Sunday 9 February 2020
How to know DIY fundamental investing is not for you?
1. When you panic buy face masks when coronavirus first hit Singapore.
2. When you monkey see, monkey panic buy groceries Friday and yesterday.
Why fundamentals matter?
Because its useless if you don't base your decisions on facts or logic.
However, don't feel bad or embarrassed.
One neighbouring country's minister was giving out free face masks to anyone and everyone, especially to tourists!? (Wayang?)
Well, it goes to show that being a politician or minister does not automatically make one "smart".
By the way, have fun spotting how many people wear masks under their chins. LOL!
Friday afternoon I went to Sheng Shiong to buy bread and eggs. Saw the large crowd, turned around and went to one of those small mom & pop provision shops. No queue, no wait.
Talk about besides being "kiasi" and "kiasu", people are willing to stand in long queues because they are too "giam siap gui" to pay a bit more?
Or maybe its a case of one track mind at work? Yes, here looking at you to those who study too much until brain "short short tei"...
Ever worked with such idiots at work? Tell them buy rice, they come back sorry supermarket no stock... Can't work out alternatives themselves? Everything must us shepherd decide... Sigh...
Free walk around the neighbourhood provision stores or wet markets. Check out the petrol stations with convenience stores too. What do you see? Any empty shelves?
Eh, if I can't do fundamental investing, and using voodoo charts as in technical analysis is more for trading, what's left for me if I not interested in "Look ma, no brains needed!" passive investing?
Well, there's always Momentum Investing.
We call them the Momo crowd.
To be sure, its not to be confused with Trend Following.
They may look similar, but its definitely same, same - but different!
Trend followers will be the first to admit we are not the smartest car in the parking lot. However, even we would like to keep our distance from the Momo crowd.
LOL!
Don't hit the face!
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Haha! Trust you to use this as a chance to poke people. Common sense or resourcefulness cannot be taught.
ReplyDeletePrice and convenience are common deterrence factors! U-turn at NTUC and went to an ulu supermart with low catchment area instead.
Kevin,
DeleteI'm not a bleeding heart, nor am I the Indian Chief who likes to tell others what to do.
I believe in small governments.
I focus on what I can control (myself), and who I can influence (my mom).
My small contribution is there will be 2 less headless chickens panic buying masks or groceries ;)
Life is a lot lighter and easier when we don't sweat the small stuffs, and don't mind giving TIPs (To Insure Performance).
Smol,
ReplyDeleteI am a bit embarrassed to say this ...
On the night when the news on orange alert, I told my wife I go buy some essentials. (Rest assured I didnt hoard, I think I bought about 1 week of supply, I didn't hit the ration quota if they applied now.
I predicted it will happen, so when I went to the 24 HR cold storage, there is only 1 more person buying more than usual, there is also no queue.
Investing is about projecting the future and taking an action
My mum in law who is panicking now laugh when I bought the food home. Now she keep asking if we need to stock up more???
I say no need, because once people see the shelves can restock, the craze will reduce. Also I told her we haven even start cooking our stock. This is call "fear of losing out"
On a side note, I am happy the NTUC start rationing purchases. This should have applied to masks much earlier, given there is world shortage .
There is no world shortage on food, so I told my mil the situation is differnt.
However, it is going to be a different story if the shelves cannot restock.
DeleteUnder normal circumstances, I would not rush to buy food. I must say my trust and confidence is badly shaken when our minister say they are going to release mask supply to NTUC and retailers in 新城今日，and then masks are no where to be find in a week.
Deep inside, I ask myself if the same happen for food, how? Although I think it's very unlikely
Risk management? I take no pride in being right about my projection of the rush to hoard food.
DeleteToilet papers came as a surprise though. Cannot use water rinser???
