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2020 market expectations and positioning

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Old 01-03-2020, 12:55 PM   #1501
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US futures are closed on the weekend

Where got -2.66%?

problem is slashing interest rate does not help the businesses. it is not a liquidity issue that business are facing but logistics supply shock and the resultant drop in business spending. the central banks could loan me a billion dollars to keep my business afloat but I'm making losses everyday because of disrupted supply lines. Liquidity does not resolve insolvency.

if the trump administration is smart enough now, they will remove all existing tariffs on Chinese products which will not help much as well but markets will like this news alot.

As it stands, weekend djia is at -2.66%.

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Old 01-03-2020, 12:59 PM   #1502
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While there is a backdrop of liquidity, this is double edge... my fear has always been that the central banks have expended their ammunition and then what? We have a litmus test on this scenario now as rates are already low and Central banks' balance sheet bloated.
If government economic intervention is merited, then fiscal policies are available. Back when the U.S. economy needed more stimulus economist Paul Krugman explained how the threat of an alien invasion would spur the necessary fiscal stimulus, tongue in cheek. Well, we have an alien invader now, even though it's terrestrial in origin and much smaller than Hollywood's space aliens.

The United States, the world's largest economy, has something like record high taxing power right now (taxes are extremely low there by modern historical standards) and could spend aggressively and massively if it wishes whenever it wishes.

Krugman recently characterized COVID-19 as both a supply and a demand shock, of magnitude yet to be determined, and with markets currently betting that it's primarily a demand shock (a consensus forecast he agrees with).

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Old 01-03-2020, 01:07 PM   #1503
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US futures are closed on the weekend

Where got -2.66%?


https://www.ig.com/en/indices/market...nd-wall-street
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Old 01-03-2020, 01:49 PM   #1504
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If government economic intervention is merited, then fiscal policies are available. Back when the U.S. economy needed more stimulus economist Paul Krugman explained how the threat of an alien invasion would spur the necessary fiscal stimulus, tongue in cheek. Well, we have an alien invader now, even though it's terrestrial in origin and much smaller than Hollywood's space aliens.

The United States, the world's largest economy, has something like record high taxing power right now (taxes are extremely low there by modern historical standards) and could spend aggressively and massively if it wishes whenever it wishes.

Krugman recently characterized COVID-19 as both a supply and a demand shock, of magnitude yet to be determined, and with markets currently betting that it's primarily a demand shock (a consensus forecast he agrees with).
Isn't taxing the opposite of stimulus? unless you mean taxing only the top 1%.
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Old 01-03-2020, 01:51 PM   #1505
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This is increasingly looking like beginning of 2008 and not 2016 or 2018. Stick to your asset allocation guys, dont over commit, yet.

Remember the real shock of 2008 came after market had already fallen substantially i.e. in September Lehman brothers. Markets started falling way back in February. So this is just the start. This is not to say sell and bailout now. But dont get overly bullish so early. There could be large scale job losses and the economy could tank and central banks may not be able to control. So keep atleast 4 years worth of savings in fixed income, to tide over any such potential scenarios.

Last edited by revhappy; 01-03-2020 at 01:56 PM..
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Old 01-03-2020, 02:05 PM   #1506
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I am also holding back as I think this virus crisis has more room to create havoc .
This is increasingly looking like beginning of 2008 and not 2016 or 2018. Stick to your asset allocation guys, dont over commit, yet.

Remember the real shock of 2008 came after market had already fallen substantially i.e. in September Lehman brothers. Markets started falling way back in February. So this is just the start. This is not to say sell and bailout now. But dont get overly bullish so early. There could be large scale job losses and the economy could tank and central banks may not be able to control. So keep atleast 4 years worth of savings in fixed income, to tide over any such potential scenarios.
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Old 01-03-2020, 02:19 PM   #1507
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based on the IG weekend markets, if we are expecting a 2% drop, looks like STI ETF will be $2.96 on Monday. I'm buying some at that price, and ready to average down, just like 2008.
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Old 01-03-2020, 02:28 PM   #1508
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This is increasingly looking like beginning of 2008 and not 2016 or 2018. Stick to your asset allocation guys, dont over commit, yet.

Remember the real shock of 2008 came after market had already fallen substantially i.e. in September Lehman brothers. Markets started falling way back in February. So this is just the start. This is not to say sell and bailout now. But dont get overly bullish so early. There could be large scale job losses and the economy could tank and central banks may not be able to control. So keep atleast 4 years worth of savings in fixed income, to tide over any such potential scenarios.


ok it's scary u r turning bearish.

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Old 01-03-2020, 02:37 PM   #1509
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ok it's scary u r turning bearish.

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he already entered 50k sti. no scare
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Old 01-03-2020, 02:39 PM   #1510
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ok it's scary u r turning bearish.

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I am just telling people who are already all in and could be tempted to use leverage as they see juicy prices.
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Old 01-03-2020, 02:40 PM   #1511
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he already entered 50k sti. no scare
I have another 100k to allocate and then my allocation becomes 50:50. That is my limit. I will be more cautious in investing the 100k now, but I will not sell whatever is already invested.
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Old 01-03-2020, 02:48 PM   #1512
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I am just telling people who are already all in and could be tempted to use leverage as they see juicy prices.
http://singaporeanstocksinvestor.blo...-in-stock.html

When to be fully invested in the stock market? Probably never.
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Old 01-03-2020, 02:54 PM   #1513
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http://singaporeanstocksinvestor.blo...-in-stock.html

When to be fully invested in the stock market? Probably never.
It is amazing 7 year old article and the level 2700 still makes sense
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Old 01-03-2020, 03:12 PM   #1514
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I am curious about something. I see that the media tends to report on the changes in the Dow Jones Index a lot more than the S&P 500. Why is this so, when DJI only covers 30 companies compared to S&P's 500? Is it more sensational to report a drop of DJI's 1000 points instead of S&P's 30 point drop?
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Old 01-03-2020, 03:21 PM   #1515
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I started buying during the GFC after STI went under 3,000, which hindsight says was too early, but I have no regrets!

My only regret from the last GFC is buying too little, rather than buying too early. Even though I ran out of CPF-OA after STI hit 1,500, I still had a fair bit of CPF-SA left but i didn't use that much....
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