Learning on 24 May 2018

On Risk Management 

“My investment process usually starts and stops with 2 questions.

What is my probability of being right?
What is the consequence of being wrong?”

On Looking Inside before Looking Outside

A new addition to the portfolio needs to be better than what you already own. It needs to improve the quality of your portfolio, otherwise your returns are mediocre. Very often, your existing stocks are better and you should size it up.

“I could improve your ultimate financial welfare by giving you a ticket with only 20 slots in it so that you had 20 punches—representing all the investments that you got to make in a lifetime. And once you’d punched through the card, you couldn’t make any more investments at all.”

He says, “Under those rules, you’d really think carefully about what you did and you’d be forced to load up on what you’d really thought about. So you’d do so much better.” 

Warren Buffett

On being Patient

Taking cue from the above tweet, let me share a personal story of mine.

There was a particular stock. I got in at 26 cts, and when it rose to 45cts, I exited totally. It rose to 52cts, and I regretted. I was just motivated to lock in my gains. It was stupid. Subsequently, it went down to 46cts, and I loaded big time. Today, I am happy. Don’t be trigger-happy.

When I sell my shares, I am giving away my future wealth to the buyer of the stock.

2018-05-24 12_06_00-NASDAQ_AAPL - Google Search.png

Looking at this chart, would you hold all the way until 2018? The answer most of you say yes. But how many of us could do it? None of us.

When it rose to 150, your gains are 200%+ or more, you will be tempted every single day to lock in your profits. But true good investors who believe in the potential of the companies would not. Perhaps, “doing nothing” is the best thing to do.

Anyway, the stock chart belongs to Apple.


On Tencent

Great slides on the company located ove https://www.slideshare.net/plus8star/inside-tencent. Super super comprehensive.

How WeChat regulate the usage of their app. https://jingdaily.com/external-links-wechat/

On Disney

Etihad Stadium to be renamed Marvel Stadium from September 1. This article highlights the enormous franchise value of Disney’s brands. Licensing is one of their highest profit areas.

On Muji

China fines Japanese retailer Muji for packaging that lists Taiwan as a country.

On JD.com

Based on the company’s previously launched AR Styling Station, which enables customers to virtually try on products such as lipstick and blush with real makeup effects, JD’s AR Beauty Mirror will appear in retail giant Walmart and Chinese cosmetics brand Carslan’s brick and mortar stores.

JD.com has been advancing the online shopping experience through AR and 3D technologies, creating multiple interactive experiences to help shoppers find and select products, and create new digital touchpoints for brands with its consumers.

JD has already implemented the AR Styling Station with more than 60 brands on its platform. The platform’s AR Glasses Try-on feature lets shoppers virtually try glasses on to see if they suit their faces. And JD’s 3D Fitting Room gives shoppers the ability to try on clothes before purchase through a customized avatar matching their hair, faces and body dimensions. The feature has already been implemented for over 3,000 SKUs in the male and female apparel categories.


This would definitely boost sales as consumers are able to have a similar offline experience while being online.

On General Electric (GE)

No One Said GE’s Turnaround Would Be Easy. It is pretty sad to see General Electric, who was founded by Thomson Edison, had fallen by so much. This happened when a company grows too big and bloated.  Anyway, this resource was shared by a friend of mine. Page 8 is really useful to assess turnarounds.

On China Payment System and Implications on USA Financial System

Really enlightening article. Check it out at  https://www.bloomberg.com/graphics/2018-payment-systems-china-usa/

On Xiaomi

CEO Lei Jun’s IPO letter: link

Xiaomi’s IPO Will Make Dozens of Lucky Workers Millionaires: link


2 thoughts on “Learning on 24 May 2018

  1. chuckcho11

    Hi Kelvin! Just a random question. Understanding the power of holding long term but If we don’t lock in the profit, what we have is actually a paper gain, and there is no cash flow come in. Is it better to lock in partial profit?


    1. Kelvin Seetoh

      Hey Chuck, while I am building up my portfolio, I ensure that my monthly expenses are always covered by my active monthly cash flow.

      You have to ask yourself if you lock in the gains today, can you deploy the capital meaningfully to other better stocks? If no, sometimes, the best thing is to do nothing.


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