Tuesday, July 31, 2007

Cheerful retreat

In times of adversity we tend to reflect and often contemplate retreat.

In the Zhouyi, the commentary to the Judgment of Tun / Retreat says:
Conditions are such that the hostile forces favored by the time are advancing. In this case retreat is the right course, and it is through retreat that success is achieved. But success consists in being able to carry out the retreat correctly. Retreat is not to be confused with flight. Flight means saving oneself under any circumstances, whereas retreat is a sign of strength. We must be careful not to miss the right moment while we are in full possession of power and position.

A retreat in war would mean surrendering hard won ground to the enemy. It could also allow the enemy a chance to harass a retreating army. A good example was when the US led UN forces put to rout the fleeing Iraqi army after chasing it out of Kuwait.

However if a retreat is well planned and orderly, the enemy or the Xiao Ren (mean man) can take no advantage. The retreats by the Shu Army led by the sage like Chuko Liang after attacking the kingdom of Wei on various occasions provide good examples of such withdrawals since even his equally wise adversary, Sima Yi was often confused. And therefore the Shu army always safely returned home with minimal harassment from the pursuing enemy.

If a superior army only knows how to advance but does not know how to retreat, the incompetent general or supreme commander should be quickly replaced before more damage is done to the army.

Investment in the stock market is almost similar to fighting a war. Investments need much pre-planning and doing lots of homework. Just by studying the Art of War of Sunzi and Wu Chi may not be quite enough. You also need to learn how to trade – which means buying and selling or advancing and retreating. Any Tom, Dick and Harry who have the means know how to buy into shares (Plan A) but how and when to sell is equally important to turn a profit. (Plan B) If an investor only knows how to buy shares but does not know when to sell them, the particular investor is largely relying on luck to make money.

A good time to sell shares is when your preset target (Plan B) has been reached; another is beating a cheerful retreat from the stock market in times of adversity. (Plan Zhouyi) By cheerful retreat, I mean ‘laughing all the way to the bank’.

For example, the counter that shot up 50% last Friday when the global stock markets were tumbling went up by another 50% on Monday before profit taking set in. Happy with the gains, I sold the investment slightly below its four years’ high. These shares bought in early July gave a net 110% return on investment. Even foreign fund managers who planned to invest for the long term would have no reason to wait for further profits. (The purchase of this particular investment was based on past Yi charts records. No divination was performed.)

What are the benefits of a cheerful retreat to a Junzi according to the Yi? The top line of Hexagram 33 Tun / Retreat, a favorite line of mine, says:
Cheerful retreat. Everything serves to further.

The situation is unequivocal. Inner detachment has become an established fact, and we are at liberty to depart. When one sees the way ahead thus clearly, free of all doubt, a cheerful mood sets in, and one chooses what is right without further thought. Such a clear path ahead always leads to the good. [W/B]

Only when we have well laid plans for an orderly retreat can we see the way ahead clearly. The timing is also crucial. (The price of the sold stock fell 20% from its Monday’s close.) One relies on preset targets derived from the 64 hexagrams chart and the timing can either be depicted in the annual Yi chart or by the prognostications. This is the way how one usually invests in the KLSE since 1993.

For those who do not have such aids from the Yi, they still have to learn how to advance and retreat in a war or in any investment. How and when to advance and retreat (read changes) forms part of Daoist studies, by the way.

By reading this entry perhaps readers can learn something of use.

Saturday, July 28, 2007

Have you sold all your shares?

My eldest sister called today from overseas to ask if I had sold all my shares. She has heard the bad news that the world stock markets including the KLSE tumbled on Friday and sounded concerned. She is fully aware that I follow the Zhouyi to invest.

"No, I have not," was my reply. “When the Dow Jones Index had gone up so much what is a drop of a few hundred points? Those who have never seen a ‘big snake shit’ (a Chinese idiom) would have panicked." She laughed.

“While the KLSE plunged on Friday, half of my basket of shares went up. In fact one of them shot up by 50% on that very day.” ‘Did you sell that counter?’ she asked. “No, still waiting for more upside,” I replied. Having been reassured, she changed the subject and asked about family members. (Concerned friends could also be reassured with this entry.)

