Uncategorized Archives

Bottom Fishing of Hong Kong and China Stock Markets (否极泰来)

Posted on May 20, 2024 Written by Dr Tee (Ein55)

Over the past few years, both Hong Kong and China stock markets have been bearish, under low Optimism level, many giant stocks (property, technology and nearly all sectors) are heavily discounted with over 50-70% price corrections.

However, it is not easy to “Buy Low” as the stock may get lower, an investor may end up selling lower with loss. Even Charlie Munger (business partner of Warren Buffett), has been trying to buy low several times for Alibaba when share prices falling down from $200+ to below $100, ending up stop loss when it exceeds risk tolerance level.

The key is timing of entry for low optimism giant stocks, including Hong Kong Hang Seng Index (HSI ETF) and China Shanghai Index (A50 ETF), aligning to own unique personality. Contrarian investing (buying during bearish trend) requires careful selection of stocks (eg. defensive dividend stocks), strong mind control and money management (eg. averaging down with position sizing and diversification over a portfolio of 10-20 giant stocks).

Trend-following investing could be more suitable for retail investors, aiming for giant stocks with prices far below value (need to compute fair price), then waiting patiently for reversal signals from bear to bull again. Both Hong Kong and China have created double bottom pattern opportunities, first recovery was late 2022 when zero COVID policy has ended but then corrected again with economy slowdown to another low (eg. 15000 points for Hong Kong HSI), second recovery only happens recently after economic stimulus plans (eg. loosening of property market, lower mortgage rate, etc). HSI recovers again from 15000 points valley to above 17000 short term resistance (late Apr 2024), currently near to 20000 points.

For investors who miss the Hong Kong HSI 30% rally from 15000 to nearly 20000 points, may feel “missing the boat”, thinking it is too “high” now to buy. In fact, this is the mentality of “penny wise but pound foolish”, i.e. only considering the near term (tree) but missing the mid to long term (forest). Even for a short term trader, it is fine to Buy intermediate “High” Sell Higher following trend, while the “High” for a trader is actually still “Low” (despite not the lowest) for longer term investor. These perception differences are personality dependent, alignment of strategy with unique personality (eg. short / mid / long terms, cyclic / growth / dividend, contrarian / follow-trend, etc) is key for success in stock trading or investing.

Current global stock markets provide special advantages to both short term traders (eg. bullish US market with new historical high for S&P500 and Dow Jones to Buy High Sell Higher with Momentum Trading, aiming for US interest rate cut in year 2024) and long term investors (eg. bearish or lagging Asian market (Hong Kong / China / Singapore / Malaysia) to Buy Low Sell High with Cyclic Investing, supported by recent economic stimulus plans in China.

It is timely now to review own global stock portfolio, making decisions (Buy / Hold / Sell / Wait / Shorting), leveraging on market greed and fear.

===================================

There are over 2000 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.

Drop by Dr Tee free 4hr webinar (learning at comfort of home with Zoom) to learn how to position in global giant stocks during COVID-19 stock crisis with 10 unique stock investing strategies, knowing What to Buy, When to Buy/Sell.

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, you could ask on any global and local stocks including but not limited to 30 STI component stocks:

Ascendas Reit (SGX: A17U), CapitaLand (SGX: C31), CapitaLand Integrated Commercial Trust (SGX: C38U), City Development (SGX: C09), ComfortDelGro (SGX: C52), Dairy Farm International (SGX: D01), DBS Bank (SGX: D05), Frasers Logistics & Commercial Trust (SGX: BUOU), Genting Singapore (SGX: G13), Hongkong Land (SGX: H78), Jardine Cycle & Carriage (SGX: C07), Jardine Matheson Holdings JMH (SGX: J36), Keppel Corp (SGX: BN4), Keppel DC Reit (SGX: AJBU), Mapletree Commercial Trust (SGX: N2IU), Mapletree Industrial Trust (SGX: ME8U), Mapletree Logistics Trust (SGX: M44U), OCBC Bank (SGX: O39), SATS (SGX: S58), Sembcorp Industries (SGX: U96), Singapore Airlines (SGX: C6L), Singapore Exchange (SGX: S68), Singtel (SGX: Z74), ST Engineering (SGX: S63), Thai Beverage (SGX: Y92), UOB Bank (SGX: U11), UOL (SGX: U14), Venture Corporation (SGX: V03), Wilmar International (SGX: F34), YZJ Shipbldg SGD (SGX: BS6).

