Saturday 3 December 2016

Most Retail "Investors" Are Failed Traders

Need I say more?

You know; I know.

Everyone knows.


  1. Why? They believe that trading is easy! Go and read those bloggers who have commercial interest on their blog posting. :-)

    1. CW,

      The established fact is that only 10% of traders make money.

      If anyone says trading is easy, they are either lying or maybe they meant trading is easy to lose money ;)

  2. wow so direct! don't distroy people's hope la!

    1. actually i kind of agree with jesse livermore, no one can beat the market.

      giving enough time, market will kill us all!

    2. and my hope as a trader is, the market did not have the time to kill me first before nature does.

    3. coconut,

      The normal progression is:

      1) Start as trader,

      2) Can't make it then try DIY value investing,

      3) Still cannot then switch to dividend investing,

      4) Lagi cannot then capitulate and embrace passive

      5) Chop fingers is the last straw and embrace CPF.

      I know. That's why I am conscious I don't over stay my welcome.

      Richard Dennis of Turtles fame did not do too well at the end.

      My trend following idol Paul Tudor Jones had to downsize his organisation due to fund redemptions by his clients recently... Underperformance versus passive index funds is not helping...

      Central banks have messed up quite a lot strategies that worked in the past - but not now with money printing. How the hell do you trade when good news is bad news? And bad news is good news?


      My foot!

    4. I went straight to no. 4? Haha! Ironically, The Complete TurtleTrader was the book/catalyst that got me interested :D

    5. Kevin,

      Ironic indeed!

      When I first read your masthead, I thought I had a fellow trend follower to play with...

      Then it came to a screeching halt!

      A passive investor!?


      Luckily, you are a good sport and open minded enough.

      We still can have fun poking the blind spots of traders and passive indexing investors!

    6. Ah. I actually took the word "turtle" and interpreted it with "slow and steady" instead of the original intention of traders, like turtles, can be "grown". Hey, now I have to blog to play with!

      The more we learn, the less blind spots we have! No one's perfect. That's why I like to read on all kinds of stuff, investors/traders/etc even though it may not be my cup of tea.

      We can't control how people think and react, even when our intentions may be good. I would very much love for people to poke holes and suffer the pain now, than twenty years later! By then too late already -.-

    7. Kevin,

      My style of interaction has it pitfalls.

      I only poke bloggers with whom I had a relationship with. But sometimes, some of the younger bloggers who are less self-assured may take offense...


      Thank goodness for young bloggers like you!

      I do want to take our discussions and challenges to each other's thesis to a deeper level.

      Life is too short for "I like you, you like me, let's do a group hug!"

      I'm not into snow flakes or strawberries ;)

      I'm into intellectual stimulation :)

    8. Turtle is not that slow unlike tortoise. :-)

      See the way turtle hunts for fish. Fast action hor!

    9. CW,

      That's why the turtle is used as the mascot for Richard Dennis' trend following traders ;)

      As for the tortoise, its up for grabs between passive and buy-and-hold investors. Anyone interested?

      The trouble with passive and buy-and-hold investing is you need 20-30 years to know whether it works for you, or not.

      If it does, fantastic! If it doesn't, well, there goes 20-30 years of that magic in compounding...

      For trading, we only need 2 years to know whether we have "it" or not. That's why the majority after 2 years become born-again "investors" ;)

      Then after another 20 years chop fingers :(

    10. Failed Trainers in trading courses also turns to value investing courses for similar reason as students will need more than one decade to prove that the courses are not right. :-)

    11. CW,

      The best thing I've learnt from statistics is the bell curve.

      Some will do very well, some will do extremely poor, while the majority? Well, like that lor!

      Its like saying every graduate CAN have a chance to be CEO - that's fair statement.

      But to say EVERY graduate will be a CEO? Then that's lying.

      That applies to investing and trading. In fact, everything under the sun!

  3. temperament,

    You have asked the most pertinent question to us all - when do we quit and cash in our chips?

    I am trading to achieve - still a long way to go as there's a few skills I've yet to master...

    But I do hope I have the wisdom and clarity of mind like Peter Lynch.

    Quitting at his peak 13 years into his mutual fund management career was prescient!

    Quitting when you are ahead is not the same as quitting ;)

    Peter Lynch is a great trader. I've studied and stolen with pride some of his longer time frame (3 years) trading strategies.

