Opportunity Cost of an Employee

My mentor who is one of the top remisier boast to me that his net worth will be increased by SGD 1 million this year. His method is pure value investing only. Sometimes, he will use CFD to short a few counters. His CFD trades are for “kopi” money or just for fun. Maybe by next year, he will cross the SGD 4 million mark. He is 36 years old only.

I need to compare again, he can spend bulk of his time to research on undervalued stocks. He has a war chest of investing ideas and portfolio of stocks from the best companies spanning from Europe, Japan, Hong Kong, USA and Singapore. 

He is setting out to start his own hedge fund and wish me all the best in my investing journey. As I am not an Accredited Investor in 2017 but I believe I will meet the requirement by 2018. Nevertheless, I will choose not to invest in his hedge fund because I believe in DIY. Nobody is more concerned of your finances than you. If I invest my own money and I lose it, it is solely my responsibility. I won’t want to leave my money in an active managed fund without having the control and not knowing what is the money been used for. 

I was on a plane when I draft this. I started reading financial reports after my boss return to his seat. I realize reading financial report is a very time consuming activity in order to understand the transaction history, growth story, and background of the business. It will probably take 1 full day to digest one single company’s financial reports and conduct the company’s SWOT analysis. In fact, there are a lot tools which I learn from my MBA that can be applied on stock analysis. 

I felt that there are a lot of investment opportunities are lost because of working as an employee. Every working day, I spend 3 hours commuting to and fro (I will read on MRT or take a nap), another 8 hours in meetings, toilets, lunch and some work, another 2-3 hours at night trying to wrap up my tasks for the day. Probably left with another 1-1.5 hrs at midnight to read a book or a financial report. Due to the lack of time, when I chance upon a good company and the stock price had just doubled in the last 3 months, I will feel upset.  
If my option income can achieve at SGD 10k per month, I will become a full time investor cum options trader. My testing model will be SGD 10k per month for 3 months consecutively and sustainability test after a major share price correction. It is no good if all the profits are wiped out after a crisis and back to square one.
  • 3 consecutive months of SGD 10k options income
  • Survive and sustain 1 crisis


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