Tomorrow will mark the end of the Chinese New Year! Again wish us all a happy and prosperous year ahead!
Here comes another monthly update of our Net-Worth.
It is a sad month!
Net-Worth increase from last month: 48.04K SGD, 1.30KG Gold
Do not be fooled by the number.
90% of the increase is due to the sale of my flat.
The selling price is 10% higher than the estimate I put down in my tracking sheet two years ago. And it is not because I sold the flat at a good price, only because my estimate was much too conservative then.
It is pretty incredible to lose more than 120K SGD on a HDB flat in Singapore. And my lawyer introduced me to the new term “Negative Sale”.
But again, compared to what happed last year, this is like peanuts.
Sometimes, it just feels that I owned a big debt to fate and I am now paying it back.
Coming back to the update, the insurance bill also kicked in this month.
With the stock market dropping across the world, our salary can barely make up for the fall.
Have you ever experienced those moments at which you made a totally irrational (not necessarily bad or stupid) decision, and afterwards you could not recall why or how you made that decision at all? You can only explain it with “Unbelievable and Unexplainable”.
I have, more than once. And the decisions (at least 7 of them) were definitely bad and stupid.
Apparently, other people have too, even to a much larger magnitude.
A Citibank employee transferred $1 billion BY MISTAKE and the bank is probably not getting the money back because a judge ruled against the banking conglomerate on February 16th.
Judge Jesse Furman of the district of Manhattan wrote in his ruling, “To believe that Citibank, one of the most sophisticated financial institutions in the world, had made a mistake that had never happened before, to the tune of nearly $1 billion, would have been borderline irrational.”
So why do these “Unbelievable and Unexplainable” things happen?
I have asked myself this question repeatedly over the past year. I just could not figure out why and how I made those decisions.
That was totally not me.
The only conclusion I could come up with is that: We are just not in control at those moments. There is a mechanism that is imbedded in us by “evolution” (“God” if you would) and that mechanism is triggered at those moments and simply takes over.
We do not know why or how the mechanism is triggered and we do not know when those moments will appear, which makes it almost impossible for us to see it coming and react to it.
Maybe that is it. Maybe that is what life is supposed to be.
Everyone has his or her destiny to fulfill a certain purpose after all.
The decisions that we could reply on rationality either do not matter to “evolution” or aligns with the path that is set for us.
We are just NPCs in a giant game. No matter how hard we try, we just do not matter, apart from fulfilling that particular purpose set for us.
What do you think?
I think I need to watch the Movie “Free Guy”! (This is not a sponsored post!)
The past week has been a bad week, with the US market drop.
I finally made some major decisions after struggle. I would like to share that with you.
Here is another update on my transactions in the past week.
Capital injection: ~40KSGD
1.YALLA Group:
The price dropped 40% in the matter of 3 days. So we added positions twice during the week, one too early and one too late, perfectly missing the bottom.
The newly injected capital is at 20%+ loss now.
2.RLX Tech:
This is the leader in e-vapor products. With people caring more about health, there is potential. Also, they also have potential to increase sales by focusing on more online retails once the demand is there.
3.DADA Nexus:
This is a delivery business closely associated with JD. And JD logistics, though still losing money by itself, has been showing improvements.
Following my exit of Singtel and Keppel Infrastructure Trust last week, I have finally made the decision to exit the SG index as well.
I entered the market at the absolute peak and am still in the very RED after 3 years. There is no sign for it to recover to its highs.
I have planned to just hold for the long term. At least the dividends will keep coming. However, with the change of investing approach, my war-chest is empty.
So after a few weeks of struggle, I sold all my positions purchased with cash.
This puts a close to the SG index investment and all in all, it is a very bad investment for me. The realized losses, combined with the opportunity cost during the past 3 years is significant.
Part of the freed-up cash has been deployed into the market as above capital inflow, and I was immediately hit by the US market drop, suffering 10%-20% losses on paper.
Haha, maybe this portion of my money is bound to be invested at the time of peaks….If this happens a few more times, I will give an early warning, so that you guys can avoid what I am about to buy.
Focus on external factors for success and internal factors for failure
If you grow up in Chinese culture, I am sure you have heard this many times.
