The bears den

[Trader11]

STI is heavily reliant on the banks and Singtel.

As our economy matures, expected returns for STI has to adjust lower.

Probably 5-6% pa inclusive of dividends as long term returns.

I don't invest in STI at all since I work in SG......already exposed to SG economy

 

[NewInvestor]

1)
I am using the Dec 2018 plunge levels as reference.
We now have more bad news that needs to be discounted v/s then
1)Escalated trade war with China
2)New trade war fronts opened up
3)Sugar high from Trump tax cuts wearing off
4)PMIs of most countries coming in lower, global slowdown
5)Strong Dollar, affecting export earnings of companies.
6)Bond yields plunging to record lows, which means investors are rushing to safety. Why are they doing that if equity prices are attractive?


So we have multiple factors that will affect earnings and hence SPX should be closer to 2500.

2)If equities keep climbing higher, I just give up equities. To me the risk of being invested and then experiencing a plunge with no recovery for a long period is worse than not being invested and markets ripping higher.

Bro, just chill. Trump's tweets and various other pronouncements (some call it flip flops) is the trend. Best thing to do is to follow the trend. It seems to me that he will keep pushing up the markets.....until, one day, he cannot anymore. Me thinks it has some way to go.

There is risk in going long. But it is acceptable risk.

 

[SBC]

Will this year-end be like 2018 again?

Meanwhile, happy to acquire more VIX.

 

[NewInvestor]

Will this year-end be like 2018 again?

Meanwhile, happy to acquire more VIX.

VIX is pretty low now. It is likely to spike at some point.

 

[sfugel]

VIX is pretty low now. It is likely to spike at some point.

Apology noob here......what’s VIX? Vixtel??

 

[eD1s0n]

Apology noob here......what’s VIX? Vixtel??

Volatility IndeX

 

[kage]

Stupid fed is cutting rates to buffer trumps trade war action ...

When the real recession comes, the fed will have no more rates to cut and it will be worse than 2008 ....

 

[Mecisteus]

Will this year-end be like 2018 again?

Meanwhile, happy to acquire more VIX.

https://qz.com/1177950/how-to-bet-on-stock-volatility-and-why-thats-a-bad-idea/

 

[Mecisteus]

I made >S$2.5 Millions from properties since 2009 (definitely much more than stocks).

Li Ka Shing and Wee Cho Yao made billions from properties.

But your point being?

 

[revhappy]

Stupid fed is cutting rates to buffer trumps trade war action ...

When the real recession comes, the fed will have no more rates to cut and it will be worse than 2008 ....

I doubt they will cut rates. All Powell said was that they will be prepared to cut if job losses increase and inflation is under threat. The market somehow misunderstood it as a sure cut.

Frankly, this is the most dumbest market ever. If data really disappoints and Fed has to cut rates 3 times, then it means things are very bad for the economy and earnings. Rate cuts won't help. As seen from previous rate cut episodes, Fed was not able to prevent a market plunge. They won't be able to prevent this time either

So markets cheering rate cuts is the dumbest thing ever.

 

[tesarise]

a complex system does not behave the way a random dude on the internet thinks it should behave.

must be that the system is dumb. yup.

 

[DukeCS33]

I doubt they will cut rates. All Powell said was that they will be prepared to cut if job losses increase and inflation is under threat. The market somehow misunderstood it as a sure cut.

Frankly, this is the most dumbest market ever. If data really disappoints and Fed has to cut rates 3 times, then it means things are very bad for the economy and earnings. Rate cuts won't help. As seen from previous rate cut episodes, Fed was not able to prevent a market plunge. They won't be able to prevent this time either

So markets cheering rate cuts is the dumbest thing ever.

I follow your line of reasoning but in my opinion, there is a overriding factor that trumps over all bearish factors. Flush liquidity. When there is too much money in circulation, they will make its way into inflating asset prices. This can come from excess corporate cash resulting in buybacks, surpluses savings being put to work into investments etc. This is the reason why it is difficult to be shorting as one is swimming against the tide. Once fear recedes, the retail money will start chasing stock prices again and fundamentals get chucked aside as greed takes hold again.

Like you, I do not think the Fed would cut and the markets got ahead of itself. But that does not matter as investors are getting greedy again.

 

[NewInvestor]

I follow your line of reasoning but in my opinion, there is a overriding factor that trumps over all bearish factors. Flush liquidity. When there is too much money in circulation, they will make its way into inflating asset prices. This can come from excess corporate cash resulting in buybacks, surpluses savings being put to work into investments etc. This is the reason why it is difficult to be shorting as one is swimming against the tide. Once fear recedes, the retail money will start chasing stock prices again and fundamentals get chucked aside as greed takes hold again.

Like you, I do not think the Fed would cut and the markets got ahead of itself. But that does not matter as investors are getting greedy again.

