A summary of Zhen Yuan Cang's 7 knowledge

Err I've somewhat finished the book, 7 knowledge for investment. Its a book for general investment in the stock market. It doesnt cover trading strategies and analysis in depth but gives insight into his methods, his strategy, point of view plus he listed some of his past stock-buying experience. Its quite light to read but some financial terms in Chinese, a bit slower to process.

I will highlight some points that I've found useful.

1) To invest, one should try to have 1 year's income set aside for investment. His reasoning is that for stock investment, there would be better returns, aka volume effect, if there is more capital. Instead with little capital, you just buy/sell one lot, the gains are limited, the transactions are many, hence incur more transaction costs for little gains.

2) To retire, his criteria is to have 20 times of your annual income. The rationale is that a person retires around 60, usually have to prepare for another 15-20 years of life expectancy.

Signz I am nowhere in this region, $30k x 20 = $600k. Woah, if only I win the Toto... lol. But for my case, I am following a bit of the idea that if I can generate near/almost my current salary, then can have time for others, cos I have replaced the Primary income with my Secondary income. Whether the Secondary income is permanent, frequent is the key area to work on.

After thinking through the limitation, I have decided to set aside a portion of Investment capital for Trading portfolio, which is more short term, the aim is to trade and generate gains to fund this Secondary income. Whether I am successful or not, really remains to be seen. I cant dictate the market but if I can learn to read the charts, then perhaps there would be some degree of success.

3) Buy into Blue-chip and hold for 10 years or more to realize perhaps much greater gains. He used his own example of buying into HSBC when it was $4.50 and keep buying in, holding LT until now he got his 20x annual income figure. His reasoning is that Blue chip can grow, little worries about bankruptcy and long term growth is there.

Hmm this is one part I kinda agree, previously in my last think-through regarding my Money Management strategies, I've decided to set aside a portion of my Investment capital for LT, aka 10 years. So I've decided to give this strategy a try. (KIV next point, related)

4) Have to have patience and refrain. The patience to really wait for low to enter. Once enter, have the refrain to sell off too early. His reasoning is that if you buy in, and cannot even wait for 1 month, dont have the 'patience' to sit through news, small gains, then its as good as investing to 'win a candy' which is equivalent to going to Macau, to gamble. You are just investing to win something, which is usually small amount, very very short term, a few days.

Hmm I dont know whether I am falling into this 'trap' that he had mentioned. There are times when I sold off too early, but if I have my investment targets to guide me, is that having no patience and refrain?

5) Have to know yourself. He mentioned one must have the restraint to avoid listening to 'insider' news which realistically wont reach the ears of small investors, cos its the big investors that should have access to them. So if small investors get wind of 'insider' news, then most likely its purposely let out to them, and they mostly kena when they follow. Also the news analysts about the markets is another NOT to follow too closely. Really cos partly it could be 'news' let out by big investors etc etc.

6) Have the patience to wait and invest LT. Think I agree with his experience. I will try to grow my own portfolio with a Longer-term view. He also mentioned that one could set aside a portion for ST, another portion for LT. Think this aspect I am on the right track.

Now is practicing the PATIENCE and REFRAIN to wait for the timing to enter now... I must constantly remind myself that I will have to think both ST and LT, separate my ST strategies with LT strategies and even price targets.
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I have just borrowed my Dad's book, which is unfortunately in Chinese again, this time, a more indepth book about the Wave Theory. I need to master this, even if I cant master, I need to add it to my tools.
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Today went to Tampines 1, the new mall in Tampines with sisters. They were bored and wanted to head out. I was just stoning around, half dead cos I was rudely woken up by another community thingy next door at 8.30am! I had slept rather late around 2am, practicing guitar, reading share book, watching LA Ink. We headed out around 1.45pm. I brought my swim gear along cos I didnt go swimming for almost 2 weeks. I had weighed myself using the new weighing scale, and found my weight has gone up 67kg! and body fat also gone up 33%... ARGH!!!!!! OMG!!!!!!

Okay, I admit, I ate a bit more on Friday evening and Sat afternoon - Macdonald, chicken frankfurt, fries, BBQ chicken, rootbeer, ice cream, hor fan, fried rice.... Bubu.... Then today I was pigging out at Tampines 1. As I was walking around, ended up eating MrBean Ice cream, 2 taiwan hotdogs, 1 chao da ji pa, 1 spagetti, 1 coke zero, 1 honey drink and 1 ginger tea. Had 2 bowls of porridge for lunch. Now I am skipping dinner cos those were my dinner. Then I felt so bad, I went swimming. My first time in almost 2 weeks. Swam 14 laps instead. Didnt feel like doing 16 cos ate a bit too full. At least I did 2 laps more than my usual of 12 laps. After the swim session, I felt much much better. It must have something to do with the natural endorpins released after a workout.

I shall resume the 2 sessions a week. Hope to let weight go down permanently!