Markets that have gone up a lot would be volatile and can be subject to wild swings depending on the mood of investors. (Think Chinese and US stock markets) Herd mentality takes over whenever there is a panic or when the bull charges ahead.

Bull Runs are never meant for the faint hearted and the lemmings. Tycoons can be turned into paupers, and near bankrupts can become multi-millionaires depending on which way the stock market turned. I have seen or have known a few over the decades since the 1980s. Therefore those who have heart problems and those who cannot afford or are unwilling to lose should not dabble in the stock market. It can literally be a ‘killing field’ of sorts since markets and stocks have no sentiments whatsoever.

If you have done proper homework on your investments in the KLSE, and if there is no major impending financial crisis or wars out there, take heart. In a Bull Run, even the ‘salted fish’ (another idiom) can be revived. (Think phoenix rising from its own ashes) But there is no guarantee that in this Bull Run, the KLSE will not plunge from time to time because of the current volatility extant in the global financial and stock markets. (Think Chinese stock market as an example)

As long as at the end of the day, you make good money from your investments, you won the war.

Just do not be a ‘water fish’ (turtle) and get conned by syndicates and unscrupulous owners of public quoted companies. (Think Iris, Foutain and Transmil) If you have been swindled out of a big sum of money, it could take a long time to recover.

Also remember to take profits when your preset targets are reached. Small retail players like us need to build up our ‘foreign capital’. Who knows, one day we could be rich enough to invest mainly in the blue chips?


Wednesday, July 25, 2007

Follow the money

Malaysian investors in the KLSE have been invariably indoctrinated by the national dailies (read shares analysts) over the past decade or more to watch shares trading volumes to predict the performance of the overall market. Watching overall trade volumes works to a certain extent where underlying shares are cheap but this well worn system would not work if prices rise and shares become more expensive in the midst of a bull run.

In a rising market, it is a ‘no-brainer’ that if trade values remain stagnant, trade volume will fall. Therefore if investors in the KLSE wants to know where the overall stock market is heading, it is better to follow the money. (For individual stocks, investors still have to watch their trade volumes.)

The increase in share prices and the KLCI this year was caused by money inflows to the stock market. Average daily trade values had more than doubled, at times tripled compared to that of 2006. However the current daily trade values of 2 to 3 billion ringgit cannot sustain the KLSE going forward as shares prices rise in this Bull Run. More liquidity is required.

If investors think that the current daily trade values is substantial, look at those of our neighbors. If you compare the daily trade values in the Bull Run of 1993 to those of our neighbors and now, you will find that the KLSE has fallen way behind.

The values traded in the KLSE used to be ten times more than those of the New Zealand stock market, a few times more than the Thailand Stock Exchange, and larger than that of the Singaporean market.

Used to be no longer count, since the daily trade values in the NZ, Thai and Singaporean markets have been raised substantially by foreign money inflows. The average current daily trade values of these three markets are RM 540 million, RM 4 billion plus, and RM 6 billion respectively. To put Malaysian readers into proper perspective, the daily trade values in the Hong Kong Stock Exchange average RM 45 billion.

It is not that I am smarter than the average share trader, but if we really think about it, the share market is all about money. Something one had learned from reading the Far Eastern Economic Review and the depicted Morgan Stanley weekly charts (showing trade values) on Asian stock markets in the 1990s. With more money chasing shares, commodities, real property, these investments will naturally rise. Inversely when money dwindles, the prices of investments fall. (Think Changes and the current US property market)

Such is the case of the KLSE. On Monday July 16, the day’s trade value fell below the previous week’s daily average of RM 2 billion plus. The following Tuesday and Wednesday trade values were higher but still below their respective T+3 values. The stock market fell those three days. The KLSE only rebounded on Thursday and Friday when their trade values reached RM 2.5 billion or more. The trade value hit RM 2.67 billion last Monday and on Tuesday it hit RM 3.25 billion sending the KLCI to its highest ever close of 1,392.18. Is this not a good enough reason to follow the money?

