Live a simple life

How important is timing?

2010-03-24T21:33:00.000-04:00

I don't think there is such thing as timing. What is market timing anyways? I think most of the people mis-understood timing. Even I fail to understand what it means by timing. It is laughable that people wish they can get in and get out at the right moment of before market crash and before bull market runs. Is there a clock that tells you what time is it in the market? I don't think there is such clock.

So how do people seemingly time the market without the clock? They resort to emotion and technical analysis and they ignore market fundamental. The better way to invest is probably ignore your fired up emotion and technical analysis; just focus on fundamental of a company valuation.

Follow these 3 easy steps will help investors increase return on capital invested.
Three easy steps:
1. buy company’s stocks when there is a hidden value
2. maintain the position as long as there is hidden value in the stock
3. ignore technical analysis

Source: http://www.ndir.com/SI/articles/0609.shtml

Simple life's journey to million dollar

2010-03-24T14:52:00.005-04:00

Today is a great day. I got a break off work. It is a great opportunity to re-launch my blog. This is inspired by www.milliondollarjourney.com. The blogger there has done a great job reaching his goal. He has already reach $500k mark. I think he should be able to reach the 1 million dollar mark 3 years from now.

And today, I will restart my blog, to talk about my journey to million dollars and how I get there.

It is possible to outperform Buffett.

2009-01-17T23:18:00.005-05:00

The table on the right is the performance of buffet’s Berkshire Hathaway. At the annual return of at least 25% (I don’t have the exact number) he has become the richest man in world. Yes we all want to be rich like him by investing, but how? We aren’t as smart as him. Don’t get discouraged, you don’t have to be smarter than him to get richer than him.

You can do just as well as him by simply invest in his company Berkshire Hathaway. It is good, but as an engineer, my mind was trained to improve anything that can be improved, even improving our portfolio to outperform buffet! Now that’s worth a read:

According to my observation, all of buffett’s new investment in year 2008 has been losers for buffett. But don’t worry, buffett did his due diligence. And you can bet your life saving that his biggest new investment such as: Wells fargo, ConocoPhilips, US Bank corp, Burlington North Santa, Kraft will do extremely well in the coming years. If you buy the stock at 30% lower than what buffett paid, you bet you will beat his records. Here is what he bought this year:

Let us all come back in 1, 2 5 years and check out how these stocks are doing.

Wake up! Your mind is playing trick on you.

2008-11-21T16:02:00.004-05:00

You know your mind is playing trick on you, when your intellect tells the market bottom is near. Why would you fall into your own mind trick and sell the market instead of buying it? When this is the greatest investment opportunity Mr. Market offers you.

Here's when the bottom will be in. If you bring up stock investment at your thanksgiving table, and instead of talking about "when the bottom is" or "what a buying opportunity this is," your semi-clueless uncle/in-law (you know who!, everyone has one) stares at you with dull, distant eyes, remembers, with pain, what happened to his retirement portfolio, and says, "who the hell would invest in stocks? Are you crazy? What is this, the 90's?"

When the average, clueless idiot who knows nothing about markets or financing has given up hope, when the common lore is that investing in stocks is for sophisticated people and nice stable bonds and savings accounts are the best retirement savings, when people start scrutinizing their budgets and purchases, when the rich are frightened and ashamed of conspicuous displays of wealth, when wildfires burn through the vast expanses of empty houses in the inland empire, when you've got to know your neighbor, because neighbors have to help neighbors get by, when grandma moves back in, when it isn't the "other guy" who lost his job, when the American Joe has it so hard, has been hit, lied to, bamboozled, and screwed over so many times that he can't afford to be a useless idiot anymore... that is the bottom. No sooner.

Finding the Bottom

2008-10-30T01:39:00.001-04:00

There is only one cause that brings the bull market to its knee, which is when companies doing bad or the entire economy is doing bad.

That was easy, we can tell when we reached the peak and get out before the big crash (down 40%) but what takes the stock market out of the bear market? To make investing life simple, I want to get the clear clue. The simple answer is when economy starts to turn around. That’s true, but we will be way above the bottom. So it isn’t that useful.

If I look back at the peak of the bull market, people ignore all the fundamental and buy whatever the media suggest. So, same scenario for the bear market is the capitulation point where people sell regardless the fundamental. The bottom should be at the maximum fear. That’s when the economy seem like it will never recover, we will never get any job, business revenue will keep losing.

Catch the Bull & Avoid the Bear.

2008-10-04T16:23:00.005-04:00

How could we miss all the signals that were telling us the bear market(credit crunch) is coming?

