It has been about a year since I started to build a large position in Global Logistic Properties (GLP). The company initially caught my attention when it bought back a large chunk of its shares. For the Financial Year ended Mar 2016, it spent about SGD…
Category: Boring Investor
However, the minion strategy goes beyond these 2 advantages. I discovered the mentality of investing like the rich. Because the amount invested in minions are relatively small, typically 1/3 the size of a typical investment in a profitable company, any price changes are fairly insignificant. In fact, as mentioned in my last post, the investment is mentally written off the moment they are purchased. Because of the relatively small size and also because they are mentally written off, there is no emotional attachment to the share price. Whether the price is down 10% or 100%, I could not care less. Contrast this with the largest holding in my portfolio which takes up 15% to 20% of my capital. When I first held such a large position, every 3-cent movement (equivalent to 1.5% price change) was enough to make me feel jittery. There is only 1 word to describe the lack of emotional attachment to share price: liberating.
One of my problems in investing is the inability to hold on to winners. This problem becomes more obvious as the stock approaches a 100% gain, which is the threshold for a multi-bagger and comes with bragging rights. Watching the stock price fluctuating just above and below the line is nerve-wrenching. On one occasion, I decided that I had enough of the jittery and sold for a 163% gain, only to watch the stock climb another 118%! In other words, I sold for double my purchase price, and the price doubled again after I sold! It was not a minion position and the amount of “lost profits” was staggering. The stock was Riverstone.
P.S. As I’ll be overseas next week, I would not be able to respond to your comments until I return. Appreciate your understanding.
I have a bunch of speculative shares which I affectionately call “the minions”. The characteristics of the minions are: small speculative positions in loss-making companies with reasonable chance of turning around. The idea behind the minions came abou…
|Fig. 1: SSB Interest Rate Forecast Errors|
|Fig. 2: Accuracy of SSB Interest Rate Forecasts|
|Fig. 1: SSB 10-Year Interest Rates|
|Fig. 2: Price Performance of 10-Year SGS and SSB|