Friday, April 24, 2015

Market Thoughts : The Quest for Financial Freedom







In the quest for financial freedom, 
everybody starts somewhere. 

This is my story.

I knew there was money in stocks. But I had this mindset that 
it was just for Rich people. And I don't come from a rich family.

I was a graduating student. 
The words Job, Money and Future were always a point of pressure
 to me. I was waiting for my internship, and going abroad was the
 most 'sensible' course of action for everyone that time. 
Even now I guess. Maybe that's just our culture. 

While waiting for my internship, I remember I had an online
 trading/investing account my brother opened for me on 2006.
And I thought it would be such a waste for my internship 
money to just sit there and rot with me.

So in the last quarter of 2010 I decided to try out stocks.
Making extra money on the side wouldn't hurt right?

I started my search.

I was like sponge and believed almost everything the 'experts' said.
 I never missed reading the business section on the newspapers, 
and I followed almost every forum personality that was known
to be an expert in their field of the markets.

And because of this, I was able to ride a few good stocks.

Behold the RSA Plays of 2010:
(Click Images to Enlarge)





 



I never got to buy that phone. #Greed 


Got Whipsawed here. 




"So this is stocks." I thought to myself. 

The feeling of making money out of money 
in just a short amount of time was magical.

I felt like I could conquer the world. Finding a job? 
Who needs one if you can earn all you want in stocks.

Of course I needed to Graduate first. There's that unspoken rule of 
Philippine culture that you need to graduate so people would know
 you're worth something when they see your diploma hanging on
 the sala wall. And of course to make your parents proud.





But after these plays, I started losing.

I realized that I was just lucky. Beginner's luck? Maybe.
But the little gains I made from my jackpot trades 
were enough to start a passion for Trading.

Fundamentals, Tips, Rumors, Techs. 
This was my order of priority.


Fundamentals

I guess everybody starts out as a fundamentalist wannabee. 
We always want the 'sure thing.'  

"A solid company that has lasted for years, A strong balance sheet,
 A good track record, etc." 

"Only a dumb person would ignore these numbers."

So who wouldn't buy that shit? I don't like reading books.
 Especially doing computations. I'm too lazy for that. 
So I figured it would be easier to have the experts do all the work.
 Give them a day or two, and they'll show you 
everything you need to know. 

Heck! There's even tons of stocks fundamental research 
material out there if you know where to find it.

Whenever a friend would start asking about the stock market, 
I would immediately find myself trying to mimic 
how and what the experts say.




This is how I imagine myself whenever 
I attempt to explain fundamentals.

I've held on to many fundamentally sound stocks and ask my self
 "why the hell am I not getting enough?" or 
"why are these solid stocks going south if they're THAT SOLID?"

I've seen stocks that are really good but don't get much attention or action. 
And I've seen stocks that are completely crap from inside-out but
 shoot up to prices like there's no tomorrow. 

"Has the world gone mad? With all that available information, we get THIS?"

There's nothing wrong about fundamentals. But I think it's only
 good for those with lots of cash and time. Like... you know, 

100M+ 

I don't have that.



Tips and Rumors


Have you ever had a known and respected market personality give
 you a tip? Or perhaps a juicy rumor about a certain stock that's
 "about to explode?" How about market buddies who tell you
 they've got real inside info? - you know, disclosures that 
haven't been properly released to the public.

Who wouldn't want to be ahead of the markets?

And because of this desire, I immersed myself in looking for 
allies who knew something about the insides of the market. 

At some point, I even became a hardcore, blind follower of some
 market gurus - to the point of going "All In" on whatever 
stock they say is good.



In the beginning, it was good. The feeling of being ahead 
of everyone, outwitting even those seasoned players gave 
off a different 'high' - that feeling that you're
part of some elite class and society.

But all was just an illusion.


I found myself ahead alright. Losing ahead 
and getting stuck before anyone else.

Whether we like it or not, our market has a certain degree of
 manipulation, insider trading, front running, or whatever you 
may want to call it.

Yes I have some buddies who might have access to these
 contraband goodies. But after careful thinking, how am I sure the
 info they pass around is legit and not something 
fabricated out of one's imagination? 
Only God knows.


But I am no God. Nor am I an insider. 



Techs

This was my reaction the first time I peered into the world of techs.



