This Is The Fastest Bear !! 2020

image credit to Bloomberg.com via seekingalpha.com

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 the 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 a 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 the long term mean valuation, as well as FTSE100 and DAX.














Finally, S&P500 and DJ also dropped below mean level, but still far from the 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 the 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 worst affected REITs are mostly second liner and REITs which are having foreign assets in Europe and the US.



Is It Good Time To Invest Now? 


I don't have a 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 the 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 favourite chart :


image credit to Bloomberg.com via topforeignerstock.com

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 the market is in crisis level in terms of valuation now, the battle with Covid-19 is not going to be easy and ended soon. We still need to wait patiently for the market to recover and reverting to mean and the 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


Quote Of The Day :



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


Comments

  1. Verseun20 March 2020 at 09:10

    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. STE20 March 2020 at 20:30

      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. Whatsyap20 March 2020 at 23:26

    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. STE25 March 2020 at 11:14

      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. lee23 March 2020 at 14:46

    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. STE25 March 2020 at 11:15

      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. STE29 March 2020 at 11:18

    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. Cory30 March 2020 at 00:07

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

    ReplyDelete
  6. STE10 April 2020 at 20:14

    Hi Daniel W, Daniel T, Hao, Loo, Richard W, TY , KC,

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

    Cheers! : D
    STE

    ReplyDelete
  7. darren604018 April 2020 at 22:23

    Hi STE,

    I am turning 20 and i have decided to read up more and begin my investing journey amidst this health crisis. I have a long time horizon for my 20+k in savings currently and my goal is to enjoy the power of compound interest in the end and not be sidetracked by the current/short term volatile nature of the stock market. As such, i would really appreciate advice on how i can carry out my plan. Either by investing my money in blue chip dividend stocks or dividend REITs or as you have said this method might not be apt for young investors looking capital growth.

    ReplyDelete
    Replies
    1. STE23 April 2020 at 11:02

      Hi darren6040,

      Thanks for reading my blog, I am so sorry that I couldn't give any specific advise on how to invest as I am not a qualify financial adviser. But as general , having a diversify portfolio during at anytime is a prudent strategy...as you said, since you are young and have much longer investing horizon time frame , investing during this crisis time and keep for long term may be quite rewarding eventually. If you don't have much time to monitor the market , having few ETF ( for blue chips and REIT ) might be a good idea.
      You may read up more from some financial platform InvestingNotes.com or Seedly.com for more detail on how to invest.
      Sorry that I can't really give much advise on this .
      Cheers !!
      STE

      Delete

Post a Comment

Related Posts Plugin for WordPress, Blogger...

Labels

Show more

This Month's Top Blog Posts

2023 Portfolio & Dividend Update

Image
  A Rollercoaster Ride I know, Uncle was really late to have this 2023 performance review as we are already in February 2024 😊 . Pai-seh, I was busy with a family trip to Korea followed by a Cruise Trip onboard RCL. Also, during the school holidays, we went a few times short trips to Malaysia and back to my hometown. My younger daughter got her O Level result followed by searching and applying for JC. That’s why I have been delaying this update and dragging my feet to write this blog post. I think most of us had the same feeling that 2023 was a challenging yet dynamic period for investors, marked by a series of unpredictable events that significantly affected our returns. I have seen my portfolio up by more than 10% in the early part of the year and it dropped by more than -8 % at one time and recovered slightly better at the end of the year with +2.3% (including dividend). As an investor, navigating through such a volatile market requires adaptability, patience, resilience, and
Read more

Stock Market Looks Like A Casino Now : Have Fun !!

Image
  GameStop the Market: Big Bets on Stock Make Wall Street Look Like a ‘Casino’ <source:casino.org>     The biggest bets made over the past couple days haven’t been placed in a casino on the Las Vegas Strip. Instead, the action’s taken place on Wall Street, as a group of stock traders on Reddit have aimed at hedge fund traders, who have made high-stakes wagers that businesses like GameStop and AMC Entertainment would stumble . The Stock Market is a Fun Casino <source:ritholtz.com>   The stock market works  as if  people were investing money in companies; some indirect mechanism ties the secondary trading of stock to the allocation of capital.  1   And of course in the limit companies  can  raise money by selling stock. So buying stock is  like  investing money in a company in exchange for partial ownership of its projects, and the amount you should pay for a stock is basically the discounted present value of the company’s cash flows from its business. The mech
Read more

Regression Line for Major Stock Market Indexes

Image
Mean Reversion : image credit to asymmetryobservation.com Received inquiry from friends/readers about "plotting regression line " for major stock markets other than STI. Would like to reiterate here that the " regression line " is just a "statistical phenomena " same as other indicators in Technical Analysis where we are just using past price trend or movement to manipulate or so call " forecasting " the future price movement.
Read more

Fake News : Dividend Income from STE

Image
<Image credit: to cnbc.com> With the increasing usage of the internet as the main platform of social media for us to communicate and as the source of news replacing traditional printed media, corporate and government starts to pay more attention to the problems and consequence of  “ fake news “ and its impact on society at large.
Read more

Portfolio & Dividends Update : 1st Half 2023

Image
Time flies, and as we find ourselves in the midst of 2023, it is remarkable to reflect upon the passage of time and experience that has unfolded. I’m sure we all have different experiences in the 1st half of 2023 in terms of portfolio management and performance. For me, the last two quarters were like YOYO and my portfolio was performing well till March ( up by almost 11%) with the hope China “re-opening and recovery “But, as time passes, the strength of the recovery is getting weaker month by month and now everyone is hoping for more “ stimulus policies” to boost the economy, with declining economic indicators like retail sales, property sales, high unemployment among youth, slower export due to weak demand from developed countries, lower PPI and almost flat or zero CPI figure. All this has made my portfolio up and down huge, dropping to -2% at one point, and rebounding slightly to 4.68% now, with hopes of more policy support from the government. If you are invested in the US or J
Read more