So to end the year, I sat down for half an hour and jotted a few observations/thoughts on markets and people. Enjoy and wishing everyone the best of health and wealth in 2018!
The entire ASX microcap game is a giant, legal, rent-seeking experiment. Learn the rules if you want to be a landlord.
Those who make the loudest noise are almost certainly insecure and have far less talent than the image they try and project.
Back proven executives, who've monetised assets and grown businesses. Ideally, multiple times.
If you care for FA at all, align yourself with directors and brokers, by getting set at or near the same price as them.
Map out, chronologically, what newsflow you can expect from the companies you invest in. If they are microcaps, work out what the liquidity events are and when they are likely to occur.
People who argue emotionally about their stocks are like religious folk who, deep down, aren't all that secure in their belief and need to convince everyone else of their "truth".
Put people on ignore, who can't respond respectfully to alternative views on their investments.
An average trader doesn't become an expert worth listening to after one good year. If they did, think about how many experts would exist after the last four months. It's called an outlier. Stay humble. Ignore Chihuahuas.
If you trust anyone on an unaccountable, largely anonymous, forum, you're maybe an idiot! No. Seriously!
Approach with caution, people who regularly make lots of fairly low content posts on stocks that have already made big gains. They're almost certainly not accumulating.
Posts that include off-the-cuff % estimates on trader subgroups are rife on SM (we all do it, sometimes) but almost never backed by any statistical evidence and basically, pretty useless.
People who send you unsolicited emails with "hot
tips" and then proceed to complain about how rigged the game is and how everyone is no good. Hypocrite much!?
Nailing a winner by chasing an IPO is the worst thing that can happen to a trader; lest they mistake it for talent and try and replicate the practice.
If you ramp stocks, while selling, you are in breach of multiple regulations and can be suspended from HotCopper for unconscionable ramping.
Broker popularity is a merry-go-round. Today's villain is tomorrow's hero and vice versa. Brokers don't change all that much over time, which suggests us investors are a fairly fickle bunch.
Don't be a pain to your broker and ride them. If you're feeling bad about an average deal, they're almost certainly feeling 10x worse.
Valuing pre-revenue specs is a shifting landscape. There is no right or wrong, just the market at a point in time. All we have is peer group analysis, marketing and mgmt; and any one of those can make or break the bank.
Don't say anything to someone online that you wouldn't say in person. This, alone, would eliminate most arguments.
Get to know T20s and the players that pull the strings in our little ASX microcosm. Check track records to reveal the guns.
Understand what it means when certain directors or investors join shells. Learn to separate the go-getters from the spivs and fee collectors.
Just because you get an allocation in an IPO or placement, doesn't mean you need to make a dozen low content ramps. 95% of brokers wouldn't expect or want it and good stocks don't need it. Have some dignity!
There are many types of shills; smart, dumb, rich, poor, eloquent, crass, respectful, arrogant. You can't pick them by any one trait and some have very good reps on SM.
If someone peppers you regularly with hot tips, via private message, they haven't just done the same thing to 20-30 others. They're doing it to you, alone, because they care about your financial future. They don't lack talent to have to do it and they won't be selling as price goes up 
When the same groups consistently turn up on nearly all the same stocks, it's because they just don't get to chat much outside SM and are really sociable people
If you're not getting good allocations in deal flow from your broker:
Don't fret! You're just not one of the privileged 5% or so that get consistent access to size in the best deals. Live with it! Or better still, go make your own deals!
If you've remained solvent through a bear market, made really good money in a bull market and could afford to give up half and still be well up, you can maybe say that you've achieved a little bit of success.
You can sit back, constantly calling market tops. Or you can go hard while markets are strong and accept you'll give back some at the end. Eight years and counting so far...
If you're new to the market (say, last few years) and up a bit, you're statistically far better off quitting right now while you're ahead and putting your money in an index fund. The catch is, you don't know if you're one of the very few who will go on and make a living from trading...
Once everything "clicks" with your trading plan and you find that elusive style that suits, you can go from unprofitable/BE/mildly profitable, to highly profitable, in a very short space of time.
Finding your niche in the market is like pre-season footy training. The fit, polished, athlete that everyone sees only emerges after masses of hard work and pushing through the challenges.
If you don't have your diet, exercise and sleep up to scratch, you aren't the best possible investor you can be. If you have small children, focus on diet and exercise
I haven't come across many folk that aren't dealing with issues (some pretty serious) behind the scenes, at some point. Have respect for your fellow traders; even those you're not a huge fan of. Who wants to contribute (however small) to pushing someone over the edge!
If you think something applies to "most other people" but not you, it most likely applies to you too. A lot of the time, we're no smarter than the crowd and make the same confirmation bias errors.
Understand just enough about a microcap but not too much.
Once you've formed an opinion on the % of microcaps that are successful in the long run, it should follow logically that you're buying a marketing story and little more.
Regarding picking emerging sector/tech themes. First question a microcap investor should be asking, before putting a dollar down: how is the sector/tech going to be marketed to the masses and how are the companies and financial intermediaries going to extract capital from investors?
Expertise in a certain academic field is no great predictor of investment success in that field.
There are fairly unintelligent traders with sound psychology who make it in the market. Not so many highly intelligent traders, with poor psychology.
If you can't learn to let winning positions run, you better be a very, very good intraday trader, or have a remarkable WLR.
Equilibrium for a trader is acknowledging the failure rates of specs and never falling for a story but still milking a stock's momentum and tailwinds for all they're worth.
Optimal success with a microcap is when its profile and market cap, puts it on the radar of good fund managers and you're already up multiple bags.
