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My brain is telling me…..

Kyith’s thoughts 2 months ago:

Everything is going well in the markets. I have so much cash to deploy and the market is so expensive I cannot find good stocks to buy. My money is sitting in cash and are being wasted by inflation while others are earning 6-8% on REITs.

Kyith’s thoughts today:

Oh s**t! This could be the severe drawdown we have been waiting and waiting for 5 years! There are just so much more problems coming that this will be insurmountable! What should I be unloading this time? I should sell my winners since I will look like an idiot if I lose all the gains. I should be selling more since I will look like an idiot if everyone starts picking up at such a low price while I hold on to stocks at this much higher purchase price!

Photo by Gary Varvel, Indianapolis Star


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Tuesday 14th of October 2014

There are a number of ways people can earn an income, passive or active. Buying shares of a company is one of the ways and it can also be passive or active:

Active: Buying & selling to make a profit from the difference in pricing Passive: Buying & holding because the company is good at earning & sharing ( dividends)

The only fear one has is the loss of money. But if the buying was done with spare, extra cash, then that fear should diminish. The reasons for using spare, extra cash is exactly for the event that is unfolding right now in the market. We will not be losing our homes, our pants.

The other reason is that we believe that the company's business is sound and that it will continue into the horizon, and if the price of its shares falls below its tangible worth, we will use ( once again) spare, extra cash to buy more.

Companies that do not survive market crashes, should have been filtered out long ago... regardless of the share price.

All the 5 years of homework, studies, observations should now be applied. If the fear is still there, then we should just leave the spare cash under our pillows.

Capitalism is here to stay and markets will always exist. Price is the key, and right now, prices are getting cheaper... but the world population is growing bigger...and people need clothes, shoes, cars, phones,medicine, energy,travel,food, ... its a big, big world with lots of opportunities.

Even in earlier times people traded in the market place.

I have targeted some companies to buy 5 years ago. They each have their own trigger prices that I look out for. The gun is loaded, and trigger cocked... there are 5 bullets... each will hit the bulls eye and I will live to tell the tale.

Its time to go shopping


Saturday 18th of October 2014

Hi Henry, you said what the market is about. thanks for educating everyone.


Monday 13th of October 2014

I am indeed keen to know what your next move will be. :) Your posts and investment decisions inspired some of my own investment decisions. And when I decided not to follow some of your moves I got beaten up (I still own some UMS stocks lol) Keep up!


Saturday 18th of October 2014

Hi Regis,

sorry for the late reply. I am not infallible. i make a lot of stupid mistakes. i am not doing much since i still buy what i buy and stuff really didn't move much. its just the companies that we do not want just keeps getting cheaper.


Sunday 12th of October 2014

Simply we can never separate our emotions from our investments. If we can the market will not be sentiment driven by herd instinct at times.


Monday 13th of October 2014

We cannot, but that doesn't mean we cannot try to work within to create a system to reduce the problems with it.


Sunday 12th of October 2014

LOL.. To overcome this, I suggest the following methods:

1. When you decide to buy shares, instead of announcing you bought some shares, you should say you nibble some shares. If the shares drop, you will better cos you nibble only; if it rises, people will see you bought shares cheaply. Sure feel good at both cases psychologically and face saving.

2. After buying, if the shares drop, you can also quote the purchase is for short term trading, eg round 10. If it rises, you can decide whether you want to turn it to a permanent holding. This approach works well, if you don't analyse and analyse minimally, but stick to bluechip, as it will recovers overtime.

3. Another approach, is after somebody announces he bought some shares at say $5, you try to buy it at $4.99. You will feel better that you are smarter and loses less/wins more than the guy when the share price rises or falls. You will feel better if that somebody does all the research and you just follow him. You will also feel good, if the somebody is "viewed" as a guru - you are better than the guru!

4. Buy using xx% of your "war chest" when sti drops "yy%". Don't need to analyse much also, but stick to bluechip. See the success of mr chua. No need to analyse market.

5. Engage an IFA who is "professional investment advisor" and has several financial certifications. Be prepared to pay slightly less than GP type of consultation fee. You will know whether it is worth this kind of fee 20 years down the road when your investment results show.

Frankly, by publishing your transactions and portfolio online, you will be forced to do the "right" and rational things, else you will look stupid. On the other hand, you will be worried and feel bad when you think how people will look at you when the stocks you bought crashes, ie you will feel really stupid. You will feel even more stupid, if these people bought and boast when they bought during the crash, especially when they nibble the shares.

The key here is that if you are influenced by how people look at you, you don't publish and talk about your transactions, else publishing your transactions actually helps you to be more rational becos you font want to be seem illogical.

For the market, we only know one sure thing - it fluctuates. To be successful, you must analyse inside out of the companies you own, like what you did, and stick to your conviction. Ignore how people will look at you. It is more important that how you will look at yourself, ie, be a inner scorecard person, rather than an outer score card person. An outer score card person has this uncontrollable desire to tell the whole world that they are always right and logical(mostly by quoting past actions, current action and blog posts included), but in fact this is not the case.

IMHO, I think you are very good in investing. I hope you don't be influenced by other bloggers and don't bother how people look at you. Your results show that you can stand on your own! It is not to compete with others, but to achieve a satisfactory return with acceptable risk over a long term.



Monday 13th of October 2014

Hi M,

Thanks for the post. I appreciate it that you are trying to open me up. When i start this off, I was rather confused by a lot of the noise. I need mentors to advise me to look at the points that matters and not be distracted by what doesn't make sense.

I felt that it is good to put out explicitly what many can be thinking so that people can laugh at me or take a hard look at themselves whether these thoughts actually make sense at all.

There are always different things that make sense in your own wealth building method but by and large, if folks stick to how volatile they can be with emotion, then its a challenging proposition.

Surprised you are familiar with Uncle Chua!

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