Interview with Winston

Interview with Winston

Postby helios » Sat Mar 27, 2010 7:57 am

This week, we are please to introduce Winston ..


InvestIdeas: What can you tell us about your background ?

I went to University in North America. I then worked in the Financial Services industry. I have worked and lived in 5 countries.

I'm currently struggling with what I want to be doing with my "Second Half". I'm not too passionate about activities like the "Red Cross", 'Green Peace" etc. However, I do enjoy exchanging ideas with some members of the forum. So maybe that could be my way of giving something back. Not too sure that I will be getting the Noble Peace prize for that though :P


InvestIdeas: How long have you been investing / trading ?

I started investing with some colleagues at work many years ago. We would pool our money and buy stocks with it. The stock broker was on the 2nd floor of the building. We would go there during our breaks to watch the stock prices. Our breaks were more frequent during bull markets and less frequent during bear markets :P

I then asked Dad for some money to invest. Thereafter, I would spent my nights looking at the price action of various stocks. At that time, I would buy stocks that were trading at the 25th percentile of their 52 week trading range.

I then "graduated" to reading Analyst Reports, reading Investment Books, watching the Financial News Network ( now known as CNBC ), Wall Street Week with Louis Rukeyser etc..

Around that time, I also learnt Options, Futures and Short-Selling.


InvestIdeas: What is your Investment Strategy

I tend to use a Tops Down approach ie. Macro then Industry and finally the Specific Company.

I try to use both FA and TA.

I learnt FA from the two books by Peter Lynch and the various books on Warren Buffett. I learnt TA ( OHLC ) when I was trading Options on Futures.

I normally want a strong catalyst before I invest. ( This is the "N" in "CANSLIM" )

I dont really have a Stop Loss but I do try to monitor my portfolio regularly.

However, I do put down the expected time frame for the investment and if the investment does not perform within the time-frame, I will normally sell it.

Recently, I have been mostly "Swing Trading" as I'm not too comfortable with many things nowadays eg. US Unemployment, European Contagion, Chinese NPLs etc..

Sometimes, I also try to zig when the short term players are zagging :P


InvestIdeas: What are your favorite books on trading/investing?

I liked Peter Lynch's "One Up on Wall Steet" and "Beating the Street". I also enjoyed William O Neill's " How to make money in Stocks". I especially like the the books on Jesse Livermore. I have also learnt a lot from books like "Market Wizards", "New Market Wizards", "Market Gurus" etc.

I have also read Jim Roger's "Investment Biker", "Adventure Capitalist" and "Hot Commodities". I used to enjoy listening to Jim Rogers when he was a full time commentator on CNBC many years ago. However, old age may have caught up with him. He's just too grumpy nowadays :p

Anyway, it was his "Hot Commodities" that got me thinking about skewing my portfolio towards Commodities ..


InvestIdeas: What are your investment vehicles ?

Nowadays, I trade only HK & S'pore equities nowadays. Occasionally, I may buy some HK Warrants.

I have stopped trading US equities altogether as I would like to have a good night's sleep.

I dont like to invest in physical property. I dont like the long term holding and the wide bid/ask spread. Maybe it's also because I have lost some money on the house that I bought in North America many years ago ..


InvestIdeas: What has been your best investment so far?

In terms of percentage, my best investment is probably some gold coins that I bought in the year 2000 for about Sin$530 each. They are probably worth about Sin$1500 each now.

In terms of speed, I have made a few thousand Sin$ in a few minutes on some HK warrants.

Some of my better investments were JNJ during Hilary Clinton's Healthcare reform in the 90s, JPM, shorting Canadian Bio-tech stocks, Tat Hong ( where I bought & hold ) and stagging on various IPOs ( the best was probably a Semiconductor IPO where I made around Sin$10,000 :D )


InvestIdeas: What has been your worst investment?

Ouch ... It's painful thinking of those past losses ...

In terms of percentage, I lost everything on a S-Chip when the CEO ran away. I'm still very sore with whoever that was suppose to be regulating those guys ...

