My Investing Muse

Here is a list of articles that I have compiled for beginning investors.  My favourite ones are the ones highlighted in yellow . Investing for part-timers https://myinvestingmuse.blogspot.com/2022/02/my-investing-muse-investing-as-part.html   Following value investing gurus https://myinvestingmuse.blogspot.com/2022/02/my-investing-muse-how-i-follow-value.html The most important return of investment https://myinvestingmuse.blogspot.com/2022/03/the-most-important-return-of-investment.html How to keep emotions out of my trade https://myinvestingmuse.blogspot.com/2022/03/how-i-try-to-keep-my-emotions-out-of-my.html Invest in proven history and not just hope https://myinvestingmuse.blogspot.com/2022/03/invest-in-proven-history-and-not-just.html What we can learn from Berkshire's letter to shareholders https://myinvestingmuse.blogspot.com/2022/03/my-investing-muse-what-we-can-learn.html Personal financial management https://myinvestingmuse.blogspot.com/2021/10/personal-financial-man...

The biggest struggle I have when I trade is my emotions .  There would be constant temptations coming from the fear of missing out (FOMO). Note that there is a difference between trading and investing. Investing.com has a great explanation of the difference: Investing takes a long-term approach to the markets and often applies to such purposes as retirement accounts. Trading involves short-term strategies to maximize returns daily, monthly, or quarterly. Investors are more likely to ride out short-term losses, while traders will attempt to make transactions that can help them profit quickly from fluctuating markets. With the above definitions, I would like to share how I ( try to ) manage my emotions coming to my trade (not investment). When I was a younger trader, I rely largely on technical to trade.   Being aware of my weakness, I started to develop a process for me to better manage my emotions. My Trading setup My trade setup will be using 2 charts - 1 Day chart as t...

All of us love a good story that paints great value in the future.  Making predictions is complex as there are too many unknown variables.  However, research in the business's history can gain us conviction and confidence for what lies ahead. Extract from WSJ: Rivian Automotive   $Rivian Automotive, Inc.(RIVN)$    and Lucid Group   $Lucid Group Inc(LCID)$    had terrible weeks on the stock market. Rivian shares fell 25% after the company cancelled price increases imposed on customers who had already ordered its truck, issuing a grovelling apology. Lucid cut its anticipated output for 2022 to between 12,000 and 14,000 vehicles from 20,000. The shares fell 14% for the week. Lucid Group overview (Yahoo Finance) The main reason that I could not invest in both companies after their listing is their  absence of a proven track record (history) . Buying based on "a hopeful future" should not form a basis for investing. A proven track record ...

When we invest, the common goal should be that of profit.  Our personality, values & understanding play a part in how we invest.   More often than not, my emotions let me down as the voices of FOMO (fear of missing out) and YOLO (you only live once) crowded out rationality and discipline.  I have learnt through personal failings that successful investing has more to do with discipline than emotions .  Irrationality seeps in as we ponder what we could miss. Of course, there would be cases where these "gut" decisions were correct.  For me, I have more misses than hits. The other element of investing lies in the "selling of hope".  Some stocks created great anticipation leading to their listing.  Thus, it is not surprising to find these stocks being oversubscribed and their listing will be burning bright for the initial days.  Rivian arrived with much aplomb with funding from Ford and Amazon.  Amazon has placed an order of 100,000 units...

Berkshire shared their letter to shareholders on 26 Feb 2022.  For any value investor, this is one of the times when we hear from two of the greatest value investors of our time - Mr Charlie Munger and Mr Warren Buffett.   Performance of Berkshire as compared with S&P500 since 1964 If you have invested with Berkshire in 1964, you would have gained a portfolio increase of 3,641,613% or 36,416x .  This translate to a compound annual gain of 20.1% (between 1964 to 2021).  O ver the same period,  S&P500 would give you a compound annual gain of 10.5% or 30,209% gain if you started investing from 1964. Such returns put them at the pinnacle of value investing.  I have been exploring a few ETFs or indices to invest in.  After seeing the record, I would strongly recommend investing directly into Berkshire shares instead.  With a proven 20.5% compounded annual return, our investment into Berkshire could double in less than 5 years.

