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.

Welcome to Ministry of Wealth!

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.

Think Investing as Tug of War - Read more? Click and scroll down



Important Notice and Attention: If you are looking for such ideas; here is the wrong blog to visit.

Value Investing
Dividend/Income Investing
Technical Analysis and Charting
Stock Tips

Monday, 20 June 2016

Pillow Stocks : The Less Stressful Long-term Investing When We Get Some Of Them Right!


Read? Dr Chan: How to Own ‘Zero-Capital’ Stocks

Quote : " How to Own ‘Zero-Capital’ Stocks

Of course, not all stocks can actually appreciate four times its original value. That said, in the event that a stock’s price double, I would not recommend selling half of the stock holding, as the remaining stock might be too little. We should not be holding insufficient amounts of quality stocks that we may come by, so I will impart a different method to make the stocks ‘free’.

Investors can deduct dividend payouts from their initial costs, and also deduct bonus shares from the amount. Over a sufficient period of time, the stocks may actually become zero-capital stocks or even ‘negative-capital stocks’ when the amounts deducted exceed the initial investment, which means that the investor will be in a profitable position no matter what happens next.

Unquote


The above method by Dr Chan is not too different from Uncle8888's way of accumulating his pillow stocks. But, Uncle8888's method may be faster way to accumulate more pillow stocks by seizing those opportunities in short-term trading across market cycle by stuffing more feathers to build pillow stocks.

Total Realized Gains = Net P/L of many rounds of the same stock + Accumulated dividends of the same stock


Read? All articles relating to pillow stocks strategy


Read? Strengthening War Chest From Our Investment Portfolio??? (3)






4 comments:

  1. Have a minuscule FCOT shares from DRP. Enjoy keeping these pillow :-p

    ReplyDelete
    Replies
    1. Important to fully understand this part from Dr. Chan ...

      Of course, not all stocks can actually appreciate four times its original value. That said, in the event that a stock’s price double, I would not recommend selling half of the stock holding, as the remaining stock might be too little. We should not be holding insufficient amounts of quality stocks that we may come by, so I will impart a different method to make the stocks ‘free’.


      Investors can deduct dividend payouts from their initial costs, and also deduct bonus shares from the amount. Over a sufficient period of time, the stocks may actually become zero-capital stocks or even ‘negative-capital stocks’ when the amounts deducted exceed the initial investment, which means that the investor will be in a profitable position no matter what happens next.




      Delete
    2. Pillow stocks strategy is NOT a passive strategy. It requires active market monitoring and implementation before it become pillows to sleep with less stress over future market cycles. This is positive thinking effect on more commonly known as House Money Effect bias. We capitalize on this bias to sleep better.

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