Monday, 31 August 2015
Paper Losses Painful. Cut Losses Also Painful! So How???
Let be honest. Tell Uncle88888 that you have read them.
The two statements at the top of this blog!
Uncle8888 didn't anyhow put them for fun!
It was only after painful moments in the stock market; Uncle8888 has this wisdom to put them right up at the Top so that every readers may read them and understand their meaning and cut deep into their Investing Mind. The two processes of long-term investing and short-term trading.
"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
Any retail investors who have not been through a full market cycle of either Bull-Bear-Bull or Bear-Bull-Bear and survive at the end of a market cycle with 4 to 5% CAGR. You are just newbies including this Uncle8888 who has been blogging and showing off from Dec 2006 till early 2008!
After 8 years in the stock market starting seriously from Jan 2000; in 2007 he made $135K; Feb 07 $28.8K, May 07 $22.8K, Jul 07 $28.4K and Oct 07 (Bull Peak) $15.8K. He thought that after 8 years in the stock market; finally he has arrived and soon he should be trading full time with this type of trading income $135K per year! Smelly smelly 50% of it is $60K per year!
But; Mr. Market taught him a lesson that till Today he will never forget! In 2008, he lost back all to Mr. Market and more.Total losses in 2008 is -$156K!
You tell me what happened when his daughter has read it!
How did newbies get themselves into large losses?
After years of blogging and listening with his own ears and reading with his own eyes and including his own personal experience; the only cause is that most newbies have average down to large losses and with their limited war chest available it has become so difficult to recover!
Hope all newbies keep this in mind! It doesn't matters now you are doing very well. But, you are still newbies!
As for the second statement; it is self-explanatory. It is ancient wisdom!
"For the things we have to learn before we can do them, we learn by doing them." - Aristotle
Who want to be a follower?
Your Gurus are not perfect so are you.
You and only you are the one who is fully responsible to fine-tune your own craft to generate that multi-year of more than 5% CAGR to disqualify yourself as newbies!
Get it?
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The Moral of Story ...
ReplyDeleteAs newbies haven't earn the right to keep average down; learn to keep our individual position smaller e.g. not more than 4-5% of our total investing capital to avoid large losses.
Even 8 years of reading countless of investing and trading books from NLB didn't stop me from losing money. Knowledge not enough?
ReplyDeleteuncle.
ReplyDeleteyou considered good enough..earn some then lose back to market.
worst for new bird like me. haven started earn yet, already lose till scared liao.
Not sure. Did you understand the moral of the story?
Delete8 years of practical experience + 8 years of reading countless books also cannot stop me from losing money . What do you think newbies need to know?
are you discourage new bird to trade, then just save for retirement the best?
Delete:-(
DeleteNeed someone good in England to help to explain it more clearly.
CW,
DeleteBe patient.
Unless one has tried mangoes themselves, no matter how powderful one's England is, there is no way to describe the taste of mango to another person.
That's why snake-oil find it easier to do cheerleading instead:
If you think you can, you can!
You can do it! I believe in you!
Keep at it! One day you'll succeed!
Everyone feels good; but once we reach home, there's a hollow feeling in the heart...
Why are the workmen keep looking for better tools when they are the ones at fault? *sigh*
DeleteI guess we can't learn how to swim by reading countless books and watching countless youtube videos. You might think you've known all the theory and all the practical by watching and reading, but it's really only when you enter the water in swimming pool then you'll find out if you can swim. But after swimming in the swimming pool, getting all the medals and long distance swimming awards, you thought you're a good swimmer. That's until you started swimming in the sea. With the unpredictable waves and different depths (no longer 1.8 m!), it's so different from the safe and sterile waters of the swimming pool.
ReplyDeleteNewbies have no right to swim in the sea. They should keep to the swimming pool and only swim with supervision.
The reason why we need tutor here. LOL!
Deletethe only way to learn trading/investing is to jump deep into the pacific ocean, very soon you will find out whether you really want to stay there or not.
Deletelosses is just a very big part of trading/investing, if you don't like them around or can't handle them, then you are in the wrong place.
Deletedon't blame yourself for not able to handle losses, very few can, thats is also why very few can make it in trading and investing.
Deleteso if you find yourself in misary when you lost, stay out of the game totally!
DeleteLp is a representative from America, not England ;)
ReplyDeleteLp is a representative from America, not England ;)
ReplyDeletetry explaining to a virgin about sex! haha.
ReplyDeletetry explaining to someone who never have a painful breakup in relationship about heartache!
try explaining losses in stocks to someone who think stock market is sure win!
We must be very thankful for the black Monday! Ok nvm, ur daddy mommy is will always cast safety net for u even if losses is huge!