Bloomberg: China Has Entered the Bust Phase: Whelan

[greengiraffe]

always see this quote by Buffet when there are mini crashes, however if every mini crash I'm 'greedy' and go in and buy some, in the end I would be out of bullets already. And ended up I still find up my stocks in the red

I still do not fully understand the meaning of this quote

my system is keep 50% cash then everytime crash down 10% take out 10% cash to buy, that way can buy in until market reach 50% down.

after that if crash another 10% to 60% then use whatever dividends coming to buy some more and really fully vested.

So very hard to run out of bullets Unless market down till 70-80% which by then everyone will be buying gold and SGX will have to close up shop.

let global consters keep eroding yr cash in the bank via their never ending $ printing machine.

since the last GFC, those who leverage up and has the ability to get hold of cheap $ are the ones who can stave off the asset inflation not the savers... that is the world order now.

Unfortunately, given that it is getting into the tail-end of the printing cycle - we are witnessing the current volatility that is atypical of a crazy bull.

This time the behaviour of this aging bull is different but since when has lightning ever strike twice...

[Dosser]

Agree that there are still not many bargains about at the moment - which suggests we are only in the early stages, if this is, as I hope, the beginning of a major correction. The property market in Singapore is clearly in the early stages of a significant decline, with all the supply that is coming online. Lots of commodities have had the rug kicked out from under them, although locally that mostly affects just O & G related counters. Bigger worry must be what happens when the US starts pushing up interest rates, and what that will do to emerging markets and currencies, US dollar corporate debt, and highly over-valued property markets like Hong Kong, Vancouver and London. Most of that does not have a direct impact on the Singapore market, but I can't see it escaping the general volatility.

Personally, I have been reducing my exposure to Singapore REITS (property concerns) and to Penguin (O & G), to give more fire-power in case we do see a major correction, but I don't see moving back in until the market drops quite a bit further. Meanwhile, hanging onto small cap electronics/IT related stocks, as that cycle seems to be moving along nicely, and, sooner or later a lot of the money saved by falling commodities has to emerge as consumer spending.

Look at the positive side. We haven't had a decent stock market crash since 2008. The taper tantrum was just a blip, not a proper crash. Before the GFC we had some real volatility, with the Asian Financial crisis followed by the internet stock bust, 9/11, and SARS.

The system needs the cleansing effect of a crash. Great for serious investors - the good and the bad all plunge together, throwing up wonderful opportunities that the value investor can recognise in the wreckage. Excluding China, of course, where I don't trust any reported numbers, from the government's GDP statistics to company accounts, so have no basis for recognising value. The burns from S-chips run deep.

In SGX, bargain still not widely available. Keppel has dived below $8, which may be a candidate.

[Porkbelly]

Absolutely fearless traders, speculators.
There is no fear yet.
Until fear permeates, the markets will bounce sharply up... if your fingers are quick, money can still be made.

[jjlim84]

Absolutely fearless traders, speculators.
There is no fear yet.
Until fear permeates, the markets will bounce sharply up... if your fingers are quick, money can still be made.

how do you sense fear? i wish there is a public fear index

Is a drop of 10% means fear? 20%? 50%? Even financial news now are manipulated I think

[BlueKelah]

Agree that there are still not many bargains about at the moment - which suggests we are only in the early stages, if this is, as I hope, the beginning of a major correction. The property market in Singapore is clearly in the early stages of a significant decline, with all the supply that is coming online. Lots of commodities have had the rug kicked out from under them, although locally that mostly affects just O & G related counters. Bigger worry must be what happens when the US starts pushing up interest rates, and what that will do to emerging markets and currencies, US dollar corporate debt, and highly over-valued property markets like Hong Kong, Vancouver and London. Most of that does not have a direct impact on the Singapore market, but I can't see it escaping the general volatility.

Personally, I have been reducing my exposure to Singapore REITS (property concerns) and to Penguin (O & G), to give more fire-power in case we do see a major correction, but I don't see moving back in until the market drops quite a bit further. Meanwhile, hanging onto small cap electronics/IT related stocks, as that cycle seems to be moving along nicely, and, sooner or later a lot of the money saved by falling commodities has to emerge as consumer spending.

Dosser, that is almost what I am doing as well

Only difference is I have no exposure to anything property related or commodity/O&G related as those sectors were already looking very poor last year when oil started to go down and I am pretty cashed up too.

IT/Electronics seem so be still doing ok but will probably not be spared if there is a significant downturn. But nowadays mobiles/pads and even cars getting more electronics, IMHO the sector is becoming sort of more recession resistant like healthcare and consumer staples stocks, rather than super cyclical like commodities.

Will be waiting for SGX to hit ~3100 levels before even considering adding to positions the next half year.

[weijian]

how do you sense fear? i wish there is a public fear index

Is a drop of 10% means fear? 20%? 50%? Even financial news now are manipulated I think

There is no public fear index, but there is a private fear index. This private fear index is the gut feeling that we have within us. All of us are human (don't believe at any moment that you are an exception to the loss aversion tendency). The successful contrarian is not immune to the tug of war between greed and fear, he is successful because he understands himself and has build the correct environment/system around himself to handle his weaknesses.

The closest thing to a public fear index will be the VIX though (CBOE volatility index on the S&P500) but there are alot of people looking at it. In investing (as in other areas of life), when it gets too crowded, generally it loses its effectiveness.