My most memorable loss was probably the Sin$12,000 that I lost in 5 minutes, about 18 years ago. It was a lot of money at that time. I was using Futures to bet on the direction of interest rates. However, it went completely in the opposite direction. That was my first hand experience that a Stop Loss cannot protect me when things gap downwards ...


InvestIdeas: What advice do you have for a young/newbie who is just starting out ?


I think that I have put my thoughts on that before in the "Family & Parenthood" thread. it's a letter that I wrote for my younger boy for one of his project.
http://investideas.net/forum/viewtopic. ... ies#p63118

I would also advise any young newbie to always keep an open mind on things. Just because you dont understand something, it does not mean that it does not exist. If I have told you about electricity a few hundred years ago, you would have laughed at me at that time :P

With regards to investing, I would advise a new investor to read as much as possible. I highly recommend the books that I have mentioned above.

Also, always think about the "Return OF Capital" and not just the "Return ON Capital" ..


InvestIdeas: Are there any other non-investment related books that may have influenced your outlook on life ?

I used to read a lot of books on Metaphysics, Motivation, Spirituality, Leadership, Management etc. I probably average a book a week :D

When I was in University, I did read the books by James Clavell eg. Art of War, Tai Pan and Noble House. Maybe those books have affected my outlook on life ...


InvestIdeas: What can you tell us a bit about your family ?

I'm married with two boys


InvestIdeas: What are some of your favourite investment topics in the forum ?

Ha Ha ... the forum is like my extended blog :P. I enjoy most of the topics in the forum.

The "Fish" thread helps me to relax :D


InvestIdeas: What are some of your other interests ?

Hmmm .. I dont really have much interests nowadays...

I dont eat a lot. I dont really drink. I dont enjoy big gatherings :P

I used to like poker, mahjong and going to the casinos. Nowadays, I dont really find those activities that exciting anymore. Maybe it's because I'm already gambling a lot on the SGX and HKSE :P

I used to read a lot. However, with the internet, I have also cut down on the heavy reading.

I used to like traveling but because I have been traveling a lot for work, I also dont quite like traveling nowadays.

I used to golf a lot. However, I dont really enjoy spending an entire day on the golf course nowadays. At our club-house, there's a small driving range but I have also not been there for a while ..

I still enjoy going to the movies though :D
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Re: Interview with Winston

Postby helios » Sat Mar 27, 2010 8:13 am

Winston,

Can you elaborate how do you execute HK Warrants with the earnings of few thousands? Are you using a milli-second trading machine (system)?

TQ.
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Re: Interview with Winston

Postby winston » Sat Mar 27, 2010 8:27 am

Hi San,

In HK, there are highly leveraged warrants called Bull Bear Warrants. They are very dangerous and very volatile.

If you get the direction correct with those Bull Bear warrants, you can make alot of money. On the flipside, you can also lose alot of money with those warrants.

I normally dont set any Stop Loss on my Equities position but with those Bull Bear Warrants, I have to set a Stop Loss.

Anyway, I have stopped playing with those Bull Bear Warrants for a very long time as the market has been trendless.

In addition, you are also at the mercy of the market maker. In times of volatility, he may put in a very wide bid / ask so you are not able to get in or out with a good price. Hence, if I'm trading warrants, I would only trade those with very high turnover so I'm not at the mercy of thosee market makers.

Take care,
Winston
It's all about "how much you made when you were right" & "how little you lost when you were wrong"
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Re: Interview with Winston

Postby learn2win » Sat Mar 27, 2010 9:12 am

Seems like you are in your 2nd Half crisis. :lol:

Thanks for maintaining such a lively and vibrant forum for us. :)
Guard Thy Treasure from Losses - The Fourth Cure for a Lean Purse - George Clason
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Re: Interview with Winston

Postby winston » Sat Mar 27, 2010 9:25 am

Hi learn2win,

Ha Ha ... yes, I have been struggling with that for 4 years now.

