Stock Market Plunge

Haven't been updating this site due to my "busyness".

Anyway, this is a post on the realisation that I have made quite a number of investment mistakes, hence probably burnt my backside badly this time round.

What Benjamin Graham mentioned was true. When Mr. Market is on a emotional roller coaster ride, you can demand a price for the stock, and it will eventually reach. Indeed, the prices of many stocks have reached my target price. But, I have little bullets left to buy!

What happened first was that I went into the market too early. Too impatient. Thinking I knew a lot when I'm only just a newbie. Did I have a reason for buying? Not really for a few of the stocks. Probably the only reason I can come up with is greed.

Then the stock market plunged further. Shit. Caught. And then a bear rally came. My thoughts were: "Oh, I'm going to miss the boat!". In I went with more savings to average down. And right after that, it dropped further.

So now, my portfolio loss is at 38.4%.

As of today, my portfolio:

Stock	Average Price Bought	Current Price	Gain / Loss(%)	No. of lots
Breadtalk	0.37	0.3	-18.92%	5
Capitaland	2.26	1.93	-14.60%	3
CoscoCorp	2.67	0.705	-73.60%	2
China HongXing	0.175	0.065	-62.21%	68
DBS	8.26	6.9	-16.46%	1
Darco	0.07	0.045	-35.71%	60
SPH	3.65	2.38	-34.79%	6

Total Cost

$60026

Total Current Value	$37000
Total Gain/Loss	-$23026
Overall Portfolio Gain/Loss	-38.36%

Then after doing so many things, I finally realised the fundamentals of wealth. Cashflow. It is more important to have a net flow of cash into your pocket than increasing the value of assets (or in this case, the value of the stocks). For example, I can buy SPH at 3.65, and with a current loss of ~35%. However, the dividends will still be coming in. I will still have cash to ride out this crisis. No matter the value of the stock, as long as the company remains afloat, the cashflow will still be positive for me. The value of dividend stocks really stands out in a recession like this by improving your cashflow.

My main worry now is with China HongXing. Originally backed by 16 cents SGD per share, prices has fallen to unprecendented levels due to fears of accounting frauds. However, if the accounting is proven to be correct, the expected value I have calculated is around 40 cents.

Expensive lesson learned:
1) I have to learn to be more patient in this game of investment.
2) Have a better reason for investing into the company.
3) Experience really counts.

"Experience comes primarily from Failure, and Success without experience is luck."
"Good judgement comes from bad experience, and a lot of that comes from bad judgement."

About Me

About Me

Me is 27 yrs old (in the year 2009). Graduated from Uni in May 2008.
Me nothing better to do, so chart here chart there.
Me also nothing better to do, so invest for dividends
here and there.

Me main investment style: dividend investing,
in both blue chips and small caps.

Me play stocks only within Singapore at the moment,
adopting long-only approach, no shorts yet. Will plan
to play with US stocks one day.

Why leh? Nothing better to do mah.


And in case you wonder, of course I know I should use 'I' instead of 'me' in the above sentences.
But me nothing better to do.

Simple Age-old Maxims of Wealth

I saw the following posted by someone in CNA forums. It's quite interesting.... worth of thought...



Spending: If you buy things you don't need, you'll soon sell things you need.

Savings: Don't save what is left after spending; spend what is left after saving.

Hard work: All hard work brings profit; but mere talk leads only to poverty.

Laziness: A sleeping lobster is carried away by the water current.

Earnings: Never depend on a single source of income.

Borrowings: The borrower becomes the lender's slave.

Accounting: It's no use carrying an umbrella, if your shoes are leaking.

Auditing: Beware of little expenses; a small leak can sink a large ship.

Risk-taking: Never test the depth of the river with both feet.

Investment: Don't put all your eggs in one basket.


Those who have already been practising these principles remain financially healthy.
Those who resolve to start practising these principles will quickly regain their financial health.

5 Steps To Gain Financial Knowledge

Here are additional helpful tips written by Adam-Khoo to gain financial knowledge:

1. When hiring a person to work for you, hire one who is more knowledgeable in the position you intend to hire him/her for. This way, you will have less worry if he/she is able to perform the job. You get to learn from the person, and you’ll have more time to attend to other moneymaking ventures. Don’t think the person might be a threat to your business, as long as you pay him/her well. Otherwise, he/she need not work for you in the first place.

2. Changes, especially those that involve bargains, can spell profit. Take for example in a supermarket where there is a “sale.” People’s most likely reaction is to buy and stock up. It is normal reaction but peculiar when analyzed. In the stock market, when there is a price crash, people tend to shy away. This is contrary to what happens in the supermarket. Why?

Perhaps, we will never know. On the other hand, when prices in a supermarket go up, people shy away. Again, in the stock market, when prices go up, people start buying which shouldn’t be the case.

3. Part (or shall I say a big portion of) financial knowledge is knowing the difference between an asset and a liability.

Actually, an asset or a liability depends on the person looking at the thing. What you think is an asset, could be a liability to another person. As mentioned before, anything you own that earns is an asset; otherwise, it is a liability.

4. Oftentimes, we stick to the conventional way of doing business: “This is the way it is done here.” For all we know, the conventional way might not be the best way. Look at it another way, the unconventional way. It could save money, and money saved is money made.

5. High emotions (fear included) can sometimes suppress financial knowledge. Do not let your financial ability submit to your emotions. Overcoming emotions is, per se, part of the learning process. Similarly, making financial decisions without proper training on finances is disastrous.

Gain more financial ability is simply having more options for opportunities that come your way. In the same manner, a higher level of knowledge can help you spot opportunities other people don’t see. What you can’t see with your eyes, you might see with your mind.

Money comes and goes. But unlike money (although this is what we’re aiming for), financial knowledge stays. The nourishment it needs to stay keen is to keep it accurate and up-to-date.

If you feel like you’re being pushed around, stay smart, exercise self-discipline, and keep updated. Be alert and look out for “double standard” information (information that requires double checking). It is better to reconfirm than be sorry later.

The basics of financial knowledge should have been taught in school; but it hardly did, and it looks like it hardly will. This explains why the poor and middle class comprise the majority of the populace with its gap from the rich ever widening.

If a person winds up with a lot of cash without financial ability, this person is bound to find his/her money gone soon. We’ve heard of athletes who earned millions during their prime and movie stars who amassed untold fortunes only to grow old broke.

Having financial knowledge is truly vital to maintain and grow your wealth.