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Wednesday, 2 January 2019

Where I fall, where I stand up - My 2018 Trading


After my first losing year for 2017 where I lost -8%, all things being equal, I guess I can say I'm mildly pleased with my trading performance for 2018.

I've made $0.66 cents last year.

Or 6% gain on $11 capital for 2018.



Now for a bit of statistical manipulation to show how easy we snake oils can fool bei kambings.

If I were selling courses or subscription services, I will stress and highlight the swing from -8% loss to +6% gain.

Those "poor" in math may be tricked into thinking its a 14% super performance for a horrible year!?

LOL!



That's why I prefer to count in dollars and cents. Harder to manipulate. 

Is that why those skilled in fundamental analysis put a greater weight on reading the Cash Flow statements?

If you didn't know already - profit is just an accounting treatment.



OK, now to pour cold water and ownself poke ownsel!

As a trader, I find myself taking a much longer perspective than most so called retail "investors" who tend to get overly excited or pessimistic over their annual performances....

Some even track LONG TERM performance monthly?

Let's put into the perspective from where I've started with $1, then its easy to tell I've been treading waters for the past 2 years:


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)

2017 - Down -8% (Opps!)

2018 - Up 6% (Road to recovery?)



$1 has turned into $11.66 in 6 years.

2 years ago, it was $1 turned into $12 in 4 years.

Hello, I'm still down...



And want to know what's more critical? 

I've lost 2 years.

Money lost can be recovered. Time lost is forever gone...


Youths may not fully appreciate this statement; "lau kok kok" old fogeys out there may understand it better. Wink.





P.S.  Newer readers who are interested to get the full context and perspective of my previous trading performances, you can click on the "Trading Performance" at the end of the blog post below.

Or find the "Trading Performance" tab under "My Interests" on the right side column of my blog. 









54 comments:

  1. Better to look at both number - actual dollar value and % as a pair.

    Same looking at dividend yield. It is always dividend yield and dividend payout ratio as a pair.

    ReplyDelete
    Replies
    1. CW,

      Up to you lor!

      I prefer to look at the raw data and convert it to ACTIONABLE information myself.

      I was a navigator for 9 months (hated every moment), and often had to do the powerpoints for my "ang moh" bosses as they discovered I'm good at "manipulating" data or turn information overload into actionable statistics that scream action!

      Well, its like what they say:

      "Never trust a statistics that you've not personally manipulated yourself!"

      LOL!


      P.S. Wouldn't comparing the DPS (cash out) versus the Cash Flow statement (Cash in or out?) be more illuminating?

      Shh...

      Delete
  2. Happy New Year SMOL, wow $1 to $11.66, respect ...

    ReplyDelete
    Replies
    1. Yaruzi,

      Happy New Year to you too ;)


      Let's hope my trading performance is not like fireworks...

      Started out with a loud bang and full glory, only to fizzle out in the end...

      LOL!


      Delete
  3. Hi SMOL,

    Thankfully you are not trading for a living. That would be even more stressful lol :) Now is on time on target. If bad year, eat mee pok. If good year, throw in an abalone or two :)

    ReplyDelete
    Replies
    1. LP,

      Trading for a living without a regular income is damn tough!

      Hence institutional traders have a basic salary. Performance sucks, end of year kenna fired. Performance good, big bonuses!

      Most independent, self-employed traders soon learn they need to supplement their erratic incomes (or make whole their busted accounts) by giving courses or selling trading ideas to bei kambings. Especially if their trading performance is so so...

      Some depend or live off their working spouse until they can join the 10% club of traders who make money.


      Its a hunter profession ;)


      Delete
  4. Hi SMOL,

    Gong xi gong xi! Good performance in a red year. :D

    "Some even track LONG TERM performance monthly?"

    LOL! Tell me about it

    ReplyDelete
    Replies
    1. Unintelligent Nerd,

      I could have done better... But I'll take what the markets give me ;)


      Mutual funds and hedge funds do track monthly performances as they need to keep clients abreast of what's going on. Plus the fact they are "active".

      But if one is a part-time DIY long term retail "investor"?

