0.40 support line for quite some time. A lot of speculator are waiting to queue at 0.40 but never got their wishes come true. Until today and they regreted their wishes were granted. KNM drops all the way to 3.70

Why and What Happen ?
First of all, let's review what support lines mean. It means the price may bounce back up when it touches that level but if it break that level then it will fall much further. In KNM, there is no apparent next support line and it will go FREE FALL if it breaks 0.395 !! Which in this case, once KNM drops below 0.395, it goes straight to 3.70 !!



Why and What Happen ?
Actually the answer was anounced later at 6:17pm

7164 KNM KNM GROUP BHD
Notice of Shares Buy Back - Immediate Announcement

Date of Buy Back : 27/02/2009
Description of Shares Purchased : Ordinary shares of RM0.25 each
No. of Shares Purchased : 1,500,000 shares
Minimum Price Paid For Each Share Purchased : RM 0.370
Maximum Price Paid For Each Share Purchased : RM 0.390
Total Consideration Paid : RM 574,005.00
No. of Shares Purchased Retained in Treasury : 0 shares
No. of Shares Which Are Proposed To Be Cancelled : 0 shares
Cumulative Net Outstanding Treasury Shares As At To-Date : 40,135,100 shares
Adjusted Issued Capital After Cancellation : 0
Date Lodged With Registrar of Company :
Lodged By :

27/02/2009 06:17 PM

Ref Code: 20090227NI00515

Actually one could have detected this as early as 10:06am when a series of constant high volume sell transactions are done.




If you remember the concept of supply and demand, when there are more selling than buying, the price will drop. Especially when the buying pattern consist of many small lots but selling is done by a few big quantity ! This means some big shots are selling off this stock !

This can be further observed at 12noon, 2:50pm, 4:10pm, 4:30pm and 4:40pm.



The green color shows the price. The red color shows the sell volume and blue is the buying demand.

You may observe you can hardly see any blue in that graph. So its almost no doubt this stock is going all the way down !

What to do now ?

If you have purchased this stock and already lost more than 10%, the general rule of thumb is to cut loss now. However, if you do not have any other better choices/stocks anyway and if you believe the fundamental business of KNM is still strong then you may choose to hold on to another 15-20% lost. All purely speculation at your own risk.

If you haven't bought this stock yet, you will need to find out what the next support line is and prepare to buy it assuming no new surprising news.

btw, KNM will be giving out 1.5 cents dividen early March. 1.5 cents out of 0.37 stock price is 4.05% pay out, which is better than today's FD @ 2+ % ( see top right for latest best FD rate ). And you could have earn this 'annual' FD rate in just within a couple of weeks ! Which is equivalent to a 100% annual gain. But ofcourse, stick to 4.05% is a more realistic figure.

So a lot of small players will be accumulating this stock like mad but there is no clear signal what the big guy will do. Supposingly in this no-support-line condition, price will drop like no one's business. I even suspect there is some internal dealing for this downside so the risk is still high on this stock where speculation is more than fundamental analysis.

The best reason to buy this stock now is you don't care about the dividen and recent lost of projects, if you know you can keep it for 2-5 years, this is still a keeper !

me ? I am accumulating more bullets and hope to hit jackpot yes ....

Blogged with the Flock Browser

Stock Picks methods 2009 02 24

First scroll down on forexguidehowto blog on the left hand side.  There is a link to download KLSE End Of Day data.

Select the latest date and you should be able to see a list of that day's stock data. 

Copy and paste that into a text editor


Subsequently use a spreadsheet program to filter out stocks between RM 0.10 to RM 0.50 (?)  then sort the stock list by volume.

There you go !  Here is a list of stocks that you may consider !

First, find something that you understand and like, have a strong feeling about etc.  For example;

You think oil price will go back up eventually, then you may want to look at KNM, Scomi, Ramunia etc.

You think zzzz has the best resources for furniture industry - LCL.

To understand what a business does, you may check from http://biz.thestar.com.my/  Just enter the stock name at top right corner and click search ! 

click on the Fundamental link to view more info about this company.  You may need to sign up as a member first.  I think it should still be FREE.

Then, make sure the company has been strong by making sure its pass years Return on Equity are always more than 15% !!

Then collect its pass years EPS and use this web site to calculate how much this stock is worth.

If current stock price is below its worth, then you can buy this stock as per the assumptions made in your worth calculation method.

Don't forget the Qualitative assesment - the management. Which is very important to make sure pass year records can be repeated in future.

Lastly after passing all the criterias above, you may use trend and technical analysis to further fine tune the timing of your entry point !

====

The following has ROE >= 14% for the past 3 years :

KNM

LIONDIV PANTECH RCECAP DUFU HUAAN HSL SCOMI LCL AZRB NTPM

After analysing the EPS growth trend
and calculated their worth,
revised with latest released EPS data
there is only one stock worth buying now

KNM worth is RM 1.10 and current price RM 0.405  ( seems suspicious but lets review this in detail next )

followed by 2nd best choice

PANTECH worth RM 0.41 but current price is RM 0.455.  Cann't buy now but just a small gap away.

The rest of the stocks has too big a gap between its worth and current market price so they are out for now !

One interesting stock is DUFU where I couldn't find enough data for assessment but its past 2-3 years record seems great except the most recent 2 years EPS trend downward.  ( which is common to ALL businesses )