Trading No EU default anymore?

The fear has a U turn from fearing EU default and sky falling down to fearing the leaving trains without them or us. Don't be so sure and market is not a place for 100% sureness. If we have been in the market we still need to dig out the last defending line before all of clouds gone.

There are things are sure:
1. if you want to hold your position and you could not hold your last defending line, you would be the losers which need years to cover your loss from your jobs in office.
2. if you can hold your position and XAO come back to 5000 later and you just trapped there since April and have done rebalance in the way XAO lead the market into GFCII, you would be OK even it means you have to wait for years.

How could you hold your position and let market help you to correct your mistakes of over-optimism is a critical issue you have to get your mind!

 

After hopeless floating everywhere...

Got a email from one of my best friends in which he told me he has sold WPC at $35 with some profit at buying price of a little bit higher than $30. He did much better than me since he could wait for the worst price came in consciously or not. Anyway profit is always better than losses.

I do wonder by myself that what have driven XAO to lead all of Aussie to believe GFCII was ahead very soon? Market tends to predict what happen in next 6 months. Are there anything seriously changed and why XAO could change its mind in days? All of us know Greece and EU are the curses for the global financial system since August. Too many Aussies lost the shirts since they just believe emerging economies had been decoupled with the advanced economies in GFC and failed to ride on the V-shape recovery. XAO as a whole doesn't want to repeat what mistakes it has made.

Now EU sounds able to be there but people logically infer that if last 28 months EU could become worse and worse, and the lure whole of XAO to sell at the brink price of GFCII, it could be worse again. However another logic concern is also on the table now: if you dare to bet when EU seemed crash onto ground you have chosen to risk your capital to lose about 30%, why don't hold a little bit longer for better return? What did your system tell you? Does your system have some logic bugs? Unfortunately my friend has lost much more than me since usually he doesn't buy if market sentiment doesn't let him feel comfortable.

Seriously saying we all don't know what happen next week. Could it a U-turn since Western Economies could stabilized and emerging economies could get the rock bottom after they have tried all to control the inflation and red hot economies due to over-supplied money? Could it the beginning of another tsunami before the clouds could be gone? Both are possible and who can say they are not.

After market has beaten all in the market who dared to challenge what market wants to set, most of us tend to prepare for worse than we could image. It is not wrong but a critical question is about your faith about XAO in years ahead: do you believe XAO, emerging economies, advanced economies, and this global economies have been moved into its end? Do you have enough cash reserves if all crash down again after EU is confirmed to be gone? Do you think if you have enough cash reserve and then EU just stays there after it fixes its flaw from its birth? Could you synthesize all of available information to bet the qualities such as WPC if you hate the dirty-cheap fishes and believe they are the toys or lures to gamble?

When we look for jobs, we need to plan, creative thought, and thorough appraisal of what would be for us, right? I do feel it is not right to make decisions to sell or buy in the tsunamis for some dollars from the risk of $10,000 more or less. I want to say what I thought to my friend but how could I after I have made a series of mistakes? I just could do is carefully tell what I feel even they are what I believe.

I dislike to say I told you since while today becomes a new yesterday, there are something you just could not tell. No one could tell. Winning always needs we are exactly right in future and determinant with great prudence even everyone gets the buffers in different format. It is highly possible I just don't know the form of the buffers my friend is using.

 

Fear, relief, & hope after a real crash

EU, US, and China don't change too much but XAO desperately moved itself up today especially the blue chips broadly.

After selling in the May and June to clean up the balance sheet, big or small market players, XAO was so scared that it sold at the beginning of August as though the world would be in GFCII sooner and decided to act immediately. Actually it braced the GFCII heartily and decisively.

Any signals for GFCII, true or faked, were used by the shorters and then bargain hunters collectively lost their guts. It turned to be popular to predict this world and global financial system at stake. What could you do if your life is in risk? XAO has been in the fleeing to nowhere but hopeless.

There are patterns for the crowd once they get into the brink to crash psychologically, which have been repeated in history and highly likely would repeat in future:

1. Anxiety
2. In denial
3. Fear
4. desperate
5. panic
6. despondent
7. depression

XAO actually was in anxiety for a long time, which started in October 2009 and then swing among the moods of anxiety, denial, and fear. XAO became desperate in July 2011, after it failed to get a traditional sunny days after tax sale. The news about the deteriorated EU and US debt crises, and China's GDP slowing down plus inflation issues, got XAO ready to crash and got into deep desperation in the end of July.

Once US and EU started to crash down at the beginning of August, XAO decided to jump down immediately and tried to take lead for the global market into GFCII. XAO became the slaughter table for bargain hunters and most of retail players flee away broadly.

However EU US, and China wend far less than XAO's assumption but extended the extremely volatile period far more than that in GFC crash. It has last for more than 2 months:



XAO has turned it the land to short. Two months tsunami are enough to drive the crowd to stampede each other and then people advised each other not to gamble anymore and everyone in the sideline feels as sages since they just sew what would happen long before XAO and all of market crashed down. "I told you so" even few really could boast for enough profit to cover the brokerage fees.