  One of the tech darlings of China   $Alibaba(BABA)$   /   $Alibaba(09988)$   has shared their quarterly earnings for the quarter ending 31 Dec 2021 on 24 Feb 2022.  This is my review. update as per 26Feb2022 From a 52 week high of 245.69, the stock (last traded at $107.94) is trying to break the downtrend as per the chart above.  With a  TTM PE ratio of 15.07 , i s this stock greatly undervalued or is this something that we need to skip ? Some Notable highlights: Global annual active consumers reached 1.28 billion as of 31 Dec 2021 with quarterly growth of 43 million. This implied a 27% year over year increase for local customers and 18% for international customers. This is made up of 979 million consumers in China and 301 million consumers international (outside of China). Alibaba aims to reach carbon neutrality by 2030 and has committed to an additional 1.5 gigatons of decarbonization by 2035, p...

  Whenever I review earnings reports or news, I prefer to approach all things with a pinch of salt.   what do we see - a young girl, old lady or ... both Humans -  we tend to see what we want to see and hear what we want to hear.  Thus,  coming to reports, we may end up picking up details of what we want (or hope) to read . Coming to investment, it is important for us to be neutral. I used to buy stocks because I loved a company for example Levi's Jeans. However, such love may not always be repaid with profits. We should not forget that we invest with the purpose of profits (first). In such cases, I have learnt that  it is best for me to remain as a customer instead of an investor of the business . We cannot mistake our love for their product & services against the intent of profits.   Ideally, we should invest in businesses where we share their purpose . After qualifying the business, I invest into...

Explosions went off in various parts of Ukraine as Putin has ordered a special military operation. Extract from Wall Street Journal (WSJ): Russian troops and tanks pushed into Ukraine and airstrikes hit the country’s capital and more than a dozen other cities early Thursday after President Vladimir Putin said he ordered a military operation to “demilitarize and de-Nazify Ukraine” and bring its leaders to trial. Ukrainian officials said an initial wave of strikes targeted military installations, airfields and government facilities across the country, as well as border-force installations.  JP Morgan summary of Russia Exports From the photo above (from Yahoo Finance) showing Russian exports as a share of global production, we can expect the price of these commodities to increase because of the current situation.  At the same time, Russia is also one of the biggest suppliers of oil and gas to Europe.  Europe is dependent on Russia for about  40% of its natural gas suppl...

  Palantir's earnings report was released on 17 Feb 2022 and the stock fell by 15% following the news. Palantir overview as per 9.45am SGT, 18Feb2022 The following is the summary extracted from Palantir's earnings report: Q4 2021 Highlights Total revenue grew 34% year-over-year to $433 million Commercial revenue grew 47% year-over-year US commercial revenue grew 132% year-over-year Government revenue grew 26% year-over-year Added 34 net new customers in Q4 2021 Loss from operations of $(59) million, representing a margin of (14)%, up 3500 basis points year-over-year and 900 basis points sequentially Adjusted income from operations of $124 million, representing a margin of 29% Cash from operations of $93 million, representing a 22% margin Adjusted free cash flow of $104 million, representing a 24% margin Closed 64 deals of $1 million or more, of which: 27 deals are $5 million or more 19 deals are $10 million or more GAAP net loss per share, diluted of $(0.08) Adjusted net earnin...

Just because a certain investor bought in a certain number of shares of a certain company, it does not mean that this guaranteed profit.  Recently, Soros's investing firm bought in   $Rivian Automotive, Inc.(RIVN)$  , this remains something puzzling for me as the company will remain in the red for the coming quarters till they have ramped up their production. If we cannot explain the business to a young child within 5 minutes, I am afraid that we do not know the business well enough.  After we have completed studies of the annual & earnings reports, we can establish an approximate value of a company.  Should prices fall, we do not need to join the mass sell off caused by panic.   Why do we need to run away from a sale - when a good company is available at good discounts (with a good margin of safety)?   We can even consider adding to our positions cause we understand that the current price does not always reflect the value of a business....