Monthly Net-Worth Update —Mar 2021 — Bleeding

 

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Dear Readers,

Thank you for coming here!

Time flies!

We are officially concluding Q1 2021. And I cannot say it is a good ending. My account is literally bleeding.

Here comes another monthly update of our Net-Worth.

It is red!

Net-Worth increase from last month: 4.45K SGD, 0.64KG Gold

The number could be inflated, because my wife did not have time to calculate her investment performance yet for this quarter and we knew it was not going to be as good.

So the real number could very well be negative. We will account for it in the next month update, because I do not want to miss the update this month.

Overall, the loss in the stock market really made us bleed.

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Investment: 5.09% annualized return, incl. dividend

As expected, pretty big drop from last month.

Since I changed my investment approach, this month marks the largest loss.

From a gain of more than 60K to a loss of ~20K, it has been pretty incredible.

Again, it is time to fear the market and know our limit. Money is not easy after all!

During the drop, I tried to catch the bottom and failed pretty badly.

I added position during the initial period of the fall, thinking this is just a temporary set-back and a buy opportunity. So the top up was at very high prices.

Apparently, I was so into the bull market that I did not even think about the possibilities of a significant fall. I caught the wave up when I changed my investment approach and increased confidence every time the market robustly regained losses and kept rising to a point that I believed that the rise would not stop.

And then, with limited war chest, I became very careful in topping up. And of course, that caused me to miss the bottom.

When the market kept rising for a few days, I started to regret.

And then I entered the market aggressively with my little war-chest, believing the bottom was close at least, only to experience another 20% fall.

Once again, timing the market did not work out for me.

However, overall, my emotional management improved a lot this time around.

I did not feel the anxiety and I managed to convince myself to have patience.

I can say that my life was not affected by the fall most of the time.

I think this had much to do with the fact that I had been busy, with work, freelancing, start-ups and interviews.

The feeling that I am able to earn more money from different sources and I am actually doing something extra really helped give me confidence and emotional resilience.

Therefore, being idle really is a good way to get people wasted. 

Stay busy and keep improving ourselves!

Till next time!

My Market Transactions — Wk13 2021

 

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Dear Readers,

Thank you for coming here!

Here is another update on the transactions.

Capital injection: ~31KSGD

1. RLX

The stock price halved on the day Chinese Government announced the tightened policy on e-cigarettes.

I thought the bottom had been reached, so I went pretty much all in, only to see the price drop by another 20%. 

So this is still in the deep red zone. 

I am prepared to hold this for 2–3 years or even longer. Lets see what happens.

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Capital outflow: None

Again, this is not the time to sell.

And again, this is the time to learn to fear the markets and only go after the gains you understand.

Happy investing!

Till next time!

Take a Deep Breath…and Survive

 

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Dear Readers,

Thank you for coming here!

It is my first time experiencing such a turbulent market situation ever. 

A few days ago, e-cigerate industry got hit really hard, due to restrictive regulations in China. So the RLX almost halved.

I thought these kind of restrictions would tank the market in the short term. But in the long term, they would accelerate the exit of followers and benefit the leaders.

Therefore, I almost emptied my war chest to top up RLX. I thought the bottom had been reached.

And yet again, there was another 20% drop…So it has been more than halved.

And now, naturally my portfolio is back to the deep red zone.

The market is really interesting! And I think that is the time we learn to fear the market.

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So what do we do now?

Some one told me that the difference between those who earn money and those who lose money in the market is not really knowledge or techniques, but the patience and the capability for emotional management.

So take a breath and survive and stay in the game.

If we want to beat the majority in the market, we need to be able to endure the up-and-downs and the emotional sway that comes with it.

Stay in the game. That is the key!

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Till next time!

Parallel Universe

 

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Dear readers,

Thank you for coming here!

Doing two things at the same time is significantly more exhausting than focusing on one thing, even though each of the former requires less than 50% of the efforts.

I am coping with three things now. While it is manageable, it is definitely not easy.

Sometimes, I question myself whether that is worth it. Why not just relax?

I guess that is just fate.

Countless choices, conscious or unconscious, brought me here, while creating exponential number of parallel universes.

I am sure, in at least one of those parallel universes, I live a relaxing and successful life. 

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Till next time!

My Market Transactions — Wk12 2021

 

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Dear Readers,

Thank you for coming here!

Q1 is coming to an end! Again, time flies.

Here is another update.

Capital injection: ~15KSGD

1. DADA

I have been thinking about adding positions. 

Based on the “37% rule”, this stock qualifies.

This stock has dropped ~40% since I bought last time and the price dropped further on Friday and reached the “Baseline” I set.

Furthermore, the financial performance of this company seems pretty solid. I am also a bit confused on why it just kept dropping while other stocks have more or less rebounded.

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Capital outflow: None

Again, this is not the time to sell.

But it does seem that fluctuations will felt repeatedly.

Happy investing!

Till next time!