Sillyinvestor,
DeleteIntellectuals have a moral responsibility to act and speak in a manner that lifts society as a whole up, not throw in one's lot with the masses that have not had the same privileges in education or upbringing ;)
I feel quite bad when the social media is slamming those who went to buy food. When my MIL told her relatives what I did, their fast reactions are "siao", but they got worried and ask their loved ones to try and get from supermarkets when they heard the mad rush, I wonder who is "bad"
ReplyDeleteBuying food is no wrong, but overbuying that is, reflects the ugly behavior of some people.
DeleteSillyinvestor,
DeleteImagine if you had NOT acted as "first mover", your mil would not be "influenced" by your action.
She in turn will not spread panic to her relatives (we empathise, the idiots are always on her side of the family).
Are you a super spreader?
What's uglier than panic food hoarders?
Those IDIOTS who swipe food and essentials off the shelves, find the queue too long, just left their shopping baskets and trolleys and walked out the store?
If you feel bad, how about sparring a thought to the poor supermarket staff who had to sort and put these discarded food back to the shelves...
At the same time had to endure customers' frustrations and complaints:
Why queue so long?
Why shelves so empty?
When got stock huh?
Third world ugly behaviours should rightfully be called out.
No point hardware infrastructure world class; software KNS...
Yah, I was forced to go buy my lotti from 7-11 ten metres away ... gotta suck up & pay full price for branded bread instead of the discounted no-brand bread. Grrrr! LOL!!
ReplyDeleteWhen I saw 100 people carrying 3L bottles of detergents & rolls of toilet paper, I thought got diarrhea epidemic.
Btw, my 30-roll NTUC 3rd class toilet paper still haven't use finish even after 3 years (I bot in 2016)... That means less than 1 roll per month ... Don't ask ... I don't think I got constipation leh...
My wife uses atas 3-ply & regularly replenishes. Told her Fri night --- sorry honey, need to wait 3 more days for resupply! LOL!!!
BTW, there's smart momo & dumb momo. Similar to trend following, they use rate of change to monitor when prices (1) may be looking to go in a different direction, (2) appear to have changed direction in a sustained manner, or (3) whether prices can continue to go in a certain direction.
Spur,
DeleteI learn something new.
I didn't know toilet paper got HER and HIS versions for married couples!?
LOL!
In supply chain lingo, you believe investory is an asset; while your wife is more into Just-In-Time ;)
Well, those overseas car manufactuters who are in your camp are less flustered than those who bought into LEAN or JIT...
Similarly, if any hospital would like to introduce JIT to their blood banks, I would recommend the proponent to do a psychiatric test first!
You sure know your trading stuff ;)
Although the "smart momo" people you mentioned would prefer to call themselves - Order Flow Traders.
Like I've said, no one wants to associate themselves with the MOMO crowd!
LOL!
Investing is for u if u
ReplyDelete- buy a day advance because you anticipate the mad rush.
- react and buy ShengSiong.
Don’t worry,I will release those shares back on Monday if the price is right. Lol
Deep down, you know China is Fked right? The only way out now is they better pray there is a vaccine or cure soon.
Guess which country outside China is going to get affected most badly?
WolfT,
DeleteThe question for traders and investors is WHAT have we done to profit from the irrational behavior of others?
Go buy toilet paper instead of putting on a position? Really?
Before anyone accuse me of being heartless and mercenary, what do most retail "investors" like to parrot?
Buy when there's blood in the streets?
And you probably think "investing" is a contactless sport...
Beijing, Shanghai, and Guangzhou are the 3 most important cities for economic vibrancy.
Guangzhou is already under lockdown - China won't make this decision lightly. Its a tell.
When we are caught in an extreme cold environment, our bodies would concentrate and conserve heat to the vital organs like brain, heart, lungs, etc.
Fingers, toes, limbs can be sacrificed to gangrene...
China is pulling all the stops to ensure Beijing won't be under lockdown.
Your guess is as good as mine if the brain is lost...
China today is not the same China 17 years ago during SARS. I wouldn't worry too much which countries would be more affected...
