I am writing this as Keppel corp drops more than 5% a day after releasing their H2 financial results.
I remembered telling a parent that you should not be looking at trading patterns or listening to friends when it comes to investing.
Unfortunately, it was ignored because an orangutan could have made money last year on mostly any bluechip near the market bottom.
I read financial blogs and discourse from time to time and have a couple of friends who are actively participating (or refuse to participate) in the markets.
It’s not difficult to reverse engineer the why behind the choices of how people allocate capital.
Spac companies are empty companies that are listed and pushed to make acquisitions. It’s a highly speculated market and people (including esteemed investors) are making a case on these asset classes.
These people love a quick gamble.
This category belongs to the introduction of this article I was talking about. They look at price trends, listen to friends and are always over-excited aver insider news.
They’ll ‘wisely’ tell you that stocks are naturally going to rise during the CNY period in a “that’s simply way of life” tone.
These people belong to the ‘fake knowledge’ category. They seem all that smart or wise but they aren’t really.
This category belongs to a class that a) fundamentally believes in the value of a digitalized currency or b) they belong to speculators.
From experience, they are mostly speculators that convinced themselves they are value/ intelligent investors.
This is my favourite category and the rarest category. They are almost always quantitative by nature and can spill out P/E or P/B ratios. Or they’ll have references to discounted earnings, free cash flows or net asset values.
Spac-ulators and speculators some times persuade themselves that they belong to this category.
This category values knowledge and you can find them almost always reading every day.
The Academic (intellectual yet idiot)
This category belongs to a class that uses financial jargon such as “risk-adjusted rates” or goes on windy lectures on macroeconomic policies. They’ll pull out a fancy-looking scientific journal looking report on stocks price movements or some economic policy.
They tend to be speculators who persuaded themselves that they are rational through ‘knowledge’. (without filters for biases I’d like to add)
The Non Participants
This category hugs onto capital and cash. They can’t take the ups and downs of allocating capital to the markets. That’s perfectly okay by the way.
However, non-participants, some times pretend they belong to the above categories without allocating a single dollar to the capital markets.
Some times this category enjoy lecturing birds on how to fly.
How you allocate stocks are merely a reflection of you: how rigorous, patient and knowledge-seeking you are. The biases you are exposed to. Or if you’re someone that is conservative. Or you are someone that is conservative but enjoys being seen as part of the risk-taking crowd.