This Is The Fastest Bear !! 2020


We have experienced the fastest and furious " Bear" ever in market history. It only took less than 20 days for Dow Jones Index to reach bear market ( i.e corrected more than 20% from the peak).

This is the situation we never experience even in GFC 2008/09. We have seen some of the REITs dropped in double digits % continuously in few days and we can see that most of the REITs are having 50% sales now.



Asian markets ( except Nikkei ) i.e STI  and  HSI are both in GFC level in term of long term mean valuation, as well as FTSE100 and DAX.














Finally , S&P500 and DJ also dropped below mean level , but still far from level achieved in GFC in 2008/09 . We will need another -21% to reach -1SD. Bear in mind that it has also corrected more than -30% from the peak.











How about S-REIT





FTSE ST REIT Index also at -2SD now but is still not at level achieved in 2008/09 during the GFC where it was caused by " subprime " and hit the property sector badly.

At this moment , we can see that the badly affected REITs are mostly second liner and REITs which are having foreign assets in Europe and US.



Is It Good Time To Invest Now ? 


I don't have crystal ball to tell but if you have "holding power" and are using the "spare cash" to invest right now. I think the odds are on your side and the probability to win the market in next 2 years is high. Provided you have also choosing the right and fundamentally strong companies which you think would survive eventually in this Covid-19 Crisis.

Below is one of my favorite chart :



Except 1929/30/31 where global economy was having Great Depression , chances of market rebounded strongly after -30% dropped are very high.


As I mentioned before , although market are in crisis level in terms of valuation now , but the battle with Covid-19 is not going to be easy and ended soon. We still need to wait patiently for market to recover and reverting to mean and market may continue to drop for a while right after you pressed the buy button since nobody knows when will be the "bottom". I still stage my buying in phase at this moment.


Cheers !


STE





"The best values today are often found in the stocks that were once hot and have since gone cold" by Benjamin Graham


Comments

  1. Hi STE ,

    First time commenter here.

    I noted you loaded up on petroleum companies instead of REITs , is there any reason for doing so ?

    Understand that the oil industry is compelling right now, but there is quite alot of uncertainty how long a under $ 30 barrel of oil will hold. Though I agree that RDS is among the more diversified energy (instead of oil) company.

    ReplyDelete
    Replies
    1. Hi Verseun,
      Thanks for the comments , yes, I hv loaded up some oil majors recently but not huge in % , in fact I bought more Banks and REITs in last two weeks. Reason for investing in oil & gas sector mainly from technical perspective that these companies might be oversold though understand that oil demand will be affected by this Covid-19 crisis and oil price may remain low in view of continuous dispute between Opec and Russia. I am hoping that some technical rebound might happen with possible price reverting to mean. I might be wrong and things may drag for some time...Of course another concern will be the renewable energy that challenge the oil consumption...but I guess it still too early and may sometimes ...

      Hope this clarify .
      Cheers !


      Delete
  2. Hi STE

    Thank you very much for sharing your thoughts and the very informative market index charts. It really helps me a lot to understand with the graphs and -1SD/-2SD explanation that you share in your blog.

    Would you be able to share with me where to get the graphs & SDs for Indices that you shared above?

    Cheers
    Whatsyap

    ReplyDelete
    Replies
    1. Hi Whatsyap,

      Thanks for the comments, I plot the chart by using excel . If you are interest , please just drop a mail to : stesg50@gmail.com
      I shall forward the sample file to you with some simple explanation.
      Cheers ! :D

      Delete
  3. Hi STE,

    Can I check where do you generate the graphs for the different SD? Is it a paid software or program?

    ReplyDelete
    Replies
    1. Hi lee,
      I am suing excel to plot these chart, If you are interested , please just drop a mail to : stesg50@gmail.com
      I shall forward the sample file to you with some simple explanation.
      Cheers ! :D

      Delete
  4. Hi Shubham/Roger/YC/tetmin/Clare/Tan/NT/Kenneth/Martin/

    Thanks for reading my blog and as request, have forwarded the sample file separately to all. Hope you find the chart useful.

    Cheers! : D

    ReplyDelete
  5. thanks for your Charts. I will probably buy some tomorrow. :)

    ReplyDelete

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