Ding Donging Markets, the Quest for a New Broker and More LKYisms

Happy Good Easter long weekend to everyone!

1. Markets still in limbo

The markets tried to rally early this week but did not manage to break any significant levels. Then it slumped on Tuesday and Wednesday before bouncing somewhat on Thursday, closing just 9 points higher than where we ended last week. Which means we are kinda in no-man's land with regard to whether we are still on the bull bus or if the bear party has already started. Essentially we are in a trading range between 2120 and 2040 on S&P 500. Break to the upside and the bull continues, break to the downside and we can start getting acquainted with Mr Bear (who has become somewhat a stranger after 6 long years of not meeting him).

Hi, do I know you?

The portfolio has bounced up US$4,061.94 and recovered some of the losses I was talking about last week. But the portfolio continues to be geared bullishly until 2040 is taken out on the S&P 500. If the markets do break 2040, there is a risk of large losses being sustained. But that's what we have to live with when we have a major trend change.

2. A New Broker, At Last?

The most astute readers will recall that way way way back in end January 2015 I mentioned that I was on the lookout for a new CFD broker that I could use in conjunction with my existing broker (City Index). This is to mitigate any concentration risk in a single broker, given that currently all of my trading capital is parked with just one broker (and we all know what happened to MF Global). Well after 3 long months of done-nothingness I got off my ass on Monday to start making some calls, and given that most brokers do not allow short trading to be done for the specific instruments that I trade, I was pretty much only left with one broker to "choose" from, and that being IG Markets. I had looked at Oanda, CMC, Saxo, Kim Eng Maybank and Philip but none of them were suitable. 

The IG Markets platform (note this is not a screengrab of my account!)

I've gotten the account open and what remains to be done is to inject funds into the account, which I will be doing over the weekend. I will then play around with the platform and execute a few trades to test the interface. If all things work out, my grand plan is to open new positions with IG Markets until there is parity between the size of my positions with City Index and IG Markets. The downside to this is twofold. First, when I want to change positions, I will now need to execute both with City Index and IG Markets separately. This would be a drag on how quickly I can switch positions. Second, my paperwork involved in doing up my trading records will effectively double as I need to calculate costs incurred under 2 trading platforms now. I'm damn lazy all about efficiency and so will need to think about how best to make use of the IG Markets account. 

3. LKY Redux

I found it very poetic that it rained during LKY's funeral. You can choose to think that the heavens teared for him, or that perhaps LKY wanted to give Singaporeans a final test of their resolve and dedication to see him off in the less than comfortable conditions. 

The rain led me to think of an election rally of his in 1980 at Fullerton, where at some point it began to rain and he shrugged the raindrops off his head like a bad-ass with nary a concern. He then had some tough words to say to the SIA pilots who tried to go on a strike back then. Very potent stuff. But despite our propensity to complain about how the ruling party can do a better job here and a better job there, and sometimes we even like to use our votes to give them a kick up the backside, LKY did say something in that rally that I can't really disagree with at all. I'm paraphrasing like crazy but in effect what he said was that: Yes we screw up sometimes. E.g. in this incident and in that incident. But at the end of the day, we get 80% of our decisions right. 

Screengrab of the rally on CNA. "And I'm prepared to start all over again!" says the man, in response to SIA pilots who thought he did not dare to disband SIA and start another airline if needed. 

And I think the man has a point. You can look at it from the perspective of how often a striker in football converts his goalscoring chances. An above-50% rate is world-class, and an average EPL striker probably has a chance-conversion rate of 20 to 30%. If LKY's "conversion" rate (i.e. proportion of "right" policy decisions made) has been 80%, I think we will one day look back and think, hey, 80% was a pretty darn good rate. And I'm saying this as someone who has not exactly been the biggest PAP fan in the past.