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Showing posts from March, 2020

Dead cat bounce?

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Like a twisted Pascal's wager, I would rather believe in a dead cat bounce than not - and therefore I am not buying the bounce. If it is indeed a dead cat bounce, it would means more room to fall in the coming months. If it is not a dead cat bounce, then I can congratulate myself for holding on tight to my stocks that have seen more than 20% plunges in the past couple of weeks. WILL IT BE LIKE THIS? OR THIS? Source: Investopedia --- Sequel to my previous post ... When we see dark clouds in the distance and don't act, we are plain dumb. When we are drenched, we wondered why we didn't act earlier. No one to blame. So what to do? Believe. Believe that the dark cloud will past eventually. For the younger generations, there's time on your side. It's the perfect opportunity now for you to observe and learn from any mistake. Perhaps 10 years down the road, we will look back at what we have been through and laugh at ourselves (for o

It's mad rush for gold

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The price of gold has gone bonkers again.  Source: Saxo Sold down finally over? Ah, I have missed the boat again.  🀦 It's rare to have gold rallied together with stocks. Hope on a new  stimulus deal  performed magic on the US market again tonight but obviously there's a big faction still believing in parking money in the safe assets. They are the realists. (And they know QE means...) Stimulus can oil the wheels but the force that turn the wheel is human spending . If there's barriers to spending then the flood of money will be dammed instead of flowing.  So what can overcome this?  When we stop seeing spikes in covid-19 cases and cities release their lock-down.  When will we see a decline in covid?  When there's global adoption of proven treatment(s) against the virus / successful manufacturing of a vaccine for it / the virus eventually die-off due to success in quarantine measures or herd immunity developed. How clos

Blue-black chips & losers “ιΎ™θ™Žζ¦œ”

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Many years ago I have done a post on " blue-black chips list ". This round I haven't done the blue-black chips list yet. Will do up one when I think the market has bottomed, although the ranks should be quite different this round and there have been quite a few of replacement of companies in the index. To remind myself of how scary the current bear is, I have compiled a list of my own blue-black chips and losers “ιΎ™θ™Žζ¦œ”. The plunge was fast from the start of March, it's almost like the stocks have climbed to a cliff point and just bungee-jumped. Image credit: Anoof on Unsplash Company name Last price done Total chg. to date % Silverlake Axis Ltd 0.25 -47.27% Starhill Global Real Estate Investment Trust 0.43 -42.74% First Real Estate Investment Trust 0.61 -42.45% Mapletree North Asia Commercial Trust 0.735 -36.64% OUE Commercial Real Estate Investment Trust 0.325 -36.5

Stratifying your assets (diversification)

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When we talk about diversification, it means building a portfolio with assets that are not highly correlated.  "Diversification is a risk management strategy that mixes a wide variety of investments within a portfolio. A diversified portfolio contains a mix of distinct asset types and investment vehicles in an attempt at limiting exposure to any single asset or risk." - Source: Investopedia Below is a table classifying the various assets and how within each asset class further diversification can be put in place according to sector, geography, risks and liquidity. Asset classes -Sector / Type -Geography -Risk profiles -Liquidity Real Estate sector v variable low Commodities type low, variable high Derivatives eg. Future, ETF sector v high high Equities sector v high high Bonds sector v low low, variable Exchange-traded funds (ETFs)

Weekend brain food VI

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Like a school kid who becomes hardworking only when her mom tells her she can go out to play if she finishes her homework, I am seeing that playground now.  Rushing homework now begins... Photo by  Ben White  on  Unsplash How U.S. Stock Prices Correlate to the Value of the U.S. Dollar "The value of American stocks, especially those that are included in market indexes, tend to increase along with the demand for U.S. dollars." "The dollar automatically strengthens when the euro weakens. That’s because the euro makes up 57.6% of the value of the U.S. dollar index. This means that whatever makes the euro weaker will make the dollar stronger and vice-versa. Each of the other currencies in the USDX has less influence on the dollar’s value." [ source ] My take The strengthening of US dollar is probably temporary. I am expecting the US gov to continue injecting cash to support the weakened economy. Demand surged as businesses switched their

Revisit: Old lessons - facing a 'new worse'

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Current STI level: We are not even at half-way point in drop compared to the GFC period in 2008 (look to the left big plunge). Chill. When we thought price can't get any higher (in bull), they do. When we thought prices can't get any lower (in bear), they do too. How far  will it drop this time depends on how fast the covid-19 pandemic gets controlled and what kind of fiscal policies get rolled out. No one can predict. So it's important to be patient and time our entries well. Don't be caught in dead cat bounce. Source: CNBC Below was my blog post from 2 years ago. In 2018, when market keeps chionging despite volatility, we are almost in a disillusion that spring will last forever... ---- Posted 12/03/18 With reference to an old post: A new worse - STI Aug 2011 , two more lessons added on: Lesson Five - Be nimble . Be impatient to the weeds. Slowly rake in the gems when they are on sale and be very patient with the gems. Lesson Six - if

When "huat kueh" becomes "ang ku kueh"