Dr Tee will cover over 20 case studies, Singapore giant stocks, eg. CapitaLand Integrated Commercial 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

View quick preview video below, Dr Tee will introduce 10 key stock investment strategies (股票投资十招) to be learned in 4hr free stock webinar:

Register Here (Dr Tee Free 4hr Stock Webinar): www.ein55.com

Filed Under: Macroeconomy, Market Cycle Investing, Market Outlook, Stock Market, Technical Analysis, Uncategorized Tagged: china market, crisis stock investing, Hong Kong Market

Bullish Tech Stocks with Golden Cross of Inflation vs Interest Rate (黄金交叉)

Posted on June 15, 2023 Written by Dr Tee (Ein55)

US stock market is recovering gradually over the past 6 months with clearance of debt ceiling issue recently, greed is overtaking fear. In particular, US large-cap technology stocks have been bullish, supported by golden cross of inflation (4% currently) below interest rate (5.25% currently), confirming the declining trend of inflation from the peak of 9.1%.

Technology stocks are sensitive to interest rate hike (which is dependent on inflation), therefore the tech sector was severely corrected over 30-50% in Year 2022, seeing light at the end of tunnel 6 months ago when inflation starts to fall. The Fed has been using higher inflation rate (eg. 6-9%) as an excuse to increase interest rate but the fact is inflation is a lagging indicator which is CPI (Consumer Price Index) % change over the past 1 year. Monthly CPI has been slowing down, therefore yearly CPI change (i.e. inflation rate) is declining naturally, the trend likely will continue till Q3/2023 with inflation rate below 3%. With inflation at moderate level of 4%, The Fed decides to pause on interest rate hike (remain at 5.25%) but keeping options of 2 further hikes by end of this year when needed.

Consistent lower inflation provides an excellent mid-term trading opportunity, especially for large-cap US technology stocks, here are familiar companies (FANG-MAN):
F – Facebook / Meta (NASDAQ: Meta)
A – Amazon (Nasdaq: AMZN)
N – Netflix (Nasdaq: NFLX)
G – Google / Alphabet (Nasdaq: GOOGL / GOOG)
M – Microsoft (Nasdaq: MSFT)
A – Apple (Nasdaq: AAPL)
N – NVidia (Nasdaq: NVDA)

These 7 tech stocks contribute to over 25% of US S&P 500 Index, 5 of them are over $1 Trillion market (Apple, Microsoft, Amazon, Google, NVdia), even Apple alone (nearly $3 Trillions) is bigger than 30 STI component stocks combined. However, strong recovery of S&P 500 and Nasdaq indices may give a false impression that most stocks are doing well. In fact, many non-technology small / mid cap stocks are still relatively weak, these 7 FANG-MAN stocks have relatively bigger weightage, therefore investors / traders selectively buy up technology stocks, help to push up the index as a whole.

Alignment with the right sector and country (Level Analysis) is key for stock trading, therefore it is not surprise to see technology stocks with uptrend prices (higher highs, higher lows), ideal for trading or even investing. However, due to moderate higher Ein55 Optimism level, current stock market recovery (especially for technology stocks) is more suitable for short term / mid term trading. A smart investor may apply trend-following trading system to ride the trend but need to be careful when it enters high Ein55 Optimism level (eg. >75%) as any unexpected black swan could result in the next global financial crisis, knowing when to exit (take profits) is critical as the next move.

US economy currently is relatively strong with low unemployment rate (3.7% currently), weaker USD would help in financial reports for many S&P 500 companies with overseas businesses (when converting income to USD). So, average inflation level (2-4%) is healthy for a growing economy, too high results in overheated spending, too low ends up in lagging economy (eg. lost 3 decades in Japan). Based on similar experience of last high inflation in 1970-1980, there was upside potential of over 50% for US indices when inflation was declining from the peak. Stock market usually is 6-12 months ahead of economy or business fundamentals, therefore forward-looking views may be needed for success in trading.

