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Tuesday, 6 December 2016

Where are the Retail Growth Investors?



In my previous post, I wrote in the comments section that most retail investors began their journey as a Trader, then as a Value Investor, moving on to Dividend Investing, and finally capitulating towards Low Cost Passive Indexing when all things fail...

What about Growth Investing?

Ah! 

That was deliberate.

Why?

Because most retail traders and investors behave like Growth Investors - no matter what they call themselves.


Verification 1: When you made a trade to buy (long), and/or you invest in something, were you expecting the price to go up higher?


Verification 2: When equities prices were low in 2009 and end 2011, did you do most of your buying then? Or looking at your entry prices, most of them were bought near intermediate highs?


Verification 3: How many of you waited for the dip to scale into your position (let the price come to you)? You chased the market didn't you?



So tell me, how are you not a Growth Investor by default?








P.S.  For those who are not familiar with Growth Investing.

The father of Growth Investing is Thomas Rowe Price, Jr.

Most retail investors are more familiar with Philip Fisher and his book "Common Stocks And Uncommon Profits".

This post is a parody.

Although most of us act like "Growth Investors", there is a reason why most retail traders and retail investors lose money.

And for those who like to do reflections and 2nd level thinking, ask yourselves why there are so few seminars/courses on Growth Investing?

If you think you have the answer, buy me kopi and we can exchange our thoughts over drinks. Wink.





12 comments:

  1. Replies
    1. CW,

      No worries!

      Just sing "Amazing Grace" and you'll be found!

      Delete
  2. Smol,any stock/trade that help me earn money is a good stock/trade, regardless of the method.

    ReplyDelete
    Replies
    1. WolfT,

      Exactly!

      As a man-whore, just as long you buy me coffee, I'll call you, "Daddy!"


      I use this verification trick to test out the convictions of those who like to "wah kali gong" - 4 legs good; 2 legs bad...

      So I go poking -

      1) Dividend Investing are for orphans and widows.

      2) Low Cost Passive Indexing is "Look ma! No brains!"


      Those that won my respect and admiration are those who can acknowledge there are pitfalls to their thesis and explain what they are doing to circumvent or mitigate them in a cool, calm, and collected manner.

      Those that huff and puff and insinuate we should take everything they say as the Gospel Truth - when they are just parroting others - now why would I treat them seriously?


      There are retail traders and investors who prefer to stick with their same kind (herding); I prefer to mix with creatures who are totally different from me (diversity).

      Caveat: Only mix with carnivores when you are sure they just had their meals ;)

      Delete
    2. Hi SMOL,

      As an income investor, I've just started to ask myself where are the bonds in my portfolio. Fixed income instruments provide "income" as well mah; why not include bonds as well?

      On the other hand, could also ask "why no mortgage reit?" 31% yield on good years.....

      Delete
    3. Unintelligent Nerd,

      By asking hard questions, our mental capacities will expand.

      Once our investment horizons or vocabulary expands, we open ourselves to more options available.

      Optionality is definitely a plus!


      I see you are not parochial and have exposed yourself to vehicles in the US market ;)

      With the appreciating USD against SGD, USD denominated assets will gain a tailwind boost to that income!

      Of course no free lunch; investing in mortgage reit is definitely not a passive thing!

      Delete
    4. I wanted to add a few more US counter into my portfolio but their prices shoot up liao.

      Oh well.

      I'm seriously considering supplementing my portfolio with a Bond Ladder now though. Partly to diversify, partly to experiment with something new!

      Delete
    5. Unintelligent Nerd,

      Patience.

      It's too late to buy stocks and too late to sell bonds.

      Which means it can be an opportune time to scale into bonds now that yields are a lot more attractive than before this Trump rally ;)


      We both learn the same way - by doing.

      Just as long we remember the Western adage of dipping our toes first into the water before plunging in.

      Or the Eastern equivalent in what Deng Xiaoping has said - cross the river by feeling the rocks beneath.

      And of course cannot forget my favourite Singapore's Hokkien street smart version - crash got sound!

      Have fun experimenting!

      Delete
  3. If I have the answer to your question, shouldn't you be the one who's buying me coffee instead?
    :p

    ReplyDelete
    Replies
    1. krz md,

      When Zen monks had their initial glimpse of enlightenment, they would travel far and wide to seek established Zen masters to seek verification of their experience.

      As to who pays for coffee, that will depend whether you are climbing up the mountain or down ;)

      Namaste.


      Delete
    2. A Zen monk starts climbing at the top and keeps climbing up. Who's climbing down then?

      None pays for coffee then..
      ;p

      Delete
    3. krz md,

      The Zen monk reaching the summit realised he had the answer all along ;)


      No coffee it is then :)

      Delete

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