Friday, January 30, 2009

How to Build Wealth Part III

(21) If you don't want to be cashed out during times of market volatility and pay fees on cash because your consultant doesn't know how to make you money during poor markets, then manage your own money.

(22) Perform a Google Search as follows: "SEC fines, Citigroup, Merrill Lynch, UBS Paine Webber, Morgan Stanley, J.P. Morgan" and read all the articles that are returned. The SEC stands for the Securities Exchange Commission, and they impose fines on investment houses when they engage in illegal or unethical behavior. Do you still believe that these firms have your best interest at heart after performing this search?

(23) Henry Blodget, once Merrill Lynch's top internet securities analyst, and other Merrill analysts once wrote in private emails that the internet stocks Merrill Lynch analysts were touting were "crap" and "junk" and that the only thing special about them were the investment banking fees these companies were paying to Merrill. (Source: The Washington Post, April 24, 2002). Though many firms have claimed to have separated investment banking from their brokerage houses today, do you really believe that a huge investment banking client that has paid massive fees to an investment firm will not pressure top management to tone down negative ratings regarding their company or to amplify otherwise already positive reports? Remember, Warren Buffet says he reads analysts' reports only when he needs a good laugh. How do most stock pickers at firms choose stocks for you? By reading their firm's analysts reports.

(24) It doesn't really make a difference in 99 cases out of 100 if an absolutely green financial consultant straight out of college manages your money or a 20 year veteran with silver hair manages your money. You'll receive roughly the same results because internal systems that guide consultants to choose money managers or firm developed asset allocation models don't change whether a consultant is 25 years-old or 65 years-old. If this doesn't scream sales optimization strategies over portfolio return optimization strategies, then I don't know what does.Individuals that say they have tried managing their own money but have failed have never implemented a realistic or proper system to do so.


(25) There is a global investment crisis aka the Peak Investment Crisis that is brewing and inevitable though the vast majority of investors are unaware of it ( and this is NOT a reference to any global market correction that may have happened recently). If you learn how to invest your own money now, which means learning a comprehensive investment system, you are highly unlikely to be caught unprepared when this crisis hits and destroys trillions of dollars in the financial market. Learn a proper investment system that teaches you to understand the global economy to guide your investment decisions and you will profit tremendously from this crisis.

(26) Most people that try to do it themselves and fail have no system. They buy financial instruments that are plastered all over the financial media, which more times than not, means that the stock has already had a fantastic run. After all, financial instruments that are languishing will not attract so much media attention. So they do the worst thing possible. They buy high and when it corrects, they sell out low.

(27) Individuals often say they can't manage their own money because they have lost money when trying to do so. However, the majority of individuals that say this never learned a proper investment system before commencing the management of their own money. So if you are among this subset of investors, below are many more reasons why anyone absolutely can learn to manage their own money.

(28) In the past, learning how to invest was all about number crunching, Dry and boring. Today long tail investment strategies have introduced a lot of creativity into investment strategies and actually made learning how to invest fun.

(29)Your neighbor told you he had a hot tip for a can't miss stock. You bought and you lost big. You vow to leave investing to the experts. Sorry, but this is hardly qualifies for an attempt to manage your own money. Foolishness, yes. Serious go at managing your own money? Hardly.



Life is short! Break the rules! Forgive quickly! Kiss slowly! Love truly, Laugh uncontrollably. And never regret anything that made you smile.

A nice story to remember on Gratitude

Well, gratitude is something that is already seldom seen among individuals. We may have all the faults and failures in life, and people already tend to blame everyone for what he has gone through. Not welcoming the idea that there is more about him to be thankful for, because each person is created by God in his own unique ways.

Here's a message I got from email, which is inspirational in my opinion.

