Dr Tee (Ein55)

Temasek Dividend Stock Singtel (掌上明珠)

Posted on April 1, 2020 Written by Dr Tee (Ein55)

Temasek invests in about 40 global stocks, the largest investment by market capitalization is in Singtel (52% shareholding), jewel in the crown. Singtel (SGX: Z74) is not just the fixed deposit of Temasek (through consistent dividend payment for decades), also cash generator for over 1 millions Singaporeans who are Singtel retail investors, the most popular stock in Singapore.

Over the past few years, due to competitive global and local Telco industry (eg. new player TPG in Singapore, uncertain regional markets), despite Singtel is more defensive than other peers, share prices has dropped by half from the peak of $4.40 to $2.28/share (about 30% price dip was over the past 2 months of global stock crisis). This is relatively stronger compare with local competitor Starhub (SGX: CC3) with share prices drop to about 1/3 of peak price. Even M1 was acquired and delisted during this period. TPG is listed in Australia (ASX: TPM), share price has also dropped by half over the past few years.

So, this is not Singtel stock crisis (Level 1 – individual stock), rather, it is Level 2 crisis (Telco sector) and even Level 3 crisis (country level – Singapore and most Asian stock markets).

Singtel is not just a Telco giant of Singapore, also a major regional Telco in Asia Pacific (Australia, India, philippines, Indonesia). It has diversification geographically, but also suffer uncertainty in each country (eg. legal cases in Thailand and India which affect its last few quarters of earnings).

Telco industry used to be a defensive sector as usually only a few licenses are given in each country for Telco operators, nearly a sure-win oligopoly business. Introduction of smart phones in 2000s, following by 3G, 4G, etc, has helped Telco industry to grow further over the past 2 decades. The yearly capex (difference of operating cashflow and free cashflow) is usually stable, therefore Singtel’s consistent earnings have contributed to stable free cashflow, eventually predictable dividend payment 2 times yearly to shareholders for decades, about 4-5% average dividend yield over the past 10 years, better than fixed deposit interest rates of 1-2% in banks.

With recent global stock crisis, Singtel share price has dropped to 11 years low, approaching the last low recorded in 2009 global financial crisis. Singtel will announce 2020 final year report (financial year ending 31 Mar 2020) in a few months time but results are predictable to be much weaker than last year due to losses in Bharti (India investment) and weaker earning over the past 2 quarters (especially with Coronavirus).

Singtel is defensive partly because it is a major Telco operator, price competition could affect its earning but few people may terminate the mobile phone lines in this internet era. During global financial crisis, perhaps some people may cut 3 meals into 1 meal to save cost but likely will still keep the phone line which is the meal of “soul’.

This implies despite Singtel has more downside in both business (especially for the coming 2020 annual report) and stock prices (especially if Coronavirus is beyond control, resulting in global financial crisis), it is unlikely the company would go bankrupt with share price dropping to $0. Singtel is a dividend giant stock, current dividend yield is nearly 7%. Assuming the earnings, cashflow and dividend available may drop by 50% (due to 1-time loss in Bharti), there is still 3.5% dividend yield.

An investor who is interested in Singtel may apply progressive entries at low optimism level, eg 5 times x 20%. Assuming $2.50/share is the first trigger at low optimism. and investor may consider (just a sample investing plan, not a personal financial advice, please make your own decision):

$2.50 or $X – First Entry (Level 1-3 crisis)

$1.50 or $Y – Second Entry (Level 4 crisis)

$0.50 or $Z – Third Entry (Great Depression, when people cut from 3 meals to 1 meal, still cannot survive, Telco is no longer important)

Assuming 3 levels of crisis happen, average price will be $1.50/share over 3 entries. Investor may also consider these prices after it drops to bottom and recover again (uptrend), no need to suffer with falling prices in bear market. The strategy is personality dependent, counter-trend (contrarian investor) and/or follow-trend (trader mindset).

Singtel may remain at low optimism (below $2.50/share) for several years, investors could collect >3% dividend yield (pessimistic assumption) during the winter period of crisis. This way of averaging method (investors may define own $X, $Y, $Z prices above, the sample prices given above are just for example purpose).

The strategies above may be applied for any dividend giant stock. There are about 100 global dividend giant stocks (you may learn the strategies from Dr Tee in 6 days comprehensive course or note down a few sample stocks in free 4hr workshop for the public), some are much stronger and more stable than Singtel. In fact, Singtel is slower in growth, more suitable for dividend investing (as if fixed deposit in stock market) at low optimism but may not suitable for growth to achieve higher capital gains.

There are many ways to make money in stocks, may not be investing, could be trading (higher probability is shorting for current stock market but risk is high due to high market volatility). It is possible for short term trader to short at bearish Telco stocks (may not be Singtel) to profit from the falling prices, especially when breaking below a critical price support, driven by fear of declining business and global events (Coronavirus, etc). So, it is possible for different persons to take different actions (Buy, Hold, Sell, Wait, Shorting) and all could make money in stocks if strategies aligned with personalities and market conditions.

There are at least 26 Temasek / GLC stocks in Singapore including Singtel, controlling shareholder with 15% or more ownership directly or indirectly (investor needs to focus only on giant Temasek stocks):
Singtel (SGX: Z74), DBS Bank (SGX: D05), ST Engineering (SGX: S63), Singapore Airlines (SGX: C6L), SIA Engineering (SGX: S59), Singapore Exchange (SGX: S68), SATS (SGX: S58), Sembcorp Industries (SGX: U96), Sembcorp Marine (SGX: S51), Olam (SGX: O32), CapitaLand (SGX: C31), CapitaLand Mall Trust (SGX: C38U), CapitaLand Commercial Trust (SGX: C61U), Ascendas Reit (SGX: A17U), Ascott Hospitality Trust (SGX: HMN), Ascendas Hospitality Trust (SGX: Q1P), CapitaLand Retail China Trust (SGX: AU8U), Ascendas-iTrust (SGX: CY6U), Keppel Corp (SGX: BN4), Keppel Reit (SGX: K71U), Keppel DC Reit (SGX: AJBU), Keppel Infrastructure Trust (SGX: A7RU), Mapletree Logistics Trust (SGX: M44U), Mapletree Commercial Trust (SGX: N2IU), Mapletree Industrial Trust (SGX: ME8U), Mapletree NAC Trust (SGX: RW0U).