      Its not as if you're going to change or switch strategies on a monthly basis right?

      And if we spot a self proclaimed passive indexing investor who tracks performance monthly...

      LOL!

      Delete
    2. Hi SMOL,

      There's no harm in doing 'monthly monitoring', but having monthly action... that says something else. I read one article about interviews with the rich - some check their portfolio daily but they very occasionally make changes to it.

      Really salute you for making money in the volatile 2018 market. What is the 2 lost years about? I thought you only make a loss in 2017.

      Hope the market will treat us better this year. :)

      Delete
    3. Rainbow girl,

      Monitor or check if they meant looking up their current prices is one thing. Like reading the papers and then going to the business finance section.

      But to take the time to calculate profit and loss, convert them to percentage, annualise monthly percentage to project the theoratical yearly gains/losses???

      Do graphs and charts some more!?

      Yet do nothing and see their stock holdings decline 20 to 30%...


      I would have thought taking some action is better than just monitoring?

      But no... They are LONG TERM buy-and-hold "investors". If so, why the need to monitor their investment performance monthly???

      Got the poke?



      Girl, you must be weak in math like me too...

      Beginning of 2013, I started with $1.

      End 2016, I turned it to $12.

      End 2017, I "gostan" back to $11.

      End 2018, I recover a bit back to $11.66.


      My trading account did not grow for the past 2 years... In fact lost money. 34 cents to be exact!

      LOL!


      That's how snake oils use misdirection to show what we want to show.

      1. Just conveniently stress the 6% gain for 2018 in a difficult year, and "cover up" the fact I've lost money for the past 2 years...


      2. Or like I've shared in my post, highlight the swing from minus 8% to positive 6% to give the illusion the percentage gain is even bigger! Try this on your "slower" friends next time!


      3. Or keep talking about past glories like how I turned $1 to $12 in 4 years. This technique used by "gurus" a lot about their time when police wear shorts!


      4. Or simply grey everything out and just focus on how I turned $1 into $11.66 in 6 years. Don't give year by year breakdowns ;)


      See?

      Next time don't believe any statistics you've not personally manipulated yourself!

      LOL!

      Delete
    4. One trainer still showing his dividends received on Check from CDP donkey years ago. That picture of check is of museum class. Lol

      Delete
    5. CW,

      Its better to live in the here and now.

      I also used to have a 27 inch waist, porcelain white skin before NS...

      LOL!


      Delete
  5. smol,

    the world is a relative one!

    how you compare a chicken and a duck? a a galaxy and a snail? does it means that the duck is always better cos they can swim or the galaxy is always better just becos its big? you can't compare them if you use absolute term.

    ReplyDelete
    Replies
    1. so if you have a 6% return for 2018 and the rest of the traders are under water or flat(out of the market), you may have a high chance of getting the "best traders" award.

      Delete
    2. last point, i don't know why others do monthly or yearly report cards but i do know that i do it is not just a report card but you can analysis the changes in time(market condition) or through the passage in time.

      Delete
    3. coconut,

      Nothing wrong with monthly report cards or KPIs - if we are doing something about it ;)

      Active fund managers do it; traders do it (I don't).

      I'm poking those who do it monthly but never do anything about it (buy or sell).

      Like those idiot managers in my previous corporate life who always asks for reports after reports... Analysis, and more analysis!?

      Why? To delay making any decisions mah!

      That's why my bosses noticed my KPIs reporting style - it screams ACTION.

      LOL!

      Delete
    4. ya, flankly i don't physically do it also, its all in my mind!

      Delete
    5. coconut,

      We same same. 心中剑。


      You can't buy anything with percentages or relative performance.

      $10K account made 50% gain versus $10 million account with 10% gain.

      Who is the better trader?

      If I'm a gold digger, I'll know who to seduce!


      Same for a guy who saves 50% of his $5K salary versus a guy who "only" saves 10% of his $20K salary.


      Absolute performance is pecking order reality; relative performance is everyone and anyone can do it!


