Fear of losing money – a Keppel story

I was reading The Sunday Times Invest section (my Sunday must read section) and came across this article by Rachael Boon: Overcoming the fear of losing money

In summary, it talks about the fear that grips everyone when presented with an investment opportunity and how to deal with it. One way was to change your perspective and view every risky decision as a decision within a portfolio of decisions. Much like how we treat our own stock portfolio, as long as the portfolio of decisions are doing fine, each individual risky decision was fine.

Reading this article reminded me of my own fears in investing in Keppel Corporation back in late 2015 – early 2016.

Keppel Corp had been tanking due to significant rig contracts being cancelled and receivables from Sete Brasil being written off in the depths of the oil price crash. At the time, I was looking to get a foothold in Singapore blue chip stocks as I looked to diversify from my US Portfolio as well as add yield to my portfolio. Keppel looked like a great candidate. I saw it as a rare discount on a blue chip that was just going through some tough times, which I felt would be temporary.

I bought my first tranche of shares in Oct 2015 at $7.30. The next few months, Keppel promptly dropped further all the way to the low of $4.84 in Jan 2016. 1/3 of my investment was wiped out in 3 months.

Siao Liao

I had never faced so much paper losses on an investment before! I had 2 choices, exit and take the loss, or stick to my guns and average down. I was really feeling the pain and pressure at this point and I had half a mind wanting to sell and be done with it. Then I remembered what the market has taught me over my initial years of investing:

When the pain and fear is at its most intense, it is usually the time to buy.

And buy I did at $4.94.

Keppel is back at $7.07 last Friday. This experience will forever be etched in my mind that decisions made in fear are never productive and effective.

Thanks for reading.


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