BOOM! 60% Loss in One Day

 

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Dear Readers,

Thank you for coming here!

I guess the more serious post about investing has to wait again.

I would like to share with you in this post about one of my speculations that resulted in 60% in one day.

WPG

I thought this one is worth a shot, given its current pricing and trends. I know they are debt heavy, but it seems that they can hold.

So I entered last Friday.

And it decided to file for bankruptcy under Chapter 11. 

It was my first time encountering this situation and I was quite nervous about losing all my investment.

So I went on to read about Chapter 11.

It seemed not that bad: it is restructuring with some protection period for the company from the debt collectors.

And I found out that GM was once in this situation as well. 

So I made up my mind: it will probably not actually go bankrupt but I may need to wait for the restructuring to be completed.

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Surprise

Yesterday afternoon, when I saw that the stock was halted in the pre-market, I just assumed that the trading will not resume until the restructuring was completed.

Feeling not happy and still a bit nervous, I took my mind off by doing something else.

And then, all of a sudden, I received a notification that my positions were sold at 60% loss.

Until then, I realized:

1. The trading was still ongoing. It was only halted in the pre-market
2. I forgot about my “Stop-Loss” order, which I always do in this kind of trading and which is supposed to be a good habit.

And pain and remorse and anger about myself filled my mind, as I watched the stock regaining its ground rapidly. 

When I woke up this morning, I saw the peak of the price yesterday was almost at my “Stop-Loss” price, which is about 10% loss.

10% vs 60%!

You can imagine how I feel now…

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Summary

So I learned 3 lessons:

1. Get to the most basic aspect. Growth potential should only be based on the strong foundation that the company wont be bankrupt.
2. Know the facts. Be really clear on different arrangements. If I knew the trading will resume, I will probably remember to cancel my “Stop-Loss” order, especially when I was ready to wait.
3. Never hold heavy positions in speculation. I wished I bought more on that 44% gain and I was certainly relieved that I did not buy that much for this 60% loss.

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A little bit extra

This also got me thinking that speculation does not really make much sense, logically.

First, speculation does come with time, energy and emotional costs. 

Second, we cannot go in with heavy positions, which means the absolute gain wont be significant enough no matter how good the percentage is. 

Of course, it can accumulate, but it also means we have to keep investing our time, energy and experiencing emotional roller coasters.

Therefore, logically it does not make much sense.

And, I knew that long ago…

So I think I will still continue for a bit and see how.

Hahaha…Who can say we humans are rational.

And the economics, which is based on the assumption that we are rational, is certainly not without questions.

If economics is like that, then finance and stock markets can only be so much more so.

Till next time!

9 Transactions & SGD100 in Fees — My Market Transactions — Wk24 2021

 

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Dear Readers,

Thank you for coming here!

I made 9 transactions last week and spent close to 100SGD in trading fees.

This is a record. 

I have never made such frequent trades in any week of my investment journey.

Some trades have already generated gains and the others still remain to be seen.

Here are my transactions for the last week, for your reference!

Capital injection: ~90KSGD

1.BYDDY

This is my first try in the electric vehicles sector.

I have always been unclear on what is going on in the sector. And I am not a fun of the concept of Elon.

So I have been staying away.

But recent news about BYDDY spurred my interest.

So on top of electric vehicles and phone assembly (probably many people do not know this, but they assemble tons of phones), they now entered e-cigarette field with technology and production capacity. And there is rumor that Apple may be purchasing batteries from them for Apple cars. 

It seems interesting and the portfolio seems diversified enough.

So I made my entry.

2.RLX

The top up is simply a response to the drop of stock price and I did not manage to control my own hand.

As a result, similar to YALA, the holding is too heavy in my portfolio.

So I might look for opportunities to let go of some of my positions. I have not seen any yet. 

Worst case, I will hold it for as long as it takes. 

3.AHT, MOSY, ROOT, FAMI, IVR, WPG

These are my speculative trys with small positions.

All the investment books I read ask me not to speculate.

Well, I guess I am among those people who have to try themselves before they will give up. 

I will keep you guys updated on the outcome. 

But if you are like me, I guess my lessons wont help prevent you from trying.

Photo by Ishant Mishra on Unsplash

Capital outflow: ~20KSGD

1.AHT

I have shared in my last entry that I was lucky to get 44% gain in one day.

Again, this is luck. 

Happy investing!

Till next time!

