Rampant Fear in the Market

So the Congress and the President passed the bail out bill after all. Remember my prediction? I’m goooooooooood. Naw, just kidding. I could just as well be wrong.

So after the news hit the wall, surprisingly… or not so surprisingly, the market went DOWN. What the heck? Does that even make sense?

“We really really need this bail out bill!”
“Please pass the bail out bill to save our investment!”
“Well, here you go…”
“Shit, wait! Maybe we don’t really want this. Oh shit…”
“I think we are screwed either way.”

Actually, it does. There is always one thing that drives the stock market and that contributes very much to the short-term volatility — human emotions. And the way the market has been moving lately, it shows one strong feeling that everyone has — fear. Fear of an unknown but tragic future. The analogy I will draw is… sheeps!

What we have now is a herd of sheep that is completely frightened by a thunder that they think is coming and is stampeding. They are trying to run away but there really is no where to run. Though a herder can try to stop them, which is the government tries to do with the bail out bill, it will have small immediate effect. We will have to give some time and effort for the fear to subside and the herd to calm down. During the stampede, some of the sheeps died. Some have gotten injured. The stronger ones are just fine. Those end up with wounds will take time to heal. The stronger ones will thrive. This is no different than our market and economy.

Heck, part of this strong fear could be intentionally amplified by the stronger ones for their own benefit — to be able to buy things on bargains — like big sheeps eating small sheeps. On second thought, this sounds quite atrocious, but it is how it is.

So far, I am still sticking with my strategy with buy and hold and have not sold anything out of fear. In fact, I have been putting hundreds here and there into my Vanguard funds.

Here is the way I see it.

Yes, there is a worse scenario that the market will tank for a long time. But in that case, it will still recover in the long run. No, it is not fun to watch my portfolio dives. However, I am patient and during that time, I will just worry about feeding myself and my future family. Maybe just myself, haha. I will also try to grow my capacity, which includes saving up to await opportunity. Time is on my side as I am 25.

Yep, there is the worst scenario where the U.S. market completely collapses, U.S. dollars become worthless, and I will have lost everything. Civil war or revolution of some sort may happen in the U.S. But in this case, I really have way more serious problem to deal with. Like fighting for food and water, staying alive, or getting the heck out of the country.

Now lastly, there is the not-so-bad scenario where the market will recover in a year or two or three… and runs its cycle like it has in the past. And this scenario, my friends, is what I am betting on.

Fear? Yes, I have it too. I just don’t let my emotions drive me. My awareness allows my perception and logic be the driver.

Here is how I always try to act:

  • Observe situation *simply*
  • Evaluate possible scenarios (best case, worst case, the most probable case)
  • Make decision to the best of my ability (a bet? that’s why life is a gamble)
  • Face and observe the consequence *simply*
  • Go back to step one

Originally posted 2008-10-03 14:21:54. Republished by Blog Post Promoter

Be Careful of Credit Card Companies Sneaky Behaviors

I use online bill pay for all my bills and manually schedule them each month.

I just finished scheduling payment for credit cards, and I noticed the due date has slowly crept earlier and earlier over last few months. How sneaky of the credit card companies! I am not going to fall into this late-charge-trap.

And I’d like to warn everyone who comes across this post to be extra careful about credit card payment due date (and probably all other bills also). tThis is especially if you make use of monthly automatic payment.

Needless to say, this is credit card companies one of many sneaky behaviors to get more money, not excluding extra/increased finance charges and increased interest rate. Only understandable in this economy, right?

That means it will do us no good to be mad at them, but just that, we, anyone who is a credit card user, are to take care to keep money in our own pockets.

Originally posted 2009-05-10 22:42:40. Republished by Blog Post Promoter

When the Intention is Pure, the Action Follows

For every action in this world, there is an intention behind it.

To know yourself, it is very important to be aware of this intention behind each action. Therefore, to choose which action to take, one can first decide on this intention.

Notice I used the word “pure” instead of “good”. There lies the key because purity has nothing to do with good (or evil). What action follows the intention may not always be considered “good”, at least at certain time to certain people. So by pure, I mean to the degree which you are aware — of yourself and reality, as they are. Hence, if you are going to be evil, how pure can you be, act, and follow through on your evil intention.

Also notice that I also used the word “intention” instead of “thought” because the thought behind the action may not be the true intention. We have gotten too proficient in deceiving ourselves with our minds. Therefore it is important to examine the thought behind the action to be aware whether that is true intention. We must be honest with ourselves.

For example, charity donation. It is often discussed, especially on personal finance blogs, as many have it as part of their budget. Some questions I could think of for that is (for you to explore but not for me to answer and decide right or wrong)…

Is it to be done because we SHOULD?
Is it to be done because we will feel good about ourselves?
Is it to be done because others will cheer and praise us?
Is it to be done because of tax breaks?
Is it to be done because we feel guilty of all these “stuff” we have?

Or, is it to be done because we are truly compassionate about people out there who are starving, malnutritioned, without homes, without education, etc.?

One other quick example is… behind many actions that we take, how many of them is all about money? I understand we have to be practical in life, which is why I have a job, but I cannot help but wonder, money… is that all there is to our life?

Learning about yourself. Learning about your true intention. Finding that pure intention is important.

Acting out of that pure intention leaves no room for regret because that means you fully understand the circumstances and is making the best choice, and that choice is solely yours. As a result, you are also being fully responsible. It leaves no room for “I should have this, or I should have that” or “So and so told me to do it” or “If I had known better…” (because you could not have know better if you were already fully aware)

Therefore, “When the intention is pure, the action follows.” Given that the person is being honest with himself about his intention.

It will also do us well to be observant and fully aware of others’ intention behind the actions. That way, we know who are friends, and who are… not-so-friendly.

Lastly, I want to link this to the law of attraction. The law of attraction has been thrown around A LOT. Consequently, “affirmative thinking” has also gotten pretty trendy. Maybe it works for someone but I don’t believe in “affirmative thinking”. What I believe is that the true mechanism of attraction… lies in this pure intention. Thus, to make the law of attraction works with you requires awareness.

Whatever type of TRUE intention you have, things and intentions of the same types will happen more frequently. Note again, intention can be different from thought, especially for people who barely know themselves. If your true intention means well, better things will more likely to happen to you. Likewise, if your true intention is one of anger, hatred, selfishness, more of that will also happen to you. If the intention is half good half bad… I suppose that cancels out.

And well, if you don’t know your true intention, then everything around you probably seems to happen at random.

The paradox is though, if you go around doing good things because good things will happen to you, that is a selfish intention… and it also falls back onto the “agenda mindset” that I talked about last. Something I leave for us to think about.

Originally posted 2009-04-10 23:54:49. Republished by Blog Post Promoter

Wisdom Results Not in Process, It Results in Outcome

We humans tend to think of wisdom as a top-down procedure. A powerful mind gathers information, measures it against the lessons of accumulated experience, and makes a rational decision. But really, wisdom is not a process but an outcome; it’s the ability to live well, to anticipate and be prepared, to avoid disaster, to navigate troubles. It came through experience and pattern recognition or it can come through instinct and feedback loops, as it does with bees. Either way, it’s a process of trial and error, of learning from mistakes. One method emphasizes the individual’s role, while the other relies on genes and evolution. Our species tend to recognize only the former method, but nature seems to favor the latter.
Rowan Jacobsen

Originally posted 2011-04-26 16:48:56. Republished by Blog Post Promoter

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