<This post is published at Stockbit.com, where I regularly interact with other investors under the name ‘coolspot’>

Uda telat 2 hari neh. Anyway, since gw di summon, (again, gw masih ga pantas di panggil suhu), to answer the question, average $AMAG saya cukup rendah, tapi tidak adil kalau hanya melihat di satu posisi saja. Gw lagi nulis post tentang bagaimana cara menghitung performance. I will update it later.

Cuma yang saya mau katakan dulu di sini, susah membandingkan performance tanpa parameter yang jelas. Return saya sekitar 20% per tahun, not that big, it shows that I have still a long way to learn. But what do i mean by that return? Here is some qualifier:

1. That is the total return of my whole investment port in stock. Including the cash that I allocate in the stock. If you only count the return of one position, you are missing out the cash portion which only return 3-4% at RDI. My average cash position has been 30-50% for the last few years.

2. This is the port that I am willing to put more than half of my networth in. I might get a return of 100% in my port, but am I ready to put significant position in that port? It doesnt matter much if I have 1% position in my port that return 100%. Which bring me to the next point.

3. People overrate performance. Risk management is equally important in investment. If you have return profile that range from -90% to 150%, you might be a great investor, but you are relying on mother nature/market so that you won’t get -90% in the first year. If you get 150% in the first year, then you will brag about it and probably try the same strategy and get burned. The most important thing is you keep playing, you still stay in the game. With -90% to -150% profile, not many people stay in the game. It is either they got out, or never put significant percentage in that portfolio. Don’t forget, that there is the effect of survivor bias. Only the winner get the spotlight.

4. Average doesn’t matter much too. Ada perkataan bahwa orang bisa mati tenggelam di laut yang berkedalaman rata-rata 15 centimeter. The issue is, average is not the only thing that matters, there is also volatility, standard deviation. If you return on average 50%, you can get killed in a year where you lose 80% of ur port, but still maintain your average.

5. At the end of the day, investment is not a game where you can find one method for sure win. There are two factors, the market, and the individual. It is not just an art, because there are certain fundamental attached. It is not just a sicence also, because there are so many luck and uncertainties involved. Investment is a craft. And it takes lifelong to learn, for those who stay in the game.