2020 投资回忆录
2020 was a year with full of surprise and out of expectation. In March 2020, the whole world entered into Bear market because of the Covid-19. Dow Jones Index drop more than 30% from the high within short period of time. My share portfolio also 大蒸发, 跌到脸青青. I did not sold any of my shares because lack of planning and lack of experience, this was a painful experience. I learned that when everyone sells their shares which will trigger the margin call therefore the share market will drop further even though you don't want to sell but force to sell. At the same time, bond, gold and other investment securities will drop as well because those people kena margin call need exchange for cash and to top up the margin call.
From this incident, I learned the important of protecting capital, planning and portfolio reallocation. And also important to 淘汰 those shares not performing well. 我也终于了解巴菲特说的“只有在退潮的时候, 才知道谁在裸泳”. Covid-19 gave a big hit to the share market. I should sell my shares if drop more than 10% if I decide not to average down or at least sell certain percentage. It always can buy back later. If I sell my shares and convert to cash, I can use the cash to buy back later, to average down my cost indirectly.
Besides that, this bear market came too fast and also gone too fast. I underestimate the power QE and now the information 传播的太快了. During March and April 2020, I always everyday 怀疑人生, I can't understand why the share market can keep going up even though Covid-19 gave a big hit to the economy. 2020 became a year if you are daring, you can earn a lot of money, no need to see the fundamental of the Company, news and future expectations are enough to support the share market. These create the bull market and break new high in healthcare and technology sector.
When the Covid-19 or any incident happened, I need to think whether the incident is giving a big impact to the companies under my portfolio. I should sell those shares having big impact and convert to those companies or sector are benefited from the incident. This can help to reduce the risk and improve the return. This can help me no need to worry and think so much about the uncertainty. Always sell loser and buy winner.
I remembered when everyday the share market keep increasing, I always look for the negative news and the history. I also read one of the blogger about after he bought the bank share and share price keep decreasing in 2008. After that, I only noticed I was wrong. 2008 financial crisis sure gave a big hit to the bank sector, their share price definitely were having a big hit. I was scared to buy shares because of those negative news. In March 2020, almost all the shares drop till the ten years ago price but I no dare to buy.
I also learned that people always unable to buy at the bottom because no one is knowing when is the bottom. 买贵点总好过无止境的average down. A good share should not make you keep average down, suppose to average up. Increase in profit is always the best 催化剂. If the company can't help you make more money and profit, is time to say bye bye.
Last time I was not believing the technical analysis. Now I believe technical analysis should be part of the method of investing. It can help you determine the uptrend or downtrend of the company. One of the easy technical analysis is the share price of uptrend company should be higher high and lower low. Sometimes technical analysis can tell you the information you don't know. The share price always reflect before the news. It is always too late when you, a retailer know the news.
On 11 June 2020, the Dow Jones Index dropped 10.79%. This totally change the phenomena of share market. Everyone was scaring the share market repeat the March 2020 situation. The whole month of June 2020 was having bad phenomena and everyone was 观望. However, July 2020 start to have strong and speculative phenomena. During June 2020, I started to read and learn some technical analysis and 庄家论. I noticed the important to have 庄家 in every share, the share price won't move if don't have 庄家. Now I was thinking to learn the simple technical analysis such as moving average, support and resistance, volume, MACD, RSI and bollinger band were enough. Chart movement is created by the 庄家, 所以做一些每个人看得懂的就够了.
In early of 2020, if I manage to buy Glove companies such as Supermax, I can become the millionaire. Because of my fear, no well prepared, don't believe technical analysis and lack of experience, I am not managed to caught this opportunity. 机会果然永远给有准备的人. What if I can think Malaysia glove companies are having significant market share in the world, demand more than supply, low raw material cost because the demand of other industry become low, go website search for the glove market price and to calculate the forward share price. However, pass is always the pass, we need to look forward and look for other opportunity.
Besides that, technology was a hot sector as well. This contribute to the significant increase and break new high in Nasdaq Index. I learned that market is always full of money, the money have to go somewhere. The money will always go the sector which performing well and better than other sector. The theme and story of the market are always change. We need to find those theme and story with some common sense and think which sector benefited the most.
In July 2020, I did some speculative because the market is too hot. This calls 顺势而为. Sometimes speculative also need 天时, 地利 and 人和. Easy to earn when market is good, hard to earn when market is bad. The increase in the share price of glove companies 带动了 share market, a lot of people were speculative. I also learned that it is important not to greedy when you are speculative, always follow your plan and must execute it. There was one meaningful sentence, “赚了还想赚, 但是永远没有想过, 赔了怎么办”.
I also learned the important of cut loss. Cut loss is one of the way to protect your capital, because 跌还会再跌. 要做到胜多败少, 尽量减少错误, 而不是从不犯错. 赚就赚间厂, 输就输粒糖. -冷眼- Besides that, I also learned the importance of portfolio diversification. We should allocate our money into share, bond, gold and share. Last time I was not believed gold because gold doesn't generate cash flow. However, everyone will buy gold when the economy is not stable and bad because USA will execute QE which depreciate the money. Those rich people need to find and buy other securities to protect their wealth. Portfolio diversification also help to generate better return. For example, economy is bad -> share market become bad -> QE -> money depreciate -> gold price increase. Another example, -> economy is bad -> reduce interest rate to encourage spending -> people start to buy bond -> bond price increase.
