tag:blogger.com,1999:blog-6897513886211197509.post279902447614277082..comments2024-03-28T12:38:11.434+08:00Comments on Singapore Man of Leisure: The Math of Averaging DownSingapore Man of Leisurehttp://www.blogger.com/profile/13774067113884418001noreply@blogger.comBlogger24125tag:blogger.com,1999:blog-6897513886211197509.post-35546678005894799612016-10-24T19:02:55.392+08:002016-10-24T19:02:55.392+08:00temperament,
I'm too lazy and irresponsible t...temperament,<br /><br />I'm too lazy and irresponsible to run a business. <br /><br />I did seriously thought about it before I came back. To buy a franchise like 7-elevan or Subway.<br /><br />But the moment I realise I have to spend most of my time on recruiting manpower and dealing with work permits; and "working for" the landlords in reality, I gave it all up.<br /><br />Trading from home and treating it as part of a nano hedge fund business has worked out much better than I've imagined.<br /><br />I quite like my Ronin status today ;) <br /><br /><br /><br /><br />Singapore Man of Leisurehttps://www.blogger.com/profile/13774067113884418001noreply@blogger.comtag:blogger.com,1999:blog-6897513886211197509.post-27209543561029516902016-10-24T15:31:32.119+08:002016-10-24T15:31:32.119+08:00temperament,
Your mileage and my mileage may diff...temperament,<br /><br />Your mileage and my mileage may differ ;)<br /><br /><br />This is the fun part of blogging I enjoyed very much!<br /><br />To banter with people who are smarter and more experienced than me ;)<br />Singapore Man of Leisurehttps://www.blogger.com/profile/13774067113884418001noreply@blogger.comtag:blogger.com,1999:blog-6897513886211197509.post-30272603949436839292016-10-24T09:14:39.370+08:002016-10-24T09:14:39.370+08:00temperament,
In percentages, its the same. In dol...temperament,<br /><br />In percentages, its the same. In dollar amount, no way!<br /><br />Sometime back, a fee-based financial adviser was poking a client for being too "kan cheong" with a small 1.5% loss on his portfolio.<br /><br />Hello! the client's portfolio is $100 million, and 1.5% is $1.5 million! Enough for a condo!<br /><br /><br />That's why I don't like to think in percentages. I prefer to use dollar amounts.<br /><br /><br /><br />I only doubled my trading's position size even though my trading account is now a 10 bagger.<br /><br />This is the optimum position size where I can cut-loss in dollar terms without hesitation nor blinking an eye ;)<br />Singapore Man of Leisurehttps://www.blogger.com/profile/13774067113884418001noreply@blogger.comtag:blogger.com,1999:blog-6897513886211197509.post-37679425736864009062016-10-24T09:04:21.151+08:002016-10-24T09:04:21.151+08:00STE and temperament,
Yup.
If we are always avera...STE and temperament,<br /><br />Yup.<br /><br />If we are always averaging down, I guess its a great tell tale sign we are not buying at the bottom end of the business cycle ;)<br /><br />And definitely not practicing:<br /><br />Buy low; sell high.<br /><br /><br /><br />A newbie buying and selling at the "right time" with pure dumb luck can run circles around veterans blinded by hubris and greed.<br /><br /><br />I've been humbled by the markets too many times to remain defiant.<br /><br />I now man-whore.<br /><br />Wind blows North, I go North. Wind blows South, I go South.<br /><br />LOL!<br />Singapore Man of Leisurehttps://www.blogger.com/profile/13774067113884418001noreply@blogger.comtag:blogger.com,1999:blog-6897513886211197509.post-50729984428318961882016-10-24T08:31:08.555+08:002016-10-24T08:31:08.555+08:00Hi SMOL & temperament,
Yah. .is very true. .I...Hi SMOL & temperament, <br />Yah. .is very true. .I like the comment on " which point of the river you start. ..." is very much depend on which part of the biz or economy cycle we are in ...that will determine our wining ...not only hindsight of any strategy or stock picking. . I guess. .:)<br />Cheers.👍 STEhttps://www.blogger.com/profile/03171270652249099828noreply@blogger.comtag:blogger.com,1999:blog-6897513886211197509.post-53529980333806464892016-10-23T22:51:31.540+08:002016-10-23T22:51:31.540+08:00STE,
