Laziness is your best friend if you want to invest.
Disclaimer.
Let’s get a few things out of the way first.
- This blog, for all intent and purpose is not financial advise. At all. Ever. Invest in Bitcoin, invest in your cousin Louie’s back street noodle stall. What you do with your own money is your own prerogative.
- I absolutely do not have half-a-mil lying around. I can’t emphasise this enough. I have an average job with average dollar bills. I do enjoy saving money though. This post was meant to exemplify how investing in the market and letting it do it’s thing is one of the best action one can take. Having said that, the Capital column would be dramatically lower had I just held on to all the stocks that I purchased. The only reason why that amount is that high is only because I exited from positions, entered other positions, sold those positions, went back into a certain position.. You know the drill.
- This table ignores any dividends as it would be rather time consuming to figure out what the dividend payout would be for times when I wasn’t holding the stocks. What? You’re calling me lazy? You’ll be right. I’m proudly so.
Uniquely special, like everyone else.
A random day. Much like today. A random time. Much like now. I casually glanced through the “complimentary” newspaper at work, looking for interesting tech and startup news to fuel my magical escapism in owning my own successful business, my thing at that point in time, before stumbling onto pages filled with short acronyms and numbers. The figures appeared to dance whimsically in and out of my view. It wasn’t that I haven’t seen the stock section before, it’s the page I mentally label “skip with disdain and disinterest”. For some reason, I was drawn into the red and green symbols that glistens the page that day. It drew short spurts of excitement out of me, like some form of devilish IV drip of monetary greed. Maybe this stock investing thing could be an easy get-rich scheme. Uh-oh 🤦🏻♂️😵
You know how you sometimes recall random shards of memories out of the blue? There’s a prominent memory of mine from back when I was still a kid, probably just around 7 to 8 years old, sitting at the back of my dad’s beaten up Toyota. It was a busy and bustling day in a typical Malaysian street, as it always is. Moments before, we were driving in puzzlement from random Chinese folks pointing and trying to get close to our car. Apparently my dad’s number plate reflected the first prize numbers in a sorta local, sorta legal lottery thing. Hah. What a life that would’ve been. 😩
Out of the blue and with extreme confidence, I told my parents, “If you tracked the daily price movement of the stock market, you can see similarities in the trend and make money from it”. 🤯 I have no idea where that thought came from and as far as I can tell, I knew absolutely nothing about the stock market. Perhaps that statement reinforced that. My dad gave a comforting laugh and mentioned that it was a good idea and that was that. I might’ve made my parents somewhat proud with my small burst of interest in money from such a young age. It’s an Asian parenting win when your child aspires to be a day trader. If they were proud, they made no effort in showing it. It’s a strange stereotype but there’s definitely a mutual understanding between child and parent of the Asian-kind that there is love between each other, it’s just not something we verbalise well. Didn’t someone smart once say actions speak louder than words? 😏
From time to time, I would imagine that “being in the stock market” is a cool adult thing to do. I have spent a few good hours watching CNN whilst feigning understanding of the meaning behind the constantly scrolling stock tickers to impress my Uncle as a child. No doubt he was and proceeded to switch the channel to watch something “more useful than the fabricated news”. I guess he wasn’t too far from the truth.
A journey through pitfalls.
So there it began. I signed up for a CommSec account towards the tail end of 2014 and bought my first stock just a day after my birthday, JB Hi-Fi, a company that I was just slightly obsessed with. People of today and the future: we did not have music streaming back in 2014. Every time I saw the golden arches of JB Hi-Fi, I had a Pavlovian reaction to needing to buy a CD. I would pop in to any local JB Hi-Fi during lunch hour just to check out what CDs are on sale. My technical analysis of what makes a CD a good candidate for purchase is if it has nice cover art or a cool sounding album title. They were already shiny little objects so the desirability factor was off the charts (no pun intended).
I decided to follow the trajectory of buying stocks in companies which I was familiar with, from Breville to Rewardle to Woolworths. Some were globally renowned names and some were local favourites. Little did I know, this strategy was made famous by Peter Lynch in his book One Up On Wall Street. Mine was the poor man’s version of it by a thousand miles.
