Saturday, January 10, 2009

Spend towards your death!

Looks like KLSE is still making a dead-cat-bounce/sucker's rally. My analysis indicates that this up-movement will reverse course soon. KLCI @ 936 may be the highest we will see for this quarter. To confirm the continuation of the downtrend, KLCI must drop below 860 (based on last week's reading). Nothing is certain yet because my midterm reading is still neutral. The KLSE sector readings are:
Malaysia Longterm Midterm Shorterm
KLCI Down Neutral Up (+)
Finance Down Neutral Up (+)
Construction Down Neutral Up
Plantation Down Neutral Up
Property Down Neutral (+) Up (+)
Mesdaq Down Down Neutral
2nd Board Down Down Down (-)

For the rest of the world:
World Longterm Midterm Shorterm
S&P500 Down Neutral Neutral
DJI Down Neutral Neutral
NasdaqComp Down Neutral Neutral
Nikkei 225 Down Neutral Neutral
Kospi Down Neutral Up (+)
SSECI Down Down Neutral (+)
HSI Down Neutral Neutral (-)
TWII Down Down Neutral
STI Down Neutral Neutral
SENSEX Down Neutral Neutral
FTSE Down Neutral Up
DAX Down Neutral Neutral

US market may be on the verge of another downward spiral. So beware! Don't hope that President-elect Obama can do anything. The only rational thing we can do is to save more and only buy what is needed. The Americans is having a hard lesson of spending beyond your means. Can you believe that their savings rate is around 1-2%? So, it is payback time for them.

Looking back at my process of financial responsibility, I realized that I got it all wrong when I first graduated. I bought a car even before I start working (okay, my parents paid for the deposit and I paid for the monthly installment). This can only happen when the bank officer cook up my loan applications! The only thing I did was to sign all the papers and the salesman fill-up the details. Anyway, buying a car without a strong savings is my mistake. I was in debt for 5 years without much savings as I have to pay also for food, maintainance, housing and parents.

Luckily I bought a book about financial planning get myself out of debt. I'm lucky as I discover the death-trap of compound interest can do to your credit card loan. I hope that someday, financial planning will be taught in school so that everyone is responsible in their financial spending. We cannot get into too much debt in good times because when the bad time comes, we will be unable to get out of it.

Now, I'm very careful with my spending until I think that I'm a very kiam-siap (miser) person!

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