The Perfect Storm of the Stock Market II

[Pocy]

Four more trading days (2017) to go, next week. No shopping (stock market) for me this month. Troops all stand-down.

 

Come 2018, plenty of market action taking place. Hold on tight. Don't jump in too quickly, will be my advice for 2018.

You seem not optimistic about 2018, any reason?

[Throttle2]

 

You see

Sure huat

 

$3.25 liao

[Little_prince]

You see

Sure huat

 

$3.25 liao

 

scare me for a moment. i thought singtel 325. lol

[tenyawph]

You seem not optimistic about 2018, any reason?

 

The U.S. markets are due for a much-needed correction (I don't know by how much).  But this is a nature of things. When this happens, global stock markets will follow suit.  I buy on deep dips (defined as correction of 10% or more).

 

My situation is very unique (full cash war-chest), so what I am doing cannot or should not be followed or applied by others who are already heavily vested in the stock market.  Only for those who have yet to venture into the stock market, if they are patient to wait.

 

I read about many bloggers who are heavily vested in the stock market and investing for the long term.  They can ride out any correction, but I hope they have sufficient 'ammo' to take opportunity of a correction, like Warren Buffet who is currently 36% in cash (>US$100B) while the remaining is invested in stocks. 

 

Although the stock market might continue to rise further, the subsequent correction and my buy-in later will more than make up for the earlier 'lost opportunities'.

[Theoldjaffa]

The U.S. markets are due for a much-needed correction (I don't know by how much). But this is a nature of things. When this happens, global stock markets will follow suit. I buy on deep dips (defined as correction of 10% or more).

 

My situation is very unique (full cash war-chest), so what I am doing cannot or should not be followed or applied by others who are already heavily vested in the stock market. Only for those who have yet to venture into the stock market, if they are patient to wait.

 

I read about many bloggers who are heavily vested in the stock market and investing for the long term. They can ride out any correction, but I hope they have sufficient 'ammo' to take opportunity of a correction, like Warren Buffet who is currently 36% in cash (>US$100B) while the remaining is invested in stocks.

 

Although the stock market might continue to rise further, the subsequent correction and my buy-in later will more than make up for the earlier 'lost opportunities'.

Why is the US market due for a correction, and why is it much needed?

 

You buy on deep dips of 10%, starting from when? For eg, from $10 when it drops to $9 will you go in? Or wait some more?

 

You say the stock market may continue to rise with a subsequent correction.. isn't this as logical as the sun will rise and set (ie "got say like never say")?

 

How confident are you that your buy in later will make up for the earlier lost opportunities? Anything to back up your claims?

Edited December 29, 2017 by Theoldjaffa

[Kezg1]

....hear say CNY coming..buy abalone stock..true or not??

[Throttle2]

The U.S. markets are due for a much-needed correction (I don't know by how much). But this is a nature of things. When this happens, global stock markets will follow suit. I buy on deep dips (defined as correction of 10% or more).

 

My situation is very unique (full cash war-chest), so what I am doing cannot or should not be followed or applied by others who are already heavily vested in the stock market. Only for those who have yet to venture into the stock market, if they are patient to wait.

 

I read about many bloggers who are heavily vested in the stock market and investing for the long term. They can ride out any correction, but I hope they have sufficient 'ammo' to take opportunity of a correction, like Warren Buffet who is currently 36% in cash (>US$100B) while the remaining is invested in stocks.

 

Although the stock market might continue to rise further, the subsequent correction and my buy-in later will more than make up for the earlier 'lost opportunities'.

 

Bro, you need to open up your narrow mind.

Theres a lot of liquidity out there.

And liquidity is what is propping up this world.

 

Reading from bloggers??

Your investment strategy and ideas and Plans are from bloggers??

Come on, you gottabe more sophisticated than that right?

Or so i thought.

 

By the way i hv never ever read a single book that Warren B has written nor hv i idolised him one bit.

I hold quite similar proportion in cash . Is he trying to copy me? Muayhahaha

 

Your situation is not unique, it is more ill managed and under invested.

 

As we all know a broken clock tells the right time twice a day.

So yes you may be right about the stock mkt eventually.

But that doesnt put you anywhere in terms of investment experience.

i think you just need to open up your narrow mind lah.

 

All the best and....

 

Huat ah all the Bros!

[tenyawph]

Why is the US market due for a correction, and why is it much needed?

 

You buy on deep dips of 10%, starting from when? For eg, from $10 when it drops to $9 will you go in? Or wait some more?

 

You say the stock market may continue to rise with a subsequent correction.. isn't this as logical as the sun will rise and set (ie "got say like never say")?