I made 44% gain in one day!

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Dear Readers,

Thank you for coming here!

I was working on a more serious entry regarding investment. But I had to stop to take care of some urgent work issues. 

And I lost the train of thoughts.

I made a few tries but I did not managed to get it back. So I decided to continue some other day, maybe during weekend.

You will see it next week, I promise.

So for today, let me share with you one trade I made the day before yesterday.

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AHT

I heard it from a friend that this stock could soar. 

I did a little research and decided that this stock is not priced high now and with Covid situation getting better, it has the upside.

So I went in with the plan to hold it for at least mid-term. Hopefully, the gain would be good enough then.

And it soared 30%+ for the day and 10%+ the next day.

Looking at the return, I decided to let it go first to pocket the gain.

So I secured 44% gain in the end.

And the price went down a bit afterwards.

So at least for the past 2–3 days, this looks like a good deal.

Just to be clear, I did not went in with heavy bucks. So the gain was only ok despite the good percentage.

Photo by Heidi Fin on Unsplash

This is my first time “hitting the jackpot” in my investment journey.

And I do not count on it to happen many times.

So things are back to normal. 

Photo by Kelly Sikkema on Unsplash

I do not really have anything to share from this experience. This is pure luck.

And I do not really recommend this stock at this price point. But feel free to keep an eye on it for future opportunities.

The trade did make me feel good though. 

And it makes me even happier to be able to share it with you guys!

I hope similar luck will fall on you too!

Happy investing!

Till next time!

Angry — Quick Update

 

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Dear Readers,

Thank you for coming here!

Today is going to be a quick update.

1.Ads revenue disappearing

I just noticed that only ~30% of my ads revenue last week was counted.

And the revenue just disappears on certain days as well. I could see some numbers at the middle of the day and nothing in the evening.

Apparently, this is entirely up to Google and there is no way to appeal or get an explanation.

I feel pretty frustrated and angry!

I did not do this for the money, but seeing the appreciation from you just disappear like that does ruin my mode.

Hopefully, this wont happen again.

And Thank you for your support!

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2.For the first time in a long time, I spent 2+ hours creating one slide

I could have done it much quicker, but I decided to spend the time to make it solid work, no matter whether that is necessary or not and no matter whether that would be appreciated or not.

I happen to have the time also.

So after a bad meeting, I spent half of my afternoon doing that slide. Considering the time spent in mentally drafting that slide, it was well over 2 hours.

2 hours for one slide. That is slow even with consulting standard. 

I am pretty happy with it. 

However, whether the person this slide is created for will be happy with it is an entirely different story.

But that does not stop me from feeling good.

It has been a long time since I spent this much time and thoughts on one slide, or anything for that matter. 

I feel pretty good. I guess I am the type of person who would derive good feelings from dedication and commitment.

Photo by nour tayeh on Unsplash

3.Unsplash not working entirely well

Just as I am writing this entry, Unsplash is not working entirely well, which prevented me from using the pictures of my first choice.

However, for the most of the time, it is Superb! It made it so easy to include pictures in my blog posts.

Thank you very much, Unsplash and the people who upload the pictures.

I hope Unsplash could reward the people who upload popular pictures. I am happy to pay a small fee based on usage.

Good work should be rewarded!

Till next time!

My Market Transactions — Wk23 2021

 

Photo by Micheile Henderson on Unsplash

Dear Readers,

Thank you for coming here!

I made some transactions last week and they are not particularly good.

Here are my transactions for the last week!

Capital injection: ~900SGD

1.OEG

I was trying to ride the trend and speculate/gamble.

I looked at this stock before and thought the trend could continue for a day or two. 

So I went in with 100 shares and did not even had a chance. So two hours later, I exited with ~150SGD loss.

Photo by Austin Distel on Unsplash

Capital outflow: ~22KSGD

1.YALA

I added 1000shares at 15.5 the week before last week, which made my holdings too heavy in my portfolio. I was a bit worried.

So seeing the stock on the rise, I just put a “limit” order at 10% gain.

I was going to wait and see, but fell asleep. So I sold at 17.05 while the highest price on that day reached 18.2/18.3. 

I would have caught the trend if I stayed awake for another half an hour. 

Sadly, there is no “if”.

However, I am happy with the transaction. 

Not because of the 10% gain. Actually, I was more irritated by losing the change of 20% gain, vs securing the 10%.

