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Monday, 18 January 2016

What do I fear most as a Retail Investor?


Before I start, I must share this interesting episode of leapfrogging.

When I wrote my previous post on what Traders fear the most, I had in mind I'll follow up with another post with what Investors fear the most.

As always, things never turn up exactly like what we've planned.

This fisherman - not Coke Light nor Coke Zero - but Pepsi, leapfrogged over me!

Very interesting discussions over there I must say! Do have  a look:

What do seasoned retail investors fear the most? (2) 



Something for those still working in the corporate sector:

Even if you have first mover advantage, don't be complacent. Just ask Motorola about their mobile handset introduction to the public. Wink.


OK, plan B!

Instead of a question, I now turn it around to share what I fear the most when I put my nano-hedge fund manager hat on - what do I fear the most?







60 comments:

  1. Wahaha the potongkaki was funny...

    Maybe my interpretation is warped but I thought the people who "don't know for sure" are the ones that use hedging.
    Those "know for sure but ain't so" are traders who are losing money.

    ReplyDelete
    Replies
    1. Rainbow girl,

      Ya lor! I don't say him! LOL!


      You are 100% spot on!

      It's those of us who are "unsure" that hedges, use stop loss, go into partial cash; and employ other risk/money management techniques to PROTECT ourselves.

      Its those who are so damn sure they are right that are 100% all-in ;)

      What can go wrong?


      A good example is AIG or Lehman Brothers or Barings Bank. Who believed they will go bankrupt?

      OK, AIG got bailed out but they have to sell most of their profitable subsidiaries to repay the US govt and the original shareholders got their stake so diluted that their stakes are now worth only 10% before the US govt bailout :(

      Now ask those who were very sure with their convictions and averaged down in size...

      Delete
    2. Agree, as retail investors we should fear the unknowns. The solution to this is simple - Diversification. ;)

      Delete
  2. Always have some cash as option without time limit.
    Not i say one hoh.
    But i like & try to put into practice lol.

    ReplyDelete
    Replies
    1. i also like to have some cash, more the better. question is where the hell are they?

      Delete
    2. Don't bluff!
      Even my wife always say i can forget about where i stash my things but never my cash.
      Ha! Ha!

      Delete
    3. temperament,

      LOL!

      coconut afraid his wife reading so pretend pretend.

      Every man will find out soon enough the concept of:

      No Money; No Honey ;)


      It's great to marry a rich man; the downside you can't stop him from having 3-4 mistresses outside :(

      Delete
  3. what i fear the most as a retail inveswtor is,

    the cookies and cakes that my wife (going to) make for chinese new year!

    in her own words, "experimenting", walan, we have to finish whatever she made, no throwing away! and also must say good or nice even if they are not!

    ReplyDelete
    Replies
    1. as for the market downturn, i not so fear (even welcome) haha...

      Delete
    2. i rather spend sometime doing my 2nd most fear as a retail investor, shopping for these new years goodies rather than make them.

      Delete
    3. and my 3rd most fear as a retail investor is, what happen if my wife happen to know i just wrote all these things about her cooking and cake making?

      die!

      Delete
    4. oh dear, the more i think of it, the more they pop out, i will never going to finish listing them down.

      thanks to you smol!

      Delete
    5. coconut,

      Next time just write you "kia bo" (scared of wife) can oredi!

      Delete
  4. ok her first batch of cholcolate cookies were out a moment ago!

    putting a piece in my mouth, "how is it? bottom a bit burn".

    "i think its ok la" (actually it is not ok).

    then i thought of giving her a bit more encouragement by asking for another piece to eat.

    "i throw them away liao, cannot eat la" and she blame the failure on my daugther for using the oven the night before hahaha......

    ReplyDelete
    Replies
    1. coconut,

      Tell her the good news that every adult now has $500 training credit from big daddy ;)

      Don't say anything more.