I hated math and physics. And techs made me remember all those
 bitter, cold nights i spent studying in high school and college. 
It was like teaching a kindergarten student (me) quantum physics 
or some complex math equation because of the terminologies 
and other stuff.





"Dude. Seriously. Why do I see more alphabets than numbers?"

But what intrigued my naive mind the most about techs was the
 consistency of profits some people claim to have. I personally
 know someone who hasn't touched his retirement money, 
built his house and funded his travels, all thanks to 
his technical trades.

It was all numbers and patterns. No flowery words that could be
 double talk. No lengthy research and computations. No news. 
No Jedi mind tricks from market experts and gurus. 

No bullshit.

Just numbers and patterns.

I could live with this.
Because all those lenghthy disclosures?




I've been a gamer all my life. 
And Gaming was an innate craft I had.
Then I thought to myself,

"This could be a nice game."

But learning the game was a real challenge. I almost gave up after
 experiencing many losses. But in the end, as what many gamers would say...

"G.G."


Here's a throwback trophy trade.





20 comments:

  1. how long was your learning curve before starting to be profitable sir zee?

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  2. 2-3 Years I guess. The market is ever changing and so the learning never stops.

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  3. Was that 2-3 years from learning technicals, bro? Or from your first trade?

    Was there a eureka moment for you?

    TIA.

    ReplyDelete
  4. From my first trade. There were lots of eureka moments. And fake eureka moments. I had to adjust and fine tune what I learned from the trades I made. And to adapt to the changes the market made. When I think about it, trading basuras in 2011-2012 was really easy compared to now.

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  5. Thanks bro! That's encouraging.

    Can't wait for your next batch! :)

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  6. Nice read! Inspiring. Never stop learning.

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  7. For some reason, every successful trader that I know goes through the same tempering process. First they lose a lot of money, but they stick with it until they find a system that works for them (then they eventually blog about it). I guess one of the keys to success in this realm of trading the markets is to not readily quit and to keep on searching for your eureka moment. Keeping good records is also crucial so you can study your moves on a later date (or blog about it later). Thank you for sharing.

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  8. Just want to ask sir. How come you had 100k+ of money to trade before graduating college? Or am I wrong about the timeline? Also, did you get a job or full time trade since 2010?

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  9. sir, from 100K+ in 2011 to 2M+ in 2012, did you borrow money or was the 2M difference your gain for 1 year? if i may ask, how much was your initial capital?

    ReplyDelete
    Replies
    1. I borrowed 2M. My initial capital was 6.8k in 2007.
      In 2010? I used my internship money to trade which is around 120-160k
      After Graduation I borrowed money in 2012. And In 2013, Total Borrowing was around 4M.
      Today, Paid off most of the borrowed funds. Only 2M Left And I plan to buy my investors out before the 2nd half of this year.

      Delete
  10. where is your starting point in finally learning TA? i mean how did you go to the basics? books? internet? i'm curious. :P

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  11. Hi ZF, in terms of cash as a position, what's the longest time you've stayed liquid until you found a suitable candidate stock? To be specific, let's stick with the main/TF port. Or have you been lucky where after exiting a position, another good opportunity becomes available right away.

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  12. 2 months max. :D That time I was forced to because I had to go for training in some mountain (with no internet)

    ReplyDelete
    Replies
    1. Thank you for your response! :) So that means, you usually see a good setup as soon as you exit your TF position. This is always my problem. I always end up in another trade as soon as I exit a good one. It's either the stock was useless or I miss a good setup while waiting for my current stock to move. Maybe my watchlist needs an upgrade.. any tips you can share, if I may ask? Even small details will give me a huge advantage.

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    2. Just be picky with your TF parameters. The less you are able to screen out, the better. Learn to Filter out the strongest ones.

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    3. Thanks again. Cheers!

      Delete
  13. It's almost the End of 2017 and i just want to say that your blogposts are brilliant! I am in a series of losing trades right now (due to fear :| ) and i saw this post of yours and it gave me hope! I do want to thank you for sharing your knowledge without expecting anything in return. I hope to do the same in my network as well. Also, i am a gamer too :P I hope too gain enough to buy myself a Nintendo Switch but that is a stretch goal :P Again, Thank you Zee :) Do let me know if by any chance you have a PSN account, maybe we can play together some time! Keep up the good work! :D

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  14. is darthmouth college where you studied ZF?

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  15. 2018 is a make or break year. hope it will be the same as the 2009 to 2013 trend.

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