Happy Chinese New Year!

Dear readers, RetailTrader wishes you a Happy Chinese New Year of the Goat! 

Look at those horns! Is it a bull or a goat? One giant leap for the stock market?

The S&P 500 hit new record highs last night, crossing over 2100 for the first time ever. I will speak more of the markets in the weekly trading update this weekend, but in the meantime to all Singaporeans who are hanging around restlessly and waiting to knock off at lunchtime and have some fun before your reunion dinner and countdown to the year of the goat at midnight, 恭喜发财, bring on the ong lai and huat ah!!!

Trading Update: 14 February 2015

True Profits Earned in 2015 to date: US$9,940.38
All-time maximum profit earned since 2011: US$142,641.26 (new high water mark!)
Current drawdown from all-time maximum true profit earned: US$0
Change from last update: Up US$5,303.08
Directional stance: Portfolio is 58.45% bullish

Happy V day to everyone! V also stands for, amongst other things, victory in light of more green shoots! and a nice new green candlestick on our weekly candlestick chart to the right of this blog.

The prognosis is that unless the markets decide to go batshit crazy on us, we are seated on cabin 2015 of the bull train with the ticket saying our destination is this place called "S&P 2200+". We can expect a fairly steady "slow-grind" journey with a few small bumps along the way, without too much scenery to see. But please keep your seatbelts on at all times, just in case.

A bull locomotive train, powered by S&P bull power™, circa 2015.

I hope to bank more coin from this bull leg for what it's worth up to 2200+, but as I bank more profits the portfolio stance (which is currently 58.45% bullish) eventually becomes less and less bullish as the bull and bear components of the portfolio adjust by themselves. This in turn reduces the extent to which the portfolio is able to profit in a bullish market. Hence, the short-term plan is to do a reset of the portfolio when the bullishness of the portfolio drops below 55%, to raise the bullishness levels to about 60+%, and that may happen sometime next week. That means calling up the broker again to scream names of countries down their throat - precisely my idea of fun late on a weeknight. 

You may ask why don't I just set the bullishness stance of the portfolio higher at the outset? That's because there is no free lunch in this world - when the bullishness stance is set too high, I run drawing a large loss in case the market goes bearish. So it's all about getting the risk-reward balance right.

For the folks celebrating V day and/or Chinese New Year, I wish you a fun and enjoyable time and hopefully there has not been too much stress in preparing for these occasions!

Trading Update: 7 February 2015

True Profits Earned in 2015 to date: US$4,637.30
All-time maximum profit earned since 2011: US$137338.18
Current drawdown from all-time maximum true profit earned: US$0
Change from last update: Up US$21,897.78
Directional stance: Portfolio is 60.42% bullish

Lei ho ah! Mo men tai! Hai ya hai ya! Mrs RetailTrader and I are spending a long weekend in Hongkie Land where our plan is to eat and eat and eat, and sleep. Sounds like a plan?

Can't spend too much time on blogging when this awaits you.

What a difference a week makes, and it's good to see some green figures on the weekly update again. As things stand, the downtrend that seemed to go on and on and on finally appears to have ended. The chances are the S&P 500 has finally bottomed in the 1970s and it actually hit the 2070s in the course of last night before correcting to the 2050s. Hopefully, we are finally on the bull train that takes us to the 2200s for good now. 

The drawdown in the markets has been a drawdown for my emotions as well. I have to admit in the course of the correction I have spent some moments at night (away from Mrs RetailTrader) staring at charts and trader sites wondering when the correction would end, staring at trendline after trendline and support level after support level being broken, Fibonnaci retracements to precarious levels, and drawing up exit plans in case the worst happens. Who said money was easy to earn? 

One positive takeaway that has proven itself to be true (empirically) is the way this strategy seems to work out is that each and every time my emotions get tested, it is a sign and clue to me that the markets will be turning around soon. Well while this may be true, it's still important to prepare for the worst, because in trading one blow up is all you need for the game to end. Rule # 1: NEVER BLOW UP.

On another positive note, the markets appeared to have bottomed out together with the recession of my flu (again, at long, long last!). Hmmm am I some kind of market harbinger? Like the World Cup octopus? Perhaps markets will correct whenever I sneeze or cough?

Ok enough from me. I'm out of here now because I have a lot to do in Hongkie Land. I'll see you again when I'm back in Singapore!

Systems of Success

I have been giving a friend gym lessons every weekend. I am not a qualified personal trainer but I have always thought it would be fun to guide someone and watch their physique develop.

It was not so easy to get my friend to get started though. My friend had for goodness knows what reasons signed up for a boxing course with the aim of entering into a competition. He's a skinny guy by nature and had recently been lamenting to me about how he wanted to grow muscle as he was always outmuscled by his sparring partners. But, he said, he did not want to go to a gym because that was beyond his comfort zone. He said that he had been doing bodyweight exercises at home but felt progress was slow. He also had problems motivating himself and would only exercise when he was in the mood for it.

I asked him what exercises he had been doing. Not that I have anything against bodyweight exercises (I used to do them and got a lot out of them), but the nature of the exercises he was doing was like, I told him, trying to box with Manny Pacquiao with one hand tied behind your back. Why do that when you can box with two hands?

