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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Value Investing
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Friday, 17 October 2014

Reading this won't make you great! (Think it is a good time to re-read)


CW88888: Reading this won't make us great but may make our mind stronger. No?

Click? Reading this won't make you great!


And finally the most important, and rarest, trait of all: the ability to live through volatility without changing your investment thought process.

This, said Mr Sellers, is almost impossible for most people to do; when the chips are down they have a terrible time not selling their stocks at a loss. They have a really hard time getting themselves to average down or to put any money into stocks at all when the market is going down.


'People don't like short-term pain even if it would result in better long-term results, he said. Very few investors can handle the volatility required for high portfolio returns. They equate short-term volatility with risk.


'This is irrational; risk means that if you are wrong about a bet you make, you lose money. A swing up or down over a relatively short time period is not a loss and therefore not risk, unless you are prone to panicking at the bottom and locking in the loss.


'But most people just can't see it that way; their brains won't let them. Their panic instinct steps in and shuts down the normal brain function.'



7 comments:

  1. Just because you have heard of cut loss then you must also follow the advice blindly, and cut loss!

    It is important to know the difference between cut loss and write off.

    ReplyDelete
  2. Read :-

    http://createwealth8888.blogspot.sg/2013/09/cut-loss-or-write-it-off.html


    Also, this BBC article titled "Warren Buffett sells more than 245 million Tesco shares ". Is it a "write-off" or cut loss; hint : is the Tesco paring down for capital? http://www.bbc.com/news/business-29640117

    ReplyDelete
  3. Great article by Mr. Sellers which I initially thought the only think he know in investment is Sell. He does write well.

    Quite like this part:

    He cited Warren Buffett as one of the best writers ever in the business world. 'It's not a coincidence that he's also one of the best investors of all time. If you can't write clearly, it is my opinion that you don't think very clearly,' Mr Sellers said.

    ReplyDelete

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