A Flat Pancake Trading Year

Oh well!

I guess the streak has to end some day, isn't it?

2013 - Doubled my trading account (Rampage!)

2014 - Tripled it! (Godlike!)

2015 - Up 88% (Double happiness!)

2016 - Up 13%... (Shy, Shy, Shy - Yes, its from K-Pop Twice's Cheer Up MV)

Tale of 2 halves

2016 started fantastic. Got played out as the trend reversed?

Then came mid-year where I thought surely this must be the one...

Nope. Got played out one more time... The market is such a tease!

Luckily, both times I got profit-stopped.

I'm not smart, but even I can take a hint from the price action the market is giving me!

Rather than be stuck in the middle of the ocean with my little sail boat with no winds, I decided to anchor myself back at the harbour. Safety first.

No wind at least I can still do my wine, woman, and song at the taverns that lined the harbour. Was pretty much on the sidelines for the 2nd half of 2016.

Then came mid-November for the US elections. Was positioned for a Clinton win but hey!

Lucky as lucky does!

Wrong but made money!?

Not one to look at the gift horse in the mouth so I cashed out.

A few days later, realised this Trump rally got legs! Jumped right back in.

And here we are. Up 13% for the year.

I guess can't complain. Was only up 5% before the US elections.

The extra 8% came within the last 6 weeks of 2016 - now that's trading for you!

I count in actual dollars

Accounting for my trading account is easy.

I funded it 4 years ago with $1, never took money out nor added new money in.

After 4 years, it has now grown to $12. (For the CNC precision machinists out there, its $12.43. Happy?)

From 11 baggers in 3 years to 12 baggers in 4 years.

Want to know something interesting?

In dollar terms, I made slightly more during 2016 than in 2013 - $1.40 versus $1.00.

Due to the low base effect for 2013, if we count in percentages, its an easy 200% smoke and mirrors spin!

Now you know why most who use fundamental analysis prefer to overlay the Cash Flow statements on top of the Profit and Loss and Balance Sheet statements. Wink.

Cash flow is much harder to fake. (But still possible. Just ask Toshiba shareholders)

That's it!

Closing my trading book for the year.

A flat pancake trading year. Move along now... Nothing much to see.

P.S.  For new readers who are interested in the backstory:

My Virgin 10 Bagger

A Good Year, A Great Trading Year

The Real Benefit of Blogging

What you expect?

Money from blogging?

Me?

Want to know what I think?

One good investment or one good trade for 2016 should be many times the dollar value what one could get from blogging.

Now that's getting our priorities straight! (Something for wannebe bloggers out there)

Wink.

There are quite a lot of interesting characters that make this watering-hole a fun place to mingle (龙蛇混杂) - provided one is not so thin-skinned that one gentle poke you go, "Teacher, teacher! Botak disturb me!"

If you are a regular here, you'll know the popular and recurring characters.

I've thanked and complimented them (they will say where got?) enough already. 

Today, I'll share the unintended and unsung benefits that I've found from blogging:

Getting to know interesting people.

These characters you seldom see them commenting here. If they do, its once in a thousand years...

1.  The Cartoonist

He's a real life scientist. Got publish research papers kind. I've forgotten how we met over here for I don't recall he's into investing or trading... I suspect its because he's into drawing cartoons and I into painting with words.

This man knows his heart's compass when he shared the cartoons he drew depicting how he and his wife met and fell in love... (If I'm a girl I'll go aw...)

He has since left Singapore and is now residing in Canada. Miles apart, seldom stay in touch, but he is one of those people where if we meet and talk, it would feel like we have just parted yesterday.

2. The Cat Woman 

This "crazy" woman (she'll know I say it with affection) trades WTI crude from home, and is once upon a time a legend from the trading community. Yes, having a pretty face helps. But that's more a distraction.

If you can go beyond her crazy (did I say it again?) good looks, you'll discover she's a warrior trader - one who can bring meat to the table!

