ValueBuddies.com : Value Investing Forum - Singapore, Hong Kong, U.S.

(03-05-2013, 05:52 PM)KopiKat Wrote: [ -> ]

(03-05-2013, 04:14 PM)Ben Wrote: [ -> ]

(03-05-2013, 01:53 PM)Temperament Wrote: [ -> ]But the mental baggage of 2 highly cyclical stocks in the shipping sector is holding me back. Because IMHO shipping sector is about to turn maybe in a year or two.

We are in the same boat. I also have one dry bulk shipping stock in my portfolio that is in heavy loss situation. I am not prepare to sell not because I think the tide is turning, but because the price has dropped so much that if I liquidate now, I am not able to cash out a meaningful amount for other use. Sorry, I know my logic is flawed, but mental baggage is hard to explain....

Just for fun, I went to do an internet search on 'Mental Baggage' and found this,

Ridding Yourself of Emotional and Mental Baggage

A useful extract,

If we keep our minds and hearts free of clutter, we will be able to focus on all that is important. We will be able to deploy our time and energy effectively, towards achievement of goals and success.


Each time I go thro' a BEAR market, I'd looked at my Stocks Portfolio, mostly submerged in a sea of red and I'd tell myself what are the stocks that I ought to get rid of. These are the ones that'd dropped the most and rightfully so as they have the worst fundamentals (Poor stocks picking skills always comes to light during a bear run - what Warren Buffett meant when he says 'When the tide goes down, we'll know who's swimming naked').

But, somehow or rather, when the market recovery comes along, I'd drag my feet... Most of the past mistakes never recover. Dropping to 0.5ct may not be the end of my agony as they can still do a reverse split and then proceed to drop to 0.5ct...

After the last BEAR in 2011, when the market rebounded strongly, I finally plucked up the courage and strength to get rid of my junks which I'd accumulated over the past couple of decades. If you'd ever tried Bungee Jumping, it's like the moments before you jump.... Want to do, don't want to do, flip-flop between the two. When the rope is finally tied to the legs, there's a moment that seems like eternity....

But, yes, like Bungee Jumping, once you take the leap, you realise that it wasn't that difficult after all. In fact, it's actually quite fun!

So, last year, after overcoming the mental difficulties to sell off my first few junks, I continued spring cleaning and today, am cleared of almost all junks (left a couple where I'd need to top up the brokerage fee if I were to sell).

Yes, the amount I got back are mostly a couple of hundreds or a thousand plus. It also did severe damage to my Realised P&L - huge realised losses. But, fortunately, there was little impact on my Net Worth as I'd always been diligently marking my assets to market value.

But, like the above sentences I'd lifted from the article, clearing my Mental Garbage for stocks had freed me from all the past baggages (that I'd been lugging along) and I'm now a lot more focussed and decisive, when it comes to Stocks.

Hope the above helps all those with the same predicament..

So the Remisier's recommendation of applying the art of "Bosai Pruning" works for you too. i think i will have to try it too. Hee! Hee!

(03-05-2013, 05:52 PM)KopiKat Wrote: [ -> ]

(03-05-2013, 04:14 PM)Ben Wrote: [ -> ]

(03-05-2013, 01:53 PM)Temperament Wrote: [ -> ]But the mental baggage of 2 highly cyclical stocks in the shipping sector is holding me back. Because IMHO shipping sector is about to turn maybe in a year or two.

We are in the same boat. I also have one dry bulk shipping stock in my portfolio that is in heavy loss situation. I am not prepare to sell not because I think the tide is turning, but because the price has dropped so much that if I liquidate now, I am not able to cash out a meaningful amount for other use. Sorry, I know my logic is flawed, but mental baggage is hard to explain....

Just for fun, I went to do an internet search on 'Mental Baggage' and found this,

Ridding Yourself of Emotional and Mental Baggage

A useful extract,

If we keep our minds and hearts free of clutter, we will be able to focus on all that is important. We will be able to deploy our time and energy effectively, towards achievement of goals and success.


Each time I go thro' a BEAR market, I'd looked at my Stocks Portfolio, mostly submerged in a sea of red and I'd tell myself what are the stocks that I ought to get rid of. These are the ones that'd dropped the most and rightfully so as they have the worst fundamentals (Poor stocks picking skills always comes to light during a bear run - what Warren Buffett meant when he says 'When the tide goes down, we'll know who's swimming naked').

But, somehow or rather, when the market recovery comes along, I'd drag my feet... Most of the past mistakes never recover. Dropping to 0.5ct may not be the end of my agony as they can still do a reverse split and then proceed to drop to 0.5ct...

