Tuesday, October 13, 2015

GMGH is a Financial Asshole

At night, I get dirty dreams that the stock markets are on fire, the property market is crashing, COE is back to $2 and Singapore is in one of the worst economic recessions that we have ever been.

I smile in my sleep.

This post by Dividend Knight rattled me a bit after I read it. I have to admit, I am one of those insensitive people that have openly said that I hope for a recession in hope of picking up assets at fire-sale prices.

However, I feel a need to defend myself so that I can continue to guiltlessly enjoy such dirty fantasies.

Firstly, saying and hoping for something in most instances does not change the outcome. Unless the outcome is directly affected by what you say (and maybe hope if they have a hope-meter to detect your levels of hope). Just because we say or hope something, doesn't mean it will happen. I don't think this point needs a lot of elaboration. It's pretty clear cut. Hope is not a strategy.

As an anonymous blogger, one of the main perks is that people don't know who I am and cannot curse me on the streets for expressing what is on my mind in my own private space. When I wish for massive economic meltdown, I do know and realize that a ton a people are going to suffer when (not if) it eventually happens. Many of these people are going to be overleveraged, while some just have plain dumb bad luck. Heck, I'm sure I'm going to suffer as well.

However, this is where crazy pot smoking hippie free love perpetually levitating market idiots can be found. The economy (and it's somewhat murky reflection, the stock market) does not expand forever in a prosperous ascent towards the heavens. There are booms and busts. That sounds so sterile. In a more real sense, businesses go bankrupt, investors lose lots of money, employees get fired and generally most people go through a hard time. Just because you use the words booms and busts doesn't remove the reality that people have to go through during those times. This is the flip side to my 1st point: Just because you don't talk about it, doesn't mean it's not happening.

Is it morally wrong to make money while other people are losing money in a recession? Yes? Well then, is it morally wrong to make money while other people are losing money, but in an expansion? Wow, isn't that double standards then?

I don't think it's wrong to make money, regardless of what other people are doing. They could be doing great! They could be doing shit. Who cares? Are you supposed to know this information? When you sell your company's products or services and eat into your competitors market share, do you cry about it at night? How is this any different? Why does what other people do matter? Is there a weekly newsletter telling you about how other people are doing and why you should care about them?

Recessions - they are NOT magical once-in-a-lifetime financial disasters which are an act of god. If you aren't prepared and ready for this one, then what about the next one, or the next one? This is the case of the ant and the grasshopper. I have got an emergency fund. I picked a stable job with a good employer. If I am retrenched, I am willing to lower my expectations, undercut my peers and work longer hours by just enough to get that next job. I am not leveraged. What more can I do to prepare for winter? Winter comes around again and again, just like recessions do. They aren't one-off things that can be hoped away or hushed and swept under the rug.

Rather than be caught out at low tide with your pants down, now is about a good of a time as any to re-evaluate your financial position and to see if you have what it takes to survive the winter. For quite a number of us, it is going to be our first winter. I am eagerly and patiently waiting for it. I yearn for it to come.

I might be an insensitive asshole for talking loudly about inappropriate subjects at inappropriate times (determined by who? The Ministry of Morales?), but you can't fault me for not speaking the truth.

10 comments:

  1. Hi GMGH

    It's all about ethical and how we view ethical depends on one's elaboration.

    It's hard not to be hoping as you said it's not going to change the outcome. People needs to know that when one is in the market (or real world), shit is going to come regardless of whether you like it or not. One must be prepared at all times, at any times.

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    1. Hi B,

      "People needs to know that when one is in the market (or real world), shit is going to come regardless of whether you like it or not." I like that.

      I think I'm pretty unethical. I had to memorize the entire ethics portion when I was taking my CFA exam. For sociopaths like me, it just didn't come naturally at all.

      Delete
  2. Hi GMGH,

    Like you i am also looking forward to the day it comes. Because when it comes, we have a chance to pick up stuff :)

    I agree that is is not wrong to make money whether the market goes up or down... because at the end of the day, all that matters is making money regardless of market conditions. (So if others only know how to make money when the market goes up, they better start learning how to make money when the market goes down... because it will come sooner or later.)

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    1. Hi investing wolf,

      I think it is pretty hard to make money when the markets are crashing though. We will see how things go! I wish you good luck and fortune navigating this crazy world we live in!

      Delete
  3. Hi GMGH

    I know where you are coming from :)

    In every market, there will be a bull camp and a bear camp.

    Making money at the end of the day is an amoral process, no?

    From a cyclical/Elliot wave perspective, corrections and downtrends are part and parcel of life.

    Once in a while, society may need a "reboot" to wipe out complacency and the extent most of our population start to take things for granted.

    For instance, do the majority of our youth know how it is like to struggle as our country has not gone through any financial crisis for some time? Something else to worry about, besides which phone to buy, what they can Instagram about and which artisanal cafe to visit next?

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    1. Hi RetailTrader,

      I am still waiting for the opportunity to show the world that I am capable of being bullish! Haha!

      I have very similar sentiments to you. I think we do require a "reboot" to shake out the complacency in our younger generations. Oh well, these sort of things are cyclical, so I'm sure that time will come eventually.

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  4. Agree with your thoughts but still if I don't think for myself, I would expressed them in a public (or even private) channel in such a manner.
    Also, from a Karma point of view, when you are doing well while others are doing badly, may be good to help those less well off. (rather than "let them eat cake").
    However, to each his own and for those who do not like how you express yourself, they do not need to read what you write.

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    1. Hi Anon,

      To address that point on helping others, I have a post in the works about charity that you might enjoy.

      Cheers

      Delete
  5. GMGH,

    Personally there is a difference between hoping for the inevitable and preparing for it.

    The state of the mind matters.

    But Brutally honest is still better than being a hypocrite.

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    1. Hi SI,

      If it is inevitable, we definitely should prepare for me. I suppose the frame of mind matters, especially since it depends when you decide to enjoy yourself. If it is before the inevitable event, you would want the event to happen as late as possible. If it is after the inevitable event, you want want the event to come as soon as possible.

      I rather be brutally honest. Please call me out if I go the other way!

      Delete

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