A real bottom signal started to appear: a tax driver, one of my neighbors, has started to feel no hopes for the stock market! He never plays in the stock market but now he could tell how risk if anyone plays in XAO.

Shorters are more sensitive to the signals for XAO to be at rock bottom. They are big boys and have the capital and tech to play the relative price range. After they helped XAO to crash ahead anyone else in advanced economies, they felt enough at least yesterday and today even retail ones still wonder what really could drive XAO up!

Yes, EU still has the risk to default but these shorters know they could not fight against the policy makers without the risks to lose heavily. Actually as RBA said, Australia market, its dollar, and sentiment could not be set by what Australia economies would do. However it becomes a little bit sure that GFCII seems need more time to materialize if it would be there.

Not the longers have got the lessons but the shorters too. What if V-shape recovery happens again? It seems the up risks are more than down risks. What if shorters starts to be fearful for up risks? If no worse news flowing into from EU, US, and China, XAO would find its rock bottom.

Could it get the feet on the bottom? Relief is the sign for hopes to grow up. Hopes once become bigger enough would lead the way for optimism. Cash reserves, bet on the relief with enough capital left for the GFCII crash, average down the total cost far more than the historical means of XAO, generally are the road maps for value investors to play the distress, hopeless, spreading bloods, and gems on fire sale.

No risk? There are! If the modern capitalism has to be in the hell. It is a matter of the faith! Why so many gamblers leave their chips on table and never come back? They may have some great systems but they are operators only! They don't know the nuts and bolts of the market or free capitalism!

So many people guess China could go so far because the central controlled political system in communism. It is not true but because China in somewhat is a capitalism society more than Australia and Europe. Deng said if a cat can catch the mice, who care about it is whit or black. China has never given their people so beautiful social security for anyone who really don't want to work! Communism in reality never bring the ordinary workers enough food even quite stable and bored life.

If China could benefit from capitalism, do you believe market would be at the end. Someday XAO would be back to 5000 and all of shorters would be longers. When? That is the problem and that is why you have to diversify and time average for your risks and have enough cash reserves for human errors. System operators don't believe they could make human errors, do you believe that? If no human errors no human there! Where would human market be? In the hell!

So the bottom line is cash reserve, faith, great margin of safety to buy with the qualities which never be falling knife to the ground. Do you know qualities and which price set the margin of safety for your capitalism cruel instinct: Get the profit from the dried bloods shed away from the operators to drive their cars into the hell? Could you?

 

I didn't know unfortunately!

Get the profit from the dried bloods shed away from the operators to drive their cars into the hell! Could you? Unfortunately sometimes I could but sometimes I just could not. It really lets me feel sorry for myself. A lot of things I didn't really know onto the earth before April.

I didn't know market is a war place which could play the human instinct to extremes; I didn't believe I could synchronize myself with the crowd when I didn't dare to forget the margin of safety; I didn't realize it needs some sufficient conditions for buying when the street are full of bloods, which is the bloods are being dried up and the warriors have not any more bloods to shed; I didn't keep my eyes onto the mouth of taxi drivers to find when they curse the market and feel sorry for the stupid market players; I didn't know the psychological patters; I did let my guess for the bottom hold me in the market when it become anxiety!

Big mistakes if you don't know, could not let you feel sorry for yourself even the consequences are much worse than what you feel now. I just could not lose my faith for XAO back to 5000. I just have the rule not to trade anything at the rock bottom. It is the rule to hold in the doorstep of the hell. Should I take a spade? It is not a issue to be survival only.

In Australia especially in Perth it is so easy: sell all and consume all and forget all, a happy survival even not glossy as we hope. It is much worse than taking a spade if you can find a spade whatever kind of! Why? XAO could be back to 5000 in surprise speed. Are you sure? No sure but if it happens your sale on fire would set you in the survival camp for ever if you are not younger than me!

The spade could be the key for get all of lost paper profit back let alone the affordable size of lost capital. The fear is powerful and then it could drive me think so hard. If I could get the lessons, it would be a valuable assets for me. I would try to let them into my bloods once I feel bored to find and use the spade.

 

12 lessons from the life of Steve Jobs

Life is short but some could make more meaning, which is amazing. Jobs' life is short bur really amazing. Could we get more colorful if we are not lucky enough to be amazing and never stop to try make it amazing? He was visionary and focus on to make the vision become true.

He was lucky he could keep his feet in the visionary field and direction. Read the article below, do wonder whether I have got my life colorful which is allowed by the environment! I am lucky enough in my generation born in China. Could I run between 55 - ? with the colors I could touch at?

I like the reviving life and visionary life. I admire Jobs as I admire Buffett and Soros. All of them put their toes in their loved fields with the lucks and self efforts. Environment is not fair to everyone. Don't bother that but you could learn from the lucky greats. They try first and then they go so far and much more far than imagination.

