The Next Big Crash - Are You Prepared?

[felixleong]

I think investors in this forum are not fearful, because most that read or post in this forum are sophisticated investors.

I think the typical aunties and uncles are fearful, they don't seem interested in purchasing blue chips at all.

STI had a high of 3,464 last year and currently its down over 12% from that high. Technically we can call it a bear.

I have been encouraging people around me to buy(non-sophisticated investors) but 9 out of 10 of them will tell me that market is weak and tapering will cause the market to decline further (fear).

However I would still like to encourage a balanced approach, just slowly buy up quality stocks as the market slowly declines. Currently our local banks are trading at only 11 times earnings. Given a choice of buying ST engg or SGX at 20 times earning or paying half the price for the same earnings on local banks, I would rather take my shot at the banks.

I think its very difficult to go wrong buying blue chips at such valuations considering the histroical PE of the STI is 15 times earnings, but yeah of course if can get cheaper the better la hahaha

Typical all over the world is BHSL lol.
At times when fear or greed takes over my emotions, i am tempted too.

sorry, what does BHSL mean? I first time come across this, chim~

[Temperament]

I think investors in this forum are not fearful, because most that read or post in this forum are sophisticated investors.

I think the typical aunties and uncles are fearful, they don't seem interested in purchasing blue chips at all.

STI had a high of 3,464 last year and currently its down over 12% from that high. Technically we can call it a bear.

I have been encouraging people around me to buy(non-sophisticated investors) but 9 out of 10 of them will tell me that market is weak and tapering will cause the market to decline further (fear).

However I would still like to encourage a balanced approach, just slowly buy up quality stocks as the market slowly declines. Currently our local banks are trading at only 11 times earnings. Given a choice of buying ST engg or SGX at 20 times earning or paying half the price for the same earnings on local banks, I would rather take my shot at the banks.

I think its very difficult to go wrong buying blue chips at such valuations considering the histroical PE of the STI is 15 times earnings, but yeah of course if can get cheaper the better la hahaha

Typical all over the world is BHSL lol.
At times when fear or greed takes over my emotions, i am tempted too.

sorry, what does BHSL mean? I first time come across this, chim~

No lah,. It's my own shortcut - BUY HIGH SELL LOW

[DP28]

I've never seen a market so dead after CNY. Felix, I agree 10% is a good guage. I would prefer a gap down of 50+ points will prove an entry opportunity. Somehow I feel counter specific are dropping faster than the index. Anyone sharing similar sentiment?

Its really been a disappointing start.

Any examples of those counters?

OCBC, SMM, Properties capland & CDL

[Temperament]

Its really been a disappointing start.

On the bright side. Sti is one of the best performing index this year as it didn't drop much compared to others indices. : ).

Yes!
It did not go up as much as DOW J too.
It just hovering like a hovercraft most of the time for ages.
i was tempted to sell more at that time.
In fact i am always tempted to sell all my stocks to start a brand new stock portfolio so that i don't have to look at so much of my past folly. Vanity at play here?
At least, i should do some weeding and let the flowering plants alone.
Huh?
Easier said then done.
How to really know which is which?
They say once you are in the stock market, it's very difficult to start all over again brand new.

[DP28]

Its really been a disappointing start.

On the bright side. Sti is one of the best performing index this year as it didn't drop much compared to others indices. : ).

That's because STI didnt hit new high but rather trade bandwidth at 3030 - 3150 on the last quarter compared to other indices where they break 07 new high.

[Temperament]

I've never seen a market so dead after CNY. Felix, I agree 10% is a good guage. I would prefer a gap down of 50+ points will prove an entry opportunity. Somehow I feel counter specific are dropping faster than the index. Anyone sharing similar sentiment?

Its really been a disappointing start.

Any examples of those counters?

OCBC, SMM, Properties capland & CDL

There is a Beta for every stock in the market

[DP28]

Its really been a disappointing start.

On the bright side. Sti is one of the best performing index this year as it didn't drop much compared to others indices. : ).

Yes!
It did not go up as much as DOW J too.
It just hovering like a hovercraft most of the time for ages.
i was tempted to sell more at that time.
In fact i am always tempted to sell all my stocks to start a brand new stock portfolio so that i don't have to look at so much of my past folly. Vanity at play here?
At least, i should do some weeding and let the flowering plants alone.
Huh?
Easier said then done.
How to really know which is which?
They say once you are in the stock market, it's very difficult to start all over again brand new.

Precisely, I was tempted to sell but I didnt. Back to felix on your 50/50 asset allocation. I am now 80/20. Thats why I am kinda stuck..

[felixleong]

80/20 is good, you still have 20% bullets to fire

I was 90/10, but now that the index has reached 3000 or less, I gonna hit 100% vested by end of this week.

The index may go lower... to say 2700, which was the level when we had the European crisis.
However I believe I do not have the ability to time the market bottom, it it goes lower to 2700 , 2500.. so be it, at 3000 I think I'm getting a decent price on the blue chips (example 11 times earnings on banks)and I would be quite confident in making at least 10-15% long term returns(say buying now and holding for a period of 3-5 years)

Would be happy if I could make 10-15% long term annual returns over my entire investing career.

Cheers ^^

[Temperament]

80/20 is good, you still have 20% bullets to fire

I was 90/10, but now that the index has reached 3000 or less, I gonna hit 100% vested by end of this week.

The index may go lower... to say 2700, which was the level when we had the European crisis.
However I believe I do not have the ability to time the market bottom, it it goes lower to 2700 , 2500.. so be it, at 3000 I think I'm getting a decent price on the blue chips (example 11 times earnings on banks)and I would be quite confident in making at least 10-15% long term returns(say buying now and holding for a period of 3-5 years)

Cheers ^^

Good for you.
As long as you know what you are doing, you should have no regret. Who can be sure the market can not go even higher to 3600 or 3700 or even > within the next 3-5 years? Meanwhile enjoy your dividends collection throughout the years.
Don't worry about what others do or say is a very important principle to me. Because we are all different. And we can make money in a different ways

[Greenrookie]

I've never seen a market so dead after CNY. Felix, I agree 10% is a good guage. I would prefer a gap down of 50+ points will prove an entry opportunity. Somehow I feel counter specific are dropping faster than the index. Anyone sharing similar sentiment?

Its really been a disappointing start.

I don't bet ONLY on market crash, but a "crash" on individual stock, and it seems opportunities are available.

I have the same view that some quality stocks did drop much faster than the index.

IMO,

Individual stocks crash 10% or more due to the following reasons:
1) insider selling
2) rights or placement
3) poor results
4) macro news affecting outlook, e.g. Tapering impact on reits, property curbs.

When the general sentiments is poor and conincide with one or more of the following, there is always a tendency to overshoot to the downside.

Look at how badly wingtai is hammered relative to other property counters, and how HPH and APPT is affected by 1) plus poor sentiments.

The problem is, if the reason is 3), it might take a long time to recover even if market sentiments improve.