In the American Revolutionary war, Colonel William Prescott commanded the American rebel forces in the Battle of Bunker Hill against the British forces.
Low on ammunition, William Prescott gave the below (now famous) order to his men:
"Don't fire until you see the whites of their eyes!"
Remember, in the 18th century, they were using muskets - not rifles. Muskets are smooth bore firearms; the shorter the range its fired at an enemy, the more accurate and lethal the shot would be.
This is easier said than done.
Imagine the enemy marching towards you. You can see them clearly. You naturally instinct is to panic and fire.
If you miss, imagine the horror while you are furiously re-loading your firearm, the enemy has closed even nearer to you and is now taking aim at you... A volley before the bayonet charge. Mama!
By the way, once the ammunition ran out, the Americans retreated. Technically, it was a "victory" for the British, but the British sustained much heavier deaths and wounded than the American side.
Morale is higher on the American side.
Investing and Trading
Isn't this what we agonise and go through as investors and traders everyday?
Fire too early, we get stopped-out or suffer the gut-wrenching disgust with ourselves seeing red all over our portfolios.
Fire too late, we find ourselves standing at the platform looking like idiots as the train peals away without us...
Do we conserve our resources or throw everything (and the kitchen sink) at the first sign of an opportunity?
When low on resources, do we retreat to live and fight another day? Or do we stand our ground come what may? Ego versus objective?
For those of us who have been in the markets for sometime, we know how's it like to "win" the battle but lost the war...
And weren't there times we were glad and morale super high when we have "retreated" from the markets?
Hi Smol,
ReplyDeleteWe must be clear about our weapon. Isn't it. Some have bazooka..
I have a little pistol, 3 rounds only some more...
Sighz....
Sillyinvestor,
DeleteObservant!
I deliberately highlight its muskets - and muskets are what most retail are using.
Slow to re-load, not accurate, and our ammunition is not infinite!
If we have a modern General Purpose Machine Gun, we can anyhow fire also can! But as an Ammo storeman duing NS, need to remind that there's 250 rounds in a machine gun belt. A machine gun nest is most vulnerable during re-loading...
Even the Swiss national bank has "capitulated" by not supporting the 1.20 EUR/CHF floor.
China has done the same by not throwing additional reserves to defend the RMB peg to the strengthening USD.
Are our reserves more than central bankers?
Those who are retirees cannot invest the same way like those with a day job with regular inflow of new soldiers to deploy in the battlefield.
Similarly, those with a median income day job is wise not to use the same battle tactics employed by those earning a much higher income.
Those of you who play Starcraft will know - a player with a better economy can trade his army with yours, and win the match by rebuilding his army faster and simply walking up to your base ;)
Surprise!
As small retailers, we must fight as guerrilla. Against a more conventional larger army, such guerrilla warfare will work. What's the number one thing in such warfare? There's no shame in running away and fighting back when the situation favors you again.
ReplyDeleteFor me? I'll be a sniper. Stand far away, with a bunch of bullets. I watch and observe a lot more than actual firing. But when I fire, I do make sure I hit the critical areas. What to do? Limited ammo mah.
LP,
DeleteSame sentiments here.
I sometimes feel like "poking" the younger ones with tiny portfolios, yet talk like they are commanding a huge conventional army.
But that's the strength of youth!
So I held back (selected exceptions with those I admire or like).
It's safer to poke seniors since they are battle-hardened - hence more thick-skinned and less likely to take diversity in opinions as a personal attack or insult.
If the market had gone to STI 3800 instead of below 3000 now, these youths would have outperformed all the old veterans (and me) who will be feeling extremely sheepish for keeping so much cash rotting in bank...
Ah! A sniper! One shot; one kill.
Require years of training and hours of preparation to pull it off.
Its better than trying to be a machine gunner with limited ammo ;)
Hi SMOL
DeleteI should belong to the youth group but how come I behaved like the old man. Jialat, 未老先衰老。
Frugal Daddy,
DeleteI'm always puzzled by the "old man" I see in the mirror each morning.
I see myself as 23 in my mind''s eye :)
By reading and learning about new things, I'm able to recapture that 赤子之心。
SMOL,
ReplyDeleteSniper in waiting ... eh
Yaruzi,
DeleteNo.
Snipers require special natural abilities (born with and cannot be learned) that I do not have.