      P.S. Want to bet there'll be people who have no problem lying to themselves that the guy who save $2,500 is "better off" than the guy who only managed to save $2,000 from the example above?


      I blame it on my Zen training.

      That's the curse of looking beyond illusions to see things as they really are :(


      Delete
  6. Bro SMOL,

    .66 cents per dollar translates to $6,600 per million dollar. What is the capital size for one to survive on that income a year?

    ReplyDelete
    Replies
    1. Sanye兄,

      Eh... You still got New Year party hangover...

      $0.66 cents per dollar is equal to $660,000 per million dollar ;)


      In dollar terms, my performance last year is not so far off from my first 2013 trading year.

      2013 I made $1 - in percentages its a 2 bagger.

      2018 I made $0.66 - in percentages its 6% :(


      And if I measure my 2018 $0.66 cents over my initial and starting capital of $1 from 2013, my return in percentages all of sudden becomes 66%!?

      LOL!


      I hope I am confusing someone!


      Some mutual funds use this trick. By choosing 2009 as index 100, everything will look good, gooder, goodest afterwards!

      But if use 2006/7 or year 2000 as index 100, now not so sexy anymore...



      In Singapore, the minimum PC requirement to be a full-time trader at
      our local brokerages is $50K. Must take SGX Approved Trader Training Programme (ATTP) exams and all that. Not suka, suka kind.

      To qualify for the special low rates, you must generate enough commissions of around $3K per month to your broker. And that translates to around $500K worth of equities transactions per month ;)

      Very hard to trade for a living with $50K; although it can be done.

      If my $1 = $50K, my trading account would be slightly more than $500K now ;)


      As with all new businesses, the no.1 reason for bankruptcy is under capitalisation.

      The more capital, the better! Ideally around $250K to trade for a living?



      Delete
    2. yes capital - 多多益善

      Delete
    3. this phase came from, in my opinion, the greatest general in our human history (political aside) - 韩信

      Delete
    4. many of his idealogy can be apply to trading, he wrote 3 "books" on military strategies unfortuantely, they were lost in history, otherwise....

      Delete
    5. coconut,

      韓信點兵,多多益善!


      Not bad, you know Chinese history ;)


      韩信 is definitely one of the great military geniuses of our 5,000 years Chinese history. Its unfortunate he died the way he did.

      Too high profile also no good for our health :(


      All the military and great Chinese classics can be applied to trading.

      Same with Tao and Zen.

      At the end of the day, you and I both know trading is about 自比自己。

      Mastery of our own psychology; ability to anticipate the actions of others.


      Delete
    6. my history is A1 you know!

      韩信 is genius amoung the geniuses, every battle he fought is an art, without his own political support (he is a political moron) his mission his boss give him is next to impossible! with so little army his boss gives him, it only take him 4 short years to take down the entire empire, the speed of conquaring is equal to alexandra the great!

      Delete
    7. coconut,

      失敬,失敬。

      I got eyes no see Tarzan! (泰山)


      刘邦 knows how to leverage on Other People's Talent (OPT)!

      This is how it is.

      Most of us are helping others achieve their dreams...

      And when we've outlived our usefulness, we'll be sent to the glue factory like in the Animal Farm :(



      Delete
    8. if 韩信 were to take down his boss 刘邦 and became the emperor of a new dynasty, his name will be right up there with napoleon, alexander the great, and perhaps genghis khan. but unfortunately he is a political moron!

      political achievement aside, undoubtably if recorded history is correct, the greatest military general ever live!

      Delete
    9. coconut,

      Wars are fought by young men; the spoils of war divided by old men.


      I was a bit bemused when I stumbled on to the discovery the less I do, and the more I talked, the more I earned!?

      No wonder landowners always exhort hard work, study hard, and all that jazz!

      When was the last time you saw landowners tilling the fields?


      Delete
    10. Wow there are great historians among us.

      Salute to both of you.

      Delete
    11. Sanye兄,

      coconut is the real deal.

      I'm the one bluffing my way through... I got F9 for history.

