Let’s see how shall I start. Hmmm….Ok, here goes.
We go through life, going through a system of external references. Since young, we do things to seek our parents’ approval, our friends’ approval, our teachers’ approval etc. These people (most of them) normally meant well.
For instance, when you are young and you excel in a sport, your dad will give you a pat on the back. If you get an A in class, your teacher will say well done, similarly so did your parents (they might even buy you a toy or two). When you have a cool toy, or happen to be talented in something, your friends will think you are cool, and want to be around you. So subconsciously, you build yourself up base on these external references, you feed off it – sometimes even get addicted to it.
Consequently, since young, you modeled yourself after how people perceive you. That is until you graduated, and got a job. Well, typically in this system, the company / boss is more concerned on how you can contribute to them. They may or may not be concerned on how their actions affect you eg. there are really mean shitty bosses out there who just don’t care how you feel. Typically, this system of external references slowly disappears.
No more teachers, no more mentors… you are basically on your own (well we all ‘grow’ up someday right?).
Well, if you are in a big corporation, in a structured environment.. there would still be the constant need to seek approval from your superior.. the way you dress, the way you act should be in line with the corporate identity.
Anyway, the external compass may generally disappear and we can feel lost.
I felt this really acutely shortly after I graduated and worked overseas with a bunch of guys (roughly my age). Basically after work, I can do whatever I want – I have no home to go back to. I am not married, my parents are in another country, and my co-workers would prefer to have their own private time after work (hey, we were seeing each other almost every day, weekends included as we share apartments).
So without this external ‘compass’ so to speak, sometimes, when I am alone, I tend to ask what is really a success to me, what’s important to me and what really defines me. That was then, and that is now. Even now, during lunch, I will have my quiet time to check up on news, to read the things I want on my smartphone. After work, after putting my son in bed, I will do my reading again, and think. Sometime writing it down in a blog.
Investing is something I like to do. Achieving financial independence is what I like to achieve someday. Trying to do a sideline. Investigating ideas, growth prospects of companies, meeting entrepreneurs (many much younger than me) are all things that interest me.
Technically these do not seem like much… these probably won’t get me an A in a MBA thesis. But these are the things that I wanted to do, beyond my full time job.
I don’t really know what I can get out of these… well nobody ever say that I can’t do these. Like after work, I can choose to go meet up or check out these entrepreneurs or places (or I can only go home and watch TV). There is really nothing complicated about it. With the internet, Facebook, Linkedin, Twitter, Blogs, Emails, Whatsapp, countless other websites or means.. you just need to ask.
Well, what’s the worst that can happen. Ah yes – the ‘Worst cases’ – I get that occasionally. I once asked a local Venture Capital firm on how I can invest in their company, and the next thing I know, is that my Linkedin profile was peeked at by them and shortly afterwards, was told bluntly via email that they were sorry, but individuals need to have min $5 mil to be one of their partners. Well at least I got a reply from them. The other VC firm I contacted did not even bother replying.
Most startups founders (esp. those with good revenue or profits) would only entertain high net worth individuals or people with specific contacts. Or to put it nicely, you will be laughed out of the door (if you are not rich or powerful). Or they may view you suspiciously, as if you might steal their ideas, etc.
Well, technically, I have not invested in or team up with any of the firms (well, the kind that I would want to invest in). However, I have achieved part of my internal goals. Well, that is to reach out, and my next stage is probably how I can help them (in ways that are beneficial to us).
You know there are 700++ listed companies in the SGX, well there are 1941 Singapore startups in Techinasia. Out of these 1941 sartups, some of which are probably inactive, or are already in Stage C or D fundings with multi-million valuations. But well, it’s a good place to start.
One of the interesting thing a co-founder told me is this: “You know, you might be of help to us. Sometimes you yourself do not know what you have that is of help. It could be the places you know, the skills you have, the contacts you have etc…. ”
Frankly in this world with little external compass, I am sometime left with groping on what I have that is of help to them. I think a lot of us model ourselves base on our jobs / appointments. Beyond that we still little talent to do other things. Talking to these founders is like looking at the mirror. It is a process of self discovery… you realise things about yourself that you don’t even know exists.
Some of these entrepreneurs I feel are the ones who know themselves the best (after all they depend a lot on their own internal compass). If we measure them by conventional external classification of success, they may not make the mark. There are plenty of entrepreneurs I know who were frank in telling me that they have many failed startups before, and have not made any income for years (put their personal life on hold, eg. getting married, having kids), or are still struggling to gain traction etc… But by their own internal compass, they have scaled numerous milestones which they have set for themselves. Like how many of us actually register our own company via ACRA, to go pitch for investors in our 20s (even going overseas to pitch and seal deals), to create a mobile app platform, recruit employees, etc….
When it comes to investing in the stock market.. you know that shitty feeling when you look at your portfolio and see that the value is 50% (or more) down. The red paper losses are everywhere (when it literally looks like a murder scene). And you start thinking to yourself, what if the ‘others’ saw it, what would they think. Ah yes, the external references. So if your pal saw your portfolio, he probably thinks you are the worst investor in the world. The media out there is screaming that it is the worst time to be invested in stocks and world is falling apart.
Well, I am not saying sticking to lousy stocks is the way to go.. but when it comes to value investing, most of the time, your portfolio will under-perform the market, until the time the market realise the true value of the investment. You really have to trust your own research and guts.
“Successful investors tend to be unemotional, allowing the greed and fear of others to play into their hands. By having confidence in their own analysis and judgement, they respond to market forces not with blind emotion but with calculated reason. Successful investors, for example, demonstrate caution in frothy markets and steadfast conviction in panicky ones. Indeed, the very way an investor views the market and it’s price fluctuations is a key factor in his or her ultimate investment success or failure.”
“The average person can’t really trust anybody. They can’t trust a broker, because the broker is interested in churning commissions. They can’t trust a mutual fund, because the mutual fund is interested in gathering a lot of assets and keeping them. And now it’s even worse because even the most sophisticated people have no idea what’s going on.”
“Warren Buffett is right when he says you should invest as if the market is going to be closed for the next five years. The fundamental principles of value investing, if they make sense to you, can allow you to survive and prosper when everyone else is rudderless. We have a proven map with which to navigate. It sounds kind of crazy, but in times of turmoil in the market. I’ve felt a sort of serenity in knowing that if I’ve checked and rechecked my work, one plus one still equals two regardless of where a stock trades right after I buy it.”
I love these Seth Klarman quotes. Basically, to invest in the stock market, you really need to dig into your own inner compass. Which why I won’t ever ask the taxi drivers, friends, colleagues, my parents what they think of my stocks.
I am sure some of them will mean well. To be really frank, at some time, my portfolio looks really shitty. But well, I think at the end, facts matters, doing your ‘homework’ is really important, what you believe matters, you just have to strengthen your own inner compass. To re-calibrate it after each failure, to know yourself better (what you are good at, and what you are not good at). At the end of the day, it is your own conviction against the tidal waves of the market.
Every year, there are people predicting about a recession, market crashes… it will happen. Inevitable. Just believe in what you have bought, give the companies time to validate your thesis. Restudy and if the fundamentals and growth prospects of the companies are still good, stick to it.