Tuesday, 10 July 2012

Follow the crowd


I read the Straits Times with admiration and envy how some young Singaporeans were quitting their well-paid corporate jobs to join internet start-ups. Similar stories were repeated in the next weeks. You can feel the buzz in the air!

Six months later, the Nasdaq dot-com bubble crashed together with the blue-eyes dreams of many… That was year 2000.

I’ve never liked crowds. 

I prefer watching movies in half-empty cinemas. I definitely would not queue for hours for that “popular” brand of bak-kua or wait 20 minutes for that “famous” hawker food.

I just make do with the next best alternative. Most of the time, I can’t taste the difference anyway.


 


When I make my core equities acquisitions, I prefer to do it when crickets are chirping.


Often when I find a company I like, I would do a quick scan to see if any sell-side analysts have issued “buy” recommendations on it recently; are there bloggers “plugging” this stock; and if there are numerous “glowing” posts on the company in equities forums by many different members.  

If I do, I’ll kick myself for being late into the game… I’ll pass on this stock and look elsewhere for the next best alternative.


Now I noticed in the papers and on various business media, most talking heads are plugging a particular investing style. It’s getting to be a bit like 2000 all over again.

My pattern recognition brain is telling me it’s time to…





19 comments:

  1. Ya. There is safety in number and many retail investors will go for that safe haven of the investing season.

    Then it is about time for some of us to leave for "safety" reason.

    Anyone know that reason?

    But, I can't say it out loud here. Later some people read liao sibei buay song!

    ReplyDelete
    Replies
    1. CW8888,

      My post just a whistle in the wind sharing what "I" see and how "I" feel.

      Diversity is beautiful.

      You like fishing; I like taking pictures.

      You happy; I happy.

      Even though we don't share the same hobby :)


      There is a reason why stock transaction volumes are down.

      If I make a living in selling fish, I'll do what I can to attract customers back to the fish market! And I don't care what kind of fish I sell!

      It's like selling capital protected savings accounts after the Lehman crisis in 2008. Those who took the bait and switched from equities missed the great comeback...

      Delete
    2. why bother people song buay song, we are not having a party here. by the way, who ah?

      so smol, whats the reason for stock transaction volumes down? afraid?

      Delete
    3. What do you think?

      LOL!

      Ask your broker, he knows ;)

      Delete
  2. Replies
    1. coconut,

      Yes, getting out of the office and home to lunch can be good to exercise the muscles. Cannot sit whole day; wait get piles...

      No lah! It's more about you do what you want to do; I do what I want to do :)

      Delete
    2. ???

      "My pattern recognition brain is telling me it’s time to…"

      get out???

      Delete
    3. You fill in the blanks yourself :)

      It's open ended.

      You can ask all you want; I shall not take off my shirt!

      Delete
  3. i agree with you on kicking myself for being too late.

    I have skipped a number of stocks because there are being too hotly pushed by the research analysts. For e.g. Sarin tech and ARA. When there's many reports on it, it is easy to conclude that they are no longer cheap without even looking at the PE or PB.

    Since then, I have learnt the lesson of building a watchlist fast and early.

    ReplyDelete
    Replies
    1. Hey shan rui!

      Shhhhh....

      I merely revealed my cleavage, you took off your whole top!

      Give chance. I cannot compete with your six pack...

      LOL!

      I think I know why some mid-life warriors return to academy to teach.

      It must be wonderful to be surrounded by young minds - full of vigor and vitality!

      shan rui, you are ahead of some your peers in ValueBuddies.

      "Knowing" (knowledge) what stock to buy is not the same as "when" and "how" (competence) to build up a sizable core position on it :)

      Although if it's a speculative punt, a lot of buzz is good; but we still need to make sure we belong to the early majority - not late majority or laggard ;)

      Keep your shirt on!

      Delete
    2. Below are extracts for you to think?

      "Is it worth your time as an individual investor to read carefully through the financial statements and also to compute ratios and make other interpretations"?
      Ans:
      "I doubt.
      If you enjoy reading through financial statements, as I do, fine. It’s a valuable learning experience. But don’t expect to find out something the market doesn’t already know. It’s very unlikely that you will find a nugget of information that has been overlooked by everyone else. Forget it; it’s not worth your time as an investor. The same time would be better spent keeping up with current developments reported in the financial press".

      "Why would you read financial statements, then"?
      ANS:
      "To know what you are getting into".

      Is there any one “litmus test” for a quick test on a company’s financial performance?
      Ans:
      "Yes. I would suggest that you compute the % increase (or decrease) in sales revenue this year compared to last year, and use this % as the baseline for testing changes in bottom-line profit (net income) as well as the major operating assets of the business".

      What i am saying is everyone has his own way. Ha! Ha!

      Delete
    3. six pack is for show only, what is a six pack if it has not even been through a simple sit-up test?

      I am still waiting for a full-blown bull bear cycle, that will be where the "when" and the "how" will be most important.

      Delete
    4. 1) Temperament,

      Those that like numbers read the appendixes in annual reports. I look at the pictures and graphs. The only numbers I sensitive to are 36,24,36.

      2) shan rui,

      Hang on tight! Coming to a cinema near you soon! Have fun!

      Tip: Keep records. (Unless you have the memory of an elephant!)

      I not so bad myself - got 1 BIG round pack :)

      LOL!

      Delete
  4. Replies
    1. Wow! A blast from 2009!

      All of a sudden, I realise I am not as quick as the young, nor as mellow as the senior...

      Sob sob.

      I think I better find an Open University course or something so I can seek solace in the bosom of my female teachers.

      Well, at my current age, it's morally, ethically, and most importantly, legal for me to date the female teachers now.

      I studied at a all boys secondary school... Fond memories of those sexual innuendos, little flirtations, eye contact... Aw...

      Hey! I am a naughty student!

      Delete
  5. this title "Follow the crowd" very misleading, like you are doing something that isn't there yet.

    if you are following, then you are in the crowd, if you are in the crowd, then you are following.

    wait the minute, i'm confuse...

    ReplyDelete
    Replies
    1. ya, i am going to do what the human do, as thought i am not a human haha.

      still confused...

      Delete
  6. coconut,

    It's called creative irony.

    If you have an argument with your wife, she calls you "You so clever!" in that annoying high pitch tone, you know she is not praising you!

    I "raise east; attack west"!

    ReplyDelete

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