 

How confident are you that your buy in later will make up for the earlier lost opportunities? Anything to back up your claims?

 

If you have been following this thread, you will find that I went into stock investment from Sep 2016 onwards, made a substantial money by May 2017, and since that time, I have been trading in and out, taking small chunks of profits until Dec 2017.   I am satisfied with my performance so far, and I just want to protect my war-chest and gains.  Call it an extreme risk management, if you want.

 

If the global stock market goes further up, no problem.  I am staying put.  Let others gain who are still vested in the stock market. 

 

On when I will enter the market, I am not saying I will enter exactly at 10% drop.  But I will sit up and observe when there is a market correction of that magnitude.  I will be using trend-following method to time my entry.  This means that I will definitely not be able to catch the absolute bottom, but at least I will be able to participate in its eventual recovery. 

 

 

Q. How confident are you that your buy in later will make up for the earlier lost opportunities? Anything to back up your claims?

A. Each stock market's peak has been higher than the last one.  So I lose out in the earlier opportunity.  After I buy in at a lower level, once recovery takes place, the next peak will be higher (historically speaking). 

 

And you are right, I have no past investment experience to back up my claim.  In fact, in life, there is no guarantees.  So I am not asking you to believe me.  You do your own investment based on your conviction, don't follow others. 

 

I hope this clarifies your queries.

 

May all of us huat for more years to come!  Just don't lose your shirt doing so!

[Theoldjaffa]

If you have been following this thread, you will find that I went into stock investment from Sep 2016 onwards, made a substantial money by May 2017, and since that time, I have been trading in and out, taking small chunks of profits until Dec 2017. I am satisfied with my performance so far, and I just want to protect my war-chest and gains. Call it an extreme risk management, if you want.

 

If the global stock market goes further up, no problem. I am staying put. Let others gain who are still vested in the stock market.

 

On when I will enter the market, I am not saying I will enter exactly at 10% drop. But I will sit up and observe when there is a market correction of that magnitude. I will be using trend-following method to time my entry. This means that I will definitely not be able to catch the absolute bottom, but at least I will be able to participate in its eventual recovery.

 

 

Q. How confident are you that your buy in later will make up for the earlier lost opportunities? Anything to back up your claims?

A. Each stock market's peak has been higher than the last one. So I lose out in the earlier opportunity. After I buy in at a lower level, once recovery takes place, the next peak will be higher (historically speaking).

 

And you are right, I have no past investment experience to back up my claim. In fact, in life, there is no guarantees. So I am not asking you to believe me. You do your own investment based on your conviction, don't follow others.

 

I hope this clarifies your queries.

 

May all of us huat for more years to come! Just don't lose your shirt doing so!

Thanks for your replies and continue believing in yourself.

 

Do enlighten on my first query on "Why is the US market due for a correction, and why is it much needed?" if you can.

 

I am the type who accepts opinions if they are of sound reasoning and based on solid facts. So feel free to expound on your original statement on the US market for the benefit of the forumers here.

 

But frankly I feel alot of what you've said so far is what I term "motherhood" statements. In Singlish, it's called "got say like never say".

 

Prime example of a motherhood statement is "Be careful when you eat, just don't choke!" - akin to your last statement above.

Edited December 29, 2017 by Theoldjaffa

[Voodooman]

Thanks for your replies and continue believing in yourself.

 

Do enlighten on my first query on "Why is the US market due for a correction, and why is it much needed?" if you can.

 

I am the type who accepts opinions if they are of sound reasoning and based on solid facts. So feel free to expound on your original statement on the US market for the benefit of the forumers here.

 

But frankly I feel alot of what you've said so far is what I term "motherhood" statements. In Singlish, it's called "got say like never say".

 

Prime example of a motherhood statement is "Be careful when you eat, just don't choke!" - akin to your last statement above.

I kinda understand what he is saying. His view is there is going to be a big correction, so he rather waits to pick durians. No right and wrong lah.

 

But staying so under-invested has its cost. I think it is important to stay invested at all times.

[tenyawph]

Do enlighten on my first query on "Why is the US market due for a correction, and why is it much needed?" if you can.

 

Prime example of a motherhood statement is "Be careful when you eat, just don't choke!" - akin to your last statement above.

 

A to 1st Q.  This is based on statistical facts.   On average. 

 

The U.S. has the best historical data set for stock market history. Since 1928, U.S. stocks have experienced a…

• 10% decline once every 11 months
• 20% decline once every four years
• 30% decline once every decade
• 50% decline two to three times per century

After a lengthy run-up in the US market, a market correction is actually healthy, to provide another base for consolidation before resuming its upward climb to further record highs.

