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What am i?
i am a trader too.
LOL!
WB:-
1) Rule # 1, do not lose money.
2) Rule # 2, refer to # 1.
3) Not until you can manage your emotions, you can manage your money.
Truism of Investments.
A) Buying a security is buying RISK not Return
B) You can control RISK (to a certain level, hopefully only.) But definitely not the outcome of the Return.
NB:-
My signature is meant for psychoing myself. No offence to anyone. i am trying not to lose money unnecessary anymore.
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Instead of selling everything off, I've considered sticking at my current cash levels and hedging off tail risk (the risk of a big move in the market).
One way to hedge tail risk might be via buying VIX via one of the ETF/ETNs. Options are not attractive because they are time limited.
The other way is to buy one of the leveraged short S&P ETFs. But for tail risk, it might be better to go VIX.
Anyone with an opinion here?
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30-07-2017, 11:33 AM
(This post was last modified: 30-07-2017, 11:36 AM by HyperionTree.)
(29-07-2017, 11:05 PM)tanjm Wrote: Instead of selling everything off, I've considered sticking at my current cash levels and hedging off tail risk (the risk of a big move in the market).
One way to hedge tail risk might be via buying VIX via one of the ETF/ETNs. Options are not attractive because they are time limited.
The other way is to buy one of the leveraged short S&P ETFs. But for tail risk, it might be better to go VIX.
Anyone with an opinion here? If you buy VIX you have to react very fast when it makes money. For example, let's say there is a correction that causes VIX to spike to 20 in a week. At that level, you have to decide whether you want to sell because if the next week the market stays low for awhile, the VIX would quickly recover even though the market has dropped. Given that VIX is quite volatile when it goes up, it is hard to use it as a good hedge.
You may consider using the USD Dollar Index Futures as a hedge. During a market correction, USD has historically appreciated versus other currencies in general. And it is less volatile as an hedging instrument and much more liquid.
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For info, you can find the valuation ratios of various different countries here:
http://www.starcapital.de/research/stockmarketvaluation
Most of the world is expensive now. While valuations do not predict a immediate market crash, it does correlate strongly to the returns in the next 2 years. In short, even if the market does not crash, the returns would not be great either. Singapore is fairly valued.
Question: can Singapore have a bull run, if all other developed markets have a correction?
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Thanks for the link. Nice data representation.
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(30-07-2017, 11:33 AM)HyperionTree Wrote: (29-07-2017, 11:05 PM)tanjm Wrote: Instead of selling everything off, I've considered sticking at my current cash levels and hedging off tail risk (the risk of a big move in the market).
One way to hedge tail risk might be via buying VIX via one of the ETF/ETNs. Options are not attractive because they are time limited.
The other way is to buy one of the leveraged short S&P ETFs. But for tail risk, it might be better to go VIX.
Anyone with an opinion here? If you buy VIX you have to react very fast when it makes money. For example, let's say there is a correction that causes VIX to spike to 20 in a week. At that level, you have to decide whether you want to sell because if the next week the market stays low for awhile, the VIX would quickly recover even though the market has dropped. Given that VIX is quite volatile when it goes up, it is hard to use it as a good hedge.
You may consider using the USD Dollar Index Futures as a hedge. During a market correction, USD has historically appreciated versus other currencies in general. And it is less volatile as an hedging instrument and much more liquid.
For something closer to home and without the risk of foreign currency exposure, one can consider moving into sgd denominated bonds listed by government entities like Hdb/Lta.
During a correction, the tendency is to look for safe haven. But of course the return will not be as great as VIX or short ETF.
There are no good stocks. Stocks are only good when they go up after you bought them.
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(30-07-2017, 11:39 AM)HyperionTree Wrote: For info, you can find the valuation ratios of various different countries here:
http://www.starcapital.de/research/stockmarketvaluation
Most of the world is expensive now. While valuations do not predict a immediate market crash, it does correlate strongly to the returns in the next 2 years. In short, even if the market does not crash, the returns would not be great either. Singapore is fairly valued.
Question: can Singapore have a bull run, if all other developed markets have a correction?
I do agree that the return is unlikely to be great but so is holding cash or bonds.
Besides the possibility of another big bubble or spectacular crash, there also lies a possibility of the market in the limbo state for a long period of time.(10? 20? years)
Assuming that STI is in a doldrums of around 2800 to 3300 for the next ten years, I suppose it is still better to stay in the market than to cash out and wait for the crash.
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But then we don't need a crash to make money. Holding cash and waiting for a correction can be a strategy too.
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30-07-2017, 04:20 PM
(This post was last modified: 30-07-2017, 04:45 PM by Temperament.)
2011 James Montier on tail risk
i admit i don't really comprehend completely what he is saying.(Aka my maths is too elementary).
i only understand he favours cash as tail risk hedge.
And i think WB calls cash as option without expiry date.
i only have to understand what WB said and try to put into practice when i think the time is suitable.
If i am wrong, i only lose abit to inflation lol.
Capital still is intact is the most impotant to me.
It is then possible for me to see what i can do next.
WB:-
1) Rule # 1, do not lose money.
2) Rule # 2, refer to # 1.
3) Not until you can manage your emotions, you can manage your money.
Truism of Investments.
A) Buying a security is buying RISK not Return
B) You can control RISK (to a certain level, hopefully only.) But definitely not the outcome of the Return.
NB:-
My signature is meant for psychoing myself. No offence to anyone. i am trying not to lose money unnecessary anymore.
Posts: 3,474
Threads: 95
Joined: Jul 2011
Reputation:
17
(30-07-2017, 11:39 AM)HyperionTree Wrote: For info, you can find the valuation ratios of various different countries here:
http://www.starcapital.de/research/stockmarketvaluation
Most of the world is expensive now. While valuations do not predict a immediate market crash, it does correlate strongly to the returns in the next 2 years. In short, even if the market does not crash, the returns would not be great either. Singapore is fairly valued.
Question: can Singapore have a bull run, if all other developed markets have a correction?
i think SGX is to small a market.
Even HKX can not.
Ah i think it happened with JPX!
But look what happen to JPX till today?
How about Shanghai X?
Possible?
WB:-
1) Rule # 1, do not lose money.
2) Rule # 2, refer to # 1.
3) Not until you can manage your emotions, you can manage your money.
Truism of Investments.
A) Buying a security is buying RISK not Return
B) You can control RISK (to a certain level, hopefully only.) But definitely not the outcome of the Return.
NB:-
My signature is meant for psychoing myself. No offence to anyone. i am trying not to lose money unnecessary anymore.
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