You Think That Long Run In The Stock Market Is All About Winning??? (2)

Read? You Think That Long Run In The Stock Market Is All About Winning???


 "For the things we have to learn before we can do them, we learn by doing them." - Aristotle 

Let do it and see how?

(1) From 1 Jan 2000 to 6 Jul 2015 ....

 

(2) In 2008 Bear Market Low; this was what actually happened ...

Large realized losses due to active contra trading and this trading strategy was aborted by Nov 2008; but too late as serious damages have been done.

(3) Current strategy is wait and see. Waited so long already ......


 








Large realized losses like in 2008 will not happen again at the next bear market. Let see how this strategy performs at the next Bear - Bull market cycle.

 

 




 

 

Can still blog about investment? Mai tio conned is good enough!!!

You Think That Long Run In The Stock Market Is All About Winning???

We must take a very close look at this image and fully understand the serious impact of large losses. Once large losses have happened; it becomes very difficult to recover. It is just Mathematics!

We must avoid getting into large losses and the most commonly large losses are due to repetitive averaging down till a single stock position turned into a large percentage of one's investing capital e.g. 40 to 60%.  Often it was too late when we suddenly realized it.


Now, Uncle8888 strongly believes he has understood it well. He has learned it first hand from his own investment marathon race from 2003 to 2011 to meet his Yearly Goals.


You can see what happened after a large loss in 2008! It became so difficult for him to recover from his large losses.

Prevention is better than cure! Avoid large losses.

For his next 10-years investment marathon race from 2012 to 2021; Uncle8888 has completed changed his investing strategies and Goals. There is no absolute need for him to actively trade for cash flow to meet his yearly target. No need!


What happened in 2008 will unlikely to happen again as his investing strategy has changed.

No more Snakes and Ladders game. Only Ladders game! :-) 


Past Goals: Yearly Goals (2003 to 2011)

Future Goals: 10-years Yearly Cumulative Goals (2012 to 2021) i.e. focusing absolutely at the outcome on 2021.  
 
Same but different!

In 2007, his War Chest was so low that recovery from losses was tough. He saw more fear than opportunities.

In 2015, his largest War Chest ever since Jan 2000, there is no sense of fear yet; but he still can't escape some feeling of regrets. 

Patience and discipline must prevail!

So, remember my Sifu saying this: "It is better to regret NOT making more than to feel SO SORRY of losing our hard earned money!"


Prevention is better than cure! Avoid large losses.

Mr STI's Backside No Greece???

How Much Is Enough To Be Safe For Sustainable Retirement Income For Life??? (2)

Read? How Much Is Enough To Be Safe For Sustainable Retirement Income For Life???


Read?  The Rule of 300: How Much You Need for Retirement


Uncle8888 also used The Rule of 300 for his retirement income for life planning

See? Retirement Income for Life??? (9)


Wealth = Asset Value + Cash flow

The Rule of 300 = Asset Value = Net Worth = 25 x Expected Yearly Living Expenses = Reaching the Edge of FIRE (Financial Independence Retire Early)

Cash flow  = 4% Withdrawal

BUT ..

If our asset value or net worth is too dependent on the volatile market for 4% withdrawal; we may be unfortunately got caught in the deep shit at the wrong time. So Uncle8888 fortified The Rule of 300 and 4% Withdrawal with his Three Taps Solutions. It is amore kiasu and kaisi approach. A typical Singaporean way of retirement planning!

How Much Is Enough To Be Safe For Sustainable Retirement Income For Life???

Read? Singapore’s four solutions for water scarcity


Learn from Singapore's four solutions for water scarcity!

In our retirement, our money is no different from water scarcity. In Chinese, water is money and money is water.


Know The Three Risks? Your Personal Finance and Investment - Three Risks That Are Seldom Actively Discussed by Personal Finance and Investment Bloggers

Now, you may have better ideas how to be safe and still have enough?

How fat is fat?

How thin is thin?

Who knows?

So don't go around asking. Nobody will know the standard level of being fat or thin!




Right?

Hmmm ...

SMOL standing besides CW8888

Now, you may know when you look at two different angles. You will have two different answers!

Both answers are correct!

LOL!


 

Somehow We Still Have Some Control Over Our Discretionary Expenses!!!

As expected, the monthly expenses for Jun 2015 did move up a little. Somehow we still have some control over our discretionary expenses. Tighten or loosen!

H1 2015 Investment Performance Report

 Read? Q1 2015 Investment Performance Report

A Goal-based Approach Investing StrategyUncle8888 has adopted a Goal-based Approach investing strategy by setting for himself a 10-year progressive Goal Targets to be achieved for each year from 2012 to 2021.

Our investing journey is not Horse Race or Rat Race where we compete against others.  No! It is our investment Marathon Race where we set our own pace and compete against ourselves to win our own race.


