Believe Your Own Eyes

The Singapore market has been trending down since the start of this year. When you switch on your machine these days, more often than not, you will see a sea of red numbers. Companies are selling at cheaper prices day after day, but how cheap is considered cheap? And when do we know if the prices have bottomed?

Honestly, nobody knows when the prices have bottomed, so do not waste your time trying to locate the lowest price. Time will be better spent to look at the fundamentals of the companies, instead of looking at the daily price fluctuations. Till date, many people around me are not vested in the market yet, but the replies from them are always 'I will invest only after the market crashed!'. What puzzles me is that even after the market crashed, how do they know which company to invest in? There are 700+ companies listed in Singapore, so is it really so easy to reap the returns by throwing your money into any company? Some of you might rebuff that we can just invest in blue-chips like DBS, Singtel, etc. when the market crashes. You are right that eventually these blue chips will do fine when the market recovers. But again, why do you want to waste such a golden opportunity of gaining multi-folds (as opposed to a few folds) during a market recovery? Time waits for nobody, so please be prepared to grab the opportunity when it comes knocking.

The stock market is a human game. Different individuals react to the market differently. It does not matter the initial capital of the investment. I started off my investing journey with a mere SGD$ 1,000. The amount of the initial capital is not the key; what is precious is the learning process, the discovery of your investing traits as the years go by. You can only know more about your inner character when you are vested in the market, and the fine-tuning along the way will make you a better investor. Investing is a life-long education, so I strongly urge everybody to start investing early.

So in turbulent times like these, who can we turn to? For those who have prepared themselves well, this will be an opportunity for them. But for those who have just started investing, worries start settling in their minds. Honestly, nobody can predict if the market will go lower or spike up. You can rely on no one except yourself.

Do you believe what you see? I do, I believe my own eyes more than anything else in this world. So I trust the figures and information reported on the company/industry, instead of getting myself affected by others. It is based on these information that I derive the intrinsic value of the company. So did the company operate differently few weeks ago as compared today? I doubt, but it seems that some stock prices differ 50% in just a span of weeks. I have made more purchases recently, with the expectations that they will rise to my calculated value in years to come. Having said this, please do not be enticed to follow and purchase blindly. Even after purchases, please always ensure that you are at least 20% in cash and only invest up to 20% of your portfolio in one company. Your 20% cash will come in helpful to shoot flying elephants and in the event of fraud or insolvency, the exposure is capped at 20%.

S-shares have been hit pretty badly these days and some are really worth looking at. The market can go either way this year, but I am still on the optimistic side as I see many good companies at good prices. Everybody makes mistakes, but remember to learn from them and not to repeat them again.

Last reminder: Believe Your Own Eyes!

Cheers!