12 lessons for us all from the life of Steve Jobs - Portfolio Insights by Brett Arends - MarketWatch

1. Yes, you can make a difference! If you want at least you can make a different from you in past.

2. You need a vision! Conventional wisdom or popular belief have the rationality roots in normal time. The time is not always normal. In darkest or brightest days, you need vision to guide your vehicle. You could be frozen or dizzy and then you would take the noise as the signal for future. It is never right but usually result in completely wrong.

3. It’s not about you! It is never about you to decide when warriors need your hands. You need to know what not about and then you have the chances to get yourself and defeat you with biases and insanity!

4. Focus, focus, focus! If you could focus you would have the chances to hit out with your fist rather than your fingers. Don't misunderstand its about strategy not tactic. Sometimes you could not focus on a hole or hitting your head against the wall. The dark is there why don't leave yourself in your corner for some bright and happy things in future?

5. ‘OK’ is not OK! Get the profit is OK but it may not be OK but the signal you are in bigger risks if not the risks in the hell!

6. It’s not about the money! If it is true it is about what for what you focus on? It is about the colors of your life. Jobs has a few very brightest colors but you could have your color and meaning for your job and you could interpret it by yourself. Once you could make the colors you may have the chances to let your loves and mates colorful too! What if you could make the color to be seen by everyone? If the shallow colors in you soul could make you feel the meaning of your life, it is OK even not OK enough!

7. It ain’t over till it’s over. You would not be a loser in the market if you don't let your market business close the door. Don't listen anyone who urge you to close the door. They would be losers in life since they could not do their job patiently and toughly since the last destination of any ways needs the persistent efforts and a lot of time.

8. Give people what they really want. In the market service business you could extend your business only if you know when the warriors really want. The needs of human doesn't depend on the time but mood. Someday and sometime we just want something and we would like to pay the reasonable premiums.

9. Destroy your own products — before someone else does. We like profit which is the product we try very hard to made. Take them away from the table if you feel someone would destroy it. Could you get the senses for the risks someone would destroy it? Take them away.

10. We are all spin doctors now. It needs to put down to hype and hustle driving by the greed and fear which would make you fret rather than peaceful. Why was I synchronized with market sentiment? I am in the spinning revolved by Mr. Market. It means you lose the control. No control and then thing in the hands of the spinning. Once the spinning big enough, you would be thrown into the hell or stayed in the side line to see V-shape recovery trains gone without you!

11. Most people don’t know what they’re doing. You could be among them too. Do you know what you are doing for your market profit? Crying in the darkness is worse than not know what you are doing.

12. Your time is precious — don’t waste it! I don't want to waste it but I do find I have less time to update my mind quick enough! Why do you right up now? It is because I have got a good sleep in the day and after reading and making my CV better, I really enjoy to read about Jobs and ponder how to use the lessons from him for my future market business.

Mental latices need a lot of read and ponder to break the barriers in your mind. It is a way to change yourself by putting something into your bloods and cells. There will be a threshold point and if I could reach at I would be different from that formed by my past.

 

in action ...

http://www.zapiks.com/share/player.swf?autoStart=true&lang=en&file=52372

 

That's brilliant Tropo! It's a pity that the video is buried within this thread.




Johny.

 

Stop losses: What kind of losses?

There are too many words among good or bad traders. Actually they seem the privilege for trader to stop losses since most of them just could not make anything else. Before you think about stopping losses, you should be sure you are prudent and tough to buy at low enough price to the future your sale price. If you keep to pay high cost, your excellent products, shares in your hands, would produce losses and then your primary job in the market is "stop losses." Once stop-losses become your business, the result is easy to predict. Could predict your daily stop-loss business?

Stop losses should be few and they should be kind of emergent actions.

Depending on what your business model in the market, everyone should have the plan B in stake since even most of traders don't believe they could make human errors but they are humans. Human makes human mistakes and his system would help him reduce or magnify the human errors as output. It is not stupid to think your human error free since you could be very excellent to run your system. but I am not before I could update my mind good enough.

***
Holiday is to enjoy but no one would sell their houses just because they get some extra money and have holiday. But traders for days and months could not keep their shares if they want to enjoy the holiday. Why? They play the ripples for life and if tsunami hit in, they have to run away in the light speed.

But what's for? For living expenses? It should produce trustful income stream at high yielding with least risk you could get. Trading for days can get the money for your living but if you are not very lucky, you could get not enough. Why are there so mange traders who don't dare to quit the jobs or keep their living with other incomes? Hit at birds or hit at the air or hit at good black swans if you trade every day? How could you hit the birds every day which don't stay there or fly in the pattens you design? You need to know trade ins and outs but do you have the time?

If you could have a little bit longer view and be right and confident for the buffer, you don't need to sell but if you know everyone should sell when you take a holiday you have to sell!