It is usually used to educate us to stay modest and keep improving.
For most of us, we received it from our parents or teachers and we just accepted it without question until it became the “culture” or “attitude” we took for granted.
However, most of us had the moments when we doubted it and even felt unfair. How come I always came hard on myself and still was not as successful?
First of all, this “attitude” could never guarantee success. Very few things in this world can.
It can only guide us, if we still believe in it, to focus on improving ourselves, which is probably the most certain way to increase our chance for success.
Secondly, we never realized the sound “logic” behind this “attitude”.
Probably it never occurred to us that we should or need to try to understand the logic behind the statement because we were so young when we accepted it.
Any success or failure is caused by the combined effects of external and internal factors.
Then why should we focus on external factors for success?
Because the internal factors are relatively stable.
In order to complete something, what are our internal factors?
Soft ones like our mindset and network.
Hard ones like our skills and capital.
The chance of any of these changing much in the short term is very slim.
Therefore, in the short term, the success depends largely on external factors. If we want to repeat the success, we need to focus on analyzing them.
Success this time could well be a coincidence. The same efforts could fail miserably under different circumstances.
Focusing on external factors for success will help us convert the unknown and uncertainties of external factors into known and certainties for success.
So why should we focus on internal factors for failure?
Because, in the case of failure, external factors are typically constraints we cannot change.
Lack of resources, regulatory restrictions, disasters etc etc
We can only change ourselves.
When we lose a business opportunity, we can complain about lack of support from upper management and back offices; we can also complain that the client is not capable of recognizing our good value proposition; we can also complain that the opponent leverages the “grey area” to gain a unfair advantage.
However, our job is exactly to deliver success subject to these constraints. These constraints are just facts that we need to accept and dance with.
During the break, I have been eating and eating, like a pig. I cannot even remember the last time when I felt hungry. It is like whenever any space in stomach was freed, it was immediately filled up.
Compared to my stomach, my mood was pretty good, but not entirely happy.
I always felt something was on my mind, weighing my mood down. But I did not know exactly what.
During a walk, my wife asked about the happiest time in my life. (PS: this was not a trick question. I can only say I have a great wife.)
I could not really recall any or not clearly at least.
But my wife had so many, from her childhood to the time she just started working to having our children to having the moment of truth recently.
Her life was not easier than mine and she took care so much more staff around the house than I did.
That was when I realized I focused too much on the negative things, even without me realizing it.
And when I really took the time to look through the things I worried about, none of them could not be taken care of by a few thousand dollars at most.
While a few thousand dollars was not peanut, it certainly was not significant enough to weigh my mood down.
What’s more, worrying about them did not really help much without actions and I knew there was not much I could do then.
So I wondered why.
Going one level deeper, I realized the underlying assumption: All things are supposed to go smooth for me and generate favorable outcomes for me. Suffering is not supposed to be associated with me.
Therefore, when some things went wrong or simply did not turn out the way I expected them to, I felt frustrated and that things were out of control, weighing my mood down.
Meanwhile, I was fully aware that things did not go as expected 9 out of 10 times. This weighed my mood further down because logically I knew what I pursued was not possible.
I think this is the closest I have ever got to the “Real Me”.
Therefore, lower expectations, be prepared for frustrations and unfortunate events and focus on the positive, for our own sake.
The first step to achieve something is to believe in it.
However, we cannot just force ourselves to believe in something.
We need support.
One of the best support is to actually see it.
We get an opportunity to see something we thought was not possible. That could be everything, even though we did not get to reach it or worse we suffered heavy losses in the pursuit.
As long as we believe (know for sure) that it is achievable, we will no longer be constraint by anything less and we will keep progressing toward it, no matter how far away we are now.
The number of ads shown on this blog has been limited due to “Invalid traffic concerns”.
Google will not disclose more details. So I do not know exactly what it means.
However, it seems that repeatedly clicking the same ads or clicking too many ads on the same page could lead to this.
So please do help avoid clicking the ads repeatedly.
Having said that, I really appreciate your help in clicking the ads that are interesting to you and I have made about 30SGD so far, as a recognition and motivation to me to keep writing.
Hope everyone had a great CNY break. Today is work day again.
