Personal Analysis Archives - Page 2 of 7

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

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Dr Tee Investment Course (Stock, Property, Commodity, Forex, Bond)

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

Dr Tee Video Education: Global Stock Crisis Investing

Posted on March 21, 2020 Written by Dr Tee (Ein55)

In this Dr Tee video education (Global Stock Crisis Investing), you will learn:

1) Understand how the 2 black swans crashed the global stock market in last 1 month

2) Compare global stock market losses: US, Singapore, Hong Kong, China, Germany.

3) Technical Analysis of Coronavirus by country with stage of virus life cycle and estimated ending period.

4) Position in two possible scenarios for global stock market before summer 2020 (Jun-July).

5) Investment clock (When to Buy / Sell) with Optimism Strategies (long term / mid term / short term) for 5 global stock markets: World, US, Singapore, Hong Kong and China.

Here is English Version of Ein55 Video Course (Chinese version is available as Dr Tee is bilingual):

This crisis investing strategy may be applied to 30 Singapore STI index component stocks (investor has to focus only on giant stocks for investing):
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), Hongkong Land (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).

This powerful strategy can be extended to global giant stocks including 30 Malaysia Bursa KLCI index component stocks (investor has to focus only on giant stocks for investing):
CIMB (Bursa: 1023) CIMB GROUP HOLDINGS BERHAD, DIALOG (Bursa: 7277) DIALOG GROUP BERHAD, DIGI (Bursa: 6947) DIGI.COM BERHAD, GENM (Bursa: 4715) GENTING MALAYSIA BERHAD, GENTING (Bursa: 3182) GENTING BERHAD, HAPSENG (Bursa: 3034) HAP SENG CONSOLIDATED BERHAD, HARTA (Bursa: 5168) HARTALEGA HOLDINGS BERHAD, HLBANK (Bursa: 5819) HONG LEONG BANK BERHAD, HLFG (Bursa: 1082) HONG LEONG FINANCIAL GROUP BERHAD, IHH (Bursa: 5225) IHH HEALTHCARE BERHAD, IOICORP (1961) IOI CORPORATION BERHAD, KLCC (Bursa: 5235SS) KLCC PROPERTY HOLDINGS BERHAD, KLK (Bursa: 2445) KUALA LUMPUR KEPONG BERHAD, MAXIS (Bursa: 6012) MAXIS BERHAD, MAYBANK (Bursa: 1155) MALAYAN BANKING BERHAD, MISC (Bursa: 3816) MISC BERHAD, NESTLE (Bursa: 4707) NESTLE MALAYSIA BERHAD, PBBANK (Bursa: 1295) PUBLIC BANK BERHAD, PCHEM (Bursa: 5183) PETRONAS CHEMICALS GROUP BERHAD, PETDAG (Bursa: 5681) PETRONAS DAGANGAN BHD, PETGAS (Bursa: 6033) PETRONAS GAS BERHAD, PMETAL (Bursa: 8869) PRESS METAL ALUMINIUM HOLDINGS BERHAD, PPB (Bursa: 4065) PPB GROUP BERHAD, RHBBANK (Bursa: 1066) RHB BANK BERHAD, SIME (Bursa: 4197) SIME DARBY BERHAD, SIMEPLT (Bursa: 5285) SIME DARBY PLANTATION BERHAD, TENAGA (Bursa: 5347) TENAGA NASIONAL BHD, TM (Bursa: 4863) TELEKOM MALAYSIA BERHAD, TOPGLOV (7113) TOP GLOVE CORPORATION BHD.

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There are over 1500 giant stocks in the world based on Dr Tee criteria, choice of 10 Dream Team giant stocks have to align with one’s unique personality, eg. for shorter term trading (eg. momentum or swing trading) or longer term investing (cyclic investing, undervalue investing or growth investing). Readers should not just “copy and paste” any stock (What to Buy, When to Buy/Sell) as successful action taking requires deeper consideration (LOFTP strategies – Level / Optimism / Fundamental / Technical / Personal Analysis) which you could learn further from Dr Tee Free 4-hr Webinar.

Zoom will be started 30 min before event, bonus talk (Q&A on any investment topics from readers) for early birds. There are many topics we will cover in this 4hr webinar, Dr Tee can have more time for Q&A if you could stay later after the webinar.