***
Sell when the market over-optimism or at least when it is anxious. Depending on your holding horizon, the over-optimism naturally is different and relative.

The shorter your horizon the more chances market turns to be over-optimism corresponding to this period. So it is very important you need to mix the horizon and market sentiment into consideration. However it could result in the train leave away from your zero-sum station to the higher and new place without you.

If anyone in the market long enough he should know:

1. Sell anything that could possibly, or does, keep you awake, anything that is disturbing you.
2. If in doubt, get out.

But we often than not are frustrated and perplexed by the zero-sum game, train leaving away, horizon, meaning of over-optimism to the horizon. So sale become a business for losses and lock the losses to most of market players.

Vision, self- and environment-awareness, horizon and game plan for a specified horizon, the rules and guide lines, discipline, analytical skill, and goal for self-reliance, are things you could not lose or sell. You have buy lower price than the sale price significantly and collectively.

Traders if they are masters are not system operators but the designers and operators who put all above into his system, simple or complicated.

***
Sell when you could not afford any more. It is passive selling. No any sale tuition book would encourage you to sell passively or sell on fire. It should be reduced to zero. If you could not, you would be wiped out from the market.

Don't let anything have chances to provokes you to stand up and punch the air in delight. Euphoria means ''sell'' without market euphoria or yours. It means a price has exceeded your expectations and asking for more is greedy. You have to book the wins sometime.

What if you don't? The cost is huge. In IT bust I lost $400,000 paper profit. Since April I lost $160,000 paper profit and some capital. It is the weakest point of my mind. Why? Greedy and don't know enoughness. I wanted to take all back to home in one time.

Greed and fear have high cost in the market. Prudence and discipline if you have good enough knowledge and experiences. Lack some necessary knowledge or failure to know about the conditions and context could magnify our instinct.

So never and ever have losses and never ever sell on the fire after all crash down are the last line you should keep to check when each time to buy, sell, or make any decision in the market.

***
Sell anything you get wrong.

In the market no guess at all is impossible. Making money by predicting share prices is hard. You cannot pin down certainty. There are so many variables and so much sentiment in stock decisions that getting it wrong is to be expected, it is inevitable, and when you do get it wrong you have to act, not deny.

We are trained with self-esteem but we also tend to pretend no errors and mistakes at all. I have a system which is great. I follow it in discipline. But today it beaks down not me!

There is no room for pride in stock decisions. Sell if you anxious before you deny. Sell if market anxious rather than at the rock bottom competing with crowd in stampede. We all get things wrong. Accept that and half the game (not losing money) is won.

I didn't sell all when I noticed the market anxiety after April. At that time I didn't understand the sale in the stock market. That is only excuse I could find but make me upset a lot. Why don't you play the fire without knowing how to protect yourselves. Stupid!

 

Common sense to buy bonds or stocks

Conventional common senses are:

1. buy bonds and sell stocks when we are moving into recession
2. sell bonds and buy stocks when economies are moving into expansion

But do you fully understand the underlying economics and sense the economies properly or just are driven in ruin or pay all you could find for the euphoric party?

It is a question about top view or full view of market since market just try to figure out what would happen in next 6 months or longer. Any economy events which market could not be perceived would be black swans to drive the market price up or down greatly.

In hindsight, XAO has questioned the perspectives of Aussie and global economies very seriously and it was impossible to dare crossing 5000 if no stabilized signals from EU and US let alone the selling season of May and June for tax return. Unfortunately XAO's worries was confirmed in August and then surprised to see the politicians in EU and US played the games but not contributed efforts to fix the problem.

In psychology I have to admit I was over-optimism but in knowledge I have to know I didn't know how to interpret the economic events. Greed and ignorance both have contributed to my misjudgment and desire to pay less tax by holding paper profit to July.

When the economies are being questioned and no good economic events or bad would drive the share price down. This price is not just for stocks but everything if last long enough. I prefer to buy at lowest price of dirty-cheap fishes but I ignored the economic lowest point, market lowest points as a whole, and then after everything down I have to lose the paper profit and wonder when market doesn't follow my desire.

I have spent a lot of time about mass psychology, life logic, and common sense, but not on the economy 101 and business 101. Some basic issues are fundamental or bottom/root issues. Without matter you are traders or investors, the market business needs the full view and root health. Soros or all of good traders focus on the full view but they never dare to put the money egg baskets on a dying tree. Buffett and all of good investors focus on the roots but they also never dare to ignore the Sun or Tsunami.

How could you get what you want? You have to run after the good things when the Sun just starting to rise but most of people are still worrying about the Sun and Sky. Could find the qualities and get to know the Sun would rise above horizon?

 

When to take or put the chips on the table?

Some do everything in the market by pattens since they could not know anything else. Some do everything in the market by guess or tips since they don't have time to know the patterns. Some do everything in the market by holding systems since they believe their systems are designed to fight in all weather or conditions. Some do everything based on the interpretation of the macro and micro views but never worry the human errors since they don't think they could make human errors. Some do everything based on carefully evaluate their own resources, system, macro and micro views, and put huge efforts to identify the best time to hit out for best return and biggest buffers.

