Main reference: Story in Sinafinance by market watcher Fen Fang
A DECADE and a half is an eternity in equity market terms, as things can easily change overnight let alone in 15 years.
Things haven’t always been so rough.
After all, 15 years ago – at the end of 1998 to be exact – the benchmark Shanghai Composite Index was trading at 1,249 points.
Nowadays, the Index is 75% higher.
But a decade-and-a-half is a long, long time to wait for this rise – and from such a low base to boot.
A more telling comparison is that Chinese shares are now around 65% lower than they were at their historic high of 6,124 points reached in October 2007.
My experience that playing the A-share markets these 15 years has more often seemed akin to donating blood rather than getting a much-needed transfusion.
After around a few years of investing in A-shares, I realized that I had four attributes that that I felt set me apart from the garden-variety retail investor.
I was assiduous, serious, curious and impatient with the ordinary.
In other words, I felt it a breach of a personal investing code of sorts to lazily and slavishly jump onboard the latest stock trend being bandied about by the big houses without first conducting the necessary due diligence.
I also was very wary of any “advice” on stock picks du jour that I hadn’t scouted myself on the horizon in advance.
After all, when everyone was talking about – and presumably acting upon – a new market fad, wasn’t it too late to jump onboard and expect a decent return?
So my obsession with finding my own “hot picks” and not relying on others – who obviously didn’t know me and hardly had my vested interests at heart – led to my spending a lot more of my precious time scanning the horizon for potential opportunities.”
Call it ego, hubris or just a general distrust of strangers, but it was my money and I’ll be darned if I am going to bet the farm on the advice of a nameless sell-side analyst, or gamble it all away on the promptings of a friend-of-a-friend-of-a-friend.
I am not here to serve as a cheerleader or shill for the professional analyst community out there, but am just saying there’s no need to reinvent the wheel.
No one is suggesting that investors blindly “donate” funds to the market without first conducting due diligence in their research.
Nor should we ignore the progress of our portfolio, foolishly believing that it will eventually rise if we would just leave it alone.
But if we become obsessive in our research, and compulsive on a daily – or hourly – basis in checking up on our portfolio, we end up missing out on so much else that life has to offer.
The lesson I learned is that a cautious investor is a wise investor, but an overly cautious shareholder ends up wasting precious chunks of time (i.e. life) wringing their hands in vain over would haves, could haves and should haves.
I would advise new investors to enter the market with healthy skepticism.
But by the same token, use a broad spectrum of brokerage reports to give some background and a general buying and selling direction.
Then, at the end of the day – after absorbing the differing house takes on particular counters – use the amalgam of opinion with a healthy admixture of your own intuition to make your moves.
This will make the market feel more like a way to ensure a stable supplemental income – a transfusion of sorts – rather than a daily trip to the blood bank where you always feel like you are doing most of the donating, and missing out on the finer things in life into the bargain.
And don’t forget – the eyes and ears alone can often deceive us.
But the heart and mind are usually right in the end.