How to tell if you're good at investing?
Its the selling or exit part right?
That's where you get the "respect" from other veteran old muttons.
And your wallet will thank you!
Even if you got the rock bottom entry buying price, at best you get compliments you lucky this, you lucky that...
Tio bo?
Just look at your equity curve and compare that against a broad-based market index like S&P500 if your universe is US mkt or STI if your universe if Singapore. Look over a 10 year period that covers both a bull and bear market. Yes, it takes that long to know if you are truly good...
ReplyDeleteMacroanalyst,
DeleteYes, 10 years is about right ;)
Just like in our mid 30s, after 10 years in the corporate world under our belt, we'll have a pretty good picture whether we'll continue up to top management...
Or be stuck in middle management...
Or worse, get kicked out as the corporate life is not for us...
Some will go back to school (if you can't; teach).
Some will start their FIRE dream as plan A (condemned anyway so trading during office hours no more taboo).
Some will say fxxx it! And go on to start their own companies. Now they control their own destiny!
Deep down we know what we are made of; whether we want to admit it is another matter.
Hi SMOL,
ReplyDeleteWhatever happened to your "a merchandise well bought is a merchandise well sold"? 😝
Imagine someone getting caught up in stocks euphoria late 2007 and then selling in 2013 to "break even" ... and then getting interested again in stocks at end-2017 and now waiting for another "break even" *slap head*
Hope I'm never like that LOL!
Spur,
DeleteA merchandise well bought is a merchandise well SOLD!
A retailer's main focus is SALES. No one buys merchandise just to add to inventory. That kind of buyer will be fired in no time...
When there's a sale, only then can we pay the workers, rent, our suppliers, and finally profit for ourselves - provided the merchandise was well bought in the first place!
That is why for us old fogeys, with the benefit of painful experience, we give a lot more respect to those who can sell well over those who had bought well ;)
Selling well is a lot harder!!!
Yup yup!
DeleteGood selling strategy can also help with bad buys (on hindsight).
Good case study can be Hyflux Pref Shares & Perps --- when should an investor admit a mistake & jettison a stinker? :P
Spur,
DeleteSelling to take profit near the market top is craft, pride, and self actualisation!
Selling at a loss to protect capital is to live to fight another day ;)
Haha...no wonder..I always kenna suan in HW zone forum as the dumb lucky bitch :).
ReplyDeleteLady You Can Be Free,
DeleteWe have seen this movie repeated many times before.
Many got paper rich during the dot-com euphoria of 2000; a lot lesser remained rich because they sold BEFORE 2000.
Same goes for Bitcoin. Buying below USD $1000 is sexy; selling above $15,000 wins a lot more respect!
And the same applies for those who managed to realise their paper gains during 2006/7 before the 2008 GFC rout ;)
LOL! You dare to go to HW zone?
Even I, who likes to poke others, dare not go there...
Lady of your calibre would be more welcomed at Valuebuddies ;)
I never go there. Occasionally I see hits coming from HW zone so I kepo go see what they discuss. Then I wonder what have I done to incur such 深仇大恨。
DeleteHi Lady,
DeleteUnfortunately, in life, success attracts haters. :(
Lady You Can Be Free,
DeleteLOL!
Outside our little bubble, unless we want to sell courses/subscriptions to the public, or monetise our blogs, who crazy enough to reveal our networth and suffer the slings and arrows from internet vigilantes?
Singapore is where those who are earning $10K per month "buay song" their peers are earning $20-30K per month.
Of course its all due to LUCK lah!
If not, we have to face the realities of competence, meritocracy, EQ, craftsmanship, discipline, perseverance, thinking for ourselves, and so on...
To us:
Luck is when opportunity meets preparation ;)
Hi lady
ReplyDeleteIt takes guts to be “lucky”
Anyway, coming back to the discussion of selling. Really not easy. It's fundamentals, technicals, ego, emotions and greed all at play !
ReplyDeleteLady You Can Be Free,
DeletePrecisely.
We may start out as Bottom Fisher, Value, or Dividend investor.
But we invariably end up as Growth "Investor" ;)
Then become "long term investor" as we forgot to sell and let a winning position turned into a loss...
Ouch!
Walao..dun curse me lah :).. Just kidding
DeleteLady You Can Be Free,
DeleteIts like NS.