Temasek stocks portfolio also affect about 15% of STI index stocks, which has strong impact on Singapore stock market. Here are 30 STI component stocks:
DBS Bank (SGX: D05), Singtel (SGX: Z74), OCBC Bank (SGX: O39), UOB Bank (SGX: U11), Wilmar International (SGX: F34), Jardine Matheson Holdings JMH (SGX: J36), Jardine Strategic Holdings JSH (SGX: J37), Thai Beverage (SGX: Y92), CapitaLand (SGX: C31), Ascendas Reit (SGX: A17U), Singapore Airlines (SGX: C6L), ST Engineering (SGX: S63), Keppel Corp (SGX: BN4), Singapore Exchange (SGX: S68), HongkongLand (SGX: H78), Genting Singapore (SGX: G13), Mapletree Logistics Trust (SGX: M44U), Jardine Cycle & Carriage (SGX: C07), Mapletree Industrial Trust (SGX: ME8U), City Development (SGX: C09), CapitaLand Mall Trust (SGX: C38U), CapitaLand Commercial Trust (SGX: C61U), Mapletree Commercial Trust (SGX: N2IU), Dairy Farm International (SGX: D01), UOL (SGX: U14), Venture Corporation (SGX: V03), YZJ Shipbldg SGD (SGX: BS6), Sembcorp Industries (SGX: U96), SATS (SGX: S58), ComfortDelGro (SGX: C52).

Temasek has 40 stocks in the global portfolio, about half are giant stocks (based on Dr Tee criteria). Singtel is Temasek’s largest investment but not Temasek’s best giant stock. An investor may invest in the Top 3 Temasek giant stocks, buying lower than Temasek (hopefully with help of global stock crisis), selling higher than Temasek (if timing is right). Even the stock with business may be in trouble (eg. Olam previously, SIA currently), Temasek is a strong sponsor, likely will help if having significant investment.

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Filed Under: Stock Market, Value Investing Tagged: Blue Chip Stocks, dividend stock, SGX, singtel, telco stocks, temasek

10 Bullets of Crude Oil USO ETF Investing (十重天机)

Posted on March 31, 2020 Written by Dr Tee (Ein55)

If you stayed till 2am Singapore time last night, you would have chance to trigger the first silver bullet, entry to buy WTI crude oil below US$20/barrel (only lasted for less than 1hr, heavy correction of 9% in 1 day) through USO oil ETF. This is last 18 years low for crude oil, mainly due to combination of crude oil price war and low demand of crude oil during Coronavirus pandemic, a rare crisis with 2 black swans.

I have shared this rare opportunity of crude oil crisis with low optimism, the first target US$20/barrel in earlier post a few days ago. At this price, crude oil is much cheaper than mineral water of the same volume (about US$50/barrel or US$0.30 / liter if you are more used to this unit of 1 liter bottled water price). Does it make sense?

If you miss the opportunity last night, not to worry, there could be 10 levels of opportunities (十重天机) ahead. Let’s learn together from Dr Tee on how to trigger 10 silver bullets for crude oil investment.

Over the past 3 decades (with multiple global financial crisis in between), crude oil (WTI) price was ranging from the lowest of about $10/barrel to $140/barrel. For simplicity, we may take $1 – $100 as possible range of crude oil price for next 10 years.

$100 = High Price (Bullish Economy / high optimism stock)

$50 = Fair Price (Average Economy / mid optimism stock)

$25 = Low Price (Bearish Economy / global stock crisis with low optimism)

Below $25/barrel with very low optimism, an investor could position in 10 opportunities for investing with 5 levels of crisis (from severe to disaster, prices may not really follows the crisis, just an illustration of how crisis causes more downside of crude oil).

Initially, prices would move in downtrend (more suitable for long term value investing with contrarian approach or even short term trader for shorting when breaking below the support), 5 possible levels of crisis (Level 1 is confirmed):

$20 = L1a = Price War Crisis (record on 31 Mar 2020)

$15 = L2a = Coronavirus Crisis (low demand 6-12 months)

$10 = L3a = Global Financial Crisis (1-2 years bearish economy)

$5 = L4a = Great Depression (Coronavirus last over 1 year without vaccine, most human in the world stay at home)

$1 (or even lower price, $X) = L5a = Nearly end of the world (no need to have crude oil or a smart scientist found a way to get free or cheaper energy source)

After reaching the bottom (no one knows, only history could tell, $X-$20, may not go through all the 5 levels), then it will recover again in a reversed way (uptrend prices):

$1 = L5b = recovering from “human crisis”

$5 = L4b = recovering from Great Depression

$10 = L3b = recovering from Global Financial Crisis

$15 = L2b = recovering from Coronavirus Crisis

$20 = L1b = recovering from price war

Subsequently, crude oil may move higher to normal range of prices, between $20 – $100+/barrel, averaging around $50/barrel. For those who are patient with strong holding power of over 3 years, there is a good chance of capital gains in future if one believes the 5 levels of crisis above are possible but low chance. Even if price war continues, at $20/barrel, Russia would start to lose money as its production cost is $20/barrel. Saudi could last longer as production cost is only $5/barrel but high national expenses won’t allow oil price to remain at low level for too long and other OPEC / non-OPEC countries may go bankrupt at this price. US, China and big funds in the world may also use the opportunity of low oil price (below $20/barrel) to buy for storage as strategic energy weapon, or simply sell higher price in future.

Some traders may take action to short when $20 support is clearly broken down. Some investors (contrarian type) may take action to gradually buy at historical 18 years low price (perhaps next target will be $15, $10, $5, $1, etc).

Question is will crude oil drops to $0 and will human forever stay at home more than 1 year with Coronavirus?

If not, it means crude oil is a commodity giant, every crisis at low optimism is an opportunity. There are 3 different strategies, counter-trend and/or follow-trend. Assuming, all 5 levels of crisis (although unlike, actual case could be between L1-L5), then one may apply multiple entries, eg (10 times x 10% capital), (5 times x 20%), (2 times x 50%) or simply 1 x 100% (1 bullet, could be due to limited capital).

1) Counter-trend (eg. 5 x 20% in downtrend L1a-L5a)

1.1) Fixed quantity method (eg. 100 units for each price)

Average price

= ($20 + $15 + $10 + $5 + $1) / 5

= $10.20

It means there is no need to guess the levels of crisis, simple average down could get about $10/barrel easily. This is 50% discount compared with someone with 1 entry at $20 with 100% capital.

1.2) Fixed capital method (eg. $100 per entry)

Total units = ($100/$20) + ($100/$15) + ($100/$10) + ($100 / $5) + ($100 / $1) = 142

Average price = ($100 x 5) / 142 = $3.50

This average method allows more units purchased at lower prices, therefore achieving a even lower average entry price.

2) Follow-trend (eg. 5 x 20% in uptrend L1b-L5b)

Average price will be same as counter-trend, depending on which levels are experienced.

3) Counter-trend + Follow trend (eg. 10 x 10% in downtrend L1a-L5a + uptrend L5b-L1b).

Results will be same as above but with more entries (more diversification), depending on which levels are experienced.

