Saturday, 25 November 2017

If only I could turn back time


I would stay...

1. Keppel Corp (sold one-third of holdings with loss @ $6.19)
Bought in Aug 2015 @ $7.50
Current $7.75
(Missed upside 25%^)

2. CDL Hospitality Trust (sold with no gain)
Bought in Apr 2016 @ $1.40
Current $1.64
(Missed upside 17%)

3. DBS (sold with gain at $20.55)
Bought in Mar 2016 @ $15.35
Current $25
(Missed upside 21.6%)

^Missed upside is calculated by the difference in current price and sold price / sold price.


The Thank-God-I-stay stocks:
1. OCBC
2. Genting Singapore

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Stop loss, Cut loss, Take profit, inaction all test our
MENTAL STRENGTH, SKILL and PATIENCE.

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Why did I sell those stocks away even though I know they have good fundamentals?

I had a trader mind-set then and thought I could catch a short-term correction to buy back at a lower price than when I sold. Alas, Mr market didn't give me that opportunity and just ramped on.

10 comments:

  1. Theory and practice not the same over point X, Y and Z. Reasonable doses of Panadols can ease heartache with right position size relative to total investing capital.

    ReplyDelete
    Replies
    1. Hi Uncle8888, what are the points X, Y, Z you referring to?

      Delete
    2. Right or wrong we will only know after days, months and months

      Delete
  2. Rainbow girl,

    If the market had tanked -50%, would you be writing the same post and reflecting how you were glad to let go of Keppel, CDL, and DBS?

    And if you can turn back time, wished you had sold OCBC and Genting Singapore?

    Well, that's what many veterans/survivors lamented during 1997, 2000, and 2008 ;)


    From your reflection, I am guessing you have not been through a -50% bear market yet...

    That's why we need to go through at least 1 (preferably 2) bull/bear cycles to really know what strategies and vehicles are suitable for us.


    Be patient and keep learning more about yourself!



    ReplyDelete
    Replies
    1. Hi SMOL,

      I like your reflective 'pokes'. In the last mini-bear, my portfolio went down 30%. Blood spill now recovered.

      Yes, when the market is on bull run we lament we sell too early. When the market tanks we lament we didn't sell fast enough.

      And the 'to sell, or not to sell' feels like the left brain fighting with the right brain.

      Delete
  3. Money management and position sizing relative to total investing CAPITAL (our hard earned saving) is critical. Volality is not risk. Ensure loss of any capital can mathematically be recovered from other positions.

    ReplyDelete
    Replies
    1. Yeap!
      And volatility is essential for gain/loss.

      Delete
  4. Errr ... if you had trader mindset ... why didn't you buy back when trend turned positive & you "know they have good fundamentals"? :)

    Stop loss, position sizing etc are just tools ... by themselves they are neither good nor bad. It's how you use them.

    E.g. "appropriate" stop loss depends on an asset's or stock's volatility say over last 5-10 years. Setting too tight a stop loss for a volatile penny stock will be "bad" as that simply whip saws you to bits. Hence volatile assets require larger moving room for stop loss. Of course if you put most of your money into risky assets that require 50% stop loss levels, you're gonna get screwed. That's where position sizing comes in ... so that 50% stop loss translates to a very small percentage of your portfolio value.

    That's why when your portfolio size gets large, it's seldom worthwhile to expend mental capital on small caps or penny stocks or speculative picks due to the small position sizes. Other than maybe for entertainment or mental challenge (not mentally challenged LOL).

    ReplyDelete
    Replies
    1. Hi Spur,

      Thank you for your enlightening comments. :)

      For DBS, it was hovering around $20 to $21 for a while and based on historical high, that was a resistant point before plunge. When it climbed beyond $22, although uptrend is intact but it is too steep so I have no guts to buy.

      My position in Keppel was bigger than I wanted, so I chose to diversify that sum to another stock. I will just hold on to my remaining 2/3 and pray for uptrend to continue haha.

      Delete
    2. Quote : "My position in Keppel was bigger than I wanted, so I chose to diversify that sum to another stock."

      Finally; you practiced position sizing by right sizing (reduce) to calm your mind.

      Delete

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