      I like history lesson; just never bothered to memorise the 10 year series for exams ;)


      Delete
    12. 韩信 served under 項羽 before he worked for 刘邦. Under 項羽, he was given low-ranking tasks like guard duty and meal preparation for soldiers. He was not the typical chao-keng NS soldier who aspired only to be cook, clerk, driver. So, like any able, ambitious but under-performing worker, he quitted his job to find another one. He joined 刘邦. Good luck for 刘邦 (who almost screwed up like 項羽) and big mistake by 項羽. 韩信 played an instrumental role in helping 刘邦 defeat 項羽 later. One of the biggest mistakes a leader can make is to drive good men away to his enemy.

      Delete
    13. hyom,

      A good test and experiment on how well we can learn from books or others.

      We know we should attract and retain talent. That's a given.

      But what do we do in our corporate life?

      During interviews, do we recruit the talented one, but may "threaten" us in future...

      Or do we hire the OK, so so one whom we think we can "control" better?


      If we are our own boss as in the business belongs to us we may go one way.

      If we work for others, we may go another way...


      Along my chequered career, I am aware sometimes I've been hired because I'm one of the better candidates.

      But there were times I've been recruited precisely because I'm a white piece of paper - no qualifications, no prior experience in that industry.


      From the hiring practice of our managers, we can tell whether he belongs to the EARN MORE (ambitious) or SAVE MORE (status quo) camps ;)

      I work best with ambitious leaders :)


      Delete
    14. SMOL,

      Not all EARN MORE (ambitious) leaders will hire based on merit. Some will still hire less capable but more obedient, controllable job candidates for selfish reasons. The problem is ambition does not go hand in hand with ability. There are managers who aren't the best people for the job based on substance but they climbed to the top through unproductive political games. These ambitious but less able people beat the competition because the abler competition had lesser ambition and lacked the drive to compete for the top position.

      Maybe these managers should thank capable but less ambitious people in the FIRE community. I too strive for FIRE and I readily admit there are certain aspects about FIRE that makes me uncomfortable.

      Delete
    15. hyom,

      It seems my experience differs from yours ;)

      To get things done, ambitious people will surround themselves with hired guns and sellswords more competent for the task than himself.

      When the deed is done, there's always time to do weeding of those who get too ahead of themselves, too greedy, hard to control, etc...


      Why would anyone surround themselves with mediocre help unless the shepherd has a self-esteem issue or doubts his own abilities? Afraid to be outshone by his own flock?


      There are carnivores.

      Then there are herbivores.

      And there's omnivores like me.


      Herbivores are great as pets; they make lousy leaders though.


      Delete
    16. Hi Jared,

      Can you explain what do you mean by carnivores, herbivores and omnivores in your dictionary? Why do you call yourself omnivore?

      My philosophy as a salary worker is that I need to help my boss get promoted so that I deserve to get promoted. 韩信 had no loyalty to his boss. 年羹尧 acted like he is the boss instead of worker. I watched ‎雍正王朝 a few times. Nian GengYao sat on horse while Yong Zheng congratulated him on his victorious return from war. If want to act like boss, then don't be salary worker and build your own "empire". If want to be salary worker, then observe the code of conduct in this job role. Of course, pick the right boss, otherwise loyalty is meaningless.

      Delete
    17. hyom,

      Listen to yourself. How many times have you mentioned your boss decides?


      Carnivore - No kill; no meat. Their fate in their own hands. They decide and determine the fate of others. Landowners.

      Omnivore - Can kill; can eat grass. Flexible. Eat grass while waiting for opportunity to replace the landowner. Why do all the work to benefit others? Shepherds.

      Herbivore - Eat grass; can't kill. Sheep. Shepherd says go left, they go left. Landowners decide whether they want wool, milk, or meat from herbivores.


      韩信 and 年羹尧 are definitely not herbivores. Their mistake were to show hand "too early".



      Delete
    18. The boss decides means the boss always has the final say and the salary worker must follow even if he disagrees. Sure can disagree, voice out. But if boss doesn't listen, worker not happy, either change boss or become your own boss. Take people's money, then do people's bidding. That is the code of conduct I expect from people who take my money and what I will do when I take other people's money. The person who controls the money decides.