I prefer to formulate more in terms of asset classes ;)
Then again, you are right. STI ETF koala specialists may figure out what Narrow Country Focus risk is all about...
Gee. I wonder whether those who voluntarily contribute to CPF would see the link...
Nah! CPF very safe one! Its like a bond. Bonds are much safer than equities. Won't default one lah!
Wait a minute...
SMOL,
ReplyDelete"Buy when there's blood in the streets?"
I nibbled a little bit last Mon when Shanghai opened ... China etf on hkex & some of the usual well known Chinese companies. Most of the prices hadn't hit low enough on my signals yet, but that Monday was such a no-brainer that I just had to bite. :)
Thought the bloodbath would last thru Tue but I guess PBOC QE too strong.
Am expecting a bumpy decline for China & Asian stocks down into March though. Got a hunch that this virus & death rates will peak by mid-Mar...
But totally different thing for my US holdings, especially tech. Kept on hitting all time highs week after week after week. It's like both the cure for the virus has been found PLUS permanent US-China trade deal & kumbayah around the campfire.
US prices have been hitting my take profit signals & I've been harvesting for the past 5 weeks ... so far moved about 15% off my US holdings into money mkt funds. Looks like I may have to do another round of harvesting this week.
And I bet prices will go up another 10% making me look like an idiot! :P
Spur,
DeleteYou buy the dipper you!
I think your bxxls the biggest amongst all of us ;)
Nice pairs trading setup you got there: Sell US rip, buy China dip ;)
Well, the markets exist to make fools out of everyone of us :(
Haha my bxxls normal sized lah LOL! And I know I'm definitely not smart. :P I just try to follow my buy & sell signals.
DeleteThe China buys last Mon was actually in violation of my buy signals, hence really a small nibble to avoid choking, only about 1% of the portfolio value.
Not really a pairs trade .... purely a coincidence if my signals activate together for different assets. ;)
I'm still expecting real buying opportunities i.e. lower lows such that my buy signals are hit, for China & Asian stocks by Mar/Apr. So for those who want to "buy when there's blood in the streets", opportunity may be nearing.
Spur,
DeleteThanks for clarifying!
I was thinking you so advanced - got hedge your positions ;)
Hi SMOL,
ReplyDeleteJust yesterday, I came across a comment from a young blogger saying that he is going to throw in the towel already because of the impending red market. Haven't even bear market yet.....?
Unintelligent Nerd,
DeleteI guess that's the crash got sound way to discover our pain threshold or risk profile.
Investing is just not for everyone. Just like not everyon can be an entrepreneur.
We all have to discover our own poisons.
Some focus on Earn More.
Some focus on Save More.
No one way is holier than the other.
I'm the cheerleader for:
My life; my path :)
Hi SMOL,
ReplyDeleteI don't have mask at home, can't find also can't be bothered that much. I still bring my kid out to malls on weekends, why? It's not because I iron teeth, but there's nobody out there, so it's quite safe. Didn't go out for last min groceries, since I figured that restaurants are 80% empty at peak hours, I should be able to ta bao instead of starting from scratch. Buy rice for what? Eat rice with loti ah?
I looked at my wife and my wife looked at me. Did we under-react? Too bo chup? Playing a fool with our lives? Don't have ans to that yet. We shall see.
I did anticipate that parents are going to cancel classes, so my plan B is to have online tuition. Got my webcam from pat ge and my digital pen ready (back from the days when I drew the barbarian, who could have thought? lol), and I'm all set to rough it out.
Stay safe.
LP,
DeleteIts about focusing on what we can control and influence.
Student can't attend face-to-face sessions?
Arrange for online coaching sessions instead. Practical, doable.
Panic food not enough go join the long queues at the supermarkets (how much can it last in reality)?
All of sudden not afraid of crowds and congestions as risk factor for person-to-person transmission???