Dr Tee will cover over 20 case studies, Singapore giant stocks, eg. CapitaLand Mall Trust (SGX: C38U), Singapore Exchange (SGX: S68), Keppel Corp (SGX: BN4), Top Glove (SGX: BVA), Jardine Matheson Holdings JMH (SGX: J36), Vicom (SGX: WJP) and many others, Malaysia giant stocks, Hong Kong giant stocks and US giant stocks, both long term investing and short term trading.

There are limited tickets left for this 4hr free webinar, please ensure 100% you could join when register: www.ein55.com

Filed Under: Fundamental Analysis, Market Cycle Investing, Market Outlook, Personal Analysis, Stock Market, Technical Analysis, Trading Tagged: crisis stock investing, global financial crisis, video education

Uphill Task to Invest in Stock Market Crisis

Posted on March 18, 2020 Written by Dr Tee (Ein55)

When Dow Jones Index drops below 20000 points during intra-day today (quickly recover above it, although may fall below again in near future), this is about last 3 years low. This implies an investor is saving 3 years of investing time if investing in current level. So, when one could invest in last 10 years low for a major stock index (eg. US S&P 500 or Dow Jones Index), it means the crisis helps one to “jump queue”, saving 10 years of waiting time.

So, when looking backward, history does help one to decide the entry and exit, especially the stock market cycle which could be 5 to 10+ years long. Current bull for global/US stock market (Mar 2009 – Mar 2020) is 11 years, the longest in the history of stock market so far, after US stock market lost more than 1/3 of market cap so far, Dow Jones Index falls from nearly 30000 to 20000 points in 1 month. Despite a bear market is confirmed, this is not yet low optimism < 25% based on Ein55 styles, only a mid-size bear so far.

However, the waiting time has to include the fall + recovery again, therefore some investors prefer to wait till the uptrend phase before entry which is easy to miss the boat (1 chance left) when an entry price is not defined. If an investor enters as contrarian approach first, there are at least 2 chances: fall below the desired entry price and again above the entry price after a period of waiting.

Ein55 members, please plan your entries, how many bullets to use: 1 shot or multiple shots. Don’t end up no shot at all when the game is over.

Learn from Dr Tee free 4hr investment course to plan for your “bullets” to shoot, investing in stock market with LOFTP (Levels 1-4, Optimism 0-100%, Fundamental – Strong/Weak, Technical – Up/Down, Personal – Trade/Invest) Strategies to leverage on current global stock market crisis. Register Here: www.ein55.com

Filed Under: Market Cycle Investing, Market Optimism, Personal Analysis, Stock Market, Technical Analysis Tagged: Dow Jones Index, S&P 500, stock market crisis

When will be End of Coronavirus Pandemic & Stock Crisis?

Posted on March 16, 2020 Written by Dr Tee (Ein55)

There is a repeatable pattern in global Coronavirus life cycle, although cycle duration and magnitude of peak.

China cases has nearly ended (Dec 2019 – Mar 2020), peak was end of Feb as projected in earlier analysis, would nearly end by Mar 2020. China is the first country to start, also the first country to end. So, experience of China (first country to start and end) is useful reference for other countries.

All the world with individual country cases are recorded here (paying attention to max new daily cases, when it is reached, would take about 1 month to reach the 95-99% peak of total cases, then another 1 month to fade away) https://www.worldometers.info/coronavirus/

Similar to stock investment and trading, if there are proven methods in the past 100 hundred years (eg. Fundamental Analysis and Technical Analysis), one could master them first, then gradually refine the strategies.

Korea epidemic is about 1 month behind China (subsiding from the peak, projected by end of Mar 2020), possible duration of Jan-Apr 2020.

This shows that if similar effort is put in (eg. active intervention by local government), the Coronavirus cycle may be about 4 months (2-3 months to reach a peak, 1-2 months to subside).

US and Europe is located further (require international flights to spread the Coronavirus), about 2 months after China pattern, active infection period could be Feb-May 2020 (reaching a peak by end of Apr 2020, fading away in May 2020). US was slow initially, now has started active intervention, possible to follow the 4 months duration. Each year, there are over 100 thousands American die of common flu but many are elderly people with weaker immune system. However, Coronavirus could also kill younger age people younger (mostly more than 40 years old), therefore many people are fearful of this unknown virus.