Year 4: H1 2015 Result for Tap No 3 (Cash Flow from Investment Portfolio)

Achieved 32.1% against 34% of 2021 Goal Targets.

 

Investment Portfolio XIRR

Track, Measure and Visualize!

Without doing it; how to revise investing strategies and to improve year-on-year investing performance?

Investment Portfolio's XIRR includes all investable cash plus the current stocks value at market closing price as on 30 Jun 2015.

Since one year ago: -4.2%
Since 1 Nov 2008: +1.8%
Since 1 Jan 2003: +8.8%
Since 1 Jan 2000: +8.1%

The reality of riding market cycles of Bull and Bear

This reality cannot be anyhow extrapolated in any form of theoretical knowledge including the most popular form of compounding interests - the Eight Wonder of the World.

No. You can't!

Embracing Three Taps Solutions to Retirement Income For Life Model






Uncle8888's Wealth's Formula:

Wealth = Asset Value + Cash Flow

Where Sustainable Cash Flow = Tap 1 + Tap 2 + Tap 3

and volatile market pricing of Asset Value becoming less significant.

Since Tap No 3 is enough to supply the liquidity needs; Tap No 1 will remain shut.

 

Investment Portfolio Performance Measurement: Absolute and Relative???

In absolute term; Uncle8888's investment portfolio total return on 11 Oct 2007 is 145% and on 29 Jun 2015 is 148%

Does the two absolute number of 145% and 148% look same and okay?

It is how absolute number says it loud and clear!

145% and 148%!


SMOL: Trust but Verify!

From Jan 2000 to 11 Oct 2007, the relative return in CAGR is 12.2%; but from Jan 2000 to 29 Jun 2015, CAGR is just 8.1%

Still same? Still okay?

When somebody tells you their Absolute Return. You should ask them for their Relative Return e.g. CAGR too.

When somebody tells you their Relative Return e.g. CAGR. You should ask them for their Absolute Return too.


Trust but Verify!

 

Human Asset Value and Financial Assets Protection???

When we, the most savvy Financial Bloggers or Retail Investors are GONE! 


What can happen to our assets? 

How to protect our human asset value and financial assets value?

How many financial  and investment bloggers talk about it?

Wealth = Asset Value + Cash flow

Asset Value = Human Asset Value + Financial Assets value.

For our human asset value, we can use life insurance to protect it. 

But, for our financial assets especially our investment portfolio, our powerful investing strategies, our most savvy investing Mind; seriously have we, the most savvy investment and financial bloggers think about it? 

Can our dependents or next-of-kin safely take over and protect our financial assets and continue to generate that kind of cash flow without some active portfolio management when we are GONE?

Can they?


For the past few years, Uncle8888 has been thinking very hard. 

Have you started thinking?

The Myth of Two Arms Fighter Is Better???

Long and Short: The Hedge Fund. Bao Jiak?

Long only Investor: Warren Buffet. Bo Bao Huat?

Some may be too young to know them.  

Got Goals. Got Plans. But No Shame!!! (2)

Read? Got Goals. Got Plans. But No Shame!!!

SMOL: Grasshoppers fly with BOTH wings. Ants have forgotten the art of flying after their maiden mating flight. More like the Queen conveniently don't share this truth with her daughters... 


Okay. Ants don't fly so ants lose out?

Never mind. Ants know that bad times and uncertainties are always some years ahead of them so they plan and plan. 

Got Plan A, Plan B and Plan C. 

They will crawl anyhow. They will crawl anywhere to build up bit by bit a large Reserve or Reservoir for the long Sunny days when Grasshoppers are dancing happily for the longest. Long summer. Shiok!



Tap 3 (Plan A: 10-years investment goals from 2012 to 2021)

Cash flow from his investment portfolio come from his realized net profit/loss (Uncle8888 won't like to sell at losses. He seldoms has net realized losses. If the paper losses become so unbearable; he will just write them off and take a hit on his performance for that year. It is non cash item like any company accounting principles) and dividends received for the year.

Since he is not an active trader most of his cash flow will come from dividends.

Ants don't anyhow pluck Goals from the sky hor! He will count using Microsoft Excel to the nearest decimal points and not akar akar using his 21 up and down fingers. :-)

His basis for his 10-year Goals for Tap 3

Tap 3 is his yearly goal to meet his yearly family living expenses for the next 10 years (2012 to 2021). His family living expenses are calculated from his historical expenses when he suddenly woke up and realized the importance of tracking his family expenses if he wanted to know "How Much Is Enough?". 

Trust but Verify! 

He trusts History but verify the Numbers with future inflation and with Chart, Graph and the Image. 

How Future You Will Thank You!

and when History becomes Goals.

