Author: STE's Stocks Investing Journey

"Lies, damned lies, statistics ! ” How this may influence your decision making in Investing ?

How to Lie with statistics ! As investors , we have been bombarded by news and statistics every minutes and seconds , as we know well, some of these news been exaggerated and statistics or figures used also questionable . We need to understand the figure behind these statistics and how is it derived to ensure that we have not been lied by statistics. “ How to Lie with statistics “ is a fascinating and short book ( only 122 pages ) . Although this book is written in 1954 , but the contents & principles still very much relevant and just as...

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What If Everyone only invested in Index ETF ?

This is a fascinating and interesting book by Randall Mundroe , a former NASA roboticist with a degree in Physics and also the author of xkcd:volume 0( a stick-figure webcomic ). Munroe get thousands of questions submitted by readers and he answers a modest subset of those that not only pique his interest but are amusing and offer the potential to use real science to explore concepts, the world around us, and day-to-day mysteries of life and the universe. What makes Munroe’s work so fantastic is a combination of two elements: his commitment to trying to answer even the weirdest question with solid...

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Saving vs Investing for Retirement : Which is more important ?

Saving vs Investing : Everyone wants to be the genius investor who would beat the market and turn a small amount of cash into a fortune. We continuously search for “ multi-bagger “ in our investment portfolio ,unfortunately it’s pretty difficult to do that and hard to achieve “Alpha “ by most of retail investors. That’s OK because as an average retail investors , we hardly could outperform the market continuously to achieve financial independence. Alternatively , consistent saving over time is much more likely to pay off than complicated investments or strategies such as timing the market , momentum trading or trend following...

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Dividend vs Share Buyback : Which is better ?

Dividend vs Share Buyback Why US market is trading upward even as investors big and small are selling ? According from an article from Fortune , most people assume what has kept the market afloat this year after sinking 11% at the start of the year was a mixture of better news out of China, oil prices stabilizing, and indications that the Fed won’t raise rates as much as thought. But the real thing buoying the market could be something else: Stock buybacks. “Corporate repurchases are the main source of net demand for US stocks,” a team of Goldman Sachs...

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The Greatest Gambler’s Fallacy

What is the ‘Gambler’s Fallacy’ The gambler’s fallacy is when an individual erroneously believes that the onset of a certain random event is less likely to happen following an event or a series of events. This line of thinking is incorrect because past events do not change the probability that certain events will occur in the future. For example, consider a series of 20 coin flips that have all landed with the “heads” side up. Under the gambler’s fallacy, a person might predict that the next coin flip is more likely to land with the “tails” side up. This line of...

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My Investment Strategy : 3 Ts 3 Ms ( part 3)

孟子曰:天时不如地利,地利不如人和。 According to Mencius studies , the “人和 “ (or People’s Harmonization ) is the most important part in any war game or battle , same apply for investment , I think this is themost difficult and challenging  part , yet the most vital to ensure success of our investing in stocks. In The Art of War (孙子兵法) , Sun Tzu , a Chinese military philosopher and strategist in the 6th century BC , he mentioned : 知己知彼,百战百胜 “知彼知己者,百战不殆;不知彼而知己,一胜一负;不知彼,不知己,每战必殆。 ” He who has a thorough knowledge of the enemy and himself is bound to win in all battles. He...

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ABS ( Alpha , Beta , Smart Beta )

When Alpha Becomes Beta What is Alpha ? Concept explain : ( From Investopedia ) A measure of performance on a risk-adjusted basis. Alpha, often considered the active return on an investment, gauges the performance of an investment against a market index used as a benchmark, since they are often considered to represent the market’s movement as a whole. The excess returns of a fund relative to the return of a benchmark index is the fund’s alpha. Alpha is most often used for mutual funds and other similar investment types. It is often represented as a single number (like 3 or -5), but this refers to a percentage measuring how the portfolio or fund performed compared to the benchmark index...

