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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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.

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Value Investing
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Friday, 7 June 2019

Five Lessons from History

Spur 7 June 2019 at 13:00:00 GMT+8

Why it's so hard to be greedy when others are fearful.

Just some food for the Mind. ;)

Read? Five Lessons from History

Lesson #2: Reversion to the mean occurs because people persuasive enough to make something grow don’t have the kind of personalities that allow them to stop before pushing too far.

It’s true for investors. The kind of personality willing to take enough risks to earn outsized returns is generally not compatible with the kind of personality willing to shift everything into muni bonds once they’ve made enough money. They’ll keep taking risks until those risks backfire. It’s why the Forbes list of billionaires has 60% turnover per decade.

Long-term success in any endeavor requires two tasks: Getting something, and keeping it. Getting rich and staying rich. Getting market share and keeping market share.

These things are not only separate tasks, but often require contradictory skills. Getting something often requires risk-taking and confidence. Keeping it often requires room for error and paranoia. Sometimes a person masters both skills – Warren Buffett is a good example. But it’s rare. Far more common is big success occurring because a person had a set of traits that also come at the direct cost of keeping their success. Which is why downside reversion to the mean is such a repeating theme in history.

CW8888: Working hard on how to keep those money won from the stock market by staying rich and not returning too much back to Mr Market. Let see whether it works well!

Read? Beware of Illusion of wealth in the stock market

1 comment:

  1. Once U have accumulated enough wealth, i think one should lower his huddle rate of return in the stock markets.

    Besides aiming 4 to 5 % of return of stock portfolio now maybe equivalent to 6 to 8 % of portfolio of the past.

    Lower the huddle rate to preserve or sustain your wealth till death do us part.

    That maybe the reason i put some money in brick & mortar, knowing REITS will give higher yields anytime if not most of the times.

    NVM, still can switch back anytime if there is opportunity as long as U have preserved it.


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