There is information overflow each day with good/bad financial news, therefore each investor needs to have own independent thinking (not to blindly follow Dr Doom or Dr Boom), following an investing / trading strategy aligning with own personality (short term / mid term / long term / lifetime).

===================================

There are over 2000 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.

Register Here (Dr Tee Free 4hr Stock Webinar): www.ein55.com

Filed Under: Macroeconomy, Market Cycle Investing, Market Outlook, Uncategorized Tagged: inflation, technology stock, US Stocks

Hidden Stock Opportunities in New Year of Rabbit 2023

Posted on January 9, 2023 Written by Dr Tee (Ein55)

Global inflations have started to decline from peak of decades high, especially for US (from 9.1% to 7.1% currently. aiming below 5% in near future). Historically, proven lower inflation would help to limit the interest rate hike which would be a relief (especially for technology stocks) for global investors. A smart investor may not wait until news to confirm such trend, able to take action earlier (with assistance of reversal signals to bull, not all stocks are suitable to consider now) than majority who may be still worrying about recession.

US stock market is not as weak as shown by S&P 500 stock index. In fact, most of the sectors are recovering well, except for technology and consumer discretionary. However, since most of the large cap stocks (top 10 of S&P 500) are technology stocks, therefore the index has been weak, mainly due to bearish Nasdaq stock market. However, there are few thousands of other stocks in US which are non-technology which may be considered earlier by investors or traders. Eventually, even technology stocks in US would follow HK/China stocks to recover strongly, especially when there is more consistent drop in inflations over the next few months.

Inflation rate is a lagging indicator based on CPI (Consumer Price Index) over the past 1 year. In fact, monthly and quarterly CPI has been declining significantly but yearly CPI difference (which is the standard inflation) only starts to show reversal in the past few months. When inflation starts to “confirm” dropping below an acceptable level by the Fed, it may be too late for most investors to enjoy the free lunch. Despite the hidden fact of declining inflations, the Fed could not be soft in its tone as lower CPI would help to create bigger safety margin to avoid future reversal of inflations to a new high, especially the US job market is extremely strong (3.5% unemployment rate, the lowest level over the past 50 years). When global stock investors start to make money again in investment, they may continue to spend more money (higher inflation), therefore it is wise to scare them to be more prudent in spending next time.
‌
With recent relaxation of COVID policy in China (full reopening of border), Hong Kong / China stock markets have been soaring (Hong Kong Hang Seng Index has jumped over 30% in the past few months while some individual giant Hong Kong stocks have started to recover over 50% in share price as if there is no tomorrow). As mentioned over the past 1 year, even a smart investor may not know the true market bottom, simple averaging down strategy below low optimism may be applied on HSI index while collecting 3% yearly dividend (comparable with Singapore Savings Bonds which has no capital gains, a popular choice for many retail investors, not knowing it is a loss in long term by investing below high inflation of 5% in Singapore).

One day, a true global financial crisis would still come (even if 2022 technology bubble and Hong Kong/China stock crisis due to zero COVID policy are only market corrections). However, an investor could not worry everyday that “sky would fall down”, as if worrying of suffocation, therefore refuse to eat (因噎废食) which is not reasonable. A better option is to be flexible, integrating short term trend-following trading with long term growth / dividend investing, taking calculated risks while others are still fearful.

It is timely now to review own stock portfolio, making decisions (Buy / Hold / Sell / Wait / Shorting) ahead of majority.

Register Here (Dr Tee Free 4hr Stock Webinar): www.ein55.com

Filed Under: Macroeconomy, Market Cycle Investing, Market Outlook, Stock Market, Uncategorized

Stock Market Sentiment Investing Strategy with Fear and Greed of Black Swans (多数服从少数)

Posted on March 18, 2022 Written by Dr Tee (Ein55)

Global investors and traders are worrying about the current stock market fears which may become the next Black Swan: Russia / Ukraine war, high inflation and interest rate hike, resulting in the largest dip in US stock market (13% for S&P500, 20% for NASDAQ) since COVID19 crisis. At the same time, China and Hong Kong suffer severe waves of COVID19, resulting in significant stock market correction, especially for technology stocks (eg. ATM stocks of Alibaba, Tencent and Meituan which contribute to 1/3 of Hang Seng Index). However, at the most fearful time, there is always a strong rebound in stock prices. Is it time to Buy, Hold, Sell, Wait or Shorting?