A rite of passage for most retail "investors".
Survive a 10 year bull/bear market cycle then we can remove the inverted commas ;)
Buy, hold or sell? All equally bloody hard. Don't do stock pick!
ReplyDeleteCW,
DeleteLOL!
That's where the passive indexers come and sell you their, "Look ma! No brains needed!" strategy ;)
If this one blows up, there's is always the voluntary CPF contributions SAVINGS plan.
Look! Investing is RISKY! Trust in big daddy good, better, best!
Talking about big daddy...
DeleteAnyone noticed that NIRC has increased from $15.9B in Budget 2018 to now $17.2B in Budget 2019? 8.2% increase ... big daddy must have killed the markets last year.
Expect big returns numbers when Temasek & GIC reports this year :P
SMOL & CW, actually I was wondering how the index investors sleep well. Imagine you bought in Oct, and it tanked in Dec. Then u pat yourself on your shoulder and say...according to history...it will go up, it's just a matter of when. If you look at the index outside US. All flat for last 10 years. At least, when it comes to stock picking. U can tell yourself many different stories.
DeleteSpur,
DeleteYou very de observant ;)
They have taken profit on their US listed banks (incumbants) and rotated to fintech (disruptors) during 2018 ;)
Would be interesting to see if they are still sanguine on China's prospects going forward as big daddy quite vested into China.
Passive indexers doing monthly DCA don't have to worry much as historical data has proven over a few decades of staying in the market that they had won.
DeleteIndexes are naturally on survivalship. Winners marching on and losers are slaughtered
Lady You Can Be Free,
DeletePassive indexing only took off after 2009 so its still early days as most have not gone through a prolonged period of -20% bear market of at least 18 months?
So far its sunny blue skies as central bankers got their backs ;)
The whole thesis of passive investing is stocks always go up, eventually... But need to sit tight for 20-30 years.
If in 20-30 years it doesn' work, where you going to find the snake oil who sold you that idea for your money back?
LOL!
i guess nobody has studied the nikkei chart...it's still 45% away 21425 from the peak 38916 in 1990 after 29 years.
DeleteShh....
DeleteIf we point out that passive indexing is not "bao jiak" for ALL markets, then its no longer, "Look ma! No brains needed!"
What? Must pick and choose which markets to passive index? That's too much work...
OK, I'll default to STI ETF!
If STI crash, then whole Singapore would too!
So I'm safe. Won't crash one!
Go with a global index ... both losing countries & companies will be slaughtered, while winning ones march on ;)
DeleteIWDA, VWRL, and VHYL listed on London exchange are popular with Sinkie indexers.
Of course if there's a major nuclear war, global index also kaput.
Spur,
DeleteThat's better!
At the very least, these passive indexers know what is single country narrow focus risks ;)
But then, we will always have those "giam siap gui" penny pinchers who complain about foreign exchange hedging costs and foreign shares custodian charges...
Not low costs leh...
Want SQ service but wish only to pay budget airline prices :(
SMOL,
DeleteFor those willing to venture, can go with brokerages like IB which has much lower transaction costs & no custodian charges.
People often confuse listing currency & underlying currency.
If a company does business & earns mainly from China i.e. renminbi, but lists on NYSE and priced in USD ... the forex concern for the Sinkie investor is not so much USDSGD, but SGDCNY.
Of course that's if you believe that company's earnings are the fundamental driver of long term stock value :P
Spur,
DeleteThrow in another layer of foreign exchange risks, no wonder even SGX stocks priced in USD are less popular with our local local retail "investors" ;)
But then can't blame them.
Singapore currency strong and stable. So unlike our Malaysian or Indonesian neighbours, we don't have to crack our heads to determine what currencies to base our networth on ;)
We never have to ask, what currency should we base our life insurance policy on?
Hope our "luck" and good fortune holds until I reach 90!
CW, hmm..I am still not too convinced with the DCA strategy...
ReplyDeleteSMOL, which fintech companies did they venture into?
ReplyDeleteLady You Can Be Free (I must come up with a nick name for you...Lucky bitch? LOL! Don't hit the face!)
DeleteI don't know.
I not big daddy insider. Although I used to work below them when I were working weekends at Plaza Sing with Howard's Storage World.
I always hoped their intelligence aura would trickle down to me... LOL!
