Sunday, February 5, 2017

What a Flash Thunderstorm taught me about Investing?

Dear readers, I am always a student of life; a voracious reader who like to read up on a variety of genres and I am a firm believer in that daily life moments, small as they may be, will teach us so much more about life itself. (as an example, don’t miss this post how spring cleaning made me a better investor). That is why even as technology advances at an astonishing speed, there is a subject called biomimicry: the design of systems to imitate nature with the belief or understanding that sometime nature provides the best solutions to problems faced by man. For example, yesterday, I watched news about how the next generation of drones will evolve into. These will evolve from flying like helicopters to flying like bats! Yes, the drones will be equipped with wings, which will vibrate via sensors and mimic the flying of bats. This bat-like flying style of drones will definitely capture more images from different angles, offer more diverse views in breadth and depth and would be especially useful in humanitarian assistance. I hope you agree with me that these days, Singapore’s weather can rather be unpredictable and it might be even more unpredictable than the local stocks markets! Yesterday and the day before (3 Feb 2017) , the weather was very hot till around 4pm or so, when the weather turned less hot and then suddenly the skies opened up and it started to pour! And what a downpour it was! Accompanied with roars of thunder and bursts of lightning! I was caught on the day before without an umbrella when the thunderstorm commenced! It rained very heavily with strong gusts of wind, flashes of lightning and roaring thunder. I waited for around 20 minutes, caught in a public sporting facility which has no covered linkways to bus stops or any other amenities. Not to waste time, I surfed the internet while thinking on whether there is any novel solution to my situation then. After some 20 minutes, I decided that I have waited enough and decided on the inevitable: to dash for 200 metres to the nearest bus stop! With a handkerchief draped over my head, I doubled up (and not ran as it was dangerous with my slippers in such a thunderstorm). Finally I reached the bus-stop and then took a bus.

To my surprise, I did not get as wet as I have thought I would from this episode. It then dawned on me that there are parallels from this with investing. Like the thunderstorm, when the stocks markets are down, there seem to be many risks (getting wet in the thunderstorm; losing one’s capital during a market downturn). However for the investor who is willing to accept some risks to run through the thunderstorm (similarly, to buy stocks when others shy away from the markets), normally, we will find that it might not be that risky afterall. It might be the best opportunity to get to our destination (financial goals) faster than those who wait for the thunderstorm to stop to act (as the stocks markets would have gone up significantly higher by then and upside would be more limited). Join the emailing list to receive regular Financial and Singapore stocks newsletters too! Like" me on Singapore Stocks Investing Facebook page to receive all posts on your Facebook as well as read more articles. Follow me on Twitter too.

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