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Interview with Maurice
(November 28, 2002)
Persons
and things that influenced his way of thinking: *
Martin
Pring - His thinking with regards to the "weight of the evidence". *
Alan
Farley (of hard right edge) - Helped me a lot to get back in touch with the price
bars directly. He allowed me to be comfortable with simplicity and
trusting my intuition. *
Van Tharp and his book, Trade Your Way to Financial Freedom *
Neuro
Linguistic Programming (NLP) - A branch of psychology that deals with
human performance, specifically, how people make decisions and manage
change. Neuro
Linguistic Programming (NLP): "NLP
is very good for building self-awareness. It's excellent for
stress-management. It's excellent for bringing to the surface how you
naturally make decisions. It also brings to the surface beliefs about
who you are and what you are capable of...also your biases. A component
of NLP is hypnosis. You need to have a very healthy relationship with
your unconscious mind in whatever you do in life. Your unconscious mind
is simply that portion of your mind that stores all your learnings
- the good ones and the not so useful ones." "A
lot of us have a lot of biases and beliefs that are not completely
conducive to success. So, you have to be what's called, congruent.
Congruent is an NLP term that says, all aspects of your personality or
your being fully supports the goal you want; there's no one part of you
that holds you back."
"One of the things that Van Tharp says is that, if you want to be
congruent as a trader, you should live a balanced life. For example,
many people trade because they find it exciting. This feeling of
excitement is often just a way for them to escape personal issues. In a
similar way, people who are under stress may try to ease it by indulging
in alcohol, drugs or overeating, many people avoid personal issues by
trading. You should trade for profit, not excitement.
One should address the root of the stress, not numb it away with
alcohol, eating or trading."
"My belief is that, the more I master myself as a person, the more I
develop myself as a person, the better trader I'll be. For me, personal
growth or personal development and successful trading are one and the
same.
Because, if I try to avoid issues by trading, they will just show up and
sabotage my trading. One can see this principle at work when many top
traders make a lot of money then lose it all without knowing why. Once
they address the psychological factors behind the losses, the profits
return." Best
Trades: He
bought P200,000.00 worth of PCOR last year at 1.20 and sold it at 1.80. For
the fund, he bought FPH at P22 late last year, and sold everything at P31. "Honestly,
I really think that some of my best trades are the ones I never
did - because of the huge losses I avoided." Worst
Trades:
Buying the Fortune Cement Corporation IPO at P8.00 in 1996. Made a
killing by doubling it to P16.00. He did not sell. The stock went back
to his cost at P8.00.
He averaged down when it was already doing P6.00, thinking the
fundamentals would save it. He sold everything when it was already down
to about P 4.00. About
the lesson he learned from this mistake, he says, "You're
either a technician or you're fundamentalist, you cannot do both. That
really thought me that no matter how good the fundamentals are, when the
tide is against you, no one is spared." Other
lessons from the market: "One
of the most difficult lessons that I have learned is when you trade or
invest, one has to have a clear and explicit set of criteria of why you
are buying and selling. There must always be consistency. If you're
buying it based on a technical criteria, sell it based on a technical
criteria. Don't start shifting it around and looking for other criteria
to justify it." What
separates the Men from the Boys? Commitment
- "People basically
get into this whole trading game because they think it's easy to make
money. When they find out how hard it is, they usually switch to
something else. For the average trader, the average learning curve - the minimum
- is
five years. I think if you make it past that point, and you realize that
this is just like any other endeavor that requires effort and
committment, that's the beginning of separating
the men from the boys." Discipline
- "My two main rules, 'cut losses and let your profits run', and,
'the trend
is your friend'." Humility
- "Just when you think you know something, the market comes and just whacks
you." Stock
picks:
"None for now. Am waiting for the market to
bottom."
"But am bullish on Euro - maybe 1.10 against the dollar--and
on gold ($350 - 400/oz) and silver." Market
forecasts:
"From current levels, a short term rally to about
1100 is possible. Aside from that, the trend is still down. A retest of
980 is the most likely. To be practical, I would consider a drop to 1000
as a retest of 980. If that breaks, expect 900 +/- 20 pts, then 680,
then 500. My Fibonacci computation suggests 900ish, so I'll stick to
that for now. With a credit rating downgrade a near-certainty in 1H03,a
ballooning budget deficit (Php 250bn + in 2003), a US-Iraq war, and the
spectre of FPJ running for pres, there are lots of triggers
that could take us to 900 levels."
"Am particularly worried about the war with Iraq because the
expectations are unrealistic : the US wants regime change AND a quick
victory."
"Unlikely, in my amateurish opinion because, after pounding Afghanistan,
Bin Laden is still alive."
"Also, the Arab world is united behind Iraq this time because Iraq
hasn't used its weapons of mass destruction on any country. Unlike in
1990, the Arab world more or less grudgingly tolerated the US attacking
Iraq because it invaded Kuwait."
"Also, Europe is not as united behind the US as it was in 1990."
"Regime change means US bombing the hell out of Baghdad and US troops
physically taking possession of Baghdad's streets. Can you imagine how
many have to die to get to that point?"
"Does the US public have the stomach for this?"
"Will it be like Vietnam all over again? Or a mini-Vietnam? Like that
earlier war, I think the success of this one will depend on how well the
PR is managed domestically in the US."
"And while all this is going on, oil will be at $40/barrel and we will
have to endure higher gas prices, food prices, min wage increases, etc." Maurice's Email:
maurice@i-manila.com.ph
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