I suspect its mainly private equity or venture capital when it comes to fintech ;)
Then they can cash out some during the IPOs ;)
I don't mind being the lucky bitch to win the angpao draw tonight :)
DeleteSome not so recent news about Temasek & fintech:
DeleteTemasek ramps up fintech investments
Temasek sells down US banks to focus on fintech
Lucky bitch,
DeleteDon't jump queue.
Manwhore waiting for 30 over years liao.
Give chance!
LOL!
Hi Spur,
ReplyDeleteThanks for sharing ! Can't believed I missed that.
Well, there goes the "market efficient" hypothesis ;)
DeleteBefore an investor can learn to sell well, he has to learn to buy well first. No chance to sell multi-baggers in the first place if the buy is bad. No chance to practise good selling with bad buying. Disciplined risk-management cut-loss selling techniques is useless when buying is bad because the person will die with a thousand cuts eventually. I learnt how to buy well first before I can move on to learning how to sell well. I can't fathom how this step can be skipped.
ReplyDeleteWhen someone boast about selling a XX-bagger, ask him/her how much of the initial capital went into this successful investment. Lots of respect if the most profitable sale is also a huge position. On this count, Lady You Can Be Free deserves my respect for her Starhub sale, even if she says she sold a bit late.
hyom,
DeleteTo use gaming analogy, buying well is early game skillset.
Selling well is late game skill set ;)
LOL!
You don't count in percentages too?
Hi Jared,
DeleteI think in terms of both percentages and absolute value but need to know when to apply.
2 people boast they made $1m investment gain. X has $1m capital. Y has $100m capital. Whose investment performance is better? Use percentage in this case.
2 people boast they sold a 10-bagger. X position size is $20k. Y position size is $200k. Who can achieve financial freedom? Use absolute value in this case.
For practical purposes, think in absolute terms. For performance measurement, think in percentages.
The most impressive investment is one which returns big absolute amount with huge percentage gain. Having said that, I did not buy the $13.6m Toto yesterday.
hyom,
DeleteIf you not careful, you'll become a salesperson yet!
Its all about spin ;)
See human; talk human.
See ghost; talk ghost!
LOL!
Hi SMOL,
DeleteI'm getting confused here. Is that a poke or a compliment?
Feel like compliment especially when this is coming from a good salesman like you. Confused because I'm not selling anything. Where's my commission?!
见人说人话, 见鬼说鬼话 is a core skill-set in life. Certainly nice to have, otherwise offend everyone if a person 见人说鬼话, 见鬼说人话.
I certainly wish I can be a good salesperson. Teach me:)
Hi temperament,
Delete见人说人话, 见鬼说鬼话 doesn't mean cannot talk from the heart. It certainly doesn't mean telling lies. Sometimes, when the truth hurts, better keep quiet. Doesn't sound wise to poke strangers, right? Even if the message is right, it won't get across because the it is the wrong messenger to send the right message. Not effective, yet offend people. Can poke friends, cannot poke strangers.
To me, 见人说人话, 见鬼说鬼话 is about saying the right thing to the right people and knowing when to stay silent. The pre-requisite is know how to read people first, then have the skill to coat the message to suit the audience and finally have the discipline to hold the tongue, especially when dealing with difficult people. It is a core life-skill which I wish I have. No machine can replace a human with this skill-set today.
hyom,
DeleteIts a ball of cotton with a needle hidden inside (棉底藏针) ;)
We don't say it out loud, but deep inside our hearts, we know there's always a more "favourite" children, sibling, parent, and yes, between wife and mom ;)
You say until so nice between abosulte figures and percentages:)
Which is great if talking to boss or clients.
But here at this watering hole?
This is what Hokkiens would say, "Got say like never say..."
Or "Everything you say one. Human also you, ghost also you... You win liao lor!"
Pick a side ;)
Then we can start having fun!
LOL!
Hi Jared,
DeleteYou ask me to pick a side. So, my preference has to be absolute amount earned for practical purposes. What's the point of feeling good about XXX% multi-baggers when the absolute amount gained is not meaningfully large enough to make a substantial improvement of standard of living for me and my loved ones? Having said that, every practitioner who is serious about this craft will measure his performance in percentages though he needs to use the right percentage measurement method, not an inflated one to make himself feel good. Maybe if he is a career professional, he may deliberately choose a measurement method to inflate his performance to look good, but I don't care about wayang shows because I am retail investor managing my own money.
