2020 market expectations and positioning

[polyglob]

I'd like to share this good read that I found in the boglehead forum.
(I am not that dogmatic).

http://www.oncoursefp.com/files/Vectors March 2020 final.pdf

You're welcome.

Is a good read. Thanks.

Which part you think is dogmatic? That this time is _not_ different?

 

[NewInvestor]

Do you not think that Reits share price depends on their underlying performance? As we get more and more virus cases, the risk of a recession becomes higher and DPU may plunge. The higher the reits fly, the harder the fall.

REITs have WALE, my friend. And as interest rates get lower, they save a ton of interest expense.

 

[Merg91]

Learn to buy when the fear is extreme.
Bought ShengSiong when AmazonPrime entered Singapore....
Bought CapitalMallTrust last few weeks when
MOH kia and the ministers appeared on TV every day updating covid-19.
Now they stop the briefing.

This COVID-19 will be likely to turn up to be like H1N1.
The fear is created by that WHO African tribesman to make him a star.

Do you not think that Reits share price depends on their underlying performance? As we get more and more virus cases, the risk of a recession becomes higher and DPU may plunge. The higher the reits fly, the harder the fall.

 

[NewInvestor]

Learn to buy when the fear is extreme.
Bought ShengSiong when AmazonPrime entered Singapore....
Bought CapitalMallTrust last few weeks when
MOH kia and the ministers appeared on TV every day updating covid-19.
Now they stop the briefing.

This COVID-19 will be likely to turn up to be like H1N1.
The fear is created by that WHO African tribesman to make him a star.

These are words of wisdom. Which is why I have been nibbling at CMT and CDLHT in the last few weeks. Buy when the fear is high. Covid19 will pass sooner or later. In the meantime, interest cuts are going to keep pushing yield assets up.

 

[DukeCS33]

REITs have WALE, my friend. And as interest rates get lower, they save a ton of interest expense.

I beg to differ. They save nothing. Most reits would have to borrow or issue rights / equity / bonds when they make an acquisition. The borrowings are all locked into fix rate interest swaps which suffer negative mark to market when interest rate falls or when the yield curve does a bull flattening. So from an interest rate expense perspective, they do not benefit. Unless they make a new acquisition, then the lower interest rate curve is something that they may benefit from.
A Reit can have a long wale but when the tenant collapse due to recessions, the reit will not be able to receive any income and may have problems finding another tenant. DPU will drop.
Maybe their property may receive a temporary boost in valuation due to discounting using a lower interest rate factor but this is paper and does nothing to their cash flows / DPU. And in a recession, values of properties would fall as no one would buy them.

 

[DukeCS33]

Learn to buy when the fear is extreme.
Bought ShengSiong when AmazonPrime entered Singapore....
Bought CapitalMallTrust last few weeks when
MOH kia and the ministers appeared on TV every day updating covid-19.
Now they stop the briefing.

This COVID-19 will be likely to turn up to be like H1N1.
The fear is created by that WHO African tribesman to make him a star.

It all boils down to risk management and time horizon for your trading and investments. Those looking at very long term investments, say over a period of 30 years, may see a year of dip in a light different from those who are old and have a short term trading horizon.

BTW, you are talking to someone who shows hand during crisis mode... but our strategies and execution methods may differ.

 

[limster]

For Feb & March, I've put in $55k into the market while waiting for STI ETF to fall to $2.99.

Looks like its not happening so I am not deploying any more of my warchest.

Unless there is a real crash (if STI ETF doesn't even fall below $3, I won't call it a crash, just a minor correction), it's back to regular DCA of ETF.

FSMOne RSP coming up, 8 March....

 

[ocs_woodlands]

Actually if you look at the market action in SGX from last Monday till now, BOTH longists and shortists will be bored to tears....

There is hardly any movement..... or maybe i am a high beta kinda guy?

When Dow -5%, STI goes down by 1%. When Dow +%5, STI goes up by 0.5/0.8%...... like that how to trade???

Really sian... I thought i would have a chance to liquidate my SPF 4% perps for equity.... but looks llike have to be satisfied with that 4%

 

[joshua182]

STI has always been a bored old man's index... ultra conservative, relatively stable, flat to slightly positive. just like singapore.

open a RH (ok, maybe not), TOS or IB account and have go lose your money somewhere else guys, there's no fun to be had here.

SG as a country is trying to find it's next growth story with the gov almost blindly pumping money into their very own meme sectors/companies/project. spray and pray, spray and pray...

 

[DukeCS33]

Actually if you look at the market action in SGX from last Monday till now, BOTH longists and shortists will be bored to tears....

There is hardly any movement..... or maybe i am a high beta kinda guy?