I would like to hazard a guess you now know ...STE,<br /><br />I would like to hazard a guess you now know WHY Sembcorp Ind and M1 have gone down ;)<br /><br />That's the price to pay for "certainty" in knowing the fundamental reasons.<br /><br /><br />Some would prefer to sell first and ask questions later. These are those who focus on market psychology - also known as technical analysis ;)<br /><br />And when the dust has settled, they can decide with a clear and calm mind whether to re-enter into the SAME stock they have exited earlier - now at a much BETTER entry price, if its still a high conviction buy.<br /><br />Note this is not averaging down since no NEW capital is injected. It's still the same old capital - albeit "recycled" with a "hair-cut".<br /><br />This is still aligned with position sizing, you are sill using the same 5% max allocation limit for this stock. <br /><br /><br />Many retail bei kambings started out with max 5% limit, then they average down in anger/frustration to get even...<br /><br />Before they know it, this lemon of a stock is now 20% of their portfolio???<br /><br />Talk about letting a small paper cut turn gangrenous...<br /><br />What happened to discipline and sticking with their investment plans and their goal setting for the year?<br /><br />No one ever set investment goals to breakeven...<br /><br /><br />Its best to listen and trust our own track record. If averaging down works for you, do it!<br /><br />Why change a winning strategy?<br /><br />LOL!<br />Singapore Man of Leisurehttps://www.blogger.com/profile/13774067113884418001noreply@blogger.comtag:blogger.com,1999:blog-6897513886211197509.post-86866465453299624662016-10-23T22:32:36.465+08:002016-10-23T22:32:36.465+08:00temperament,
Position sizing and averaging down a...temperament,<br /><br />Position sizing and averaging down are not the same.<br /><br />Let's say you limit a stock to not more than 5% of a portfolio. That means even if the stock goes to zero, the max loss is only 5% at portfolio level.<br /><br />5% of a $100,000 portfolio is "only" $5,000.<br /><br />5% of a $10 million portfolio is $500,000! Some how I don't think you would shrug it off so lightly ;) <br /><br />1 or 2 lots no feeling. Hundred thousands of lots then we are talking!<br /><br /><br />As for 1,2,3,4,5 or 5,4,3,2,1?<br /><br />No need to guess. Just experiment on your own and let your own experience and track record tell you which is better ;)<br /><br />Don't let anyone tell you what shoes you should wear! Unless you don't trust your own feet ;)<br /><br /><br />My own experience is there is be a BIG difference in psychology when I average down versus average up.<br /><br />One path is going against the wind; the other is moving ahead with the wind behind my sails ;)Singapore Man of Leisurehttps://www.blogger.com/profile/13774067113884418001noreply@blogger.comtag:blogger.com,1999:blog-6897513886211197509.post-78700015866402356602016-10-23T21:26:16.431+08:002016-10-23T21:26:16.431+08:00Hi SMOL,
Yah ! This is my problem as well ,, avera...Hi SMOL,<br />Yah ! This is my problem as well ,, average down on Sembcorp Ind ,,,jatuh lonkang,,, average down on M1 also masuk lonkang ,,, : ( <br />Think temperament have a good question to ponder,, whether we should use sizing up or sizing down strategy ,,,, my interpretation will be sizing up if we still have war chests,, sizing down when we are running out of bullet.... :). Just kidding<br />Cheers !! :)STEhttps://www.blogger.com/profile/03171270652249099828noreply@blogger.comtag:blogger.com,1999:blog-6897513886211197509.post-18453528038585820642016-10-23T09:59:02.052+08:002016-10-23T09:59:02.052+08:00Sillyinvestor,
I understand what you meant.
Agai...Sillyinvestor,<br /><br />I understand what you meant.<br /><br />Again, I never said averaging down is an OK strategy.<br /><br />Notice why I persist in correcting you and CW when it comes to "precision" in language?<br /><br />Words by themselves are not important; but we should always be mindful on the power and influence of words have on our psychology ;)<br /><br /><br /><br />My post is merely a carrot and stick coaching technique to encourage the reader to reflect and seek the answers themselves.<br /><br />Whether averaging down is a good, bad, or useful in specific situation is entirely up to EACH and everyone to decide for themselves.<br /><br />As you have discovered, sometimes it works; sometime it doesn't.<br /><br /><br />2009 to 2016 is a bull cycle. Averaging down in a bull cycle - that's your reflection.<br /><br />For another reader who has gone through the bear cycle of 2000-2003, his reflection of averaging down will be totally different!<br /><br /><br />In the next bear cycle, your reflections will get "refreshed and updated" as you go through a multi-year bear cycle yourself ;)<br /><br /><br /><br />Just remember 2 things:<br /><br />1) We don't invest to break-even.<br /><br />2) Stay alive! <br /><br />No chips; no play :(Singapore Man of Leisurehttps://www.blogger.com/profile/13774067113884418001noreply@blogger.comtag:blogger.com,1999:blog-6897513886211197509.post-35245494808555621922016-10-23T09:22:23.884+08:002016-10-23T09:22:23.884+08:00Hi Smol,