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My Stock Watch List

Why do we need a Stock Watch List? I guess most of the investors are having their own stocks watch list in hand which they intent to buy when opportunities arise. Having a watch list of potential investments next to your workstation allows you to seize upon opportunities presented by the sometimes over-react Mr. Market. Armed with a watch list, investors will be at an advantage position as he or she can simply wait for good investments to arise rather than going out looking for them when needed. Besides, having a watch list will also avoiding us of “impulse...

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Not All Dollars Are Created Equal

Why Smart People Make BIG Money Mistakes ! This is one of the book I like the most and would recommend to readers who intent to learn more about “ Behavioral Finance “ in a more practical and laymen terms. A fascinating and practical manual: Looking at the ways we spend, save, borrow, invest, and waste money. It explain why so many otherwise savvy people make foolish financial choices ,like why investors are too quick to sell wining stocks and hold on to the losing shares , why borrower pay too much credit card interest and savers can’t save...

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I’m OK – You’re OK

According to Wikipedia : I’m OK – You’re OK    is a 1969 self-help book by Thomas Anthony Harris. It is a practical guide to transactional analysis as a method for solving problems in life. The book made the New York Times Best Seller list in 1972 and remained there for almost two years. It is estimated by the publisher to have sold over 15 million copies to date and to have been translated into over a dozen languages. Base on the principle of Transactional Analysis that we are all born ‘OK’ — in other words good and worthy. Frank Ernst developed these into the OK matrix, (also known...

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My “ Rojak & Kia-su ” Portfolio

“ Scripophilist or Karung Guni “ According to “ The Free Dictionary “ , Scripophilist is a person who collect expired or antique bond and stocks certificates. These certificates can be valuable to the study of economic history and often have value themselves as collectibles. Nowadays , we do not have chance to see and hold such scrip as all share certificate are being placed under the custody of CDP and we are only getting the stocks holding summary from CDP from time to time. But base on below , we may have chance if a company ceases to...

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Why Zebras Don’t get Ulcers.

One of the book which I read few times in “ My Book List “  was the one called “ More Than You Know “ from Michael J. Mauboussin , other than “ The Most Important Thing “ from Howard Marks. According to Wikipedia : Michael J. Mauboussin  is managing director and head of Global Financial Strategies at Credit Suisse, where he advises clients...

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My Investment Strategy : 3 Ts 3 Ms ( part 2)

Before I start to explain the 3rd and 4thelements, allow me to quote below from Warren Buffet which is very much related today’s blog post : “The Intelligent Investor has three big lessons: think of a stock as a part ownership of a business; the market is there to serve you, not instruct you; and always require a margin of safety. Berkshire shareholders are better than most at understanding that they own a part of a business.  In most of the case, best advice is the one which is simple to digest, a few choice of words can summarize...

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Stock Gift Cards : Giving stocks as Gift

Came across this article about giving “stock gift cards” as gift which is very innovative ideas though the practicability in Singapore’s context remain yet to be seen. Many challenges and hurdle will need to be cleared before this could happen here in our country. I don’t mind if someone would give me this as gift which consist stock of ” Google , Apple or Facebook ”  and this is definately much better than getting something which you don’t really like it or just wear it once. Stock Gift Cards: Bringing Wall Street To The Masses? http://www.investors.com/etfs-and-funds/personal-finance/wall-street-literally-meets-main-street-via-gift-cards/ Economist has long...

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Equity Premium Puzzle ( EPP ) and Lifetime Retirement Investment Scheme ( LRIS )

CPF advisory committee just revealed another two proposal to enhance and ensure better retirement planning for members. 1) A CPF Life Escalating Plan 2) An alternative CPF Lifetime Retirement Investment Scheme (LRIS) As usual , many good article and debate from fellow bloggers in recent days , allow me to link two which I think gave a very good explanation and suggestion on these 2 proposal : From Investmentmoats : http://investmentmoats.com/saving-money/what-is-this-new-cpf-life-escalating-plan-and-cpf-lifetime-retirement-investment-scheme-lris/ From BIGfatpurse : http://www.bigfatpurse.com/2016/08/cpfs-lifetime-retirement-investment-scheme-good-or-bad/ In following blog , I would like to share my thoughts on proposal 2) which is LRIS and Equity Premium Puzzle . Apart from...

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