Wednesday, April 8, 2015
Low Expectation Leads To Nice Surprises
I want to relate another true story. Hehe can be a storyteller already.
We had a colleague who was our lunch mate for many years, more than 10 years. Then one day she was on long MC, so out of concern another colleague asked her the reason for her absence. Her reply was 'Sorry confidential, for close friends only'
My friend was shocked and disappointed to hear this answer. Me too.
After more than 10 years of colleague eating lunch and chit chatting during lunch times, sometimes a drink after office hours, we are nothing more than colleagues? Are we not close friends? This reminds me of a movie 'Sleeping with the Enemy' is a 1991 psychological thriller film directed by Joseph Ruben and starring Julia Roberts and Patrick Bergin. Am I 'Eating Lunch with the Enemy'?
Do you classify your friendship by the different category?
Someone I knew told me 'yes' they do have different classification of friendship.
Am I thinking too much?
Why are there so much segregation?
I try to think of an explanation to this, and find that its all about expectation.
I remember a time, my daughter asked my wife why she is harsher to them but nicer to stranger or neighbour? Ever wonder why your family members eg parents, especially wife haha are harsher to you or your kids but are nicer to strangers? Its because of the thing called 'expectation'. Along the years, because of closer ties and relationship, your family members expect more from you, their standard given to you are raised.
So, after so many years of 'friendship' with my lunch mate or colleague, some of us began to have expectations from our colleagues or may have 'upgraded' them as 'close friends'. Sometimes we expect others to treat us the same as friends. But not so. You treat them as friends doesn't mean they will do the same to you.
So what does it got to do with stocks?
Yes, there is.
When you buy a stock what was your inital expectation? Just to collect dividend, capital gain or waiting for that privatisation? Maybe after many years, your expectation of that stock have growth. Eg Your initial expectation is only to collect dividend. But your expectation had silently growth to capital appreciation, stock bonus, takeover, privatisation, etc and you keep holding on to it to fullfil your high expectation. But does it mean to do all that you had expected?
Another example, if you buy a stock because it was under valued but it is now grossly over valued. Do you hold on to it as you start to expect it to do more than that?
For an undervalued penny stock, investors and big boys usually do not monitor it and have low expectations. Sometimes, a slightly better news can produce very positive results :)
So was it wrong to have high expectation? No.. not at all. We just need to manage it. Eg sad to say some colleague will just stay as 'colleague' and cannot be advanced to 'friend' status. Some stocks are just dividend stocks, not much capital gain. Some stock can only have capital gain and pay little or no dividend.
High expectation will lead to disappointment and low expectation will lead to nice surprises.
Set your initial expectation as what it meant to be and whatever received after that is considered bonus :)
Then you will be a much happier man or woman :)