I just written a post after reflecting o...Hi Smol,<br /><br />I just written a post after reflecting on what you said. It got so much clearer after writing (as usual)<br /><br />As u said, average down by itself is a ok strategy, if we are sure what we are doing. After my reflection, the irony is my winning positions, only 1-2 counters have the "opportunities" to average down. <br /><br />But a few counters did break even after averaging down.<br /><br />The real slap is averaging down then sleep on it. Once we average down, the managitudue of fall is "doubled" and we should cut. <br /><br />Connecting the dots now, until the next big bear refresh and reset my journey Sillyinvestorhttps://www.blogger.com/profile/03228581533460899084noreply@blogger.comtag:blogger.com,1999:blog-6897513886211197509.post-7950758533676380652016-10-22T08:25:08.765+08:002016-10-22T08:25:08.765+08:00LP,
In trading's parlance, we call it:
Scal...LP,<br /><br />In trading's parlance, we call it: <br /><br />Scale in; scale out.<br /><br /><br />We all have to learn it the hard way (including me).<br /><br /><br />Can be quite hard for newbies to differentiate - when the pros do it, they appear to be doing the "same" when it comes to execution...<br /><br />But there's a REAL difference.<br /><br />Only those who survived from their averaging down "temporary insanity" episodes will understand ;)<br /><br /><br />Experiential bloggers like us share our "war time" stories and reflections. <br /><br />We have battle scars to back-up our reminisces ;)<br /><br /><br />Singapore Man of Leisurehttps://www.blogger.com/profile/13774067113884418001noreply@blogger.comtag:blogger.com,1999:blog-6897513886211197509.post-62343765809640866132016-10-22T07:37:27.744+08:002016-10-22T07:37:27.744+08:00:-):-)Createwealth8888https://www.blogger.com/profile/08563834016250153049noreply@blogger.comtag:blogger.com,1999:blog-6897513886211197509.post-39934403041704262082016-10-22T00:15:42.053+08:002016-10-22T00:15:42.053+08:00Hi SMOL,
It's true. Don't anyhow average ...Hi SMOL,<br /><br />It's true. Don't anyhow average down unless you want to flip until you go longkang. I've done it in the past and lost terribly. Now I follow bro8888 and average in. Doesn't matter whether I'm buying higher or buying lower. I'm entering the same counter but with a new thesis behind the new purchase haha<br /><br />Best to treat each purchase, even if it's the same counter, as if they are separate and independent purchases!la papillionhttps://www.blogger.com/profile/01372278083694506953noreply@blogger.comtag:blogger.com,1999:blog-6897513886211197509.post-56930306893348518612016-10-21T22:35:28.009+08:002016-10-21T22:35:28.009+08:00Blursotong King,
I'm not qualified. It's ...Blursotong King,<br /><br />I'm not qualified. It's a big subject and if not careful, can lead you astray...<br /><br />Just suffice to give you some hints that non-attachment is not detachment. <br /><br />Neither is it lack of love or compassion ;) <br /><br /><br />If you interested in Non-Attachment, just google "non-attachment" and have fun getting "lost" for a feel of things.<br /><br />Once you have a better sense of it, you can start to explore Buddhist books in the library.<br /><br />If still interested to practice it, private message me and I can direct you to some of the courses out there run by reputable Buddhist organisations.<br /><br /><br />When I first came back 5 years ago, with time on my hands, I attended the Christian Alpha course and finished 1.5 years of a 3 year Buddhism course before I dropped out - it got boring...<br /><br /> <br />Quite interesting counter-balance:<br /><br />Spiritual freedom vs financial freedom ;)<br /><br /><br /><br />Singapore Man of Leisurehttps://www.blogger.com/profile/13774067113884418001noreply@blogger.comtag:blogger.com,1999:blog-6897513886211197509.post-89464166271986624022016-10-21T22:14:48.215+08:002016-10-21T22:14:48.215+08:00CW,
I've not played Pokémon; but I've flo...CW,<br /><br />I've not played Pokémon; but I've flown Dragonair a few times during my time in Shekou (Shenzhen) ;)<br /><br />Power name - Dragon Airlines!<br />Singapore Man of Leisurehttps://www.blogger.com/profile/13774067113884418001noreply@blogger.comtag:blogger.com,1999:blog-6897513886211197509.post-60421857190829268282016-10-21T21:24:07.133+08:002016-10-21T21:24:07.133+08:00SMOL
Care to share more about the philosophy part...SMOL<br /><br />Care to share more about the philosophy part? I am interested to learn<br />Anonymoushttps://www.blogger.com/profile/10263563592714522076noreply@blogger.comtag:blogger.com,1999:blog-6897513886211197509.post-61931217396085105552016-10-21T20:26:11.139+08:002016-10-21T20:26:11.139+08:00For awhile, I read Dragonair Pokemon. :-) For awhile, I read Dragonair Pokemon. :-) Createwealth8888https://www.blogger.com/profile/08563834016250153049noreply@blogger.comtag:blogger.com,1999:blog-6897513886211197509.post-79968730796519187342016-10-21T20:24:42.682+08:002016-10-21T20:24:42.682+08:00temperament,