Who are you?

I still could not correctly interpret the news below:

US "treasury prices fell on Friday, pushing 10-year note yields to the highest level in more than a month, after a U.S. report said the economy added significantly more jobs last month than economists expected, buoying hopes that the recovery won’t stall."

How long will it last? What more information need to be used for your intelligence and application of life logic and common senses for a wise decision? Have we run and cried in the market long enough and we should sit down and seriously think what lessons we could get?

I have to even I don't think anyone who have systems, need to do so in rush! I do feel if I don't do now I will waste my tuition fees I have paid.

 

"Conventional common senses are:

1. buy bonds and sell stocks when we are moving into recession
2. sell bonds and buy stocks when economies are moving into expansion"

Wdongli you have got it around the wrong way!


Imagine a portfolio of $100,000 and risk profile of 30% bonds and 70% stocks.

The value of the portolio drops to $60,000. The ratio of bonds/stocks is now 50/50. To rebalance your risk you sell some of your bonds. 30% of $60,000 is $18,000 so, you sell $12,000 of your bonds and use it to buy stocks.

If the value of the portfolio goes up and your shares increase, you do the opposite and sell stocks to buy bonds.

The value of the portfolio rises to $150,000. The ratio of bonds/stocks is now 20/80. To rebalance your risk you sell some of your stocks. 70% of $150,000 is $105,000 so, you sell $15,000 of your stocks and use it to buy bonds.

This is strategy is known as buying low and selling high.



Johny.

 

My interpretation

To correct interpret the meaning of bonds' and notes' yields in days is impossible. However if it is put into the backdrops of volatility and turbulence of the market since August, which have been forced the bargain hunters run in the ruins in XAO, it means XAO has been in depression too much.

US "treasury prices fell on Friday, pushing 10-year note yields to the highest level in more than a month, after a U.S. report said the economy added significantly more jobs last month than economists expected, buoying hopes that the recovery won’t stall."

The news was saying investors felt the economies had less chances to be in recession or better than they expected in last two months. More jobs means economies need more labors to generate value, which was not the sign of the economies wend down. Recession once was confirmed the crash should take part usually in one or two months to touch its rock bottom. If EU could not defaulted before 17 Oct, the economies should try to find its way to stabilized.

Not all agreed EU would not be defaulted. Not all agree global financial system could be there for too long. It has the risk to crash again but to XAO 3800 is a critical point. It means GFCII or not. No GFCII XAO goes to below 3800 is highly unlikely for months if not for years.

If GFCII comes into its play, the policy makers would be forced to work together since it is a scene for all of them would lose rather than win. They would desperately be forced to fight. So XAO would fight at around 3800 and wise market business people would put their life betting with enough cash reserve for the crash and lower their betting cost not too far away from the rock bottom in average.

We could not forget what we just saw what GFCI was and what V-shape recovery would be. Retail warriors are not important at any historical turning points. How many retail players had the guts to bet on V-shape recovery?

It is a game not for absolutely right as the retail warriors with some system hope and try to get for pennies profit. It is a game for roughly right for long enough time. GFCII could not be the end of the modern capitalism and the global financial system since it is not good one but better than any system human could make.

No anyone of my friends didn't think I was crazy and insane when I bought aggressively between Nov 2008 - Mar 2009. No anyone thought I was not a gambler after August crash I refused to run in stampede. I never thought hold the position when the whole market run in stampede is wrong. I didn't believe I did anything wrong after August. I do believe I was seriously wrong and completely wrong between April - June. All of my mistakes resulted in the cost run and cash reserve deletion.

In the market my mistakes are those strategically. It is the mistakes to interpret the full picture. Anyone would are wrong strategically would lose the war if no way to stop the worst consequences, sale on fire! It is the despondency and surrender in the war. It means all chances would be gone!

In the market all of mistakes would be ended at cost running and cash reserve deletion, which could be caused by bad lucks but the cause is no enough margin of safety have been built up before the worst case you could afford or make you lost enough!

What's the art of war? It is not about computer system just as it is not about armory and number of army or the rocket launchers. Any one if just love their computer system he is a warrior not a strategist. War could be won only by the side with right strategy, good intelligence, prudent protection, and consume the effective forces of the enemies!

What's the meaning of taking a spade? At different time it could be strategical one or not. Could we understand the trick different to use something when it needs to be used?

 

Interests and wants but could be in CV?

I need a spade since I need to use my labor value as my bonds for some yields which could generate enough cash inflow so that I help others and then help me to use bonds(stability and certainty) and stock(risk and better future) for me and others. Work is to generate asset and value. Philosophically it is right to life.

It happened due to the market crash but forces me to think about the relationship between attacking and retreating in the war and life, risk and profit, short term and long term, market and life, others and myself, help to others and others helping to you, and so on.

