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Covid-19
19-05-2020, 08:53 AM.
Post: #191
RE: Covid-19
(18-05-2020, 09:43 PM)Curiousparty Wrote: https://on.mktw.net/2Ze92jb Check out this article from MarketWatch - ‘Betting against the U.S. economy and consumer is a loser’s game’ — why one strategist sees Dow 40,000 on the horizon


40000 points Dow in sight ?


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Contrarian indicator? I have seen these types of predictions before, and then the market plummets....

Either way, I am sticking to my strategy: new buying limited to gold miners and to Singapore electronic/IT firms. 

If the DOW gets to 40,000 it will not be because of the US consumer but due to a flood of money from the FED, and some of that liquidity is going to keep spilling over into precious metals. If the DOW plunges the FED will be opening up the taps even further, and ditto. Meanwhile, one of the sectors that will see a long term gain out of COVID-19 is electronics/IT, due to the switch to home working and video conferencing.

Warning: I have been wrong before (lots of times), can be wrong now and will be wrong in the future.

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19-05-2020, 10:36 AM.
Post: #192
RE: Covid-19
(19-05-2020, 08:53 AM)Dosser Wrote:
(18-05-2020, 09:43 PM)Curiousparty Wrote: https://on.mktw.net/2Ze92jb Check out this article from MarketWatch - ‘Betting against the U.S. economy and consumer is a loser’s game’ — why one strategist sees Dow 40,000 on the horizon


40000 points Dow in sight ?


Sent from my iPhone using Tapatalk Pro

Contrarian indicator? I have seen these types of predictions before, and then the market plummets....

Either way, I am sticking to my strategy: new buying limited to gold miners and to Singapore electronic/IT firms. 

If the DOW gets to 40,000 it will not be because of the US consumer but due to a flood of money from the FED, and some of that liquidity is going to keep spilling over into precious metals. If the DOW plunges the FED will be opening up the taps even further, and ditto. Meanwhile, one of the sectors that will see a long term gain out of COVID-19 is electronics/IT, due to the switch to home working and video conferencing.

Warning: I have been wrong before (lots of times), can be wrong now and will be wrong in the future.

There are tens of thousands of analysts in this world (or maybe more?) and some of them could probably stand out, by coming up with "out of the world" predictions.

These are really noise than anything else for most market participants (including VBs). Their functionality serves to either (1) capture attention, or (2) as social proof for those who hold similar convictions. Nothing beats a warm fuzzy feeling after hearing someone "agrees with you".

If you don't need (1) or (2), it is simply a waste of time to read into them.

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19-05-2020, 12:35 PM.
Post: #193
RE: Covid-19
Yes. I maintain no one, not Warren Buffett, not Ray Dalio, not even Jerome Powell himself knows what the future of the market holds, especially in the short-term.

Reading these analysis, at best is a point of reference, but usually it's a waste of time.
=========== Signature ===========
“If you buy a business just because it’s undervalued, then you have to worry about selling it when it reaches its intrinsic value. That’s hard. But if you can buy a few great companies, then you can sit on your ass. That’s a good thing.” - Charlie Munger

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20-05-2020, 08:24 AM. (This post was last modified: 20-05-2020, 08:28 AM by Curiousparty.)
Post: #194
Covid-19
https://on.mktw.net/36fYXDH Check out this article from MarketWatch - We’re in a new paradigm for stocks, this analyst argues. Get ready for permanently higher valuations.

Finally, the makeup of the stock market indexes and the economy is now skewed more heavily to technology, which should offer loftier valuations and returns than older, generally more industrial, industries did.

As Colas puts it, “we think the combination of mobile phones, high speed internet and Moore’s Law changes the calculus, both in terms of corporate return on capital and the sustainability of cash flows.”

In gist , the whole paradigm has shifted . We cannot no longer apply metrics and compare with past ... the makeup of stock is different now and the landscape is different too, especially with FED relentless money printing machines ...


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20-05-2020, 08:15 PM.
Post: #195
RE: Covid-19
Given the slowdown wld probably have started after CNY this year, I think the survey results are realistic - restaurants wld likely have their reserves depleted in 6 mths(notwithstanding govt / landlord help). Some eateries may already have been somewhat affected since Feb 2020.

Side note : I am sceptical whenever I read abt business owners claiming they cannot survive short term closure(e.g. 1 - 2 months), that wld mean their business are not sustainable in the first place. I mean, which rationale businessman wld not have spare cash to tide over emergencies ?  

It seems offering delivery/take-away does not help much - I guess when we dine in a restaurant, other than being able to consume the freshly prepared food, we are also paying for and enjoying the ambience/service/experience. It is somewhat different when we take-away, something feels missing, the prices are also not very affordable.

Coronavirus: More Singapore restaurant closures and layoffs to come, Chope survey finds
"...The survey reported that 42 per cent of restaurants, or about two in five, said they would not be able to operate beyond two months at the current rate of cost and revenue, while 81 per cent said they cannot survive beyond six months..."
https://www.straitstimes.com/business/ec...rvey-finds

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21-05-2020, 01:41 AM.
Post: #196
RE: Covid-19
(20-05-2020, 08:15 PM)dreamybear Wrote: Given the slowdown wld probably have started after CNY this year, I think the survey results are realistic - restaurants wld likely have their reserves depleted in 6 mths(notwithstanding govt / landlord help). Some eateries may already have been somewhat affected since Feb 2020.

Side note : I am sceptical whenever I read abt business owners claiming they cannot survive short term closure(e.g. 1 - 2 months), that wld mean their business are not sustainable in the first place. I mean, which rationale businessman wld not have spare cash to tide over emergencies ?  

