Saturday, May 3, 2014

Random thoughts: Reflections

Recently, I have a lot of questions on my mind. I do not have answers to many of these.

I read recently on CW and SMOL thoughts about financial investments. SMOL think of himself as a swing trader with a horizon of 6-18 months when equities is concerned. Hmm.. My record of buying and selling is not too far off from that, in fact, I think I have a strong trading mentality. Not that there is anything wrong with that, but it kinda of clashes with what I have in mind.

I recently sold Sabana and Hpht. Both have a holding period of only 6-9 months. For both, some assumptions made are totally wrong, so I guess it's totally fine to switch out. Not much of a loss.

Then the next question, how often can we always get our assumptions right? When market turns, most assumptions will change. Valuation might change too. No such thing as intrinsic value that is static. Unless u are investing in a solid blue chip where u are comfortable about it business viability, do u dare to average down?

How much cash to hold for ammo? CW has a 3 M approach, of which he think mindset is most important, follow by money then method. I think all 3 are interlinked.

Most bloggers blog about methods, I have an inkling if we are in a bear correction mode, eg a 20% fall, most of us will have some losing counters in our portfolio, in a severe 40% bear, our portfolio would have plummeted. Does that make our method lesser? I do not think so, but I guess many beginner readers will think. Hmm.. He not that Zhun afterall. If we plan for bear, and super bull arrive, do we benefits? Are our investment plan really bull - bear inelastic? Meaning we might make paper losses but generally have a strong returns over a long term that beats inflation and leave some more? (5-7% annually) no need to be a straight line, but can we withstand the test of time, and test of discipline?

Lastly, I have my fair shot of stock picking, results is mixed at best. Although I might have spend a lot of time and effort researching, things still turn out wrong. Might get better with experience. But I realized the convention wisdom of always trust yourself and be misconstrued as dun trust others.

I always read postings at valuebuddies. I know of a few who are more analytical than me. If I know roughly their entry price, shouldn't I just follow if after checking, their analysis is sound? That would be more productive isn't it? I have not followed anyone in that manner yet. Preferring to find my own pot of gold. Maybe I will try a different method. Some researched by my own, some tagging along, having a money plan for bear and bull. (As mentioned by drizzit ) in one of its post. I find I do not wished to tag along because of ego more than because of convention wisdom. If we can buy funds and let someone manage our money, what's wrong with tagging of are sure of one capability. As long as you know nothing's bao Jia can Liao

P.S: for bloggers whose names are mentioned here, I hope I didn't infringe on your "copy" write. cW, drizzit and SMOL and valuebuddies forum links can all be found in the right side of this blog.

6 comments:

  1. Have you read about Mohnish Pabrai and cloning?

    ReplyDelete
  2. sillyinvestor,

    Please feel free to quote, question, and challenge my postings. There's no silly copyright disclaimer at my blog. I have no pretentions as to think I am an "author" just because I blog...


    You wrote: "Might get better with experience. But I realized the convention wisdom of always trust yourself and be misconstrued as dun trust others."

    My personal view is not so much as trusting only yourself and not trusting others.

    Seeking counsel is wise. We have our blindspots. Finding good counsel is hard though...

    Its more about making our OWN decisions after a solitary pursuit or group debate, and taking responsibility for the decisions we made - right or wrong.

    If we blame others or make the mistakes of OTHER people, how would we get better with experience?

    Hence you see "investors" going from course to course, seminar to seminar. The previous setups and methods did not work! The next guru must be the true messiah this time!

    They are seeking the answers from outside when its within us all the time - The Mind part.

    And sometimes the answer is that some of us are just not suitable for DIY investing or trading.

    This is where my road with CW differs.

    Show me anyone or institutions that will provide a money back quarantee that if you follow their advice and invest with them for at least 30 years, they will reimburse the losses you made.

    Be it trading or investing. If everyone makes money, the math is wrong somewhere....It just doesn't add up...

    Trading is hard. I'm not so sure investing is any "easier" just because the time frame is longer!?


    Don't mind me. I am always arguing with the STOP sign.... (I have my own demons to exorcise...)

    ReplyDelete
  3. Nope, but since you mentioned it, it should not be "not yet"

    ReplyDelete
  4. hmm.. the interesting part:
    Be it trading or investing. If everyone makes money, the math is wrong somewhere….It just doesn’t add up…

    I guess trading does not create jobs, and do not add productivity to the economy, so there is lesser possibility for everyone wins...

    I think very soon, I will be stepping out of my comfort zone and following someone else' buy, nevermind I didn't do the research on my own, I felt super spoon felt that all I need to know, or which to know is already written... and after checking, is correct. Checking is so much easier than digging from scratch...

    ReplyDelete
  5. Trading is negative sum game so the Maths must add up?

    ReplyDelete
  6. CW,

    You got your Keppel 10 bagger because someone sold them to you. And that someone has "lost" out on a 10 bagger.

    Yes, let's all invest carefully altogether; everyone will be a winner in the long term. We all believe in unicorns and fairy dust... In the long term, there's no accountability as we will be all 6 foot underground or in a urn....

    ReplyDelete