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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"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

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Tuesday, 25 October 2016

Positioning Size and Risk Comfort Level Where Successful Retail Investors Don't See Eye To Eye To Successful Retail Traders

Read? Cut Losses Where Successful Investors Don't See Eye To Eye To Successful Traders

Real People. Real Story!

Upon a time; there were two men from time to time when they have the opportunity they would poke each other over trading and investing. 

One man was the late known "Guru" who has avoided to answer even simple question of Yes or No by stating the fact that even audited companies could hide frauds and not detected. In another word; even audited statements cannot be trusted. "Guru" has been advocating faith and trust and you need to believe! 

Trust since you can't really Verify! You can't!

The other man is still currently trading for a living.

One day; late "Guru" poked back with a good response.

Positioning Size and Risk Comfort Level

Guru : When I have full conviction over one company; I dare to build up positions up to 5 to 10% of my net worth. In your trading; you dare or not?

Uncle8888 fully agreed with Guru!

Successful retail investors can have very high level of risk comfort when they see opportunity and seize them; but successful traders will have to fall back to their risk control and risk management even they have full conviction. 

How many successful retail traders dare to build up their positions to 5 to 10% of their net worth?

That is the difference between retail trading and retail investing. 



  1. CW,

    This story does not hold water.

    Does not pass the smell test...

    Are you saying retail investors don't need risk management?

    Perhaps that's why after 7 years of bull run from 2009 to 2016, if our portfolios are only showing a slight positive or nursing some small losses, it really calls into question what will happen if STI tanks another 20%?

    Don't worry! I have a high tolerance for risk comfort...

    It's just a flesh wound!

    The Black Knight from Monty Python would be proud ;)

  2. Hmm. CW,

    Build up position to 5-10% of net worth? Meaning what? Net worth = total assets? Include property and CPF?

    Or just investible cash and CPF ??

    If it's later, what is the big deal of 5%?

    If it's the former, think he either sibei zai, or he think he sibei zai.

    All my Investible cash is just 20% of my net worth excluding property.

    1. He was multi-millionaire so 5 to 10% of his net worth is not small number.

    2. Hmm..

      I think u didn't get my point.

      I am not questioning if it is a big amount or not. Most probably it is.

      I am questioning the definition of "net worth". Which is misleading. From your answer, I think it meant investible cash= net worth.

      Well I would agree that 20 counters portfolio is focus investing.

      5% net asset means all his investible income is concentrated in 2-4 counters .

    3. Think he was trying to say that retail traders use their working capital to trade while retail investors may use their net worth to invest. That why we can see some retail investors putting in $Xm in the stock market to get $XXX,XXX dividend income. Not sure how many retail traders are willing to put $Xm into their trading account to trade?


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