A well-known speaker started off his seminar by holding up a $20 bill. In the room of 200, he asked, "Who would like this $20 bill?". Hands started going up. He said, "I am going to give this $20 to one of you but first let me do this". He proceeded to crumple up the bill.
He then asked, "Who still wants it?" Still the hands were up in the air. "Well", he replied, " What if I will do this?" And he dropped it on the ground and started to grind it into the floor with his shoe.
He picked it up , now crumpled and dirty. "Now who still wants it?" Still the hands went up in the air.

My friends, we have all learned a very valuable lesson. No matter what I did to the money, you still wanted it because it did not decrease in value. It was still worth $20.

Many times in our lives, we are dropped, crumpled and ground into the dirt by the decisions we make and the circumstances that come our way. We feel as though we are worthless. But no matter what has happened or what will happen, you will never lose your value.
Dirty or clean, crumpled or finely creased, you are still priceless to those who do love you.

Truly inspiring? For me it is. We should never lose hope in times of downfall and be grateful for those people who stood by us in those times. Well, I would like to take this opportunity to thank all those people who have been an instrument for my happiness and contentment. You guys have made my world a beautiful place.



Life is short! Break the rules! Forgive quickly! Kiss slowly! Love truly, Laugh uncontrollably. And never regret anything that made you smile.

Thursday, January 22, 2009

Today's winning trade

Entry price at 89.06 for a sell entry. Exit price at 88.19, gaining 90 points for US dollar versus japanese yen.






Life is short! Break the rules! Forgive quickly! Kiss slowly! Love truly, Laugh uncontrollably. And never regret anything that made you smile.

Thursday, January 15, 2009

How to Build Wealth Part II

100 Reasons Why Managing Your Own Money is the Safest & Quickest Way to Build Wealth

Part II

(11) Reason #(10) is true because major firms coverage of small and micro cap stocks are appallingly light. Firms must provide extensive coverage of large cap stocks , the Genentechs, the IBMs, the McDonalds, the General Electrics of the world to appease their clients. However, the Microsofts of the future are small and micro cap stocks now. You can't build wealth buying and holding the IBMS of the global stock world. Yes, I know that the great Warren Buffet was a buy and hold man, but today's investment world is much different than it was 50 years ago, or even 20 years ago. The explosion of derivative instruments and many more investment vehicles have formed a certain interdependency among assets that never existed before. Furthermore, the actions of some nation's banks have introduced a very tangible fragility into the global economy today. Nothing in this world is static. Certainly, the global climate is not the same today as it was 50 years ago. The temperatures of the world's oceans are not the same is they were even 20 years ago. And financial markets are not the same today. Buy and hold blue chip stocks if you want. But you will never build wealth this way today.

(12) Information technology and the flattening of the information world now makes it easier for you to be much more knowledgeable than any financial consultant employed by any of the major investment firms.

(13) Financial consultants, because of the payout grid that dictates their salaries, are often motivated by selling you the highest commission based products, not necessarily what is in your best interest.

(14) Investors that have actually built wealth through investing like Warren Buffet, George Soros, even Mark Cuban, have all managed their own money. Investors that have already amassed great wealth employ money managers. That should tell you something about what's necessary to build wealth.

(15) Even large global investment houses only have the resources to track about 1,500 stocks. There are estimated to be over 75,000 stocks that trade globally. Investors want coverage of the most popular stocks in their country which means that the great majority of stocks that firms' analysts cover are large cap domestic stocks. You want to own the best stocks in the world, you have to manage your own money. Give your money to someone else to manage, and chances are very very high that you will never own the best stocks and opportunities in the world.

(16) When was the last time you heard a truly unique approach to investing from a financial consultant anywhere? If you have spoken to 10 different consultants at 5 different firms, most likely their pitches will sound like broken records. Now think about this? How can it be that in an arena as creative as investing, that different financial consultants from different firms that live on different continents all apply the same principles and strategies when managing your money if these similar approaches are not sales driven but return driven?

