A Reminder to Self

I've changed the settings allowing anyone to comment after being told they had something to tell/warn/ask the Stressed Up Singaporean Mum, J in her posts here and here. I've seen nothing so far, if there is nothing to add, I'll change the settings back in a couple of days' time. 


I read a book by an 'investor guru' who came up with a sexy catch phrase which goes something like this, "You make your profit when you buy, not sell." Well, with thousands of investment advice going around, I don't blame a book writer for the need to add the controversy element to draw readers' attention. When elaborated, the idea was to ensure each time you make an investment, it has to be such a good deal that your profit is virtually guaranteed when you need to sell it off in the future.

In short, it was just another way of saying, 'Buy low, sell high,' the most old fashioned business rule even little kids selling candies in their school fair can grasp easily. Well, investment gurus still get their sales and book royalties but leave readers very little to take away with them. What an investor really needs is to master the art and science of identifying an undervalued investment. That of course, is a different ball game altogether. 

I spent a lot of time playing Guild Wars 2 lately. More than anyone would approve. That included my wife, who had been quietly tolerant so far. Unlike Guild War 1, with a traditional in-game trading system of calling out in a populated town what you want to buy or sell and establish your deals, not without some old fashioned haggling too! Guild Wars 2 has an interesting trading post within the game. It was an automated real time stock market system, almost like the real thing. That eventually intrigued me more than any specific part of the large array of activities you could do in the game.

Surprisingly, I learnt more about stock market fundamentals than the actual SGX board that I used to monitor regularly back in the younger days. I was surprised that I actually studied the market more intently in the game than I did, and should have. The Guild Wars 2 trading system actually showed details of spreads such as quantity of orders as well as the actual numbers of buyers behind the queue. I realised how important these details were and how easily a few huge buyers or sellers of thousands of copper ore could let establish a false sense of the market by interpreting that for huge demand, as compared to a a real market demand. Well, I know that big fund managers have been impacting stock markets all along but this experience allowed me to see for myself how they make their impact. 

It brought upon me why both the chartist (technical traders) and fundamentalist (value investors) often go wrong. The problem with scientific framework is that once everyone follows it religiously, it will be difficult to find value. Besides, even well studied traders are unable to bail ourselves out in time when the milk turns sour. Though it is arguable that this group of traders, having the advantage of being nimble, take much lesser damage than the mass public who leave their money to big fund managers who are often unable to steer their bigger ships out of troubled waters fast enough most of the time.

So I am brought back to the possibility of parting with my money big time here in Perth. The lure of falling into the trap has been strong indeed. Fortunately Guild Wars 2 came along as a timely reminder. There is more work to be done. A lot, a lot of work. Cool it. More haste less speed. Remember, the market will always be there. There isn't such a thing as a best or worse time.


  1. The trouble is, one can never be sure of a "guaranteed" future in which to sell. The world is so changeable that there is never a "sure thing". I always try to keep this in mind when investing, how useful is it to me, personally, if no one else wants it, and can I live with the knowledge that it may be worth less than I paid for it? Basically, a "worst case" scenario keeps me cautious but relatively safe, and I tend to start small and if things go well, slowly add on. Tortoise and Hare comparison makes me a tortoise but they live much longer than Hares :)

  2. Bro. Talking abt investments. I saw an offer for a 50" 3D LED TV for 600 bucks on Groupon. Wondering if I should... ahem... invest in it. Only have 2 days left to decide. Of course, the biggest obstacle is the probable veto by the home finance minister. What a dilemma!

    What do you think? To buy or not to buy?

    1. 50" is fucking crazy. You can watch that soccer match 50m away. $600 is more than 50% of the car you last bought. It's many days' pay for many of us too!

      Having said that, buy! buy! BUY!