Spinning the Wheel of Misfortune

 

Some readers may notice that there's a certain radio silence coming from me. The first reason is that I don't have to market my next ERM course until March 2022. The second reason is that I'm busting my ass trying to complete building my cryptocurrency course that is targeted at conservative investors. You can expect the first preview in about a few days on 16th February 2022 and I must say that if you want to catch me while I am still raw and may cock-up a course preview, there is really no better time to catch me. 

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Today I'm going to talk about two scenarios. Which scenario do you prefer?

A) You earn a bit, other people earn a lot, and get in your face about the whole matter.

B) You lose a bit, other people lose a lot, and you have the option of getting into their face.

If you have been doing local stocks focused on dividends, then for the past 10 years, you are experiencing (A). But recently, because of the Tech Rout, you may be going through (B). 

My recommended single stock United Hampshire REIT  in a Dr Wealth event last year did not do well since the recommendation was made when it was $0.75 and it is now only $0.625. But since putting up that position,  it earned about $0.03 US cents in dividends, so it's a 13% loss. But another stock recommended in the same panel was Palantir which was a Tech crowd favourite that got a recommendation at $24 and it's now trading at $14. 

That's a 42% drop. And I am elated. 

The truth is, for most dividends investors, our characteristic portfolios have a heavy dose of mean reversion, we do bounce back, short-term is fine and I'm even leveraged above x2.

As dividends counters recover with leverage, something interesting happens, your collateral increases while technology stocks drop. This is compounded more aggressively if you received leveraged dividends at the same time. 

I call this The Wheel of Misfortune. 

Imagine a wheel with different investing possibilities: Cryptocurrencies, US Tech stocks, Chinese Tech Counters, local Tech, local data centre REITs. When SG Banks began to climb this year, leveraged investors get to Spin the Wheel of Misfortune. 

I think some of us are playing this game wrong. I'm seeing more messages congratulating dividends investors for their wisdom and no one seems to be rubbing it into the STI recently. I think trying to emulate dividends investors is the dumbest thing to do right now - I have millions of dividends counters accumulated over the past 15 years and it produces an MP's allowance every month. 

To play the Wheel of Fortune, you need to see who is bleeding the most. Who is the quietest on social media after months of non-stop flexing and bragging on social media with their magical ability to find growth stocks or alt-coins. The kind of beta males who go on a Tinder date and then, with no career to speak of, spend hours regaling their dates with stories of their cryptocurrency trades, earning a blacklist from the ladies.

Now is the hard part.   

As much as you may disagree with their flexing and self-aggrandisement, you need to take this latest round of dividend payouts and shop for counters that are producing the biggest amount of hurt for their investors.

I've got a lot more collateral on my Interactive Brokers account and after spinning the Wheel of Misfortune, I think Palantir seems to be hurting the most. I went in on IPO day and I paid $10.50. Now it is trading within $12-$14. I did overpay sometime ago for $24 so my average price is only $15. 

So I've been buying Palantir up throughout this week, from $12 to $14. I've quadrupled my position so far and I'm likely to go further over the next few days. These days, I'm less afraid of a margin call - I have enough stablecoins farming yields that I can withdraw to avoid liquidating my leverage portfolio. I'm also supplemented by dividends from an unleveraged portfolio. Do note that I know very little about PLTR, IMHO, it's impossible unless you've handled their Gotham or Foundry software yourself. I doubt the gurus know anything about the counter.

I think it's time the reader spins the Wheel of MisFortune too. Other candidates for me include ETH or HK Tech ETF 3067.  

At least when the kuailan comes back in a few months ( and you know it will happen), I've got a credible tech and cryptocurrency portfolio to share the joy of these flex bros. 

This blog will reduce its update frequency until I complete my work to launch my Cryptocurrency for Conservative Investors programme.

Wish me luck !