I never understood her psychedelic charts. She will make 20 t0 30 trades a day, lose a few hundreds here, make a few hundreds there. End of the month she'll be up $10,000??? How on Earth she does it???

She's not trading now. She is now full time taking care of her hordes of cats living with her.  

3.  Smart Beta

This is one good example of a one-sided relationship; I'm the thick-skinned one. You can tell by the way he blogs he is or used to be from inside the industry; not the usual regurgitate what they've read from books and re-summarise for dummies kind of blogger.

Waiting for his next post to engage with him is like watching paint dry...

He is the reason why I like to mix with people who are different from me.

Beginning of the year, during the commodity rout, he made a brave trade to long the Canadian Dollar without leverage (which shows how much money he has).

I on the other hand decided to short the Canadian Dollar end of this year just after OPEC's agreement to cap oil production with 10:1 leverage (which shows I'm tiny).

We both made money.

4.  Patty,

You won't see him commenting on my finance related posts. He'll only appear on my wine, woman, and song posts. Especially when it concerns Anime, Manga, and all things Japanese.

I've stolen with pride quite a few "inspirations" from his Facebook page for my blog posts.

He definitely got culture and soul in his heart. And a song or two! 

Now he is busy playing with his DIY bicycles?

Idiot, makes me look bad with my inactivity...



Blogging to receive

So many have grand manifestoes to give and share. Yet they spend quite a lot of time and effort on blog monetisation...

I suspect that's the main reason why most bloggers stop blogging after the honeymoon period...

A beggar would probably make more money than us!

But I don't feel poor.

On the contrary, I feel quite "rich" with the relationships I've made.

Thank you everyone! (I now sound like a politician)




P.S.  Eh! So when you are going to buy me coffee?

IKEA coffee 50 cents only, and comes with unlimited refills!

(That's how you tell whether a company is great or not. If an ex-employee leaves and continues to promote his ex-company... The company is good, better, best!)

Hallelujah - Pentatonix

Song dedication to friends of the cross out there!



To some people, it's all about the bass, no treble.

Some exalt the fidelity of treble.

While some just prefer the comfort of the midrange tones.

And then there are those who will debate whether we should include beatbox into a cappella...



But put them together...



Merry Christmas everyone!

昨天；明天

What are Bucket Shops?

I noticed a bad habit by some readers of financial blogs - too reliant and dependent on their favourite "shepherd"...

For example, got question on CPF matters, instead of checking the CPF website or contacting CPF directly, prefer to be spoon-fed...

If you get a summary from a summary from another summary, what do you think?

Want to bet there's some "oil and vinegar" (油加醋) added to the mix?

How do people get scammed?

Yup, they don't do the verification themselves.

Assuming others will do it for them, and/or have their best interest...

Think about it. Would you help others get richer than you if you do not get any benefits in return?

What are bucket shops?

I think I'll do it differently.

Anyone of you have placed 4D, Toto, or soccer bets illegally with private bookies?

There must be some "incentives" for you the retail bettor right?

If not why you would want to choose this illegal option over betting legally with Singapore Pools?

When you place your bets with these illegal bookies, they are taking the opposite side of your bets right?

These bookies are trading against you.

They make money when you lose; and they also make money when you win (bookies take a cut of your winnings).

And there's another risk.

Some of the bookies never pass your bets to their big syndicate boss.

If you win big, these bookies may "run road".

How to collect your winnings like that?

You can't complain to the syndicate boss - you don't know them.

And please hor! You can't go to the police too!

You betting illegally remember?

And that describes pretty much how a bucket shop operates. Wink.

You whiter than white bei kambing

What? You not "Hokkien peng"?

You "ang moh pie" and educated type?

You catch no ball what I say?

Hello, there's such a thing called Google.

OK, OK, don't hit the face!

Here's the Wikipedia link: Bucket shop

If you read to the  bottom, there's this "See also" section on forex scams, binary options, boiler room, and pump and dump.

You may want to explore own time own target.