Assume, only L1a-L3a ($20 – $10) with 3 levels of crisis, one could still get $13 as average price with fixed capital method over 3 entries. This method is different from dollar cost averaging which buys all the time (low and high prices). This method requires low optimism to trigger multiple entries, high optimism to trigger multiple exits (future topic when market is bullish again to sell one day).

Learn further from Dr Tee for both trading (eg. shorting crude oil in bearish market to make money) and investing (eg. buying crude oil in bearish market with value investing). Contrarian investing has risk of buy low get lower, therefore needs to be supported by giant investment (eg. crude oil, gold, property and over 1500 global giant stocks with strong business fundamental). An investor may also integrate trading into investing, only enter during uptrend phase but there is a risk of missing out (eg. price may touch $20 and rebound forever). So, align the strategy with own personality, either trading or shorting, there are many ways to profit from current crude oil crisis and global stock crisis.

Ideally, buying giant dividend stocks (about 100+ in the world) at low optimism prices with high dividend yield is even better than crude oil investing because one could collect over 5% dividend return in next few years (better than fixed deposit in bank with 1+% interest rate) while waiting for winter time is over, applying similar methods of entries but first silver bullet to trigger (first entry) will depend on unique optimism level of each stock, this is 1 of 55 investing styles developed by Dr Tee.

What is the chances of winning in crude oil for entries below $20/barrel if one has holding power of over 3 years (typical global financial crisis is 1-2 years)?

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Filed Under: Commodity Market, Market Optimism, Market Outlook Tagged: crude oil, etf, global financial crisis, oil & gas, uso, WTI

3 Strategies for Crude Oil ETF (USO) 大小通吃

Posted on March 29, 2020 Written by Dr Tee (Ein55)

When WTI crude oil falls below US$20/barrel during current Crude oil price war (between OPEC and non-OPEC), price is cheaper than mineral water (same volume) for some countries, it is attractive to buy USO (WTI oil etf) for long term, I am not surprised if Jim Rogers (long term commodity lover) may be accumulating when crude oil prices are at low optimism.

OPEC (Saudi, etc) and Non-OPEC (Russia, etc) could not sustain for long term (over a few years) with WTI < U$20, despite low production cost (about US$5/barrel for Saudi, about US$20/barrel for Russia) as national expenses of oil produces countries are also high, money from crude oil is main source of national revenue.

One may leverage on crude oil crisis, either investor or trader could benefit if aligned with own personality. WTI and Brent crude oil prices correlate well, differences are about a few dollars per barrel of oil prices. When Brent is below US$25/barrel, WTI would be near to US$20/barrel, so either price may be used for analysis, then easy to take action through USO (WTI oil ETF).

Here are 3 main strategies to invest in USO crude oil ETF:

1) Long term investors

1.1) Contrarian investors

This is suitable only if one could hold more than 3 years, use low optimism and strong holding power on a commodity giant (oil won’t drop to $0, similar to property or land, also a giant by default). Risk management includes diversification (not just invest in crude oil) with position sizing and progressive entries (eg. 10 times x 10%).

Assuming $20/barrel is the first target (use either WTI or Brent for analysis, be consistent), trigger the first buy, then when drop to $15, $10, $5, $1 (similar to car COE drops to $1, assuming something nearly impossible happens), trigger possible more entries until extreme low optimism (no one would know the lowest point but likely not $0).

Saudi and Russia are pressing the oil price down but US & China and global giant funds, may standby to buy low as national reserves. Crude oil in the world is limited in supply, therefore it has its intrinsic value, especially world needs crude oil for energy (more demand when Coronavirus crisis is over).

1.2) Trend-following (short term traders / long term Investors)

After reaching lowest point one day (only history could tell), crude oil would start to recover. The same group of investors may use the remaining capital to add more positions (still low optimism). Traders who long would also join at this phase for short term trading

Since the market trend now is bearish, trend-following investors or investors who long the market would choose “Wait” action.

2) Short term traders (shorting)
This is suitable for short term trading, aligning with current bearish trend, aiming for every major support, eg $20, $15, $10, $5, etc (these levels are just for examples)… whenever breaking below, shorting would be initiated. Traders protected by position size and cutloss (risk could be high for leveraged trade in a volatile market). S&P 500 trend over the past 1 month of falling 30% following by over 10% of weekly gain is a good example of intense fight between bull and bear.

So, one could “Buy” (contrarian investors), one could “Wait” (trend-following investor or traders who long), one could “Short” (short term traders), all 3 actions are correct if aligned with own personality. If one follows others to take action, then all 3 actions could be wrong.

Since crude oil is a giant, crisis in price is an excellent opportunity to invest with at least 3 strategies. Learn from Dr Tee 4hr Free investment course on how to take actions in crude oil and global giant stocks.
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Filed Under: Commodity Market, Market Cycle Investing, Market Optimism, Market Outlook Tagged: crude oil, etf, investment strategies, uso

Change Horse Strategy: SIA to SATS (塞翁失马)

Posted on March 28, 2020 Written by Dr Tee (Ein55)

Nightmare of a long term investor is to hold on to a weak fundamental stock with declining share prices over the decade, wasting both time and capital. It is painful to cut loss halfway, therefore many retail traders (especially those who follow tips to invest) may initially plan for short term trading but when encountering global stock crisis falling from high stock optimism, making losses, forced to be a long term investor since then.

Singapore Airlines (SGX: C6L), SIA, is not a giant stock nor junk stock, under-performing in business (see details of SIA stock in another earlier post), both long term investors (hold for 10 years) or short term traders (hold for 1 month) may make significant losses. So, some investors may be mentally conditioned (despite having option) to subscribe to new rights and bonds issues to avoid future share dilution, investing more new capitals in unknown future of SIA in competitive airlines industry.

Many people may think big names (especially blue chip stocks with decades of history) equals to strong companies. SIA is a big reputable company, therefore some may think it is also a good stock investment, especially backed by Temasek, 55% major shareholder.

There are at least 26 Temasek / GLC stocks in Singapore including Singapore Airlines and SATS, controlling shareholder with 15% or more ownership directly or indirectly (investor needs to focus only on giant Temasek stocks):
Singtel (SGX: Z74), DBS Bank (SGX: D05), ST Engineering (SGX: S63), Singapore Airlines (SGX: C6L), SIA Engineering (SGX: S59), Singapore Exchange (SGX: S68), SATS (SGX: S58), Sembcorp Industries (SGX: U96), Sembcorp Marine (SGX: S51), Olam (SGX: O32), CapitaLand (SGX: C31), CapitaLand Mall Trust (SGX: C38U), CapitaLand Commercial Trust (SGX: C61U), Ascendas Reit (SGX: A17U), Ascott Hospitality Trust (SGX: HMN), Ascendas Hospitality Trust (SGX: Q1P), CapitaLand Retail China Trust (SGX: AU8U), Ascendas-iTrust (SGX: CY6U), Keppel Corp (SGX: BN4), Keppel Reit (SGX: K71U), Keppel DC Reit (SGX: AJBU), Keppel Infrastructure Trust (SGX: A7RU), Mapletree Logistics Trust (SGX: M44U), Mapletree Commercial Trust (SGX: N2IU), Mapletree Industrial Trust (SGX: ME8U), Mapletree NAC Trust (SGX: RW0U).

