Are you holding cash or making investment into progressing sector in 2016?

[valuebuddies]

In VB, we focus on value investing, if we find value in a put option, we can buy it, and this is still value-investing right? However the way I determine value tend to be more generally accepted approach, which I look at PE, dividend yield etc. In most cases when I was wrong in my thesis, I still managed to recoup my loss from the dividend.

To speak about crash, I think this is probably still too early. In the past, crash tend to come when everyone are cheering on the market. Despite weaker corporate earnings and poor economic data, we should see some divergence in the market which don't seems to be the case now. I guess that we could see 3500 in sti before the bear really come fast and furiously. In timing wise, most people are expecting 2016 but, with contrarian view, I say late 2017. 

Lastly, I would think that "cash is king" now. If I am buying, first criteria must be cash rich and low debts.

[TUBInvesting]

I am already almost all in... Maybe its a tab too early but I guess its still good because since the drop in Aug 2015, I have yet to see my entire portfolio drop more than 8%.

The issue now is I am unable to really time some of my exits since most of them continue to go up up after I exited (with gains though).

Most probably will sell some to get more liquidity if market remains weak till June..

http://tubinvesting.blogspot.sg/

[valuebuddies]

I am already almost all in... Maybe its a tab too early but I guess its still good because since the drop in Aug 2015, I have yet to see my entire portfolio drop more than 8%.

The issue now is I am unable to really time some of my exits since most of them continue to go up up after I exited (with gains though).

Most probably will sell some to get more liquidity if market remains weak till June..

http://tubinvesting.blogspot.sg/

Bull markets are born on pessimism, grow on skepticism, mature on optimism and die on euphoria.

The key is that prices continue to go up after you exited, and you will sell more only if market remains weak

[Temperament]

I have been struggling to buy anything for the past year, even though the market is down..........compared to 2009 when I cant stop buying

So I am keeping cash

I find that STI is being hammered by O&G , banks....the rest of the market is down albeit not attractive enough to me

I guess for 2009 it was pretty much a no brainer for value investors. All the blue chips were cheap as chips.


Sent from my MotoG3 using Tapatalk

hi CF,
On hindsight, it was a no brainer. But at that time, boy~ I was scared! I can still remember my trembling fingers as I pressed the 'buy' button on the online brokerage platform, even till now.

Hi newborn1000,
Howard Marks of Oaktree Capital had previously mentioned in his last memo (Jan2016) that it is 'A Time to buy' but not 'The Time to buy'. You have similar thought lines along his.

i bet if a Black Swan appears again, we will be very excited about suddenly too many good things on sale but also very anxious and apprehensive because what the good things on sale may not really turn out to be good after Black Swan disappears.

That's why (i guess) many dare not buy during this time.
And many who do, i bet none is buying without trepidation.
No?
Where as buying in a Bull or even Side Way market, most people just happy to do it.
No?

[Behappyalways]

Hi CityFarmer,

For your infor ^^

http://www.investopedia.com/articles/inv...e-etfs.asp

You can short using an exchange traded fund where your maximum potential loss is your invested capital.

Shorting ETF, should be similar as shorting stock shares, right? It sound like a real fantastic way of shorting.

Any trick that I can learn? Short with borrowed unit, or naked?

[Temperament]

Hi CityFarmer,

For your infor ^^

http://www.investopedia.com/articles/inv...e-etfs.asp

You can short using an exchange traded fund where your maximum potential loss is your invested capital.

Shorting ETF, should be similar as shorting stock shares, right? It sound like a real fantastic way of shorting.

Any trick that I can learn? Short with borrowed unit, or naked?

Traders and shortists  always say why fighting in the market with one hand tied behind your back (people who buy long only)
There are many cases of millionaires to even billionaires who had been short squeezed to death(literally)
At least, one billionaire in Germany was during the 2009 BLACK SWAN.

My make-up doesn't allow me to fight with 2 hands in the market no matter how i try.
Very few individuals are "Ambidextrous" by nature.
So if you are not, you try with the disadvantage hand, you will get killed very fast lol.

[CityFarmer]

Hi CityFarmer,

For your infor ^^

http://www.investopedia.com/articles/inv...e-etfs.asp

You can short using an exchange traded fund where your maximum potential loss is your invested capital.

Shorting ETF, should be similar as shorting stock shares, right? It sound like a real fantastic way of shorting.

Any trick that I can learn? Short with borrowed unit, or naked?

The ETF will cap the losses, but it might be more risky than covered short or even naked short with its 1-day compounding. I don't think it has any use to value investors, even for the purpose of hedging.

Thank for the info, anyway.

[BlueKelah]

@Temperament : I am probably one of the few hoping for Black Swan to happen. That's when the loaded elephant gun will go to work. If you are buying individual stocks of companies you have been following for a while and know what is going on with management and the industry/sector and what assets are backing the stocks you are buying, there wont be any trepidation at all as prices sink. True value investors thrive on down markets. 

Easy to say, easy to do as well, just so long you have a plan and have had enough experience investing in stocks and gone through crash markets like during AFC and GFC.

[TTTI]

Hi CityFarmer,

For your infor ^^

http://www.investopedia.com/articles/inv...e-etfs.asp

You can short using an exchange traded fund where your maximum potential loss is your invested capital.

Shorting ETF, should be similar as shorting stock shares, right? It sound like a real fantastic way of shorting.

Any trick that I can learn? Short with borrowed unit, or naked?

The ETF will cap the losses, but it might be more risky than covered short or even naked short with its 1-day compounding. I don't think it has any use to value investors, even for the purpose of hedging.

Thank for the info, anyway.

Just wondering how are you guys shorting equities/ETFs?

From what I understand, for SGX, the traditional way of shorting via the SBL, borrowing shares and selling, then buying back at a later date, is almost never used. Nobody does that because the lending fee is very high. Most of the equities I see on the list require interest of 8% per annum or so. 
One really has got to have very strong conviction, and the fall has to occur fairly soon after you short to pay 8% interest and still have left over for a profit.

I personally short international stocks or S&P ETF via options. Either buying put options, or selling naked call options.
Even then, this is very occasional as the 1 inherent problem with shorting is the holding cost. 
Once you set up your short positions, regardless of how you do it, there is always a cost to that position so the clock is working against you all the time.
Is there another way that you guys are shorting local stocks?
I'm not really a fan of shorting but it does help to know.




https://thumbtackinvestor.wordpress.com/

[shadow_walker]

The idea is to long an inverse index etf, which means you are shorting the index.

The key risk is indeed the compounding risk due to the inverse nature.

Assuming both the index and etf are at 100:
1) The index goes down by 25% to 75 - The inverse etf will gain 25% at 125
2) The index goes up by 33% to 100- The inverse etf will lose 33% from 125 to 83.3

As the index goes down by 25% and up 33% to remain at 100, the inverse etf's value has dropped from 100 to 83.3.

Each time the index goes up and down, the inverse etf holder will suffer. Same goes for leveraged etf.

Volatile time makes it worse while they only gain if the underlying movement is single direction.

Both inverse and leverage etfs are destined to lose money over time, they are only meant for short term trading purpose.