Sunday, June 21, 2020

How not to think like myself

I had this realization over the weekend that I may need to step back from being me whenever I make decisions (in this case investments)

I was going through some articles on Seeking Alpha and ARK Investments and suddenly it dawned on me that during the entire steep decline in March 2020, my concern were capital protection, averaging down to get better positioning on existing stocks, yield seeking and downside protection. It sounds well and good and for a dividend investor with a (I dont wanna spend 6 hours a day analyzing stocks mindset) it made sense. But then I realized that I wasn't spending enough effort or resources into prospecting for 5-10 year developments, I wasn't allocating resources for areas that benefited from COVID-19 such as healthcare and IOT and stuff.

A brief look at what I SHOULD have done:


  1. Rotation (Capital protection of underweight stocks and rotate to others)
  2. Yield for future (done correctly)
  3. Average down (overdid it)
  4. Downside Protection (too conservative)
  5. Identify Areas and Buy those with Potential in new normal (ZERO)

And this is a typical chart of what happened if i had just go ahead with any of the stocks in 5. or had went through with it (KDC, MLT, FLT for local stocks and QQQ, ARKK, ARKF for overseas tech) :

1. MLT - identified but did not buy. 

QQQ- identified but did not buy:


In general, I had the ideas roughly in my mind that logistics, tech related, infrastructure, utilities are gonna be ok to very good. But the thought process of "protect capital" & "as a salaried employee with bills to pay - must be conservative" , made me overly focused on existing problems and failed to have an better overview... Awful Awful,
I had a bad feeling during early May that I made the sub-par chessmove... and now its been proven.

I need to take a step back from thinking like myself in the market. Because Mr. Market does not care about individuals.

I need to develop a systemic way to identify stocks and trigger reminders to allocate capital.

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