However, a few countries (eg. UK and Sweden) may not prepare to fight the Coronavirus actively, just let the nature takes its course, likely the peak cases will be more severe in the first 2 months (eg. Iran or Italy cases without active intervention in the first 1 month) with method of community immune system (hoping virus would end naturally or evolve into less deadly strain with many times of infection when over 60% people are infected). So, the duration of this new method of “no invention” as solution is yet to be observed, will be a useful reference for future epidemic but it comes with big price (many death) if it does not work (eg. fatality rate is much severe than common flu).

For Singapore and some countries (eg. Southeast Asia: Malaysia, Indonesia, Philippines, etc), spreading of Coronavirus is slower initially (could be due to warmer weather), but due to cross-infection by travelers of inter-countries (eg. Europe / US / Southeast Asia), start to grow in new cases. Therefore, even with active government control, duration could be longer (but lower peak), period could be 5 months (Jan – May 2020), ending in each country depends on when global pandemic may end unless the country could be totally isolated from the rest of the world (eg. Australia and New Zealand measures of isolating all international travelers for 14 days upon arrival).

Of course, if the last continent, Africa, may also be infected badly, then global pandemic could only end with Mar-June 2020, until all countries have gone through 1 cycle of 4 months infection within the country.

However, even the pandemic may end in summer (Jun-Aug 2020), it may come back as new strain of virus in the next winter (Dec 2020) in another unexpected country or city. So, vaccine development is still key. Last time SARS in 2003 ended too fast in summer, on-going vaccine development was stopped, otherwise it could be modified for Coronavirus as both belong to the same family of viruses.

Global stock markets experienced a minor correction (10% correction) during initial fear of Coronavirus, following by major correction (20% drawdown) when spreading is growing globally as pandemic. Under the worst case, if Coronavirus remains serious beyond this summer, coming back in new cycle of life in next winter, then global financial crisis would be waiting. Therefore, fighting against Coronavirus is not just for health (life), also for wealth later. Without health (life), then wealth is meaningless.

When Coronavirus pandemic and stock crisis are almost game over, it is time to master stock investment skill to improve quality of life in future, learning from free 4 hour investment course by Dr Tee here: www.ein55.com

Filed Under: Market Outlook, Personal Analysis, Stock Market, Technical Analysis Tagged: coronavirus, pandemic, stock market crisis

Risk Management for Stock Investment (三足鼎立)

Posted on March 15, 2020 Written by Dr Tee (Ein55)

In stock or any investment, before aiming for rewards, one should consider the potential risks first:

– what are the threats (poor business, bearish price, weak economy, etc)

– how it may fail (high debt, cashflow issue, political / legislation, etc)

– how likely it may fail (record of proven business, economic moat, etc)

– when it may fail (global financial crisis, business crisis, etc)

– how bad is the potential loss (0%, 10%, 50%, 90%, 100%)

.. and many more factors to consider.

From physics point of view, an object only needs 3 legs to be supported in a stable position (三足鼎立), similar to stock investment with diversification over 3 chances:

– 3 Minimum Analysis: FTP (FA + TA + PA) = Fundamental / Technical / Personal Analysis with comprehensive views

– 3 countries of stocks: minimize regional crisis

– 3 sectors of stocks: minimize sector crisis

– 3 timing of entries (at low optimism) / exits (at high optimism): minimize surprises at certain period

– 3 types of stock players (defender – dividend, midfielder – dividend + capital gains, striker – capital gains): well-balanced investment team

– 3 timeframes – Short term (ST), Mid term (MT), Long term (LT): full coverage of trading and investment period

– 3 prices in SET in trading plan: Stop Loss / Entry / Target Prices

– 3 actions: Buy / Sell / Do nothing (Hold or Wait)

…and many more “3 legs” in risk management

Learn from Dr Tee free 4hr course to consider both rewards and risks for different types of investment (stocks, properties, commodities, forex, bonds) with 10 unique trading and invest strategies. Register Here: www.ein55.com

Filed Under: Personal Analysis, Stock Market Tagged: risk management, stock market

Stock Market Crash with Coronavirus Pandemic

Posted on March 12, 2020 Written by Dr Tee (Ein55)

There are always 2 sides of news, outcome depends on which side you position. Learn further here to position in both Coronavirus and Stock Market Crisis.

