Wednesday, 4 July 2018

Watchlist: ThaiBev Y92 (3)

Approaching its 3-year low. Still watching as downtrend is intact.


梁文福 - 太多太多



Sunday, 1 July 2018

Book review: Investing with Purpose by Mark Aardsma

This book is not just another book teaching you how you should be investing your money in the financial world. Mark's concepts are at a whole new level beyond that, which strongly attracted me to continue flipping the pages. It can be borrowed from the NLB.

It makes a very good sequential read to Rich Dad, Poor Dad. While Rich Dad showed us the importance of financial literacy and getting out of the rat race, Investing with Purpose gives us ideas on how we could actually do it. With stories of his own journey from an early retrenchment 'victim' to becoming a multi-business owner and mentor, Mark emphasized on maximizing the utility of finite resources (time, money, skills, network etc) to materialize investment and entrepreneurial plans. He talked about the tangibles and the intangibles ROI where 'investments' in life are not all about money. The context he wrote in is pretty easy to understand and at the end of each chapter there's a summary under Action Points plus some nice illustrative sketches.

Here are some valuable take-aways that I would like to share from the read. (The word-for-word concepts from the book are highlighted in bold.)

What is "Contango"?

I was reading about futures contract and came across this term. Let's learn a new term today if you are as clueless as I am.


Spot Price 
refers to the current price in the marketplace at which a given asset such as a security, commodity or currency can be bought or sold for immediate delivery. [Read more: Spot Price]

Saturday, 23 June 2018

Time in the market & Timing the market

They sound like opposing terms but can we have the best of both worlds?

Answer is CAN... I am a believer of both concepts and Uncle8888's Pillow Stocks Strategy.

The whole process starts from (1) picking the right stocks (I am a lousy value investor, therefore I tend to pick 10-20 stocks from across the sectors instead of focusing on a few of supposedly good value ones), (2) protecting our capital by reaping the capital gains from the gems after some time even though we won't know for sure how long that will be, (3) staying vested at 'zero cost' to reap dividends (beauty of pillow stocks strategy).

How much we reap, in terms of dividends and capital gains, depends on our time vested in the market. On the contrary, we should be regularly weeding out the money-losing stocks (in my opinion, sell when the stop-loss price is hit even if the stock pays dividends) to invest in the money-making ones to ride the test of time.

When investing in the right stocks, we should also consider the margin of safety by investing at the right price and allocating the right position size. What are deemed as 'right' here may vary from one person to another. There is no perfect definition as each of us have different risk appetites.

The crux of the strategy lies in selling part of the pillow stocks for gains (recoup capital) before the market decides to ride the downward roller coaster. That's when timing the market plays a part. Time the ups and downs of market by spotting industrial trends, predicting the future prices via macroeconomic outlook, watching out for price actions...

Sound easy so far? Hmmm...

When it comes to execution it will not be easy at all - because we are 'kiasi' and afraid of being 'wrong'. Buying the wrong stocks at the wrong time, selling gems out too early, missing to get the lows... Also pillow stocks these days are especially hard to collect as the market gets more volatile and have shorter bull-bear cycles. The 'right stocks' are harder to pick with the the ever-evolving technologies and monetary policies. Stocks 10 years ago that rode the UP escalator might not be the ones that can allow you to ride the UP escalator again 10 years from now.

While the market continues its volatility after a long bull run and I have divested my biggest holding to sleep better at night, I must not rest on my laurels but continue to 修炼 my 3Ms - Mind, Money, Method. Looking forward to the Great Singapore (stocks) Sales.

Read also: Opportunity costs in stocks market
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