For the month of September, my portfolio continued to decline some more.
For most new investors, they would panic now and try to cut loss and invest in something more profitable.
If you are also feeling the need to cut loss and keep whatever you have and invest in something else, please remember Warren Buffet's quote.
"The stock market is a machine that transfers money from impatient people to patient people."
There are few stocks in my portfolio that went down maybe 20% during the month of September, and what do you think my thoughts are?
Maybe some of you would say: cut loss, and some others would say, just wait until it goes back to break even and sell it.
My actual reaction is: "damn, the price is so cheap... how can I buy more shares?"
If you guys had read my articles before, you would know that I always recommend people to buy more when the stock is cheap.
My famous line is: buy shares in the bear market, and take profit in bull market.
Some people would kindly correct me by saying: Asshole, you are not making sense! People usually buy more shares in the bull market, and sell their shares in a bear market. you are doing it wrong...fucking moron!
Well, kind Sir, I beg to differ.
The reason I say buy more shares during a bear market because it is so damn cheap, and most importantly it is cheap because everyone is afraid, not because the company is no longer prosperous.
You know it's not a company's problem when the entire industry is falling.
The reason I say sell for profit during a bull market is not because I want to contradict. Obviously in a bull market that continues forever, we should buy. However, how do we know the bull market will continue? We don't!
So the best action should be taking profit when everyone is rushing into the market.
During this month, some readers wrote to me and ask me what I think about the market, and what are my predictions for the coming months? Is there going to be a big crash coming soon?
My standard answer is: I don't know...
Not because I'm holding back on my information, it is because I actually don't know.
I often get this kind of question when the stock market is in a decline.
My thought is that when the market is in a decline, people want to seek guidance and comforting words from me.
I would tell them... "You are seeking comfort because you invested in a wrong stock and hoping to hear from me supporting words that the stock will go up in the future, so you can sleep better at night."
Why don't you just invest in the right stock, the right industry, and buy cheap... so you can sleep like a baby every night!
The problem is I can't predict the future, so I always tell people to take less risk, and stay away from Options and Margins.
To be completely honest, none have listened so far...