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Thursday, 20 August 2015

I give myself a re-rating on an exit



Sometime early this year, I exited on a business trust at $0.715.

Yup, after my sale, that share promptly went up to $0.74 before its slow meander down to near it's all time low of $0.55 today.

I remember being quite angry with myself. Giving myself a B- rating for this exit. I've left too much money on the table...

I don't set consequential goals like X% returns for the year - things I've very little control over. But I do set qualitative goals (fuzzy fuzzy kind) for my entries and exits - these are within my control.

I am into speculation craftsmanship - if I improve on my entries and exits, the returns will take care of themselves.

Guess what?

Upon reviewing the recent price drop, I think I might have been a tad too harsh on myself... 

I now re-rate that B- rating to A- for that "lucky" divestment.



Something to share for those who have yet to experienced a 20% bear market in the STI; or a 50% hair-cut on their individual stock holdings to ponder upon.

Especially when you review your "SMART" investment/trading goals for 2015.



Regular readers will know I don't baby-sit readers. But I can give you 2 hints:

1)  What's your definition of a competent investor/trader?

2)  Describe your edge - you must have one for you to engage in DIY investing/trading!?





22 comments:

  1. Hi SMOL,

    Maybe when it returns back to $1, you'll re-rate again? LOL

    ReplyDelete
    Replies
    1. LP,

      A price over $0.80 will be a good level to start taking money off the table!

      But that's an investment for another investment cycle. Let's finish this 2009 to ???? cycle first ;)


      Just showing an example to illustrate the importance of flying with both wings ;)

      It seems Buy and Sell are quite emotive words. Some even equate selling with shorting!?

      Hence I choose the neutral words of Entries and Exits ;)

      Delete
    2. Good answer. Agree! That's how we ride the cycle up and down :)

      Delete
  2. Hi SMOL,

    Your story reminds me of my exit from a REIT at break even. After my exit, it went up a few more cents then today it's trading less than a dollar....

    Agree with you that being better or more precise and entries and exits will improve performance drastically. I think consistency is under rated as an investor or trader. If I am consistently making money, I call that a hell of a competency to have.

    ReplyDelete
    Replies
    1. Joyce,

      For us trading full time, and with no fresh "rescue" funds from our day jobs, we can't do what most part-time retail do - let a trade turn into a long term "investment".

      If we take care of the downside, the upside will take care of themselves.

      Tell me about it!

      The setups that worked for me last year are not working so well for me this year... Must constantly adapt and "be in sync" with the markets.

      Back to sharpening the saw!

      Delete
    2. Luckily you write as rescue funds and not bailout funds! I agree...last year was easy peasy happy go lucky but this year is like the complete opposite...

      I'm also evolving along with the market...must go with the flow rather than against the flow since I'm only ikan billis and not a big whale!

      Delete
  3. Cash flow from where? Market or Salary? Just pain but no breakdown. Someone just told me he has lost many years of his bonus to Mr. Market and worked the past few years for nothing. :-(

    ReplyDelete
    Replies
    1. CW,

      That's where your wisdom of "not making back the same way we lost" comes in ;)

      However, it doesn't help those who do the same thing over and over again expecting a different result :(

      You are a good case study of falling asleep in 2008, fell, picked yourself up, and do it DIFFERENTLY this cycle.

      With your capital safely under your pillow, this 15% decline is not so fearful, is it?

      Cash works wonders as ballast during stormy seas ;)

      Delete
  4. Hi SMOL,

    I give you a 赞. My edge is probably analysing my site's traffic? But then again a post with high traffic doesn't mean anything too. Hahaha.

    ReplyDelete
    Replies
    1. Derek,

      Thanks!

      Remember the stock we talked about sometime back with hm over dinner?

      It has broken $3 yesterday ;)

      It's not ego or anything; but I need to pat myself on the back on those rare occasions I finally get it right!