      I disagreed with what 韩信 and 年羹尧 did because I don't like salary workers who are carnivores. Be your own boss if you want to be carnivores and not traitors who make hostile takeover of your benefactor's family business.

      If 年羹尧 were an omnivore, then he miscalculated. 年羹尧 didn't live in the right time and environment. Besides, 年羹尧 had a good boss. Very hard and too risky to be your own boss when the entire 天下 belong to an Emperor who is still doing a good job and the punishment is 株连九族. This is very different from the business world today where an employee omnivore can start a niche business which does not compete with his current employer. Or he can trade/invest for a living as a one-man show which does not conflict with his boss's interest. In the commercial world today, the omnivore worker can live harmoniously with his carnivore boss if he plays the game correctly. It's different from the political world which 韩信 and 年羹尧 lived in.

      Delete
    19. hyom,

      Notice the landowners of both 韩信 and 年羹尧 were DECISIVE the moment they discovered their shepherds were getting too ahead of themsevles?

      That's why wealth never lasts more than 3 generations...

      "Landowners" who inherit their empires are not always carnivores...

      Not when they are "passive" and totally dependent on their shepherds.

      History is replete with examples of stewards kicking out their incompetent and docile masters and putting themselves on the throne.

      That's why I like to poke "passive" ;)






      Delete
    20. 天下 belongs to 天下人 and by right, not to a certain family. When the Emperor is doing a good job creating value for the people, 天下 belongs to him. When he or his descendants fail to do a good job, they should be overthrown. Loyal herbivore subjects is doing a great deed for the people if they transform themselves into carnivores and make a hostile takeover when the rulers are incompetent. When Emperor is good, herbivores should stay as herbivores and serve the benevolent carnivore boss with loyalty. Win-win for all.

      The landowners of both 韩信 and 年羹尧 did a great deed serving the people when they kicked out the incompetent rulers.

      年羹尧 had a good boss. He was lucky to have a good boss who grew the empire. His prospects will be bright if he had stayed as a herbivore. He deserved his fate.

      Passive means low activity but not total inactivity. Knowing when to act once in a blue moon is more difficult than acting frequently. Productivity is also much higher and cost is lower.

      Delete
  7. Hi SMOL,

    Very good performance, particularly for the last 2 years although you said those 2 years were lost years. The initial 4 years was a 12 bagger. But I still say the last 2 years impressed me more. If a trader made a 12 bagger in his first 4 years, I will be both worried and impressed. Worried because I will be wondering if he is taking too much risk to achieve that 12 bagger. This is why your -8% performance in 2017 is impressive. Drawdown in bad year was small compared to the gains in good years. This is indicative of good risk management. 2018 performance was non-correlated with the general market. Many investors would love non-correlated performance for hedging purposes. 6% in 2018 is not to be sniffed at. 6% in 2018 means you have beaten people from the investing giants like David Einhorn and Daniel Loeb to the nobodies like me. LOL.

    Well done. Hope you have a multi-bagger performance in 2019.

    ReplyDelete
    Replies
    1. hyom,

      Yes, that's conscious risk management on my side.

      Despite growing my account from $1 to $10, I've only doubled my trading position size.

      That's akin to shooting my own foot. The more the account grows, the more I "underperform" when counting in percentages.

      There's a reason why I count in dollars and cents ;)


      Most newbie traders would increase their trading position size in accordance to their account size.

      Had I increased my trading posittion size by 10 times in 2017, I won't be losing "just" -8%...


      That's how traders bust their accounts even after several years of good run. One bad year and they are ruined...


      I'm not smarter than others. Been there, done it. The difference I guess is I have profited from my past "crash got sound" ;)


      Delete
  8. Hi Hyom,

    In the end, 韩信 ended up being eliminated by 刘邦. This goes to show that it does not pay to follow a leader.

    My two cents worth of views.

    Ben

    ReplyDelete
    Replies
    1. "In the end, 韩信 ended up being eliminated by 刘邦. This goes to show that it does not pay to follow a leader."