I'm more a trend follower.
Trend followers are not the smart ones.
Smart ones are value investors - they know how to calculate intrinsic value - I can't.
I have no glory tales of buying at the bottom or selling at the top.
I'll never be the smart money early adopters, but just as long I can position myself as the early majority, and sell to the late majority or laggards, I'll be OK ;)
Yup SMOL, I think being a sniper is the best coupled with consistency and accuracy in hitting the target but sometimes just like in the movie American Sniper, have to be sure before shooting an innocent child who tried but in the end gave up carrying the missile away. Just like in trading and investing, have to be sure of the target before shooting away.
ReplyDeleteJoyce,
DeleteWho doesn't want to have one shot; one kill?
Alas my track record says otherwise.
Trading is like dating.
We don't say no to love even after several painful heart breaks. We still go on dating until we meet the "right" girl/boy.
When I stumbled on to Trend Following, it just felt a better fit for me. Even then, I still need to customise it - I'm discretionary, while most trend followers are systematic.
Why trend following?
Just as long I keep my losses small, and milk as much as possible from my few winners, I can have more duds than winning trades and I'll still come out on top.
Funny how this is similar to Peter Lynch's one 10 bagger can overwhelm losses in other stocks even though Peter Lynch is not a fan of stop-losses.
Since I have yet to have a 10 bagger in my track record, I better stick with Trend Following's money management techniques and stop imagining I'm Peter Lynch!
best is to use a auto reloading machine gun with chains of ammo just next to it.
ReplyDeleteSMK,
DeleteYou are probably thinking of the Minigun - a multi-barrel auto loading Gattling gun with a 4000 rounds belt ;)
High frequency trading anyone?
temperament,
ReplyDelete30mm cannon rounds' impact on soft human bodies...
And when run out of cannon shells, one missile one human target?
That's resources for you...
I hope I don't have to face a military conflict in my lifetime.
We dodged a bullet when the dominoes stopped falling after Cambodia.
Sad when the Red threat is gone, we now face a threat from another colour...
i will be one of those who will fire earlier KS bit
ReplyDeletei dont want to be the one who havent fire a single shot and already killed
Jimmy L,
DeleteWho knows that first shot of yours may hit the opposite commander on his horse?
And upon seeing their leader down, the line will break and beat a hasty retreat.
You shall forever be immortalised as the hero who won the battle single-handedly ;)
Impressive analogy :)
ReplyDeleteThank you!
DeleteI like history :)
Hi SMOL,
ReplyDeleteFrom romance of 3k, napolean, Winston Churchill, I always enjoy these stories, though not the war per se.
For ur eg, What is the use of victory in this type of battle when u already r licking heavy wounds when, it is not yet "do or die"! In most sports we have 3 or 5 games to det ultimate winner. Just 1 win already tired out no good.
Life is not about one battle! Need stamina.
Is it better to participate in 100 battles and win 80 or participate in 10 and win 9 or let u even win 10 out of 10???
Rolf,
DeleteLife is not solely about money money money.
After one financial milestone is hit, we move the goal posts and attack the next milestone. Never ending battles...
When is enough, enough?
Sometimes it's good to ask WHY am I at war in the first place?
Guess battle here is just a metaphor that describes the different stages in life we need to go thru.
DeleteOf course the best is not to have obstacles and live life peaceful. But not quite possible at times.
to me it's still stages of life that each individual go thru and eventually come to a point of enlightenment and balance, n understand the true meaning of life.
Rolf,
DeleteI am reflecting quite a bit on this in or out of 江湖 when we have hit enough:
Warren Buffet is in; Bill Gates is out.
George Soros is in; Peter Lynch is out.
黄清元 is in (saw him at this year's getai); 江慧 is out.
Very free, mind fxxxking myself ;)
hehe... frankly I seen many older businessmen in my industry. They were out problem free w loads of cash, then re-enter again. Now cash lesser n problems more! Maybe they cannot live life wo problems! since so use to it.
ReplyDeleteThey who were out n out r enjoying their 2nd stage of life. "Reborn!"
Knowing myself I prefer to be Bill Gates, Lynch n Jiang Hui! Of course first must find the next stage of what I want to do..
so which stage r u?
Rolf,
DeleteI'm in the one foot out and one foot in stage.
Mondays to Fridays I'm out; Saturdays and Sundays I'm in.