The Shanghai Composite has since stormed back to 4,323 points from its recent lows of 3,500+, while I give up trying to predict when the KLCI will hit 1,400. However the Yi chart still shows a good KLSE.

For individual stocks check their trade volumes, but for the overall stock market remember to follow the money.

Good Luck!

Sunday, July 22, 2007

Further thoughts on TTC 5

These thoughts arise after viewing an ongoing discussion in Tao Speaks on the first two verses of TTC 5.

In Chapter 5 of the Tao Te Ching, Laozi indicated that Heaven and Earth did not act out of benevolence. Neither did the sages. They treat the myriad things and the hundred surnames (humans) as straw dogs.

Ancients formerly used humans as sacrifices to their gods until such human sacrifices were replaced with straw dogs. When Laozi mentioned straw dogs, he provided a clue. Straw dogs were insignificance things yet the gods accepted them as sacrifices. Why?

Perhaps, the answer is on every one’s lips, yet some scholars and experts point here and there and tend to think they are rather wise.

History is twisted once again to say Laozi used the TTC to condemn the Confucians while others study words of his so called ‘students’ to point to the thoughts of the great sage. It seems like sacrilege. Twisting history could come from attachment to misconceptions, narrow mindedness, and not doing the necessary homework. (Think Japan and now Taiwan changing their history books)

If such scholars and experts keep on misleading the students and future generations with their own attachments and idiosyncrasies, more and more like them could be muddled. Why can’t these scholars and experts just follow what was said by Laozi in his Chapter 5 with regards to the actions of Heaven, Earth and the sages? All is required is the simple and yet highest regarded virtue by the ancients. (Refer TTC 38)

For those who still do not have a clue, the answer to the question, the word on their lips, the most regarded virtue by the ancients, is sincerity (Zheng). (Refer Shujing, Zhouyi)

In case there is a remaining question, sincerity comes from the heart. That is why the gods accept sincere sacrifices of straw dogs (instead of humans). That is why sages act out of sincerity without any regards to the hundred surnames. And Heaven and Earth act out of sincerity without any regard to the myriad things.

If readers think that attaining sincerity is easy, go ask the Yi about it.

Wednesday, July 18, 2007

TTC 5 - Guard the Center

Sometimes in the search for meanings related to our studies and practice, we have to rely on scholarly translations. However if our practice go deeper perhaps beyond the understanding of most scholars and practitioners, then we may have to do the required homework or research ourselves.

It is not really my wish to translate chapters of the Tao Te Ching, since one has just started to read this classic only a few years ago as compared to the many that have read it for decades and the available hundreds of translations.

It could be obvious to some that the understanding of what Laozi said in the Tao Te Ching may differ much between scholars and those who cultivate. Perhaps this translation of Chapter 5 may provide glaring differences with the extant English translations. The reason for this translation is because one is doing limited research for my neidan practice on the subject of the ‘germinal vesicle’ (an invisible cavern within). And want to leave behind some notes for fellow travelers and self for future reference.

As usual, knowing my limitations, readers should prepare to read my translation of Chapter 5 with a pinch of salt:

Heaven and Earth are not humane. They treat the myriad things as straw dogs.

Sages are not humane. They treat the hundred surnames as straw dogs.

The space between Heaven and Earth is like a bellows*. Empty yet inexhaustible.

Actions improve and bring it* out.

Many words have limitations. Not as good as guarding the Center.


Perhaps for the English, the bellows is the most appropriate word to describe the space between Heaven and Earth.

In alchemic terms, Earth acts as the furnace while Heaven acts as the Cauldron. Probably most Western scholars have linked bellows to that of the waidan practice. Waidan practitioners used the bellows to blow on the fire started in the furnace to melt and then mix the medicine and chemicals in the cauldron, before taking in the refined mixture.

The written Chinese word translated as bellows actually indicates a bag opening at both ends with holes for exhale – perhaps more akin to the ‘germinal vesicle’, not to the bellows.

If my understanding is correct, then Chapter 5 is also about neidan practice and therefore the various available English translations may not have come close to the real meanings of what Laozi had revealed.

