15+ years ago I began my investing and trading journey learning all the principles of Warren Buffett and applying his ideas as much as I could.
I began life as a true long term value investor, looking for stocks that I thought were temporarily cheap and out of favour, then buying them and holding for the long term.
I also attended numerous live trading seminars dedicating myself to leaning all the fundamental and technical trading aspects and also trying my hand at very short term trading. Then came the 2009 GFC, where my portfolio along with the rest of the market declined by over 50%…unsurprisingly, that hurt.
It was then that I realised that everything I thought I knew wasn’t so and I recommenced my search of a better way. A light bulb moment came when I thought, what if I trade for a longer time frame, combining fundamental information about a company’s financial data, adding technical analysis (learned from short term trading) to know when I should enter and exit, adding individual position sizing and portfolio risk management rules and then finally topping it off with current market conditions analysis to determine if and how I should trade the current market circumstances as the world stands?
The result…Extreme out-performance which professionals call ‘adding alpha’. That is the simple story of how I began and evolved over time, making all the silliest trading mistakes you can imagine and experiencing the most ecstatic joys when your accounts got a massive boost from market upswings to the depressing lows when my accounts halved in value during the GFC.
by Terry Tran