As from April 2013 my Journey in Investing is to create Retirement Income for Life till 80 years old for two over market cycles of Bull and Bear.

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This blog is authored by an old multi-bagger blue chips stock picker uncle from HDB heartland!

"The market is not your mother. It consists of tough men and women who look for ways to take money away from you instead of pouring milk into your mouth." - Dr. Alexander Elder

"For the things we have to learn before we can do them, we learn by doing them." - Aristotle

It is here where I share with you how I did it! FREE Education in stock market wisdom.

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Value Investing
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Thursday, 12 November 2015

Concentration Risk??? May Look Like One!!!


Someone quoted to Uncle8888 last night that she saw one blogger was doing well by taking concentration risks. She is thinking of taking that approach to average down on one stock - potentially good prospect.


What your favorite bloggers may not have say it loudly?

The highest weight-age in their current portfolio stock may look like having concentration risk at recent snap shot view.

Do you think that Uncle8888's Kep Corp is about 18% of his current total stock investment cost is a concentration risk?



So what is risk?

Read? Getting good returns without too much risk???

Risk is about permanent loss of our capital . Right?

In this case, the whole current Kep Corp position holding is FOC!

Not a single cent of his investing capital in it.

Now, where is the risk by the definition of the current World's Greatest Investor of our times?

He don't have risk; but he will have his greatest REGRET of not making more hays while Sun shines. Sianz!




















 



 


4 comments:

  1. "In this case, the whole current Kep Corp position holding is FOC"

    Unquote:-
    This is where our psychology or BRIAN can play a trick on us.

    Just like a gambler who has a winning streak and start betting his money as FOC MONEY.
    He has abandoned his capital management of betting judiciously.
    So is investing in the stock market any much difference.

    The moral of the story is never think any money or things you have now are "FOC"
    But can you beat your own "Brain"?
    i think at times,we can not lah!

    ReplyDelete
    Replies
    1. Agreed! We invest to increase our wealth.

      Hence the capital gain is our wealth, not FOC money.

      Delete
  2. Hi bro8888,

    I think some people have to learn the lessons about averaging down themselves. I'll never do that again, not without looking at my total allocation for my portfolio for that particular stock!

    ReplyDelete
  3. Unfortunately human beings don't think in absolute dollars. We think in relative dollars and behave as if not all dollars are created equal. By assigning relative values to different moneys we run the risk of being too quick to spend, too slow to save, or too conservative when we invest—all of which can cost us in the short or long run.
    But then all money is really the same!

    ReplyDelete

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