How I got started Investing in Stocks

Peter Lynch

It was late 2010.  I got suckered into a crappy job with a large MNC.  They told me I had great responsibilities – leading the planning of projects, liaising with contractors and stakeholders, being part of a booming industry and maybe get offered a permanent position if I had a good review.

I ended up being an admin boy, whose only technical responsibility was to make sure engineers filled up their ‘timesheets’.  It was ironic that the engineers had to waste time filling out an excel form detailing what they spent their time on.  One engineer even quipped during a meeting, “We should just put in our timesheets: ‘Spent 2 hours filling a stupid timesheet’.”  The whole meeting room laughed, even me, and I was the one in-charge.  A kind-hearted engineer saw me punching in data into excel one day and told me this:

“Go learn some Visual Basic or Macros to automate this brainless task.”

And that was how it all began….

After taking a few days to pick up Macro, I automated the mind-numbing data entry task until I only had to spend less than 2 hours each week doing that brainless job.        

So what did I do with the rest of my time?

–  Looked for jobs online

– Read funny news

– Use facebook. Like funny posts. Share funny posts.

– Gossip with colleagues on Web ex

Within 3 weeks I got so sick of this routine I wanted to shoot myself in the head.  I had bigger dreams than studying 16 years to be an admin boy.  I wanted to run my own business and be my own boss.  But I entered the working world because I was curious and needed some start up capital.  Also, it was good to get a taste of this whole get a degree, get a career thing.

To build capital fast I could not rely on just a salary.  I noticed another colleague, a fresh graduate just like me, looking at shares on SGX one day and I got interested.  I pestered him into teaching me the basics like looking at the bid-ask spreads, how to place and order and how to sell.  I then proceeded to download e-books about stocks and read them on my computer while at work.  Remember, I only worked 2 hours a week!

HOW TO ACT LIKE YOU ARE WORKING WHEN YOU ARE NOT REALLY WORKING (Bonus Tips)   

  • Frown at the computer as if you are working on a really tough problem
  • Mutter to yourself, as if you are going through the problem in your head
  • When you are walking to get water or going to the toilet, make sure you WALK FAST WITH A PURPOSE
  • Greet people with a quick nod and a quick smile to signify that you are a busy man

I did that for a few more months while waiting for my new job to start.  I worked 2 hours a week, and spent the rest of my time learning about investing in stocks.

I read the The Intelligent Investor: The Classic Text on Value Investing but I struggled to understand the financial jargon written in the book.  Price to book value, intrinsic value, current asset minus total debt divide by – oh my head!  Then, the criteria Benjamin Graham listed out for picking stocks was so strict I could not find stocks on SGX that matched his criteria.  But then again, I was really a beginner and probably wasn’t searching for stocks efficiently.

By googling ‘Best Investment Books’, I soon picked out a list of books which I read fervently.  The one which really inspired me was One Up On Wall Street by Peter Lynch , a cool, white-haired Fidelity fund manager who explained stocks investing so simply that a fool like me could understand.  Furthermore, he went on the emphasize a quality that really gave me the confidence to start investing:

“A strong gut is a more important prerequisite for success in the markets than a sharp brain.”

He then proceeds to give some examples of everyday people investing successfully.  That was enough to overcome all my hesitation and inertia to get started buying my first stock.

A few days later, my account was up and I was pestering my broker with phone calls, “Ay, how do I pay for this stock which I just bought ah?”

Many people talk about getting rich but refuse to take calculated risks.  They cling onto their money so tightly and park their cash in banks, letting inflation erode away their purchasing power over time.  Putting your money in the bank is not ‘safe’.  It is a sure lose situation.  Rather than sitting back and bemoaning that our financial fates lies in the hands of merciless macroeconomics, shouldn’t we take a chance and invest?  You can’t win if you don’t try!

I bravely bought my first stock, China Minzhong with about $5k and my heart sank right into my gut as I proceeded to watch it plummet within seconds after buying, causing me to chicken out and sell at a loss of more that $500 after holding it for only 1 week.  As if that wasn’t bad enough, I proceeded to watch my portfolio go down by $15k from 2010 till 2011, a time when you could blindly pick a stock and reap 100% gains easily.  I did a remarkable feat.  I was  the only stock investor who lost money while Asia equities bounced back like a basketball post recession!

That anecdote wasn’t meant to scare you.  Learning theory does not necessarily translate into a smooth application.

As Bruce Lee once said, “Learning is not enough. You must do.”

 After plunging into stock investments, I never looked back.  My losses turned out to be temporary and my earlier ‘investment’ in these books was the start of a wonderful investing journey that got me through financially challenging times, especially when I started my business later on.

Thank you, Peter Lynch.  I would probably be eating grass by the roadside if not for you 🙂

 

 

 

 

 

 

 

 

 

 

 

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4 Comments

  1. Derek

    Hi The BF,

    Your story of the MNC job reminds me of myself when I started working. The company asked a group of us to go for a ‘trial run’ where in actual fact, we were working for them for free. I gave up after a day and the recruiter called to ask me to stay on saying that I was ‘outstanding’ and would be give my greater responsibilities. It was like a sales pitch, making me feel good but I can see that their greater responsibilities is akin to your timesheet and I rejected.

    I think we have the same investment styles. I too find “The Intelligent Investor” too complex – is meant of the hard core value investor. Peter Lynch’s book is much simpler and easier to relate. However while his book gives you many case studies, he did not go into detail on his valuation methods.

    Cheers!

    Reply
    1. The Bf (Post author)

      Maybe they were really evaluating you? Hahaha! But if the future responsibilities don’t make use of your potential then you made a right decision not to waste time there.

      Peter Lynch was a growth investor. I remembered one of the criteria he used was earnings growth. However, earnings can be easily manipulated and we must look for other aspects like cash flow, debt, balance sheet as well.

      Reply
  2. B

    Hi Bfgf

    I used to do timesheet as well for my work and sad to say its really a pain in the ass. The idea of doing that is mostly to account for the ‘false’ number of hours you have done and the rest of the ot is usually free or needs to get approval.

    Good story there which you have shared. Its probably a good lesson as well that pushes you to go for entrepreneurs in the end.

    Reply
    1. The Bf (Post author)

      Hi B,

      Ahahaha! I didn’t know that other companies practise this procedure as well. Really ironic that in order to measure productivity, they make you do something unproductive.

      Reply

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