 

Since I am in a full-cash position, I am targeting a decent re-entry point, that is to buy on dips. What I do not know is how much this correction will be.  

 

A to 2nd Q.  The motherhood statement has been explained in detail previously in my earlier postings, from page 50 onwards of this thread which spelt out a few pointers in my investment strategy.  The most basic pointer is this: Nibble your stocks.   Don't plough everything at one go. Unless you are very sure, don't do it.  This is one of my risk management methods.

 

I know that I am currently very under-invested.  Many months ago, I mentioned to T2 previously that "I am playing with marbles" with the amount that I was invested in (because this amount was small relative to my war-chest size).  So can give thanks to his timely reminder. 

 

Lastly, I must emphasize this, which I have stated previously in this thread (now I am beginning to sound like a broken record), no one can predict accurately when the stock market will crash.  So the next best thing is to be prepared for it.  Set aside ammo, so that you can take opportunity of it when it happens. (Repeat: Warren's 36% cash ammo standing by.  He is well prepared).  Eh...does this qualify as another motherhood statement as well.......sorry!

[Cook123]

I think it depends on what type of investor

For investors who depend primarily on capital gains, they might be more likely to consider taking some off or all off the table in anticipation of market drop and to enter when that happens

I know there are some who are in a high cash level now and they said they are waiting to enter when the big bear or big trough comes and they can buy like the great singapore sale

But when it happens, if it happens, what percentage of those can or dare to jump in at the height of the bear or around the height?

During the Lehman crisis, how many pple were in high cash and jump in at say sti 1400 or even 1600?

It’s easy to say what one would do when something happens. But when it really happens, what one really does might be a different thing totally.

[Theoldjaffa]

A to 1st Q. This is based on statistical facts. On average.

 

The U.S. has the best historical data set for stock market history. Since 1928, U.S. stocks have experienced aâ¦

• 10% decline once every 11 months
• 20% decline once every four years
• 30% decline once every decade
• 50% decline two to three times per century

After a lengthy run-up in the US market, a market correction is actually healthy, to provide another base for consolidation before resuming its upward climb to further record highs.

 

Since I am in a full-cash position, I am targeting a decent re-entry point, that is to buy on dips. What I do not know is how much this correction will be.

 

A to 2nd Q. The motherhood statement has been explained in detail previously in my earlier postings, from page 50 onwards of this thread which spelt out a few pointers in my investment strategy. The most basic pointer is this: Nibble your stocks. Don't plough everything at one go. Unless you are very sure, don't do it. This is one of my risk management methods.

 

I know that I am currently very under-invested. Many months ago, I mentioned to T2 previously that "I am playing with marbles" with the amount that I was invested in (because this amount was small relative to my war-chest size). So can give thanks to his timely reminder.

 

Lastly, I must emphasize this, which I have stated previously in this thread (now I am beginning to sound like a broken record), no one can predict accurately when the stock market will crash. So the next best thing is to be prepared for it. Set aside ammo, so that you can take opportunity of it when it happens. (Repeat: Warren's 36% cash ammo standing by. He is well prepared). Eh...does this qualify as another motherhood statement as well.......sorry!

Thanks for explaining. It is interesting to learn the psychology behind each investor's thinking.

[Voodooman]

A to 1st Q. This is based on statistical facts. On average.

 

The U.S. has the best historical data set for stock market history. Since 1928, U.S. stocks have experienced aâ¦

• 10% decline once every 11 months
• 20% decline once every four years
• 30% decline once every decade
• 50% decline two to three times per century

After a lengthy run-up in the US market, a market correction is actually healthy, to provide another base for consolidation before resuming its upward climb to further record highs.

 

Since I am in a full-cash position, I am targeting a decent re-entry point, that is to buy on dips. What I do not know is how much this correction will be.

 

A to 2nd Q. The motherhood statement has been explained in detail previously in my earlier postings, from page 50 onwards of this thread which spelt out a few pointers in my investment strategy. The most basic pointer is this: Nibble your stocks. Don't plough everything at one go. Unless you are very sure, don't do it. This is one of my risk management methods.

 

I know that I am currently very under-invested. Many months ago, I mentioned to T2 previously that "I am playing with marbles" with the amount that I was invested in (because this amount was small relative to my war-chest size). So can give thanks to his timely reminder.

 

Lastly, I must emphasize this, which I have stated previously in this thread (now I am beginning to sound like a broken record), no one can predict accurately when the stock market will crash. So the next best thing is to be prepared for it. Set aside ammo, so that you can take opportunity of it when it happens. (Repeat: Warren's 36% cash ammo standing by. He is well prepared). Eh...does this qualify as another motherhood statement as well.......sorry!

What do you mean by nibble? Just curious? So you have a number in mind?

