How To Avoid Investing ADHD

One of the hardest lessons in investing is to keep focused and stay the course. At least for me. I am still working on it. Limpeh got a bit of ADHD one. He no study high, only learn how to high. I wouldn’t have chosen the tough life of a Premium Ah Beng otherwise. Splashing red paint on the humble abodes of people who overleveraged is very difficult, you know. I frequently get calluses on my hands from prying open the paint lids.

Back on topic, I often get impatient when a stock doesn’t increase as expected within a short time frame and move on to “better” stocks. Of course, I do have long term dividend stocks as the bulk of my portfolio but I also allocate some of my funds for goreng stocks, which I expect to profit from within a short time frame.

When it doesn’t, I’ll sell it and move on to more promising stocks. While this strategy isn’t wrong for day trading and technical analysis, it can result in missing out on gains. Case in point:

I bought PHB (Pegasus Heights Berhad) at 0.025 and held it for over a month to sell at 0.030 before finally getting rid of it at 0.025. There are times when it reached 0.030 but the trading volume wasn’t enough to match my sell order. It finally moved to 0.030 with volume today. I would have made money had I not gotten impatient and sold it at cost.

Same with SCOMNET, INARI and KANGER. I got restless and sold it when it didn’t move to my target price within a few days to weeks.

MAHSING was a little different, although ADHD related. I sold it too quickly to lock in my profits. I should have waited till the NTA (Net Tangible Asset – how much the company’s physical assets worth) of 1.40 before selling. I would have earned 100% instead of 24.7% if I had waited for only 2 more days.

Part of the reason I write this journal is to document my trading mistakes so I can learn from it. The main driver behind my ADHD is the (overwhelming?) urge to chase unrealistic gains. To me, the stock market = risker, thus I should expect inflated returns in the double digits starting with at least 2 or 3.

That may not be the ideal expectation and will result in me pursuing a short-term riskier trading strategy. It’s also quite time consuming. I spend 2 hours every night researching potential stocks and looking at charts before I sleep.

I’m not saying I will quit all that since I find these research sessions highly rewarding and educational but perhaps, I should temper my trading strategy with more long-term dividend plays and reduce the amount I dedicate to short term plays. A return to fundamentals, so to speak.

I invested more into my two largest holdings TENAGA (Tenaga National Berhad) and SUNREIT (Sunway REIT) today as part of that strategy.

Often, we forget about the less sexy counters in our portfolio while chasing for gains in the latest and greatest stocks like gloves and vaccines. It’s important to realign and pick up some long-term dividend stocks at a huge discount during these heady, bullish times as these safer bets will lower your portfolio’s risk profile.

Nowadays, limpeh’s gang also petition me to go into Macau scams and money games for high profits but I still believe in the old school mainstays of extortion and the “reflexology” for long term dividends while managing risk. I wouldn’t need to train my quads for a spot of fence jumping that way!

Goreng more, sakit kepala. Goreng less, sleep better!

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