A colorful man could make his life colorful and then help others to be colorful in their life or business. We could be in the war but we don't need to compete in stampede. When we try to beat others we could be beat by others. No points even we have to be in protection under any conditions.

What interests do you have could mean who you are. The followings are my interests which are not perfect but fit to what I believe about life, market, and jobs now. Not all of them are available to me before April. Do wonder if I could put it into my CV for a spade?

Interests and wants:

1. Love to read and ponder to enhance and improve self so that being able to face the challenge in life and use my strength for team goals with better knowledge and experience.
2. Work to understand team goals which could be that in office, society, and anywhere we work and live in.
3. Enjoy hands-on works since it could be necessary to get the goals
4. Like dance to refresh mind and body completely even never good enough.
5. Do research if having time in psychology, management, organization, politics, economics, investment, and fail-safe and desire to use them in my engineering works and life.
6. Eager to know life logic, common sense, mistakes and lessons from them, and wisdom since they are the basis of value in life and work
7. keen to find way to beat stupidity, ignorance, arrogance, and guess work for intelligence.

 

Thank you Johny. I am working on to get the spade since one side I could not sell in the bottom and another side I have to get more cash reserves. Market is always putting the paradoxes on the table.

Sell? What if EU is stabilized and XAO back to 5000? It is possible and probable. Hold? What if EU crashed to the ground? We need cash reserve or bond in hands. Market have anything but not sure things. All of the challenges are how to balance between the future gain and current cash King.

I would try all to reduce the debt to zero before next crash, which would give me a circle without worrying the spade anymore. If we could not protect us, we don't have future. If we could not obtain the gains in future, we don't have future too. At bottom everyone needs the cash and bonds and need to buy more stock for future gains but we tend to use all of the cash and then any debt could be serious trouble. Should I use debt in future? If I could identify a historical boom at its very beginning I will and make it manageable in worst case as that in GFC ruins.

What's the existing market? All worry about what the card on the table tomorrow. All of retail traders wants to sell anything they feel not good. It is a process to beat everything until 100% for no risks at all. It is a process to produce great buffers for everything if sky and economies would be OK sooner or later but do you have the cash to buy the stock or do you have the bonds to generate the cash income for your survival.

A spade is a bond with some yield quite stable. If we have $1,000,000 in Australian treasury bond, and a lot of cash now, we could buy more stock and if it crash more we buy more. I was very stupid at April when I could pay off debt and could depend on my rental for my full-time study in this crisis. No debt in crises. No bond(except labor type of bond) only in euphoria! They are two extreme matters we have to think about.

Could we get balance between these two extreme? Yes? We would have hope to have $1,000,000 bonds to chase the gain in future from the stocks. No? Big problems and will drive us away from the market.

 

People wants different things!

Market has got some reliefs and hopes. It is a great sign for bottom. So who feel relieved or hopes or differentiate? What do you feel?

People feel different from the same things.

If you are trapped in the market since GFCI or shorter, you should feel relieved and perhaps you want to get out with less losses than that a few weeks ago. Relief is a not sure situation. Pains have colored out gens with the fears which perhaps has been overdone. Prudence make you wise; Coward make you worry the sky in danger.

If fortunately you sold at peaks and have cash or enough bounds for safety when all worry about the future, you could be very hopeful and cheerful by the news from EU. You want to put some money, and would like to put more in with enough cash reserves and want to put money into the market for high yield of stocks which have high dividend and qualities.

Some bargain hunters who are tough enough are still waiting patiently with the hopes. They need to timing the lowest and count on how long they should hold and how much cash needed to hold if they buy. Could the relief and hopes become optimism in the market? It is still too early to say until the last week of October but at that time it seems too late.

To make big enough profit in the market you need to be right and decisive. However logically we have not right but decisive; not right and not decisive, right and decisive or right and indecisive. Four options we do have and we have only 25% chances to get the best option if we do nothing for balance and intelligence.

So could you believe your guess, feeling, and system outputs without a good enough mind for a best option?

***
1. I didn't sell the big winners or losers at peak of the consolidation at April
2. It laid the destructive seeds into the market soil and anything I did after that could not change the strategical failure results. You put your toes into the valley of death and then some damages are inevitable.
3. In big destructive events and ruins, all of us would desperately want to reduce the losses and then it is quite hard to be rational, wise, intelligent, disciplined, and then more mistakes would tend to follow
4. It is extremely hard not to sell on fire if you have been burnt after cost run and cash reserve deletion. It is impossible if you have destruct your houses too much on the fire for you not to sell on fire but it is the most effective way to destroy your houses completely.
5. The market worse, you would be depressed worse with little cash reserve. The market better, you would be relieved but you want to stop your pain desperately.
6. Patience if no prudence in peak is impossible when you are in the ruins of stampede.

