Reflections After Watching "Money Monster"

I watched the movie “Money Monster” last Saturday. Other than it being a damn good movie, it also relates to investing on numerous occasion, especially an investor’s mindset. I will try to recall the scenes while it is still fresh in my head and explain how it relates back to my mindset of investing.


SPOILERS AHEAD!

Do note that I have already forgotten what are the characters’ name and the scenes explain below are not very accurate. I am just explaining what I recall from the movie that relates back to my investment mindset.

Scene 1

“The intruder explained that he had put all his savings into the stock prior to its share price crash.”

During my Sharing Sessions and maybe some of my previous posts, I have stated that an investor mindset, especially a novice, should have the following:
  1. Invest only using a fixed sum at the start, increase slowly only when you are more experience.
  2. Only invest using your disposable income.
  3. Be prepared to lose all your money.
  4. Have a long term mindset when purchasing a stock
If one has the following mindset while investing, you will not make rash decision and invest riskily, and you will not rush into a decision when the stock price falls significantly.

Scene 2

“When George Clooney saw himself on TV explaining a week earlier, on nation TV, that the stock that has just crash was ‘safer than saving account’. In addition, the stock, at that time, was on an upward trend – Maybe even 52 weeks high.”

There are a few things here that caught my eye.

Firstly, all investment has risk. Nothing is safe, even banks could go bankrupt one day. Keep money under your pillow have its own risk too.

What you should do is to fully understand “what you are getting yourself into”, when you decide to make the investment, even if it is questionable. If you do not understand, ignore it.

Secondly, in my Sharing Session, I shared that if a stock is recommended by an analyst – it is already too late. The share price will have jumped significantly after the recommendation.

Thirdly, as per my Sharing Session, I explained that I preferred to buy stocks near it 52 weeks low price or at least not at its height. This is because “what goes up must come down, what goes down must come up”. You can also see it as the possibility of buying a stock at a LOWER price and selling it at a HIGHER price is much higher than buying a stock at a HIGH price and hope that it goes even HIGHER prior to selling it.

Scene 3

“When George Clooney asked the public, that was watching the show at that time, to invest in this particular stock and push the price up. He will be expecting the algorithm system to pick it up and eventually pushes the price even further upwards. However, the stock went south eventually.”

Basically, I see this scene as a simple reminder that Mr Market is unpredictable – Change is the only constant in the stock market.

Scene 4

“When the algorithm system designer explains that the system will not fail and push the stock price down. But it is the act of men who makes the system to fail.”

This relates deeply to my Enhanced Triple S Scorecard, as well as all other checklists or tools out there. Anyone using system based/tools based investing must be able to understand how these systems and tools work.

Without actual knowledge, one should not anyhow use a system or tools to invest. If there is any wrong input, you may invest using the wrong result and suffer losses.

This is also one of the reason I started my sharing session. It is to explain clearly to users how and what to input into the Enhanced Triple S Scorecard, so that a correct result will be given to the users.

Scene 5

“When the CEO of the company was found to have misused the money for other investment.”

After the Swiber and Singpost saga, it made me realise the importance of having good management. Good management will lead to better profit for the company, which in turn will cause the share price to rise.

It will be added bonus if the management is shareholder friendly – by giving out high dividend or doing share buyback. These actions will allow the share price to rise significantly or at least hold during a downturn.

So that's the end of this post. Quickly go watch the movie if you have yet to do it.

For those who are interested to find out more about Enhanced Triple S Scorecard, you can come to my 2nd Sharing Session with T.U.B! I will only be sharing how to use and input data into my Enhanced Triple S Scorecard with the attendees of the Sharing Session. If you are interested to attend, do not hesitate to contact me directly.

Oh... and do remember, please like our Facebook page - T.U.B Investing.

Comments