Ian On The Red Dot

I think the finance industry is just one big system to fleece money from the masses to funnel it to the few. It is a game setup from the start to benefit only a few players. There is no such thing as a level playing field.

I took Economics for my A Levels. I did well enough in the first year when the subject material was covering microeconomics related stuff like marginal utility to be offered a S Paper in Economics. I thought Economics was something I had interest in until I started studying macroeconomics and attending S Paper Econs lectures.

I won’t say I lost interest. Rather, I tried to run away and hide from the system we were living in. I wanted to go under a rock and not try to understand what I felt was a totally screwed up system. I didn’t want to face the facts about the system we were in. It was scary stuff.

A lot of things just didn’t make sense to me then. I could understand what the textbooks were saying. I could understand what the S Paper lecturers were trying to highlight. But what really got to me was how in the end, the individual was powerless to change a system that is so messed up that it has led to excesses and suffering. I couldn’t fathom how we even allowed ourselves to be led down a road that was powered by the greed and fear of humans, a system that pandered to the worse in humans.

It was only when I started working, and even then slightly apprehensively, that I began to regain interest in such stuff.

I can’t run away from this system. I am tangled in this web. I probably can’t change it. I jolly well better learn as much I can about this system and understand it, if not to profit from it, at least not to be made a patsy.

Doing nothing is a position taken.

And so, yesterday, I got myself a CDP account. I don’t intend to trade, speculate or invest. Yet.

But to me, getting the account is like getting a driver’s license. You get it even if you don’t expect to use it because you never know when it might come in handy.

I got it as an acknowledgment that whether I like it or not, this is a game (i.e. financial machinations of this world) I have to play, either as an active participant or a defensive one.

Anyway, something worried me when I was opening the account. Half of the people at the customer service counters or waiting for their turn were elderly folks around the age of my grandma. I’m obviously using guesstimation here.

I’m not sure why they were there. They could be there for a myriad of reasons but it just worries me that the elderly is involved in anything related to the stock market. It just doesn’t seem like the wise thing to do considering they have a shorter time horizon.

What was also interesting was how some of these elderly folks were accompanied by younger looking individuals. I would guess that these individuals were around my age. I have my own conclusions about these individuals and none of it is good.

Anyway, yeah. Yesterday was one more step.

Just finished reading the book “Mobs, Messiahs, and Markets“. It is a great read and I’ll definitely have to read it again not just because there is so much material to digest but because the writing is deliciously beautiful and brimming with wit.

The book sheds light on the shenanigans that are currently happening in the world as well as some from the past. The one thing I learned from the book is to think for one’s self. Yet, the book cautions against logical thinking because there is a tendency for us to do it wrongly. We use our thinking to help validate what we want - our brain is the slave to our emotions and desires. Also, there is the danger of thinking we know a lot about a subject matter, if not everything which can lead to disaster.

A healthy dose of skepticism and humility is needed when the gears in our brain start turning.

Investing tips from the book:

1. Don’t Go Looking For Trouble.

You don’t always need to be either a seller or a buyer. Sometimes doing nothing can be good. Although holding cash is actually doing something.

2. Don’t Expect The Market To Give A Sucker An Even Break.

The little guys lose consistently. They pay too much to the financial industry in fees, commissions, and spreads. The market isn’t a level playing field.

3. Don’t Be A Patsy (i.e. a person who is gullible and easy to take advantage of).

Don’t try to figure out what the market is doing by deferring to experts. Always remember that you are guessing and because you are guessing, make sure the odds are in your favor. Don’t buy high expecting to sell it when it gets higher because the market has been going up. Remember to buy low.

4. Never Get Too Far From The Facts.

5. Never Buy Tuna Unless It’s On Sale.

6. Never Buy What Someone Else Really Wants To Sell.

7. Never Buy What Everyone Else Is Rushing To Buy.

8. Gold.

I’m not doing justice by just listing the points above but this is more for my own notes than anything else. I borrowed the book from Tampines Library so the book is in the system. Try to borrow it if you get the chance. I’m definitely going to buy this book to add to my collection once Borders has a discount.

The one fault I have against this book is that it has introduced the phrase ‘public spectacle’ into my vocabulary. I find myself using it quite often now in my conversations with people.

Public Spectacle = Lies -> Farce -> Disaster.

Some associated links:

This is the blog that is associated with the book - Mobs, Messiahs, and Markets. It hasn’t been updated since October 2007 so to read more from the authors, going to their blogs might be another recourse.

I managed to find the blog for only one of the authors Lila Rajiva - The Mind-Body Politic.

Couldn’t find the blog for Bill Bonner so I’m just going to link to the site for his daily newsletter - The Daily Reckoning.