The penultimate verse confirms my simple understanding of the workings of the ‘germinal vesicle’. And like what Laozi had revealed, it is used by Daoists to reach and guard the Center. (More on this understanding and the germinal vesicle later)

It is always up to each of us students to understand what the sages meant to say and to put their advice into practice otherwise we are like straw dogs. If we do not understand the words of the ancient sages, do not expect to understand the actions of Heaven and Earth. Ha, straw dogs again! Cannot run away from that!

Sunday, July 15, 2007

Enjoy the mini rally

Last week, the KLCI rebounded and closed within seven points of the record high of 1,391 set in June. Liquidity has improved for the overall stock market, if investors have not noticed. Mesdaq counters and the blue chips hogged the limelight as volume leaders but the biggest gainers in terms of percentage returns last week went to the second board counters. One such counter shot up by 50% within the day!

More second board counters have gone up over the past week with higher volumes. The price of the counter that I have bought and held since early this year has gone up by more than 50%. However, in line with the good prognostication obtained and the Yi hexagrams table, its share price still has room for improvement. Once the target is reached, the investment will be disposed of.

With the announcement of one of the main components of the index, Tenaga’s third quarter earnings surge of 175% hitting the newspapers on Saturday, the KLCI would probably breach 1,400 the forthcoming week with higher liquidity. Those who had bought this electricity board’s shares or have longed the index futures last week would have cause to celebrate.

Counters related to the Iskandar Development Region in Johor because of the write up in the Star Bizweek on Saturday may also see a mini rally in their shares prices because of the expected upward revision in land prices. The second board counters with the recent revival of interest in them could also rally with increasing volumes. So would those with other theme plays.

With local participants and foreign funds feeling bullish, and no fear of ‘heavy obstacles’ in the way, expect a mini but broad based rally. Just do not get too greedy and get carried away since it would be a mini rally for most shares. The big ones come later when there is much higher liquidity in the KLSE than current trade values.

Meanwhile enjoy the mini rally and realized gains if your targets are reached.

Thursday, July 12, 2007

Knowing the Yi (3)

Recently one had mentioned mild warnings by the Zhouyi on investments in the KLSE. Experienced Yi diviners would know what was meant by mild or minor warnings but the less experienced may not.

Mild warnings comprise of admonitions from the Yi on small mistakes made by man and which do not cause grief or suffering to others and self.

In April this year, after clearing most of my stocks for profits, one had asked the Zhouyi on the intended investment in the shares of six public quoted companies. Two of the answers from the Yi contained such minor warnings on the investments.

What were they, some may ask? Let me reveal the prognostications on both investments for discussion purposes.

The prognostication on the first investment came in the form of Hexagram 24 Fu / Return with the bottom and third lines changing.

The first line in Fu says:
Return from a short distance. No need for remorse. Great good fortune.

The third line says:
Repeated return. Danger. No blame.

The price of this particular share went up slightly before drifting lower and by the end of May, the stock had fallen by 23%. One had cut losses on this share in June to hold cash. The loss on investment was roughly 10%. It was a small loss. The mild warnings were contained in the two lines that changed, if readers have not spotted them, – “No need for remorse”; “Danger. No blame”.

At the time of writing this entry, its shares price has yet to rebound back to the price at the time of the divination after several attempts over the past one and the half months. (Think repeated return)

The prognostication on the second investment was Hexagram 44 Gou / Encounter with the third, fourth, and top lines changing.

The third line says:
There is no skin on his thighs, and walking comes hard. If one is mindful of the danger, no great mistake is made.

The fourth line says:
No fish in the tank. This leads to misfortune.

The top line says:
He comes to meet with his horns. Humiliation. No blame.

After the purchase of the shares and feeling uneasy because of the mild and severe warnings from the Yi, the investment was sold off a few days after the purchase. Loss on investment was minimal.

Not long after the disposal, the company announced a default in the interest payment of its loan stocks. Its share price fell almost 30% after the bad news. The price of this stock is still hovering at the recent lows. (Think misfortune, humiliation)

The third line of Gou contained the mild warning, in case Yi students missed it.

I was really concerned over the severity of warnings contained in the other two moving lines of the hexagram therefore the entire investment was disposed of shortly after the purchase.