(17) If you utilize a money manager to handle your money, the great majority of financial consultants don't understand anything more than you do about investing. Most people don't realize this because they don't know the proper questions to ask their financial consulants. Take care to learn the proper questions and you will reveal their weaknesses.

(18) The great majority of financial consultants can be summed up in one word. Salesman. Enough said.

(19) Investment firms convince you to do so many things that are not in your best interest. We'll list these things now.

(20) If you don't want to buy in bull markets, buy in bear markets, buy during corrections, and buy during market tops, learn to manage your own money.


Monday, January 12, 2009

How to Build Wealth - Part 1

100 Reasons Why Managing Your Own Money is the Safest & Quickest Way to Build Wealth

How to Build Wealth

Millions of people all over the world seek the key to building wealth, yet it remains an ever elusive achievement even to those that have more resources than the average Joe. In fact, it doesn't matter if you are black, white, Latino, Asian, Arab, Christian, Buddhist, Muslim, Brazilian, Japanese, Kuwaiti, British, German, Spanish, Italian, Cuban, Chilean, Argentinian, American, or Canadian, the key to building wealth is the same no matter your nationality, ethnicity, race, or religion. Yet so many people seek so many different solutions such as changing investment firms from Merrill Lynch to Goldman Sachs to J.P. Morgan in seek of higher returns; seeking out independent financial consultants; specula-ting in assets they don't understand; and buying investment newsletters to provide research & recommendations. And the great majority of people that have been searching in this manner to build wealth are still searching today.

Why?

The answer is quite simple. All of these investors have a particular shared denominator of failure and another denominator highly predictive of success that is missing. Their common denominator of failure is their motivation to find the easiest method to build wealth. The placement of their money in someone else's hands to manage, the purchase of newsletters to provide their stock picks for them, and the greed driven behavior of gambling in speculative assets are just some of the many pursuits investors undertake in search of wealth. Their common missing ingredient and their reason for lack of success is their exhaustion of all possible methods to build wealth except for one - Seizing personal responsibility for learning how to manage their own money.

So the million dollar question is literally this: What is the fastest way to build wealth? Ready for the answer? Take the time to learn a proper investing system, seize responsibility for your financial future, and manage your own money. Unfortunately there are truly no viable alternatives to this answer. There is a reason that the best method to accomplish something is almost never the easiest way. When it comes to investing, it is simply amazing that the vast hordes of investors believe that the easiest ways to invest are the best ways to invest. This is the furthest thing from the truth.


100 Reasons Why Managing Your Own Money is the Safest & Quickest Way to Build Wealth

No one will ever care more about the performance of your money than you. Period.

(1) No financial consultant or investment firm will ever care more about the performance of your portfolio than you. Reasons (2) and (3) are quite lengthy because they help clarify reason (1).

(2) A financial consultant's job is to make his or her firm wealthy, NOT to make you wealthy. These two objectives are vastly different. This is per-haps the second most important reason why you must take responsibili-ty for managing your own money. Most people realize that most financial consultants are nothing more than glorified salesmen and saleswomen, even if they do work for a prestigious investment firm. If you currently employ a financial consultant, the next time you visit the office, make a point to speak to the branch manager and ask him for the annual returns of the top five best-paid financial consultants in his office over the last five years. Then ask him which financial consultants in the office have earned the best returns for their clients over the last five years and ask to see these returns. Don't let the branch manager answer your questions by giving you the annual returns of the best five internal or external money managers that the investment firm utilizes. This res-ponse does not answer your question. First of all, it is highly unlikely that the top producers hire the top five best performing money managers year after year as any major global investment firm utilizes hundreds of money managers.