[Throttle2]

What do you mean by nibble? Just curious? So you have a number in mind?

His warchest is a million bucks. So nibble is $50k, i guess?

Or taking a decent bite is $200k?

 

One thing that people never realise is that if you miss the big run ups, you wont catch enough of the dips every single time to beat the market

 

Of course we all know what he is talking about.

We know whats buying on dips

We know whats not chasing the market

We know whats taking profits off the table

 

And that is why we still have bullets.

We must always have bullets

No bullets, war is over.

 

But when you are winning the war and yet over-ration your bullets, you may end up losing the war.

 

Whatever it is, to each his own becos if we lose, other people wont give us money

And if we win, we wont give others money either

 

So back to the bottomline.

As long as we put our money where our mouths are, we should rest in peace.

 

Have a great New Year weekend Voodooman and the bros here.

Good luck and godspeed.

[tenyawph]

I think it depends on what type of investor

For investors who depend primarily on capital gains, they might be more likely to consider taking some off or all off the table in anticipation of market drop and to enter when that happens

I know there are some who are in a high cash level now and they said they are waiting to enter when the big bear or big trough comes and they can buy like the great singapore sale

But when it happens, if it happens, what percentage of those can or dare to jump in at the height of the bear or around the height?

During the Lehman crisis, how many pple were in high cash and jump in at say sti 1400 or even 1600?

It’s easy to say what one would do when something happens. But when it really happens, what one really does might be a different thing totally.

 

All I can say is this, many people might think about a GSS before it happens, but do they seriously give it a deep thought and sit own and spend some time to really plan for it?  Or they kind of "okay, when the time comes, I will do it?" Because when GSS happens, there has to be a concrete GSS plan on hand to execute it in a disciplined way.

 

Do you have a plan on hand when that happens?  Let me know.  I have a plan (in fact 2 plans, a conservative investment one and an aggressive investment one) already, in preparation of this.  I know what stocks to buy (selection based on FA) when that happens.   Those who have been following me in this thread know that I have been planning for a GSS since Aug 2016.  Does that prevent me from participating from the bull market in 2017?  No, it didn't.  And they knew how much I made (since I trumpeted it.  I was showing newbies how to do it.)

 

Q. But when it happens, if it happens, what percentage of those can or dare to jump in at the height of the bear or around the height?

 

A. If we talk about a market crash, I am going in based purely on TA (there is no fundamental reason about a failing knife, remember, it's pure market panic - market sentiments driven).  I will be looking at trends, trading volumes, moving averages, RSI, etc to time my entry.   I definitely will not catch the absolute bottom (It will be difficult to do so) but it is sufficient as I can participate in its recovery. 

 

And yes, I agree it takes a strong stomach to make a buy when everyone else is selling (that's why we need discipline to execute our plan).  But it is actually the best time to go in. You will know when the time comes.  The headlines will be 'blood on the streets'. (or Wall Street if you are reading the U.S. news).    A good technique is to look for price gaps.  When trading the volume is heavy, don't jump in yet.  You jump in when there is a price gap, and trading volume starts to dry up.  At this stage, the short term risk of a further downside is less. Remember, there is no guarantees in life. 

 

The biggest risk management take-away I can give is this: Nibble stocks. (I define this as 1% of my war chest or more, depending on one's comfort level). Spreading your purchases over time, (repeating myself many times before, from page 50 onwards of this thread).  Think about it.   You get to make 100 mistakes over a period of time before you bust your ammo supply.  And seriously, after making 10 mistakes, one must learn from it, and not continue to make another 90 mistakes.  (By mistake, I define it as entering the stock counter  and it continues to go down further significantly - interpret TA wrongly, perhaps?).

 

For those who can 'take real losses', I do practice stop-loss limit to cut losses.  Not everyone can agree to this, though.  It is okay to make losses, just keep them small.  A few big winners will more than make up for these small losses.  Because to me, nothing is worse than accumulating a bigger loss (on paper), and tying up unnecessary capital (holding on to these paper losses) and lose the ability to deploy them when the opportunity comes.     One famous blogger publishes his portfolio (with entry prices) and I cringe when I study it....

 

So, I might have sprouted more motherhood statements, I am sure, for those seasoned investors bros here.  So "please don't shoot me", I am here to learn from others as well so I become a better investor over time. 

[Enye]

wah so many stock gurus here....

 

peasant kah kia very busy taking notes

 

 

[Kusje]

wah so many stock gurus here....

 

peasant kah kia very busy taking notes

 

ðð¤

Boss. Please share notes later - I take gk and photocopy.

 

My language skills not too good so I write much slower than you. Only managed to note down 5%.