Recently, I received a number of comments like the one about my post, You just don't understand Europe:
Cam you were wrong about Europe outperformance relative to U.S. in your prediction for 2013.I am European I know Europe. Don't make mistake of doubling up on your losses.
Some of my readers mistake this blog as investment advice. I draw everyone's attention to the disclaimer at the bottom of every post, which reads in part [emphasis added]:
None of the information or opinions expressed in this blog constitutes a solicitation for the purchase or sale of any security or other instrument. Nothing in this article constitutes investment advice and any recommendations that may be contained herein have not been based upon a consideration of the investment objectives, financial situation or particular needs of any specific recipient. Any purchase or sale activity in any securities or other instrument should be based upon your own analysis and conclusions. Past performance is not indicative of future results. Either Qwest or Mr. Hui may hold or control long or short positions in the securities or instruments mentioned.
What Is An Investment Process?
You shouldn't use this blog for investment advice. Let me explain. Most investment processes consist of at least the following three steps:
- Decide on what to buy and sell.
- Decide on how much to buy and sell.
- Timing the trade.
As an investment manager, I would add a fourth step of "review and control", which consists of analyzing past decisions and understanding what went wrong and what went right in order to improve future decisions.
I write this blog as my way of thinking out loud and inviting feedback. Most of what I write relates to step 1. There is little or no discussion of steps 2 or 3. Even if we both agreed that security XYZ is a good idea, I have no idea about your circumstances or your portfolio. I can't tell you how much to buy or whether it is appropriate for you at all.
Moreover, if I advocate entering a position, don't be assured that I will write about my decision to exit the position. Consider the post I wrote in early December about the market leadership of European stocks and homebuilders (see Some surprising market leaders). Even though I had identified European stocks as market leaders, it didn't mean that I don't have a risk control discipline. The chart below shows the relative performance of the ETFs for Euro STOXX 60 (FEZ) against MSCI All-Country World Index (ACWI).
When the relative trend break occurred in early February, we were out of the trade. I didn't write about it, nor did I feel any obligation to do so.
You can see a similar pattern in the homebuilders, which we exited at the relative trend break.
You Get What You Pay For -- Ideas
The best way to use the content in this investment blog is as a source for ideas. But understand that you get what you pay for -- and it's not investment advice.
If you do want investment advice, then I need to have an up-close-and-personal relationship with you, where I'm paid a fee. If you believe, for example, that the fund that I manage is appropriate for you, then I will undergo the four steps outlined above.
Otherwise, use my ideas at your own peril.
Cam Hui is a portfolio manager at Qwest Investment Fund Management Ltd. ("Qwest"). This article is prepared by Mr. Hui as an outside business activity. As such, Qwest does not review or approve materials presented herein. The opinions and any recommendations expressed in this blog are those of the author and do not reflect the opinions or recommendations of Qwest.
None of the information or opinions expressed in this blog constitutes a solicitation for the purchase or sale of any security or other instrument. Nothing in this article constitutes investment advice and any recommendations that may be contained herein have not been based upon a consideration of the investment objectives, financial situation or particular needs of any specific recipient. Any purchase or sale activity in any securities or other instrument should be based upon your own analysis and conclusions. Past performance is not indicative of future results. Either Qwest or Mr. Hui may hold or control long or short positions in the securities or instruments mentioned.