Covid-19

[weijian]

Thank you for your insight.

Given the many unknowns, I often wonder how we can say for sure the intrinsic value and thus the margin of safety.
Using the discounted cash flow model, for example, a lot of assumption about the future has to be made. Or else, the model just won't work.

I have been a keen follower of value investing. But increasingly, I find that market is the aggregated reflection of investor sentiment. And chart reading becomes a useful tool to understand the market.

hi shiyi,
You seem to suggest that the margin of safety is determined by the calculation of intrinsic value. The margin of safety is simply the difference between what you pay (price) and what you get (value). So there are 2 factors - (1) price you pay and (2) the value we think we get.

As specuvestor and wildreamz have mentioned, the calculation of intrinsic value is probably something that is highly probabilistic and it is better served to be approximately correct. It is also something that we cannot control at most time (no, changing the numbers in the DCF formula is not control)

On the contrary, the price we pay is something largely within our control. So personally, it is easier to put more effort into things we can control.

You could use chart reading as a method to understand the market - nothing wrong. Value investing is timeless in a sense because of its principles. Do not forget that WB has evolved his methods over his long career but his principles have never changed.

[Curiousparty]

https://on.mktw.net/3gUaJbT Check out this article from MarketWatch - U..S. regained 2.5 million jobs in May, unemployment falls to 13.3%, BLS says


Shortists all running for cover !!!


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[Wildreamz]

https://www.cnbc.com/2020/06/05/heres-wh...orted.html

PUBLISHED FRI, JUN 5 20201:29 PM EDTUPDATED FRI, JUN 5 20205:21 PM EDT

Here’s why the real unemployment rate may be higher than reported

• The unemployment rate fell to 13.3% in May, according to a Bureau of Labor Statistics report on Friday. 
  
  
• The agency admitted the real unemployment rate likely exceeds 16%.
  
  
• That’s due an error in how furloughed workers were treated in the data sample. April’s unemployment rate would have been nearly 20% absent that same error. 
  

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TLDR; instead of the widely reported April (14.7%) -> May (13.3%); "true" unemployment rate could be circa April (20%) -> May (16.3%)

[weijian]

Massive Up and Down Moves in Stocks in the Same Year Are More Common Than You Think

There have been two massive moves in the stock market this year. After a relatively calm start to the year, it took just 23 trading sessions for the S&P 500 to fall 34%. It’s now up 40% since the lows seen on March 23, 2020.

It’s hard to fathom such massive moves occurring during the same year (and this year is still not even halfway over).

Once you start digging into the historical numbers you begin to realize the stock market is even crazier than advertised. Surprisingly, huge up and down moves happening in the same year is not that out of the ordinary.

https://awealthofcommonsense.com/2020/06...you-think/

[KobiLee]

AstraZeneca Approaches Gilead About Potential Merger. Healthcare is a rare bright spot ...

https://www.bloomberg.com/news/articles/...ial-merger

[Curiousparty]

https://medium.com/concoda/this-is-what-...5574dac796

This article explained why the stocks kept going up..., as Long as Fed keeps its money printing machines on...


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[Wildreamz]

TSA passenger traffic; source: https://twitter.com/carlquintanilla/stat...44384?s=20

Full quote: Carl Quintanilla (CNBC)

The trendline of TSA passenger traffic implies a recovery to pre-COVID-19 levels by August. “We realize this sounds ludicrous. And we do not necessarily think what will happen. But the rising mobility of Americans suggest that industry experts may be too negative..”’-

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Caution: avoid extrapolating exponential trendlines ad infinitum.

[dreamybear]

Given that ours is a open economy with small domestic mkt, I guess SG may face a longer timeframe to get back to pre-covid ?

I think we hv to be very careful abt re-establishing links to other countries given the different lockdowns lifting considerations all over the world. Safeguards shd be carefully implemented in order to prevent another few rounds of circuit breaker(CB). If not, it will feel like the past few months of CB and taking so much precautions is "wasted".  

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Virus may be here for the long haul so Singapore must adapt: Minister
https://www.straitstimes.com/politics/vi...t-minister

Various factors at play in decisions to lift coronavirus lockdowns across the world
https://www.straitstimes.com/singapore/v...-the-world

Indonesian Capital's Reopening Triggers Concerns of 2nd Wave
https://www.nytimes.com/aponline/2020/06...Position=2

[karlmarx]

Things will certainly be bad. But one should also be careful when reading the news. There are facts. And there are stories written based, strongly or loosely, on those facts.

A good story is one that is strongly supported with facts to its claims.

A sensational story is one that is loosely supported with facts to its claims, and frequently compensated with plenty of extrapolation.

There's a lot of fluff in many articles being published. More in foreign presses. But ST and BT are not immune, because they reproduce those foreign press stories.

Ask yourself what are the facts in any story. You can draw your own conclusions based on those facts. More often, those facts are usually insufficient to arrive at any useful and valid conclusion.

Don' forget that headlines sell stories better than facts.

And don't forget that a reporter is often only a messenger of the story's source; the reporter reproduces the source's opinion, which the reader may, over time, forget that he/she is actually reading an opinion, which is usually biased to the source's interest.

Sometimes, stories are completely written by (and credited to) third parties, which only serve to advance their own agenda. You can think of them as sponsored posts, but it isn't labelled as such. So you'll be fooled into thinking its actually written by the publication's staff, unless you make it a habit to check the identity of any 'story' you've read.

On slow news days, you can have a lot of these (and 'sensational stories'). And they are really a waste of time to read.

Always look for the facts.

[specuvestor]

Unintended consequences of smoother traffic...

(Bloomberg) -- One nearly empty passenger jet “climbed like a rocket,” prompting the pilots to exceed their assigned altitude. Others have scraped their tails on takeoff, gone off course or strayed close enough to other aircraft to prompt mid-air collision alerts.
The common thread: the massive disruptions to the U.S. airline industry caused by the Covid-19 pandemic.
While the plunge in travel has in many ways eased pressure on roads and the aviation system, it has at times had the opposite effect on safety. The rate of highway deaths has actually risen as motorists speed on empty roads. And the drop in airline passengers has triggered an unusual spate of incidents that are challenging flight safety, according to publicly available reports as well as government, industry and union officials.