Before sharing any personal views on current stock market, Dr Tee often likes to begin with a unique “Stock Market Sentiment” Strategy with a survey for my investing workshop audience or readers:

“What do you think of the Singapore stock market trend for the next 1 year?”
A = Bear Market (STI < 10%) B = Flat Market (STI within +/- 10%) C = Bull Market (STI > 10%)

Please make your choice before continue reading further. This is an important move because you will be part of “Dr Tee Indicator” on future market trend.

The participants with diversified background and experience representing the mass market will cast their votes. Here is the latest statistics (see Figure above) based on recent survey: Bear Market (6%), Flat Market (40%), Bull Market (54%). Please compare your choice with this overall distribution on market outlook.

This unique Dr Tee Personal Indicator is making use of the psychological weaknesses in traders/investors who usually buy high (when greedy) and sell low (when fearful). Therefore, the recommendation of investing calls of buy / sell / hold, is against the mainstream view:
• Buy: when bear market view > 75%
• Sell: when bull market view > 75%
• Hold: when flat market view > 25% (current market)

The current majority market view (40% flat market & 54% bull market) aligns well with the current market trend in Singapore as Straits Times Index (STI) has been recovering gradually from low of 2233 points during COVID-19 pandemic, trading at fair price of 3337 points with uptrend potential with support of growing economy. The bearish view is relatively low (6%, less than 50% neutral line), matching the declining fear during Covid-19 stock crisis with recovery of Singapore and Asian stock markets.

This Ein55 Personal Indicator has monitored the stock market regularly since Nov 2011, successfully predicting a golden entry point to stock market after the US credit crisis in late 2011 with >75% bearish views. Unfortunately, during the next worst time of Mar 2020 pandemic, Dr Tee could not meet up with audience, therefore missing another pessimistic point (>75% bearish views) in this survey but investors won’t miss the investing opportunity with Optimism Strategy (1 of Dr Tee 55 investing styles). This unique investing methodology is consistent with the famous saying by Warren Buffett: “Be greedy when others are fearful. Be fearful when others are greedy”, but in a measurable form of investors emotions.

Response from each stock market (eg. Singapore, US, Hong Kong / China, Malaysia, etc) could be different as it greed and fear could be country or even sector (eg. technology vs value stocks) dependent as their Ein55 Optimism levels are different. If similar survey is conducted in Hong Kong recently, over 75% local investors or traders likely will have bearish views. However, no one could buy at the lowest point (if yes, then it is luck), therefore trend analysis on reversal pattern is required before Buy Low.

Register Here (Dr Tee Free 4hr Stock Webinar): www.ein55.com

Filed Under: Market Cycle Investing, Market Optimism, Market Outlook, Stock Market, Uncategorized Tagged: global financial crisis, market cycle investing, market outlook

Dr Tee 免费华语视频投资课程：环球股票市场展望与冠状病毒技术分析

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

危机，有危就有机。Dr Tee 应用了难得休假，制作更多网上学习课程。几天的努力后，呈献给 Ein55 会员，全新的免费华语视频投资课程（一小时多的学习）：环球股票市场展望与冠状病毒技术分析。

这儿是 Dr Tee 华语视频（英语视频也已完成，Dr Tee 双语皆行）： https://youtu.be/Wxq_6lj_mOE

请欣赏鄙作，留言求进步。您可订阅 Ein55 youtube 频道，链接未来投资视频。双红利：

1) Dr Tee 9堂网上价值投资策略课程 ($100, Ein55 会员获得75%折扣，只需$25, 可全家分享):
https://www.investingnote.com/store/products/discover-giant-stocks-value-investing-strategies

2) Dr Tee 免费投资课程与电子书下载:
www.ein55.com

Filed Under: Market Outlook, Stock Market, Technical Analysis, Uncategorized Tagged: 免费华语投资课程

Coronavirus and Stock Market (Updated 12 Feb 2020)

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

After the reversal of new daily cases of Coronavirus to downtrend from 5 Feb 2020, it still follows the bi-linear predictive model (see earlier video talk for details), continue to fall for both World and SG (not obvious in trend based on 1 day as sample size is smaller).