I then went into a grand lecture as to how success is a culmination of habits. To achieve success, you must take the necessary actions that cause you to improve. Depending on what you are hoping to achieve, there are many things in life that require constant, habitual actions to bring your goal to fruition - i.e. you create long-term habits in your life that lead you to take actions towards improvement and hence success. And to create habits, you need to have 2 ingredients: 1) knowledge and 2) motivation. This is the road map to success - by accumulating the requisite knowledge and motivate yourself into building long-lasting systems of success. Or so I thought. 

But let's break down this road map again and look at it from the other way round.

Knowledge - My friend did not have knowledge as to the workouts he could do in the gym that would efficiently develop muscle. I gave him a run through verbally on the basic exercises he could do. Problem solved. He could not say anymore that a lack of knowledge was inhibiting him from succeeding in his goal. You now know what you have to do to succeed, I told him.

Motivation - I told him that he had to want to achieve his goal badly enough. There was no point in complaining that his workout regime was not working out if he was someone who exercised in accordance with his moods. I asked him how serious he was about this boxing competition. Did he want it badly enough? Perhaps he was better off pursuing another sport, like chess? He shook his head vehemently and said he wanted it. Then I said ok, then the next thing he has to think about, now that he has the knowledge and the motivation, is to:

Habits - .. is to use the knowledge and motivation to create long-lasting positive habits that would cause him to do things regularly that can help him to succeed. There are ways in which you can make yourself do things on a regular basis for the long term. Taking exercise for example, some people like to have exercise buddies exercise with them every week. Failing to show up would mean letting your buddy down. Some people make a public commitment e.g. on their blog to say they want to exercise every week. That could work as well if social pressure gets you going. I told my friend another way to ensure that he sticks to a routine of exercising every week was to give someone trustworthy a large sum of money that will be forfeited and given to charity if he failed to turn up for the exercise session. But that sum of money had to be big enough so that he feels the pain. I nobly offered myself for this very important role but he rejected my kind offer. Then I offered to help supervise and push him every week if he would come to the gym near my place. He was on for it. That's building a habit for you.

Actions - Then it was just a matter of showing up. First week goes by, second week goes by. You set out to do the things that your habits lead you to do. After a while things become routine and you start to do those actions by autopilot. Any resistance you had towards doing those things start to erode over time and you no longer have to motivate yourself to do those things because they have already become an automatic, habitual action. And over time, the actions accumulate to lead you ultimately towards progress and success.

Until recently I thought progress in life towards your goals is about building enough positive habits that will each take you on autopilot to progress and success in things that you find important. In other words, building systems of success. It's a bit like building dividend streams that will lead you to wealth - here then, I'm talking building smart streams of little habits that will make you a stronger, faster, better person. Habitual progression. I still stand by this but recently I came across a blog entry that has added to my understanding of the path to success - there was another path I had not been thinking about. More on this in a future post.

Expenses Update for January 2015

Here's my inaugural post on my personal monthly expenses. I also wrote a summary of my personal finances (including expenses incurred) for 2014 here.

Breakdown of expenses:

• Clothing: $130.90* - This includes laundry, some of which we outsource to our friendly neighbourhood dhobi.
• Food: $1780.22* - Food is averaging at $30 almost a day with the bulk allocable to dining at restaurants. Yes, it's sinful but we eat out most of the time and at restaurants most of the time, with the occasional splurge on fine dining. If there is some fat that can be weaned from the expenses, this would be it but we are folks who enjoy our food.
• Health Care: $482.98 - This was unexpectedly high because of the stupid flu I have been going on and on about. Four trips to the doctor and one to the pharmacist ended up costing about $200. The rest can be attributed to largely health supplements. I'm a health junkie and am a VIP member at iherb.com - more on that next time, I'm sure!
• Home Office: $11.75 - Purchased some stationery from Popular. Nothing much to see here so move along, folks.
• Household: $283.70* - This covers largely the quarterly aircon maintenance contract we signed for 2015, and housekeeping (which is something we outsource as well to a part-time helper who comes about once a week to clean up).
• Others: $600 - A one-off work-related expense. 
• Parents: $2000 - Because I'm a good boy deep down.
• Personal care: $329 - This covers haircuts, hair treatment and some face serum I bought for my metroself.
• Property: $293.76* - Quarterly maintenance expenses for our house
• Tax: $1108.07 - Death.. and taxes. Certainties in life.
• Travel: $121.60 - This relates to transport actually, so it covers top up of EZ-Link and taxi rides. I don't drive but Mrs RetailTrader does.
• Utilities: $153.57* - Covers electricity, water, internet, cable tv. Yeah some people think we are using a bit too much aircon.
• Mrs RetailTrader: $4 - Erm not going to say too much on what I spent $4 on Mrs RetailTrader ;)

Total: $7,299.55

* - denotes expenses that are shared with Mrs RetailTrader

Top 5 categories: 1) Parents (27%) 2) Food (24%) 3) Taxes (15%) 4) Others (8%) 5) Health Care (7%)

I think amongst the Singapore bloggers who track their expenses, mine must be one of the highest hahaha. Well that just means I have lots of room to improve :) But February's expenses may be higher because it's CNY season and my first time giving out red packets. And furthermore in January I could skip my monthly mortgage payments because we credited excess sums into our mortgage savings account last year. Let's see where we end up. My goal for this year ultimately is to save 50% of all income (including trading income).