The Next Big Crash - Are You Prepared?

[KopiKat]

We talk a lot about margin of safety in this forum. So is 10 or 20% decline good enough margin of safety?

Still have to look at individual stocks. Using a simple metric, many were trading at PE >20, which to me, was easily 10-20% over-valued, especially more so if they were non-growth stocks. So, a 10-20% decline is still not enough... For others, they were just fully or slightly over-valued, so, eyeing those, if they do drop 10-20%...

[swakoo]

http://www.todayonline.com/business/sti-...n-tensions

SINGAPORE — Worries over an imminent United States-led attack against the Syrian government boosted oil prices and undercut most global stock markets yesterday, with Singapore’s Straits Times Index falling for the ninth straight session, its longest losing streak in 11 years.

“The apparent certainty that military action against Syria is on its way has traders uncertain about what the repercussions will be for igniting a powder keg in an already volatile region,” said Capital Spreads analyst Jonathan Sudaria.

Looking back at what happens to the market when the U.S. begins military operations:

Gulf War I
24 February 1991—Desert Storm begins as coalition ground forces drive on Iraqi forces in Kuwait.

Gulf War II
March 19, 2003—Cruise-missile and bomb salvos hit Baghdad an hour after the deadline passes. Operation Iraqi Freedom begins.

[Image: z?s=%5eGSPC&t=my&q=l&l=off&z=m&a=v&p=s&l...&region=US]

The start of both wars coincided with the beginning of massive multi year bull runs. IIRC the markets went up as first bullets were fired.

Of course, the taper chatter is another matter altogether...

[KopiKat]

http://www.todayonline.com/business/sti-...n-tensions

SINGAPORE — Worries over an imminent United States-led attack against the Syrian government boosted oil prices and undercut most global stock markets yesterday, with Singapore’s Straits Times Index falling for the ninth straight session, its longest losing streak in 11 years.

“The apparent certainty that military action against Syria is on its way has traders uncertain about what the repercussions will be for igniting a powder keg in an already volatile region,” said Capital Spreads analyst Jonathan Sudaria.

Looking back at what happens to the market when the U.S. begins military operations:

Gulf War I
24 February 1991—Desert Storm begins as coalition ground forces drive on Iraqi forces in Kuwait.

Gulf War II
March 19, 2003—Cruise-missile and bomb salvos hit Baghdad an hour after the deadline passes. Operation Iraqi Freedom begins.

[Image: z?s=%5eGSPC&t=my&q=l&l=off&z=m&a=v&p=s&l...&region=US]

The start of both wars coincided with the beginning of massive multi year bull runs. IIRC the markets went up as first bullets were fired.

Of course, the taper chatter is another matter altogether...

It's the unknowns and the uncertainties that creates the fear and volatilities... Once the first bullets were fired, it removes that and things may end up to be not that bad after all... Same thing likely for QE3 easing... Once Ben officially starts turning off the tap, he'll remove a major unknown & uncertainty... The market can then proceed to find a new equilibrium... till the next fear(s) start to dominate...

Even in our daily lives. A major issue / problem can keep us awake at night... many nights, if you continue to avoid the unpleasantness of the task to confront and try to solve it... But, once you make a plan, take the first step, more often than not, it turns out to be not that bad after all.... You can now sleep peacefully and soundly... even before the 'dirty' job is done...

PS. I thought we ought to be more worried about the 'Ayam Penyet' effect, in case our neighbour sneezes and we catch a big cold?

[Behappyalways]

sometimes it pays to look at the stars(astrology) than analysts' reports.......joking ^^

http://bbs.wenxuecity.com/fortune/266839.html

[swakoo]

Same thing likely for QE3 easing... Once Ben officially starts turning off the tap, he'll remove a major unknown & uncertainty... The market can then proceed to find a new equilibrium... till the next fear(s) start to dominate...

Yes

PS. I thought we ought to be more worried about the 'Ayam Penyet' effect, in case our neighbour sneezes and we catch a big cold?

The 'Ayam Penyet' effect if it happens would be an artificial occurence as our forex reserves, household balance sheet and other financial metrics are very strong unlike our neighbours'. Any event that is artificial will not last for long. So if the bond vigilantes decide to attack us again like they did during the AFC of 1998, it may present an opportunity..

[camelking]

STI all red, holding at 3000 level

10th red trading day liao

---

here we go again.....

Put on your crash helmet, fasten your seat belt, brace yourself and ... wheeeee..... let's try to enjoy the ride, assuming we survive it....

In my case, sell low-beta (some call it defensive stocks) to free up cash, change target list (adjust for additional discounts depending on quantum of STI drop), wait for target to hit...

PS. Some also call it as sell winners to buy losers...

hmmm....what caused the plunge?

End of QE? Isn't it a good news? I mean, the biggest Economy in the world is recovering......Not good news?
War in Syria? Do they have oil? no, then US won't be interested....
China is crashing? They have been talking about it since....2008...

Data from Germany seems good.
Japan is trying to grow.

PE of STI is around 12.7 (source from sharesinv.com)

I agree it is good time to re-balance your shares
Panic? No...

Of course, i could be totally wrong.

how u think of the sti etf? down 11% liao over 3 months

safe product but guess not much upside....maybe good for CPF fund.
Only buy STI ETF when there are lot of fears in the market.
But look at this forum, people can't wait to buy!

Where is the fear?

[Bibi]

But look at this forum, people can't wait to buy!
Where is the fear?

I tot this is a value forum so there wont be fear when price plunge. Only excitement and happiness.

[sgd]

But look at this forum, people can't wait to buy!
Where is the fear?

I tot this is a value forum so there wont be fear when price plunge. Only excitement and happiness.

this is not a crash lah this correction was doing fits from months back already we all saw it coming. We haven't seen a real crash yet, a crash would be another 300 points gap down from here that's a crash

[WolfT]

But look at this forum, people can't wait to buy!
Where is the fear?

I tot this is a value forum so there wont be fear when price plunge. Only excitement and happiness.

There will only be excitement and happiness only when u have a big enough war chest to take advantage! ha...
For those all in there will be fear...

[brattzz]

waiting for the BIG SALE leh!
but since everyone already know FEDs tapering off liao.. so maybe just a small correction nia..

okay lah okay lah, just pick up when there is discount... was hoping for >40%...