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Article - BURNT BY STOCKS - I LOST $700,000 IN 3 MONTHS

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Old 10-04-2013, 04:02 PM   #61
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The article demonstrates a potent mix of greed and fear combined with leverage (in the form of contra) mixed with a gambling mentality. It shows the various emotions that an investor has to handle and how it can completely screw up your portfolio if you are not careful.

Good to also read up on the following (just google or use Wikipedia):-

1) Gambler's Fallacy
2) Overconfidence Bias
3) Loss Aversion
4) Over-Reaction Bias
5) Mental Accounting
6) Anchoring
7) Hindsight Bias
8) Confirmation Bias
9) Endowment Effect
thanks for sharing !!!
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Old 10-04-2013, 04:09 PM   #62
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It is very simple for people to preach to others on the internet. But personally I have been through 2007 and that feeling really sucks big time when you have put in your hard earned savings which literally turned them into 10-20% of value that is left of what you put in.
Its absolutely correct to take profits now when stocks are making new highs. The dot com bubble of 2000 and financial crisis 2007 had taught me lessons not to blindly listen to what people are telling you. (Hence survived both with a bigger asset some years later)

People told me I am too pessimistic when I should be investing in full (like now!) or too optimistic when we should stay away from investing (like 2 years ago).. I come to the conclusion that Mr Market is made up by emotional sentiment and you should be very very careful now with all the new IPOs and market auntie discussing how much they've made in stock recently.

I've already divested all my S-REITS(except Suntec) simply because some of my friends who I monitor are all buying REITS now.. and from years of experience I know they usually buy high and sell low ... and they are the same bunch telling me all REITS will go bankrupt when the yield was at 10%! a few years back.
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Old 10-04-2013, 04:13 PM   #63
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Its absolutely correct to take profits now when stocks are making new highs. The dot com bubble of 2000 and financial crisis 2007 had taught me lessons not to blindly listen to what people are telling you. (Hence survived both with a bigger asset some years later)

People told me I am too pessimistic when I should be investing in full (like now!) or too optimistic when we should stay away from investing (like 2 years ago).. I come to the conclusion that Mr Market is made up by emotional sentiment and you should be very very careful now with all the new IPOs and market auntie discussing how much they've made in stock recently.

I've already divested all my S-REITS(except Suntec) simply because some of my friends who I monitor are all buying REITS now.. and from years of experience I know they usually buy high and sell low ... and they are the same bunch telling me all REITS will go bankrupt when the yield was at 10%! a few years back.
U use ur friends as indicators......

Another reason to sell now is bcos I can think it through and decide.
I dun have to panic sell......
In the meantime, I can collect dividends as I wait....
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Old 10-04-2013, 04:24 PM   #64
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I'm thinking of selling liquidating as well.

Problem is, what do I do with the cash?
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Old 10-04-2013, 04:26 PM   #65
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I'm thinking of selling liquidating as well.

Problem is, what do I do with the cash?
you do not need to invest 24/7 and make your cash work so hard everyday one, she also need a rest too
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Old 10-04-2013, 04:27 PM   #66
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you do not need to invest 24/7 and make your cash work so hard everyday one, she also need a rest too


That's a funny analogy.

Giving cash a break means I have to work harder leh.
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Old 10-04-2013, 04:27 PM   #67
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I'm thinking of selling liquidating as well.

Problem is, what do I do with the cash?
Same problem here! Every new high makes me more and more tempted to sell knowing that it can't keep on going up. Good problem to have though.
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Old 10-04-2013, 04:30 PM   #68
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That's a funny analogy.

Giving cash a break means I have to work harder leh.
aya, your cash already give u a return of a few years 'annual pay' yield le, infact maybe you already can quit your job and shake leg liao right?

putting her to work will mean she will breakdown sooner or later, she is not a machine, even mrt breakdowns too
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Old 10-04-2013, 04:38 PM   #69
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Its absolutely correct to take profits now when stocks are making new highs. The dot com bubble of 2000 and financial crisis 2007 had taught me lessons not to blindly listen to what people are telling you. (Hence survived both with a bigger asset some years later)

People told me I am too pessimistic when I should be investing in full (like now!) or too optimistic when we should stay away from investing (like 2 years ago).. I come to the conclusion that Mr Market is made up by emotional sentiment and you should be very very careful now with all the new IPOs and market auntie discussing how much they've made in stock recently.

I've already divested all my S-REITS(except Suntec) simply because some of my friends who I monitor are all buying REITS now.. and from years of experience I know they usually buy high and sell low ... and they are the same bunch telling me all REITS will go bankrupt when the yield was at 10%! a few years back.
Your friends really are 明灯...
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Old 10-04-2013, 04:39 PM   #70
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I'm thinking of selling liquidating as well.

Problem is, what do I do with the cash?
CASH IS KING. Roars
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Old 10-04-2013, 04:42 PM   #71
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Yes market is very exuberant now. Small time players are also jumping in with more cash, swimming in the ocean with big sharks is always dangerous.

Doesn't help that Straits Times always interview people who make it big on the market and they extol the virtues of being invested without elaborating on when to be invested.

MIL was telling me that she wants to park money with me now, that always scares me when ultra defensive and risk adverse people also want to invest in equities.
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Old 10-04-2013, 04:46 PM   #72
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Yes market is very exuberant now. Small time players are also jumping in with more cash, swimming in the ocean with big sharks is always dangerous.

Doesn't help that Straits Times always interview people who make it big on the market and they extol the virtues of being invested without elaborating on when to be invested.

MIL was telling me that she wants to park money with me now, that always scares me when ultra defensive and risk adverse people also want to invest in equities.
Wah such an indicator.... Tell MIL to put in FD.
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Old 10-04-2013, 05:12 PM   #73
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Time to buy gold, gentlemen. Please be fearful when others are getting greedy. This is how equilibrium strikes the unwary.

Hold is fine.. But dun buy! Sharks are coming in for the kill when prices get unrealistic
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Old 10-04-2013, 05:15 PM   #74
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It all depends on whether my target prices are met. Starhub is the last stock to sell. I will sell sph after it IPO the REIT......

In fact, I just sold M1 today at 3.04

My paper gain can cover 5 years of dividends oredi.....

I foresee another crisis within the next 5 years.....
What happen to our theory of power of cd? I was expecting that at least before I sell lol
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Old 10-04-2013, 05:20 PM   #75
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Time to buy gold, gentlemen. Please be fearful when others are getting greedy. This is how equilibrium strikes the unwary.

Hold is fine.. But dun buy! Sharks are coming in for the kill when prices get unrealistic
Like musical chairs, I think music hasn't stop yet, central banks still letting their addictive printing machines work.

Should be in 3 years when the music official stops...

Be selective about counters now but not totally out of the market
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