      Delete
    2. Ya, how could I have forgotten? I was referring to dinner. LoL
      We need to have a drink to celebrate. :)

      Delete
  5. Hi SMOL,

    So the question is enter again no a 0.55?

    As the stocks plunge, most top analysts are now very quiet! I still remember last year so many younger ones talking about long term double digit returns... now all sort of gone quiet.

    yeah time to re rate!

    ReplyDelete
    Replies
    1. Rolf,

      As a trend follower, I prefer to buy it back when it breaks $0.60 on the way up again ;)

      I am lousy at picking bottoms :(

      Don't like to catch falling knives. If $0.55 breaks, the further downside could be ugly...

      Delete
  6. SMOL,

    Don't know lei...
    No strong feelings lei...

    I am buying back a lot of counters which I sold earlier. I am buying back at lower selling price and some even lower than initial entry price.

    But I not excited...

    When I am selling, I also not really excited.

    Just always a bit worried.... Whether buy or sell... Always a bit worried

    At the rate I am reconstructing my portfolio...

    I think I am going to be "more worried" soon

    Until now, I still don't really know what kind of investor I am, so cannot really rate my performance. Until It is quite clear what kind of investor I am not

    ReplyDelete
    Replies
    1. Sillyinvestor,

      For a trader, it's easier to know and rate ourselves - 2 years and if we are honest with ourselves, we will know whether we have an edge or just cannon fodder for the rest of the 10%...

      For an "investor" - need to go through a full bull/bear cycle. And that may take 5-7 years to really know who and what kind of "investor" we are...


      That's the REAL reason for starting early.

      Not the excel file extrapolation on the wonderful effects of "compounding"... That's the realm of fantasy and day-dreams...

      The earlier we know ourselves, the earlier we can adopt the RIGHT vehicle.

      And that may mean some would realise neither "investing" nor trading are suitable for them...

      What's wrong with having a job that we like doing and doing it till we drop dead?

      Delete
    2. ah.... know ourselves... sounds familiar. hehe

      Delete
    3. Rolf,

      We all have our own unique strengths and weaknesses.

      Let's celebrate the diversity in all of us!

      Delete
  7. SMOL,

    A grasshopper saying it's ok to work till we drop dead if we like our jobs. U ok bo.

    Was talking to my colleague, and I think she does has the intention to work as long as she is able and she is old.

    Funny thing is when she is younger, she did thought of stopping etc...

    Now that she is near retirement and (more than enough to retire with plenty of money) she just want to keep working.

    We will only know what we really want when we get it. If te magic disappear once u got it... U know it is just another motivational goal but not what your heart really desire

    ReplyDelete
    Replies
    1. Sillyinvestor,

      I am doing what I enjoy in this next phase of my life.

      Managing my own nano-hedge fund and trading business is a "full-time" job.

      I would think Steve Jobs and Richard Branson are grasshoppers too ;)

      I think most people have misunderstood the metaphor of "grasshopper"...


      "Investing to Achieve", and "Investing to Escape" are not the same.

      Delete
  8. Hi SMOL

    Don't be so harsh on yourself. Why rate yourself on a action of yours. It is a collective you that make you unique :)

    ReplyDelete
    Replies
    1. Frugal Daddy,

      I, me, and myself? LOL!

      I'm not a perfectionist by any stretch of the imagination.

      But like all craftsmen, there is a joy and quiet satisfaction in producing good "work".

      Bit by bit, I begin to understand why the Zen monk spends countless hours drawing circles over and over again in pursuit of his calligraphy.

      And appreciate why the Samurai warrior keeps doing the same sword slash a thousand times...

      It just happens trading is my chosen cultivation tool :)

      Namaste

      Delete
  9. Hmm. I was told that a person spent his lifetime figuring out why "1+1 is not equal to 2".

    Great that you found yours.

    Mine should be my philosophy to keep thing simple. As simple as it can be. :)

    ReplyDelete

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