1) Fear

Bad news: Coronavirus is now a PANDEMIC (declared by WHO).

Good news: It has been a fact (global speading) for weeks, only a label now

2) Wealth

Bad news: Global economy will get more hit (global travelling restrictions by most countries, consumer and retail sectors would lose money), global stock market would fall further (so far down by about 20%), people may lose jobs, etc.

Good news: Global stock market is cheaper now, investors could get highly discounted prices to buy stocks

3) Health

Bad news: Many people would die after infected

Good news: Fatality rate is actually less than 2%, even much lower for those less than 50 years old with stronger immune system.

There are in fact more people die in common flu each year, awareness in Coronavirus could directly help to minimize death in common flu, therefore more lives would be saved in this health crisis.

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So, stay calm, be cool, both for Coronavirus pandemic and also global stock market meltdown. However, one has to take active actions in both crisis:

Coronavirus

1) Enhance personal hygiene (wash hands, wear mask if unwell, etc)

2) Social distancing (avoid crowded places)

3) Stay healthy (exercise & healthy diet, optimistic, etc)

Stock Market

1) Buy – Mainly for contrarian investor (eg. Warren Buffett), aligned with lower optimism at country/world levels (L3-L4), stock market may have further downside.

2) Hold – Mainly for fundamental strong stocks which are defensive to sustain through possible global financial crisis

3) Sell – Mainly for trading stocks, exit following the plan (eg when down by 5%, 10% or 20% or breaking below certain price support).

4) Wait – Mainly for trend-following traders or investors for clearer market signal.

5) Shorting – Mainly for short term traders to align with current short term bearish market, profiting from shorting with breaking of support, following lower highs and lower lows pattern.

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Currently with 20% price correction in global stock market, it is still a mini bear, medium term investors may start to do homework but position only after there is a clear price reversal (eg. economic stimulus plans by G7 or fading of Coronavirus in summer time, etc) and cut loss has to be included in plan.

If not, need to be patient to align with longer term lower optimism, especially for Level 3 (US) and Level 4 (world), not just on individual stocks or sectors which are falling knifes in prices, not suitable for traders.

Do you feel better now that you have a choice to be positive or negative? More importantly, position in the right side with right action for both Coronavirus and stock market crisis. Learn from Dr Tee free 4hr investment course to convert the crisis into opportunity: www.ein55.com

Filed Under: Macroeconomy, Personal Analysis, Stock Market Tagged: global financial crisis, pandemic, stock market crash

Warren Buffett Investment Styles Evolution

Posted on March 7, 2020 Written by Dr Tee (Ein55)

Warren Buffett has gradually adjusted his investment styles over the past few decades. In the early years, he applied more on value investing to buy stocks at discount. Then he gathered more stocks with steady business but slower growth (eg. Wal-mart, Coca-Cola, etc).

However, Berkshire is a listed investment company, Warren Buffett has to “evolve” to increase the growth rate of investment. Therefore, it is not a surprise when we see Warren Buffett started to invest in technology company (eg. IBM and Apple) for higher potential return. Despite he is not a technology person (he usually said don’t invest in something you don’t know), he could still make a decision through the financial reports of there technology companies.

Similarly, Warren Buffett has significant investment in airlines stocks as the cyclic stocks could give higher capital gains through longer term cyclic trading or mid-term investing for a few years. Warren Buffett enjoyed tremendous gain in the past in “trading” PetroChina, Buy Low Sell High in 4 years.

So, just be yourself, no need to copy other people’s best method, eg Warren Buffett styles. Before any investment, reviewing own past history of investment performance (reasons for successes or failures), leveraging on other people’s proven strategies, integrate and reshape into own unique stock investment and trading strategies, John or Mary’s Styles.

The only thing not changed is change itself. It is fine for retail investors and traders to adjust own styles over the years when one has identify the “sweet spot” which one is comfortable, eg. “buying a portfolio giant stocks at discounted price during crisis to collect dividends and waiting appreciation of share price over the decades with quarterly monitoring of business performance.”

Leverage on Dr Tee free 4hr stock investment course to shorten the learning curve in investing journey: www.ein55.com

Filed Under: Personal Analysis, Stock Market Tagged: investment styles, stock market, warren buffett

Real Market Crisis or Just Fear?