We may study Temasek portfolio (about 40 global stocks, about half are giant stocks, half are non-giant stocks, based on Ein55 giant criteria), focusing on top 10 Temasek giant stocks, buying them at low optimism prices (could be lower than Temasek’s entry price for some stocks now), selling them at high optimism prices in future, protected by Temasek (eg. even for non-giant stocks: Olam, SIA, etc).

Temasek has a giant stock, SATS (SGX: S58), spinoff from SIA many years ago. Although both SATS and SIA are low optimism stocks (both related to airlines industry, suffering in Coronavirus crisis), SATS is a much better opportunity than SIA to buy at low optimism.

SATS controls about 80% of Changi Airport’s ground handling and catering business. SATS has 2 main businesses (about half each), gateway services and food catering services (including to non-airlines sectors). Similar to SIA, SATS is also affected by airlines sector crisis due to Coronavirus spreading, over 90% flights are down, business will be affected in next 12 months. However, in a longer term, SATS has 2 times stronger business fundamental than SIA. The performances of 3 key financial statements over the past decade are exactly opposite for SATS and SIA:

Income Statement:

SATS = increasing earnings

SIA = declining earnings

Balance Sheet:

SATS = increasing equity, declining debt / equity

SIA = declining equity, increasing debt / equity

Cashflow Statement:

SATS = increasing free cashflow

SIA = declining free cashflow

At current share prices, SIA is about 4.9% dividend yield (potential value trap, crisis is crisis), SATS is 5.6% dividend yield (crisis is opportunity).

For SIA investor who holds to SIA stocks with losses but could not sell due to loss aversion, may sell SIA and buy SATS on the same day with same capital remaining (fine even if 50% loss), transferring the fund (soul) from a old horse (SIA) to a young horse (SATS) which has a brighter future and strong energy than SIA to climb higher for capital gains in long term.

This is Dr Tee (Ein55) powerful “Change Horse” Strategy, suitable for those “stubborn” long term investors holding losing stocks for many years. This is a strong Personal Analysis (PA) method as an investor could tell husband or wife that they never actually sell the stock (eg. SIA), just change the stock name to SATS, offspring of SIA. This is important for those who assume sell a losing weaker stock implies immediate loss, they could continue to hold the stock but through transfer of capital to another giant stock, future winning probability would be higher than continue with than the weak stock (may be worse if double the investment with average cost strategy with new rights).

SIA vs SATS may not be the best example to illustrate “Change Horse” strategy because SIA is not a junk stock and SATS is a giant stock but suffering Level 2 (sector) crisis of airlines industry. This strategy will be even more powerful if readers could apply changing a junk stock with a strong giant stock in a promising sector (low optimism in stock prices but not having crisis in business or sector).

A mistake (eg. making losses in stock investing) is not a mistake if one could learn from the mistake, not too late, even knowing after this article. It is a blessing in disguise（塞翁失马、焉知非福）if an investor could learn to overcome own biggest enemy (oneself) to change a weak stock with a giant stock immediately. SATS may not be the best example to “change horse” as there are over 1500+ global giant stocks based on Ein55 giant stock criteria, one may select 10 giant stocks aligned with own unique personality to form a dream team stock portfolio.

You are invited to join Dr Tee private investment forum (educational platform, no commercial is allowed) to learn more investment knowledge, interacting with over 9000 members.

Filed Under: Personal Analysis, Stock Market Tagged: airlines, Blue Chip Stocks, crisis stock, f&b stocks, growth stock, investing strategies, sats, SGX, sia, singapore airlines, stock strategies, temasek

Singapore Airlines Rights/Bonds Issues (插翅难飞)

Posted on March 27, 2020 Written by Dr Tee (Ein55)

SIA Singapore Airlines Rights Bonds Issues

Singapore Airlines (SGX: C6L), SIA, is Singapore national airlines, icon of Singapore when flying proudly in the air for decades. Over the past few months of Coronavirus crisis, Singapore Airlines fall in share prices over 30%, aligned with the airlines industry as the business drops by about 90% due to international travel restrictions in many countries.

As a customer, many people enjoy the premium services given by SIA, including the high safety standard with newer aircraft than the peers. However, as an investor, SIA is not a giant stock worth investing (mentioned before in earlier post). The high standard services, skillful pilots and newer aircraft come with a price which affects the business.

Therefore, the on-going Coronavirus crisis may not be a short term crisis for SIA, even when Coronavirus may stop by this summer. In the mid term (within a year), airlines industry would recover gradually, those weaker in free cashflow (including SIA) would need extra funding. SIA has decided to issue rights and convertible bonds.

Luckily, both the rights and bonds issues are renounceable, meaning investors who have SIA, has the options to sell (or buy more) such rights, although the price may not be up to expected prices under current crisis for airlines industry including SIA.

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Let’s examine both options (sharing for educational purpose, please make your own investment decision):

1) Rights Issues

SIA just announced 3-for-2 rights issue, for every 2 shares owned, entitled to 3 rights to buy at $3/share. Comparing to last price of $6.50/share, the theoretical ex-rights price,

TERP = [($6.5 x 2) + ($3 x 3)] / 5 = $4.40/share

Rights issues usually is a pain for investor who looks for passive income (eg. collecting dividend), now may need to pay passive income in return. If an investor does not buy the extra shares of rights nor sell the rights, then the shares holding will be diluted, TERP price of $4.40 is just a reference, actual price after ex-rights could be lower when market sentiment is bearish.

Therefore, the decision for rights (whether renounceable or not) should be base on a new investing perspective. It is as if someone look at the current SIA stock, need to decide to buy at current SIA price at low optimism (regardless of rights issues). Is it a good investment?

“Crisis is Opportunity” (eg share price drops by over 30-50% to low optimism < 25%) only if it is a giant stock with strong business fundamental. Unfortunately, SIA is a blue chip stock (big reputable company with strong sponsor, Temasek which holds 55% SIA shares) but not a giant stock following Ein55 criteria. A giant stock is not defined by the size of company, rather it is by its internal strength. So, even a small cap stock could be a giant stock, many of these companies which are stronger than SIA, share prices even fall more than SIA over the past few months, therefore from investment perspective, SIA rights issues are not attractive.