Similar to Technical Analysis, when a clearer reversal pattern is formed, if data reported is reliable, Coronavirus could reach its peak by end of Feb 2020, then fading away in 1-2 months. However, if there is a second or multiple peaks with significant surge in new daily cases, then the duration of Coronavirus may be prolonged by 1 month for each new peak of new daily cases. So, we need to monitor daily from now.

Coronavirus monitoring is as if short term stock trading, daily price day has to be analyzed to form a longer term trend analysis (weeks / months) for better consistency in results.

Bullish US (strong economy) + Bearish China (Coronavirus spreading + economy slow down) = Mild bullish global stock market.

Despite both countries have comparable world GDP contribution (US 24%, China 15%) but for stock market value, US contributes to more than 50% of world stock market cap, therefore impact of US is much stronger than China.

Singapore is affected by both US and China, therefore the trends for stocks is sideways with moderate economy, close to 50% optimism, fair value.

During Coronavirus crisis time, demand for some commodities is increasing. Commodity market has been at low optimism for about 5 years, it is time to explore this area: Oil & Gas, Palm Oil, Mining, Agricultural, Precious Metals, etc.

You may learn from Dr Tee on how to position in global giant stocks in this current market condition. Sign up for free 4hr course: www.ein55.com

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

Filed Under: Macroeconomy, Stock Market, Uncategorized Tagged: coronavirus, stock market

Little Black Swan – Wuhan Pneumonia Virus

Posted on February 4, 2020 Written by Dr Tee (Ein55)

Wuhan pneumonia is an emerging black swan, real impact to stock market depends on the final scale (last SARS crisis results in regional stock market crisis), need to monitor closely.

Short term impact on stock market is speculative: some healthcare (eg. glove manufacturer) stocks are rising in prices, while airline stocks suffer due to potential lower number of passengers with less traveling in an enclosed transportation. When this virus has similar scale as SARS, there is a potential to result in a regional stock crisis (eg. China / Asia) or even global financial crisis (if becoming a new form of global flu without an effective vaccine).

As mentioned earlier, in the final stage of bull market with over 75% optimism level, we are walking on a layer of thin ice, shorter term trading/investing is safer, ok to be “kiasi” (fearful of danger) for both daily lives (don’t go crowded place, staying healthy for stronger immune system) and stock investment.

Scale of “black swan” depends on severity of Coronavirus, eg duration and population of people infected (assuming fatality is around 2%). Currently it is still a mini bear for China stock market but having potential to grow into bigger bear if it escalates from health to social and even political issue.

Under the best case, it is likely a medical cure could be formulated within months, based on past knowhow on cousin of coronavirus, SARS. Under the worst case, it may evolve into a common global flu, when most people (survivor) has antibodies, the fatality rate may drop to a normal flu (eg. 0.05%).

The worst virus in mankind history was “Spanish Flu” in 1918 with 50 millions people die of 500 millions infected (about 10% fatality rate, close to SARS). Even so, it stopped eventually. Life will find a way. Virus also depends on human, won’t kill all the human. With advance in medical technology over the past 100 years, chances of overcoming Coronavirus is very high, just a matter of time, whether active or passive measures (eg. SARS just stopped after months of spreading). However, if human continues to make similar mistake, next crisis (or this crisis) may not be a just a financial crisis.

For smart investor, safer approach is to be a shorter term investor or trader when global stock market has been in high optimism > 75% while tested by various potential wolves (US-China trade war, US-Iran conflict, Coronavirus, etc) every few months. Learn to invest for opportunity from crisis: www.ein55.com

Filed Under: Market Outlook, Stock Market, Uncategorized Tagged: black swan, wuhan virus

Comparison of Coronavirus (vs SARS vs Flu) and Stock Market

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

Wuhan Virus or 2019 Coronavirus has caused great fear globally, especially in Asia. Why? Here are 3 main reasons, having similarities to stock market with comparison to well-known SARS and common flu.

