S= Q r ( modified)
Success , S, is equal to the product of Ability to Execute, Q, and rate of return of the opportunity, r.
Q is a product of Knowledge, K and Personality/ Character ,C.
Thus, the modified version of the above success formula is
S = KC X r
While knowledge can be gained by effort, personality/ character and talent are innate.
C determines your preferred methodology. ….whether short term or long term, focused or diversified, high beta or low beta, value investor or growth investor, got grit or no grit, speculator or investor. Trying to change strategies without changing C is an exercise in futility., and sub optima.
Its wiser to know thyself and fit the strategy to the C then to try to change C to fit the popular strategies. Wiser to perfect the tactics required to fit the optima strategy than to act against your innate Nature.
Knowledge is not skill. Skill comes from repetitions, practise, talent and having the right temperaments . In the modified formula, we have replaced Q with KC in order to examine what makes Q work.
KC stands for knowledge and character. One without the other is insufficient. Not enough to make a difference. Having expert knowledge is not enough to make a difference. You also need the right character/ personality for the right market.
Success in stock market , as every business man knows, you also need grit, tenacity, fiecesomeness, different from the other 99%, stubbornness, never say never, optimism, can do attitude, focused, concentrated, clarity, keep it simple as simple as possible. You need a bulldog quality, bite and don’t let go.easily.
"people want to invest, they want to be successful.......they need to have big dreams, and grit....and of course, knowledge and mind set."
Take Koon YEWYIN for instance. A lot of people admire him, a lot of people in i3 laugh at him. Admire or laugh at, the same qualities that people laugh at are the same qualities that others admire. Not easy being the 1% especially if the 1% come from the stock market and not from creating stuffs that people want.
Success and failure are close cousins. Its yin yang. You cannot get one without the other. No risk no reward. Its a personality thing.
One thing people can admire in KYY, he uses his own capital. Not just talk, put his money where his mouth is. Got skin in the game. Willing to take risk. Focused and concentrated.
RE-EXAMINING THE ROLE OF R
Perfect stock picking requires us to pick the one with the highest r in the time allocated and then allocate as much capital into it as is available. Absolutely the most intelligent way to trade the market. No need many ideas a year. A few will do to make it a fruitful year. Too many ideas, too many trades, some lose, some make money, at end of the year, feed the remisiers only.
Act and act big , focus and concentrated when the target price gives a huge possible return. ….like when Dayang is $ 1 and quarter profit X 4 X 10 is $ 4 and already 2 previous quarters of 5 sen each.
Or when Jaks is 50 sen because of forced selling of substantial shareholder with 33 % stake.
TYPICAL DURATION OF MAJOR TRENDS
From the lows to the highs, major trends are measured in years, not just days. And typically, uptrends are slow and gradual. Takes a long time to climb against a wall of worries. Down trends are fast and sharp. As traders and participants in the stock market, our objective should be to profit from the up trends ( takes time) and avoid the down trends ( as much as possible).
Traders have to find a way to benefit from the uptrends by staying in the market and to do it naturally according to their personality/ character. I mean, if you are managing a $ 100 million portfolio, you cannot be as fleet footed as one managing a $ 100,000 portfolio.
DARE TO BE DIFFERENT?
Dare to strike out on your own?
Dare to find what suits you?
Can we talk about best strategies without talking about personality, character, talent, risk tolerance?
I can define investing as participating in the growth of excellent companies…...and everything else as trading / speculations.
Definitions are important. Definitions focus the mind and help to make money, avoid losses.
The future has many possibilities but only one will come to pass. Just because a certain possibility come to pass in 6 months, in 6 years, it was not the only possibility back then. No need to be too arrogant if make money or too humiliated if lose money. The future enfolds by quantum theory, many uncertainties, and probabilistic in nature. They say Hope for the best, prepare for the worse.
Our job is look at stuffs probabilistically and to lead a happy, relaxed life.
Ego, praises, criticisms have no role to play in leading a happy relaxed life.........
or trying to change the world, or trying to help other people make money from stock market ( or guarantee other people at $ 1.50 per share) also got no role to play in leading a happy relaxed life.............( KYY's mistake )