As from April 2013 my Journey in Investing is to create Retirement Income for Life till 85 years old in 2041 for two persons 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

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Sunday, 29 March 2020

Most Retail Investors Will Need To Go Through At Least One Bear Market Crash Before Believing In "Passive" Income For Retirement


Past few weeks; Uncle8888 has received more emails from blog readers and Whatapps messages from his ex-colleagues with common topics in their mind. 

How ah? Cut losses and recycle capital when market drops lower?

Can I recover my paper losses? 

Can I still believe in "passive" income from investing to FIRE or retire?

Sigh!!!

One guy in his 50s who has just started investing a few years ago and now sitting on more than $200K paper losses and feeling stress and more stress from his nagging wife that these paper losses could have funded their son university study!  

Market already stressed him and nagging wife who doesn't understand market add more stress! Cham!

Hope his son doesn't ask him. Papa still okay or not?


Hmm ..  Uncle8888 still remember this ... same same :-)

Read? Not Interested In Investing or Too scared To Invest???

Why it is known as personal investing? Don't let wife know too. It is very personal!!!




21 comments:

  1. Uncle 8888

    This should be where woman comes out better than man. I have one auntie client who says this as well.

    Personal investment is very personal. And in the end,its for the family.

    ReplyDelete
  2. Ha! Ha!

    "Market already stressed him and nagging wife who doesn't understand market add more stress! Cham!"

    Unquote:-

    Sound or look familiar the above sentence.

    When i first invested in 1987/1988, i was caught straight away and get mauled. by BEAR lol.

    But i didn't faltered in my own principles of belief of the market until this day.

    Amen.

    ReplyDelete
  3. Now she knows everything what is going on with our money and assets.

    Except her money is her money (CPF bo pian mah).

    LOL.

    We really believe we are in it together for better or for best (not worse O. K. Touch Wood)

    ReplyDelete
  4. Sorry corrections, my wife not the nagging type but did say a word or two then.

    ReplyDelete
  5. But we were DINK and ND then.

    That's why everyone of us invest with different personal's circumstances, can affect our final investment results.

    ReplyDelete
  6. This post of yours, remind me of what WB said: (Something like that)

    "U should not be in the market if U can't stomach 50% loss in your stock portfolio. It is a matter of time your portfolio will be"

    Unquote:-

    Now how many veterans here agree?

    i for one agree.

    ReplyDelete
  7. If U keep on trying playing with catching the falling knife, your stock portfolio can be easily 30 to 50% in the red.

    In fact if less than 20 to 25 % loss when the Bear market is at it's lowest point, i think U will be O. K. if U can hold for 3 to 5 years or more..

    YMMV.

    ReplyDelete
    Replies
    1. https://www.marketwatch.com/story/getting-crushed-in-this-market-one-look-at-warren-buffetts-portfolio-and-you-might-feel-a-lot-better-about-yours-2020-03-25?siteid=yhoof2&yptr=yahoo

      Just remember the above is WB's portfolio.

      And he will never, never trying to catch a falling life like us.

      Delete
    2. Temperament,

      Buffett has caught many falling knives before & likely he's doing so at this time too. This will be confirmed in the next 2 weeks when we can see his quarterly 13F to see what he has been buying / selling in the first 3 months of 2020.

      Probably his most famous "falling knife(ves)" was in 16 Oct 2008, when he had finally started buying stocks in a big way again. "Buy American. I am."

      S&P500 went on to drop from 950 to 670 i.e. another -29% drop ... on top of the earlier -36% drop from Oct 2007 to Oct 2008. If Buffett was an employee running a hedge fund or unit trust, he might very well be fired by Nov 2008 or Feb 2009.

      Of course by Oct 2012, everyone had forgotten what a lousy market timer Buffett was LOL!!

      He can afford to be early, as long he thinks the valuation is cheap enough & the company is not going to kaput in the recession. Buffett probably has a few B's of household expenses rotting in savings accounts & T-bills & CDs (US version of FDs). 😂

      Delete
    3. LOL.

      "He can afford to be early, as long he thinks the valuation is cheap enough & the company is not going to kaput in the recession."

      Unquote:-

      That's the difference for catching a falling knife for him which we all wish we could emulate too. Right?

      And at the bottom of bottom 2008/2009, Banks and Insurance Companies were lying up to ask him for loans (aka at a very special terms dictated by him IRRC).

      This is where i want to stress actually.

      i remembered i couldn't buy any banks dirt, dirt cheap because i didn't have any US market trading account then.

      Not anymore.

      But now the banks are all well capitalised unlike 2008/2009.

      Opportunity very rarely knock twice at our door.

      That's life.

      Delete
    4. Temperament,

      There were many opportunities a week or 2 ago ... and I'm sure there will be many more in the weeks & months ahead.

      Just whether we are able, willing & need to invest ... or not. Kekeke!!

      Delete
    5. Warren Buffet's Thoughts On The 2020 Stock Market Crash. What To Do When The Stock Market Crashes According To Warren Buffet

      1. Focus on the underlying business rather then seeing companies as stock ticker symbols

      2. Don't buy stocks at elevated valuations. Cash is a position. Always keep cash on the sidelines for market down turns to take advantage of opportunities.

      3. Don't try to time the stock market. There are periods of economic booms and busts. Stay the course. A loss will translate into gains over the long term.

      4. Stay invested. Investment returns will smooth out over time. Especially over longer time periods.

      5. Go shopping! As share prices are collapsing wonderful businesses are on sale. Stock market crashes are one of the rare times these wonderful businesses can be purchased at amazing prices. Extraordinary opportunities present themselves.

      Unquote:-

      NO. 3 seems to contradict NO.5

      i believe many people will be confused.

      Maybe even stumbled.

      Make no mistake, since day one i already considered he is a market timer.

      Though he said , "Don't try to time the market"

      Only U must understand how he does it actually.

      With his intellect, with finesse timing the market of course.

      Delete
  8. The lowest point should be > then 40 % from it's peak. 50% is better

    ReplyDelete
  9. Nothing is real until U experienced it.

    Theory is theory only.

    Practical is practical.

    Don't believe in what WB said?

    Then when it happens to U, i think is a "good thing" because not many people have the 3 Cs in BEAR market investing.

    Of course not forgetting U have build up a foundation(Cash) for 3 to 5 years.

    YMMV.

    ReplyDelete
  10. Buffett is a businessman by natural, just that he is so good in investing as well, that people forgot he is a businessman by natural. Haha

    ReplyDelete
  11. To put matter to rest or no misunderstanding by anyone (my England is no good), what i should say is,

    "And he will never, never trying to catch a falling life like the way we do"

    He does but not as the way we do.

    i hope no misunderstandings by anyone.

    ReplyDelete
  12. Ahem...cough....in good times they tend to be quiet, but when things start goes haywire all those ' I told you so' starting ringing around the ears.
    No, not my wife, I'm not married. It's my mom. LOL I guess all woman the same no matter which role.

    ReplyDelete
    Replies
    1. ha ha. Nagging wife can be nagging mother too

      Delete
    2. Ha! Ha!

      i am most fortunate.

      My late mom was quiet type.

      And my wife too.

      Woman is nagging then how to describe man?

      Long winded?

      i have been accused.

      Maybe because i tend to be 4Ks and perfectionist lol.

      LOL.

      Delete

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