When Dow -5%, STI goes down by 1%. When Dow +%5, STI goes up by 0.5/0.8%...... like that how to trade???

Really sian... I thought i would have a chance to liquidate my SPF 4% perps for equity.... but looks llike have to be satisfied with that 4%

SG is not a trading market - volatility is low and transaction costs high.

 

[h.y.o.m]

The key data to take from last night's market action is lower volume. The bear is still strong.

The overnight price action appears as if the Market has totally ignored Covid 19 and latched on to the 50bps cut and Biden's results on SuperTuesday to buy up the market. So where were the sellers that were pushing the SP down just 2 nights ago? The strong selling coupled by heavy volume then, suggests that the funds were in. Now there are some ways to interpret this - climatic volume hides buying from smart monies... so was that smart monies looking to scoop things up?
Last night, we had a strong surge but look at the volume - it was significantly lesser than the prior 2 days. It is still high volume but way lesser than prior 2 days. Would this then suggest that the smart monies are not backing this overnight rally? There may be institutional monies pushing as with volume that is high but the smart monies? Maybe they are only willing to buy at lower levels and not at current levels.... or maybe they were absent altogether which presents a stark picture that the selling 2 days ago were all funds looking to exit and last night's rally profit taking by short term funds. The jury is yet to be out but I note a few key points:
1. The rally from the bottom was resisted and turned at the 50% Fibonacci mark at 3125
2. Algo funds appear to be testing and pushing minor boundaries on both ends in the recent selloffs and rallies.
3. 3050 level is that level of congestion where the battle appears to be fought and is a key pivotal point.

From a fundamental perspective, the Central banks' actions so far would not mitigate the effects of a recession caused by a virus due to both demand and supply shock. Clearly, the professional market did not believe in Fed's cuts and hence that sell off on announcement. However, given the reaction observed yesterday, we may need a more "serious" infection headline to spark the next sell off. And I would venture to say that we can only expect such headline news to get more serious as containment efforts have clearly failed.

On a whole, I would opine that we currently have a technical rebound. My macro interpretation is that it is still early days and that the only cure for the market's malaise / Covid 19, is scientific and not fiscal nor monetary. I would stick to my gameplan to trade short term and play the volatility to my advantage. Key direction is short (sell on rallies) and more on break below recent lows.

PS: To forumers who privately message me to look at certain stocks or for views, I would apologise if you did not receive my response. It takes time and effort to analyse - if you ask me, I would do some homework before replying.

 

[ocs_woodlands]

SG is not a trading market - volatility is low and transaction costs high.

Ok, i will trade US markets when I go for early retirement within this decade and don't have to wake up at 630am every day

 

[Trader11]

I will say that it is damn cheap to punt now since fed reduce interest rate....

 

[d9_lives]

Is a good read. Thanks.

Which part you think is dogmatic? That this time is _not_ different?

I meant I am not dogmatic (many bogleheads are).
I do DCA religiously, regardless of the headlines and price of the day but I also bought some individual stocks (a sin to many of them).

 

[commie_rick]

These are Singapore bond ETFs. I guess, US bond ETFs shot up. SG ones left behind.

Sgx is pretty slow and illiquid

 

[Merg91]

Got some for $3.028 recently.
It has moved a bit up only today.

STI doesn't move much partially because of the 3 banks are falling.

For Feb & March, I've put in $55k into the market while waiting for STI ETF to fall to $2.99.

Looks like its not happening so I am not deploying any more of my warchest.

Unless there is a real crash (if STI ETF doesn't even fall below $3, I won't call it a crash, just a minor correction), it's back to regular DCA of ETF.

FSMOne RSP coming up, 8 March....

 

[joshua182]

liquidated when spx 32xx... 27th feb and watched as it went up to almost 3.4k over the next couple days... now its 3k.. i think this round max drop is 15%, worse case 20%.. so abit more to go bah.. anyway lock in the 1 yr of gains to play options and crap myself, fun times..

 

[MrHighlander]

Similar sentiments

No lump sum buy at this moment

Just ‘opportunistic’ DCA

For Feb & March, I've put in $55k into the market while waiting for STI ETF to fall to $2.99.

Looks like its not happening so I am not deploying any more of my warchest.

Unless there is a real crash (if STI ETF doesn't even fall below $3, I won't call it a crash, just a minor correction), it's back to regular DCA of ETF.

FSMOne RSP coming up, 8 March....

Posted from MaMaMia HardwareZone Forums app

 

[joshua182]

Any trades screenshots in verifying your claim? No?


Remember, embrace integrity!

OK boss, here is the photoshop.

sry i meant 27th jan...

 

[revhappy]

HK REITs Vs Singapore REITs.

https://www.straitstimes.com/busine...s-reluctant-to-spin-off-properties-into-reits