It’s the holiday season. As I cruise through the gift exchanges, Christmas gatherings and festive merrymaking typical of December, it is also usually the time I think about the year I’ve had and the lessons I’ve learnt.
As we send off 2019 (and the decade) into the sunset, here are my personal lessons of 2019 which I will bring forth into the new year.
Risk N Returns is not a investment blog if we don’t start with investing lessons.
1) Being contrarian is never fun
Regular readers will know that I’ve been caught in a falling knife this year by the name of Eagle Hospitality Trust. Much mud has been slung at this one, which led to a sharp sell off in its unit price. In spite of this, I had quietly averaged down on this counter and not bothered to fight the mud slinging.
Bearing the brunt of the horrible news flow and commentary was not fun though. It seemed like almost every day brought another negative press piece to feed the conspiracy theories. Telegram chats were flooded with rampant discussions about the latest issues.
Early in the face of this news flow, I find friends questioning my investment decision, to the extent that I started doubting myself. Ironically, it was due to all this noise that I decided to plant my feet and take a stand. I decided to tune out all this information until I see credible evidence. Management, to their credit, have been providing sound and logical responses to issues of the day.
I don’t blame people for the mud slinging and speculation. It is what makes a robust debate and market. Going against popular wisdom sucks though, it creates a lot of FUD (Fear, Uncertainty and Doubt). I’ll advise people who can’t take it to just don’t bother with risky assets altogether.
I find that it takes a certain amount of belief to take a stand like I did, something that was only possible due to my next lesson.
2) Trust your investment thesis
Trusting your investment thesis is extremely important. The reality is that markets are not efficient and share prices are driven largely by sentiment. I find that I work best when I have a solid basis for my investments.
If I hadn’t had the logical basis for my investment conviction, I may have succumbed to the FUD and realised a lot of losses. EHT has thankfully bounced from its bottom nicely and seems to enjoy a more positive investor sentiment, especially in the past 2 weeks.
This counter’s wild adventure has reminded me of a phrase that I’ve mentioned in the Kevin Shee Show podcast – All investments are good at the right price. This is especially relevant in the case of my EHT investment.
3) Staying humble in the face of success
WeWork and Masa Son has taught me that it is way more important to stay humble if you are a successful investor as Aswath Damodaran mentions in the above video. Boasting about your returns and attributing it to your abilities can propagate a sense of complacency, something we can’t afford as an investor.
Luck has shone on me this year, I hope for the best next year.
It’s been a tough year on the career front.
1) Networking is important
One of my KPIs this year as an Internal Auditor was to reach out to new stakeholders within the company to learn more about the business. As an introvert, this does not come to me naturally.
However, I’ve come to realise that networking is important within your company and externally. You never know when you’ll need these connections to help with a career transition or just to learn more about their work and industry.
2) Company loyalty doesn’t exist anymore
In a fast paced world with stiff competition, companies have grown to be ruthless in the way they restructure and retrench staff. I’ve seen this shift ever since I’ve joined my current company, having survived a major restructuring myself while also seeing colleagues leave in the past week due to redundancies.
Company loyalty doesn’t count for much, its much more important to show the value you bring to the business. If you can be replaced by a robot or someone at half your salary, companies will do it.
This constant spectre of retrenchment has driven me to find ways to increase my value to the company or a future employer. This is partly why I started a Master’s programme.
1) Cherish your family
It seems timely for SingTel, one of my major portfolio holdings, to share a Christmas themed ad about family. Beyond the corporate ad and the subtle message on spending within your means, the family message is especially significant.
I am at an age where my parents are starting to age and develop health issues. My parents have approached this in a rather matter-of-fact way. They have taken active measures on legacy planning and also right-sizing our family home.
These activities remind me that my time with them is limited and I should look spend more time with them. Especially while they are still in relatively good health.
To all readers, Merry Christmas and hope 2019 has been as amazing as it has been for me.