It seems offering delivery/take-away does  not help much - I guess when we  dine in a restaurant, other than being able to consume the freshly prepared food, we are also paying for and enjoying the  ambience/service/experience. It is somewhat different when we take-away, something feels missing, the prices are also not very affordable.

Coronavirus: More Singapore restaurant closures and layoffs to come, Chope survey finds
"...The survey reported that 42 per cent of restaurants, or about two in five, said they would not be able to operate beyond two months at the current rate of cost and revenue, while 81 per cent said they cannot survive beyond six months..."
https://www.straitstimes.com/business/ec...rvey-finds


For dine-in, a 10% service charge is levied while there is no service charge for take aways. Most restaurants net margin are less than 10%. Do the maths. 

Running a restaurant in SG has extremely high overheads. Rental and manpower salary are the top killers. When revenue inflow freezes up while expenses outflow are still chugging along, the cash burn can be devastating even for a couple of months. 

Now, imagine those successful restaurants with dozen of outlets across SG, the losses can easily runs up to million of dollars. Assuming rental $30k, manpower $20k (10 staffs at $2k each). Just these two expenses alone are $50k per outlet, $500k for 10 outlets, per month. Multiple by two months, its $1m already. Without govt Job Support Scheme and rental rebate, most SG restaurants would have closed down by now. 

If you are the owner of a restaurant, with the uncertainties of Covid19 situation ahead, will you continue with the loss-making business and let it drain your savings away (may be months or years!)... OR... will you close down your business first, cut your losses, stop the bleed, and reopen a new restaurant when Covid19 is over? Which is the more rational and "cheaper" option?

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21-05-2020, 01:14 PM.
Post: #197
RE: Covid-19
Just came back from withdrawing my matured fix d and didnt renew it. The lady told me many pp withdrew and put into stock market. Seems not enuff fear and hopelessness in the stock market yet.

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21-05-2020, 04:25 PM. (This post was last modified: 21-05-2020, 04:26 PM by Wildreamz.)
Post: #198
RE: Covid-19
I'm not surprised, currently it's both a good time to buy low (STI and HSI etc.) and chase high (Nasdaq and S&P 500).
=========== Signature ===========
“If you buy a business just because it’s undervalued, then you have to worry about selling it when it reaches its intrinsic value. That’s hard. But if you can buy a few great companies, then you can sit on your ass. That’s a good thing.” - Charlie Munger

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22-05-2020, 08:20 AM.
Post: #199
RE: Covid-19
Looks like it will be more years of low interest rates, and low growth rates.

More yield seekers, more risky high-yield investment products, and more yield compression.

More VCs/PEs financing start-ups, more disruption to noncompetitive and old economy businesses.

Fewer IPOs, more delistings.

But at the same time, companies perceived to be at higher risk of defaulting on their loans will find it more difficult and expensive for (re)financing.

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22-05-2020, 10:17 AM.
Post: #200
RE: Covid-19
(21-05-2020, 01:41 AM)jfc18 Wrote: For dine-in, a 10% service charge is levied while there is no service charge for take aways. Most restaurants net margin are less than 10%. Do the maths. 

Running a restaurant in SG has extremely high overheads. Rental and manpower salary are the top killers. When revenue inflow freezes up while expenses outflow are still chugging along, the cash burn can be devastating even for a couple of months. 

Now, imagine those successful restaurants with dozen of outlets across SG, the losses can easily runs up to million of dollars. Assuming rental $30k, manpower $20k (10 staffs at $2k each). Just these two expenses alone are $50k per outlet, $500k for 10 outlets, per month. Multiple by two months, its $1m already. Without govt Job Support Scheme and rental rebate, most SG restaurants would have closed down by now. 

If you are the owner of a restaurant, with the uncertainties of Covid19 situation ahead, will you continue with the loss-making business and let it drain your savings away (may be months or years!)... OR... will you close down your business first, cut your losses, stop the bleed, and reopen a new restaurant when Covid19 is over? Which is the more rational and "cheaper" option?

As an owner of a small F&B business, I can attest to what you said is pretty accurate. It’s very difficult times for most businesses, including F&B business. A friend of mine who has a shop primarily selling desserts (mango saga, yam paste, chendol etc…) has already given up. Another friend doing maid agency is already preparing to give up too. I am still hanging on for now, despite the huge losses, primarily because I felt sorry for my small team if I were to close, and also partly because our govt has provided relief, which while is not sufficient to cover the losses, is nevertheless very helpful

Yes, the overheads are high in F&B business, Shops that are rented to F&B command a higher premium than other trades. Rental makes up about 15% of gross turnover, and with sales plunging by 70%, you can do the math yourselves. The margin for the remaining 30% sales can barely cover rental!

Manpower cost is also high. On average, an employee cost about $2.5K a month, taking into account CPF, levy for foreign workers, lodging etc..

As to whether it is cheaper or more rational to close now and stop the bleeding and open another one again when situation is better, or continue to stay in business and bleed, it is a very tricky question. There are pros and cons to the two options. I guess every business owner will try to hang on for as long as they possibly could, with a little bit of optimism that things will improve faster than thought.

Closing a business is easy, but opening up another one later it is very hard, and can be costly. First and foremost, there are strict requirements to comply with for operating a F&B outlet, and the process of getting all the regulatory approval is not an easy task.

Next, equipping a shop for F&B is very costly, especially the exhaust system which is a must have for F&B business. A very basic and simple exhaust system can cost more than $20K upwards. The cost of equipping a 500 sq ft bare shop to be ready for operation will easily be in excess of $100K.

Then there is also the consideration of losing the regular customers if you were to close, and will need to build up the goodwill again when you open up a new one elsewhere.

Lastly, and perhaps the most crucial and challenging part, is you will lose your good staff, especially if you have a skillful chef, and may not be able to find an equivalent replacement in the future.

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