Change is the only constant
I haven’t been reading much into individual companies. I just felt that with markets hitting new hits, the is now very little room for errors. Why go against the tide?
I think in investing, one must really ‘know’ oneself. No pointing kidding yourself and acting all gungho and take on more risk than you can stomach. Sure when markets are rising, the profits are magnified when you invest more.
However, can you accurately time the crash and be out before the profits vaporize? In a rising market, psychologically there is this reluctance to sell, as you do not want to lose out on the gains (as compared to others).
In a crashing market, how much loss can you stomach, people may be able to endure a 10% or even a 20% decline, but a 50% decline? Very few can. And when your chips are all in (after all, the more you put in, the bigger the ‘gains’) – it is really very hard to stomach the loss (well at least I know that is for me – hence, for now, that is all I can ‘afford’ to be in the market).
It is ‘fun’ tabulating up the unrealised profits week after week. However, as any investor would know, unrealised gains are as they are – unrealised. Capital gains are fickle, passive income gains not as much – but if you stick to a fundamentally weak company with deteriorating business, it too would be gone.
There is, after all a difference between getting rich and staying rich. I think the below post put across this point very clearly.
Getting Rich vs. Staying Rich (read here)
The fortunes of people, companies, and even countries change.
This Taiwanese video (click here) shared by another blogger about the future of Singapore and China Rail Silk Road masterplan (which connects Southeast Asia via China to Europe) and China Maritime Silk road masterplan (which includes the Kra Canal through Thailand bypassing Singapore), is a sobering wake-up call that even future of nations are not guaranteed.
The London – Yiwu freight train has successfully been launched (click here). While news of the commencement of the Kra Canal has recently surfaced again (read here). I do not know what the future holds for Singapore Inc, but as China grows, it would continue to seek a more economical, faster and cheaper link between it and the west. Singapore might be an unfortunate casualty. Frankly, in simple economics, the real beneficiaries of this connection are the landlocked cities along the route (rather than the coastal cities of China or London).
I do not know what the future holds for Singapore Inc, but as China grows, it would continue to seek a more economical, faster and cheaper link between it and the West. Singapore might be an unlikely casualty. I think the political rational highlighted in some of the news and Taiwanese video is a bit overblown. Ultimately it all boils down to economic…perhaps I can see the day when the transportation of goods flow the other way round (from the west to the east) :p.
Let me digress a bit – it kinds of remind me of the 2006 American computer-animated comedy-adventure film ‘ Cars’. In the film, we learn about a place called Radiator Springs which used to be a popular stopover along the old U.S. Route 66, but with the construction of Interstate 40 bypassing it, the town literally vanished from the map.
Having said that, as the time goes by, the ‘world’ in many ways get smaller – national boundaries may slowly blur (ok, maybe not that small with the new Trump protectionism and Brexit). People with marketable skills (and the right attitude) may find it easier to find jobs in many other countries.
And as investors, the world is literally your oyster (ok, there are some restrictions, eg. dividends from other countries may be taxed. If I am not wrong US stock dividends are taxed 30%). If someone living in far out Omaha can be one of the richest men in the world…..
In addition, I always feel that for some businesses unlike hard assets (eg. properties), these tend to be mobile (if location A doesn’t work out, they move on to location B).