Stock Investment: The Most Relaxing Job in The World

Someone once said, 'If you're happy with your job, every day is a holiday.' So if your work is to analyze and invest in the stock market, and you like it, then you actually never worked for a minute. But here's the reality: If the market is in a friendly condition where the stocks are rising, most investors will do the stock analysis with pleasant. But what if the market crashes and some of your stocks crumbled? Are you still able to manage your portfolio with a joyous feeling without grumble and lamentation?

While in fact the stock market could dropped at any time, and no matter how good you are in stock investment, there must be times where you suffer losses. The problem does not lie in the losses, but in how you keep your good mood so that you may working on analysis etc as usual rather than feeling down, influenced by the losses.

Because once you feel bad, you will not be able to analyze with logic and to manage your portfolio accordingly. The easiest example, in 2015, the Jakarta Composite Index (JCI) dropped 12.1% during the year, and of course there were many investors who suffered greater losses. However, based on logical analysis, since last December I have said that for this year of 2016, the JCI is likely to rise. However, some friends do not believe that (that the market will go up), just because they had bad experience in 2015, and not based on a specific analysis or hypothesis. So how could you think that 2016 will be a profitable year? Even to regain the losing money, it is very difficult!

For a more extreme case, in early 2009, if someone said that the JCI will go up a lot in the year, then people may think he’s insane, even though he saying it (that JCI will rise) based on logical analysis, because at the time the people are still traumatized by the market crash in 2008.

But in fact the JCI surged 87.0% during 2009, which became the largest increase in history!

So now I invite you to focus on the following question: How to keep our good mood in analyzing and managing our portfolios, even if we are in a loss position? Because only in that way you will still be able to do the work with a calm heart, and even you may find golden opportunities behind the decline in the stocks/JCI (and indeed, usually an opportunity to buy stocks at a discount price would rise just after the market dropped). While if you became pissed off just because your monitor were full in red, surely you will make a lot of mistakes.

And this is what I do: In my work space in the home, in addition to a set of chair and table with a laptop on top of it, there are also 42 inch ultra HD television, home theater sound system, DVD player, and an Xbox One console. There are also two weights for light exercise, aromatherapy air freshener, and a small fridge containing soft drinks, chocolate, ice cream, and fruit. Another thing, when reorganize my portfolio at home, I usually only wear a T-shirt and shorts.

So whenever I getting tired or confused when reading the corporate annual letters etc, I will shut down my laptop and watch movies (I’m currently watching the Sherlock series, portrayed by Benedict Cumberbatch), or play the Pro Evolution Soccer on the Xbox, do stretching and light exercise, or dancing alone while listening to cheerful songs. Only after that I will get my good feeling back, so I can continue my work without frustration or something.

Meanwhile, if the market were dropped and my feeling inevitably depressed, for example in August - September 2015 ago when the JCI tumbled to as low as 4,100’s, I deliberately buy a lot of chocolate and ice cream. I do not know with you guys, but for me, eating chocolate will always make my feeling better, and it ultimately helped me to analyze the stock and market with calmness, and to buy and sell purely based on the analysis. Frankly, in last August when the stock index were below 4,500, I held sizeable cash, and based on my logical analysis, I should start buying now! As the stocks were traded at their lowest possible valuation, or even lower.

But of course, it was not that easy to buy stocks when almost everyone’s panic and shouting about crisis bla bla bla. However, after eating countless sticks of Magnum ice cream and Silver Queen chocolate bars, I finally able to remain calm, and we were successfully buying a lot of stocks in that month.

Kopiko seventy eight degrees, my favorite coffee drink to refresh my morning

Now just imagine if the conditions are the opposite: You work in a small office room that contains nothing but a desk with a computer on it (sometimes with two or even three monitors.. what for, honestly???), you can not listen to music, no food nor snacks, and you wear a formal and uncomfortable shirt. Then how could you calm your nerves when the market is down???

While if you watch 'The Big Short', the main character in the film, which is a hedge fund manager named Michael Burry (portrayed by Christian Bale), in his office he just wear a T-shirt and shorts. And instead of watching the computer monitor seriously, he instead listening to a rock music while pretending to play drum in the chair where he was sitting, or standing then dance and sing along with the rhythm of the song. The result? He was able to stand against the pressure when the market continued to rise throughout 2007 and early 2008, until he make great profits from short positions he took, when the market finally crashed in mid-2008, as he had previously predicted.

Well! So back to the question above: How to keep our good mood in analyzing and managing our portfolios, even if we are in a loss position? Then the answer is to play a cheerful song, standing from where you sit, and start dancing! But if you do not like listening to music, just do whatever you like, or eat something that you like (I like chocolate, but you may prefer cookies, for example) so that your head becomes fresh again. Warren Buffett himself says that he spent ten hours each week to play his favorite game, the bridge. Is playing bridge a part of the job analysis? Of course not, but it would help Buffett to relax after reading the financial statements etc.

And actually, not only in the position of losses, but you have to keep yourself stay relaxed and happy at any time, either by listening to music or playing something, and only in that way you will enjoy a ‘permanent holiday’, as to ‘analyze the stock’ is already a job that you like and you enjoy, no matter if the stock market goes up or down. Trust me, even if you do not like to read economic data etc before, then by applying these tips, the analysis work will be enjoyable by itself, just try it yourself.

Now, you can play 'Better When I'm Dancing' by Meghan Trainor, just down below. So ladies and gentlemen, please stand up, and start dancing!

Any inquiries about investment in Indonesia Stock Market, please send an email to teguh@averepartners.com