One of the disciplines I've gott...temperament,<br /><br />One of the disciplines I've gotten better in recent years is the awareness of my emotions.<br /><br />I'll stay on the sidelines, reduce my position size, or take a break from trading whenever I caught myself having too much emotions vested in my positons.<br /><br />As a man of leisure, I must maintain my air of debonair ;)<br />Singapore Man of Leisurehttps://www.blogger.com/profile/13774067113884418001noreply@blogger.comtag:blogger.com,1999:blog-6897513886211197509.post-90098299874880740392016-10-21T19:50:37.858+08:002016-10-21T19:50:37.858+08:00Blursotong King,
Emotionless is not the same as n...Blursotong King,<br /><br />Emotionless is not the same as not letting emotions get the better of us ;)<br /><br /><br />Extreme frugalness is similar. What's the point of living in such an austere manner?<br /><br />So is the greed and never ending accumulation of money in the name of "financial freedom".<br /><br />Hence we walk the middle path.<br /><br /><br />Similarly, wisdom is needed to avoid the extremes of being emotionless and emotion overflow ;)<br /><br /><br />Letting go is non-attachment. <br /><br /><br />I better stop as that's a whole different realm of philosophy altogether!<br />Singapore Man of Leisurehttps://www.blogger.com/profile/13774067113884418001noreply@blogger.comtag:blogger.com,1999:blog-6897513886211197509.post-449586867737487872016-10-21T19:25:15.352+08:002016-10-21T19:25:15.352+08:00CW,
I never say don't average down ;)
Don...CW,<br /><br />I never say don't average down ;)<br /><br />Don't try this at home means unless you are a pro and know what you are doing, don't monkey see monkey do.<br /><br />If you have trained and prepared for it, at age 80 also can run a marathon!<br /><br />But if you have not trained for it, even at the peak of our health at age 18, we'll likely hurt ourselves...<br /><br /><br />The irony is that some of those who think like that are the same ones who - with good intentions - like to "wah kali kong" and preach to others not to use leverage/margin for investing and gambling is bad for you.<br /><br />If they only knew the risks they are taking on by averaging down just to break-even...<br /><br /><br />Singapore Man of Leisurehttps://www.blogger.com/profile/13774067113884418001noreply@blogger.comtag:blogger.com,1999:blog-6897513886211197509.post-88919751378325597832016-10-21T18:57:10.504+08:002016-10-21T18:57:10.504+08:00SMOL
Letting go is difficult.
If we take out th...SMOL <br /><br />Letting go is difficult.<br /><br />If we take out the emotion for every decision we make, wouldn't it make us a lifeless person.<br /><br />If that's the case, what is the point of living?Anonymoushttps://www.blogger.com/profile/10263563592714522076noreply@blogger.comtag:blogger.com,1999:blog-6897513886211197509.post-55588453917754722852016-10-21T18:28:11.801+08:002016-10-21T18:28:11.801+08:00Don't average down. Then how? Many are thinkin...Don't average down. Then how? Many are thinking like that!Createwealth8888https://www.blogger.com/profile/08563834016250153049noreply@blogger.comtag:blogger.com,1999:blog-6897513886211197509.post-34306029670381270522016-10-21T15:28:30.523+08:002016-10-21T15:28:30.523+08:00B,
Ah!
The reverse stock split ;)
Don't kno...B,<br /><br />Ah!<br /><br />The reverse stock split ;)<br /><br />Don't know whether to cry or laugh when you can't even breakeven with a 10 bagger!?<br /><br /><br />Letting go is something we have to learn and master...<br /><br />Children all grown up with their own families? Letting go...<br /><br />My job has been taken over by a machine? Letting go...<br /><br />Love of my life marrying someone else? Letting go...<br /><br />Stock turned salty fish? Letting go...<br /><br />Losing my hair at the top? Letting go...<br /><br />LOL!<br />Singapore Man of Leisurehttps://www.blogger.com/profile/13774067113884418001noreply@blogger.comtag:blogger.com,1999:blog-6897513886211197509.post-54727780845757473702016-10-21T15:08:08.113+08:002016-10-21T15:08:08.113+08:00Hi SMOL
Nowadays, it doesnt take a share price to...Hi SMOL<br /><br />Nowadays, it doesnt take a share price to drop to $0.01 before it gets suspended. $0.01 consolidate back to $1 and then drops to $0.01 and then consolidate again. Wah, 1 cent so cheap cheers!!!Bhttps://www.blogger.com/profile/09041255778427742477noreply@blogger.com