“Crisis is Crisis” if the company has poor business fundamental. SIA is not a junk stock, it has reasonable business performance but over a long term period (10 years), all 3 key financial statements are not doing well:

1) Declining earning (intense price competition in industry with higher cost of extra services),

2) Declining free cashflow (negative due to high capex, eg, purchase of new aircraft),

3) Declining net asset value (NAV or equity) with higher debt / equity (therefore this time SIA prefers to borrow money from shareholders through rights and bonds issues with little cost).

The worst is SIA is a long term cyclic stock, average capital gains for long term investor over the past 10 years of holding is nearly 0% (eg. share price from $9/share in year 2009 to same $9/share in year 2019, before falling to $6+/share in the next 1 year). It means SIA is more suitable for short term / mid term trading within months or years, following the price trends.

So, taking up rights issues, even at low optimism price of SIA now, an investor has to take the risk of potential mid-term risk as airlines industry may take more than 6-12 months to recover, even Coronavirus may end in this summer. Buying shares with rights issues are more suitable if this is under short term with bullish stock market (if so, one may consider the stocks directly, not the rights).

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2) Bonds Issues

Besides short term “borrow” of money from shareholders through rights issues, SIA also borrow money in long term through Mandatory Convertible Bonds, MCB (amount could be converted to shares upon maturity). For every 1000 SIA shares, there is option to buy 2950 MCB at $1/unit with zero coupon (no interest paid).

Over the next 10 years, value of bonds would increase with average growth rate of 6% CAGR, $1000 MCB value would become $1806.11, if not redeem earlier (like a bond price with about 6% higher price yearly), will be converted back into shares at a fixed price of $4.84/share (near to TERP price).

This decision has to think from long term investing perspective. If SIA share could be more than $10/share after 10 years and bond not redeem earlier, then $4.84 equivalent of entry price is good. However, based on SIA past 10 years of price record (0% capital gains), for share price to be above $10/share after 10 years is even a question mark, although it is possible to be more than $5/share as this is a low optimism price, therefore less likely to make a loss, although may not be huge capital gains (depending which price cycle of SIA after exactly 10 years later, high, mid or low optimism).

Even for bond investor perspective (about 6% equivalent of coupon, assuming SIA redeem earlier, possible if share price may be low, SIA may not let long term supporter to make a loss as they help SIA during crisis), the deal is average as there are other short term corporate bonds (bond reasonable coupon and bond price discount) or dividend stocks which could easily pay 6-10% dividend yield while having 10 years to sell for extra capital gains.

The main strength of SIA is having a strong sponsor, Temasek. Even if minority shareholders don’t follow to buy rights or bonds issues, SIA can still “fly” with 55% funding from Temasek to help in low free cashflow (negative) now, not to mention extra funding from government to airlines industry to fight against Coronavirus crisis.

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In summary, rights and bonds issues of SIA is not attractive (but safe for long term investing as company unlikely to go bankrupt with strong sponsor). Since there are so many giant stocks with stronger fundamental and lower optimism (more discount in price below intrinsic values) in global stock market, an investor may not need to take up the offer, especially it is renounceable (can be traded, eg selling the rights to others but may not at a fair price).

We believe SIA will recover again soon, can fly again proudly in the sky, we will continue to be their faithful customers (passengers) but not a long term investor. Even one is interested in crisis investing on airlines stocks, therefore are other much stronger airlines giant stocks (please search past articles by Dr Tee if interested).

Although the analysis above for rights and bonds issues are for SIA, the same consideration could be applied for any stock with similar corporate actions. Check the stocks are for investing or trading, whether it is a giant stock, then align the decision making with own personality.

There are at least 26 Temasek / GLC stocks in Singapore including Singapore Airlines, controlling shareholder with 15% or more ownership directly or indirectly (investor needs to focus only on giant Temasek stocks):
Singtel (SGX: Z74), DBS Bank (SGX: D05), ST Engineering (SGX: S63), Singapore Airlines (SGX: C6L), SIA Engineering (SGX: S59), Singapore Exchange (SGX: S68), SATS (SGX: S58), Sembcorp Industries (SGX: U96), Sembcorp Marine (SGX: S51), Olam (SGX: O32), CapitaLand (SGX: C31), CapitaLand Mall Trust (SGX: C38U), CapitaLand Commercial Trust (SGX: C61U), Ascendas Reit (SGX: A17U), Ascott Hospitality Trust (SGX: HMN), Ascendas Hospitality Trust (SGX: Q1P), CapitaLand Retail China Trust (SGX: AU8U), Ascendas-iTrust (SGX: CY6U), Keppel Corp (SGX: BN4), Keppel Reit (SGX: K71U), Keppel DC Reit (SGX: AJBU), Keppel Infrastructure Trust (SGX: A7RU), Mapletree Logistics Trust (SGX: M44U), Mapletree Commercial Trust (SGX: N2IU), Mapletree Industrial Trust (SGX: ME8U), Mapletree NAC Trust (SGX: RW0U).

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Learn from Dr Tee free 4hr investment course to position in global giant stocks (stronger than SIA) with tremendous discount in share price below the intrinsic values, suitable for long term value investing for capital gains and passive income (high dividend yield during stock crisis).

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Filed Under: Market Outlook, Stock Market Tagged: airlines, Blue Chip Stocks, bond market, crisis stock, rights issues, sia, singapore airlines, stock market crisis, temasek

Source of Stock Market Fear (解铃还须系铃人)

Posted on March 27, 2020 Written by Dr Tee (Ein55)

Based on simple calculation, with over 13k new daily Coronavirus infected cases, US will overtake Italy in 1-2 days as No 2, then in 2-3 days will overtake China as No 1 for # infected cases (based on reported data, not actual happened). Italy has shown declining number of new daily infected cases over the past 5 days.

It means the Top 3 ranking of Coronavirus would change in position in about 3 days from:

1) China, 2) Italy, 3) US

1) US, 2) Italy, 3) China

In fact, based on # death cases (more reliable comparison as it is easy not to report mild infected cases but difficult to ignore death cases even happened at home), true ranking should be:

1) Italy, 2) Spain, 3) China, 4) Iran, 5) France, 6) USA

Reason is there are many mild cases not reported in Europe (limited medical resources).

In Europe / Iran, fatality rate of 8-10% is much higher than norm of 1-5%, not aligned with China (5%, which is already high) and Singapore / Germany (0.5%, both countries considered golden standard as most cases are detected and treated with top medical services). So, actual fatality could be around 1% (assuming full detection but average medical services), therefore actual cases in Europe / Iran should be 10 times higher than actual. So, the actual fatality should be close to 0.5 – 1% if most infected cases are considered (including those without symptoms).