The sales proceeds from both investments have since been reinvested in other stocks over the past few days.

Perhaps if Yi students receive such prognostications in future, they can easily know how to differentiate between mild warnings and those which are considered severe.

Monday, July 09, 2007

Heavy obstacles end

Since the last entry on the KLSE on June 26 2007, the stock market fell for the rest of that week. During the span of the last fortnight, the Shanghai stock market went up to 4,100+ before tumbling to 3,500+ a drop of about 600 points and ended last Friday with small rebound to 3,700+. Amateur bombers tried and failed to terrorize England and then Scotland with their car bombs filled with gas canisters and nails. (Think Yi chart timing)

I understand that some Malaysian investors lost out on some opportunities when the KLSE rebounded last week. There were rumors swirling around in the market that the KLCI would fall by 200 points or more, therefore these investors had sold all their investments to hold cash. Heck, they were probably listening to the so called ‘ShenXian’ again!

Regular readers would probably have noted that one has given several hints in the previous entry which include revealing my own investment strategy, rarely revealed beforehand, not to sell all their stockholdings. And that the Yi had only given two mild warnings. In fact one reminded investors to look at the laggard second boarders.

If investors have bought into certain second board counters – companies that have good fundamentals and paying dividends – over the past two weeks with part of their spare cash, they could be making money. Some of their shares prices have already gone up by a third, the past week. Volume is also picking up, probably retailers are bottom picking these laggards – some were ‘darlings’ of house wives and the ‘man on the street’ so to speak during the bull runs of 1993 and 1996. (Their share prices often ‘sky rocket’ when trade volume picked up because of their small capital outstanding.)

If momentum builds up this week, the second board counters could be in for a good run. In case you think that there is a conflict of interest, I am still accumulating one of my favorite counters which had hardly moved the past fortnight and bought a small amount of shares in two or three others for punting out of the total 240+ counters listed in the second board. To avoid conflict of interest is one of the reasons why I do not recommend or name a particular stock to buy which also allows me to remain blameless.

Since the recent heavy obstacles depicted in the Yi chart for 2007 will end by tomorrow, one will buy more of the favorite counters (which include low liners) that I have been holding onto, once their particular trade volume builds up.

This July run up could probably take me across the thresholds* of a 100 % return on investments for 2007 to date and the twenty fold return on capital since early 2006. All thanks to my teacher, the remarkable and inscrutable Zhouyi!

Happy returns every one!

(Both *thresholds could have been crossed earlier if not for those uncalled for remarks in May on the Chinese stock market.)

Saturday, July 07, 2007

A matter of sincerity

Sincerity is a highly regarded virtue by the ancients who taught humanity since it comes from the heart of a person. Words and actions spring from the heart and mind. And go together. By discerning subsequent actions of man, we can often come to know if sincerity really exists in the heart of that person at the time the words were spoken. By their very actions we can also learn how to differentiate if they are Da Ren, Junzi, or a Xiao Ren. (Refer to the ‘three types of man’.)

In our national The Star newspaper today, one notices various examples of the insincerity and sincerity of man in action. Perhaps readers can discern for themselves the insincere and sincere actions of man in these few examples.

The StarBiz – Hong Kong stocks column:
"The index was also supported by rotational interest in property stocks, which had lagged the market’s recent rally. ‘Everybody knows that Li Ka-Shing has been buying up shares of (his flagship companies) Cheung Kong and Hutchison Whampoa in the past month or so.

The same is true of the Kwok brothers,’ said Eugene law, head of research at Celestial Asia Securities Holdings, referring to the family that controls Sun Hung Kai Properties. Interest in Cheung Kong was also bolstered by news that Deutsche Bank has raised its stake in the firm by buying additional shares on the market last week."

Remember one reason for the sudden diversion of institutional funds from China stock markets in May?

In the article on the ‘auspicious’ date of today:
‘In Yijing, everything is regulated in a seven-day circle. So 07.07.07 can be described as a perfectly regulated cycle,’ said Dr Chuah Chong Cheng, who has studied the Yijing for the past 30 years. Dr Chuah also noted that today’s numbers added up to 21, ‘the perfect marrying age for both men and women.’ He said even in Christianity, the number seven was ‘good’.