Things were looking good. Despite me not looking at valuations of the companies before I parted ways with my beloved money, I was making some paper gains.. then I decided to make as many investing mistakes as one possibly could.
🧠: OMG! The stocks that I purchased has made some money. Uh oh. 2012 is real, just delayed! Hitler will rise again! Backstreet Boys will have another top charting album! It’s gonna crash any moment now. STOCKS SOLD.
I then casually returned to the market with more bravado than ever. I’ll pick any stocks that I merely have a 6th degree of separation from. See a company advertising in a business magazine on a flight? INSTA-BUY! Ooh. That salmon company has a product on the local supermarket shelf? COME AT ME! This was the phase where I bought into random small cap companies like Credible which turned out not to be that um.. credible. 🥁
🧠: OMG! Those random stocks that I bought a few days ago was a bad decision. I better sell out from it before 💩 hits the fan. STOCKS SOLD.
After a few weeks of a breather, I often found myself falling into the trap of finding quicker shortcuts to make money. I subscribed to paid memberships of online stock picking services with the idea of buying into the recommended stocks and making a killing.
🧠: OMG! Those companies recommended are *sees a 0.5% drop* TANKING IMMA LOSE ALL MY MONEY. HOW WILL I MENTALLY BRAG TO FAMILY AND FRIENDS OF MY INVESTING PROWESS? STOCKS SOLD.
Funnily enough, two of the services that I subscribed to got done for by the Australian Securities and Investments Commission. Thankfully, I learnt some crucial lessons in a raging bull market and wasn’t too much worse off. To come full circle, I actually read One Up On Wall Street by Peter Lynch and understood that the next step to picking companies that I interact with frequently and love is picking great companies with a sustainable moat and great leadership. Ok. Of course there were more important nuggets from the book. That was my TLDR to a TLDR.
I started investing tiny amounts into companies like a2 Milk, Afterpay, and SEEK whilst getting into multi-factor ETFs like QLTY and QUAL which are passively managed funds of quality companies based on strong financial ratios. It feels like I was on a roll and settling into an investing style.
🧠: OMG! I have a new strategy to change to! I better liquidate every single stock that had any traces to my old investing style! Bu.. but.. STOCKS SOLD.
🤦🏻♂️ How embarrassing. To make things worse, I did that dance multiple times in a year. Perhaps being an Asian with semi-battered self confidence, I’m a bit of a closet masochist.
Portfolio of laziness.
Thankfully, I crawled out of that hellhole of idiocy. Well, mostly. I won’t make any claims that I am no longer impervious to any silly mistakes however I have begun to journal every investing decision that I make and the reason behind it. Ok. Fine. It’s not a journal, it’s an Excel spreadsheet so sue me. Actually don’t. Please.
Going back to the table of my investments 👆, it goes to show that despite picking only 9 positive stock performers compared to 17 negative stock performers, my total gain would’ve been 66%. I would be happy with that, except that I’m no stock picking genius and it’s mostly luck from a raging bull market.
My strike rate with my ETF picks fared much better which makes sense. An ETF is a bunch of companies stuffed into a single stocking of joyful purchase. Whilst that dilutes some great performing stocks within that ETF, it also means a reduced risk of underperformance and I’m ok with that 👌. It helps me sleep better at night.
Bu.. but.. a 66% gain for stocks vs “only” 20% for ETFs. Yeah. It’s a staggering difference. A staggering difference which proves that like all good things in life, stock investing requires time to grow. The majority of the stock picks that I made were done from years ago whilst I have been regularly investing into a select few ETFs over the past few months. This means that my ETFs has not had the chance to grow as much as my theoretical stocks which I sold out from.
TLDR? Invest regularly on a periodical basis in good index funds or ETFs and have a 💩-ton of fun on this journey.
As always, thanks for reading and please leave a comment if you have some thoughts to share or questions to ask.
Time for Bubble Tea.
joe from fidilaa.
