How far from a 'new worse'?


STI history
Is this a phase of consolidation before coming to a waterfall?

This month did not start well with Trump's new tariff slap on China. Just as I was gloating over a 12% gain on my Capitaland's shares, the gain has quickly plummeted by more than half in the blink of an eye before I could react. 

Obviously I didn't learn my lesson too well.

My Equity portfolio on the whole is still afloat. Generally speaking, if one uses the war chest to buy good dividend stocks during sales (that's why I say market timing matters), one's portfolio would have a higher margin of safety to weather a market downturn.

Are we at a market downturn? Hmm we are probably nowhere near signs of waterfall yet... (although by the time we catch sight of it, it's often too late to react).


Let us take a brief glance at the highest to lowest points during STI plunges over the past 10 years.

STI lowest points


3189 (07/2011) to 2646 (12/2011)  
-17%

3487 (04/2015) to 2539 (02/2016)  
-27%

3613 (04/2018) to 2979 (10/2018)  
-17.5%

(I did not do the exact calculation on that behemoth plunge for Lehman's crisis, but you can tell from the graph above that it is more than 50% for sure.)


Actually I would rather see a waterfall than a rapid. At least the buy or sell signal would be much clearer. When market goes one-tweet-up-one-tweet-down, I feel like a fool. And this trade war thing is probably going to be a slow-boiling thing which no one can predict its boil-over point.



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Comments

  1. Low interest rate is new normal! :-)

    ReplyDelete
  2. Rainbow girl,

    Welcome to the club!

    Try hanging on to our positions without getting "fake-out" by one day up, one day down tweets ;)

    This environment is great for day traders though.


    Remember this:

    The market's main purpose is to inflict as much pain to as many market participants as possible!


    We just be patient lor.

    You wait for your waterfall; I wait for my longer trends ;)


    My one got slope. Easier to hop on board.

    Yours is straight down!? You are nimble!

    LOL!

    ReplyDelete
    Replies
    1. Hi SMOL,

      The great buy lies in the aftermath of a waterfall, not during the fall itself.

      If I can short the fall itself then lagi better! But I am far from nimble... as opposed to what you said. :P

      Delete

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