paullow portfolio

[chialc88]

MW,
mindset is important.
one of our Valuebuddies signature says something about 1 foot ve 7 foot pole.
this is a great tips for me.
Its very easy to ID a good stocks and profits from it.
There is no need to try very hard to find them.
Most people do not pick them up because of this or because of that reason.
But, it's precisel this and that reason that make them selling at this amazing price.
so, once I brought these stocks, all the numbers will continue to move in the right directions... until they changed.
Most of the time, the numbers don't change and hence nothing much need to be done.

+++++++++
But, for those stocks that's need to do deep/detail analysis before I can decide/determine whether they are good?
These stocks will need constant monitoring.
If I am more adventures, then I pick them up, else I will skip them as there are so many good stocks available.

Having says that everyone has their own temperament.
Just do the right thing that make sense...and rewarding too.

QED

Love Compassion

[paullow]

Hi musicwhiz,
Give u an analogy. In a hospital setting it is not uncommon for a junior doctor takes 1hour to see a case when a registrar might take 1/2hr to see the same case. A senior consultant.or a professor might take 10-15min to settle everything. Does it mean the senior doctor cuts corners n does a slipshot way? He has gone thru the relevant training n at a short glance he knows what to look for or exclude. A senior person has more to lose in terms of reputation than a young person in same trade. And people will willingly pay hundreds of dollars to see a reputable senior consultant for just minutes of consult than pay 50bucks to see a trainee doctor for one hour.
I believe the above applies to most professional trades as well as other industries.

[CityFarmer]

Hi musicwhiz,
Give u an analogy. In a hospital setting it is not uncommon for a junior doctor takes 1hour to see a case when a registrar might take 1/2hr to see the same case. A senior consultant.or a professor might take 10-15min to settle everything. Does it mean the senior doctor cuts corners n does a slipshot way? He has gone thru the relevant training n at a short glance he knows what to look for or exclude. A senior person has more to lose in terms of reputation than a young person in same trade. And people will willingly pay hundreds of dollars to see a reputable senior consultant for just minutes of consult than pay 50bucks to see a trainee doctor for one hour.
I believe the above applies to most professional trades as well as other industries.

Pardon me to interrupt while waiting for MW reply.

There is true in the statement, but we should take a balanced view. I have always reminded engineers on the trap of "jumping into conclusion", or premature conclusion, even for very senior and capable engineers. It happens for those overly confident ones.

The senior and capable ones may be able to stay on right track of diagnostic, right from the beginning, but I will respect those continue to spent time to further re-enforcing the diagnostic with sufficient supporting symptoms.

[secretinvestors]

Hi musicwhiz,
Give u an analogy. In a hospital setting it is not uncommon for a junior doctor takes 1hour to see a case when a registrar might take 1/2hr to see the same case. A senior consultant.or a professor might take 10-15min to settle everything. Does it mean the senior doctor cuts corners n does a slipshot way? He has gone thru the relevant training n at a short glance he knows what to look for or exclude. A senior person has more to lose in terms of reputation than a young person in same trade. And people will willingly pay hundreds of dollars to see a reputable senior consultant for just minutes of consult than pay 50bucks to see a trainee doctor for one hour.
I believe the above applies to most professional trades as well as other industries.

Hi paullow, well-said and very good analogy. I like the way you link your life experience with your investment experience. I guess that is why people with similar framework and philosophy will still end up with entirely different stocks in their portfolio and with differing results as well. There's really no right or wrong answer but as long as the idea is logical and prudent, and applied with consistency and discipline, the results should be quite satisfactory in the long term. I too have incorporated some of the useful attributes from my field of work and study into investments. Thanks for the insight!

[paullow]

Hi secretinvestors,

Thanks for that kind note.

My investment strategy is able to both blend as well as complement my professional work.

Both are very similiar in the sense:

1) Safety first ie do no harm - human health (in my day work) or money protection (in my investment work) first.

2) Make money second (relevant in both day work and investment work).

3) Work harder and smarter as time goes by, not forgetting the first 2 points.

paullowinvestmentjourney.blogspot.sg

[Musicwhiz]

Hi musicwhiz,
Give u an analogy. In a hospital setting it is not uncommon for a junior doctor takes 1hour to see a case when a registrar might take 1/2hr to see the same case. A senior consultant.or a professor might take 10-15min to settle everything. Does it mean the senior doctor cuts corners n does a slipshot way? He has gone thru the relevant training n at a short glance he knows what to look for or exclude. A senior person has more to lose in terms of reputation than a young person in same trade. And people will willingly pay hundreds of dollars to see a reputable senior consultant for just minutes of consult than pay 50bucks to see a trainee doctor for one hour.
I believe the above applies to most professional trades as well as other industries.

Hi Paullow,

I think what you would refer to here is the presence of skill, or what we would recognize as "skill". An interesting point you made here, as I have been reading the book "Thinking, Fast and Slow" by Daniel Kahneman. He talks about skill being simply an ability to recall a variety of events or instances from experience, and being able to translate these experiences into tangible action. The brain works in a way that allows for the System 1 (automatic, unconscious system) to make snap decisions based on past experiences and occurrences. To the observer, this looks like "skill" because the doctor would seem to be decisive and knowledgeable.

