What has your warchest gotta do with stock performance ?
Aktualisiert
Apparently , a lot , man !
Read this article here
If you have bought say, 1 lot of Moderna Inc at its IPO price at $22, you would have made
Cost - 1000 x 22 = 22,000
Profits - 1000 x 50 (current share price) = 50,000 less Cost ; i.e. 22,000
= 28,000
With a bigger war chest, say you bought
10 lots = 10 x 28,000 = 280,000
100 lots = 100 x 28,000 = 2,800,000
Literally, you can become a millionaire from just one IPO stock by holding for less than 24 months!
A few things to note :
1. Not all IPO generate such kinds of return
2. Not everyone has 100 lots of spare cash sitting idle at home , awaiting to be deployed in the stock market
3. Millionaire dream is still possible to achieve through buying smaller lots into good companies and ride the bull trend, e.g.. Microsoft, Amazon, Apple, Berkshire Hathaway, etc.
4. This is a happy story where millionaires and billionaires pop the champagne. How about if it goes reverse ? Let's assume this is the only one stock you bought. You either swim or sink with the only boat you have. So, diversification is important and necessary from a risk management perspective. Not forgetting we are analysing this performance on hindsight and not during the IPO days where the future is still unknown and uncertain.
Will I buy this stock ?
NO, it is way too high now although there is a possibility that it might go higher. If I want to, I will wait at $40.88 level to initiate a buy position. A new company requires a much longer time to do research and the chart has not much historical pattern to fall back on.
Read this article here
If you have bought say, 1 lot of Moderna Inc at its IPO price at $22, you would have made
Cost - 1000 x 22 = 22,000
Profits - 1000 x 50 (current share price) = 50,000 less Cost ; i.e. 22,000
= 28,000
With a bigger war chest, say you bought
10 lots = 10 x 28,000 = 280,000
100 lots = 100 x 28,000 = 2,800,000
Literally, you can become a millionaire from just one IPO stock by holding for less than 24 months!
A few things to note :
1. Not all IPO generate such kinds of return
2. Not everyone has 100 lots of spare cash sitting idle at home , awaiting to be deployed in the stock market
3. Millionaire dream is still possible to achieve through buying smaller lots into good companies and ride the bull trend, e.g.. Microsoft, Amazon, Apple, Berkshire Hathaway, etc.
4. This is a happy story where millionaires and billionaires pop the champagne. How about if it goes reverse ? Let's assume this is the only one stock you bought. You either swim or sink with the only boat you have. So, diversification is important and necessary from a risk management perspective. Not forgetting we are analysing this performance on hindsight and not during the IPO days where the future is still unknown and uncertain.
Will I buy this stock ?
NO, it is way too high now although there is a possibility that it might go higher. If I want to, I will wait at $40.88 level to initiate a buy position. A new company requires a much longer time to do research and the chart has not much historical pattern to fall back on.
Anmerkung
Haha, someone send me a telegram reply out of nowhere and blasted me for not going long on this stock. Erm.....I don't know why he does that but from a trader/investor perspective, I think I can understand. I have shared before trading/investing can be a lonely game. It is YOU and the chart and news at play , most of the time. You are basically convincing yourself to buy or to sell, to buy big or small, to buy now or later, to take profit or wait some more......
Such conversations are ongoing , for some hourly or daily while others may be weekly or monthly depending on your trading style, time frame, etc. Yes, I am alright to miss this 1 fold returns. Had I bought in April at 40+, I would have double my returns by now. WOW, only less than a year !!!!!
My heartiest congratulations to those who longed it but I am not sad nor feeling angry that I did not participate in it. I shared that our warchest in some way determine what investment game you can play. The more chips you have, the more choices you have. That is about all , we have yet to factor in your winning rates which in some way depends on your trading strategy.
I was once like that too, putting the blame on the authors for the missed opportunity or losses. I later realised by outsourcing the responsibility to others, I am attempting to escape and conveniently let others take the blame. This can go on but it does not solve the problems.
No matter who post the trade setups, be it an analysts from top investment bank or the likes of investment gurus like Jim Rogers, Ray Dalio , etc, they are in no way responsible for your profits or losses. You and I have to bear it ourselves. By doing that, we learn to exercise caution in our trades, plan our trades properly , ensuring the right lot size, review and study our trading methodologies, etc. Only then, over a period of time, we can see the results we want.
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