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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Thursday, 17 December 2020

Setting New Record in Asset Price? What Really Happen To Our Real Wealth After Point X???

New Record High!!!

So what?

A moment or a short period of an illusion of happiness and pride as retail investor!

Then what?

Uncle8888's Three Little Pigs have set their own historical record high and so what?

Kep Corp at $13.73 

Sembcorp Ind at $6.90

DBS at $31.28

Did he lock in any profits anywhere near their record historical high and kept them safe from Mr Bear?

NO!

Dumb!

Suck!

Nothing but just an illusionary period of happiness and pride as retail investor! That is true!

Until we have mastered the skills and foresight to lock in paper gains somewhere near historical record HIGH and kept them safe from returning these gains back to Mr Market. All these paper gains are just an illusion of wealth!



11 comments:

  1. CW,

    Ain't it the TRUTH!

    That's why SGX tried to promote its single stock futures for those who might want to lock-in their gains. But not popular.

    US got options; rest of the world have CFDs where we can hedge our stock positions.

    Good luck enticing leverage/margin adverse retail investors on such hedging tools... LOL!


    You think why Buy-and-Hold is such a great excuse/cover for retail investors to avoid making a decision?

    Sell Keppel at $13 to see it go all the way to $25? Bang head!

    Don't sell Keppel at $13 to see it drop back down to below $6? Bang bxlls!

    ReplyDelete
  2. True, true.

    But how about the other way when the stocks reach 52 week new high but after ii sold them, they go up higher by from 112 (the price ii sold them) to 123, 124.

    Still wonder how much higher they will go up future? - Growth stocks?

    Really always console myself, make money O. K. liu.

    And always remember "Liu De Ain't Sun Chai, Bu Pah Mei Chai Sou".

    The market is always there for us to rinse and repeat.

    Only can we do a better rinse the next time; the next time...

    ReplyDelete
  3. Hi Uncle8888,

    Maybe that's why more & more Sinkies are going to Uncle Sam's stock markets? Stocks only go up! šŸ¤£

    Nasdaq 100 ETF and ARK Innovation ETF and Semiconductor ETF are some of the more popular shiny things catching the eyes of Sinkies these days.

    But most were not around to see this and this. LOL.

    On a more serious note, nobody can tell or predict when, what or where is the high or the low. We just need to know when is enough, when to take some profits off the table (or walk away totally), get to know our investments really well & hence develop a "feel" for their price movements/valuations, and perhaps also explore & deep-dive into other assets and countries outside of our comfort zone (pandas & koalas, I'm looking at you LOL!).

    For those willing to be too early or too late, and suffer underperformance at times compared to buy-and-hold, they can use dumb trend indicators (keep it simple) and stick to it! If you start using trend indicators at the wrong times e.g. late-2017 or early-2018, you can suffer underperformance for 1 or 2 years. It's whether you're willing to suffer for 1-2 years in order to reap the rewards over the next 10-30 years.

    Else be prepared to manage risk with asset allocations & have low yielding cash and safe bonds portion to do rebalancing or opportunistic investments when stocks & other risk assets suffer corrections.


    SMOL,

    In this year of heightened VIX, selling options has been the way to collect pocket money from the markets!

    The trick is to focus on decaying options (~2 months left to expiry) on stocks or ETFs that you'd love to own or already own (in the case of selling covered calls).

    A common mistake is to sell naked put options on meritless companies, which gives you higher premiums. But end up crying if kena put those disaster stocks that have little hope to recover.

    Or when one has funds to buy 100 shares & then use that money to buy or sell 100 options, instead of only 1 option. (1 US option is on 100 underlying shares)

    If markets move in your favour ... hoot tua tua. If the market moves against you, jialat! That's what happened to that Robinhood trader who threw himself in front of a speeding train...

    ReplyDelete
    Replies
    1. Spur,

      Some snake oils even tried to peddle selling options as passive income!?


      Before GFC, AIG was making good money selling CDS as protection against bond defaults. Most bonds don't default. Until they do during GFC. Losses was so bad almost dragged the whole AIG group down... That's the sell protection, collect premium trade, or pick pennies in front of the steamroller ;)

      The opposite is buy protection like that 50 cent hedge fund manager. Month after month flush money down the toilet when the options they bought expire worthless. Then came the market swoon in March this year. Cleaned house and made more than $2 billion!!!

      Choose your poison.

      Make money consistently year in, year out. Then get destroyed in one black swan event :(

      Or throw and lose money every year, but if lucky, wins the Toto jackpot!

      Delete
    2. "perhaps also explore & deep-dive into other assets and countries outside of our comfort zone (pandas & koalas, I'm looking at you LOL!)"

      Ha Ha!

      With Lion OCBC HS Tech ETF, there is no more excuse from pandas & koalas for not exploring exposure to HK mkt. May be Lion OCBC will slowly introduce other market ETF if response to trading this ETF is decent.

      Delete
    3. So far from 10 Dec (1st day trading) till to day quite reasonable for an ETF.

      Actually i plan to hoot tua tua but think not worth it compare to if want to hoot better hoot individual stock , though so much more risky.

      My broker of 20 to 30 years experience agreed.

      So only 5000 minimum IOP - FOC on brokerage fees.

      Delete
    4. Smol,

      Selling options is definitely NOT passive! And definitely not using your rent or mortgage money to provide the backing. LOL!

      AIG & other big banks and insurers were selling counterparty swaps on basically trash dressed up as gold i.e. subprime & NINJA mortgages sliced and diced into tranches, and then blessed with AAA by S&P and Moodys.

      It was a time bomb waiting to go off.

      The professionals committed the classic beginner's mistake by using derivatives on junk (which maximises profits) but pretending they are not by using advanced calculus & statistics to mesmerise both public & regulators. LOL!

      Regarding the Covid March vomit, I'm more familiar with Bill Ackman's $27M bet on put options turning into $2.6B šŸ˜²

      Aiyoh now I finally know who "50-cent" trader is, after 3 yrs... Yeah this hedge fund struck gold in both 2018 & 2020.

      Erm, the church of england is a customer of 50 Cent ... now you know where the tithes go! Hohoho!

      Delete
  4. "My broker of 20 to 30 years experience agreed."

    He thinks that this HS Tech ETF cannot cheong much due to lacking of trading volume?

    ReplyDelete
    Replies
    1. i think he means cannot compare apple to orange.

      He said most if his clients cheong with individual stock not ETF

      Delete
    2. Also i would have hoot tua, tua if not because of ETF 's expenses and mangement fees. i think if it is a reasonable a good ETF, it can be kept as legacy holdings.

      Delete
  5. Someone have said we have to look at the value of money (too much printing & QE) relative to the value of assets.

    That's is one of the main reason many people think why the stock market value going higher and higher because the value of money goes the other direction.

    No?



    ReplyDelete

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