By this, I mean that most financial consultants make zero decisions about what stocks are purchased with the money that you give them. They hire either internal or external money managers to do this for you. You want to find out what are the returns of the top five best-paid producers in your office based upon the mix of money managers they hire for their clients. If a branch manager refuses to divulge this information, you have to wonder why. If they tell you they do not know, and they only know the returns of the various money managers their offices employ, this is even more incredulous. Why would the manager assign such little significance to the kinds of returns his top producers are earning for their clients that he or she doesn't even track this information? And if he or she can provide this information, ask if the returns he or she can give you are the exact figures that his or her top financial consultants have yielded on average for all their clients or fi they are just estimates. Again, if a manager is just guessing, you have to wonder why they wouldn't know this seemingly critical information.

Finally, if they know, but won't tell you, why would they not release this information? Shouldn't the best paid financial consultants in any office be earning their clients the best returns year after year after year over all other financial consultants by a very wide margin. And if not, why are they being compensated so highly? The answers to these questions, if you receive honest answers, should reveal that great salesmen are compensated very handsomely by their firms while almost zero premium is put on the ability of a financial consultant to earn great returns for their clients.

(3) Hiring a truly gifted financial consultant is still not the answer, because chances are that a truly gifted financial consultant will not hire you. Building on point (2), many investors will then say, OK. I'll find myself the financial consultant, the one that falls in the top 0.5% of all consultants that really know what they are doing, and I'll hire him or her. Here is why they are wrong again. Because most people never take the time to properly learn how to invest themselves, they never can understand the investment strategies of those that truly know what they are doing. This lack of understanding, despite any efforts on behalf of the consultant to educate the client, inevitably leads to incessant questioning of this consultant's actions, strategies, etc. which can grow very tiresome very quickly.

I have dropped large accounts in the past because of such meddling,
sophomoric behavior from clients that had a lot of money. Furthermore, I have refused to accept large accounts as well because I could tell, in speaking with a prospective client, that he or she firmly held so many misconceptions about investing that he or she would be a nightmare to deal with. Consultants that truly know what they are doing, despite their efforts, can not educate anyone fully in 3-4 hours time if one has been conditioned for years to believe the nonsense that global investment firms have taught him or her. Furthermore, because great consultants realize that so many widely believed concepts about investing are nonsense, and have achieved their great performance by realizing this, they will constantly be fighting an uphill battle against clients that believe this nonsense. Therefore the chances that they would keep these clients in the long run are slim to none.

Even if one finds the rare consultant that truly knows what he or she is doing, and truly has outperformed the markets significantly year in and year out, because these types of consultants invest so differently than the status quo, any lack of exposure to such intelligent investment strategies will undoubtedly cause fear. It is human nature that ignorance leads to fear. In turn, fear causes incessant badgering and questioning, a behaviour that 100% of the time will cause a great financial consultant to terminate a relationship with a client.

Because great consultants achieve their outperformance by making decisions that go against the grain of what 99% of other financial consultants do, a great level of understanding of how to invest properly is necessary for one to even to maintain a relationship with a great consultant. In the end, even if one doesn't wish to manage his or her own money AND even if one is able to find that rare 1 in 1,000 financial consultant that really knows what he or she is doing, one still needs to learn a comprehensive investment system just to maintain a healthy relationship with their knowledgeable consultant. Ultimately, this is why you should learn to manage your own money!

(4) Global investment firms always tout a message of trust in their commercials. But where is the historical performance that merits that trust? 6% to 10% a year?

(5) If being a financial consultant required such specialized knowledge, why do investment firms hire financial consultants from a vast array of back-grounds and degrees? The investment industry is most likely the industry that possesses the greatest amount of diversity regarding the former professional careers of its frontline personnel. This is because there is no specific set of knowledge required to be a great financial consultant. Only great people skills and sales skills. You can not find a single other industry that is so willing to hire people from all walks of life. If you want to become a lawyer, you need a law degree. Want to become a marketing executive with a large firm? You better have at least eight years of marketing experience with a Fortune 500 company. However, if you want to become a top manager at a prestigious investment firm, your degree is irrelevant as long as you have an uncanny ability to sell.