1) It is relatively unknown (how it is infected, etc)

For any new virus, whenever it is a stranger, people would feel fear. It is similar to black swan to global financial crisis, when the share price falls, investors do not know why and how it drops so much, the fear leads to more selling or shorting, getting worse (vice-versa, during dot com bubble, the greed for unusual surge in price could make one losing their mind in investment).

So, further research (eg. temporary medical solution) would help to reduce the fear. Transparency by government would help, else various personal news or rumors may make it worse.

2) It is relatively deadly (3% of those infected)

People worry because the consequence is death (3%). However, scientifically, when we compare Coronavirus with SARS and flu:

Coronavirus = 3% dead (about 81 death of 2800 reported cases so far)

SARS = 10% dead (about 774 death of 8094 cases reported)

FLU (yes, common flu) = 0.05% dead (about 8200 death of 15 millions cases estimated in US alone)

Usually people focus more on higher probability of death (fatality rate), ignoring the size of population infected. Therefore, SARS in year 2002-2003 partially contributed to regional financial crisis because it is very deadly, 1 out of 10 infected would die. The common flu actually kills much more people yearly but affecting mostly elderly people (“natural” cause of death), low fatality rate of 0.05% is usually ignored. Coronavirus is in between SARS and flu for fatality and size of population infected (likely more than SARS cases eventually based on the trend so far), therefore it is less fearful than SARS but more fearful than flu. In fact, based on actual number of death, flu is more “dangerous” than Coronavirus or even SARS.

It is also similar to Global Financial Crisis, the “fatality” rate is high, usually more than 50% drop in global stock indices, more than 90% drop for some cyclic stocks or even go bankrupt for some which may not last through the winter time of financial crisis at low optimism for a few years. Global Financial Crisis (Level 4 = global) attracts attention of global investors, therefore great fear. In fact, there are numerous crisis each day from Level 1 (company, e.g business is losing money) to Level 2 (sector, eg Oil & Gas crisis over the past few years) to Level 3 (eg. China stock crisis over the past 1 year) but the scale of “fatality” attracts different attention, therefore different level of impact on global stock market.

3) Mass Media Spreading of News

When a news is reported again and again many times each day, worse with social media (eg. Facebook, how many articles including my article here), it could become great fear in a short time. I went to a shopping mall and NTUC fairprice today, observed about 5-10% of people start to wear mask (they may not be sick but afraid of getting sick), more than usual (before the outbreak of Coronavirus). This is a Personal Analysis (PA) on impact of news (eg. reporting how many people die and where is it), showing Coronavirus could be a potential black swan for global stock market when population infected increase without an effective medical solution for more than 3 months.

The 1929 Great Depression (the greatest Global Financial Crisis ever), it lasted for about 4 years (1929 – 1933), significantly longer and more severe than modern global financial crisis (typically 1-2 years of bear market). In the era of 1929, communication technology was limited, news spread very slowly, could take days from 1 end of the world to reach another 1 end of the world. Therefore, the greed and fear could last much longer due to lack of spreading news in an effective way. Over the past few decades, global financial “crisis” just come and go (thanks to modern communication tools), as if “wolf is coming”, global investors could recover the “losses” after holding for another 5-10 years, if the stocks are fundamentally strong.

=============================

Concern for Coronavirus vs flu is similar to driving car vs taking airplane. There are more car accidents than flight accidents but when plane crashed, the fatality rate is much higher (eg. recent Iran plane, also Malaysia Airline x2 cases over the past few years, as well as recent helicopter crash with NBA celebrity Kobe Bryant), worst it is being widely reported by mass media (newspaper, news, etc) and social media, creating great fear of taking plane (of course, the fear may last only for a short term). People may not so worry about driving car (especially when driving own car) as one may think they are in control (compared to taking plane, life could partially depend on pilot).