I have already been hit by the worst financial turmoil in my first year of investment career. But, as long as I have a full time job providing me cash flow to invest, this bear market driven by credit crunch is probably the best lesson. It also prepares me for the future bear markets to come. Oh I am learning from the best-worst bear market.

We better learn from the our past and benefit it for our future. Here is a graph that pretty much telling us all the signs of pre-bear market and pre-bull market. Catch the bull and avoid the bear:

Tell the telemarketers to beat it.

2008-09-22T17:43:00.008-04:00

I was having a good monday afternoon nap until 3 telemarketers called me. It really drove me through the wall, so i did some research.

If you are from canada, you can call these numbers to put your on the "no calling list":
1)
1800-462-4463, pick option 2, tell them you want to be in the no calling list.

register the "national do not call list" http://www.lnnte-dncl.gc.ca/

2)
SQM (Service Quality Measurement Group)
To get off the calling list call 1-800-446-2095.
Remember to ask that you be put on the Do Not Call List for ALL companies that they are AFFILIATED with.

3) How To Stop Telemarketing Calls

Here is how one of us humor ourselves: http://www.snotr.com/video/1298

If you know anything to prevent them calling us, please let me know

Opportunity knocks S&P 500

2008-09-18T10:44:00.005-04:00

One of the sure bet is when a company to be added to S&P 500's index.

The reason is that, there are many institutions, mutual fund, passive indexers who are only allowed to buy stocks in the S&P500. So naturally, all these institutions, indexers and mutual funds will add this company to their portfolios, causing a short term demand for the company stocks, pushing the price higher.

Here are a few companies will be added to sp 500:
saleforce.com (announced date: 2008 09 11, price: $58, replace FMN)
Fastenal (announced date: 2008 09 11, price: 53.99, replace FRE)
Harris corp (announced date: 2008 09 16, price: 47.4, replace Leh)
kraft (announced date: 2008 09 18, price: $33.34, replace AIG)

I added the date they were announced, so we can check how they do a few week after the announcement.

Retire as early as possible, but not earlier than possible

2008-09-12T19:51:00.011-04:00

There is risk if invest in stock market. It also brings up your worry-ness level.

To be truly retired without worry, the best way to do that is make sure the post-retirement income is risk free.

I would suggest to use your projected annual income divided by 5%, that’s should be how much money you will need to retire without worry.

For example:
I need $30000 annually. so i need 30000/0.04=600k to retire comfortably with most of my money invested in 4% bond and a bit money in stock market. Even my stocks investment falls; I still get the money from the fixed income.

Here is a quick calculation for people who needs to know how much they need to retire:

Shopping but forgot your coupons?

2008-09-04T21:09:00.004-04:00

Have you ever purchase something and forgot that you could have saved 10-25% percent but you forgot to bring your coupons? What about forgetting to bring your Air Mile Card? Well, I certainly have forgotten many times.

Here is a good advice for the forgetful and busy ones, so next time when you go shopping you won't forget them:
1) Put your coupons in your car's cabinet.
2) Put your Point cards (air miles, petro point, department store point card, home depot, pc card ect...) in your car's cabinet.

3) for people who don't drive, you can keep some point cards/coupons in your wallet just in case, but try avoid overstuff the wallet, or you end up with a George Costanza Wallet.

Final Word:Keep your life simple, make things easily accessible.

Don't Squeeze The Garlic: Garlic E Zee Dice and Garlic Twist

2008-09-02T20:35:00.006-04:00

This is the tool I've been looking for ages. If you are like me who loves to cook; I bet you know how tedious to chop garlic into small pieces or how stupid the garlic press was designed. I have been trying invent a new way to chop garlic. Today I found two similar product: Garlic Twist or Garlic Pro E-Zee-Dice, they can quickly turn peeled garlic into a fine dice and easy to clean with a quick slosh of hot water and soap.

Life should be simple, the new garlic twist fits our core belief perfect. Throw away your garlic press and welcome the garlic twist.

Decode the force that propel stock market.

2008-08-31T12:10:00.011-04:00

There was an interesting article from Forbes about what makes stock market go up and down.

In short, the stock market and the ~~herd~~ investors only care about the expected cooperate earning because that's the only reason why market goes up. The market doesn't care about the economy as a whole.

Here are the clues you can pick up when cooperate earning are about to rise:

1. When the feb is starting increase interest. This usually means the feb has been making it cheap to borrow money from the banks; by pumping money into the economy businesses are expanding quickly and so is earning and inflation. The fed needs control inflation by hiking the interest.

2. When S&P 500 p/e falling. Which means the "e" the earning in the p/e formual is raising.

The chart illustrated similar pattern between s&p 500 and fed discount rate.
They go up together, down together.