In the same article:
Indian numerologist S. S. Mano, however, said it was not advisable for couples to get married on 07.07.07. ‘For us, it is inauspicious but if couples still insist on marrying on the date, they should do it before 11.30 am to avoid bad luck.’

‘Many of couples want to marry on this day because it is unique, only once in a hundred years. Although it is the norm for the Chinese community to choose a good day for marriage, the younger generation is not that superstitious,’ said a Thean Hou temple marriage registration department officer.

Where did this expert learn and draw the conclusion that everything is regulated in a seven-day circle in the Yijing? In line with the Great Learning, did he thoroughly investigate things? And do Yi studies really require something foreign or derivative to augment our learning?

According to my 2007 Yi chart, the date is indeed inauspicious. Perhaps the two specialists know something too that the Yijing expert doesn’t?

In another article in The Star paper:
‘Yes, today I am happy,’ declares Mr. Sandwich, as Sirivat is known. ‘Because of the crisis (Thailand’s 1997 economic meltdown on July 2, a decade ago) I found a new business – although it is selling sandwiches for 40 Baht apiece versus selling a condominium for 5 million Baht a unit – I am happier,’ he said.

In early 1997, Sirirvat was in the ‘bubble business’, borrowing heavily from finance companies to bankroll his property projects including a one billion Baht condominium development and to dabble in the stock market. It was a ‘big business’ which, on hindsight, the US-educated Chinese Thai businessman says, was beyond his financial capacity.

Depression hit Sirivat but he did not commit suicide, which was the option of many who lost their fortune during the Asian financial crisis. ‘If I killed myself the problem would not be solved, and the burden would be on my wife and children,’ said the man whose motto is ‘I’d rather be bankrupt than dead’.

To eke out a living, Sirivat strung a 12kg yellow foam box around his neck and began peddling sandwiches on the streets of Bangkok. On his first day, Sirivat had to put on a brave face as many people asked him: ‘You are a multi-millionaire, why are you selling sandwiches?’

He sold about 40 sandwiches on that day. He sold more when local and international media zoomed in on the compelling story of insolvent multi-millionaire peddling sandwiches. Now he sells about 800 sandwiches a day. And he plans to list his food and beverage business on the Thai stock market in 2009.

At present, Sirivat is not optimistic about the Thai economy, saying Thais have not learnt the lesson of 1997. ‘Thai people forget easily. They are over borrowing again,’ he notes.

Many of the multi-millionaires and millionaires like Sirivat who had lost everything in the Asian Financial Crisis and have persevered through this difficult decade would now have a chance to rebuild their fortunes if they have not given up their lives or hopes already.

The real dragons can once again fly in the heavens! It is just a matter of timing and the right actions.

The sincerity and other virtues of Sirivat provide a shining example of perseverance which led to success through hard times, the crossing of the great waters. Think of the Zhouyi, the various chapters in the Tao Te Ching, and the fourteen years of travel by Confucius.

For the sake of fame and fortune, people have given up their lives or sacrifice others down the millennia. Such insincere and unjust actions would have caused a lot of grief and suffering to those affected.

If only man can learn how to be sincere like the great sages, heaven and earth, in their every thought and action, then there will be less grief and suffering around in the world.

Thursday, July 05, 2007

Knowing the Yi (2)

Of the millions throughout the world who study or read the Book of Changes most would have done so without teachers. If you count as one of the many, perhaps this entry could help you know the Yi a bit better.

After having read the Book for months which will quickly turn into years, we probably know little about the sixty four hexagrams, let alone understand any of the 384 individual lines. If we do not know the meaning of the hexagrams do not expect to understand the lines in detail.

Without the proper guidance of a real master, and in search for excellence, probably the best method available to any Yi student to know the Book a little better is through divination – if divination is not against your religion. When we consult the Yi, we will have to concentrate our mind on the question and then the answer. Yi’s answer or the prognostication comes in the form of a hexagram if there are no moving lines or two hexagrams, when there are one or more lines that change.

