LKY’s words as applied to TA

Hello everyone,

Recently, I came across an article on Yahoo! Singapore’s page about MM Lee’s words in his latest interviews with journalists. As I read through the article, I realise there were some things that he said that could apply to TA as well. Let me go through some sentences with you all, and you can tell me what you think.

1. MM Lee admits the PAP will meet its downfall in the future.

Many empires, regimes, and groups have come and gone in histroy. Nothing in this world will last forever. In other words, no trend can go on forever; sooner or later, it will collapse. MM Lee goes on to say he believes the PAP will continue in good stead in the next 10 or 20 years. However, beyond that, MM Lee admits he cannot comment on. I beleive this is certanly true in technical analysis as well. Whenever a stock, or even the economy appears overheated as a result of a long uptrend, the naysayers will start screaming for the burst of the bubble – the end of the world. Most times it is not so bad, but people will start calling for the start of a huge downtrend. They will give all kinds of reasons to back their doom and gloom claims. Let us recall a recent catastrophic event – the 2008 – 2009 crash. At the bottom, some people thought the end of capitalism was in sight. Slowly recovering in 2009, ministers and economists from around the world started giving their predictions on the kind of recovery that would ensue. Without mentioning names, I remember some who said we were in a L-shaped recovery. Others said W – double dip – while yet others said it was a U-shaped recovery. In the end, the stock market came out with a V. Who would have thought so?

While yes, I agree with MM Lee that no system lasts forever, I want to highlight a small part that does not sound significant. MM Lee did show us that sometimes you can tell how long a trend may continue. In his case, he still sees the PAP as continuing to rule Singapore in the foreseeable future. Sometimes we can tell a trend should keep up, based on analysis that we come up with. If your analysis is more times than not right, then be bold and go with your analysis. Beyond 10 to 20 years, MM Lee says he cannot tell what would happen to the PAP. That is true on the charts as well. Projecting further into the future, sometimes one just cannot tell what may happen. So how should we apply this to our TA? Go with the trend. As I have said several times here already, the trend is your friend. Simple quote from someone in history, but ever-practical. As long as no other indication of a reversal should take place, then go with the current (just remember to be nimble and alert). How many times in your years of analysing and trading have you caught the very top or bottom of a trend?

2. Safeguards in the political system

MM Lee goes on to say that in the event where the PAP gets knocked off the perch, Singapore still could survive because of the safeguards in the political system.

In trading and investing, we must have a philosophy, a style that we adhere to consistently. We must have a reliable system of analysing a security, such that even if we have been proved wrong once, we can press on the  Plan B button, get out and bounce back the next time around. If you have a system in place, you will succeed in the long-run. Follow a set of rules that you have always believed in for many years. Tweak it along the way as you deem fit, just like how the PAP came up with the safeguards in the first place because they anticipated a “projected shift in power”.

Please go to this link for the article:  http://sg.yfittopostblog.com/2011/01/21/mm-lee-predicts-fall-of-pap-sometime/ 

All analyses, recommendations, discussions and other information herein are published for general information. Readers should not rely solely on the information published on this blog and should seek independent financial advice prior to making any investment decision. The publisher accepts no liability for any loss whatsoever arising from any use of the information published herein.

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2 Comments

  1. Posted February 5, 2011 at 12:36 AM | Permalink | Reply

    This article you wrote is simply great application of applied knowledge in another paradigm. I like it! And also much respect to Mr. LKY – whenever he speaks in public, there is this distinct power and wisdom.

    • Administrator
      Posted February 5, 2011 at 5:13 PM | Permalink | Reply

      Denzuke,

      Thanks alot for your compliment. It may seem like there is no link between words on a country and the trading world. However, I believe alot of things are related in life. This was just a small example. In future, when I pick up something, I will post an article that’s something like this one.

      Thanks again.

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