28 March 2020

Dead cat bounce?

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

THIS?



OR THIS?

Source: Investopedia
















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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 our action / inaction). Yeah just like the older generations who have been through the GFC.



What doesn't kill us makes us stronger. So keep calm to thank yourself 10 years from now.




“Risk and time are opposite sides of the same coin, for if there were no tomorrow there would be no risk.  Time transforms risk, and the nature of risk is shaped by the time horizon: the future is the playing field.”
- Bernstein


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Portfolio as at 26/03/20: -17.7% 


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25 March 2020

It's mad rush for gold

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 close are we to seeing the wheels turn?
Even if the wheels do turn, it may be some time before the businesses pick up to the level of past year's glory. Risk and fear take time to dissipate.


A good read from Of dollars and data blog -
How the coronavirus crash is different from 2008
"Sometimes we have to accept that history is no longer a useful guide.
The fact is that I can crunch all the correlations, produce all the plots, and spawn all the simulations that I want, yet I will be no closer to understanding what comes next."


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22 March 2020

Blue-black chips & losers “龙虎榜”

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 “龙虎榜”. 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.

man bungee jumping
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 -36.52%
Thai Beverage Public Company Limited 0.535 -31.85%
ComfortDelGro Corporation Limited 1.46 -30.23%
Genting Singapore Limited 0.58 -29.70%


Top losers in % are highlighted in red font. Thank goodness they are not substantial positions.

Biggest absolute amount losers are SLA and CDG. Both because I averaged up when they were in raging bull period. (I shouldn't have just sat on my profits then!)

Falling knife caught - ThaibevGenting and SLA (bought again after plunge).

:(

I could justify the mega price plunge in all of the above (due to their sector hit) except for SLA.
Even with a plunge in ringgit, I don't see how it's banking software business can be badly hit. Is it just panic selling by speculators? Or maybe I don't understand it's underlying business enough.

Overall portfolio tanked 22% (loss on absolute capital since inception). If count in yield, it is not in loss. More ammo on standby mode for next month.

From now on it's Panadol-taking time until the Covid pandemic blows over.

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Trading update:

Lost back some of the gains I took from Treasury Bond 20+ (TLT) as a result of it's plunge last week only to see a rebound on Fri after I stopped loss. This is due to the FED's commitment to buy Treasury bonds, which later became unlimited Treasury bonds. (I should have seen it coming. Sigh.)

Read: Toilet rolls and Treasury bonds tell the same panicked story (FT)


Failing to short the rebound of stocks, I concluded that my left hand fighting skills need much improvement. So instead of seeing big gains (from CFD), my portfolio is back to the same level from the beginning of this year despite being very undulant. Disappointing.

Round 2?

Now waiting for wonderful companies (in the US) to get beaten down to wonderful prices, not just fair prices before entry.

"It’s far better to buy a wonderful company at a fair price than a fair company at a wonderful price.”

The impact on businesses have not yet been fully realized as this seems like only the start for the pandemic crisis in US and Europe. We are not sure how much have been priced in for the dip at this point given an inevitable drop in forward earnings. So let's be patient.

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Sit tight for those who are in the same ride and stay safe.

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