(6) Think about what #(5) implies. Think your financial consultant has an MBA or business degree in finance? Think again. The typical financial consultant does not have an MBA. However, the common denominator that all successful financial consultants have is a great knack for being able to sell.

(7) There is so much misinformation disseminated by investment firms in order to keep you dependent upon them. That alone is a reason why you should cut the umbilical cord to investment firms and learn to do it yourself. There is a reason why investing legends like Warren Buffet state that he only reads firms' analyst reports when he wants a good laugh. He realizes the level of misinformation that is necessary to build client-firm dependency. You should too.

You'll never build wealth quickly with diversified portfolios (diversified by asset allocation, diversified by style, diversified with mutual funds). But this is all investment firms do. I once met a top financial consultant at a major firm that believed in buying nothing but index funds for his clients. If this is how your money is being managed, do you really need to pay someone to buy index funds for you? Figure out the equation: A. Diversification won't create wealth. B. Investment firms diversify portfolios. C. I give my money to an investment firm, thus my portfolio is diversified. What's your conclusion?

You will never build wealth at an investment firm. Preserve it? Maybe. Build it? Fat chance.

(9) 6% to 10% will never help you build wealth. You must learn to at least earn 15% to 25% or more every year. At 8% a year, it will take you 9 years to grow $250,000 to $500,000 and 18 years to grow $250,000 to $1,000,000 in a non-taxable account, not considering the erosion in purchasing power due to inflation. At 25% a year, it will take you less than 7 years to grow $250,000 into a $1,000,000 in a non-taxable account. That's the difference between building wealth and preserving wealth. 6% to 10% a year helps you preserve wealth, not build it.

(10) Major global firms will NEVER find the best stocks in the global market and hold them in your portfolio.




Saturday, January 10, 2009

Today's quotes

Happiness depends not upon things around me, but on my attitude. Everything in my life will depend on my attitude. --Alfred A. Montapert


Thursday, January 8, 2009

Happiness

Happiness is like a butterfly which, when pursued, is always beyond our grasp, but, if you will sit down quietly, may alight upon you -- Nathaniel Hawthorne (1804-1864)

It is the chiefest point of happiness that a man is willing to be what he is -- Desiderius Erasmus (1465-1536)

A happy life consists of tranquility of mind -- Cicero


Monday, January 5, 2009

Investment Scam

There are a lot of scams sprouting about even if there are a lot closing down ... Last year there was CellPawnshop, Pipcorp, Cyrus Hao, Franc Swiss, Legacy, even banks like Bank of Paranque and 14 other banks who closed before christmas time. Recently, another one is a certain Filipino named Rolito Alcantara who ran away with 61 million dollars from people in Dubai, especially from other Filipinos' money. People always gets trapped with 5 % or higher percentage per month earnings with their money.

I'm blogging this to remind others to be careful with investments, I have heard a lot of lives lost, literally, because of these kinds of scams, people running away with other people's money.

In investing, as a personal opinion, 50% of the time is spent on research, 30% spent on timing, and only 20% spent on implementation. Thus, it is very important to know THE WHAT, WHEN to enter into an investment, WHEN to exit or cash in on an investment, as well as WHEN NOT to enter into an invesment.



Weekly Pivot Points

These are the Weekly Pivot Points for the 1st trading week of the year.






Sunday, January 4, 2009

Latest Financial Data

Here's the latest financial data of Financial Institutions in the US submitted last December 2008 by US Commodity Futures Commission. Click on the link to download the info.


Thursday, January 1, 2009

Disclaimer

RISK WARNING: Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. Before deciding to trade foreign exchange you should carefully consider your monetary objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your deposited funds and therefore you should not speculate with capital that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent advisor if you have any doubts. Past returns are not indicative of future results.
This blog, coffeenchoclate.blogspot.com assume no responsibility for errors, inaccuracies or omissions in these materials and shall not be liable for any special, indirect, incidental, or consequential damages, including without limitation losses, lost revenues, or lost profits that may result from these materials.

End

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