Morning folks. Here we are. Another Sunday morning and another blog post from Singapore Dividend Collector. Strap yourself in people.
I would like to start this post with a few thoughts on what has been going on in the markets over the past week.
We've all read about the the nose dive in the US with the major indices loosing more than 3% in a single session. Household names such as Apple, Microsoft, Nike and Amazon felt the heat losing more than 4% of their value. Investors have been hit in Singapore, too, with some in the blogging community freaking out and talking about running to the hills. Aghhhhhhhhhhhhhhhhhhhhhhhh!
What I find interesting is how quickly the tone of writing changes once market turbulence kicks in. For a long time, people have been glowing, showing their portfolios online for all to admire. Like kids in the playground presenting their football cards, these bloggers fizz with excitement when given a message of encouragement from a random in blogosphere.
"You're so close to FIRE!!!"
(By the way, next person to say "FIRE" gets a punch in the neck. I'll be blogging oh so soon on this fucking annoying term)
However, as the last week has shown, the stock market occasionally will rabbit punch you in the kidneys.
"Oh, have you seen my new Hong Kong growth portfolio?"
"No, I haven't."
"You just have to see this; I swear micro caps are so the way to go moving forward."
"Really? why's that?"
"Well, like, I read this book, yeah. And it said that the only real way to get a ten bagger is to scour international markets for this little companies called micro caps, yeah. Are you with me?"
"Yes, I'm with you."
*The following day*
"Shit, help, my micro port is down...badly. I'm selling up. This is not for me. Big time."
Anyway, the fact is that we haven't had a decent, balls to the wall, blood out the nose market collapse for a long time now, and it's on the cards. Make no bones about it: something big, grotesque and vulgar lucks on the horizon, and things are going to get messy.
For me this is cool. I'm happy to let the markets do their thing while I nibble at beaten down stocks from time to time. History has shown us there's little to fear in the long run. In fact, as Business Insider wrote ' There's almost no chance young investors will lose money over 40 years.' Thus, it's important for people during these times of volatility to remember the long term game (if that's the game you play, of course)
I play the long game in investing and sleep at night as a result. A colleague, who will remain nameless, buzzed around out workplace earlier in the year, gesticulating like a street drinker on acid.
He felt he found the key to life (like so many by the way) in the Crypto rally.
"Bit coin is the way forward. Followed closely by Litecoin. Have you read about Litecoin? It's the future according to my research."
Hearing this, I breathed deeply and shuffled somewhat uneasily in my office chair, waves of cynicism warming my veins.
"Your research? Tell me about that, if you will."
He ran his fingers through his hair and chomped quickly and awkwardly on some gum. His mouth moved up and down almost as if controlled by some hidden, malevolent force."
I saw this and it alarmed me. I'd seen this type of chewing before by people on MDMA and Cocaine.
"Are you OK?" I asked him. "You don't look OK. Have you been sleeping?"
He sighed deep and long and chewed on his right thumb nail.
"I haven't really been sleeping. No time really. I feel this run in the Crypto market is my big chance. I believe this is a once in a generation opportunity, and I will not miss my chance."
The dark rings under his eyes and flabby facial expression told me a different story.
"What do you mean your chance?" I replied.
"Can you not see what is going on here? This is the big one. The big chance. All we have to do is study this stuff and invest hard. The markets will take care of the rest."
I saw in his eyes a strained expression. One full of painful, stretched optimism. Eyes reddened by too many sleepless nights.
I'm sure you will agree this is not a wise road to traverse. And the same goes for freaking out when the market has a wobble. Don't panic; don't sit up all night watching endless videos about the history of stock market crashes; don't listen to Doomsday pundits predicting Armageddon for your portfolio. Screw all of that 100 times over!
What you need to do is the following: make sure you are confident in the underlying businesses you own. Do they have decent management? Do they make money? Are you confident they will be around in the future?
If the answer to these questions is yes then chill out, work hard and then invest back into your portfolio when pessimism is high. Don't get caught up in the noise. Relax, for life is for living, not gnawing at your lunulas like some crazed psychopath.
Please be rational and learn from history. All is well and will continue to be so. Crack open a beer and smile.