    He is definitely not a buy and hold investor ;)

  4. Hi SMOL,

    Jessie livenomore, that great trader, cut loss on his life when he thought it's not long worth living. That's guts. I know I wouldn't do that, I'm too 贪生怕死 - greedy for life, scared of death lol

    Now for the serious side: You mentioned most retail investors are failed traders. That means there are some retail investors who are not failed traders. So what are they? Successful traders perhaps? Those are the interesting ones :)

    1. LP,

      You have keen eyes ;)

      1) The bleeding heart, fisherman, you, and others whom most newbies would assume as "investors" are not above making opportunistic trades from time to time ;)

      Feedback from trading helps the investing side. For eg, if we keep losing money in our long trading positions, maybe we should take some money off the table for our investment side? It seems market is telling us something... No?

      2) Corporate insiders higher up the food chain. CEOs, CFOs, Directors, Corporate Secretaries; etc. They know the real reasons why they don't make use of bank loans at lower interest rates but choose instead to IPO their shares to the public, issue preference shares, rights issues, corporate bonds instead...

      Why they choose to buy back their own shares instead of issuing dividends, or take up a bank loan to maintain the dividends???

      3) Industry insiders like CFAs, brokers, private bankers; etc. The same snake oils offloading Swiber bonds or Lehman mini-bonds to their most favoured clients, make a wild guess would these industry insiders buy the same bonds for their own investment accounts?

      Being in the retail industry for furniture and now home appliances, there are certain products and brands I would never touch with a six feet pole...

      Similarly, I'm sure there are some tutors you will want to keep a distance from ;)

      4) Entrepreneurs who have sold their startups or companies for millions and are now full time "retail investors". Well, they definitely are not buy and hold investors are they?

      They have a big edge over most bei kambing retail investors - they know WHEN to cash out!


  5. Hi temperament,

    Buddhist say if you commit suicide, you'll go to other realms and suffer in hell and/or become animals too. So a similar question to what you posted to me is this: Did Thích Quảng Đức, the burning monk from Vietnam, commit suicide?

    I think he did not too :)

    1. LP,

      Its the state of mind when one goes that's more important for Buddhism.

      An enlightened monk who is perfectly at peace, feeling no fear nor anger, self-immolates - its still suicide.

      Black is not white no matter how much we sugar-coat it.

      Which realm this enlightened monk goes to may not be the same as the novice monk who self-immolates himself in anger as an act of defiance...

    2. Yes, you're right. I am not the one who said that burning monk is not committing suicide, i'm just merely parroting another prominent monk who said that. But I think his intention is what you said.

      I'll stop the religious comments here :) Don't want to turn this thread into some religious debate haha

    3. LP,

      No worries!

      I won't shy away from man of leisure topics like Sex, Religion, and Politics!

      Its evident in my blog posts - they appear as innuendos, parodies, pokes; etc.

      I am conscious of the out-of-bound markers and of course I am selective with WHOM I have a discussion with on such topics ;)

      To me, the ability to argue with a STOP sign, verify, ask difficult questions, and have a lively debate without coming to blows - are the reasons why I blog ;)

      I don't blog to I tell you so!

      I blog to hear different opinions so I too can learn and grow.

      I'm totally selfish!


  6. just last week a friend of mine ask me, "seems like you are doing ok, are you going to quit what you do? isn't it dangerous to keep doing it!" she lost quiet a large sum invest in stocks and gave me a list of stocks she owned and ask me what should she do?, keep them or sell them.

    she is a teacher....

  7. this is another story only happen this weekend, another childhood friend of mine who is doing business and end up with 300k debt! he is getting a bank loan of another 300k and instead of saving his business, asking me to help him to recoup his debt by betting in the stock market!

    i decline his request...

  8. coconut,

    If only we treat investing with the same professional respect as trading, less damage may be done to bei kambings who were misled with slogans like:

    1) Its for the long term...

    2) Blue chips are safe...

    3) Got dividends why you worry...

    As if scoffing trading as "gambling" will make retail "investors" holier than thou...

    Gambling is investing in things you have no clue on!

    The moment anyone asks such questions:

    a) What should I do?

    b) Should I hold or sell?

    They have become like what I wrote previously - headless chickens.

    I've been there before.

    I promise I'll never go there ever again.