      Up to her to join the dots and see if she will take up baking course to claim that $500 ;)

      Delete
    2. please hor, the last time she went for her cooking/baking course, end up we spend don't know how much for all the equipments, really a lot!!

      this time she might end up doing the whole kitchen which is really whats in her mind now!

      keep quite!!

      Delete
    3. currently she is into nitting and garndening, lucky for me, these does not cost much but i better watch on the horizen to see any chances in the weather.

      Delete
    4. coconut,

      OK, I shut my mouth ;)


      Ya hor! Those not so good at their "crafts" like to blame their equipment.

      Some retail traders use thousand and one indicators, and still looking to add that one extra elusive indicator to complete the whole...

      It's just Price, Volume, Time; what more do we need?

      Delete
    5. wah lan lightning don't struck twice!

      i saw her 2nd batch laying on the table so i say "burn again ah?" seeing them dark in colour.

      "NO LA! these are chocolate cookies stupid!"

      i like her persistence haha....

      Delete
    6. OK, now go do your part - product tester!

      Delete
    7. ofcos i have to test it, part of my job really. but guess what she say?

      "wait! its still hot", her confident seem disappear in thin air....

      again she just another piece in my mouth haha, "mmmm, much better this time", she walk back into the kitchen feeling more confident i guess haha...

      Delete
    8. today is a good day for our friends in the market. i see a lot of rebound. i'm using this opportunity to not sell, i got holdings too, but to hedge against them.

      i don't likr the idea of being an investor, holding on to losses which is very against my trading instinct, feeling like a crab that is bound all my eight legs and ready to be put into frying pan and not being able to move!

      i will try to hedge as much as i can.

      Delete
    9. LOL!

      1. You good. Must give her support mah :)


      2. Yup. Today lots of green and squeezing the late shorts ;)

      Wow! Keppel up 6% and Sembcorp up 8% - now that's we don't see everyday!

      Interesting!

      How fast sentiments change ;)

      Market testing the convictions of the shorts today. The next few days it will the shorts' turn to test the convictions of the longs ;)


      Let's see which will break first.

      STI 2700 or 2500?

      Delete
    10. Well, that was quick?

      Today reversed all the gains of yesterday... One day up; one day down.

      Delete
    11. i still have not complete my hedging la KNN!

      yesterdy only done about 30%, still 70% expose!

      Delete
    12. yesterday shorts actually had show quite a good gain, very tempting to unhedge already haha...

      Delete
    13. Its your kind of market ;)

      You're a trader true and true.

      If itchy, book the profits for half your position and let the other half run lor.

      Buy the dip strategy from 2009 to 2015 is now not working so well...

      Delete
    14. ok then better keep my hedge, actually today even a down market, i actually manage to sell some of my holdings which holding quite well on the price, further reduce my exposure.

      now my concern is more on the upside, not the downside anymore!

      Delete
    15. wrong, actually i'm hoping...

      better don't say wait anger many, my hope now is what investors fear the most...

      Delete
    16. I know.

      Small kopi money trades are for us to get the pulse of the markets.

      We are all waiting ;)

      Delete
    17. first of all, i'm still losing money overall, no copi money.

      you can sit and wait but i can't! i have to be alert and quick to respond should market turn, you seen the turn before, very fears too! should market turn to the upside i must unhedge my positions quickly too. it just make trading more complicated and masy.

      Delete
    18. coconut,

      Well, you are the one with the Space Time Continuum!

      I'm more pedestrian.

      I don't have to capture every pip or tick; I just need to hit a few home-runs and I'm good ;)

      Just like poker, I keep folding until I get a strong hand. Then I'll raise!

      Delete
  5. Hi SMOL,

    What I scare most as a retail investor? In order of most scare to least scare

    1) lost all capital ... ( company go kaput )
    2) Self doubt
    2)Regret and blame game
    3) lose money

    ReplyDelete
    Replies
    1. Sillyinvestor,

      That's why I don't anyhow "encourage" others I care a lot to invest.

      Look at the things we have to "worry" and "sacrifice" just to secure our financial future.