US has about 1000 death cases from Coronavirus, assuming 10x more to 10,000 cases, still 10X lower than common flu (eg H1N1) which results in over 100,000 death in US yearly.

So, it is not the deadly virus which causes the crisis. It is the fear of unknown virus which immobilize the movement of people, causing loss in jobs and income, therefore falling in stock market and economy.

So, the root of the crisis is fear, which needs to wait for # new daily cases to decline over the next 1-2 months in the world (India started later, may end later), only then the crisis may be over. Even if Coronavirus is back in next winter in Dec 2020, strain likely will be lower, could be another H1N1-like of long term virus with mankind.

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Trump knows market greed vs fear very well. Therefore, unlimited QE is introduced. In fact, the highest level of QE is no need to spend 1 cent, just an announcement to restore the confidence but actual money may take months, eventually the fear of crisis could end in summer before actual QE money is printed.

Therefore, in the past, the Fed Chairman has to think twice in wordings after each FOMC meeting, especially during Alan Greenspan time, few people understands, therefore stock market has to guess his mind. From Ben Bernanke to Janet Yellen to Jerome Powell, it is more transparent and predictable.

Global stock market is similar to Coronavirus, fact or illusion is not critical. Most important is the perception which instantly affect the emotions, greed or fear, the winner would drive the stock market up or down.

Since the source of all “evils” are fear of Coronavirus started in Jan 2020, then the crisis could only end when the Coronavirus die down around summer (解铃还须系铃人、心病还得心药医). Jan-Jun 2020 will be a record in human history, 6 months of mass vacation for most people at home, spending more time with family which was a luxury last time.

If the market fear of Coronavirus disappear in coming summer, then global stock market would have good chance to recover, with condition that current global QE must provide quick short term help in next few months to both business and individual through direct money allocation (similar to blood transfusion to a weak patient), or literary “throwing money from helicopter” to everyone to manage the short term fear to sustain the economy, until the real evil of fear, Coronavirus is away for its summer vacation.

If it is flash stock market crash (falling in Mar-Apr 2020, then gradually recover by summer), this could be a record of fastest fear and quickest greed in human investment market history. If not, then the short term fear would bring along a long term pain of global financial crisis to the world. So, summer is critical.

Learn from Dr Tee free 4hr course on how to position in global stock markets before the critical summer (Jun-July) with both counter-trend investing and follow-trend trading strategies. Register Here: www.ein55.com

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Filed Under: Market Cycle Investing, Market Outlook, Stock Market Tagged: coronavirus, global financial crisis, stock market crisis, stock market fear

Stock Market (QE vs Coronavirus) 水火不容

Posted on March 26, 2020 Written by Dr Tee (Ein55)

Over the past 1 month of global stock crisis with 30% major correction to US stock market due to fear of both Coronavirus pandemic affecting the whole world and Crude Oil price war between OPEC and non-OPEC.

By right, it is nearly a mission impossible for global stock market to recover (eg. for S&P 500 to stand above 3000 points again). Trump’s most powerful opponent is not China nor Biden. It is the tiny Coronavirus which was still an underdog a few months ago when rising from China, but now becomes a deadly challenger to Trump’s second’s term US presidency.

“Water” and “Fire” are 2 extreme elements, never get along well (水火不容). Similarly, “Greed” and “Fear” are 2 human nature which affect the stock markets, eventually the global economy.

Trump is multi-billionaire businessman, understanding the importance of greed to stock market. So, unlimited Quantitative Easing (QE = printing money) combines forces with global QE by Q20 (through various ways of economic stimulus plans, including Singapore), providing liquidity (as if “water”) to investment markets and economy to fight against spreading of wild “fire” due to fear of Coronavirus, which results in weaker economy mainly due to reduced social networking, greatly affecting all sectors, especially transportation, retail, tourism, F&B, now virtually everyone when more countries are under lockdown.

QE is literally printing money or adding liquidity, naturally results in short term market rally, even if not even 1 cent is used yet. Greed could change the market overnight, changing from 5% daily drop to 5% daily rally for global stock market.

However, current “rally” in stock market is more suitable for trading (mid term) unless entry is positioned with long term value investing (consider price below the intrinsic value), able to resist the potential downside. “Greed” and “Fear” will exchange blows to stock market, until a stronger one would survive and stand for longer time.

Let’s understand the weapons of stock market “Greed” and “Fear” now.

Greed is supported by global QE. However, when global stock markets were over speculated over the past decade to high optimism > 75% (especially for US), after the Fear has come to correct to mid optimism of about 50%, it needs more silver bullets to be strong again. In the last global financial crisis (2008-2009 subprime crisis), a few trillions of dollars were pumped in during QE 1-4 during years 2009 – 2014 to revive the US economy with excitement of global stock markets.

Due to investment market and “greed inflation”, current global stock crisis would need more than 10 trillions of dollars to resolve (similar to addiction to drug, dosage is increased each time). So, Trump has found a smart way of “Unlimited QE” through the Fed to provide “unlimited greed” to the investment market, resulting in short term stock market rally.

There are 2 keys before summer (Jun-July) to determine the fate of Trump and global stock markets: Economy vs Coronavirus conditions.

Be careful of early Apr when the first set of monthly economic data is released, likely to show higher unemployment rate or lower GDP, then investors may be back to fear again. Job market is very crucial for global economy, especially for US. Until Feb 2020, unemployment rate of 3.5% is the best performance over the past 50 years, implying the downside is tremendous. For every 100 American, about 96 have jobs which salary could be used for spending (helping other businesses with stocks to grow) and investing (helping investment markets such as stock and properties to grow).

If Mar 2020 (first monthly data after Coronavirus and global stock market crisis, to be reported in early Apr) unemployment gets worse significantly, eg to 4-5% or higher, it means a downtrend economic cycle is initiated with less spending and less investing by No 1 economy, US, which contribute to over 50% of world economy and stock market values. After the retrenchment, usually it is hard to hire back in a short term and economy is slower in response, compared to stock market which could change overnight.

So, time is key now to Trump, only maximum 3 months (Mar – May) to stabilize the global stock market fear, firstly with silver bullets of unlimited QE. However, this is only half-time match, the ending would depends on whether Coronavirus could end on time by summer and even so, will it come come again every 6 months during winter, affecting the whole whole again before vaccine is developed in about 1 year.

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Good news is Trump has a fair chance to win as Coronavirus dislikes warm temperature. Here is an update of Coronavirus condition in major countries (see my previous video on how to analyze):

1) China – 4 months Coronavirus period is confirmed, ending in Mar 2020. China people including Wuhan / Hubei have reopened the door of economy, busy making money again. This is the result after painful experience of lockdown of whole China for 2 months, with good practices continue to prevent future viruses.

