STE's Stocks Investing Journey

Did you see any patterns in below charts /images? Can you relate this to Investing? image credit to amazon.com.cg image credit to home.com image credit to amazon.com .sg

Stumbling upon this blog post from one of the famous Financial Blogger from HKG ( 取之有道 ) Other than the famous “Rule of 72” which is well known by most of the value investors, below are few more mathematical concepts which I think is also rather important for anyone who is involving in stock investing. Concept explained : Rule of 72 ( by Investopedia ) The ' Rule of 72 ' is a simplified way to determine how long an investment will take to double, given a fixed annual rate of interest. By dividing 72 by the annual   rate of return , investors can get a rough estimate of how many years it will take for the initial investment to duplicate itself.

<Edited with additional info and video clip > Investment Success: Skill or Luck? We always attribute our success in life or any aspect in life ( e.g career development /doing business / investing ) to our skill or performance but does  “luck”  has any place in these successful events. If we think that  skill  ( talent ) play a very important role in investing,, then you may find that some very talented or intelligent people fail in investing ( e.g Newton ), and if you think that investing is purely on luck, then we may have a puzzle to explain the success of great investors like Warren Buffett or Peter Lynn and others in beating the markets for multiple years.

Will there be another market crash in 2017? The unlucky 7 Whenever there is a year ending with 7, the stock market will collapse and have a crisis. For example, the name for the   1987   stock market crisis is Black Monday. Interest parity arbitrage trading and currency war fueled the   Asian Crisis   in   1997 . It involves borrowing a cheap currency with low yields and investing in a stable currency with higher yields to earn spread income, known as  positive carry.  Hence the name,  carry trades.

I guess most investors also having experience of buying a unit trusts (aka mutual fund) or maybe having unit trust in their portfolio at a certain point of their investing life.  Depending on the situation, some may have bitter experience and few lucky one may have made money from their investment in unit trusts.

Forecasting or predicting the market movement Sometimes I have been asked by friends on how well the market or certain stocks perform in coming months or what will be the direction of index moving towards in next year or so.  Even in every investment seminars, one may notice that the most question people like to ask those investment “ Gurus “ will be “ how do you think the prospect of STI index in 20XX ? or What do you think about the performance of the Bank / O&G / property sector in the next few months?

How to Lie with statistics! As an investor, we have been bombarded by news and statistics every minutes and second, as we know well, some of this news been exaggerated and statistics or figures used also questionable.  We need to understand the figure behind these statistics and how is it derived to ensure that we have not been lied by statistics.  “ How to Lie with statistics “ is a fascinating and short book ( only 122 pages ).  Although this book is written in 1954, the contents & principles still very much relevant and just as valid in today’s context  (perhaps even more so, as it's so easy to acquire statistics due to our current technology). Darrell Huff gives people the tools to talk back to statistics.

祝大家“ 中秋节快乐！”  No posting about investing today and I would like to wish all my friends and readers a very happy  " Mid-Autumn Festival "  and enjoy your gathering & bonding with your loved one & family members.

what if ? This is a fascinating and interesting book by Randall Munroe , a former NASA roboticist with a degree in Physics and also the author of xkcd: volume 0 ( a stick-figure webcomic ) . Munroe get thousands of questions submitted by readers and he answers a modest subset of those that not only pique his interest but are amusing and offer the potential to use real science to explore concepts, the world around us, and day-to-day mysteries of life and the universe.

Saving vs Investing : Everyone wants to be the genius investor who would beat the market and turn a small amount of cash into a fortune.  We continuously search for “ multi-bagger “ in our investment portfolio, unfortunately, it's pretty difficult to do that and hard to achieve “ Alpha “ by most of retail investors.

Dividend vs Share Buyback Why the US market is trading upward even as investors big and small are selling? According to an article from Fortune, most people assume what has kept the market afloat this year after sinking 11% at the start of the year was a mixture of better news out of China, oil prices stabilizing, and indications that the Fed won’t raise rates as much as a thought. But the real thing buoying the market could be something else: stock buybacks.

What is the 'Gambler's Fallacy' image credit to lanieshope.org The gambler's fallacy is when an individual erroneously believes that the onset of a certain random event is less likely to happen following an event or a series of events. This line of thinking is incorrect because past events do not change the probability that certain events will occur in the future.

Yes, I’m a “ speculator “, is really hard to differentiate and draw a dividing line between “speculator and investors “ as both words being used interchangeably from time to time, depending on the situation, one was in. Sometimes I noticed that people buying certain stock in anticipating the price will move up soon,, but when the price dropped eventually, he suddenly became an “investor “ that claiming to hold the stock for the long term. Hence we say in Chinese: 投资 投机 只是一线之差 ！

孟子 曰： 天时不如地利，地利不如人和 。 According to Mencius studies, the “ 人和 “ (or People’s Harmonization ) is the most important part of any war game or the battle, same apply for investment, I think this is the most difficult and challenging  part, yet the most vital to ensure the success of our investing in stocks. The Art of War ( 孙子兵法 ) , Sun Tzu, a Chinese military philosopher and the strategist in the 6th century BC, he mentioned : 知己知彼 , 百战百胜