Another update on my transactions in the past week.
Capital injection: ~15KSGD
1.Semiconductor Mfg Intl:
This stock has dropped below my average price and I still believe in its long-term prospects. Thus I have added about 8KSGD worth of shares.
Luckily, the stock price is on the rise for the 2nd half of the week.
2.CSPC Pharma:
I did not have any medical stock in my portfolio. But the industry is good with people willing and able to spend more on health and beauty.
This particular stock looks well positioned and cheap enough.
The price has been flat since my purchase. Let see.
I have also tried to add positions to China Southern Airlines, but missed by a few cents. The stock did very well for the week with ~10% rise. So I guess that is another opportunity missed due to my indecisiveness.
I have sold all my positions of Singtel and Keppel Infrastructure Trust.
Keppel was the first stock I ever bought and that was like 7 or 8 year ago. I made a bit money from the dividend with capital appreciation at -6%.
I bought Singtel pretty much at its peak and I am still in the RED when I sold them.
The reason for the selling is that I do not see much potential in the next few years and it is a not big sum. And selling them would allow me to take care of one less investment account.
Therefore, I just let them go at the market price before the CNY.
The fund will go into my war chest and be deployed later.
Sold a great stock at a 10 or 20% gain, only to see it skyrocket shortly after
Held a bad stock for the longest time, only to see it drop to the bottom
If you have done so and more than a few times, you are definitely NOT alone.
I am with you totally. I have done this with quite a few stocks for quite a few times in my not-so-long investment journey.
When I recalled my experiences and my thinking process leading to the decisions, I realized that it was due to the mismatch between the behavior of the Stock Market and the behavior of my own.
The stock market, maybe most of the things in this world, follows Matthew Effect, while my behavior followed Anchoring Effect and Mean Reversion.
If you meet your university peers 2 or 3 years after graduation, you wont see much difference in most of them. They will be in similar levels of their career and making roughly the same pay as you. You might disagree with me by pointing out that some of them make twice as much as the others (6k vs 3k), such as banking and consulting employees. But trust me, the difference of a few thousand is nothing, compared to what is coming.
If you meet them 10 years after graduation, you will see a huge gap between those who are doing well and those who are just getting by. For example, those who get into the leading start-ups in the Tech industry could be already financially free, while some others are struggling to keep their jobs amid Covid.
If you meet them 30–40 years after graduation, probably you will have nothing to talk about rather than the common experience you had in University.
Those who do well will do better, while those who don’t will get worse.
This is also the case in the stock market.
The capital inflow concentrates on the leading companies in good industries, pushing their stock prices higher and higher.
On the other hand, the rest of the stock will continue to tank due to lack of capital.
The more mature the stock market, the more obvious the trend.
In the US, this has been the case for a long time: trades concentrate on leading stocks.
In China, the trend has officially been recognized this year. In January, the index climbed up while more than 2/3 of the stocks dropped in prices.
The days for shorting penny stocks are over.
So, in stock market, the trend is that good stocks will command higher and higher prices, while bad stocks will suffer from lower and lower interests and prices.
2.Anchoring Effect and Mean Reversion for my behavior
Anchoring effect is “a cognitive bias where an individual depends too heavily on an initial piece of information offered (considered to be the “anchor”) to make subsequent judgments during decision making”.
Mean reversion is “a theory implying that asset prices and historical returns gradually move towards the long-term mean”.
Anchoring effect makes me treat the stock price when I start to track it or the buying price as the baseline.
Mean reversion makes me believe that the stock price will tend to revert back to the baseline.
Therefore, when a stock price rises by 20%, I start to believe that it will revert soon and start selling.
When a stock price drops by 20%, I again start to believe that it will revert soon and continue to hold or start buying.
Therefore, I can only hold good stocks for short term and enjoy limited gains, but hold bad stocks for the longest time and suffer big losses.
On one hand, good stocks will command higher and higher prices, while bad stocks will suffer from lower and lower interests and prices.
On the other hand, the average investors suffer from treating their buying price as baseline and believing that the stock prices will revert back to it.
As a result of the mismatch, they let go of the great stocks at 10–20% gain while holding on to the bad stocks which will bring them higher and higher losses.
