The Sunday Times Invest Seminar 2015

This is again the time for The Sunday Times Invest Seminar.  This year the seminar is still held at the Ritz-Carlton Hotel.  Early in the morning, the reception area of the grand ballroom was already filled with enthusiastic participants.

As the seminar is a collaboration between The Sunday Times and DBS bank, the panel of speakers were from these two institutions.

Mr Lim Say Boon was at the seminar last year, and he was present for this year as well.  He shared his view on the world stock markets, what to expect going forward.  We are now climbing a wall of worries as the real economy is doing less than satisfaction while the stock market has been going up up and up.  Stock valuations are no longer dirt cheap although there are still spots of good values.

The other speakers also gave some interesting view points and for some, you might not get them so straight forward and direct from the main stream media.

This seminar is definitely something you should consider attending next year.

Season of Red

It has been a couple of days we saw a bloodshed in the stock markets across the world.  The world is so burdened with all the problems, from the US debt deal crisis, to European debt crisis, to the downgrading of US treasury debt.  So many problems, yet no solution in sight.  It seems really bad, but is it?  The US debt deal crisis between the two parties seemed urgent and critical, but did it really matter?  As expected, a deal was made just before the so-called 2 Aug deadline.  Then came the downgrading of US debt by S&P.  So what?  Did we already know that US debt is not sustainable, and the downgrading is long overdue.  There is really no surprise.  Then why the bloodshed in the markets?  Well, the crocodiles are ready to attack, that's all.

If you can't fight them, join them.  Somebody told me about this.  Comparing with the way I handled the financial crisis back in 2008/9, this time round I must say I handle it better.  In the last financial crisis, and the one before, I was afraid, I was scared, and I followed the media, I didn't have a plan, I didn't know what to do, and I was restless, I was impatient.  This time, I am getting more patient and calm, as finally, I have a plan.  I stopped putting any money in the stock market since March.  I deemed the prices are too high, valuations are unattractive, coupled with high inflation, high housing prices, high oil prices, it is a perfect environment for an impending financial crisis.  Together with falling BDI, low VIX, all the conditions are right.

Now the storm has come.  I cut my losing counters short.  Money lost is money lost, just go out to get it back somewhere.  There is no point mourning about money lost, just like no point mourning about spilled milk.  Learnt the lesson, admit mistakes were made, then move on.

This is a season of red, a season of hope and fear.  Have a plan, and follow your plan.  Happy investing.

Van Tharp's Peak Performance Course

It has been almost two years since I first took up Van Tharp's Peak Performance course.  This course is meant for traders to improve their investment psychology, so as to improve their trading performance, which should translate into more profits.  However, this course is not limited to traders.  It is very useful to people from ALL walks of life, it does not matter whether you are a housewife, an engineer, a banker, a politician, or whatever your profession is.

I went through this self-study course, and it has changed me significantly.  I managed to unload my emotional luggage, especially the rubbish, and start to see improvement in life.

Just an example, my score for the LSI:SPI ratio, a ratio used in the course to gauge your condition of life, has improved from a high score of 2.28 (which is bad) to 0.67.  I find my life now is a lot more meaning, I start to have profits instead of losses in my investments.  I am more cool when faced with adversity.  I don't feel constantly upset or depressed.  It may be still a long way for me to become successful, but I am sure I am on the way there.

This is a course definitely worth your money, time and effort.

Investment Psychology: Unload the Burden of the Past

Yesterday, I talked about 2 common mistakes novice investors make with Bottom Fishing.  Today, let's discuss another aspect of investment psychology.

Some investors tend to be constantly haunted by their past failures.  He/she may have lost a substantial sum in the last recession, the last market crash, the last market correction; or he/she may have lost the 'golden opportunity' to make millions of dollars.

These past burdens loaded on their shoulders as well as their mind.  When the crashing down market has turned, they are simply frozen by their past burdens and fail to act sensibly.  They are still licking their wounds while letting once in a decade opportunity pass. 

It is essential for any investor to realise the fact that he/she cannot be 100% right.  Nobody can!  Past losses, missed opportunities are all in the past.  No matter how sad, how remorseful you are, you can't turn back the clock and correct those mistakes.  Such past lessons should serve as your personal case studies, for you to analyse why the mistakes were made, what had gone wrong in your decision-making process.  They should be stepping stones to future successes, instead of being burdens that drag your feet. 

Happy investing!

Bottom Fishing

There are two mistakes that novice investors make with 'bottom fishing'. 

The first mistake is bottom fish too early.  'Bottom fishing' becoming ugly catching a falling wedge, and investor gets hurt, sometimes seriously.  A good example is the fall of Shanghai Stock Exchange (SSE) from its all time high of 6000 points down to less than 1/3 of its peak value of 1600 points.  When you 'bottom fish' when SSE had fallen 50% at 3000 points, another 50% drop in value is still in store for you. 

The second mistake is to go for the 'ultimate bottom'.  People wait for that absolute lowest price before they bottom fish.  When the ultimate bottom comes, nobody actually knows that's ultimate bottom, unless you can predict the future in exact details.  Then when the ultimate bottom has passed, and prices start to climb back, the novice investor thinks he/she has missed the golden opportunity and is unwilling to pay for the higher price.

The first mistake will burn a hole in your wallet, while the second mistake will make you lose the opportunity for good profits.

Investment Psychology - 1

To a novice investor, the one utmost important thing in investment is to 'buy low and sell high'.  To a more mature investor, he may consider a  good trading system to be the key to his success.  To an investment guru, success in investment depends on nothing, but sound psychology.  Psychology plays a vital role in one's investment life, it decides whether you will be a successful investor or a sore loser, even before you embark on your investment journey.  However, in most of the investment literatures, psychology is usually neglected, or even purposely ignored.   In recent years, the works of Van Tharp, Alexander Elder, etc have made more investors aware of the importance of investment psychology.  In this series of articles on investment psychology, I would like to share with you what I have understood investment psychology to be, how it plays such an important role in your investment success and some of my personal experiences.  I hope you will find such articles useful to you. 

Thank you :)

Investment Psychology - Summary

I will use this entry as the summary page for a series of my blog entries on investment psychology I plan to write in the coming days, months, or even years.

Investment Psychology 1