THE sharp fall in Noble Group's shares on Tuesday signalled that
investors fear there could be more share sale ahead by the commodity
trader's major shareholder China Investment Corp (CIC), said Maybank Kim
Noble shares fell 10 Singapore cents or over 7 per cent to S$1.295 on
Tuesday on news reports that CIC is looking to raise as much as S$405
million by selling about a third of its shares in the commodity firm via
a married deal.
The company drew a trading activity query from the Singapore Exchange
as a result of the steep fall. The counter jumped to the top active
list in the morning session with some 390 million shares worth some
S$511 million done.
It is not positive that China's largest sovereign wealth fund is
actually cutting losses on their long-term investment based on their
original cost.This is especially so considering that Noble was supposed
to be a strategic investment for CIC, indirectly helping China manage
their raw material requirements," said Maybank Kim Eng.
Uncle8888 has adopted a Goal-based Approach investing strategy by setting for himself a 10-year progressive Goal Targets to be achieved for each year from 2012 to 2021.
Our investing journey is not Horse Race or Rat Race where we compete against others. It is our investment Marathon Race where we set our own pace and compete against ourselves to win our own race. Year 3: Q3 2014 Result Achieved 22.2% against 25%of 2021 Goal Targets.
(Too much cash rotting in the bank as war chest)
Investment Portfolio XIRR Track, Measure and Visualize! Without doing it; how to revise investing strategies and to improve year-on-year investing performance?
Portfolio's XIRR includes all investable cash plus the current stocks
value at market closing price as on 30 Sep 2014.
Since one year ago: +1.9% Since 1 Nov 2008: +5.8% Since 1 Jan 2003: +10.0% Since 1 Jan 2000: +9.2% Riding the market cycles of Bull and Bear
Liquidity and Permanency
We have to maintainLiquidity of Capital (War Chest) for the Next Bear and Permanency of staying Invested for the next Bull since we can never be able to effectively time the market.
After taken back 100% of his Investing
Capital and some profits off the table for his War Chest; it is going to be like Year 2000 restart; except this time Uncle8888 is armed with Master Degree in Stock
Market and going for his PhD. in Stock Market.
It is going to be more exciting in the next Bear!
This time, regular readers will be able
to watch "Full Time" actions on how investing lessons for PhD course are
In the last two courses, readers could only watch "Half Time" actions since Uncle8888 has only started to blog in 2006.
When will Mr Bear come?
Retirement Income for Life
Tap 1: Survival Money
The cash flow from Tap 1 doesn't depend on stock market condition.
"I have not failed. I've just found 10,000 ways that won't work." - Thomas A. Edison
"I have lost money on 999 but win 1 ten-baggers. I have not failed!" - Anonymous retail Investor
Here are a list of quotes to overcome your fear of failure:
“You’ll always miss 100% of the shots you don’t take.” Wayne Gretzky
“I really don’t think life is about the I-could-have-beens. Life is
only about the I-tried-to-do. I don’t mind the failure but I can’t
imagine that I’d forgive myself if I didn’t try.” Nikki Giovanni
“No man ever achieved worth-while success who did not, at one time or
other, find himself with at least one foot hanging well over the brink
of failure.” Napoleon Hill
“Success is often achieved by those who don’t know that failure is inevitable.” Coco Chanel
“Defeat is not the worst of failures. Not to have tried is the true failure.” George Edward Woodberry
“You build on failure. You use it as a stepping stone. Close the door
on the past. You don’t try to forget the mistakes, but you don’t dwell
on it. You don’t let it have any of your energy, or any of your time, or
any of your space.” Johnny Cash
“Do not fear mistakes. You will know failure. Continue to reach out.” Benjamin Franklin
“Forget about the consequences of failure. Failure is only a
temporary change in direction to set you straight for your next
success.” Denis Waitley
“I honestly think it is better to be a failure at something you love than to be a success at something you hate.” George Burns
“I’ve come to believe that all my past failure and frustration were
actually laying the foundation for the understandings that have created
the new level of living I now enjoy.” Tony Robbins
“What would life be if we had no courage to attempt anything?” Vincent van Gogh
“I don’t know the key to success, but the key to failure is trying to please everybody.” Bill Cosby
“One who fears failure limits his activities. Failure is only the opportunity to more intelligently begin again.” Henry Ford
- See more at: http://quotivee.com/2013/articles/failure-is-the-mother-of-success/#sthash.2Q4v1Yhd.dpuf
Famous Failures As In Human Assets vs Financial Assets: The Great Divide!!!
