Thursday 27 October 2016

Everything You Ever Need To Know About Investing

Buy low; sell high.


  1. SMOL, LOL ... KISS (keep it simple stup*d)

    1. Yaruzi,

      I can handle brevity and verbosity equally well ;)

      I am balanced!


  2. Lol, SMOL

    Many including myself cannot wait to buy low. So we HOPED TO buy high sell higher

    1. Sillyinvestor,

      Your statement sums up the majority of retail investors out there.

      If you ask them "what" kind of investor there are - many will self-proclaim they are Value Investors...

      They can also readily parrot the wise sayings of famous Value Investors they are fans of.

      Yet they buy "high" and hope...

      The irony is how many have read the works of famous "Growth" investors? Take for eg:

      Thomas Rowe Price (Father of Growth Investing)

      Philip Fisher (Common Stocks and Uncommon Profits)

      William O' Neil (CAN SLIM strategy)

      Most retail "investors" like to buy the same stocks others are owning. You buy; I buy.

      That by definition can't be Value investing. Value investing is buying when others are selling ;)

    2. After buying a stock and its stock price goes up a lots and then shout loudly value investing works.

    3. CW,

      Perhaps that's why the below post garnered a century of comments:

      Here's a question to Value Investors 

      The patient reader who is willing to read through all the comments may discover only a minority few can grasp the essence of Value Investing...

      If we cannot say with conviction WHEN to sell, then the retail "investor" have no clue what "Value" is - and is merely pretending to see the Emperor's clothes...

  3. So simple. Still need to read or attend course?

    1. CW,

      I don't know about others, but I am still sharpening my saw on improving my Entries and Exits.

      Perhaps its my Kaizen (continuous improvement) supply chain background, or my Zen cultivation - there's still much to improve...

      Actually its quite easy to see whether we have room to improve.

      Just take a look at our mark-to-market portfolio.

      1. Can we buy at lower prices?

      2. Ever regretted not selling at higher prices?

      If the answer is "Yes" to both questions, guess what goal settings they do?

      Land owners do portfolio reviews differently from shepherds.

      Shepherds do reflections while "bei kambings" don't.

      "Bei kambings" just record their transactions.

  4. "Buy low, sell high" - 4 words.

    Simpler: "Don't loss money" - 3 words.


    1. Sanye,

      Concise but incomplete ;)

      We can easily don't lose money by NOT investing. Put money in CPF, fixed deposits; etc.

      We invest for what?


      Yet how much time and effort we put into SELLING?

      If there's no selling, how to get REALISED profits?

      Li Ka-Shing really superman.

      Before China slowed down, he sold most of his China investments.

      Before global trade slowed down he put his HK/China port holdings in a business trust and IPO it ;)

      Now he got his war chest to buy low for rinse and repeat!

  5. buy and wait till it profit then sell = 100% sure win
    those losing just hold and tahan the drawndown(DD) :)

    1. Jimmy,

      For you to talk like that, its a sure giveaway you have not been through a 50% drawdown at portfolio or stock level ;)

      There are long term retail investors who bought at the high during the dotcom boom of 2000 and even today, after 16 long years, still very much under water...

      Just ask those retail investors who bought Creative Technology at above $50 during 2000; and still hoping for salted fish to comeback alive....

      I am luckier. My Jurong Technology went to ZERO. At least I have closure and can move on ;)

      I didn't know then. Now I know what's money management the hard way :(


      P.S. Buy and hope is not a strategy.

    2. My late FIL held IPC, Liang Huat, etc. These iconic home grown companies which never recover till his grave.

  6. temperament,

    The seasons come and go...

    The moon wax and wane...

    The tides ebb and flow...

    Cycles are part and parcel of nature.

    Even empires rise and fall...

    Its a bit of hubris to suggest that the stocks you own will never fail...

    The once mighty AIG, Lehman Brothers, Nokia, Kodak, Sharp, Hanjin have already fallen.

    Even Singapore will one day be a pale shadow of our current selves. Not in my lifetime I hope!

    Remember Malacca?

  7. Hi SMOL,

    I've a few un-actionable advice too:

    1. Bring an umbrella if it rains
    2. Work in an industry that can survive and thrive in the next 30 yrs
    3. Invest in a company that won't lose money
    4. Buy a winning ticket for toto and 4D
    5. Be friends with friends who are influential and have good network

    We have plenty of such advice. But the key lies in the 'how', not the 'what'. The 'what' can be said in a sentence but the 'how' can't be finished even with 3 books.

    1. With my senior citizen concession pass @ $60 unlimited travel; when I travel alone I can't bother to bring umbrella even it rains as there will be bus and train connection with built-in shelters to avoid getting wet. :-)

    2. Yeah uncle 8888

      That's what I told my colleagues too when they saw me never bring bag when coming to work. I'm always the "free" and "easy". Got shelter what for need umbrella ? Water bottle keep in office. Still need to bring what else?

    3. LP,

      The one I love best is:

      Only buy stocks that go up in price. Those stocks that don't go up, don't buy.



      It's a pity I don't remember who's the author. I just remember I burst out laughing when reading it the first time!

    4. CW and Small Time Investor,

      Did you know you both have just succinctly described the practice of "crash got sound"?

      If you both confident you can stay dry even when it rains, why bring an umbrella indeed!

      The umbrella is merely a tool - just like plans ;)

      To adapt to any eventualities (兵来将挡), we require adaptability, flexibility, imagination, and weird sense of humour ;)

      人算不如天算。。。Murphy's Law...

      Look ma! No plans!


  8. Hi Jared,

    Buy low;sell high.

    Very logical investment principle but totally useless when it comes to execution. How low is low? How high is high?

    Although value investing has been proven to work for many, I can say the same goes for the principles behind value investing. Buy when price < intrinsic value by a large margin. Sell when price > intrinsic value. How to quantify intrinsic value? I got seriously wounded in my early days as a value investor when I probably got the intrinsic value off by 50% even though I thought I bought at a large margin of safety. I sold at > 50% loss. Good experience to let newbies know about my stupidity. Value investing of course works but newbie investors had better be humble about whether they are more likely to be Warren Buffett or Mr Market's buffet lunch.

    By the way, what is meant by "climbing up the mountain"? What is meant by "climbing down the mountain"? It reminds me of a nursery rhyme song that I sang as a kid.

    1. hyom hyom,

      This post is a parody.

      For the reasons you have described, I am of the opinion most people just call themselves "value investors".

      There are only a minority of value investors who really know their craft and are profitable ;)

      Value investing is easy to "teach" though - at least the theory part ;)

      Climbing up the mountain means someone working towards their owm summit or goal. In our community, its financial freedom.

      Climbing down the mountain is the journey AFTER we have reached our summit.

      Its important to know the difference as I can't use the same strategy of climbing up the mountain for my journey down ;)

      For eg, without a day job to earn more and save more to bail me out during a market crash, risk management is even more important to me!

      That's why youth who don't know what cannot be done will outperform veterans in a bull market in percentage terms.

      Youths with little to lose, are often 100% vested, no emergency fund, no backups whatsoever... Especially when its their first bull market.

      Veterans having gone through several bull/bear cycles, have learnt to take some money off the table :)

    2. Now we have Deep Value Investing course; more powerful than value investing. LOL!

    3. CW,

      Next it could be Abyss Value Investing. Ravine Value Investing. Or maybe Bottomless Value Investing!?

      And for the nuclear one - Black-Hole Value Investing!



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