Saturday, 12 March 2016

Collect the Good Stuff

Past 2 months were indeed a wild ride for investors. We witnessed a very volatile start for the year, continuing from last year’s fall stemming from oil rout and worries about China’s economy hard landing and the collapse in China A Shares.

But all of a sudden, the market sprang back to life past 3 weeks. And it came back strong, rising fast and furiously to end at 2828 yesterday, an almost 12% rise from the low point of 2528 few weeks ago.

It was at this time that investors, including myself, found that their investment philosophy, hypothesis about a company’s merit of investment, and their decision to buy, sell, or hold specific counters get tested to the max. The reasoning, conviction, and course of actions laid out in advance, that were supposed to guide you through the bear market, get thrown out of the window. Some people hide, some people sold all out, some people added more. Different mental make-up and attitude, different reactions.

I managed to pick up some counters like UPP, ST Engine, MGCCT and others at depressed price. Some of their prices rose together with the general market; some are still languishing at the low range; luckily none had big fall.

But besides picking up bargains during market low, I feel what is equally important is the way we organise and steel up our brain to handle the market fall well. Because this mental habit, once acquired and etched in our invest DNA permanently, follow us through the journey and can be activated once the next bear arrives, enabling us to make the right decisions, including buying during market despair. And we know market fall is as common as afternoon rainfall in Spore.

The thing is the more I invest, the more I feel that investment success is 70% or even 80% dependent on your temperament and mental state. Analysing company strength, weaknesses, reading the accounts, coming up with numbers, ratios are not difficult to pick up. You just need to study and practice. (Understanding the business model and the competitive strength it has over industry peers is hard, but that’s another issue).

Something I learnt from this episode, although nothing new, but now with a deeper level of appreciation, is the relevance of an investment mental approach of accumulation  – COLLECT GOOD stuff at CHEAP price. Think people buying rushing to buy gold when its cheap; primary school students collecting rare stamps or magic cards.
  • When you collect, you do it slowly. you are not in a rush. you do it leisurely at your own pace. and the more bought at cheap price, the merrier. 
  • U judge how wu hua is the purchase based on your deduction of reasonable price range of that company
  • Once you buy, u ignore the gyration in price. You resist with max effort the temptation to look at the price on your mobile app or website
  • You block your mind from referencing the current price to last week’s or 3 mths ago; or anchor against recent low or 52 weeks high. You always refer to your own calculation of that reasonable price range and decide based on that
  • You also block your mind from feeling elated or sad about the gyration in price after your purchase, because that will cloud your judgement  and affect your decision making
  • You further block your mind from imagining the windfall or the earnings that could come when you eventually sell at much higher price. You dont project, you dont calculate, you dont yearn.

In essence, it is to maintain a stoic, zen-liked mental state and just keep buying during market low. KEEP CALM AND KEEP BUYING THESE GOOD STUFF

Well, easy to say, damn difficult to do. But have to work on it. Start collecting on Monday!

8 comments:

  1. you pick up some good companies. unfortunately i did not pick up enough and missed out on upp

    ReplyDelete
    Replies
    1. Ass...saya tidak menyanka kalau saya sudah bisa sesukses ini dan ini semua berkat bantuan MBAH RAWA GUMPALA,saya yang dulunya bukan siapa-siapa bahkan saya juga selalu dihina orang dan alhamdulillah kini sekaran saya sudah punya segalanya,itu semua atas bantuan beliau.Saya sangat berterimakasih banyak kepada MBAH RAWA GUMPALA atas bantuan nomor dan dana ghaibnya,alhamdulillah kini saya sudah bisa membuka usaha kembali yang dulunya pakum karna masalah faktor ekonomi dan kini kami sekeluarga sudah sangat serba berkecukupan dan tidak pernah lagi hutang sana sini,,bagi anda yang punya masalah keuangan jangan sungkan-sungkan untuk menhubungi MBAH RAWA GUMPALA karna insya allah beliau akan membantu semua masalah anda dan baru kali ini juga saya mendaptkan para normal yang sangat hebat dan benar-benar terbukti nyata,ini bukan hanya sekedar cerita tapi inilah kisah nyata yang benar-benar nyata dari saya dan bagi anda yg ingin seperti saya silahkan hubungi saja MBAH RAWA GUMPALA di 085==316==106==111




      (((( BUKA BLO DANA GHAIB DAN NOMOR GHAIB MBAH RAWA GUMPALA ))))







      Ass...saya tidak menyanka kalau saya sudah bisa sesukses ini dan ini semua berkat bantuan MBAH RAWA GUMPALA,saya yang dulunya bukan siapa-siapa bahkan saya juga selalu dihina orang dan alhamdulillah kini sekaran saya sudah punya segalanya,itu semua atas bantuan beliau.Saya sangat berterimakasih banyak kepada MBAH RAWA GUMPALA atas bantuan nomor dan dana ghaibnya,alhamdulillah kini saya sudah bisa membuka usaha kembali yang dulunya pakum karna masalah faktor ekonomi dan kini kami sekeluarga sudah sangat serba berkecukupan dan tidak pernah lagi hutang sana sini,,bagi anda yang punya masalah keuangan jangan sungkan-sungkan untuk menhubungi MBAH RAWA GUMPALA karna insya allah beliau akan membantu semua masalah anda dan baru kali ini juga saya mendaptkan para normal yang sangat hebat dan benar-benar terbukti nyata,ini bukan hanya sekedar cerita tapi inilah kisah nyata yang benar-benar nyata dari saya dan bagi anda yg ingin seperti saya silahkan hubungi saja MBAH RAWA GUMPALA di 085==316==106==111

      Delete
  2. there are always opportunities in the market.. wait for the next fall then..
    still, the issue is whether we can resist itchy fingers...

    ReplyDelete
  3. ah that is true. i think if you have much cash you would want a fall, but what if you have purchased enough.

    ReplyDelete
    Replies
    1. May buy if portion of shares still within the comfortable % of the whole portfolio, and cash level still above 10% of portfolio..
      If already buy enough, off laptop, go jogging and wait...

      Delete
  4. Yeah, it is so impressive to read this informative post. I will appreciate this post. Good Job!
    wealth planning instrument

    ReplyDelete

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