09 March 2020

A sea of red as the bear awakens from hibernation

A sea of red once again. It's not every day that we see stocks like CSE Global dropping 13%, or the likes of OCBC, SATS and QAF by more than 6% IN A SINGLE DAY?

STI is now at 2782, a far cry from 3,300 plus at a recent peak.

For somebody holding a portfolio of $10,000, a 20% drop is $2,000 difference.  If you have a portfolio of $1,000,000, that 20% is $200,000. 100x difference. Bearable?

Now's where the rubber hit the tarmac. For those who say they can tolerate a 40% drop and will not sell down in panic, here's validation time.

What's your reaction like so far?  Are you flinching yet?  A twitch maybe?

And by the way, it's tax season. Have you filed your Income Tax yet?


Anonymous said...

I want you to know a 20% drop on a 1.5m portfolio is bearable. It comes with training. If you cannot tahan to see 20% drop, you will not remain invested.

Anonymous said...

"What's your reaction like so far?"

Bought more :P

Not a lot though .... war chest of cash & short term treasuries still form 35% of overall portfolio.

Will buy a bit more during big down days.

Lizardo said...


Glad to hear you could withstand a 20% drop on a $1.5m portfolio. Guess you're a 9 on the scale of (aggressive) investor profile. Steady.

Lizardo said...


High five man! Wish I had more too.

Anonymous said...

Hi Lizardo,

It's been a while since I read your blog. And what a start to this new year. The Covid-19 virus still has not shown any sign of abating but instead threatened to spread to more countries and people causing fear and panic wherever it struck. And the stock markets have not been spared with wild swings from one day to the next.

I guess for traders including those who trade with DLC, CFD and other form of margins, they are having a field day.

What about investors like myself? I have been just watching at the sideline waiting for my selected stocks to hit the buy-trigger points. Just when you thought the trigger price would be reached, the price fall reverses and raced upwards. So the waiting game continues.

You asked if you have a $1.5M portfolio and the market just wiped out 20% of that value, how would you feel? Well the answer really differ from person to person, for example:

1. If that $1.5M portfolio represents 1 to 10% of the person's overall asset, it probably wouldn't hurt a bit.
2. If that $1.5M portfolio consisted mostly of free-to-hold stocks, then again, the 20% paper would not hurt at all. Free-to-hold here means the investor has recouped the cost of the stocks through dividends paid or from profit. For eg., if you purchased a shares of a stock which pays 5% dividends and you have held the shares over 20 years, you would have recovered the cost of buying that stock and it becomes free-to-hold. Or the price of the stock doubled and you sell off half of your holdings to realize the profit which is the original cost of the shares rendering the remaining half that you are still holding free-to-hold shares.

Last year, my dividends was $78,000, so roughly I have around $1.5M in the market before the rout. My situation is somewhere between the two cases mentioned above with my portfolio representing below 30% of our asset. Many of my shares were bought donkey years ago and are free-to-hold and are still holding up above the original purchase price.

I see this Covid-19 crisis as yet another opportunity to bargain hunt, but as it is not possible to buy at the bottom, I just set multiple trigger points to deploy the warchest.


Lizardo said...


Cool cat. Waiting for opportunity yet again.

I haven't seen a lot of the contra signals yet tough - i.e. lots of people and headlines screaming "sell!"