2) Korea – was the second most severe country, Coronavirus would end in Apr after follow the lockdown model of China. This is the first proof outside China that Coronavirus could be controlled within about 4 months period with active intervention to minimize the death cases.

3) Italy is the most severe cases, considering the death number (actual infected cases could be more than China as mild cases were not diagnosed). Even so, after lockdown for a few weeks, last 5 days were showing downtrend in new daily cases, good chance to reach a peak by mid of Apr, ending in May.

4) Iran has been stable at high cases (growth is limited), social distancing could be a challenge, therefore infection may continue until more people to be infected before community immunity may be established to stop the spreading.

5) US/Europe is under high growth of Coronavirus, especially for US (major city like New York City with crowded population is high risk), over 13k cases each day, likely will exceed both China and Italy to have the highest number of infection. However, due to strong medical resources, US death rate is lower than China and Italy. However, US/Europe may have high growth in cases in Apr, fading in May, only then may end in Jun.

This is also true for countries like Germany and Singapore, so high infected number may not be a threat, more importantly spread over a longer period to ensure medical solution could be given.

6) Singapore and Southeast asia countries continue to follow the global trends (mainly US/Europe) with high growth. With total / partial lockdown, significant reduction would be observed in number of new daily cases as most new cases are imported cases due to return of residents infected from overseas.

7) Both Africa and India (second world largest population) may be slow in spreading of cases but Coronavirus treats everyone fairly. So, early intervention in India with strict measures would help to lower the death rate by slowing down the growth rate, similar strategy as in Singapore. Many people die in China Hubei and Italy, not due to high number of cases, but mainly due to lack of medical resources during the peak period.

In summary, there is fair chance for current on-going Coronavirus to end in summer (Jun-July). The turning point from high to slower growth rate (decline in new daily cases) is key for US as this is the first signal to see light at the end of tunnel, which would affect both stock and economy in US and whole world.

So, Trump could only help 50% with unlimited QE. The remaining 50% would need the opponent Coronavirus to fall itself. The results will be clear in summer but signals will be clearer each week from now to summer and stock market would reflect such probability of winning or losing through the stock prices.

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In general, don’t focus on daily changes in share prices. Rather, one has to establish an overall strategy: long term investing, mid term trading or short term trading. Both long or shorting is possible but need to align with own personality.

In the current uncertain market with lower optimism in Asia stock market and mid optimism for US, it is relatively safe to apply long term value investing but entries have to be in batches (eg. 10% x 10 times, 20% x 5 times, 33% x 3 times, 50% x 2 times), averaging down and up with low optimism strategies across Level 1 (individual stocks), Level 2 (sectors), Level 3 (country) and Level 4 (world) over a portfolio of 10-20 global giant stocks.

If trading is applied, S.E.T. (Stop Loss / Entry / Target Prices) trading plan must be followed strictly but a challenge for retail traders in volatile market with +/- 5% in daily stock market.

If Coronavirus may end in summer, global stock market has reasonable chance to recover with support of global QE. If not, it may fall into depression with global financial crisis, especially if the same virus may come back again every winter, every 6 months to haunt the world. By then, vaccine in about 1 year of now would be key to prevent the global financial crisis falling into the great depression as it is serious when there is little social network (eg. shopping) for more than 1 year.

Dr Tee has cancelled all investment workshops in Feb-Apr 2020 during global stock crisis to follow the government rules with less gathering. This is a regret for some students as it is the best time in 10+ years to learn and apply crisis stock investing. So, I could only share through more regular articles and video education but it has limitation compared to a more comprehensive 4 hours workshop.

The next available free 4hr investment public workshop (with meet-up) by Dr Tee will be on 21 May 2020, you may register here before it is full: www.ein55.com

Filed Under: Macroeconomy, Stock Market Tagged: coronavirus, global financial crisis, qe, quantitative easing, stock market

Action in Global Stock Crisis 心动不如行动

Posted on March 24, 2020 Written by Dr Tee (Ein55)

Market analysts usually like to predict the future. Before 1 month ago in bull market, some still predicted how high US stock and economy may surge. Now, of course predict how low it may drop to the bottom.

Some readers may be confused of so many future market directions, unsure which one to follow, ending up as an observer without taking any action, missing the boat eventually.

It is human nature hoping to buy at the lowest or sell at the highest point of stock market. However, it is not practical to follow these predictions before actions. Each of us need to have a strategy aligned with personality, may not need to be a long term investor, could be short term or mid term trader.

In general, long term investor only need to buy at price below the value with significant discount, no need to buy at the lowest (if got it, treat it as a bonus but not a must to have). An investor just need to define % discount acceptable to oneself, similar to a shopper going for shopping with sales, will trigger a buy when % discount is more than expectation.

For traders, one may add trend-following indicators on prices, waiting for reversal before entry (now is mostly for shorting), no problem if new prices are higher, a confirmation of new trend (eg bull to bear) but always follow SET plan: Stop Loss / Entry / Target Prices.

Action is more important after reasonable analysis (no need to be very precise, especially for longer term investing but overall direction must be correct). Press the button when signals aligned with own personality, not aligned with market analysts or mass market.

Learn further from Dr Tee free 4hr investment course on how to take actions in global stock crisis: Buy / Hold / Sell / Wait / Shorting with 10 different strategies in stocks: www.ein55.com

Filed Under: Macroeconomy, Market Optimism, Personal Analysis, Stock Market Tagged: global financial crisis, stock market crisis, take action

Antibiotic of Unlimited QE (饮鸩止渴)

Posted on March 24, 2020 Written by Dr Tee (Ein55)

Trump started as US president on 20 Jan 2017, S&P 500 index was 2271 points (Trump “IPO” price), surging to historical high of 3386 points on 19 Feb 2020, rising about 50% in 3 years, reaching over 90% Optimism for US stock market, then following to 2227 points currently, below “IPO” price of Trump when he was elected.

S&P 500 index is report card of Trump. Some US voters may not like Trump but still support him due to economic consideration (job market with low unemployment rate, strong GDP, bonus fortune from US stock and property markets, etc). Now, Trump’s report card is back to square one, falling below the first date as president (“IPO” price), is an indication of market valuation of his performance.

Optimism is a measurement of market greed and fear. High optimism > 75% usually is not sustainable, therefore I have been reminding readers over the past 2 years when S&P 500 over 3000 points, to be extra cautious, focusing mainly on short term trading (trend-following, entry/exit with short term signal, including cutloss when there is unexpected reversal signal).

Unfortunately, some investors may think it is a free ride with bullish US economy supported by a strong president who knows stock market, therefore entering initially as a short term trader, after market correct down more than 30% in 1 month, being forced to be a long term investor.