      Imagine if we had "encouraged" our family members and close friends to invest in 2014 and 2015, using the money rotting in bank meme?

      Loss of credibility aside, how do we face them if they are facing double digit losses due to our good intentions?

      There is a place for CPF, fixed deposits, wholelife policies, and triple A rated bonds.

      Singapore may see our 2nd corporate bond default and that would be a timely reminder to those "white papers" who never questioned whether getting the extra few % in yields is worth the risk they are taking for their capital...


      Delete
    2. Incidentally we still hold on to our whole life insurance - 27 to 28 years already.
      But each month 3 of us (together) just paid $154 in total. Is this hedging or losing money unnecessary?
      i also have a 7 year (now 6 already) corporate born losing 2 % if i sell now. It only pays interest 3.08% p/a.
      My wife's CPF, i have not touched except 38K for buying IPO Keppel D C reits.
      It seems my asset allocation is not up to standard, lol!

      Delete
    3. temperament,

      Sometimes I had to pinch myself for the blind dumb luck that happened - I just cash out my wholelife policy end Nov last year. Great timing or what!?


      3% for 7 years is great compared to US 30 year treasuries at slightly below 3%. Just as long that corporate bond is not junk bond like Pacific Andes - sleepless nights for extra % yield not worth it ;)


      As for your wholelife policies, I don't think your networth is less than the payouts. Just as long the policy returns are higher than our Singapore fixed deposit rates, I guess it does little harm to have that extra layer of security blanket to make you sleep better at night. I'm sure your son won't mind!


      Buy term and invest the rest is better when its based on a personal track record.

      Some parrots are finding it for the first time that their "invest the rest" portfolios are underperforming wholelife policies big time...

      There is a reason why majority of investors underperform our CPF 2.5% yield.

      Any "safe" returns above 2.5% must celebrate!

      Delete
    4. SMK,

      I wouldn't mind being a "holy man" if not for the fact I'm not ready to give up women yet ;)

      Delete
    5. it's been a fun ride. will have to bid dc farewell for a while. :)

      Delete
    6. SMK,

      Old no go; new no come ;)

      Cheers mate!

      Delete
  6. I do observe this fear most in many people and thus also many retail investors: Nomophobia = Which is the fear of being without their mobile phones and the constant supply of information. Just kidding.

    But now seriously:

    The markets are extremely leveraged today and this leverage does not refer to money only, but information and emotions such as stupidity, greed, fear, etc.

    When I feel that "overleverage" creeping up in me I try to relive the anxiety when being down 5% or more in the past.

    Often I recognize that even though it was truly scary life moved on and markets recovered and the world didn’t come to an end.

    So next time the fear comes again (like right now) I do remember that the fear this time only feels different. It isn’t truly different.

    ReplyDelete
    Replies
    1. Andy,

      Learned a new word today!

      Receiving constant supply of information at the bottom of the information food chain I guess is better than not getting the memo? LOL!


      I use cash as my ballast whenever I get that sinking feeling. Only when I'm on cloud nine do I eject my ballast ;)

      Delete
  7. Hi SMOL

    Seems te odds of shortist winning is higher and 2500 is within breaking distance

    ReplyDelete
    Replies
    1. Sillyinvestor,

      Well, I was scratching my head yesterday on the counter-trend rally after the horrible China numbers!?

      We are now living in strange times...

      Bad numbers but markets interpret them as "good" since they expect China to launch more stimulus?

      I miss the old days when bad numbers were bad numbers... LOL!

      Delete
  8. I am neither trader nor investor. I am opportunist

    ReplyDelete
    Replies
    1. Frugal Daddy,

      That's cool!

      I'm working my way up from trader to speculator ;)

      Delete
  9. Wow, SMOL,

    Look at the whipsaw for Sembcorp!

    Such actions ....

    I am actually also scratching my head...

    Interest rate, China debts, all these anything new?

    Mr Market just feel like throwing tantrum or market in denial for too long ??

    Luckily I only had Sembcorp who is going on such furious dive...

