June and the Importance of Patience

June was a difficult month in the Asian markets. It was a continuation of the correction pattern since the regional markets peaked in late February. So yes, it has been ongoing for over four months now.

Source: Bloomberg

To ATEC’s memory, this has been one of the longest periods of trendlessness in the markets in quite some time. There were lots of reasons to weigh down on sentiment — from Huarong’s fallout to Beijing’s clampdown on the tech titans. From fearing shortages in semiconductors and components to fearing inflationary pressures from many corners of commodities, and then panicking over the end of easy monetary policy by the U.S. Fed and of course, the Delta Covid variant. The list could go on. Yet, Asian markets did not crater. They just… meandered. To ATEC, that is a good sign.

Corrections have a way of deceiving investors. They distract investors from what the underlying themes and trends are by casting a net of fatigue over participants. The result is that many become jaded. If we are not careful, we become too anchored to the ‘worries of yesterday’ and might find it hard to change our minds when the market starts to trend.

If one were open-minded, we will realise that such periods of trendlessness are the perfect bedrock upon which to develop a critical mindset: patience.

The ability to ‘not do anything’ to ATEC, is another underrated virtue in the investing world; a super skill.

Patience allows us to avoid being too trigger-happy, and in doing so, reduces our trading mistakes. An unintended consequence of being patient is that we also learn to grow our discipline.

Always, ATEC finds it important to keep returning to one’s own internal process and approach, to avoid falling prey to our own sentiment.

Is the underlying thesis still intact?
What has changed?
What can change?
What do you need to see to change your mind?

Understandably, controlling one’s emotions can be one of the toughest skill sets in investing and even professional managers face this challenge on a daily basis. ATEC is often guilty of falling prey as well. Yet, there is no shame in accepting that we feel these sentiment swings as humans. This is why, as with any successful professional sportsman, to draw an analogy, it will take years to achieve a certain level of proficiency.

The path is never flat nor straight. But we will take it anyway. ATEC seeks progress, not perfection… and yes, ATEC still thinks Asian markets have unfinished business on the upside.

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Upside Technologies

Investing research and thoughts from an Upside user and Portfolio Manager named ATEC, based in Singapore. learn more at https://upsidetechnology.co/