10 Lessons we can learn from Habagat crisis in the Philippines that we can apply to stock investment/trading

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I heard finally the sun came out today; we hope it stays that way until the water subsides.
This is an eye opener
source: http://www.theatlantic.com
What happened is an eye opener. We already went through Ondoy and we all remember the horrible memories that for some still haunts. I did my share to help even though I am not in the Philippines especially in Metro Manila by donating and feeding words to encourage our countrymen to stay brave, to be a hero, and to be aware.
I gathered some lessons that we learn from this event. We should always remember the experiences we go through and learn from it.
Lesson 1    Be ready
Often times the reason why lots of people die or perish is that they are not ready for such event. Yes it could be a calamity or an unexpected catastrophe but readiness is always a necessary element. In the military or even in rescue operations, personnel or soldiers do the drill several times to all kinds of possible situation so in case such happens they already know what to do. No more long time thinking and deciding because such is already done long before. Also “ready” means having all the needed tools and supply in case of emergency. These essentials are stored in easily accessible place so that no time is wasted looking for them.
Same with our stock investing. Ready means that you are able to make decisions and able to have the capital or the means to place a buy or sell in case there is an unexpected price surge or an sudden opportunity to buy more. It is advisable to leave at least 10% of your portfolio as cash for ready funds in case an opportunity comes.

 

Also being ready means you know the obvious signs if such price surge or drop will happen. Always use your free or net time learning how to read reports, charts, broker’s analysis, and also read the news and trends in order to be able to have the necessary data when you make your buy or sell decisions.
Lesson 2  The little things matter
The little things like drinking water is important
source: http://www.dadychery.org
As I already mentioned you should always have the tools and supply on hand and accessible in case of emergency. And of all the little things we ignore are now the important things in times of calamity. The power went off and you have these rechargeable lamps but you haven’t charge them for a long time or even worse you have candles but you don’t have even a single piece of match or a lighter to light them. Also of all the needed food supply you don’t have potable or drinking water on hand. Small things like that which we usually ignore on ordinary days become so important on such times. For sure after this you would always make sure you have these stuff but maybe if the next days, weeks, or months has been a good weather you will stop making sure you have all these little stuffs and in an unexpected day nature strikes again and you don’t have them again.
In stock investing or trading little things matter as well. Are you tired and forgot to check instead of selling a stock you actually placed a buy order? Yes It did happen to me and good thing the stock was on a bull rally so I was able to go with my buy order and sell it after a few minutes, whew! But what if you were putting a million peso buy but you intended to sell? Yeah I think it did happen once (I already forgot the stock that was traded on that unfortunate day).
Lesson 3  Are your important documents safe
Yes during times of flood it would be very wise to have a means to safely secure important documents. It could be your passport, your visa appointment application papers, passbook, or anything that you need to transact with government agencies or other institutions.
In stock investing or trading we usually open an account and forget. What if your broker requires the original documents if you intend to claim all your money and close your account. Also what if you wrote your online access and loss it? Then after a few days somebody withdrew all your money and closes your account? Sensitive information should always be kept safe. If the flood waters can destroy and carry away such things, it can also happen even in the age of online era.
Lesson 4  Stand on a deep rooted foundation
in the rising flood go to highre ground
source: http://www.dailytelegraph.com.au
Yes when you are facing a flood that becomes faster every hour you really got to go to a place that has a strong. It is better to be safe and be in a place or structure with strong foundation before the rushing water catches you or your love ones.
Stock trend can actually get you carried away and sooner you are way too far and already missed opportunities. Always follow your targets, tame your greed.
Lesson 5  Go to higher ground
source: http://www.komonews.com