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STI continued its downward spiral today. And my "huat kueh" (those on paper gains last month) mostly have became "ang ku kueh" now. SMOL sure will mock  poke why didn't set SELL alert?! SG Portfolio down 9% to date  :( I wonder will they flatten some more to become roti prata. I bet they will be real "tasty" then. Can gobble and grow fat from all that oil yield.  Hmm... Provided they don't do drastic cut. It's not too difficult to make Ang Ku Kueh I realized.  I meant the real ones. Ok, jokes aside. It's no fun to see US stocks bungee jumped. If you thought the blue chips are bad, wait till you see these... Gap Gap More gap *Gasp* There has simply been too much euphoria fueling the market for too long, now it's losing air like an over-inflated balloon. And in a fast and furious way. For newbies in investing, yes, this is how scary the bear looks. ----

Revisit: Waiting for stabilization

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It's deja vu! After almost 9 years.  Waiting for stabilization - published in June 2011 STI dropped another 3.6% today and is now hovering at 2681. Where are we now in the big cycle? Now imagine many mini cycles along the line of this big cycle. That would be the day-to-day market fluctuations. ---- Related old posts: What's moving the US market Emotion and Action Lessons from 2015 Money Management I Don't ask your guru teacher / blogger what you should do now. Because if you haven't learnt from any past mistake, now's the time. "Free fall ah... lelong lelong!" Aiya, must really beat my itchy fingers for ComfortDelgro, Thaibev, DBS and ST Eng. Naughty! Nv wait!  *** Like what you read? View my other posts  here

Overnight winner

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It was a mega black swan event yesterday. S&P halted trading for the first time since 1997 and DOW dropped 2000 points . STI closed 6% down. Probably the largest single day drop experienced by anybody who's vested in the markets.  Stark contrast to my blog title - it's massacre for US stocks My US portfolio which was beaten down earlier by big names such as Disney, WBA, IBM and FB (already long position stopped out) still cling on to 2 long positions - 3M and FB as of yesterday. Yet when I finally logged in to my SAXO account (after multiple failed attempts probably due to servers overload), I was greeted by a slight tinge of green. *Surprise* Thanks to my one and only hedge, the 20-Year Treasury Bond (TLT). If only I didn't close out all my marginally losing short positions prior to going on overseas trip, I would have gotten a pasture and not some grass. That's black swan for me. I closed out all my positions at a slight net profit yesterday when

Why I will not touch any oil stock for now

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I will not touch oil-related stocks for now and for a long time perhaps. Earlier on this year, I have sold all my Keppel shares at $6.73. Oil-related stocks are not only those that supply oil / gas but also include those that produces oil-rigs, do offshore oil drilling. It seemed like yesterday that the oil crisis has sent my portfolio plunging more than 30% , and I am so not going to repeat the same mistake this cycle (see also  previous post's video on economic cycle).  From the macroeconomic point of view, oil demand will gradually reduce due to two main reasons - 1) manufacturing sector slow down  2) conversion to electric vehicles and "green fuel". Will an oil price war driving oil price lower stimulates demand? I think unlikely so in the face of current covid-19 virus situation. Quoting from Reuters: “This could be even worse than 2nd half 2014 and prices could test $30 or even $20 given the simultaneous demand shock with the coronavirus impact

Watchlist: First Reit

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Price: $0.97 Div yield: 8.8% P/B: 0.9 Risks: Master lease renewal in 2021 and Sponsor's credibility "lease negotiations are expected to be completed 12 months before the lease expiry" Target: ??? --- Time to choose bowling balls to low-ball some stocks in the upcoming weeks / months. Bowl SLOWLY... Others on watchlist: bank, china-related and hospitality stocks *** Like what you read? View my other posts  here

The irrational market and Boom-bust cycle

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What do we see yesterday?  The US market is a sea of green ! The power of hope of Fed rate cut. See the headlines... Bull's case: Fed will cut rate to stimulate the US economy, businesses won't go bust. Stock prices of the businesses will then continue to chiong up and up. Bear's case: Coronavirus is causing worldwide productivity decline and it's nowhere near getting controlled. Economy is already seeing downturn, yield curve inversion 's here. Productivity decline = earnings decline = P/E go over the moon = stock prices would come down. How will the market be tonight? “Markets can stay irrational longer than you can stay solvent.” - Keynes ----------------- A crash course for you on economy if there's difficulty in grasping what I am trying to say: Article:  Why China Buys U.S Debt with Treasury Bonds My takeaways.. Boom comes when spending increases. Recession comes when spending reduce

Making hay while the sun shines

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Knowing this phrase is one thing, practising is another. When we got a 'prodrome' that disaster is coming, we should stock up our food pile. When we got 'prodrome' of a market crash, we should keep our hay (start cashing out).  What to do when market ALREADY started crashing? Too late to cash out without incurring losses. This brings us to the Chinese proverb - δΈ΄ζ—ΆζŠ±δ½›θ„š 。 The same applies to countries and companies coping with a pandemic. Planning ahead is important. Who is well equipped and who has the protocols in place, when the outbreak happens and shit hits the fan we will all know. Are you a thinker or doer? -- Now then say warchest not enough to slowly buy as the markets plunge? Now then say 'why didn't let go of my bad investments earlier'? Now then say 'why didn't I buy those bonds when times were good'? Now then find the long-forgotten watchlist? Hmm... Still not too late to open a tra