Saturday, June 17, 2017

Random Thoughts In My Mind

As an investor, you will always run into many thoughts that will influence you and make you think much more. So these are the thoughts I had over the length of this week...

Concentration vs Diversification

It has been rather dull lately while waiting for Fed to announce the increase in interest rate. Regardless, the Stocks in Singapore did not move much. Rather, it seems that the US market is beginning to be on a downtrend.

Nevertheless, my mind is quite focus on reducing the number of counters in my portfolio and increasing my warchest.

One of the reason was that I met a friend recently (he is a very good investor and he will be in the upcoming interview series) and he commented his belief to me - "Invest in ideas you believe in the most". 

Despite disagreeing with the concentration in his portfolio, his words did influence me. It made me think a lot about each of the counter in my portfolio. In addition, I also felt my portfolio was too diversified and this did affected my returns. In my opinion, a portfolio with 15 to 20 counters will be good enough for diversification.

Currently, I am trying to manage this "feeling" in order not to rush into any impulsive decision, and relook into each counter in my portfolio/watchlist.

Rowsley Ltd downtrend

This counter has been on a downtrend for a few months now. Apparently it seems that one of the major shareholder has been selling. But the other shareholders did not buy the extra shares immediately.

I was interested in this counter previously. But my Super Scorecard save me from it, if not I will be holding on to a huge paper loses now.

Then I came up with a conclusion - It seems that "the rich can afford to lose much more or hold much longer. But as retail investors, we cannot".


My Bias

As investors, we will have our own biases,

For me, I do not like company acquiring new companies with issuance of new shares. I also tend to not like companies with extensive operations in China.

Thus, these bias may have caused me to jump into conclusion without understanding enough of the subject company.

This result in disagreements among my fellow investors and even my colleagues. Nevertheless, I guess we can always "Agree to Disagree, but everyone of us should also listen with an open mind".

In future, I will have to try to understand more before making comments of any particular counters.


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