When I approached various personalities on their first investment stories series, I only expected a five minutes, short paragraph of response from their busy schedule.
Some never really replied, but I am blessed that most did.
But Shan Rui from Singapore Young (21 years old) Investor blog decided to share in detail, his exceptional investing experience at an age where most of us are spending more time playing computer games. Here’s his “essay” on this series.
In his own words – “I am more than willing to contribute for your article since it will help many retail investors out there.”
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I have always wanted to play the stockmarkets after I participated in a virtual stock competition organised by my school and lost quite a bit of the virtual money from speculation. I spent the 2nd year of my NS reading up on investment before I decide to take the plunge at the onset of the current Euro Zone crisis last September which I have to say I am very fortunate.
Out of the first 10 stocks that I bought, I made losses in 9! The first 2 stocks that I bought were Eratat Lifestyle ($0.134) and VICOM($3.36) where I was convinced by their business models. I made 10% losses in Eratat Lifestyle as I realised that it is certainly not a safe value play as it has a suspicious trade receivables number. As for VICOM, it has been my most profitable investment currently though I have not realised any gain other than a $0.107 per share dividend received.
The next 2 stocks that I bought were Mewah ($0.54) and Sunvic ($0.55) as I was buying on rumours coming from certain trading and investing websites. I placed a heavy bet of $10000 in hope that i can recoup my losses but I ended up losing money yet again though I was quick to cut my losses. I bought and sold them and then i bought them again as I cannot take it that I am making losses at that point in time.
Subsequently, I bought into UOL($4.26) since it seemed to be undervalued though I did not really do much analysis. 2 days later, ASSD was announced and all the property counter starts to crash heavily and I sold it at a 5% loss once again. Of course, if I have done my homework I might not have sold UOL given that it holds hotels, offices and retail malls.
After that, I bought OUE at $2.05 and sold it at $2.05 incurring brokerage losses as I am being crippled by fears.
I also bought into San Teh upon the declaration of dividend distribution the previous night. Not only was i speculating, I keyed in twice the amount as I failed to cancel the previous trade. Needless to say, I made ~8% losses again as I sold it within 3 days as I know I do not have enough money to pay for it.
In all, I made up to 11% in realised losses within 3 months and I told myself that I am going to stop speculating once and for all. I have read The Intelligent Investor before I have started, but I simply cannot control the very powerful feeling of greed and fear within me. However, I am glad that I have paid for the lesson and become determined to follow the proper path. I “restructure my portfolio” and bought companies like SIA Engineering ($3.55), HR Glass ($1.06) before the short bull returned in 2012.
Valuebuddies.com has been a very useful community as the subtle peer pressure has helped me to control my emotion. Now, I am no longer as affected by price movement and can easily go one day without looking at the stock prices. In fact, I do wish that STI starts to plunge now so that I can buy excellent companies at better price.
If I have started in a bull market, I supposed I will have believed that I am the next Warren Buffett or Peter Lynch and when the bear comes my portfolio will simply get wiped out completely. Therefore, I believe that I am very fortunate to have started at the right time where the tide goes out so fast that I realised immediately that I have been swimming naked. Apart from the potential monetary return, I have benefitted intellectually and emotionally and have never regret taking the first step.
Key takeaway
- Stop Speculating
- Suppress your Greed
- Control your Emotion
Read First Investment Stories from Personal Finance Experts Episode 1 and First Investment Stories from Personal Finance Experts Episode 2 if you missed it previously.