My friend ask for divine advice. I am not kidding. The advice he got is stay out of the market for the time being. That is when I started buying when STI is at 3000.
The way I see it, there are a few ways.
1) Exit to a level of comfort, taking some loss if necessary and stay out of the market
2) Accumulate at various points and continue buying
3) Short the market
4) Rotate your holdings, buy and sell at the same time and liquid some bonds (if u have)
5) Look at signals (whatever sect u below) and trade in and out of market
If u have a different option that I have not heard of, please leave a comment below.
The point I am trying to make is, no matter which path u take, u will most probably be bombarded by views of people walking different paths. They might claim how dangerous it is to walk a way that is different from theirs.
My advice is: walk your way. It is ok to do a U turn. But it is really not a good idea to run around various paths, fudging in and out of different routes because you wil end up going nowhere.
Before u start, have u plan your path? Why are doubting your own plan now? It is ok to discard a plan due to conviction but rarely it is a good idea to fudge between one path to another. Is the grass greener on the other side? Really? If u have done due diligence in peace time, now is the time to execute your plan and see if it works. Use your own metrics to determine your own success.
I am taking path 2. People who are on different paths, feel free to share why u choose your path, but rest assured I will not listen. LOL. For those taking the same path, I hope my post provide some company in this lonely walk.
First of all, let me explained I have been waiting for this Bear for years. So much so that I admit I might have squeeze the trigger too early. I am climbing up mountain, and have been persuading myself not to go below 60 percent cash before the covid 19 crisis, even though there were many counters I have wished to owned. If I do not accumulate during a bear, when do I do it then? During a bull?
As the market tanks, I went on a buying spree. I have calculated that I can enlarge my portfolio in 3 tranches. I have fired off the second round for about half of counters in my portfolio. A few counters have been holding up rather well such that I have not yet had the chance to accumulate. I usually wait for a counter to fall 20 percent before I consider if I would enter again, if the counter does not have strong earning visibility after my analysis, I will waited for a bigger drop of 20 to 30 percent, but I usually pull the trigger at 30 percent. At 30 percent fall, I ask myself why I refuse to buy, and will seriously consider selling that counter. So far, I have not made the choice to sell.
As of now, I still has 35 percent cash, down from the peak of 60 percent. It can be raise further if I choose to redeem my cashback of my policy (no impact on termination value or risk of loss)
As of today, my portfolio is about 11 percent in the red. Although there is some apprehensiveness, I still lookout for valuable buys. Of course, I am also slowing down my purchases but selling is hardly in my mind - not because I am a stamp collector but because I believe in the businesses that I bought.
I am sharing what I am buying to remind myself what I have done in a bear market and review what I could have done better after this covid 19 blew over. (for better or worse)
For cyclical play, I am betting that they can survive this crisis. They might make smaller profits but will unlikely go into loss and when better returns, hopefully I will be reward with better valuation. The counters I have accumulated or initiated are:
1) Silverlake Axis
2) Sembcorp Ind
3) Diary Farm
4) Hong Kong Land
5) SIA engineering
For dividend yield, counters accumulate include:.
1) CSE global
4) Cosco 517 (HK)
5) GA pack 468 (HK)
On watchlist for this category
2) Taisin Electric
For earning growth. Under current environment, this group is highly unlikely to perform
On watchlist for this category to accumulate of initiate position
2) Raffles Medical
3) Pan United
Contemplating Sell counters
Do nothing counters
2) Ascendas REIT
3) Singapore Shipping
As I buy DBS from 23 to 22 to 21, etc, the term used by others not in the path is "kena burn" etc. In my mind, I am expanding the weightage of dividends counters in my portfolio.
As people talk about preserving cash and sell, I ask myself if the company is going to see better days and survive this without going into loss. If the answer is yes, I will hardly sell. The next question I ask is whether the counter is a market leader that has the competitive edge to ride the way up with lesser competition after the blood is shed? If the answer is yes, I ask for a lower mangnitude of drop before I buy. I am telling myself that I must be prepare to see my portfolio go down 30 percent if I manage to use all 3 tranches and market really go down 50 percent . The more u buy the more you lose. But I am planting the seeds for harvest when autumn comes.
I am also telling myself I am accumulating a portfolio at low prices and not at market high. This enlarged portfolio should yield 4 - 5 percent with some safety of margin when the black swan sail away.
There might be a better path. I wish sincerely all those in other paths the best. That path might also be more rewarding. But similar to life, we walk the path we want, and most importantly, we be at peace as we walk, since it's our choice. If someone walks with us, great. If someone walk another way, say hi and may we meet again.
How are u doing ??