Author: Create Wealth Through Long-Term Investing and Short-Term Trading

Peace Of Mind And Emergency Funds. Really???

Read? Peace Of Mind and Emergency Funds Peace of mind? Chun bo? Emergency fund may help us to avoid selling investment assets during market low at realized losses and locked in permanent losses to fund our living expenses. When we kept seeing our investment portfolio going down in value -10%, -20%, -30%, -40%, -50% and more. How many retail investors still have peace of mind? Some of sleepless nights; we could be blaming ourselves for being stupid for not getting out of the market earlier to level up our war chest to buy them cheaper and more...

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Spending So Much Time On Investing. Worth It Or Not? (2)

Read? Spending So Much Time On Investing. Worth It Or Not? 99 Years Leasehold HDB 4 RM Home in Hougang is going to zero in 68 years! From PropertyGuru, the last transaction price in his block May 2016 4 Room flat , New Generation 1,001 $415,000 His gross profit = $415,000 – $55,000 = $360,000 over 31 years His CPFIS net refund (net profit) over 18 years (2000 to 2018) is $303K. Home is not an investment property so it doesn’t generate cash flow so it will have to depend on capital appreciation before it is too late for 99 years...

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Counting The Opportunity Cost Of Rotting Cash (3)

Read? Counting The Opportunity Cost Of Rotting Cash (2) How to count? Assuming Uncle8888 has stayed fully invested for 5% dividend yield since he is only interested in STI blue chips from 2012 to 2028 (10 years from now). How much realized gains must he made before 2028 over future market cycles to break even with accumulated dividends from 2012 to 2028? It is about 74% realized investment gains over current War Chest. He will have to achieve at least 74% to 180% ROC over current war chest by 2028! Not really that bad on holding larger war chest to time the market. Current War Chest...

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You Love Your Job But Your Company Doesn’t!!! (3)

Read? You Love Your Job But Your Company Doesn’t!!! (2) As usual, Uncle8888 went for his “free” coffee black and before he could sit down. Someone came over to his seat and tapped his shoulder and called out his IC name! One ex-colleague whom he has never met for more than 20 years. He was retrenched at 43 during AFC 1998. After two years of looking for job, he finally landed Project Manager job with MOE; but he has to work long hours; and sometime has to burn weekends too. After  one and an half year; he gave up after...

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How To Become A Better Investor With Ray Dalio’s 5 Investing Principles

Read? How To Become A Better Investor With Ray Dalio’s 5 Investing Principles Two of the five investing principles listed, Uncle8888 can relate them well. LOL! 3. Constantly compare your outcomes to your goals Do you diligently compare your investment outcomes to your investment goals? It is common to see investors boasting about their investment goals without having a real measure to evaluate how close they are. Without a clear measure in place, you are unable to receive feedback on whether your investment decisions are right or wrong. This deprives you of the opportunity to improve your investment decision. After...

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Counting The Opportunity Cost Of Rotting Cash (2)

Read? Counting The Opportunity Cost Of Rotting Cash How to count? One method is to look back at his past investment portfolio performance and achievement. Best period from 2000 to 2007 (Bull) : 12% CAGR Worst period from 2000 to 2009 (Bear) : 1.6% CAGR Current period from 2000 to 2018 : 7% CAGR Future period from 2000 to 2028 : 7% CAGR To achieve and maintain 7% CAGR till 2028; Total Return (ROC) on his current War Chest has to be at least 180% over the next 10 years!...

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Bonds vs Stocks. Age is not the important factor, money is

Read? Bonds vs Stocks. Age is not the important factor, money is As you can see in these examples, age is not the most important factor. The amount of money is the most important factor. Where do you fit in? What are your special circumstances? How much money do you have to support the life you want to live? How much money do you want to leave behind? Hmm … in Uncle8888’s plain and simple thinking on long-term investing is...

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Risk and Leverage are subjective. Knowing Enough!!!

Read? Risk is subjective Uncle8888 doesn’t fight Mr Market with both arms. He is one arm swordsman. Why need leveraged instrument in margin trading for shorting or leverage up for higher yield on own investing capital e.g. assets pledging to open overdraft trading with brokers. He doesn’t have to polish his trading Craft for better Entries and Exits. He is Panda or Koala in the stock market; but his food is still not extinct yet! Knowing enough! Money is enough! Capital is enough! Risk is enough! Parroting Buffet …. it is insane to risk what you have and need in order to obtain...

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Illusive Profits During Bullish Market But Permanent Losses In Bear Market

If you have NOT been through at least one full market cycle of Bull-Bear-Bull or Bear-Bull-Bear; you may not understand what Uncle8888 is saying … Illusive profits during Bullish market but permanent losses in Bear market. Over the years Uncle8888 have many coffee sessions with Readers/Starfishes who form the two groups of retail investors: One group are newbies who have started out investing/trading for one or more years; but they didn’t not achieve the investment return as expected. So they want to find out from veterans who have been in the market; and hopefully they can learn from veterans’ experiences...

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Counting The Opportunity Cost Of Rotting Cash

Read? Investment Portfolio Draw-down Across Market Cycles Cash is rotting due to inflation so the opportunity cost of holding is to beat inflation rate. Uncle8888 is assuming 2.5% yearly inflation rate. His opportunity cost for rotting cash in his war chest is …. the number doesn’t look too scary to beat it. To generate at least 68% ROC on war chest by 2030 i.e. another 12 years for the next Big Bear!...

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Conviction? Hoot Tua Tua Or Let Them Grow Slowly And Steady To Tua Tua???

Read? No One Can Teach You Conviction. You need to Acquire It Yourself Ask any retail investors who have average down their stocks until recovery to break even is near impossible. Are they ever short of conviction? Uncle8888’s money management and risk management limited exposure to any single stock to not more than 10% of his total capital since inception in Jan 2000. From the chart below; where is his conviction over the last 18 years? Hoot tua tua or Let it be and then tua...

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Buffett has one big investing lesson in this year’s annual letter: Never borrow money to buy stocks

Read? Buffett has one big investing lesson in this year’s annual letter: Never borrow money to buy stocks CW8888: Even you are the world’s greatest investor; Mr. Market no hew you during market crash! Warren Buffett believes investors should avoid using borrowed money to outperform. The Oracle of Omaha explained the perils of using debt and leverage in his 2017 annual letter to Berkshire Hathaway shareholders released on Saturday. “Berkshire, itself, provides some vivid examples of how price randomness in the short term can obscure long-term growth in value. For the last 53 years, the company has built value by...

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