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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.

Learn from Dr Tee free 4hr stock investment course to convert the crisis into opportunity. Register Here: www.ein55.com

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

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

Dorscon Alerts with 4 Levels of Investment Opportunities

Posted on February 14, 2020 Written by Dr Tee (Ein55)

Dorscon disease outbreak alert system (4 colors: Green, Yellow, Orange, Red) was established in Singapore after SARS 2003. Some people may worry the current situation may be changed from Orange to Red Alert for Coronavirus (if so, schools have to be shutdown temporary).

There is grey area (no clear quantitative criteria) in Dorscon for 2 main criteria (# infected vs # death) to be Red Alert:

1) spread widely

– how many # infected daily is considered widely

2) Significant # death

– how to define significant?

Even for SARS in Singapore, it was later benchmark as Orange Alert, having 33 death out of 238 infected cases in Singapore. Since Dorscon absolute criteria may not be known. We may do a relative criteria based on benchmark with known case of SARS in 2003 at Orange Alert.

For Coronavirus, although actual fatality rate could be much lower than 2% (due to many cases in Hubei may not be diagnosed in earlier stage), we may assume 2% as the worst case scenario.

We could do a reversed calculation to estimate when Coronavirus may be as severe as SARS based on Dorscon criteria of Orange Alert before transition to Red Alert. There are 3 possible conditions as criteria:

1) Same # infected as SARS of 238 cases. Currently Coronavirus has 58 # infected in Singapore till 13 Feb 2020. Coronavirus is about 25% level of SARS for Singapore. Since worldwide data shows Coronavirus has more potential than SARS, then this # infected may have potential to grow in Singapore.

2) Same # death as SARS of 33 cases. Currently Coronavirus has 0 death, still a long distance before in par with SARS (which is rated as Orange alert).

3) Since # death in Singapore for Coronavirus is 0, we may also apply same # death as SARS of 33, assuming 2% fatality rate (worst case) for Coronavirus, we could derive a critical # infected = 33/0.02 = 1650 # infected in Singapore before Coronavirus is comparable with SARS. Criteria 2 and 3 are related, see whichever reached first.

Conclusions:

SARS Orange alert criteria is in fact quite high. If we use the same criteria as SARS, then Coronavirus has to have either 238 or 1650 infected cases and/or 33 death in Singapore before declaring the same level of health crisis as SARS (which is still Orange Alert). Based on 3 possible conditions, the easiest criteria (assuming either wide spreading or significant number of death, not both) to meet is probably No 1 based on same # infected of 238. For Conditions No 2 & 3, will be more difficult to achieve, if applying this criteria, likely Coronavirus would remain just Orange Alert.

Assuming SARS is the upper limit of Orange Alert, then Coronavirus currently is probably the lower limit or Orange Alert. The Red Alert has to be reserved for true health crisis, otherwise there is no proper level to reflect the right action for such emergency then.

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Dorscon standard is just a reference, main objective is to show the relative risk in health, individual could then use it to make decision on how much risk to take.

Similarly, we may apply 4-color Dorscon concept in stock investment, dividing into 4 levels of investing opportunities, each level has its own risk vs opportunity based on business fundamental vs optimism level:

4 Levels of Ein55 Investment Opportunities

1) Green

– Strong business fundamental

– Low Optimism level (<25%)

2) Yellow

– Strong business fundamental

– Moderate Optimism level (25-75%)

3) Orange

– Moderate business fundamental

– Moderate Optimism level (25-75%)

4) Red

– Moderate business fundamental

– High Optimism level (>75%)

For either long term investing or short term trading, a stock requires minimum of moderate business fundamental. Buying weak fundamental stocks with bullish price trend is speculative, more suitable for very short term trader (eg. during the Coronavirus crisis time, some weak stocks start to rise).

When Optimism level is higher (from Green to Red Opportunity), positioning style is safer from investing to trading. Current global stock market is around Red Opportunity but traders may still consider short term trading in US with high optimism. For Singapore (moderate optimism level), it will be either Yellow or Orange Opportunities, depending on type of stocks.

Learn from Dr Tee free 4hr investment course on balance between risk and opportunities with comprehensive LOFTP Strategies (Level / Optimism / Fundamental / Technical / Personal Analysis). Register Here: www.ein55.com

Filed Under: Fundamental Analysis, Stock Market Tagged: coronavirus, dorscon, investment, stock market

Dr Tee Video Talk: Coronavirus Life Cycle and Stock Market

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

Over the past 7 years of teaching with over 700 days of lessons, Dr Tee has not taken 1 single day of MC, working nearly each day. So naturally I feel sad to cancel 12 events in Feb 2020 due to Coronavirus alert by government for wellness of students during this crucial period.

Crisis is Opportunity, I have used the 1 month homestay to learn how to make youtube video talk. After a few days of effort, here is Ein55 Talk for Ein55 Reader on Wuhan Coronavirus Life Cycle with Stock Market Analysis.

Enjoy and give your comments for improvement. You may subscribe to Ein55 youtube channel (Ein Tee) for future Ein55 video talks. You may also attend Dr Tee free investment courses and download free eBooks at www.ein55.com. Join Dr Tee Facebook Investment Forum: https://www.facebook.com/groups/ein55forum/

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

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

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

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

Keypoints on Coronavirus with Stock Market

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

Despite there are 6 new cases of coronavirus today in Singapore, all could be tracked, originally from China tourist group, before the total travel ban of China tourists to Singapore from 1 Feb 2020.

A few important keypoints:

1) The virus is transmitted within small group. So, avoid shake hands, talking in close distance or rubbing face (nose, mouth, eyes) would help to minimize the case.

2) Stay healthy is more important than feel stressful each day (affecting immune system when could not sleep well). Since coronavirus spreading or infecting is beyond our control, we just keep to the right habits, not to over-stress oneself, infected with depression even before the real virus.

3) Global stock market has accepted the fear over the past 1 month on this new virus, showing technical rebound in prices. In medium term (3-6 months), when real economy (quarterly GDP) and sector business (eg. tourism, hotel, F&B, transportation, manufacturing, etc) also show weaker fundamental, then there is an more room of downside, especially if the spreading of Coronavirus continues.

If Singapore has the first death case or uncontrolled spreading of virus to local people, then the crisis would become greater as people may be as fearful as during SARS time. Now the fear is still little, only 1 out of about 50 people wearing mask, after public sharing on no need to wear mask unnecessarily if not sick.

Light at the of tunnel will be waiting for effective vaccine or self-termination of virus around summer time (about 8 months if following SARS experience).

4) At the moment, this is just a minor crisis, not yet a lifetime opportunity as in global financial crisis (stock indices could drop more than 50%). Both investors and traders should monitor closely, minimize risks with exit plan and waiting for opportunities to buy low.

Learn to invest during global financial crisis: www.ein55.com

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

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.

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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