  9. you might be thinking why he is so stupid, but he is not! he think his business is in a path of no return and so as his mountain of debts. ofcos this is his words not mine.

  10. what is left in her portfolio are the blue chips, others had disappeared. one of her big lost was chartered semiconductor which no longer exist. she feel so helpless and heart pain, this is her hard earned money as a teacher!

  11. temperament,

    The 3 main Abrahamic religions as in Judaism, Christianity, and Islam all viewed suicide as a sin - although this view is no longer taken for modern Judaism where death by suicide is more akin to a disease or disorder.

    However, it gets murky when it comes to giving up your life in the name of a Holy war like the Crusades...

    Which brings the question back to the concept of faith or logic - I see it more in terms how "persuasive" the shepherd you following is.

    As to the concept of AMD or euthanasia (no sugar coating), I think that's a test of conviction for religious people.

    Your maker is calling you home, yet you fighting tooth and nail to avoid going home...

    I see you and your wife are both at peace and have embraced his Grace in deed; not words written on water ;)

    Peace be with you, man of the cross.

  12. coconut,

    I've made good money during the cut-sourcing boom of my time with Omni-industries, JIT, etc.

    Then I over stayed my welcome and held on to Jurong Tech which went to zero :(

    Just like yesterday's China stocks play, Myanmar story play, Water stocks play, and Oil and Gas play, it would have been better if retail "investors" knew how to BUY and SELL.

    Blue chips may not go to zero, but a 50% loss is still a 50% loss...

    Buy and hold is like passive investing in disguise. What you expect if its a "Look ma! No brains needed!" strategy?

    I say this with utmost humility.

    Its like we've both realised - trading or investing is a full time endeavour. Of course can do part-time, but its definitely not 5 minutes a day...

    Its a craft.

  13. lately i over heard many people had been buying banks issue bond fund disgiest as some safe fix deposit with good returns for the pass years.

    this is a time bomb waiting to be exploded! ameture just don't weight risk vs reward, its a matter of time they get into trouble!

  14. same for passive income, many jump into real estate investment looking for mere 2-3% returns, and ofcos the all time favorate stock market!

  15. sold my appartment in may, now i'm homeless!

  16. coconut,

    And that's not gambling?

    It's not that bei kambings don't weigh... They can't as they understand not what they buying into...

    If they only knew smart money invests in bonds for capital gains; not income...

    Ha! What took you so long? Playing the sell first, rent, and buy back later game?

    If I'm your wife, I'll lock the money from the property sale away from you least you start tapping it as turbo boost to your trading account!

    Ring fence it!

  17. coconut,

    The behaviour of your businessman friend is not uncommon.

    Same for many corporate people too. Career not going anywhere and instead of fixing the problem where it lies, start embarking on a journey of financial freedom as a means of "escape"...

    That's where vultures will come offering quick promises to fill the holes in their hearts.

    If the financial snake oils don't get them, the prosperity evangelists will.

  18. Hi SMOL,

    What a statement to make on a Saturday morning! Luckily I only read this on a Monday! ;p

    1. Welcome back trader friend!

      Your radio silence has been too long!

      It seems no one wants to dispute my irreverence ;)


    2. Well I think a trader gives off the feeling of being a mercenary whereas an investor makes one think of a wise sage so can you imagine a failed mercenary becoming a wise sage over time ;P

      Also wonder how to encompass both personalities in a person to be successful at both....

    3. Joyce,

      It's back to labelling...

      I hope one day I am good enough to call myself a speculator ;)

      Baby steps. I'll settle for trader at the moment.

      Not everyone can be bilingual as big daddy have found out.

      A few are polyglots, most of us are comfortable with bilingualism, while some are just monolingual no matter how much we hothouse or brainwash them.

      That's one of the unintended benefit of investing/trading - we get to know ourselves a lot more than we've bargained for!

      Some welcome the truth; some just want to deny everything as the truth is not congruent to the mental projection of themselves...

  19. temperament,

    We have.

    Stephen Hawking has warned us about Artificial Intelligence.

    And human beings now can create life where there is none before - cloning.

    At the moment its only with animals. One day, someone will clone another human...

    That would shake a lot of foundations... If we can create life without a soul, that would put into question whether there is a soul in the first place...

    We can't help ourselves.

    The seed of self-destruction lies within each creation by men.


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