Back to Coronavirus, the fear or concern depends on many factors. Between life and money, clearly life is more important. Therefore, some healthcare stocks (eg. glove stocks with applications in healthcare) start to rise while airline stocks start to fall (F&B sector may also suffer if similar situation as SARS, few people dare to go out for dining).

One could not control certain things in life (eg. spreading of virus) but we could control our habits to reduce the probability of accident (eg. wearing mask, washing hands more often, etc) and also reduce the fatality with stronger immune system (healthy body, even got infected, more likely to survive, both Coronavirus and flu). However, one should not overstress oneself that sky is falling down as if global financial crisis. Business fundamental is critical for a stock in longer term. Similarly, one should strengthen our immune system (eg. exercise regularly, eat healthily, sleeping well, etc) which is an effective long term prevention of any unknown disease. Worrying too much would affect our health.

It is the same as stock investment, even as investor could not know whether the stock prices would go up or down, one could increase the probability of success by combining LO-FTP (Levels 1-4, Optimism 0-100%, Fundamental, Technical and Personal Analysis) and reducing “fatality” in investment with proper risk management (eg. diversification over 10-20 global giant stocks with strong fundamentals). While paying attention to prevention of Coronavirus, continue to learn about stock investment, many principles are applicable for both the virus and stock investment (more details in www.ein55.com).

Filed Under: Uncategorized Tagged: coronavirus, stock market

Dual Roles of REIT Investing as Defender and Striker

Posted on September 14, 2019 Written by Dr Tee (Ein55)

REIT investing is a popular investment choice to collect passive income through dividends. By law, 90% of net income from a REIT has to be redistributed back to shareholders in the form of dividend. A REIT could give dividend 4 times (4 quarters) a year, if an investor could gather a few strong REITs, it is possible to generate a stream of consistent quarterly or even monthly income. One could become financial free with REIT investing as the income (passive income of dividends and capital gain of stock prices) depends on the capital for investment which is scalable and dividend yield which could be maximized (depending on dividend / share price). Singapore REITs could give out more dividends due to tax exemption, therefore the average dividend yield is usually higher than overseas REITs.

Due to stock market uncertainty over the past few years, Singapore investors prefer to invest in defensive sector such as REITs or blue chip stocks (eg. 30 STI component stocks). As a result, REITs prices have gone up to higher optimism of 53%, resulting in lower dividend yield, narrower spread with nearly risk-free return such as Singapore Saving Bond. Most people consider REITs for longer term investing, aiming for 5-10% dividend yield yearly. However, over the past 1 year, some REITs are behaving as striker with over 20% return in only 6 months of trading.

As investor or trader has 2 options when considering REIT investing:
1) Investing REIT for Long Term (Defender)
Successful REIT investing requires selection of REITs with strong fundamentals, eg. consistent uptrend quarterly dividend payment, supported by steady free cashflow generated from REITs portfolio. However, during global financial crisis, unlike property market which is more defensive in nature (dipping by only 25%), REIT has speculative element of stock market, therefore REIT price could even drop by 70%. It is crucial for long term REIT investing to align entry with a low optimism price during global financial crisis. However, during a very bearish stock market, most retail investors may not take actions due to great market fear (also fearful when others are fearful), therefore missing the opportunity of lifetime to buy low and hold for long term.

2) Trading REIT for Short Term (Striker)
Successful REIT trading requires selection of REITs with reasonable fundamental, supported by uptrend share prices in a bullish stock market (for long strategy). Short term trading mainly aims for capital gains in a few weeks or a few months, following either Buy Low Sell High, or Buy High Sell Higher strategies. When price trend is reversed, a REIT trader has to follow the exit strategy to sell the stock or even cut loss. It is risky for a REIT trader to enter for short term gain but reluctant to exit as a trader when price trend is reversed, changing to a role of investor halfway, may end up Buy High Sell Low, losing in REIT trading. Although overseas REITs may not be suitable as defender for dividend income, some strong giant REITs are excellent choices as strikers for capital gains with rising prices.

Successful REIT investing requires understanding difference between investing and trading, aligning with own unique personality (Personal Analysis). REIT investing also need the knowledge of Fundamental Analysis of business, Technical Analysis of prices, Level Analysis and Optimism Analysis of global stock market.