Failures as in Human Assets
Yesterday, you have failed or you have even failed the worst that you have never see before. The worst failure ever!
You can still go to sleep. May be sleepless night. May be wide awaken till the next morning sun rises.
When tomorrow arrives, you learn more, gain more insights, have better ideas, ............more of this ....some more of that .....
You have another brand new 24 hours to work on your past failures and continue forward. What is there in yesterday to hold you back?
Do you have to "recover" your yesterday's failure and pay back on your past mistakes? No?
Failed again Today. Never mind! There will always be
Tomorrows. In fact, there are many tomorrows if tomorrow can still come.
Failures as in Financial Assets
Lehman Brother became Lemons
Geniuses in Long Term Capital became idiots
Today famous failures as in financial assets. Tomorrow will become History!
In investing, we can't afford to keep making mistakes and thinking that we can learn from 999 losses and win 1 ten-baggers.
In investing, yesterday's losses will add on to your bigger recovery baggage to do much more just to break even.
In investing, should we listen to this man?
"I have not failed. I've just found 10,000 ways that won't work." - Thomas A. Edison
or listen to this man ....
Rule No.1: Never lose money. Rule No.2: Never forget rule No.1 - Warren Buffett
Uncle8888 said Thank You! You have done well for your financial planning. 1. You have cut losses on your ILP and avoid this time bomb. 2. For many years, you have resisted your wife for upgrading to bigger and spacious 5-room HDB or Executive. Now, you have plenty of cash in CPF OA earning the best interest rate in Singapore @ 2.5% CAGR.
3. You have two low cost group insurance coverages.
4. You have three endowment policies for your three children to fund their university education. The last endowment policy will mature before the age of 60 as the escalation cost of premiums from the age of 60 is significant! This was the best advice coming from my life insurance agent. It is good that you got yourself educated earlier in your life that once you are retired you are not an valuable asset that will need protection by life insurance. You just need comprehensive medical insurances and self-insured funding to get through the rest of your life.
5. You have awaken not too late at early 40s and seriously started to plan and taken short-term trading and long-term investing investing as the road to reach financial independence by 55; but you have missed the target by 1.5 years. It is better late than never. LOL!
6. Against the common wisdom of housing loan as good debt, you thought that it was better to fully paid up your HDB housing loan as early as possible. Consequently, being debt-free, you were in better position to support your wife's idea of becoming full time housewife to look after her three kids. Wife happy. Man peace. LOL!
Risk is an integral part of investing. Generally speaking, it is the
counterbalance to return. Although we hear many money managers and
advisors talk about "risk management," it is a rather ambiguous phrase.
Today, risk and volatility
are often used interchangeably, which is an overly simplistic
definition promoted by academia. However, a recent memo published by
Howard Marks, the Chairman of Oaktree Capital Management, does a
fantastic job at providing a more accurate description.
Marks may not be familiar to the average investor but he is highly
respected among the world's best money managers, including Warren
Buffett. In short, risk carries many different forms and cannot be
completely quantified. Here are a few key points I took from his memo,
titled, "Risk Revisited."
1. Volatility is not risk. Academia has defined
risk as volatility because it can be measured. It is a foundational
concept underlying the majority of financial models. Stocks are often
assessed using their betas, or their fluctuations, in relationship to
the market. In fact, beta has become perversely ubiquitous with risk.
This fallacy often lulls investors into a false sense of security and
is usually coupled with a woeful lack of understanding of risk. For
example, the utility sector's beta is about half that of the Standard
& Poor's 500 index (depending on the time frame measured). It would
be a grave mistake to assume that by purchasing a utility, one is
exposed to half of the risk of the market.
2. Risk is the potential to lose money permanently. Continuing
with the utility company example, there are a plethora of risks
associated with stocks. Volatility may provide a modicum of insight into
the overall risks. However, it dupes the investor by failing to account
for anything company specific. If the market were to drop 10 percent
because of a geopolitical conflict, volatility or beta might do an admirable job of forecasting the utility company to decline roughly 5 percent.