After the last BEAR in 2011, when the market rebounded strongly, I finally plucked up the courage and strength to get rid of my junks which I'd accumulated over the past couple of decades. If you'd ever tried Bungee Jumping, it's like the moments before you jump.... Want to do, don't want to do, flip-flop between the two. When the rope is finally tied to the legs, there's a moment that seems like eternity....

But, yes, like Bungee Jumping, once you take the leap, you realise that it wasn't that difficult after all. In fact, it's actually quite fun!

So, last year, after overcoming the mental difficulties to sell off my first few junks, I continued spring cleaning and today, am cleared of almost all junks (left a couple where I'd need to top up the brokerage fee if I were to sell).

Yes, the amount I got back are mostly a couple of hundreds or a thousand plus. It also did severe damage to my Realised P&L - huge realised losses. But, fortunately, there was little impact on my Net Worth as I'd always been diligently marking my assets to market value.

But, like the above sentences I'd lifted from the article, clearing my Mental Garbage for stocks had freed me from all the past baggages (that I'd been lugging along) and I'm now a lot more focussed and decisive, when it comes to Stocks.

Hope the above helps all those with the same predicament..

Woah, you put it so elegantly!

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(03-05-2013, 04:29 PM)Temperament Wrote: [ -> ]

(03-05-2013, 04:21 PM)NTL Wrote: [ -> ]

(03-05-2013, 01:53 PM)Temperament Wrote: [ -> ]

(03-05-2013, 01:16 PM)NTL Wrote: [ -> ]

(03-05-2013, 12:06 PM)Temperament Wrote: [ -> ]Sorry, i think i have let you mistaken me somehow or somewhere. Though my remainder portfolio is losing money i have over-all realised portfolio gain UTD from 2008 till now.
What is most important to note is you will make mistakes in individual stock purchase but despite of it you should still make money over all your portfolio.

Hi Uncle Temperament,

Very likely I mistaken you as you are talking about "balance of your portfolio". For my first 4years (2007-2010), my portfolio is fully taken down by the GFC, then in 09-10, while the market rally, I found that the stocks that I was holding were not moving as much, though some do recover, but never to the level I bought in. And most of these are big names. Slowly, I decided to give up on some of my "darlings" and take the remaining to invest in other companies, including REITs, that emphasize on sustainable dividend. After I see some results in my "re-allocation" exercise, I did more re-allocation and invested more money into the market.

For beginners, you have done very well indeed. Yes, you have the gumption not to run away from the market. You should do well going forward. Just remember to make it into your lifetime "hobby".
Congratulations again! i think you have got it.

---

Trying my best. Thanks.

And please remember i am just a retail investor. Or some like to call me "POP & MUM" investor. Ha! Ha!
Cheers!

Me too, just a retail investor. I still have alot to learn, and a long journey to take.

(03-05-2013, 01:11 PM)d.o.g. Wrote: [ -> ]

(02-05-2013, 10:45 PM)Temperament Wrote: [ -> ]That's why once you are in the stock markets for some years, it's very hard for most of us to sell everything and start from scratch again. Start a brand new portfolio that is. Anyone has done it?

I have done it, but it was because I was going into the fund management business. I wanted to start on the same basis as my clients i.e. 100% cash so I sold almost everything (some things had no liquidity) and started from zero. I took some heavy losses but decided there was no turning back. The portfolio I built was very different from the old one. The mental baggage we carry with our current portfolio is amazing. It's like moving house - you don't see how much is accumulated until you move it all.

Hi d.o.g.,

I can imagine the mental burden to disembark on your old portfolio to rebuild a new one. Especially when you are a honest manager who only wants the best for clients. So you treat their money as though its yours, and when we are talking of perhaps hundred of millions.

That could also be the reason why its increasingly hard for you to buy a greatly discounted prices. Because of your huge ammo power, you cannot be selecting obscure and illiquid companies of small market cap and yet these are the companies which are more likely to be trading at a discount than well known companies which research houses like to cover, thus it would take as hell of a long time to build up a substantial position as to exit totally.

<The mental baggage we carry with our current portfolio is amazing. It's like moving house - you don't see how much is accumulated until you move it all.>

do you refer to your emotional "attachment" with your heavily researched companies?

For me, I do a good 3-6month intensive reseach on a company including multiple site visits after identifying those that meet my criteria.

I am on my own and handle perhaps a fraction of what you are doing.

Buying on my conviction is the easier part. But selling it all when it has hit my target price is not so. True that profit has to be taken has to be taken once ripe to one's satisfaction. Still,every hundred lots sold has that bit of emotional attachment. Afterall, I spend months buying a counter and also will spend months offloading it. Maybe as humans, we do have that bit of feelings for our companies, who may be run by people we already know of.

But in between buy and selling phases, there's usually little work to be done.