    If every counters dive like that, I think I will start to worry

    ReplyDelete
    Replies
    1. Sillyinvestor,

      Fierce right?

      This is where we have the advantage of standing on the sidelines (what we can control) if we so wished.

      That's the power of big killer whales thrashing around!

      When big cap blue chips act like penny stocks, I stand the hell out of their way ;)

      Delete
    2. i suspect GIC or temasek is unwinding all over the world.

      Delete
    3. if you look closely at the market action, no panic!

      and that spell trouble ahead, as traders i rather it came down quickly and get it over with.

      Delete
    4. coconut,

      I don't know about GIC or Temasek, but I see smart money doing what you say - unwinding, rebalancing, raising liquidity, reducing risks ;)



      Delete
  10. Err....
    Smart Money.
    Which means our money not so smart, right?
    At times we may throw good money after bad money.
    That means our money can be stupid lol!

    ReplyDelete
    Replies
    1. temperament,

      Money is a noun.

      It's the person deploying the money that gives money the adjective of "Smart" or "Dumb" ;)


      By saying I "see" smart money, that means I am not one of them :(

      Delete
  11. Ha! Ha!
    Don't be too modest!
    i am serious and joking at the same time

    i believe money can have its' own life, and characters.
    In your hands, you give it life and characters - only peculiar to you.
    So in my hands, it will have its own life & characters - peculiar to me only.

    And if don't show love to someone, how can she responses to you.
    i think it's the same with everything - living or "dead".
    Yes including money.
    Actually money always have lives.

    By the way, today market now, my interpretation is Big Boys make life difficult for retailer shortists.
    If not i want to short too.
    Ha! Ha!

    ReplyDelete
    Replies
    1. temperament,

      This morning's fleeting gains were once again wiped out...

      Yesterday, I was tempted to short the Simsci at 292. If I had done so, I'll be profit stopped at 290 this morning.

      And then suffer the "frustration" of seeing the Simsci retrace back below 285...

      Why would I expose myself to this emotional roller-coaster just for a measly 2 point profit?

      This kind of choppy moves not my market. I don't play with the whales. Have you noticed the whales are using DBS to push the index around?


      I'm keeping myself focused on the MAIN prize ;)

      Delete
  12. this one is easy for me to siam: I always question my theses or conclusions on casuality.

    what is harder for me is: searching for observations beyond my scope. sometimes things are just outside your arc of fire.

    ReplyDelete
    Replies
    1. SMK,

      Now is my turn to return the poke ;)

      I can understand if you won't squeeze the trigger if you are still questioning your thesis or reasons for buying.

      On those occasions you bought, how to "siam"?

      Delete
    2. that's easy. I always employ 'sentimental analysis', sometimes add in a little technical analysis. if you follow the crowd, you are the crowd. if you observe the crowd, are you the crowd?

      example: https://www.blogger.com/comment.g?blogID=37872616&postID=1662302266191290120

      by the way, my 'theses' is a just a standin word for anything that I conclude. maybe not necessary be for just buying and maybe not necessary be for just investments.

      I believe it is always important to question your own beliefs, to be less stubborn enough to do that. and to admit it if your beliefs do not stand up to your own scrutiny. it's all a bit socratic and platonic.

      you might even say there's a bit of arts stream in me. lol. philosophy is not just useful for existential angst. lol

      Delete
    3. SMK,

      "if you follow the crowd, you are the crowd. if you observe the crowd, are you the crowd"


      Wow!

      Mixing philosophy with quantum mechanics!?


      We Chinese Singaporeans are lucky aren't we?

      On the Western side we have access to the classical Greek philosophies and the Age of Enlightenment of 18h century Europe.

      And on the Oriental side we have our 三教 or 儒释道 (Confucianism, Buddhism, Taoism).


      It's always a pleasure to have kopi talk with someone who doesn't reek of "bronze smell" (铜臭味)。

      Free must come back and do Zen combat OK?

      Delete

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