If the Flush Liquidity theory is correct, then the correct strategy is to buy on dips and accumulate.

 

[BBCWatcher]

I don’t necessarily recommend anything I’m describing below.

Investing in property is totally a different animal.
1) You can't invest in smaller quantum like $1k or $10k with properties

You can, via REITs and REIT index funds. The U.S. financial markets offer REIT index funds with US$1 minimum to open and US$1 increments. (Via Schwab, for example.)

2) Downside is quite limited with properties. ie The value cannot go to 0.

Real estate near the Chernobyl nuclear power station is worthless. Every individual piece of real property is only one industrial incident, asset forfeiture, revolution, invasion, epidemic, fire, flood, or other calamity away from a total writedown — and it’s a fairly long list.

The value of total global investable stocks (e.g. IWDA, VWRD) cannot fall to zero unless human civilization comes to an end. (Which I cannot totally rule out. Giant space rocks exist.)

So logically, the upside is going to be limited and controlled especially with government intervention.

This is true of real estate in Singapore, certainly. The government is massively interventionist and will strictly limit your upside.

3) If you look at the long term historical returns of property prices, they aren't really outstanding and beaten hands down by returns from stocks.

Globally, over long stretches of history, that’s probably true. There are local or regional, shorter term exceptions. Singapore between World War II and the Asian Financial Crisis was probably one such exception.

What makes properties attractive is because of the leverage.

Cheaper leverage historically, but brokers and financial markets are challenging that. The U.S. margin interest rates that IB charges are basically identical to U.S. adjustable mortgage interest rates, especially when factoring in mortgage costs. Moreover, the options and futures markets let you make highly amplified bets if that’s your thing.

What makes them unattractive in Singapore are the taxes. Real estate is comparatively heavily taxed in Singapore.

 

[NewInvestor]

I don’t necessarily recommend anything I’m describing below.


You can, via REITs and REIT index funds. The U.S. financial markets offer REIT index funds with US$1 minimum to open and US$1 increments. (Via Schwab, for example.)


Real estate near the Chernobyl nuclear power station is worthless. Every individual piece of real property is only one industrial incident, asset forfeiture, revolution, invasion, epidemic, fire, flood, or other calamity away from a total writedown — and it’s a fairly long list.

The value of total global investable stocks (e.g. IWDA, VWRD) cannot fall to zero unless human civilization comes to an end. (Which I cannot totally rule out. Giant space rocks exist.)


This is true of real estate in Singapore, certainly. The government is massively interventionist and will strictly limit your upside.


Globally, over long stretches of history, that’s probably true. There are local or regional, shorter term exceptions. Singapore between World War II and the Asian Financial Crisis was probably one such exception.


Cheaper leverage historically, but brokers and financial markets are challenging that. The U.S. margin interest rates that IB charges are basically identical to U.S. adjustable mortgage interest rates, especially when factoring in mortgage costs. Moreover, the options and futures markets let you make highly amplified bets if that’s your thing.

What makes them unattractive in Singapore are the taxes. Real estate is comparatively heavily taxed in Singapore.

All good points by BBCW. Which is why I, a long time Spore prop investor, have been switching from real estate to stock/bonds/REITs investment. The process continues.

 

[FrostWurm]

May be my message is not clear: for past 10 years, my total ROI from properties is >400% & i made >S$2.5m.
For stocks i made <150%, so property returns significantly greater than stocks from my experience for past 10 years.

I made 700% from investing in cash

 

[DukeCS33]

Deal or no deal, nothing has changed.

https://www.reuters.com/article/us-...-border-despite-trump-deal-idUSKCN1TA01K?il=0

So Markets rally on news of a deal being struck. Would all that unravel down the road?

 

[DukeCS33]

May be my message is not clear: for past 10 years, my total ROI from properties is >400% & i made >S$2.5m.
For stocks i made <150%, so property returns significantly greater than stocks from my experience for past 10 years.

You said your stocks returns much more than properties, so interested to know what are your returns for properties & stocks over past 10 years. Care to share?

Stock returns vs property returns... this can be settled easily by comparing how the property index performed relative to the STI. If one applies leverage on property, then the same needs to be applied to stocks so as to have an apple to apple comparison.

 

[Trader11]

Deal or no deal, nothing has changed.

https://www.reuters.com/article/us-...-border-despite-trump-deal-idUSKCN1TA01K?il=0

So Markets rally on news of a deal being struck. Would all that unravel down the road?

Trump just want a "deal" to make himself look good for election 2020.

 

[Mecisteus]

You said your stocks returns much more than properties, so interested to know what are your returns for properties & stocks over past 10 years. Care to share?

OK you want to hear a real or some cool stories?

If real, who will verify?

So which property or stock can give the best returns for next 5 years?