Don't try to prove you have better personality but exchange the bloods and cells of your bodies for a behaved market players. Inverting, inverting, and inverting against what you see and feel and then you have chances to be wiser and intelligent. A stupid operator could aim at a bird with a rocket launcher. Simplicity is beauty; Life logic is simple by meaning but application needs more.

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My daughter said very politely about my mistakes and her feeling which told me the truth: In April, I was arrogant privately to Mr. Market with my ignorance and stupidities; I felt I could sense the trend of the Market even I said a flap of bird could cause a storm or tsunami anywhere around the world; I felt I could set what I could make in the market and put the shares aside for best tax return; I need the failure which could be a great start and force me to think both protection and gain together always.

She said something like that "dad, objectively, you need to lose painfully and early than lately. Before you could win for long term, you need to be beaten down and forced to get a spade. No one could save you if you don't want to sell all you have got and pay off the debt in worst case. It is a time for decision not blame to anyone even to yourself. The meaning of the spade is different this time and it would help you to get rid off the debt and some extra money to play in the market if you could hold the spade for another 3 years. You know that and you just find excuse to delay" She has paid off half of a $400,000 mortgage in 2 years without cars in her home, which she thought not needed even she are very lazy to cook and spend too much on what she loves, such a IPhone and updating to new one just after new release.

I guess I came here too late and have to much things to do do in short time. So naturally I tend to be a risk taker for a few great puffs not a long term player with strategy and plan. However life needs long term view and balance, which I do realized just after April. So the failure now could be better start if I could get the lessons onto the ground not just twisting.

 

Bond or Labor value, peaceful mind, debt free, and future gain

Life and market need balance. We could not be problem free and failure free.

So when trivial many problems pop up no one really become desperate or depressed; when big profit pops up, it is great and could make you feel great, which is acceptable but after a few days, you have cool your head down; Great risks or losses never hurt you when you are in alert; if you have lost your shirts or painful in the ruins with tear, you made the causes in euphoric time not now; it is important for you to think all of resources to correct your mistakes and reduce the damages to you and others, which is the time to show your respect, integrity, and guts, and self-esteem with honesty.

I have searched around for the spade and get my mind ready. I don't need to get the similar payment as I quit my job. I do need to get enough yield from my labor value to get though this crisis. Life is never fair to everyone especially those who have made some silly and big mistakes. If you want to be fairly dealt with, you should act wisely in balance. In the past my salary never make enough asset or gain but it did give me chances to leverage my idea through the debt, some of which are wrong and few are right and leverage the gain marvelous.

Based on my search it seems not a difficult task to get a Engineer Job between $70,000 - $100,000 with some gaps. It just asks one or two years of experiences. It is unbelievable when Australia as a whole worry so much. Could I get one very soon? I don't know. So sold another $10,000 of ARH today to reinforce my cash reserve in case I could not get a spade as quick as I expect. I did feel very painful to sell part of ARH but no option else I could choose.

It was a bad selling since it happened in relief and hopes after the market crash. It should happen in April and then it would lock 200% profit rather than 10% only! It was a sale on fire after the house was on fire and I have to sell valuable for survival! That made me feel very sorry for myself even I have to do what I have to do! What if the market stays here for another 3 months? To Mr Market is fine but to me it would put some unsustainable pressure. After balance the merit and demerit to sell, I just could choose a option which is bad but could leave some room for me.

From next week I would focus on the application of the spades. I am much better in social English, more tend to cooperate for solution and goals, more rational and intelligent even giving up the belief on IQ only, and more focus on direct goals rather than dreaming. This personality changes are more productive than dreamer whom I have been since I went onto the road in my life independently.

With a spade, I could ponder why a business could be better off and another could be dreadful for living. My friends said I am crazy to find a spade and they thought it is a conduct to accept the defeating. Your toes are in valley of death and then you have to figure out which is the best way to get them out and put them on a way to the top for victory! You have to convince yourself not anyone else you are rational and logical. You have to know the strategic retreat is necessary to win bigger in future.

Philosophy has its great part in life and market. I didn't get big enough profit but these three years as a full-time market student do open the door for it. I should put basic of economics and business into my study. In the market we do need the material for top-bottom or bottom-top understanding. Could I fix the problems about the bottom? It is a true challenge.

After I get the new spade, I would try all to pay off the debt and don't leave the spade alone before I get a $1,000,000 bond-equivalent investment with acceptable yield. It could happen very soon but I prepare for long term for it. Why don't sell all and enjoy to spend? Naturally I was born as a worker or creator! Good or bad? I don't know and never thought it very seriously!

 

What if things worse even...

After continuous and higher and higher strength of bearish mood, the excellent news for EU to shore up the financial system would be discounted greatly.

Relief and hopes could not remove the question, what if worse, which all of market players have asked more and more seriously since Oct 2009 and after anytime they assume the worse is over they were beaten again. These poor boys and girls have been punished without right or wrong what the economic reality and in the days of market up, they would ask this question with fears rather than cheers. It is very rational and well explained in mass psychology. They start to be very behaved even Mr. Market might stop to swing his rob on these poor girls and boys. There are shallows of the fear after you hit your head desperately and depressingly.