But because the concept of portfolio really came to me. 

I really convinced myself of maintaining a balanced portfolio, instead of going for any single stock emotionally, which cost me dearly in the past.

The rationale behind the decision is more important than a right decision itself.

Happy investing!

Till next time!

Which strategy is most profitable, chasing the “rising stars”, abandoning the falling ones, or holding?

 

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Dear Readers,

Thank you for coming here!

If you do investing, I am sure you have wondered which strategy is most profitable.

There are tons of discussions, researches, theories, and even bets regarding this. 

And there still does not seem to be a dominating answer.

I read a report from the China Merchants Bank on 2020 investment returns, which I think can provide a good reference for you.

So I would like to share it with you in this blog.

First of all, if you are not familiar with the China Merchants Bank, it is the fastest growing bank in China with the most advanced technology and best customer user interface, with probably the best investment value. 

I still keep my account with them.

In 2020, the size of the funds managed by the Bank was around 700Billion RMB. It is said to be the largest in the market.

In my opinion, the size is significant enough to make the report “reasonably representative”.

From Internet, translated by Author

So going into the report, the average return for all investors is 24%, which is great. This would make the perfect advertisement for them.

Do take note that this was in 2020, so before the drop caused by the profit-taking in Feb/Mar.

If we look at the different groups of investors, investors who hold achieved the highest return of 39%, 63% higher than the average.

Followed by the investors who DCA at 32%, 33% higher than the average.

Investors who try to time the market, either by pursuing the funds on the rise or clearing positions before the pandemic to avoid the fall achieved the lowest, at 11% and 20% respectively, well below the average.

I think a big reason is the deep and narrow “V” we experienced last year. No one would expect it to rebound so fast. 

So those who sold would not have time to re-act. And those who pursue would have come in at higher prices.

So again, timing the market is hard.

Photo by Anto Fredric on Unsplash

So where was I in this?

Haha, I cleared my positions after the pandemic rebound, at about 5% above the pre-pandemic high.

At that time, I believed that the fundamental to support the market valuation was not strong enough and I was not drawing any salary and could not afford much risk.

So I missed a large part of the upward trend…

Well, life goes on and so must the learnings.

Happy investing!

Till next time!

What do we get, besides money, from investing?

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Dear Readers,

Thank you for coming here!

With the “negative” real interest rate which has been going on for as long as 15–20 years, we need to invest to retain the value of our money.

So everyone should and need to invest.

However, I would like to elaborate this need from another perspective, the perspective of personal growth.

Investing is one of the best learning platforms we could ever hope for.

Because the feedback is specific and direct. We know which transaction we did or did not do yielded what results.

Because the consequence is never blur and definitely felt, especially when we lose money.

There is a direct link between our capabilities and the outcome.

Before I go on and elaborate more on this point, I would like to direct your attention to how valuable this “direct link” is.

Just think about our jobs. 

Is our reward directly linked to what we know, what we are capable of, and what we actually contributed?

I am sure there are jobs that do, but most of them do not.

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So in the field of investing, there is a direct link between our capabilities and the outcome.

What we do not know, what we cannot control ourselves on and what we cannot be decisive on will all reflect in the outcome, which is loss or gain of our investment and in turn our net worth and ability to live the lives we want.

Each of these shortcomings is like a hole in our pocket, through which we continuously lose our wealth. 

So we cannot afford to stay still. We need to be running.

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So what are the capabilities and qualities we need to improve to achieve better outcomes?

There are so many! And we will need different subsets of them depending on our investment approach.

Here I would like to highlight three traps from my own experiences of investing. 

Everyone is subject to the risks of falling into them and needs to build the abilities to avoid them.

1. Greed: Making decisions beyond our capabilities

2. Resentment: Feeling hatred for adversity and people who we think caused it, instead of taking rational and well-thought-out actions

3. Sentimental-ness: Following purely our feelings and losing control

Thinking back each of my decisions which proved to be wrong, one or more of these traps were present in the decision making.

As a result, I have experienced “bleeding” multiple times.

But at the same time, I must be thankful. It made me realize the shortcomings within me and that set the stage for further improvement.

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Investing is one of the few options we have to fight inflation and grow our wealth. So from that perspective, it is a necessary journey for us.

At the same time, it is also a challenging, interesting and possibly fruitful journey, not only to our wealth, but also to our personal growth.

Happy investing!

Till next time!