Friday, February 19, 2010

Poetic interpretation of capital allocation

I'm reading a queer book on poems - Christopher Matthew's "Now we are Sixty (And a bit)". This particular one is especially striking to me:

Timothy wakes up at twenty to three-
Nips to the bathroom, has a quick pee.
Coughs, yawn, feels a bit queer-
Goes to the kitchen: thinks 'Why am I here?"

I think it pays to write down the reason for wanting to get a stock, lest you forget. Humans have short term memory. A little encouragement, a little discouragement, a dash of good mood, a pinch of unhappiness makes one forget the reason for wanting to get into a counter. The worst kind of mixed up is when you wanted to do trading but when the price turns against you, you start to adopt an investing mindset.

I think what KK says is right, have an x,y,z mindset. Split up your capital, put some into yield, some into growth and some into speculation. The devil lies in the details - how many % to put into x, y and z? Well, it depends on the type of person you are. Investing is very much an extended self and thus the philosophy of one's investment strategies must fit into how a person behaves and thinks.

PS. My blog article title is cool right? Hahaa! Nassim Taleb really got a hold on me - I folllowed his style so that the article cannot be so easily derived from the title of the post itself :)


AK71 said...

Hi LP,

I think you have a typo. Should be "poetic" and not "poetric". ;p

la papillion said...

Hi Ak, watch out for spelling errors too, will pounce on you :P

AK71 said...

Hi LP,

Sorry, occupational hazard. Hahaha... I make typos too. If you spot them in my posts, please let me know. ;)