Posted on March 5, 2020 Written by Dr Tee (Ein55)

I just talk to my sister in LA, confirming California people (richest state of USA, about 1/3 national wealth if remember correctly) also feel fearful now of Coronavirus.

Last 1 week of global stock market correction was a reflection of such initial global fear. China, “leader” of Coronavirus crisis is on the way of recovery (estimated duration of 6 months from Dec 2019 to May 2020). For other countries in the world, there is lagging effect, eg Singapore started first Coronavirus case in late Jan, may end about 1 month after China. For US and Europe, there could be another 1 month lagging, so hot summer would be just nice if following similar exit pattern of SARS, cousin of Coronavirus.

Question is Australia and NZ would be winter then in Jun-Aug, if the global spreading could not end by Jun, it may become seasonal flu every 6 months, worst during cold winter when temperature is colder, most people would stay indoor, higher chances of close contacts for infection.

Singapore by right is a hot tropical country but due to artificial mini winter or autumn (aircon room), the condition is much worse than neighbouring countries of Malaysia and Indonesia along the equator.

Health crisis is usually more fear than actual harm. If the deadly virus may kill all human, then stock market is not important anymore. If not, it means the stock market will always recover when crisis or more precisely, the fear is over.

I read news that some people are worry of “Corona” beer as name is close to “Corona” virus. So, what is real crisis (fact-based harm) or just a fear due to ignorance? Remember, stock market is made of mass with all types of investors: smart, ordinary, ignorant, etc.

However, fear can be deadly. Corona beer belongs to AB InBev (NYSE, BUD), same company which owns Budweiser, share price fell about 40% over the past 1 month when global Coronavirus condition gets worse. AB InBev is the world largest brewery, also a giant beer stock. The fear of stock market and “Corona” has created an artificial crisis on this stock. Crisis is Opportunity if business fundamental is not much affected while the share prices falling.

Learn fact-based scientific stock investing strategies from Dr Tee free 4hr course, leveraging on market fear, converting into opportunity. Register Here: www.ein55.com

Filed Under: Macroeconomy, Personal Analysis, Stock Market Tagged: crisis, market fear

Perfect Storm – Global Spreading of Coronavirus

Posted on March 5, 2020 Written by Dr Tee (Ein55)

Second Wave – global spreading of Coronavirus, potential chain reactions in stock market:
-> regional fear of Coronavirus
-> global fear of health crisis
-> L4 stock from high to mid to low optimism
-> global financial crisis

Fear driven by US, No 1 economy needs special attention as it affects over 50% global stocks.

Last 1 month when Coronavirus was serious in China, Singapore and Asia, the local Asian fear were insufficient to affect the US or global stock market due to small size of Asian stock market.

In summary, safer to position as short term trend-following trader or investor. A mini bear could be a correction but also could evolve into a big bear.

Sars in 2003 was regional (mostly Asia) and occured at L4 world stock market low optimism, therefore impact was limited to global stocks as potential of falling further is limited.

This time in year 2020, Coronavirus is less deadly than Sars but spreading globally (even to Africa, the only safe continent is Antarctica but no one could confirm as it is too cold there), causing global fear, having potential to be a black swan to trigger global financial crisis if the condition could not be controlled by summer (before May) as currently L4 world stock market and L3 US stock market are at high optimism.

It usually only takes 6-12 months to drop from high to low optimism, therefore Coronavirus has to be controlled globally (reaching 95-99% peak as the development in China and Singapore) within 3 months by end of May, else the more “deadly” global financial crisis may be triggered, especially if US is badly affected.

Coronavirus may not be so deadly, 1% people may die. Global financial crisis could be more deadly, both short term (see the news, even millionaire or billionaire who could not control greed may lose financially, a few ending own lives eventually) and long term (eg depression over finance condition, especially if investing in junk speculative stocks which may not recover at all after the crisis).

Back to the source, China is showing declining trend (less than 1% new daily cases), following by Singapore (stable to downtrend, about 0-3 new daily cases in last 1 week, about 1-2% new daily cases). If global countries follow similar measures as China and Singapore over the last 1 month (eg restrictive travelling, public health education, quick action on isolation for infected cases, etc), it is possible for the rest of world to take another 1-2 months (by end of Apr) to reach its 95-99% peak as well.

