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Old and New, Fast and Slow, Time and Timing


japantrain My wife an I went to Japan for a vacation and one thing that struck me was the yin and yang nature of the Japanese society. And its balance.

You have people moving quickly to work. One of the fastest in the world along the Hong Kong people and Singapore. The next moment, you have senior citizen moving slowly to their destinations.

People in the latest fashion, alongside ladies and men in the yukata worn in summer. The most cutting edge technology you can find in the numerous electronic stores alongside  the temples and shrines that have lasted for centuries. The old traditional store run by someone in his late 70s along with the modern one run by a youth entrepreneur.

The marvel is that it can coexist together.

In the previous article, I talked about my preference for time over timing in my investment.

It drew readers to question my basis for questioning timing you entry and exit as a valid investment strategy.

My key reasons to believe that time in the market wins over timing are:

  • you can miss a market recovery when you sell to stop loss; and missing just a few days of the market recovery can impact your investment yield tremendously
  • no one method can be the Holy Grail of investing, to precisely enter when it is at the bottom and exit when it is right at the top and you cannot know this in advance, it is only evident when you look back in the past- and worse, you cannot know what is the exact cause of the rise or fall
  • even if you have a lot of time and analyse it to the death, you cannot isolate the factors or causes that make market fall or rise, else the day trader and the academics studying the market will be the billionaires.
  • a company stock or a market can stay irrationally exuberant or depressed for longer than one can stay liquid or maintain a short position
  • no one person has identified or predicted with 100% accuracy the market falls and increases

Personally, my own inclination is that I don’t have the time to monitor the stock market and the economy so closely. The bonus is this helps me trade less and keep my trading cost low.

My best performer in my stock portfolio is a stock I kept for 4 years through the downturn. Within the past 3 weeks, it has increased by 214%. If I had tried to time it, I don’t think that I would have held it for so long.

I subscribe to the model by Peter Lynch. To hold a stock portfolio of a few stocks which maybe two or three has suffered losses or even total loss, but the rest of the 7 or 8, some of them are multi-baggers. I am prepared to hold it for a few years or until the story behind the company changes. Or until we forecast that we need money for major expenses that are coming.

Like a vacation to Japan :)

Have a good week ahead.

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