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At the 2000 Sydney Olympics, Britain's Men's Eight Rowing team, for the first time achieved something no British team had done since 1912: They won gold. It wasn’t easy for them… How did they do it? British rowers surprising win during the 2000 Sydney Olympics You see, after a depressing 3rd place finish in Cologne in 1998, the British team asked themselves how they could improve? During each training, whenever they had to make a decision, they asked one question: “Will it make the boat go faster?” This is one of the most powerful questions you can ask. Even in investing. I learnt a painful lesson once like thisYears ago, I bought shares in Brighthouse Financial, which was spun-off from Metlife. Metlife was one of the world's largest US life insurers. Now, a spin-off happens when a parent company, like Metlife, takes one of its businesses and separates it by forming an entirely independent company, called Brighthouse Financial. When Brighthouse Financial spun-off, it was also restructuring its entire business. But it didn't work out. Yet, I stubbornly held on while its shares kept falling. Brighthouse Financial forced me to lock bad money up I could have sold its shares and quickly invested into shares of stronger businesses. Yet I didn’t. Holding on to Brighthouse Financial was a huge opportunity cost. I held its shares for ~1.5 years before selling at a painful 23.4% loss (ouch). It took another seven years for Brighthouse Financial shares to trade back to its IPO price. Here’s the problem. I told myself: “As long as I don't sell Brighthouse, I'm not losing any money.” After months, I admit. I was wrong. Finally, I sold off its shares. Just like the British rowers, the "boat" is your portfolio and your stocks are the army of rowers in your portfolio. Along the way, you'll realize some of the stocks you picked will go wrong. There will be some stocks that won’t be driving your “boat” forward. This is normal. How to grow our money fasterBut if we don't pay attention to the "boat" we are working on, and constantly asking ourselves how to make our money work faster, we're finished from the start. To grow our money faster, sometimes you need to overcome the voices in our heads: "It's okay, It'll bounce back up soon." "As long as I don't sell it, I'm not losing any money." And cut the stocks that are pulling your portfolio back. If you want to make your portfolio grow faster, ask this question on each stock you own: Will this make my portfolio go faster? If the answer is no, cut it and move on. Sometimes, investing can be simple. Willie Keng, CFA Founder, dividendtitan.com P.S. Like this issue? Click HERE to join other dividend investors reading my DT Compound Letter. I send my regular letters to your inbox. |
Analysts love a bullish call. So when a Citi analyst put a sell call on OCBC two weeks ago, I went: “Finally someone started making sense.” Singapore banks haven’t fallen as much as I’d like. That tells me one thing: The market is treating DBS, OCBC and UOB like a riskless asset class. Even if people don’t say the word “riskless”, the market is buying Singapore banks as though it believes it’s riskless. There’s little margin of error for Singapore banks trading at market highs. Investors have...
The bond market is seeking answers. CoreWeave, a major data centre operator saw its shares hit a 52-week low. Its bonds, which were issued in June with a 9.625% yield, have dropped in price. This pushed its yield to around 15% recently. This means, any investors who are buying CoreWeave’s bonds are demanding a 15% return to compensate for its credit risk. I would say this is a canary in the coal mine for its debt-funded AI expansion. The company continues to burn enormous cash. And this data...
I hated what I was about to do. “Ah, darn it.” I took a deep breath before I hit send. It was 2016 and I was a research analyst in a private bank. The report I wrote on the computer screen was glaring back at me: "Sell call" on Nam Cheong. Nam Cheong was one of the market darlings during the oil & gas boom. It built and chartered oil support vessels for big energy companies back then. Nam Cheong bonds sat in many of the private clients' portfolios. It wasn’t a popular call. Within days, my...