If the virus cannot be avoided, then the second best goal is to minimise the impact. Action is important, similar to fight against Coronavirus and also to face the global financial crisis which may be like an emerging virus, we won’t know how deadly is this black swan but early action (ok to be considered kiasi or kiasu) would help (eg, exit as a short term investor when the loss is more than the risk tolerance level). Same as Coronavirus, we need to stay alive in stock market by preserving the capital unless investing in a portfolio of global giant stocks, then one could have the option to hold through the financial crisis, similar to Warren Buffett style of buy low & hold.

Meanwhile, Malaysia is tougher, having 3 potential crisis at the same time: Coronavirus, stock market and political. Hope this is not the perfect storm. Learn to convert crisis into stock investment opportunity: www.ein55.com

Filed Under: Personal Analysis, Stock Market Tagged: coronavirus, perfect storm, stock market

Global Stock & Coronavirus Analysis (Updated 5 Mar 2020)

Posted on March 5, 2020 Written by Dr Tee (Ein55)

– World vs SG

world and Singapore Coronavirus daily update

– China vs World Outside China

Here are a few main conclusions on Coronavirus with additional analysis on world outside China (due to serious outbreak in South Korea, Iran, Italy and emerging potential in the rest of the world).

1) China

China started first in Dec 2019, also the first country to reach 99% peak (daily new cases is less than 1% of total) by end of Feb 2020, aligned with earlier Technical Analysis projection with bi-linear model.

2) Singapore

Singapore is unfortunately experiencing second wave (new clusters of infection), aligning with spreading in the rest of the world outside China (especially in South Korea, Iran, Italy and Japan). Need to monitor the second peak (new max daily cases) vs the first peak (was 9 cases for Singapore), if “higher high” is achieved, Singapore may be back to growing phase as there could be cross-infection among the countries (not limited to China or a few countries).

If Singapore follows similar pattern of China (especially non-Hubei region), there is a time lagging period of 1+ month after China, Singapore may reach 99% peak by end of Mar 2020 or in Apr 2020 (if second wave in world outside China is longer and more serious than expected).

3) World Outside China

Singapore now is dependent on the World (especially Outside China), therefore good condition in China does not help Singapore much. Currently the world (outside China) is still growing, despite there is a dip yesterday in daily cases but it is insufficient to establish a clear trend (need at least 1 week of downtrend without serious new outbreak in another country). Based on population, world ex China has 5X potential than in China, therefore if it becomes pandemic, there could be 5x more cases than in China (non-Hubei which is about 50% of China cases).

US is part of “World Outside China” category, relatively still not so serious at the moment (considering the population of US). However, trend of the rest of the world is growing with Coronavirus, even if “second wave” is trending down, there could be 3rd or 4th wave in any city or country as there is time lagging effect for Coronavirus to spread from 1 country to another country (eg. from China Wuhan to Singapore in 1-2 months, then to the rest of the world in 1-3 months).

It is still a good news to see China condition improves significantly over the past 1 month (with condition that we trust the data reported) as the rest of the world including Singapore would follow similar pattern in near future, just take extra few more months to end or at least control the health crisis (reaching 99% peak with less than 1% new daily cases).

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Thinking positively, world outside China (including Singapore) could follow the footstep of China, both for Coronavirus (uptrend and then downtrend) and stock market (correction for a few days during first week of fear, then up again). G7 includes US are taking pro-active actions to stimulate economy to prolong the current bull market (started since year 2009). For example, US Federal Reserve has started to cut interest rate further by 0.5%, despite US economy is still strong.

There is no need to worry as we could only control what’s within our capacity. This is true for Coronavirus, also valid for stock investment (eg. what stocks to buy, when to buy/sell is within one control but exactly when and what crisis may come is beyond the radar). We just need to take the right actions, then depend on the probability to give us the unfair advantage (eg. low chance to be infected, high probability of winning in stocks).

While taking precautionary measures for Coronavirus, learn to take calculated risk to invest in global giant stocks at discounted prices with this rare health crisis which is only a correction in global stock market at the moment. The main focus is on the next global financial crisis which could be the best opportunity for an investor.

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Filed Under: Macroeconomy, Personal Analysis, Stock Market Tagged: coronavirus, stock market

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