And yes, I sleep very well at night also.

Best regards,

Paul

I used to hold like 9 different counters and my results neither over nor under perform the index
my dividend counters were performing but my asset plays were going no where and I had some small loss on my speculative plays

in 2011 I sold almost everything and "Restarted" my portfolio and kept plus added position to my 2 remaining counters, challenger and starhub.

I currently hold only 3 counters , I sleep better and perform better ^^

paullow Wrote:we are talking of perhaps hundred of millions.

I wish!

paullow Wrote:Because of your huge ammo power, you cannot be selecting obscure and illiquid companies of small market cap and yet these are the companies which are more likely to be trading at a discount than well known companies which research houses like to cover, thus it would take as hell of a long time to build up a substantial position as to exit totally.

I do not have "huge ammo power" but I have to draw a line somewhere with regard to illiquid securities. Some companies are quite large but still illiquid e.g. WBL, APB etc. The thing about the fund management business is that the money does not belong to you, it belongs to the client. At best you are the steward of the capital for some time, hopefully a long time, but ultimately if the client wants to redeem you have to give them their money back. That means when I buy something I have to be able to sell it at some point in the future. Even if I am happy to hold it forever, my client may not be. Client needs change too. People retire and draw down their savings, children grow up and go to university, parents decide to distribute some of their assets ahead of time etc.

Few things are completely illiquid, if you want to buy or sell badly enough you can usually get a price. Not neccesarily a good one but it will let you in or out. The spread can be as much as 10% in both directions. So when you are looking at something illiquid, keep this in mind.

There are a lot of companies in the zone between "index stock" and "illiquid tiny stock". Although liquidity does fall off rapidly once you leave the "index stock zone" it is usually still adequate for the funds I handle. If I handled 10x the money the investment universe would definitely be smaller. Going regional solves this problem until the next 10x jump in AUM. Then you go global.

paullow Wrote:do you refer to your emotional "attachment" with your heavily researched companies?

I think it's investment inertia, like the way people are reluctant to mess with assets inherited from their parents, whether it's houses or an investment portfolio. It's been documented before in studies, where people were only willing to pay $X to buy something, but if they already had it they would only sell it for $X+Y.

paullow Wrote:But in between buy and selling phases, there's usually little work to be done.

To me buying and selling are not work, they are just trading actions resulting from the research which is the real work. Research activity seems to fluctuate - sometimes there's a burst when the "to do" list is long, other times it's a lull with mostly just updating of spreadsheets and the occasional company visit or conference call.

I think ComfortDelgro is benefiting from the fall of SMRT.

Those who practised pair-trading would have long ComfortDelgro and short SMRT since late year when SMRT former CEO got blamed for all the breakdowns.

Is such a pair instrument

Actually ComfortDelgro Sg's operation, SBS transit (which are I feel is the direct comparable to SMRT and not Comfort), is suffering as well. Its just that its operations in UK, Australia are performing well.

But one thing good to note is SBS transit is still profitable. So far, Comfort's profit rise is attributable to its rise in profits in SG taxi services and Australia's Bus operations

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http://www.tremeritus.com/2013/05/04/smr...h-defects/

SMRT’s China-made London cabs plagued with defects

SMRT started to roll out new China-made London cabs in Singapore in early March 2013.

London cabs are especially popular with the disabled as they are wheelchair-accessible and can accommodate high-backed, motorised wheelchairs. Indeed the disabled form the majority of passengers using such cabs.

The Ministry of Social and Family Development even gave SMRT a $3.1 million grant to cover part of the COE and ARF of London cabs.

However, barely 2 months on the road, all kinds of defects have surfaced in these China-made taxis.

Wheelchair users who rely on London cabs say that it is hard to book them because they are frequently in the workshop for repairs.

SMRT has admitted that these cabs have manufacturing defects such as faulty air-conditioning, dashboards that do not light up and windscreen wipers that stall.

The London cabs are made by China’s Zhejiang Geely Holding Group which bought over London Taxi Company, the original maker of the taxi, in February 2013.

SMRT even flew in a PRC engineer from Geely to help in the repairs.

A cab driver, who has sent in his cab for repairs twice, complained, “We not only have to forgo earnings, but also have to fork out the rental fees for the days the cab is stuck in the workshop.”

Another has to use a torchlight at night to view his dashboard because there is no dashboard lighting.

Meanwhile, it has been announced that China-made trains will be used in the new Downtown Line, which is due to open this year (‘Made-in-China trains for Downtown Line unveiled‘).

The first train arrived from Changchun, Jilin Province of China, on 12 October 2012. Ten more trains will be shipped to Singapore before the opening of Downtown Line 1 by the end of 2013.

China-made........