His Goals is more commonly known by folks as passive income.  

Depending passive income from dividends? 

Someone has already said ...

pansy t27 June 2015 at 22:55:00 GMT+8

I feel that dividend into is not very passive nor dependable. It is a good supplement but cannot be "depended" on.

Uncle8888 has known Mr. Market too well. We can't really trust Mr. Market and be too dependent on him to meet our day-to-day survival.


Know The Three Risks? Your Personal Finance and Investment - Three Risks That Are Seldom Actively Discussed by Personal Finance and Investment Bloggers


Ants are good at planning so he has Plan B (Tap 1 : His Large Reserve or Reservoir)

His assets for Tap 1 is NOT subjected to market asset pricing volatile so it is non-volatile asset class.

Tap 1 is normally closed and will only be turned on to top up Tap 3 when Tap 3 is not enough during poor market condition and dividends are not enough to cover his family living expenses.


Tap 1 is built with large capacity in mind to last till his EOL...

Plan C (Tap 2: Medical and Health Care Self Funding)


$XX,XXX as emergency cash + CPF MA, SA, and RA and also covered by MediShield and ElderShield.



Now, who said Ant cannot fly?

Got Goals. Got Plans. But No Shame!!!

Keynes: "I do not believe that selling at very low prices is a remedy for having failed to sell at high ones... I feel no shame at being found owning a share when the bottom of the market comes."

Uncle8888's 10-year Goals for all to see. Ants, Butterflies and Grasshoppers are included.

Got Goals!  Got Plans

This year didn't hit the target. No shame! 

Next year, we can walk, run, jump or screw to plan to make it. No shame!

No shifting Goal Posts. No shame!

He wrote: "I do not believe that selling at very low prices is a remedy for having failed to sell at high ones... I feel no shame at being found owning a share when the bottom of the market comes. - See more at: http://business.asiaone.com/news/stock-picking-tips-great-economist-keynes#sthash.G0GHnC4H.dpuf

Durians are addictive!

Some can skip their lunch or dinner for durians!

Uncle8888 and Auntie8888 have been eating durians for years and already immune from heatness.

LOL!

Not Too Worry Over The Future Cost Of Nursing Home???

How come?

It is the way how Uncle8888 thinks how much is enough over his remaining lifetime.

Now, he sees what he likes. He eats what he likes. He likes some fun. He likes some traveling. He is not so frugal now.

But, when the day he needs to stay at the nursing home. He will be absolutely frugal! He will spend on needs to stay alive. No more eating out. No more fun. No traveling. Absolutely frugal!

From not-so-frugal to absolutely frugal lifestyle how not to afford it?

Right?

No?

CPF investment account is good at locking up profits! (2)

Read? CPF investment account is good at locking up profits!

An update to the amount of CPF OA 2.5% interest rate earned on the yearly dividends that I received from Kep Corp since 2001.

An additional of 57.4% ROC that hasn't been included as Total Return.

 

Expert Mode In Investing: Patiently Collect Dividends Over Long Run or Good Market Timing???

Right or Wrong?

No right. No wrong?

Known Unknown?

Unknown Unknown?


What do you think?


Real people. Real Example ...

Uncle8888's top three holding and also his top three longest holding period from 12 to 14 yrs.

12 years is a long time! Long enough for a baby to reach his or her secondary school level. :-)

14 years of collecting dividends from Kep Corp. It should be more than enough to show good patience. Right?

Total Return Vs. 2007 Peak Stock Price:

Just about 2.5% above 2007 peak.

Market timer won!

13 years of collecting dividends from Semb Corp. It should be more than enough to show good patience. Right?

Total Return Vs. 2007 Peak Stock Price:

Just about -9.1% below 2007 peak.

Market timer won big!

12 years of collecting dividends from DBS. It should be more than enough to show good patience. Right?

Total Return Vs. 2007 Peak Stock Price:

Just about 33.4% above 2007 peak.

Tortoise won!

Made 10,000 People Millionaires???

At course fee of $3,000 per person and let say net margin of 50%. 

Here is the Maths ..

Net margin = 20% of $3,000 = $600

10,000 were tutored or trained faithfully or diligently to become millionaires = $600 * 10,000 = $6,000,000


At course fee of $2,000 per person and let say net margin of 50%. 

Here is the Maths ..

Net margin = 20% of $2,000 = $400

10,000 were tutored or trained faithfully or diligently to become millionaires = $400 * 10,000 = $4,000,000


Think about it.

Which is easier?

10,000 people contributing $3,000 or $2,000 per person to make one person Multimillionaire or One person to make 10,000 people millionaires.

Think for yourself. Folks!

Trust but Verify - SMOL

One veteran sent me this note last night ...

Cleared all today… switch to short term notes for now