I think in terms of both percentages and absolute value. Let's use myself as an example. I made triple-digit gain in percentage in an individual stock position before in my portfolio. As I said before, when someone boast about selling a multi-bagger, ask him how much of the initial capital went into this successful investment. So, if I were to ask myself this question, one weakness in my investment process is revealed. I have an obsession with diversification. Result? Impressive percentage gain in the individual stock position but unimpressive absolute gain for that winning position because portfolio is too diversified.
hyom,
DeleteThank you!
The conversation has become more interesting now as its no longer "talk male-chicken" ;)
My poke on percentages is merely a coaching tool or catalyst to get readers to question their long held "beliefs".
What's more important is the PRACTICAL rubber hits the road application of what we think we know ;)
For your case, its your obsession with "diversification" - or conservatism, or safety first, or kia si/kia su, or playing for a draw result, to use a soccer analogy.
To another person who vested 50% of his portfolio in Hyflux's preference and perpetuals... His reflection maybe the opposite of yours...
Too centrated positions; need to diversify more?
And maybe question his math - risk of major damage to capital versus greed for "only" 6% yield?
Would zero yield for outsized capital gains, with the same corresponding risk of major damage to capital, be a better risk adjusted "speculation" instead?
Crash got sound only works if we can think for ourselves and have our own epiphanies.
Waiting for a shepherd to tell us what to do is to invite others not to treat us as an individual, but just as a data point or statistics...
:)
Hi Jared,
DeleteAlways glad to engage in an interesting conversation. Feel free to poke next time but do poke harder because I get confused sometimes.
I would like to tap your Hokkien expertise. You have interesting Hokkien phrases on your watering hole.
These English phrases sound short and witty. Could you help to reveal these words of wisdom in their original actual Hokkien?
- "Crash got sound"
- "Got say like never say"
- "Everything you say one. Human also you, ghost also you"
I'm Hakka. I know limited Hokkien and the limited Hokkien I know are mainly vulgar ones picked up during NS. Can't use on your watering hole.
Hi Temperament,
You are spamming someone else's watering hole. Take the unusual lack of reply or golden silence as a form of message. You are elderly person. So in Chinese culture, it is not respectful for the younger folks to poke too directly.
Hi temperament,
DeleteWait wait! I'm saying it's not polite to spam. Not chasing you away. Don't misunderstand. This is not my blog. I'm not the host. I'm only a guest.
hyom,
DeleteLOL!
I grew up in the 70s where my primary school and neighbourhood friends speak mostly Hokkien ;)
"Crash got sound" - 撞到有声 - long dio wu xia
"Got say like never say" - 有说像没说 - wu gong chi bo gong
"Everything you say one" - 话都是你说的 - wei long zhong li gong eh
"Human also you, ghost also you" - 人是你，鬼也是你 - lang si li, gui are si li
I'm the man with the slow hands mah. Foreplay a bit first.
See the reaction.
Can?
Then poke harder!
Cannot?
Don't play lor!
LOL!
hyom,
DeleteIts OK.
I'm doing my share of public service ;)
Let him do his monologue here. There's no harm.
Better this than let him ownself talk to ownself in public spaces and frighten our women and young children!
LOL!
Hi all,
ReplyDeleteWow. So much happening on this post. It appears that I am late in the show. Better late than never.
My take is that it is better to take it with ease regardless of what happen in the market. Enough to eat and sleep, can already. The rest is secondary. Afterall, it's just a number game.
Ben
Ben,
DeleteIts not a numbers game if we are too heavily vested in the stock market...
Until we have difficulty sleeping...
Its a dead giveaway we are in over our heads!
Or we let the market gyrations affect our day job, and relationships with family and friends :(
From your comment, I see you no longer have a lot of skin in the game anymore ;)
Hi Ben,
DeleteFrom your past comments, I get the impression that you are a stock picker. Is this correct? Is your portfolio mostly made up of passive index funds/ETFs or individual stocks that you pick?
Wah...so happening here.. how come I can't generate this kind of energy at my site ;). Sifu manwhore...can teach some kungfu? Hyom, thanks for the mention.
ReplyDeleteLady You Can Be Free,
DeleteSex, religion, politics ;)
And perhaps not taking myself too serious?
LOL!