What I Learned From These Two Blog Posts


You might have noticed that the frequency of me updating my blog post has reduced recently. 

Yah .. I have been busy catching “Pokemon” and running around many parks which I never or have no time to explore before during full time working . 

 Places like “ MacRitchie Reservoir “ ,” Woodland Water Front Park” , “West Coats Park” , Fort Canning Park “ , Changi Village “ , “ Bishan-Ang Moh Kio Park “ and of course the usual “ Garden By the Bay and East Coast Park”..etc.



Believe me , money or even after achieving financial freedom have nothing to do with  “ Happiness" 


Happiness is not about how much money you have , it is "not a state of being or having but it is a state of mind and mentality" .


There is no guide, no rules, no manual that will teach you how to live a “happy” life and of course there are advice or books that can teach you how to approach certain situations to gain the best result. 

Happiness is not determined by what's happening around you, but rather what's happening inside you. Most people depend on others to gain happiness, but the truth is, it always comes from within.

A simple meal with your loved ones, an interesting game , a beautiful landscape , each can make me happy and what we need is just a right mentality and state of mind.

Ok ,, enough talking about “Pokemon Go”… back to topics of investment. Although I have been reducing the frequency of writing but I continue to read and follow most of the blog post from other financial bloggers.


Two interesting blog posts caught my attention :


One is from AK about “ $100,000 Lesson From Marco Polo Marine “ , it is about his experience in investing in so called “ cyclical industry”  where he might need to write off the investment of once upon a $100K in his portfolio.

One hundred thousand loss is not a small of amount for most of investors and of course for him , he could take it because of his portfolio size and the key word of “ diversification”.

I am much more a “ Kia Su “ kind of investor and you may notice that my portfolio have so many counters , although it is very much skewed towards REITs and Business Trust . For more detail , you may refer to my portfolio  ( here ).

I will not put more than 10% of my capital in any single stock so that if anything happen to one or two of these counters in my portfolio, I can still absorb the risk ,sleep well and move on.


More reading on “The Importance Of Diversification”  from Investopedia .



Second one will be from B of “ A Path To Forever Financial Freedom “ on “ Which Market Should I Invest In ?”

Here, I am not trying to justify if we should invest in foreign market or just in where we know the most and have “core competence “ like Singapore market, but rather , his statement about investing during upward or bull cycle which may give us having fallacy of “ Midas touch “ kind of perception that we are “expert” in picking the right stocks with great return of 30-50% in just few months of investing.

Allow me to quote from his blog post :

“Quote “

“….do distinguish if the profits you made are because of skills or luck or a combination of both. It is usually that easy to ride the bull run to make money if the environment allows them to do so. “ Unquote “

In current bull market where A Rising Tide Lifts All Boats, after few attempts of good returns , one may become “ over-confidence “ and betting more and more , aims to be the next “ Warren Buffet “.



I have also written about “ Success In Investing : Skill or Luck( here ).


Concept Explained :  “Over Confidence Effect “ by Wikipedia 



These two blog posts remind us of the need to have a more diversify portfolio and not to fall into the bias of  “Overconfidence “ in recent up-swing market.

Investing is a long term journey and not just few exceptional high return in months or years , it is about participating and surviving in market cycles which move within pendulum swing in the long run.


Cheers !!






Most folks are as happy as they make up their minds to be.” Abraham Lincoln

Happiness is not a possession to be prized, it is a quality of thought, a state of mind.” Daphne du Maurier


Comments

  1. I am retired Pokémon trainer. Lol

    ReplyDelete
    Replies
    1. Retired after achieving highest status and F.I.R.E the trainer ...LOL

      Delete
  2. There is safety in the Law of Large Number

    ReplyDelete
    Replies
    1. Yes! Very true,,, size matter !!!

      Delete
  3. Hi STE

    Thanks for the mention.

    Indeed, I think there are many people who are overly confident and the more it gets the more we're going to see a deep hardfall in times to come.

    It's sad but history always repeat itself in mankind.

    Good reminder from you :)

    ReplyDelete
    Replies
    1. Hi B,
      Yes ! Indeed , is better to have some buffer or " margin of safety " in our portfolio construction ...always keep some war chest to take advantage of " Mr Market " suddenly so moody and turn pessimistic... ;-)
      Cheers !!

      Delete
  4. Think AK means he use to have 100k investment there. He had reduced earlier before the Greatfall.
    Timely reminder on diversification.

    ReplyDelete
    Replies
    1. Hi Cory ,
      Ah hah ! .. I C , thanks for the clarification...well noted.
      Cheers ..

      Delete
  5. Very True Lines by Warren buffet..Helping blog to all.. Free Stock Tips

    ReplyDelete


  6. The Magic Multibagger
    Here we are going to share Top 10 Stocks with you according to a strategy which is endorsed by Warren Buffet, written in “the little book that beats the Market” by Joel Greenblatt. Joel Greenblatt runs a hedge fund named Gotham Capital and has compounded capital at 40% for 20 years from 1985 to 2006.
    Financial Investment Advisor

    ReplyDelete

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