Readers may learn from Dr Tee FREE 4hr stock investment course on how to invest and trade REITs, applying LOFTP (Level, Optimism, Fundamental, Technical, Personal Analysis) Strategies to select global REITs and blue chip giant stocks, knowing What to Buy, When to Buy and When to Sell.

Register Here: www.ein55.com

Filed Under: Stock Market, Trading, Uncategorized, Value Investing Tagged: reit, reit investing

4 Signals for Global Financial Crisis – Dr Tee Important Sharing in Invest Fair 2019

Posted on August 21, 2019 Written by Dr Tee (Ein55)

Dr Tee has been sharing his views on market outlook over the past 6 years of Invest Fair (2014-2019). The stock market condition each year is unique, a result of complex interactions with other investment markets (commodity, property, forex, bond), major economy and global political events.

In year 2019, stock market continues to be bumpy, especially for US and world stock markets at high optimism level. Dow Jones Index drops by 800 points over 1 day recently due to news of inverted bond yield (US bond yields, 2 years is higher than 10 years) which has been a reliable market recession signal over the past few decades.

Dr Tee has shared the following 4 major signals in Invest Fair 2019 to monitor for Global Financial Crisis:

1) Stock Market
Both world stock market and US stock market are falling down from higher optimism of over 75% optimism to current 63% Optimism, forming triple top with 3 trials so far. Political economy interventions (eg. cut down of interest rate or gentle ending of US-China trade war, etc) could prolong the bull market but the global stock market may require a crisis to reborn, forming another decade-long of natural market cycle.

2) Bond Market
US government bond yield is generally aligned in direction for longer term with stock market. With both short term and long term bond yields are falling downward from critical 3% to less than 2% (Optimism currently at 36%), money could be flowing at faster rate from stock market to a more defensive bond market or keeping as cash in banks. The inverted bond yield in US (especially for 2 years bond yield to exceed 10 years bond yield) is a risky signal for stock market, historically over the past 50 years, leading to 7 global financial crisis after 6-18 months when signal was observed.

3) Global Economy
US economy is still strong, job market (unemployment rate of 3.7%) is near the best performance over the past 50 years. However, the rest of the world (50% of world economy) are slowing down, including Singapore with current GDP growth rate of only 0.1% (42% Optimism with bearish trend). At the same time, US GDP growth rate is 2.3%, showing early sign of weakness with 71% Optimism in economy after falling down from past high level of 3% GDP.

4) Black Swan
Usually global financial crisis could be formed only after earlier 3 signals are aligned: falling down from high optimism global stock market, bond market and economy. However, an unexpected black swan (any negative global events, eg. political economy – US-China trade war, forex crisis, property crisis, commodity crisis, large-scale war, major natural disaster, etc) could trigger to accelerate the pace or prolong the duration of global financial crisis.

Externally, the uncertainty of US-China trade war continues to be a threat to global stock market, especially Trump’s first term of US presidency would last till end of year 2020, drastic change in political economy becomes a possible black swan. There is also risk of currency “war” if major economy choose to weaker own currency to have unfair advantage in export.

Trump may introduce more stimulation to economy (eg. requesting the Fed to cut more interest rate) over the next 1 year if want to keep the S&P500 at high optimism to show as report card to voters before running for second term presidential election next year.

“Crisis is a crisis” for those who are ignorant, junk stocks could go bankrupt in business, while blue chip stocks may also fall down in price with more than 50% capital loss. “Crisis in an opportunity” for those are prepared from now, learning to take the right actions (eg. sell high before buy low again for strong fundamental stocks, or position with short term trading in current stock market to profit from market volatility).

Learn from Dr Tee on 5 critical strategies to position in current stock market (LOFTP – Level / Optimism / Fundamental / Technical & Personal Analysis), profiting from global financial crisis with early preparation. Sign up for free 4hr stock investment course by Dr Tee.

Register Here: www.ein55.com

Filed Under: Uncategorized Tagged: global financial crisis, invest fair

2 Free eBooks by Dr Tee (Click to Download)