But another interesting fact is that doctors also tend to over-estimate their skill for assessing a patient's condition, especially in cases where the diagnosis is not clear cut and is based on a study of many aspects of the body (e.g. a complex or rare medical condition). [The full details of this example can be found in the book, where he explains it much better than me!]

Suffice to say that when it comes to the area of investing, it is much more difficult to be "skillful" because it takes years, if not decades, to see the results of investment decisions and to learn from mistakes. In other words, it is not a discipline which lends itself to easily observable (and hence learnable) outcomes. Kahneman also says that we tend to under-estimate the role of luck in many outcomes and we have a tendency to attribute too much to "skill", especially in endeavours where skill is not easily measurable.

So the pertinent point here is - if we do not invest sufficient time and effort into investing, how would we really know if we are "skilled" or we are simply "lucky"? Skill is being able to make use of a coherent process to produce consistent desirable outcomes. Luck is a case where not much analysis or structured process is involved, and yet the outcome seems "good". So I argue that for investing, one needs time, repeated failures* and lots of learning to be able to develop "skill" and "acumen"; if the time period is too short (as in 2009-2014), a lot of the outcomes could still be attributable to luck.

*Repeated failures will also test a person's psychology, as there is always an empathy gap present when a person merely talks about what he will do during a real crisis or crash, and what he actually does when it happens.

[paullow]

Hi Paullow,

I think what you would refer to here is the presence of skill, or what we would recognize as "skill". An interesting point you made here, as I have been reading the book "Thinking, Fast and Slow" by Daniel Kahneman. He talks about skill being simply an ability to recall a variety of events or instances from experience, and being able to translate these experiences into tangible action. The brain works in a way that allows for the System 1 (automatic, unconscious system) to make snap decisions based on past experiences and occurrences. To the observer, this looks like "skill" because the doctor would seem to be decisive and knowledgeable.

But another interesting fact is that doctors also tend to over-estimate their skill for assessing a patient's condition, especially in cases where the diagnosis is not clear cut and is based on a study of many aspects of the body (e.g. a complex or rare medical condition). [The full details of this example can be found in the book, where he explains it much better than me!


Suffice to say that when it comes to the area of investing, it is much more difficult to be "skillful" because it takes years, if not decades, to see the results of investment decisions and to learn from mistakes. In other words, it is not a discipline which lends itself to easily observable (and hence learnable) outcomes. Kahneman also says that we tend to under-estimate the role of luck in many outcomes and we have a tendency to attribute too much to "skill", especially in endeavours where skill is not easily measurable.

So the pertinent point here is - if we do not invest sufficient time and effort into investing, how would we really know if we are "skilled" or we are simply "lucky"? Skill is being able to make use of a coherent process to produce consistent desirable outcomes. Luck is a case where not much analysis or structured process is involved, and yet the outcome seems "good". So I argue that for investing, one needs time, repeated failures* and lots of learning to be able to develop "skill" and "acumen"; if the time period is too short (as in 2009-2014), a lot of the outcomes could still be attributable to luck.

*Repeated failures will also test a person's psychology, as there is always an empathy gap present when a person merely talks about what he will do during a real crisis or crash, and what he actually does when it happens.

Hi Musicwhiz,

thanks for the informative reply. Its been a pleasure exchanging pointers with you. i do have the following comments to make:

though senior doctors usually take a fraction of time, compared to their junior contemporaries, however, nothing less but even much more in fact, would be expected for these senior doctors in their 10-15minutes of time spent with patients.

I do agree that time and again, we read in the newspapers about this person high up in this profession behaving in a manner unbecoming of a person his professional status should be. Whether junior or senior, there are rules to abide to. Those who cut corners and behave unprofessionally, are similarly subject to public complaints and possible disciplinary action. Those doctors which "over-estimate" their skills and manage patients based on these "overestimates" are only endangering others' lives and their own credentials. Even one life 'mistakenly' taken by a doctor is one too many.

I strongly believe that everything must return to basics, in whatever one is doing. In medicine, its the usual history, physical examination, investigation and management. In investing, to me, its screening, fundamentals, research visits and more research. Not doing things the proper manner and sequence, however senior or skilled one might be, is only taking on unnecessary risks, with possible perilous outcomes.

thanks.

[Musicwhiz]

Paullow,

Thanks for your comments, very useful exchange indeed.

[pianist]

I kinda disagree with item 6.........
Investing is a lot of work, "not much time needed" is dangerous IMHO

thus far in my investments, the hardest time was the starting part and was getting to know myself well enough to plan a strategy suitable for myself in my particular circumstances and situation, and the ability to grow my investments from 100k to 1mil.
once this is in place, personally, i find myself taking less and less time to make acceptable and sound investments decisions.

I agree. When I first started investing, it was a steep learning curve. So, I spent more time crafting my portfolio.
However, right now, I find myself spending relatively less time. All I need to do is to do minimal monitoring.

i cant agree more..in my own experience, i find rental investment takes more efforts than shares investment

for share investments, i treat it as watering plants on a routine basis - consistent is key, nurturing each of them, every day give them some waters so that over time they will grow and i enjoy the shades and flowers
the flowers are blossoming time as if in tune with the 4 seasons..

[brattzz]

i always thought i have lived my life wrongly, rushing through the rat race without much thinking,
Should life be like that? or akin more to value?

i started pot gardening, and begin to see the value of it, watching my pots grow!...

value life is value investing.