Finance:

A branch of economics concerned with resource allocation as well as resource management, acquisition and investment. Simply, finance deals with matters related to money and the markets.

Kampung:

A term for a 60s styled community village in the regions of South East Asia. A place where people do not have to be wary about their neighbours. A place where there are no barriers, physical or otherwise. A place where people share their belongings and knowledge.

Finance Kampung:

THE place on the internet where people come together and share their financial knowledge, regardless of their age, gender, occupation and the knowledge they currently possess.

About Trader Tan

The Beginning 

I suppose the best way to explain why I started this website, would be to talk more about myself and how I came to pick up investing and trading. I was exposed to the financial markets sometime in early 2003. Back then, I had saved a small sum of money, and I was thinking what I can do with it. If you remember, 2003 was when the world markets was starting to pick up from the 2000 dot com crash and all the horror stories from it.

Being young and ignorant, the only things available to me was either fixed deposits or unit trusts. Fixed deposits, I just never considered it. In singapore, fixed deposits is really the unncessary freezing of funds. Could never understand why people would put money there for 1 to 2% returns, especially since it is relatively illiquid. Unit trusts were actually quite hotly offered around that time by all the financial planners around. Wanting to be more involved in the growth of my money and any lessons that came with it, I opt to buy unit trusts DIY. That is, through a discount seller like fundsupermart or dollardex.

The advantage of them would be the lower sales charge, but you would actually lose the 'expertise' (or lack of), of the financial planner. Lucky for me, 2003 was the beginning of this 4 year long bull run, and I managed to get a decent return by playing dart throwing. Simply randomly throwing darts and choosing the unit trust to buy.

1 year later, I sold off all the unit trusts. The thought that came to me was that, I wanted to do more research. Wanted to be more involved with my money growth. There was actually a saying going around, "When you buy unit trusts, you lose 5% before you even started." When the market is good like the way it is now, it seems to be insignificant. Most equity unit trusts are turning in 20-50% annually. But back in 2001 to 2003, most unit trusts actually had negative returns! And you couldn't do anything about it, since the money is in the hands of the fund manager. And all the while, the fund manager gets to keep the nice comfy 5%. Talk about unfair.

The years before

I decided to do stocks. Back then, while there were information and stock forums, there wasn't really much information for the new investor to read up on. So I had to just do it by trial and error. Being a non-finance student, I had to do my own readings. I read economics, accounting, etc... But mostly I read forums. When you're not an accounts major, chances are while you might understand what an annual report is saying, it wouldn't really make any sense to you because you've got nothing to base it on. Being a little bit more 'kiasu', I bought Sembawang Corp. At a nice low price of $1.50 too. (And in case you are wondering, yes, sembcorp was once a $1 stock.)

I didn't put all my money into sembcorp though. I kept a little to buy those speculative stocks. In the end, I lost 50% of the money I allocated to that. The saying is right, "You can't call yourself a successful trader until you went through a storm." That said, I don't believe I have gone through a storm yet, since the past couple of years has been a raging bull market.

Before this, most of my stock picks were due to fundamental analysis. That is, looking at the foundations of a company, and decide that either, 1) it is undervalued, or 2) there is large growth potential, and then buying it. After a year plus of this, I decided I wanted to try my hand in technical analysis. So I sold it all. Lucky for me, I sold sembcorp at $3. (Unluckily for me, the high of sembcorp during 2007 was $6.)

Technical analysis is basically the study of the price movement of a stock. They don't care for what the company does, how good is the management, etc.. The basic philosophy is that the value of a company, is not the same as the price of the company's stock. While they might be somewhat correlated, most of the time they aren't. Proponents of technical analysis basically believe that the price of the stock is only due to the psychology of the participants in the market, as well as the supply and demand for a stock.

So that was the start of my journey as a trader.

The years to come

One of the reasons I did investments was the belief that no matter what kind of job you do, how much money you make on your job, eventually you will have to have some investments. You can't be living off a job income while you are 80 years old right? So to prevent that, you would actually have to start investments some point in your life, such that the income from that investment asset is enough to sustain life when you want to retire. And of course, the earlier you start, the better.

I hope this site serves as a guide for the journey of others, as well as to plan for my further journey ahead.

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