Why we\'re poor losers in sports -- Same applies to Investing

This article appeared in The New Paper yesterday. The lesson that I learnt from this, is that failure is the mother of success. You must learn to accept failures before you can succeed. So who cares how your stock portfolio performs last year. The important thing is -- Did you learn how you can improve? Why we\'re poor losers in sports JESSIE PHUA: THE BEST athletes in the world fail more than they win. But when they lose, it never dampens their spirit. Instead, they come back stronger, they come back fighting with more resolve. Nothing prepares you better for life than sports does. This is important, especially in Singapore\'s context, to remind people that it is perfectly OK to fail. It is perfectly OK to lose. My bowling consultant Sid Allen had this to say of Singaporean athletes when he first came here. He was head coach of Malaysia\'s bowling team for 10 years (from 1990-2000, when he produced a top-notch Malaysian women\'s team). He told me Singaporeans cannot lose. Yes, he\'s right, Singaporeans do not know how to lose. When Singaporeans come face to face with confrontation, they are the first ones to turn away. When Singaporean athletes go to competitions, they are already thinking of excuses to explain why they did not win. Part of the problem is this \'face\' thing. Our education system leaves us very little room for failure. Everybody wants to save face and because of that, we make sure that we enter a situation where we know for sure that we will win. If we\'re not in that situation, we always buy insurance first so that in the event it does happen, we\'re going to say, \'well, I told you so.\' The fighting spirit is so lacking in some of our athletes. I see some of our athletes go pale even before they go into the competition arena. Someone asked me if I thought I would win when I put in my bid for the FIQ presidency (in early 2007). I told him it\'s the same thing as asking my bowlers if they will win the gold medal when they go for the major Games. If I did not think that I would win, why did I put in my bid? We must have the mindset that even if we die fighting for it, we\'ll know we fought a good battle. ANNABEL PENNEFATHER: I REMEMBER an incident when I was still president of the Singapore Women\'s Hockey Association. In 1990, I wanted my girls to be selected for the Asian Games. So we sent them to South Korea for exposure. We were beaten 16-0. When the girls came back, the men were saying, \'Oh, this is terrible, we cannot afford to lose like this. They must hang up their sticks.\' Mind you, those were the days of Melanie Martens and Florence Chua. It was one of the best teams we\'ve had. But I told the girls it was OK. We would just keep doing it slowly and quietly. Two years later, we hosted the Inter-Nations Women\'s tournament in Singapore. We held stronger teams like Italy and we finished at a reasonable level. The point I\'m trying to make is that the girls wouldn\'t have had the confidence or the experience if they had not gone to that event in South Korea. That same team went on to win Singapore\'s only South-east Asia Games hockey gold medal in 1993. And the same person, I won\'t mention names here, who criticised the girls in 1990, eventually wrote about what a difference those two years had made. We had to lose to win. It was a long and lonely journey, but in the end we won.

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SINGAPORE\'S SPORTS DIVAS JESSIE PHUA, 53, president of SingaporeBowling, president of bowling\'s world body Federation International des Quilleurs (FIQ), and a Nominated Member of Parliament. ANNABEL PENNEFATHER, 60, president of Singapore Hockey Federation (SHF), vice-president of International Hockey Federation (FIH) and Singapore National Olympic Council (SNOC). LEE BEE WAH, 48, president of Singapore Table Tennis Association (STTA), Member of Parliament for Ang Mo Kio GRC The hosts at Bollywood Veggies farm: IVY SINGH-LIM, 59, ex-president of Netball Singapore from 1992-2005, farmer-owner of vegetable farm Bollywood Veggies along Neo Tiew Road, and president of the Kranji Countryside Association. JUDY KONG, 61, education director for Bollywood Veggies, head of Singapore Baseball and Softball Association\'s (SBSA) media and publicity committee, and former executive director for Netball Singapore in 2000 and 2001.

I would definitely agree with the article, though I found it a little short and devoid of more examples which may have had a bigger impact to drive home its main point. For an investor, \"losing\" money is part and parcel of investing. Even after detailed analysis of the facts and available information, one can still make a mistake because some unforseen circumstance had eluded him. Of course, I will hesitate to liken investing to a sports competition because ultimately investing is not a game, it\'s a journey for one to achieve decent returns on their capital over time. But the similarities are that it is an intensely personal journey and the road will always be bumpy. Learning from mistakes should always be the motto of the true investor, for even Warren Buffett committed mistakes during his investing lifetime which he (still !) regrets today. There should be no shame or embarrasement in admitting mistakes or failures because they act as stepping stones for us to grow and be wiser for the future. Without mistakes to guide us and mould us, we would be unable to progress and always be falling back on the same erorneous ways. I myself have learnt a great deal from this recession and bear market which I have blogged about, and will continue to evaluate my mistakes in light of new information so that I can become a better investor.

Just some sharing... Over the CNY, I visited many bosses and successful investors. Naturally, we talked about the stock market. It strikes me that there is a familiar trend in the way that they invest. Most of their first few stocks are rarely growth stocks, usually stalwarts that can generate strong cash flows and give generous dividends. They would then plough the dividends back into the markets, this time to look for growth stocks. Using this method, would ensure that there would be steady cashflows for investments every year and you are contantly reminded to balance your portfolio at the start of the year to see what are some good ideas that you can evaluate with the dividends on hand. Do you think this is workable?

Yes, I would agree that this idea is good and workable for the long-term. We are of course assuming here that the dividends from such \"blue--chip\" companies remain fairly stable and uninterrupted, notwithstanding the ocassional recession which may crimp cash flows and result in reduced dividends. However, I believe it\'s not as simple as it appears. Owning shares of \"stalwarts\" would mean one can enjoy a decent yield above inflation but it may also mean that there is limited growth for the company. I believe one should have a healthy mix of growth AND stalwart companies (I do not recommend distressed companies or turnarounds though). This is so as to capture the upside capital gain potential of growth companies while at the same time maintaining a healthy cash inflow through dividend paying companies. Of course, timing is of the essence as well - accumulating cash during severe downturns allows an investor to buy shares on the cheap. This can be achieved through normal hard work and aggressive savings, and need not just be limited to receiving dividends to plough back into the stock market.