It was an easy read, I finish the book in 3 hours, every page of it and even have time to go through some sections again.
Easy read but highly enlightening. The third or forth book provide some answers to many of my questions. I will add it to my recommended reads.
I am not giving any summary but internalizing what I read with my own investing experince. When Andy asked me what kind of investor I am, I can't answer. SMoL said I am a Rojak investor. I think I really am. It showed that I dun fit into any of the book's 3 tribes or 2 gangs, in fact I overlapped quite a lot.
The magic range for cut loss is given. 20-33%. FSL was bought at 1.62, it is last traded at 1.75. It went to a low of 1.28. That is a fall of 21%. I always have the mental struggle that had I "cut loss", I would have miss this rebound and I had re-examined my story for buying and the story has not changed except that no dividends has been declared. But I feel that minus has been offset by the well execution of MR Osaka.
I have a better feel of the range now. 20% is properly too low a bar for me to cut loss.
As for sembcorp, I did behave like hunter and accumulate at 3.8, with an average price of about $4. If I assume 30% loss as cut loss I would have gotten out at around $2.7. But I watch it go to $2.14 without buying nor selling. I did bid at $2.1 thou. So, it would seem that my temperaments are that more of a hunter than Assassins.
But wait, there is a problem. Hunter allowed their portfolio to be concentrated because they dare to position big. Also, they have serveral rounds of fire.
I could perhaps only fire 2-3 rounds with my "diversification" at perhaps 2-3 counters out of 8-12 counters? Hardly a good hunter.
So to be a more effective hunter, I could either work to increase my war chest or reduce my counters or do away with the self-imposed limit of not more than 15% in one counter. None of which I am actually comfortable with. In fact, I hope to reduce all my counters to not more than 10% of my portfolio.
As for being a connoisseur, I hardly recall picking any counter than generate more than 50% return (even if I had sold them earlier) the only 2 examples I can think of is China Gaoxian, from 19 cents to 37 cents (peak at 45cents) and CES at 48 cents. China Gaoxian has gone to the dogs and CES is a shade of its peak. YZJ was bought at AV. Price of 90 cents and its peak is 1.44 (I already sold at 1.2 plus) So does buy and hold really work? I am better off doing buy and sell isn't it?
Of course, there are examples like Best world or UMS which are muti-naggers but they are not in my radar.
So I have the aspiration to be a hunter-connoisseur but is still ill-equipped as a hunter and unconvinced as a connoisseur. The examples quote in the book do buy and hold for 3-5 years, hardly value-investor time frame. Assuming fundementals did not change, there is no guidelines of how much profits is "enough" except that it is trimmed on its way up. I guess we can apply "trailing stop" or valuation method to determine it. But looking at my own investment radar, even at its peak, YZJ and CES are hardly overvalued.
Of course, one big contrast is YZJ and CES are all in cyclical industries and is hardly "cash generating"
Machines or companies with "visible future earnings".
Also hunter exposed themselves to more loss, while it is possible to turn a loss to a win or reduce loss, hunter's accumulation could also magnify the loss. Since gurus with their expert analysis only have a hit rate of 49%, what more to say about mine?
I am not expecting a book to do magic but is just blogging to summarize my thoughts which I find always useful.
In conclusion, I believe to improve myself better, I might need to do a combination of assassin and hunter to better manage my bullets as I continue to save more and add to the funds.
As for the winning exits side, I dun believe I can exit near peak and is ok with My returns so far.
I hope with more practices, I can improve my returns and I think the first thing I need to do is to reconcile the contradiction of diversification and having enough ammo to have a good position size of a winner?
Also, it is possible to be both a hunter and assassin? Accumulate more at a lower AV. Price and cut loss when the AV. Price is perhaps 20%-33%? Or hunter and assassin dun mix?
Also, the effect of dividends in managing "loss" is not discussed. My wife is jumping when I asked her to cut APTT at a loss of 16%. But I told her with her dividends, she actually exited with 5% gains. She said like that also count? I say "of course, it is a safety net"
Still have not found the answer of what kind of investor am I. The only closest answer perhaps is "dividend" investor.
Andy, if u are reading this, thanks for the recommendation.