Tip: Don't assume everything that's written in internet is correct or up to date.

If you got do your homework first, then if you want to jio me or the fisherman out for coffee to do verification, your questions will be much more intellectually stimulating.

Anything is better than, "What stock to buy?" or "At this price can enter?"

LOL!

 

 

What is the No. 1 Export of US?

C'mon.

Think.

If you are into bonds, currencies, gold/silver, you would know the answer.

But if you are an equities only specialist, then excusable.

Who died and made you Indian Chief?

For those of us in my generation, its a common phrase we use during our National Service.

In our little financial bloggers community, its definitely a breeding ground for lots of self-styled Indian Chiefs. Wink.

Let's turn the tables and focus on us for a change.

If you are a polytechnic graduate, doing well in your career with frequent promotions despite not having a university degree, guess what? You often get well meaning advice to "upgrade" and study for a degree from classmates whose career are not going anywhere, but they are always on the paper chase thinking that more ABCs behind their names will help them in that promotion they so desperately seek...

You are single and happy but every stranger you meet always tell you to get married. Yet their marriage lives are not exactly what you call "bliss"...

You happy and contented being a believer of your own faith. You put the symbol of your faith outside your door. Then some strangers come knock on your door and tell you in your face your faith is wrong and you are believing in false gods...

To those over enthusiastic evangelists, how would you feel if some militant atheists come to your house and tell you its the 21st century already?

You enjoy life and never bother anyone. But everyone is always telling you how to live your life - with good intentions of course:

Don't smoke - wait you get lung cancer. You die.

Don't drink - can get liver cancer. You die.

You eating that fried chicken? High cholesterol. Wait you get stroke or heart attack. You die.

You buy Toto? You know the odds of you winning? See? If you save and 30 years later...

Eh, you look fat (how rude!), still don't diet or exercise? Obese no good. I think you know the drill by now. You'll get this and that.

And then you die!

Friends, in the long run we all die lah.

The confused "Value Investor's" transition from Value, to GARP, to Growth Investing...

This post is stand alone.

For those who have the time to read a century of comments to get the context and perspective, you may want to read this old post: Here's a question to Value Investors.

When to buy

When do Value Investors buy?

They buy when they can find a stock that is selling below its "fair value".

There are quite a few metrics to use, but fair to say these "fair value" metrics can be "calculated" from published quarterly or annual statements.

Teaching or learning these metrics is easy. There are formulas, excel file templates to fill-in, numbers to crunch.

All very black and white stuffs.



When to sell?

When the reason you bought was because there was a "discount" to fair value, then the logical "catalyst" to sell is when that "discount" is no longer present.

That's what the pros do.

After the sale, they go hunting for other stocks that are selling below fair value.

Buy, sell, rinse, and repeat.

If they can't find stocks selling below fair value, they don't bite.



Retail Value Investor don't have the same playbook

The competent ones do buy at discount to fair value.

But when the stock price has risen to fair value, that's where retail value investors deviate from the pros...

Nope, can't sell.

What if after selling the price goes higher?

Now these retail value investors have transition into Peter Lynch's Growth at Reasonable Price (GARP).

And when the price has soars to more than 2 standard deviations from fair value, with P/E multiples that will make any true blue Value Investor puke, now the same retail value investor will morph into a Growth Investor like Philip Fisher.

No worries!

See? I made a mistake with my "fair value" calculations. The stratospheric price today is the new "fair value". So there's lots of room for price to go much up before everything is overvalued!

What?

Am I making it up as I go along?

No way! Look, I'm a LOOOOONG term investor OK?



When shit hits the fan

Its not so bad if one transitions into GARP or Growth Investing from a Value Investing mindset,

All of the above entry methods have their own exit strategies.

But if we morphed into a long term buy-and-hold strategy mid way, that's similar to the joke traders use to mock themselves - letting a trade become a long term investment - you know it usually does not end well...

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.

Most Retail "Investors" Are Failed Traders

Need I say more?


You know; I know.

Everyone knows.