Yet, it fails to predict the impact falling natural gas prices or a
change in legislation may have on any particular company. Additionally,
if the entire market declines from a global macro event, capital is not
permanently lost. A patient investor can usually wait for a recovery.
Only when you sell the investment do you realize an actual loss. When
something fundamentally alters a company's business, the risk has the
potential to be permanent.
Think about what the iPhone did to BlackBerry or what the iPad has
done to personal computers, or PCs. Beta, volatility and even crystal
balls failed to predict these fundamental shifts.
3. Risk is necessary.Attempts to predict the
future will most often lead to failure. However, an investor can
understand how the risks relate to each company without necessarily
predicting the exact outcome. Great investors are astute at thinking of a
range of possible outcomes and selecting investments that have more
ways to win than lose.
If I own a company that sells natural gas, I have to consider the
range of outcomes if gas prices will rise, fall, or remain flat over
coming years. Clearly, there is risk should prices fall or even stay
flat. However, if I feel the stock is appropriately accounting for this
risk, and I can envision a number of paths toward higher prices in the
future, my downside could be limited and potential reward attractive. As
the popular adage goes, "There is no such thing as a free lunch." Smart
investors take on a measured amount of risks, which cannot be captured
by a stock's historical volatility.
4. Nobody knows the unknown, but some investors don't know this. If beta is a reasonable indication of market risk,
then one can reasonably estimate performance given a forecast of the
overall market. However, most investors realize this is a loser's game,
as nobody knows where the market will be in the near and long term.
Unlike the earlier gas price example, there are an infinite number of
interconnected and complex unknowns or "black swans" that could impact
the market. These could be wars, terrorist attacks and disease
epidemics, among other possibilities. None of these risks can be
captured by historical volatility metrics like beta.
5. Prudent acceptance of risk is superior to shunning the unknown.Given
the widespread reliance on beta as a measurement of risk, modern
portfolio theorists have concluded that certain asset classes and
subsets of asset classes offer higher returns, while others offer more
safety. Eugene Fama and Kenneth French famously touted their
three-factor model used to predict expected returns while they were both
professors at the University of Chicago Booth School of Business.
Small-cap stocks are considered risky and thought to offer long-term
returns in excess of safer large-cap stocks. If this theory were
accurate, though, shouldn't every investor allocate a large portion of a portfolio to small caps?
Of course, the answer is "No." Return is not guaranteed. It is merely
possible. A smaller company may face more risks than a larger company,
none of which can be precisely known. If the smaller company
successfully mitigates those risks while growing their business, the
investor ought to be more handsomely rewarded. Regardless of the
expected return, the risks remain immeasurable and the outcomes
Some investors are highly conservative and often shun risk. However,
this leaves an investor vulnerable to the risk of missed opportunities.
Just as it would be imprudent to place all of one's eggs in the
basket, it would be a mistake to shun risk all together. A far more
logical approach is to assess the returns needed by the individual and
expose the portfolio to risks the investor can tolerate.
Risk must be taken or there will be no return. If an investor has a
short time horizon, they should wish to avoid illiquidity risk, but they
may be comfortable with leverage risk or credit risk. On the other
hand, just because an investor has a high risk tolerance does not mean
it is smart to take unnecessary risk. The ideal portfolio manager should
have a ceaseless desire to understand the risks facing his or her
investments, while simultaneously acknowledging he or she can only be
sure the future is unknown.
Last updated : 15 Sep 2018
I am 62 yrs old uncle living in HDB heartland who has achieved financial independence @ 56 and finally retired @ 60 from full-time job as employee on 1 Oct 2016.
Single household income since 1995 with three children. Eldest son and daughter are now working and youngest son still in his 3nd year Uni in SUTD.
I have been doing long-term investing and short-term trading in Singapore stock market only since Jan 2000 so I am that Panda or Koala in the investment world; but I am still surviving well in the wild.
I am now executing my Three Taps solution model to maintain sustainable retirement income for life till 2038.
Disclaimer: Stock trading involves significant risks. Create Wealth trader is not a licensed Investment Adviser and will not be responsible for any losses which you incurred. You are advised to always do your own homework before making any trading decision.