Cannot "Buy Low and Sell High", then How?

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Dear Readers,

Thank you for coming here!

I wrote in my last post that I started to regret the lost opportunities for adding positions, now that the stock market is up from the lows. This causes anxiety.

And this is typical FOMO (Fear Of Losing Out). I lost out because I did not top up at the lowest points, compared to those who did.

But if I had FOMO, why didn’t I just get in and deploy all my war-chest?

You are right! Because of FOBO (Fear Of Better Options).

What if the prices drop further? This also causes anxiety.

So I constantly feel anxiety, struggling between FOMO and FOBO.

SO how? Can we avoid the anxiety and at the same time achieve good outcomes?

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The fundamental reason of feeling endless anxiety is that we embrace “Fear/Panic” instead of “Curiosity”.

“Curiosity” means exploring, accumulating knowledge and making discoveries.

“Fear/Panic” implies speculation and gambling. 

Therefore, to avoid anxiety, we need to feel that investing is interesting and we are willing to really dig deep to understand how it really works, without caring about gains or losses.

Every fluctuation is but another opportunity to learn and understand the behavior of the market.

We need to forget about making money.

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What?!

I hear you because I think the same way: this is too hard.

So is there any other way?

I can only see one: Find a “Rule” and stick to it.

The “Rule” is something we can predict and reply on in the somewhat random market. 

The “Rule” represents certainty in the market full of uncertainties.

You can borrow from others or engineer your own and refine it along the way. 

But note that the purpose of the “Rule” is not to achieve the best outcomes, but to reduce anxiety with acceptable outcomes.

Just like the law, whose purpose is not to ensure justice, but to end dispute.

Therefore, do not dwell on buying at the lowest points and selling at the highest points. That is just not possible.

If you still find it hard to let go of the “hope” for best outcomes, just think of this way: the chances of achieving better outcomes are not higher in any other way, even with the anxiety. 

It is totally likely to have anxiety and worse outcomes at the same time.

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So what are some of the “Rules” we can apply?

Well, DCA (Dollar-Cost-Averaging) is definitely one. 

I tried to stick to it for about two years. While I cannot say much about the outcomes, the anxiety I felt was definitely much less than with my current investment approach.

But since I have decided to try something different from DCA, I will share another “Rule” which is more complex.

The 37% Rule.

We can split every decision making into two phases:

1. The first 37% of the time, to explore and establish the “Baseline” without making any decision
2. The remaining 63%, to pick the first opportunity that is equal or better than the “Baseline”

This is a statistically proven conclusion. Do not ask me how. I used to be able to understand complicated matters as this. Now I am just too lazy to try.

However, I am still able to illustrate its application.

For example, we want to invest SGD2000 in a particular stock every month. 

However, we can only have the money after pay day, say 15th of the month.

So at what price should we invest?

The first 37% of a month is ~11 days. So until 26 of the month, we should observe the market and establish the “baseline”, which is not necessarily the lowest price in the 11 days.

Then for the remaining 19 days, from 27th to the 15th of next month, we should just buy at the first opportunity when the price reaches the “Baseline” or below. We could simply place a “Limit order” that is valid for 19 days.

Statistically, this approach will give you relatively good outcomes.

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In Summary

Struggling between FOMO and FOBO will bring endless anxiety and probably bad outcomes.

The fundamental solution is to embrace “Curiosity” to explore and understand how things really work, without worrying about the outcomes.

The next best alternative is to pick a “Rule” and stick to it. The certainty the “Rule” brings will reduce anxiety.

Do note that the purpose of the “Rule” is not to achieve the best outcomes, but to reduce anxiety with acceptable outcomes.

“DCA” and “The 37% Rule” are some examples.

Till next time!

Another quick update — Things are up!

 

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Dear readers,

Thank you for coming here!

This is again going to be a very quick update.

Things are really up!

I once again just sent out the last message I needed to send today for work. The schedule has been pretty tight lately, mainly because of the multiple things ongoing.

When some of them demand attention at the same time, that is when overloading happens.

But I am ok perfectly. Nothing I could not handle. Have been through much tighter schedules.

While efficiency could surely be improved in some cases, I am satisfied with my performance overall. 

And I feel I have regained some of my confidence. Now is the time to guard against arrogance!

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Also the stocks are up!

I have regained 60% of my gains since I changed my investment approach last Nov, up from -115% that happened very recently.

Now, I start to regret the lost opportunities for adding positions in the past week.

Honestly, I had gotten a bit scared by the repeated and significant drops. 

Therefore, when I saw the opportunity to top up, I set very low prices before going to bed or focusing on work.

In a few cases, the prices were really close to my set prices, but I missed them in the end.

My returns would have been much bigger if I was less afraid and just set a reasonable price for top up.

But anyway, I would never know whether it will start shooting up or keep going down. 

I guess we can only earn the returns that we are qualified for.

Once we are there, opportunities will present themselves. I look forward to that day!

Till next time！