2018 Result and reflection

2018 Full year performance +146.15%
Performance since inception(April 2016- Present) +753.69%

I've made a calculation mistake calculating my ytd performance back then . which result in increase in number after correction. It might not be so believable but I've posted every transaction since early of the year. It would be good if you can prove whether there's an error. It's all in my previous posts, feel free to visit.

Mistakes

1. Illusion of competence

The major mistake that I made in 2018 is AEM. This is a company that I started to analyse in 2017. The business model for tester market itself is not so complicated to understand, the difficult thing is to know the market share and market revenue of the business. It is heavily dependant on the client. It also won't help much when most of your revenue is earn from only one customer. I had no knowledge of what kind of chip is being tested by AEM's tester, what percentage of the Intel's chip is being tested by AEM's chip. Actually what I mainly rely on is the statement of the chairman who said there's multiple years ramp up period for HDMT. However, that "multiple ramp up period" stop after 1 year by the statement from the same company. I was stupidly fooled by myself to even think that I know the long term future sustainability and prospect of the company. I didn't make the line of my circle of competence clear enough and choose instead of a blur one. Lucky for me, the margin of safety of the short term valuation still allow me to profit from this stock. Nevertheless, In the future, if I keep fooling myself like this to confirm my preconceived notion and maintain my ego sometime in the future I will end up being a complete failure. It is my major drawback.

2. Unnecessary trades

Naturally people can't sit still. When someone is trying to optimise the return of investment, he will normally think that he has to do something. As a result, more trades, more fees and it decreases return for many people. I know that well, but I consciously made the mistake (https://www.investingnote.com/posts/531858) without a valid reason and only to buy same stock back later. It was a completely stupid stunt performed by me. An uneducated, mindless mistake that will impair the absolute value of my portfolio. It is funny how one can still be irrational from time to time even with the knowledge he already acquired.

Portfolio

Haidilao 68.54%
Report I wrote about this company:
https://www.investingnote.com/posts/1187480

China Sunsine 13.77%
https://www.investingnote.com/posts/1019692

Pinduoduo 17.48%

Thoughts:
-I think the biggest contributor of the performance this year is Luck. I got to find an undervalued "money on the floor" stock this year which safely sail through an Asia bear market.

-I think that if most of the people agree with my idea or I'm using investing approaches that well accepted by everyone I'd end up with an average result. It actually make sense mathematically. It really makes me feel that investing is not that easy and "beat the market" is extremely difficult. Human is by nature a social and hierarchical animal. Our genes make contrarian and independent thinking a lot harder than we actually realise in our conscious mind. In order to have significant gains, the structure of the market require you to disagree with majority of people including experts and still turn out to be right.

-Reading bio of successful business people and various business models made me a better business analyst.

-I need a proper accounting education, not just self-taught. and I believe everyone should pursue their education with a purpose of finding a solution for his real life problem as their main objective.

-It is better to only choose companies that don't require you to do DCF in order for you to know it is cheap.

-China has too many steve-job-wannabe and many of them ended up disasters. I'd prefer Ren-zheng-fei-wannabe but they are rare.

-I should've studied harder when i'm little(It gives me shit now) but i think compare to normal people my intellectual development is retarded. perhaps it is because of my ADHD?

Happy New Year! wish you have a bullish 2019!

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19 likes
13 comments
BoatKiaLiao

wow great returns

rationally

Can share the app you use to track portfolio performance? TIA!

vincentwong10

Reply to @rationally : PortfolioTrader in IOS

Noctis

Impressive return

Spinning_Top

Thanks for sharing! Happy New Year

Pizzaprata

AEM is not your mistake, it's actually the management which shot themselves in the foot. They just announced orders for next year which is higher than last December. This company still has a lot of potential. China Sunsine is another good potential stock which I am holding for long term.

Pizzaprata

Reply to @vincentwong10 : Yes, same here. It's really impossible to know how big the market is with only Intel unless you are an insider at Intel. However we know they have a great product, problem is it took AEM too long to acquire other customers.

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Bluechipfan

Yes you are transparent. I even know your Sunsine's and Pingduoduo's entry prices. Well done. I like your concentrated approach with heavy lifting on only a few stocks. I am doing something similar but I do have separate portfolio which consist of only Reits counters.

lynlynnakamori

a very happy new year to you!

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