By reading and pondering on the answer, our mind becomes alert to the various possibilities indicated in the hexagram (s) and/or the lines that change. If we keep a journal or a log on the divinations, we leave a trail for later references where necessary. There can be occasions where prolific divinations are done on various subject matters or a hobby. But do not overdo the divinations.

Be serious. A day or a week is not sufficient time for most oracles to unfold. Prognostications need time to unfold. If you follow some Yi aficionados to divine daily or weekly on how to live out their lives, it becomes meaningless after a while. Not only can such incorrect practice(s) make you become dependent on the Yi, you could easily confuse the unfolding of answers because of various overlaps and by assigning them (the unfolding) to wrong hexagrams. Therefore, it is best if you could find an interesting subject (no, not your love life) for prolific divinations.

For me, a professional accountant, asking the Yi on various types of investment proves fruitful over the decades. At times the divinations especially where there is a bull run can be prolific. There is no cause for overlaps because of the numerous categories of stocks and shares to invest in. I usually wait for the unfolding of an oracle, the prognostication, on an investment before asking again.

Not only can one do the necessary homework on the investments, be it real property, foreign currencies, stocks or shares, the answers given by the Yi usually convey clear directions on what actions to take. After acting on each prognostication, the investor has to wait for the oracle to unfold. Since the questions can be on various investments across the world and on their timing, Yi’s answers allow one to learn how to master time and space.

For example, the Yi indicated with Hexagram 54 Gui Mei / The Marrying Maiden with the second and third lines changing to answer my investment question in August 2006. In the judgment it is said:

Undertakings bring misfortune. Nothing that would further.

The third line has this to say:

The marrying maiden as a slave. She marries as a concubine.

Investors in the KLSE at the time may not know that this counter in question, Time Dotcom, would be married off as a concubine, that the prognostication, and therefore the investment, is not good. And while the other share investment which one had consulted the Yi on at about the same time had more than doubled – more than tripled if we count its lowest price before the rebound - Time Dotcom’s price has only gone up by a third over these past eleven months. (Refer to the relevant entries dated August 27 and September 3 2006.)

This explains why in my 64 hexagrams table, there are definitive good and bad hexagrams for investments. And there are good and bad lines too. Only by referring to past divination records, can we learn to discern and interpret the meanings of each prognostication since we can check into details, specifics, and the timing?

Conjectures and 'umbrella covers' given on prognostications do not work with investments. To be dead right, one really has to put the money where the mouth is!

Consulting the Yi on serious matters, scientific experiments, and investments allow for good divination experiences. And if we can foreknow of major events that will affect lives or investments in any parts of the world, then we can be said to have mastered time and space.

What you want to do with your affinity with the Book of Changes is entirely up to you. There are no prerequisites to your class, status, religion, wealth, and/or intelligence to study the Yi. All you need is a good translation of the Book of Changes in a language that you can understand, together with the ability to read and the interest to study this ancient classic and Chinese civilization.

However, as Richard Wilhelm has indicated in his translation, the Book is meant for the Junzi - superior persons - and not suitable for everyone. If we care to look at the Great Images, Da Xiang, we cannot help but agree. But, if you follow others to ignore the Great Images on the false premise that they are written only for kings and/or the Confucians, because it is a Confucian classic, you do not know what you have missed out in your Yi studies and the requisite cultivation of a Junzi.

By trying out the various suggestions in this entry, you could come to know your Yi better. Perhaps one day, in your endless search for excellence, you would achieve a higher degree of clarity and a deeper understanding of this profound Book of Changes. Who knows, certainly not me!

Sunday, July 01, 2007

A matter of opinion

The cover feature of Bizweek, the Star Newspaper, on Saturday 30 June 2007 collated opinions from various fund managers on the second half of 2007 for the KLSE. While all the fund managers therein agree that the second half is likely to see the KLCI scale new heights, every one had a differing view on how high it can reach. Most opined that the KLCI will be above 1,400 by year end and probably hit 1,500 in 2008. The most bullish of them according to the Star said that ‘the [Malaysian stock] market will eventually scale to 2,000 mark over the next 24 months’.