During floods water will surely go up thus besides standing on a strong and deep rooted structure you got to go to higher ground. If the water keeps on going up and your house have a second floor you go there and if it still goes up your last resort is the roof top. After that you’re in big trouble so as much as you can still go to a higher place go and save yourselves.
Most Filipino view stock investment as gambling thus they come in buy speculative stocks hoping to gain right away only to end up broke. Always have stocks of good value that will surely stand even in economic crisis. Allot a portion of your portfolio to blue chips to in a way be in higher ground in case your speculative stocks don’t perform as expected. Again I am not saying “don’t buy speculative stocks,” I said allot some of your portfolio for strong and trusted stocks.
Lesson 6  Be up to date
update yourself from time to time
source: https://www.facebook.com
Remember the pointing game our countrymen did during the rains? Yeah people blame PAG-ASA or any of the government units for not giving updates when in fact there were updates; in the news (may it be TV or radio), twitter, Facebook, and other social media. But the problem is the flood was rising fast? That is why you should have a handy cellular phone that works to at least inform yourselves with your families and friends near you. Since they are near you they might be facing the situation before you do thus be able to prepare for the worst. If TV, radio, or social media is not enough then you have to find ways to update yourself.
Updated information helps in your buy or sell decision that is why you must have access to these information. Your broker does provide such but if such is not enough go get the information yourself from all possible sources. You can find updates in company bulletins, news, stock forums, and friends. Update yourself to have the edge.
Lesson 7  Calm down, don’t panic
Panicking only causes delay and disaster
source: http://news.nationalpost.com
Most would panic instead of thinking of a solution to get out of the catastrophic situation. Calm down and think of a plan to save yourselves. Panicking won’t do you any good. Times like this calls for one’s quick decision making and action. Remember the flood won’t wait for you to move to higher ground, it will surely get you.
There is too much noise in the stock market. Yes you hear this thing from here and there and you jump into it and end up making the wrong decisions. If you are ready just like in lesson 1 you would know which rumor or talk is the truth. If you let such wrong information and rumors affect you, you will surely panic and end up making the wrong decisions with your stock trades.
Lesson 8  Know alternative exit routes 
Know alternative routes
source: http://www.therelationalmarketer.com
Floods have a direction thus knowing exits in your house, barangays, or area will surely help you when a huge rushing flood is on your way. Knowing alternative exit routes prevents you from getting stuck in the water freezing.
In stock trading we call this psychological stop or targets. One has to establish such in order to help in cutting losses. The stock price might continually drop and with a psychological stop one might end up losing more money instead of making money. Cutting losses helps one to avoid further losses and recoup such loss to a better stock.  
 
Lesson 9  Money is not the most important thing
Your life is more important than your money of possessions
source: http://ca.news.yahoo.com
In times of calamities money is not really that important, your life is. Lots of people get trapped or die in floods or other disaster because they choose to stay behind and look after their possessions. They stay their making sure nobody would steal their possessions but what if stating will cause your life? That is why you better be wiser by first thinking of you and your love one’s safety if things get worse. You can bring some necessities but you cannot bring all or else it will slow you down and get carried by the rushing water. Or even yet if you get trap in your car better get out of it before the water carry you and your car.
Remember why you are investing in stocks. Always think that you are using your money to earn so that you can have value for yourself and your love ones. Don’t let your greed carry you away or else you might lose it all.  
Lesson 10  Help or share whatever you can  
instead of going one's way, better stay together and help each other
source: http://edition.cnn.com
In times of disaster we can clearly see the real people and at times the real heroes. Also if you don’t work with others during calamities surely you will die of either lack of food or freezing. So share whatever you have and stay with the group for survival.
The best way to enjoy your blessing is to share it
source: http://edition.cnn.com
Sharing your knowledge about stock investing/trading (this is different from inside trading) so that they can learn and have a better decision is a good way of making the stock market a better place to put in money. Wiser investors will now know how to trade right and thus have a healthy stock market. Also you won’t know all information and updates that is why by sharing what you know you will also get new and better information about a stock. Also sharing your blessings to the less fortunate makes you more motivated to be better at your trading or investing skills to be able to continually share. As they say the best way to enjoy one’s blessing is to share it. 
Financial Freedom Advocate About the blogger

Louis Delos Angeles is a Certified Public Accountant, blogger behind Investing in Philippines, and author of Investing in Stocks: Preparing for the future small amount at a time. Check him out in Google+ Learn more about Louis and his financial freedom advocacy here.

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2 comments for “10 Lessons we can learn from Habagat crisis in the Philippines that we can apply to stock investment/trading

  1. August 14, 2012 at 6:02 am

    Agree to all the list above. But aside from those lessons, I also learn that, we must not blame it all to Government. We might also the reason why there’s floods.

    Weather Philippines

  2. August 15, 2012 at 10:02 pm

    Very true Apple, that is why during the rage of the flood I ran a Facebook campaign that says “Stop the blame, stop pointing fingers. DO something to help your countrymen”

    We can blame the government later(if they have faults, but more people need help and that is more important.

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