Just noticed your signature. George Clason. That's the guy that wrote "The Richest Man in Babylon" or something like that. I did read that book in the 90s and it has also affected my thinking about things.

The most memorable part of the book, was when they pay a lot for stuff like art, pearls, tea, perfume etc..

Another part that I like is when they were trying to buy the camels at a good price or something like that. They did not close the deal eventhough the price was very good as they wanted a cheaper price. Lesson learnt: when you nickel and dime and dont act, the opportunity may not be there anymore :P

Take care,
Winston
It's all about "how much you made when you were right" & "how little you lost when you were wrong"
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Re: Interview with Winston

Postby millionairemind » Sat Mar 27, 2010 10:11 am

W,

Thanks for the interview. Very enlightening...

I have a couple of questions if you don't mind.

1. You mentioned you don't have a stop loss on stocks. Does it mean that you will hold even if the stock keeps going down like in 2008?

2. Which are the countries that you have lived in? And which ones do you enjoy the most and Y?

Thanks,
mm :D
"If a speculator is correct half of the time, he is hitting a good average. Even being right 3 or 4 times out of 10 should yield a person a fortune if he has the sense to cut his losses quickly on the ventures where he has been wrong" - Bernard Baruch

Disclaimer - The author may at times own some of the stocks mentioned in this forum. All discussions are NOT to be construed as buy/sell recommendations. Readers are advised to do their own research and analysis.
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Re: Interview with Winston

Postby eauyong » Sat Mar 27, 2010 10:18 am

Hi Winston,

Fully agree with "Return OF Capital" as a priority and much appreciate your hard work on your "extended blog" which I enjoy reading every morning. :D
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Re: Interview with Winston

Postby Musicwhiz » Sat Mar 27, 2010 10:43 am

Winston,

Thanks for the enlightening interview! Wow I never knew you dabbled in so many products before and are so experienced. Peifu! For me, all I have ever dabbled in are Singapore equities!

All the best, and please continue to contribute your ideas.... :D
Please visit my value investing blog at http://sgmusicwhiz.blogspot.com
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Re: Interview with Winston

Postby winston » Sat Mar 27, 2010 10:50 am

Hi MM,

I'm trying to improve my Risk Management techniques as I go along :P

I dont like an arbitrary number like the 8% Stop Loss mentioned by William O'Neill. That 8% Stop Loss is to be used with the other CANSLIM rules, which may or may not be appropriate for my situation.

Also, if I'm "Swing Trading" volatile stocks, I dont want the market makers to hit my Stop Loss in a volatile market.

I prefer to look at the situation and then decide on the Stop Loss.

1) If I'm Scalping or Day Trading, the Stop Loss could be around Sin$500 or a cut after 2 days and never have a losing position over a week-end.
2) If I'm Swing Trading, the Stop Loss is also around Sin$800 or a cut after 2 weeks
3) If I'm Position Trading, the Stop Loss is a cut after 4 months or when fundamentals have detiorated
4) If it's a Long Term holding, I will only cut when fundamentals have detiorated

In 2008, I moved from Cyclical & Growth Stocks into Cash and some long term stocks. The thinking was that I will average down on those stocks as long as their fundamentals are still intact. I also wanted to collect some dividends while I wait things out. I will also try to protect my losses by having some Puts and a high Cash portion. On hindsight, I should have moved everything into Cash and Puts but hindsight is always 20 /20 :P.

Nowadays, I'm about 80% Cash and mostly "Swing Trading". I still have some legacy stocks in my portfolio so I will sell those as and when the situation is appropriate.

With regards to your second question, I will send u a PM :P

Take care,
Winston
It's all about "how much you made when you were right" & "how little you lost when you were wrong"
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Re: Interview with Winston

Postby winston » Sat Mar 27, 2010 11:23 am

Hi eauyong and Musicwhiz,

Thanks for your kind comments.

I have also learnt alot from your postings.

Take care,
Winston
It's all about "how much you made when you were right" & "how little you lost when you were wrong"
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