Monday, 3 November 2014

Global market adjustment, what am I doing? (end)

I think Oct has been a roller coaster for a number of investors. Looking back for just 1 month, how many people has been played by the V-shaped rebound?

Several things to take note of:

1. If looking at the lowest point of adjustment makes me feel fortunate that I've sold my shares earlier, then what should I feel right now (i.e. as of market closed on 31 Oct)? Remember this experience.

2. The lesson of how to sell a share. To learn to let go, not to have any emotional connection with any share. This is not the first time I know this, but I didn't take it seriously. Selling INSAS 1.5 month ago taught me a lot. People say you need to forgive yourself, for all the things we didn't do, for all the things that we should have done. This is even more true in the stock market. It doesn't help if I keep on lamenting things like "I should have bought this share earlier" or "I shouldn't perform this transaction". Make peace, move on.  

3. The importance of capital protection. One of the reason why I sold INARI is that it has come to the point with the minimum acceptable profit. Of course, looking back now seems so stupid of me, but what if? No one knows what's going to happen.
As what people usually say: the stock market is always there, but will you always be ready for the market?

4. Confidence. I have to admit that I lost confidence to INARI after seeing it free fall consecutively. I even thought of something wrong is happening within the company. The is the main reason why I sell INARI (which some people raised concerns about its financial credibility before) and GHLSYS (which I bought in without any good reason except GST). But during the panic sell moment, I kept SHH, because I have confidence in the company. How to have confidence? Do homework and understand the company more.

5. Be patient. Sometimes retail investors are like patients in the stock market, looking for some guidance. So, patient needs to be patient. Even if the market is going up and I am holding cash, that's ok. Return is not determined by 1 month, look for a long term perspective.

6. At the lowest point of adjustment, a lot of shares have dropped to below my target buying price. E.g., MMSV 0.45 (lowest 0.38, current 0.58), IFCA-WA 0.30 (lowest 0.285 current 0.59) etc. At that time, I not even thought of buying any share. Ironic isn't it?

This experience makes me realize that I have no difference from most of the others,to be emotionally controlled by the market. I followed the crowd to panic sell at low point. If this is the case, how can this makes a difference in my investment return?

7.  Where do I stand in the market? I need to know what I am doing, all the rationales in buying and selling, and the plans of what if, i.e. risk management. If I know what I am doing, and know where I am standing in the market, I wouldn't have lost myself if something happens.

It is what it is. Take it as a lesson. Move forward.