As responsible fund managers, probably they are doing their bit in talking up the market or providing some information on it. They are paid to do a job well and get rewarded. If the market overruns their set target(s), they are still fine by all counts, but if the market does a u-turn and plunge, the most they lose is a well paid job. But in a bull run, anything can happen. That is why one never relies on analysts or fund managers in any type of investments. I can do the necessary homework and then ask the Yi!

While the stock markets of many Asian countries rose in 2005; both the stock markets of China and Malaysia that year were down. The Shanghai Composite did exceptionally well in 2006 rising by 126.6% while the KLCI rose only by 22.8%. In the same year, the markets of Indonesia, India, Philippines, Hong Kong, and Singapore again outperformed Malaysia.

The 2007 YTD performance of the KLCI of 23.4 % underpins my earlier prediction of a super bull run for the KLSE this year. Continual liquidity and overall confidence in the stock market will provide the key supports to drive up shares prices.

The main reason for the call of a super bull run is because of the various good oracles given by the Zhouyi in late 2006 and in January 2007 on investments in the KLSE – from divination experience, similar phenomena had occurred during the early days of the bull runs in 1993 and in 1996. The actual price rise from each good prognostication had outperformed the expected returns on investments depicted in my 64 hexagrams table because of the bullishness (read confidence) of the underlying stock market.

It therefore means that the KLSE would perform better in 2007 than 1993 – the year in which the table for the 64 hexagrams, their expected returns was laid out based on actual rises and falls of the investments in question (read experiments). However only time will tell - a further six months to go - if the prediction for a super bull run will be correct or not.

Actually the rise in share prices in the KLSE is the start of a painful recovery process from the abysmal plunges caused by the Asian Financial Crisis in 1997/ 98. Those who were veterans of the 1993 and 1996 bull runs, like the particular bullish local fund manager, will note that most of the remaining low liners and second board counters that were quoted then are still way below – many less than 10% of - their peaks, notwithstanding their recent good run ups last year and the first half of 2007.

I chuckled when I read the Outlook for Second Half 2007 by CIMB Private Banking published in BIZWEEK, The Star, on Saturday 16 June 2007 and the following excerpts:

“We expect Bursa to consolidate in the short term after a very strong eight-month rally. Likewise, regional and global stock markets are also expected to experience a pullback on similar grounds. However, any pullback should be a buying opportunity as we expect equity returns of 10% - 15% on a one-year horizon.”

In the article, CIMB also mentioned about factors which can cause a fall in the KLSE: “a sharper than expected US slowdown; a rise in US interest rates; a delay in the widely anticipated cut in the US interest rates; and a heightened inflation outlook in the US, China and India.” “Any material negative surprises could precipitate a correction in markets given many investors are prepared to take profits” the bank added. They suggested “swapping a portion of equities position with non-equity correlated investments or lower volatility investments such as fixed income, hedge funds [sic], or just keeping liquid cash for re-entry on a correction.”

It sounded like they have been reading my mail (or the entry on ‘Reduce your gearing’)! However they may be a tad conservative in their expected returns. Like the various local fund managers, CIMB top range 15% increase of say 1,350 points currently will take the KLCI to 1,552.5 points by mid 2008.

In my opinion, and like anyone else, it is just a matter of opinion, if the performance of the KLSE or the Bursa in 2007 turns out as one expects, by mid 2008, the KLCI could be around the year stated. (Read the year aloud?) But do not wager the KL Futures based on my prediction; you could lose your shirt because of the daily, weekly, or monthly fluctuations (Think Changes).

Before 2007 comes to an end, there will still be bigger obstacles to cross. No, you would not get that type of readings from charts and analysis, even if you can chart superb ‘time windows’. (Think SN Lock, the chartist who formerly wrote for the New Straits Times)

The Yi prognostications together with the Yi chart and hexagrams table shall suffice. Confirmations from Daoist immortals strengthen each prediction.

If only kin and friends had listened carefully to my various suggestions on how to maintain and create wealth, perhaps then they would not have to lament their recent costly mistakes or lay blame on this or that.