Its one of those penny wise pound foolish moments...
Sad day for Total Defence in Singapore where we can so easily "run out" of food...
That's why I wrote my first cryptic post on 居安思危 ;)
I switch to defensive walking whatever possible i.e walking under the Sun
ReplyDeleteCW,
ReplyDeletePlus bonus golden tan to boot!
You handsome devil you...
Stay hydrated and we are good to go ;)
Just don't overdo it until you become 非洲华侨！
temperament,
ReplyDeleteYou say one hor!
Smol,
ReplyDelete"Buy and forget" approach is the way to go. Focus on living the life to the fullest. The investment portfolio will take care of the annual expense on a permanent basis on its own. The start will be difficult in creating such portfolio. No pain and no gain.
WTK
WTK,
DeleteI am guessing you started your investing journey after 2009?
Buy and forget?
That's the closest thing to "faith based" investing...
The cousin to passive investing ;)
Hi SMOL,
ReplyDeleteDo you mind elaborating on what you mean by "Trend Following and Momo crowd may look similar, but its definitely same, same - but different!" in the last paragraph of your post? Also, why do you keep a distance from Momo crowd?
hyom,
DeleteThe Momo crowd are like those idiots who panic buy food at the supermarkets. But why buy toilet papers? Because some fool read HK running out of toilet papers!?
When investors/traders act because others do I better do... That's Momo! Short for momentum. Some call it fear of missing out as in FOMO ;)
Order flow traders and Trend Followers SPOT and TAKE ADVANTAGE of such flows or trends.
Why keep my distance?
A school of fish can be confusing and distracting if I'm in their midst.
But if I stalked the school of fish at a distance (like dolphins), then its easier to follow the herding behaviour...
Also, I don't want to get too friendly with my food ;)
Hi SMOL,
DeleteThank you for your insights.
I distinguish between MOMO in financial markets and MOMO in daily life. Individuals need to be considerate in their social behaviour so that society as a whole can function peacefully. Moderate amount of stock-piling in the right items(rice, dried food) is reasonable for self/family protection. Excessive, super-selfish, senseless stock-piling of everything(toilet paper, instant noodles, condoms, hand sanitizers) brings down everyone, including the super-selfish individual who will be affected ultimately.
Stock-piling of masks as forward thinking re-sellers in social media is what behavior?
DeleteMasks now selling at $40 to $50 per 50 pcs at social media
CW,
DeleteThen there are speculators who bought medical supply stocks or short airline stocks at the first report of trouble in Wuhan in anticipation of what the MOMO crowd will behave ;)
temperament,
ReplyDeleteWell, you should ask your doctor or those in the medical professions ;)
Trust but verify remember?
Those who know the facts and have convictions will act.
Then there are those who say say only...
Those who act based on rumours are the Momo lemmings. Please don't say you know me OK?
temperament,
ReplyDeleteI bought in 2003 and 2009.
I don't know about you ;)
temperament,
ReplyDeleteThere's one branch of philosophy that put forth the idea that "choice" or "free will" is an illusion.
Science has caught up and now there are evidences (not conclusive yet) that the illusion of "free will" could be a case of the mind tricking itself.
Which brings us back to spirituality.
If you say its predetermined, predestined, how can you then say its always choice in the end?
;)
temperament,
ReplyDeleteHey, its a free world!
Do what's right by you.
Don't just say say only ;)
temperament,
ReplyDeleteAgain if its just coincidental, AND everything does not happen without HIM, then where does "choioce" or "free will" come into play?
Shouldn't you consult HIM on your buy and sell decisions instead?
And by the way, don't forget to tithe on your way out ;)
temperament,
ReplyDeleteThank goodness you haven't forgotten your Sunday biblical lessons!
All these talk about choice and coincedental from you makes me wonder whether you were going astray...
LOL!
Au contraire! Atheists have everything to live for as there's no life 2.0 or sequels to rely on ;)