Sunday, May 26, 2024

Bedokian’s Lessons And Learning Points

Since starting on my journey of trading, and subsequently investing, I have had made a few mistakes, misjudgments and of course, misses. In this post I will share some of these as lessons and learning points for you to take home.

Trading Instead Of Keeping: Apple

Apple was the very first foreign counter that I had purchased since I started my trading back in 2009, where I bought it at USD 158.23 in August 2009. Around seven months later, I sold it for USD 225, making a 42% return, and was very proud of it then.

Well, looking back, if I had kept those Apple counters, it would have become a 30-plus bagger by today, which means per share without split would be around USD 4,430. My next purchase of Apple did not arrive until 2014, and I have been holding that since. For good quality companies, it is, in my opinion, better to hold than to trade, as their growth would be advantageous if your investment runway is long enough.

Beware Of Forex: Citibank

Again, on my trading days, I went into Citibank at USD 4.78 and USD 4.88 in August 2009, with that time the USD/SGD exchange rate was about 1.44. Subsequently, however, the exchange rate went down to as low as 1.20. Even with a reverse split, Citibank’s price did not really improve much, and even though at moments where it went above my buy price, I still made paper losses on forex. Eventually, I liquidated Citibank in November 2011 with a 13.4% loss.

The main conclusion is, beware of forex losses, thus for overseas counters, it is better to look for those whose growth would outpace potential forex losses, e.g. Apple.

Price Action Gone Wrong: Singtel

I bought Singtel during the transition from trading to investing. The first time I got into it was in December 2013 at SGD 3.57, exiting in August 2014 at SGD 4.03, almost 13% gain. Ironically, I bought back a year later in August 2015 at SGD 4.03, after observing that the price of Singtel hovered around SGD 4-ish for the past one year or so. At that point, using my price action model, I had set reentry at around SGD 3.50-ish, thus I had further made entry points in January 2016 (SGD 3.51), December 2017 (SGD 3.57), February 2018 (SGD 3.48), March 2018 (SGD 3.32) and June 2018 (SGD 3.18), with the last two being averaging down acts.

The learning point is that price can go drastically down beyond the range of one’s price action model. At the turn of 2020, even before COVID19 was full blown, Singtel’s price had dropped below SGD 3.00, and had been remaining there ever since. I did go into Singtel again a couple more times for averaging down, but that is all. At this moment the average price stood at SGD 3.015.

The One That Got Away: Meta

When Meta’s price was shot down due to its poor earnings in October 2022, I had smelt blood, but I did not act on it. The few reasons of hesitation were that I had not research enough into the company, and during that time I was looking at other asset classes and counters (e.g., bonds and Alphabet). Till now, within a time span of 20 months, Meta had recovered 430%.

The lesson here is when one of the market leaders had suffered a drastic fall, it is worth to spend some time looking at it. I did not have a position in Meta then (and still do not have now), and was not actively prospecting, therefore I did not really undertake, which by reckoning would have been just a few hours’ effort

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