So true that we need to go against human nature to succeed in investing!
You probably already know that the value of your flat is higher than the combined value of the land it sits on and the brick & motor.
There could be a few reasons why this is the case.
Here I would like to discuss it from the perspective of “Public Wealth” and would like to advocate that controlling the property price is important to a balanced society in Singapore.
“Public Wealth” is defined as below in Oxford Dictionary:
Public welfare, the public interest (now archaic)
Public financial resources, national wealth
As the name suggests, “Public Wealth” belongs to the public.
However, we, as a member of public, may not get our share.
A significant portion of the “Wealth” is used in building infrastructure, such as MRT stations, schools, hospitals, parks.
As you can easily image, the infrastructure has a big impact on the value of your property.
When you own the property, you also “own” that piece of the “Public Wealth” associated to the your property, while people who do not own a nearby property do not.
So that portion of the “Public Wealth” was allocated to a subset of population because they own the right properties, while it rightfully belongs to the whole population.
And more expensive properties tend to occupy more “Public Wealth”. It is a no brainer that the infrastructure in Orchard is more valuable than that in Sengkang.
This creates a re-enforcing cycle to enlarge the wealth gap among the population:
Rich people can buy expensive properties, occupy more “Public Wealth”, become richer and buy more expensive properties
Poor people can only afford cheap properties or no properties, occupy little to no “Public Wealth” and become poorer and poorer (relatively)
Therefore, it is important for the government to control property prices so that most people can afford it and do not have to “give up” all the related “Public Wealth” that is rightfully theirs.
However, it is worth noting that this does not apply in all the countries.
Some countries have negative “Public Wealth”. For example, the infrastructure is built using loans or simply there is no national infrastructure and the communities have to build their own.
However, in Singapore, “Public Wealth” is obviously and hugely positive, thanks to the government.
Therefore, for residents of Singapore, we should buy properties, upgrade when we can and own more properties when we can, trusting that the government will control the wealth gap on our behalf. We just make sure that we do not add more burden to the government.
Another thing I observed is how volatile the market is.
I set alert levels on my broker platform, exceeding which an email alert will be sent to me.
Previously, over a month, maybe I see one alert or even less.
Now, I see it almost every day and sometimes more than 1 in the same day.
I yielded good returns initially and lost half of it in the past week.
So in a volatile market like this, are we calm enough to stick to the course? Are we sure that what we own is well supported? Do we “know” that they will come back eventually? Do we still have war chest to deploy to further reduce the average cost if they continue to drop?
These are just some of the easy questions that we need to be able to answer with confidence.
Therefore, there are tons of opportunities out there. The only problem is whether we are prepared.
We do not see the opportunities, maybe because we really do not know about them. But most likely, it is because we are limiting ourselves or afraid of being proven wrong or simply being lazy.
So do not complain about the lack of opportunities. Just focus on getting prepared.
I do not know when we are ready. Maybe we can only be sure when we succeed.
But I know when we are not ready.
If we are wishing we could catch the opportunity or we could turn back the time, we are not ready yet!
Another update on my transactions in the past week.
Last week, the market was pretty much in the Red. And the GME episode and especially the reactions from Wall Street were just hilarious!
It is incredible to see so many opportunities floating around all the time. I can only blame my lack of capabilities to capture them.
Anyway, let’s get back to reality. Over the past week, I made the following transactions:
Capital injection: ~15KSGD
1.Nvidia
Nvidia technology is no doubt in the lead. I have purchased 4 Nvidia graphic cards directly and indirectly since I started to use computers.
I could still recall the time in 2017/18 when Nvidia mid-high end cards were selling at a premium due to the demand for mining. That price hike pushed my plan for building a new gaming PC by about a year.
With Bitcoin price in the cloud now, the demand will persist. It does seem the situation is repeating itself with the high-end 30 series.
Therefore, I think the stock could farewell in the mid term.
Over last week, the stock dropped by 6%, which makes this purchase my most costly purchase from Nvidia so far.
I hope I could make enough money later on from this purchase to buy a few new cards from them. Haha.
I also wanted to add some shares of China Southern Airline and also Semiconductor. However I missed the opportunity window again due to indecisiveness.