      If you don't own the job or the business yourself. You can be sacked or retrenched or retired.

      Delete
    2. Hi Ben and Createwealth8888,

      I would not put the blame entirely on 刘邦. At one point during the war with 項羽, 刘邦 was under grave danger and called for 韩信's help. 韩信 refused to send troops to help until 刘邦 agreed to his request to be made a King. I see this as the critical event that sealed 韩信's doom, after the war was over when he became of lesser use to 刘邦. 韩信 had it coming, thanks to his over-ambition and lack of loyalty. It is ok for an ambitious worker to ask for promotion. But it is not ok to blackmail the boss into giving the promotion and take advantage of the boss when he desperately needs help urgently. A loyal worker should help the boss first, score some achievements, then ask for promotion but not before.

      Delete
    3. hyom,

      Those who are fans of 韩信 would probably lament 韩信 should let 刘邦 die there and then, and just replace him.

      That's what is meant when we say 韩信 not "political" enough ;)

      Do also die; don't do also die. Then might as well go full carnivore mah!




      Delete
  9. wow haha, i actually agree with hyom, 韩信 is a polical assh..., moron! well lets put all these aside and study in depth his battle, absolutely outstanding, genuis!

    ReplyDelete
    Replies
    1. coconut,

      The same can be said of 年羹尧.

      雍正 "loves" him so much yet he had to be an ass and forget who is master, who is servant...


      In politics, women and clothes can share. Power? In your dreams!


      Siblings and parents all can be "sacrificed"... What more can we say?


      Now that's the epitome of:

      Success is what you have sacrificed to achieve it!

      Delete
  10. Quite interesting.

    If Han Sin didn't help Liu Pang, still will he succeed as the next King?

    i doubt it.

    By asking some one's permission to be the king, he had shown he was not fit to be the king.

    He had shown he didn't have the IQ and EQ to be a king if history was correct?
    //
    Rare is the person happy to be second in command after the war was over.

    Even when the country was in peace time, Chinese history had shown it was never easy to live as one of the royal princes in any dynasty.

    There were intrigues and murders among the royal family, each one viving to be the next king.

    And the king was ever worry about keeping his sons toeing the line.

    ReplyDelete
    Replies
    1. temperament,

      Don't need to look at empires and countries.

      Just look at the listed companies and family businesses.

      Often we see the original founding partners of a successful listed company leave one by one until there is only ONE.

      Same for family business where once the Patriach leaves to sell salted eggs, nephews, nieces, cousins, uncles, and aunties start taking each other to court...

      Even lao lee's case is merely reflecting every family same same - got one difficult to chant sutra...

      Group dynamics ;)




      Delete
  11. Indeed!

    We all can't escape being human beings.

    But the higher animals like the monkeys, lions have their political games too.

    Only we are more brutal - killings up to ninth generations in ancient times of Kingdom.

    ReplyDelete
    Replies
    1. temperament,

      Humans like to think of ourselves as the only "intelligent" specicies, yet we are the most cruel "animal" of them all.

      Only humans kill for sport; other animlas only kill for food or survival is threatened.


      Small correction.

      Humans where got so long life as in 9 generations all living together at the same time?

      The 9 generations comprises:

      1) 4 generations up and down on the Father side.

      2) 3 generations up and down on the Mother side.

      3) 2 generations up and down on the Wife's side.


      In general, I take pride in our 5,000 years of Chinese heritage. But there were times where I'm not so proud to be a Chinese... This is one of them.


      I'm a believer in taking personal responsibility.

      Delete
  12. OIC!

    So that's up to 9 generations mean.

    U really Chinese cultured?

    ReplyDelete
    Replies
    1. temperament,

      My brain thinks in England; my heart sings in China ;)


      Young that time, you'll never see me in Chinatown or shopping at OG. I'm Orchard Road Robinsons and Metro guy.

      Now middle-aged, I spend most of my weekdays at Chinatown; my shopping in recent years also at OG!?

      LOL!


      I'm going through my China renaissance...

      You think why I write in Chinese once in a while?



      Delete

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