Tell the future could be much worse become a popular topic in taxis, office, workshop, and home. I never noticed it before as I didn't know we should run around the corner always and extend the running scope while our corner extend correspondingly. I quit my last job not because I knew these logic but I feel I don't know the logic and common senses.

What if things worse even...? Fear are still very strong with the weak hopes and relief. We all worry the wild fire could be on anytime but logically it could not do so since all of wild weeds have been burnt into soil. Yes what if worse or what if better? Which system could give this light to lead us out of the dark tunnel with 100% sureness. No! I could not find it and could not deny its chances are less and less if the news could be better and better.

It is prudent to ask this question seriously but it is mistake to enjoy to ask this question to show we are wise and prudent even it is a action to synchronize us with crowd sentiment, when this question become so popular.

 

Are you fearful?

Yes I am fearful after the trivial mistakes in good time turns to be a fire and force me to sell on fire largely or find other cash inflow to stall the pressure to sell on fire if things are worse or longer to be better than my expectation. It is a confidence crisis for me about my capability to study in the market as a full time students. Are you wise or stupid? In fact I could not deny my stupidity but I do want to be wiser and get the right solution for my confidence crisis.

The roots of the confidence crisis are:

1. unexpected bad events in global economies and market
2. unprepared mind or not good enough mind to have enough cash reserve for this existing crisis in the market
3. failed to understand the severity of contagion of bad economies and market sentiment of any market around the world and the dependency of Australia economies on others, especially China, US and Euro.
4. Failed to keep high prudence about the long consolidation channel of XAO, which actually was calling the bad events to crash after Japan's earth quake and Queensland's floods plus the minor government. It needed the crash to clean up the worry at a rock bottom
5. Didn't understand the market sentiment cycle and the special feature of dirty-cheap fish in the crash and after the crash: it crashes quicker than the market as a whole and recovery later and slower than the market as a whole even it could shoot up with the extreme good news when the market sentiment is OK.
6. Didn't understand the business 101: in crisis cash is king for survival and catch opportunities; in euphoria gain is king and more gain you could lock you would set up your future buffer and make yourself stronger when everyone else would be extremely weaker after the crash
7. Failed to understand budget is always the first concern in any economy conditions. You have to cash positive after the family expenses for the life style you get or better the cash extra for better life style your loves really hope. Not all of family need to be a market player and we don't have right to ask them to follow us.
8. Failed to be responsible for family since I allowed one year's income burnt on the fire. It was a crime for family.
9. So running in the ruins, the problem is how to avoid stampede with less damage as I could reduce. It is a not pleasure to be in any cases like that. I failed to know it very clearly and then I should be blamed and cursed if I could not be quick to stall any possibility for worse case!

I don't want to be a warrior after April but I acted as a warrior since Oct 2010. Warriors would be consumed in war which is what they were born for! I failed to realize it until too late.

I am fearful if I don't work desperately to fix my mental problem I could make more mistakes when my mind would be synchronized with the market crowd. When you are synchronized with crowd, you would be defeated completely or sit at sideline to lose the chances.

Fighting against the most popular themes in the market always and inverting and inverting to get the chances and buffer of safety in case the crowd is wrong later which usually the case in the market. Suddenly I do realize how to get the quality: the blue chips which ride on the trend with proven history and they would be beaten down in the storm and tsunami too even they could recover much quickly; the tsunami would force the market to burn them to extreme which should happen in normal time, a unavoidable consequences, their price largely lower than that in normal time.

After all of dreadful fishes and swans at the doorstep of hell, you could buy great at the price much lower than the reasonable price which Buffett would like to pay. He is too big and the extreme low price could not change the value and he could not fool other big boys to pay extremely low. Long time I could not figure out why Buffett would stop his very profitable Cigar Butt business. He could not not he doesn't want!

He seemed know, and should know asset, if big enough, need tough control in allocation, to avoid disasters. When he became big enough, the pool of Cigar Butt is too little for his freedom and ambition. Circles? His snowball was put into the tally machine of shops, the delivery of the papers, the candy machine as small business, the cigar butts with tough value criterion, the sunk textile factory, the unbelievable lady's furniture shops, the newspaper, the insurance companies, and then more and more big fishes in his control....

How many retail players have any clues how hard to put a snowball from one yard to another and continue to do so for decades and started when he was a kid. I could not do so until now. How fabulous man with the desire, passion, and persistence for the goals, which you could agree or disagree with. He makes great things from the gross root. You could not help but amazing all around him, a fool but special!

Damned! I haven't get a snow ball big enough in the dirty-cheap fish circle as a immature value and buffer lover plus strong tendency to take the risks since errors are unavoidable before the mental maturity. It is really painful if thought I couldn't put it in another circle at higher level very soon. Thanks God, it is my fate!