This chart illustrated inverse relationship of S&P 500 p/e and S&P 500.

Final word: Interest rate will raise, and sp p/e is at the 2003 peak; evidence suggests bull market is coming soon.

Full story via Forbes

How to lower the interest on loan and credit card debt?

2008-08-30T23:21:00.003-04:00

We will tackle this issue head to head. There are Credit card loan, mortgage, student loan and what not. The interest rate ranging from 7% to 18 %; yeah, that’s gonna eat up a big chunk of your pay check.

What you want is lower the interest you pay so you can pay less interest and get out of debt quicker. Here is something you didn’t know that can actually lower your monthly interest:

- Call your credit card company and ask them to lower your interest rate.

- Get a line of credit with lower interest rate. Borrow the money from your line of credit and pay off the high interest credit card first.

- Last and the most effective way is to get a 0% interest credit card. Use the money borrowed from 0% interest credit card to pay off your other high interest debt. (note. 0% interest promotion usually last 12 to 15 months)

You can find all the 0% interest credit cards here.

Freebies, Life should be free

2008-08-30T14:10:00.010-04:00

I love getting stuff for free. I used to get a lot of free samplers ranging from shampoo, shavers to tea cups. They saved me a lot of money in a year.

Here is the ultimate site for you. You can literally get anything for free. You can find a lot of free stuff here:

- www.totallyfreestuff.com (all kinds of freebies)

- www.pgeverydaysolutions.com (free P&G product samplers like shaver, shampoo, bodywash)

Small and Cheap laptop for outdoor

2008-08-30T00:54:00.009-04:00

I want to be able to blog and surf the net anywhere I go. Yes, there are laptops, but who wants to carry these bulky laptops on the road? It wouldn't be safe to carry all your important information on the road.

So the solution is to get a very cheap laptop that you wouldn't care if you lose it. Here come the netbooks, they are cheap, lightweight and best of all, they are easy to use! They can be turned on in 30 seconds; they run on Linux hence you don't need to worry about viruses, hardware drivers and buying software ect....

They cost between $299 - $400. The most populous netbook is the Asus Eee pc 901, DELL Mini 9 and IBM U10 are also releasing their flavor of netbooks in sept 2008.

complete list of netbooks

The Most Essential Secret to Successful Investing

2008-08-29T18:04:00.006-04:00

Here is a worthwhile post from seekingalpha.com about the most important aspect of investing:

What is THE most important aspect of investing?

It’s not the ability to read a balance sheet. Nor is it recognizing trading patterns. In fact, this particular quality isn’t even specific to investing; it’s essential to any skill.

I’m talking about patience.

From an action standpoint, investing is boring. Unless you’re a day trader, it’s very much a waiting game. After all, buying or selling an investment requires nothing more than a click of the mouse. A couple seconds and you’re done. The rest of the time (99%) you’re doing nothing.

Full Story via seeking alpha

You can't teach money

2008-08-28T23:40:00.008-04:00

Law professor Lauren Willis suggests that we just give up on financial literacy - she says it's a waste of time and can even get you into trouble.

(Money Magazine) -- When Americans are in financial distress, politicians often call for better education. Case in point: The Economic Recovery Act of 2008 allocates funds to improve borrowers' knowledge of home loans.

Lauren Willis, an associate professor at Loyola Law School in Los Angeles who specializes in financial products regulation, says that's the wrong move. She argues that trying to teach consumers to make wise money choices is not only a waste of time and resources, it may be dangerous.

Question: What's so bad about financial education?

Answer: It doesn't work. Sellers of financial products spend billions drowning out well-meaning messages to consumers from nonprofits or government agencies.

Continue...

Starting your own blog

2008-08-28T21:39:00.007-04:00

Today is the first day my own blog. Like everything we do for the first time; I have done many things unnecessary such as finding best blog provider and finding the most beautiful templates.

I could have saved myself a lot of headache and 4 hours of my life. These flashy template and blog providers are like your friends' beautiful blond girlfriends, they are high maintenance. We don't have time, energy and attention for that. We want our lives to be simple.

At the end of the day, I chosen the default template supplied by this blog's service provider, I avoided to change the color or picking on every detail.

Now I have a simple blog that require minimal maintenance time which allows me to blog the things that matter.

Last Word: Keep it simple, use default setting

Live a simple life

2008-08-28T12:16:00.000-04:00

Last night I was swamped with tremendous amount of worries. I worry about keeping my job, worry about starting a family of my own. Such event leads me to realize how complicated my life have become. I rather live a simple worry-free life, and I start this blog to pursue my dream of a simple life.