This famous fighting style by Muhammed Ali came to mind while exchanging ideas in my previous post with qian bei (senior) Coconut.
Float like a butterfly
Before fantasizing about yields or returns on investment, qian bei CW8888 said it best with his: Return of Capital.
Yup, if we don’t get our money back, everything else is just words written on water. The classic White men’s promise to the native American Red Indians… Even if all the treaties were written in black and white. Something for Singaporeans who have a fetish for more regulations to ponder over ;)
Nowadays, investors/traders have to watch over their shoulders to keep an eye on counter-party risks. Have you heard of counter-party risks 5 years ago?
What if my broker goes kaput? What if there’s a run on my bank? Even countries and governments can default? If you own sovereign bonds that default, try bringing the textbook to the publisher and ask for a refund! What bonds are “safer” than stocks @#@%$&!!*
Or try suing the ratings agency. Their defence will be: “I say say only you really believed?”
Or since you have not paid us directly for the ratings, there – here’s your money back. Pay nothing; refund nothing back. Fair what!
Tip: You may want to keep an eye on those synthetic ETFs with French and German banking counter-parties. Some of these banks are ripe for a credit downgrade in 2012.
Sting like a bee
Going through 2011 unscathed in a way is “winning”. But I not so sure about relative benchmarking used by others. Fund managers use it to “protect” their rice bowls I understand. But as private investors/traders? You mean STI down 20% and your portfolio “only” down 5% you very happy?
Being the practical me, I rather use absolute benchmarking. That means my portfolio must beat inflation – period. Call a spade a spade. No such thing as “ponding”.
For Chinese and Cantonese readers, you may want to listen to my speculation song.
Always treading water is fine if we are happy with the current spot or just focusing on burning calories. But isn’t it a bit tiring expending all this energy and going nowhere?
I would much prefer to be swimming towards somewhere. Even if I don’t have any clear goal or destination. Who knows I may meet a mermaid?
Opps! I think I am going off tangent again…
Back to boxing. Even if we can float like a butterfly and avoid getting hit by our opponent, that won’t win us the match!
We still need to hit consistent winners (go for win on points) or make a big knock-out punch (go for KO)!
Again using investor qian bei CW8888’s example. If he cannot find multi-bagger and high yielding winners like Keppel Corp, can he “retire” at 55? This is going for KO.
For traders, its more about finding the right “vehicle”. 5% here, 10% there – just like the Malay saying: Sedikit demi sedikit, lama-lama menjadi bukit! (a little a little, wait become a hill!) This is going for points win.
Knowing you knowing me
Eh… Investing/trading is not a gentleman’s sport. Can’t stand the gore and violence? Perhaps its better to stay outside the ring.
And if you don’t fancy getting your nails broken or hands bloodied – outsource. Get a hired hand. But remember to act like a land owner. If the hired hand don’t perform, next!
I think those that were very quick to ask for the resignation of the SMRT CEO should have no problem here. (you decide whether it’s a “like” or “poke”)
Singapore Man of Leisure (welcome to my blog; just google it!)