US and G20 political leaders decide to adopt an easy old way, Quantitative Easing (QE, printing money) to revive the global stock market and economy with antibiotic. However, QE as antibiotic can be addictive, last global financial crisis of 2008-2009 required a few trillions of dollars in QE 1-4 over about 5 years. When the same market patient falls again in the next global financial crisis, it may require over 10 times more dosage, eg over tens of trillions dollars to revive again.

By right, global stock market and economic crisis are common over the hundred years. A patient who is falling sick due to flu, usually there is no need for antibiotic, just sufficient rest with down time would help to recover gradually. Similarly, usually stock market just needs to fall to low optimism for a period of time, then it would recover naturally, even the Great Depression in 1929 could recover again after 5 years of “depression”.

Year 2020 is special. It is election year for Trump’s second term US presidency. Therefore, Trump does not have time for typical bear market to fall and recover after 12 months later. Trump needs the report card of S&P 500 to become positive again by summer, aligning with similar timing of Coronavirus may fade away with warmer weather. Therefore, financial antibiotic is used by many countries, including US which shows the ultimate super cure of “unlimited QE”, implying unlimited purchase of asset with virtual money.

“Unlimited” QE may not be really unlimited but it could help to give confidence to market without spending 1 cent. Therefore, usually when the Fed say something, wording has to be careful as it could cause the market to move in certain direction.

Unlimited QE or massive global QE (over 10 trillions dollars) would be another time bomb for future generation. In late 1980s, Japan has experienced burst of a super bubble of stock and property market, resulting in a lost 2-3 decades later, elderly people could not retire while young people see gloomy future with flat salary. Unlimited QE is as if financial addiction if without control, similar to drinking poisonous wine to quench the thirst (饮鸩止渴).

When global stock market experienced high optimism over 75% in the past 2 years, implying the market patient was having fever. There is no need in a hurry to revive the patient in short term, after falling to low optimism, it would recover naturally. Global political leaders hope to sustain the high optimism market or economy is uphill tasks to fight against the market fear with snow ball effect.

Trump is taking a chance but it depends on collaboration of Coronavirus to end by summer (Jun-July 2020). Even the global stock market may fall to low optimism < 25% before summer, if timing is aligned with W.H.O. declaration of ending of Coronavrius pandemic, then the global QE would help. Despite global stock market could be in crisis but real economy would take about 6 months to show the damage, therefore these financial stimulus plans have to be implemented ASAP, more or stronger dosage may be required before summer over the next few months.

For global investors, global stock crisis is a fact, only difference is whether it is a flash crash (V share recovery in 3 months) or typical global financial crisis (over 6-12 months for economy to fall to bottom before stock market could reborn). Either way, it would be a gift from heaven, either received in 3 months or 12 months later.

Investors may focus more in long term value investing during this period, entering in batches to preserve the bullets, some positions during downtrend of low market optimism to ensure a chance for lucky draw, then remaining positions in uptrend to align with market direction as a trader.

Learn from Dr Tee free 4hr investment course on 10 strategies aligned with unique personalities for a portfolio global giant stocks under tremendous discount now, leveraging on Unlimited QE with global stock crisis. Register Here: www.ein55.com

Filed Under: Bond Market, Personal Analysis, Stock Market Tagged: global financial crisis, quantitative easing, stock market crisis, Unlimited QE

Time for Bottom of Stock Market (海底捞月)

Posted on March 23, 2020 Written by Dr Tee (Ein55)

No one would know the true bottom (the lowest point) of stock market unless having the ability to “Back to the Future”. Time for the bottom of stock market is ideal but may not be practical as it could be reaching the moon with underwater reflection (海底捞月), greedy for the lowest (cheapest price with most discount) with little considerations of other risk factors, may fall into water with market trap. For those without any action, there is also a fear of missing out, eventually may miss the boat of opportunity totally. So, it is a dilemma for some investors to Buy or to Wait when stock market is bearish.

Similarly, in a Bull market (last 10 years), it is also a headache for investors to “Hold” or to “Sell”. Over the past few years, I have reminded repeatedly readers and students to take note of the high optimism risk at Level 3 (country, especially US) and Level 4 (world) stock markets, safer to apply short term trading, walking on a layer of thin ice which finally breaks over the past 1 month (those who fell but did not sell as short term trader is now trapped with over 30-50% losses). So, even one may not know the highest point, as long as know “High Enough” (>75% optimism), one could escape from the 30% loss in global stock market, which may have another 20-30% potential to fall, if it becomes global financial crisis with declining economy.

However, it is possible to apply probability investing to start progressive entries (for contrarian investor) when it is “Low Enough”. 25% Optimism will be a point of “Low Enough”, 0% Optimism is considered a rare opportunity. However, “Buy Low” is insufficient, one has to align other Ein55 styles to form personalized strategy aligned with own personality, otherwise When “Buy Low” may “Sell Lower” or “Sell Lowest” one day for those with weak holding power, especially if global financial crisis is confirmed and become worse over the next 6-12 months after the starting of global stock crisis in Mar 2020.

Trump and G20 political leaders may join forces in the next 1-3 months to launch the most generous QE ever (eg. massive printing of money of a few Trillions of dollars through asset purchase by government and other feasible economic stimulus tools). However, this is borrowing money from the future generation (20 years from now), simply planting another time bomb for future investment market (similar to QE 1-4 over the past decade, finally triggered by fear of Coronavirus and crude oil crisis).

For smart investor, one could save 10-20 years of investing time by leveraging on current opportunity. However, the lost generation who does not know investment may suffer in future. See Japan ‘s example of lost 3 decades, some elderly people could not retire as retirement was evaporated and young people need to struggle with lower pay job without bright future despite inflation is low.

I am reluctant to reveal here exactly what are the prices of “low enough” (25% optimism) or “rare opportunity” (0% optimism) for each investment here (stocks, properties, commodities, forex, bond, bitcoin, car COE, etc). Main reason is readers may not be trained, sharing may be wrongly used as “tips”, when not supported by other Ein55 styles (eg. strong fundamental stocks and technical of prices, macroeconomic analysis, personality, etc), it could be a disaster.

Current global stock market crisis could be a gift from heaven but only if one knows exactly how to position with integration of minimum 5 Ein55 Styles of LOFTP strategies (Level 1-4, Optimism 0-100%, Fundamental – Strong/Weak, Technical – Up/Down, Personal – Trade / Invest).

Register Here for free 4hr stock investment course by Dr Tee (23 Apr session is full, next one is 21 May session, only 1 class monthly, will be updated in same website): www.ein55.com

Filed Under: Macroeconomy, Market Optimism, Market Outlook, Stock Market, Technical Analysis Tagged: global financial crisis, stock market bottom, stock market crisis

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