Thursday, 21 January 2016

Bear rules! Every Rebound is a Window to Escape!

Since GFC, first time that every major market is or soon-to-be entering technical bear market! Knives are falling everywhere! Do not catch! 


Market is in crash mode, and will continue for some time. Do not expect it to finish any time soon!  Although the next few days and weeks could see rebound, but before long another round of panic selling will follow again. Target is first at 2011 low, and then 2008 low. 




For investors who started investing since the bull market post-GFC, this is the first time when they find everything has changed.  


SG markets has heavy weight on Banks and Real Estates, featured with many counters from O&G and a variety of REITs. ALL of them are facing tremendous pressure. Crude oil future price seems determined to test its new low. There are serious talking in the market that $10 is not far!


Contrary to common belief, blue chips are not risk heaven. Instead, they are the major victims as big hot money are concentrated in these counters which are now escaping. This is why you see many counters, such as CityDev, that are trading at big discount to its value, can still fall. 


Don't try to be a smart ass and use your nerd-box value analysis to fool your mind, blind your vision, in order to comfort your wretched heart. The BEAR rules now! Never attempt in any way to fight with bears. (好汉不吃眼前亏!)


If you think the price is unbelievable, far below your deemed value level, you must prepare to see it go lower. There is no supporting level that can not be broken. On the contrary, in a bear market, once a new low price level is attained, more often than not, a lower target can be expected. So every rebound is a chance to escape. Just the opposite of bull market. 


Unless you are convicted long term investors with big stomach for paper loss, and big cash in hand to keep loading with lower and lower price. Do not fight with the trend. Do not take the attitude that " I am a value investor. I buy more if price drop more!" or you could run out of cash before you should be!


Hold your fire! Hold it!Don't be tempted by new lows. Wait and wait and wait and wait and wait and wait and wait and wait! Don't lose patience. 


Don't be afraid of bear. Don't be fooled by temporary rebound! If you missed the GFC, here is another once-a-decade-opportunity. Make sure you have MONEY when the market is truly hitting bottom,which could be in 2H 2016. 


Let the storm be stronger! 



8 comments:

  1. Ah! The 7 year itch trade of the decade ;)

    同道中人

    Don't fire till you see the whites of their eyes!

    LOL!

    ReplyDelete
    Replies
    1. thanks for dropping by. i learnt the hard lesson b4. market moves in extreme. follow the trend rather than fight with it,

      Delete
  2. i got another rule,
    1. don't lose money
    2. refer to rule 1.

    ReplyDelete
    Replies
    1. yes. never lose money does not mean never cut loss for losing position. as long as ur portfolio is all right. holding a hopeless losing stock and never sell is not investing, is gambling.

      Delete
  3. They say when you buy is more important than what you buy may be true.
    But if you also happen to know what to buy then plus when to buy, the Hokkien will say "Boh Bey Chow", or "Tok Kong".

    So far experience is always buy too early and sell too early one.
    Still learning how to improve Fine Tuning (B&S) in the market.

    ReplyDelete
    Replies
    1. market timing is easy said than done. dont be harsh on urself. even professional funds cant do everything right. try not to make big mistakes. cut loss position quick and firmly, let the profiting position run slowly. for us ordinary investors, always place small size to test, resist the urge to trade too often, admit mistakes and quickly cut loss to protect capital, wait for best opportunity. actively doing nth is the most important part of investing. as they say, the apprentice knows when to buy, the teacher knows when to sell. the master knows when is the time to rest. 会买的是徒弟,会卖的师傅,会休息的是师爷。

      Delete

Related Posts Plugin for WordPress, Blogger...