Monday, March 05, 2007

It is a massacre out there

The bulls are getting slaughtered left, right and center in the Asian share markets today. The low liners and the speculative stocks that skyrocketed last week and earlier in the KLSE fell heavily – some by more than 30% from last Friday’s close. Their prices had dropped lower than levels reached during the global markets plunge last Tuesday. The KLSE index led the falls in the South East Asian stock markets.

One just watched the carnage from the sidelines in the peace and quiet of my office. Sipping coffee followed by some Chinese tea after that. My four favorite pages of 17 live stock quotes each on the computer monitor were all dressed up red. Blood red! So was the page on volume leaders. With an overwhelming majority of shares counters quoted in the KLSE falling like ten pins, how can the bears not win this battle?

In a quiet moment, one had spared a thought for some friends. After seeing the year highs, they had refused to sell their shares at lower prices along with me. At least one had warned them, over the phone, not to buy any after the rebound on Wednesday and for the week, since one expected heavy falls this week. If they chose not to listen, what can one do? When a stockbroker assistant asked why I was selling so many shares in such a short spate of time, my answer was, “I am easily startled”. (No, I was not born in the year of the Rabbit!) She had never listened to a word I said about the KLSE over the years, so why bother.

Have a thought for the latecomers (retailers and punters) who bought stocks at sky high prices and who are left holding the ‘hot sweet potatoes’. Trading in shares is a game of musical chairs with a twist – in case readers do not understand what it involves – the last player(s) holding the ‘hot sweet potatoes’ loses, not win. If punters have followed the ‘blind’ and bought more when shares rebounded last week thinking that the technical charts still look good or had followed Dr. Chuah, the Yijing scholar from Penang, who predicted the worst is over for the year, they could be in for further surprises around the corner.

Bull Runs do not follow trends or charts. It is all about liquidity and confidence. That is why one often tells friends, that shares float up on hot air. If confidence fizzles out, markets plunge.

It was rather fortunate that one had read the thoughts of ancients who taught the Chinese how to trade. Their trading strategies more than two millennia ago still work today. One also put Leon Richardson’s strategies in shares investment into good practice. Mr. Richardson had shared his wisdoms in the Asia Magazine back in the 1980’s before he retired. To buy low and sell high, traders can make a profit. It is that simple. But Malaysians have a tendency to buy shares at high prices in the hopes of selling higher.

Since some friends have asked, this is what one will do. Wait. One will wait until no one wants to buy those shares I had sold earlier. Those who bought the shares last week have already lost much. Therefore, it is just and fair to buyback shares especially from a seller who had bought them from me – even though they remain faceless – one keeps meticulous records of which stockbroker sold to me or bought my shares. (To answer questions before they are raised.)

Markets do not ‘die’ where trade exists. Those who lost everything in their haste to make much more money will. The Malaysian Chinese like to joke about ‘chopping off their fingers’ every time they lose bundles of money. There had been many such occasions since the early 1980’s. But their itchy fingers magically grow back very fast if there is money to be made in the KLSE. Old fools seldom learn. New fools are born every day. But this old fool could be a bit luckier in 2007.

One wonders how Dr. Chuah will face his irate followers or readers who bought shares in the KLSE on his advice after the plunge on Tuesday or this morning, if any. Do Yi students see the difficulties in remaining blameless?

It is advisable not to be a ShenXian in tumultuous times like these!

6 comments:

Luis Andrade said...

Perhaps Shenxian should stick to their immortal spiritual goals and leave the market to lowly mortals...

Allan, I would like to ask you a few questions in private, if that's OK.

All the best,

Luis

Anonymous said...

Dear Mr. Allan Lian,

Hello.
My name is Rodney Lee and I am writing from Penang.

Do you have an e-mail address with which I can send more information about my interests ?

I must admit I don't follow everything you have written but I am very keen in Chinese metasciences.

Unfortunately, being English educated as you are,I feel somewhat short-changed by the inability to grasp instantaneous fluxes in the YiJing, thus losing out on many things.

I don't want to resort back to South Asian methodologies which are written in English.

My e-mail address is: adagio_g_sharp@hotmail.com

Have a nice day.


Yours pensively,


Rodney Lee.

Allan said...

Ah, Luis, but one of the goals of ShenXian is to lead mortals to a better life – if the devotees or disciples ever listen!

You can certainly email me with your questions, if you trust me enough. What are friends for anyway?

Regards,

Allan

Allan said...

Hi Rodney!

There are several resources and recommended sites related to Yijing and ancient Chinese philosophy accessible from the blog. An earnest student can spend a number of years studying the material contained therein.

What is written in the blog can sometimes be too deep for Yi students without the requisite experience and years of study. If you do not understand what was written, you can always ask for clarifications or return later when you are able to.

If you do not own a copy of the Richard Wilhelm’s translation, I suggest you buy one for your Yi studies. Before the advent of online sales, I bought a few hard copies in New Zealand for my friends. The book stores in KL, Singapore and Australia did not stock the translation. The translation is also available in Hong Kong where I bought some for a couple of merchant bankers.

If you have less than ten years of Yi studies, I also suggest that you read the Yijing Dao website and spend some time in the I Ching Community forum to hold discussions there. It is a good way to learn more.

Regards,

Allan

Allan said...

Oops! I did not click the email box after the recent change to the new Blogger. I was told that all things remain the same as the old Blogger.

No wonder, fan mails fizzled out after the change! (Joke)

The email address is made available at the complete profile, if any one else is interested to write in private.

Luis Andrade said...

Thanks Allan! I sent you a message this morning.

All the best,

Luis