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Mr. Market is sick from COVID-19 and AK talks to himself.

Monday, March 2, 2020

One reason why I have not been blogging as much is that I don't really have anything new to say.

Yes, to be fair, we cannot blame it all on my adventuring in Neverwinter.

Anyway, although I won't really be saying anything new, I am going to blog about investing in the stock market now.

I have received quite a few comments from readers asking about my investments and also what am I doing?

Why?

Mr. Market is pretty sick from the COVID-19.

So, we see stock prices declining and by quite a bit too in some cases.






If you have been following my blog, you would know that I always say it should not matter what I am doing.

What you should be doing matters so much more.

This is because our circumstances are different and vastly different in some cases.


CPF savings in a pie (chart).

Know ourselves and do what we can comfortably and, more importantly, safely do, given our circumstances.

In my retirement, I am mostly investing for income.

I am more concerned with whether my investments are able to generate income for me regularly.

If they are able to do that well, I am quite happy to hold on to my investments.

I would sell if I think that things have changed or if I think that there are better investments for income.

I do a bit of trading from time to time, selling high and buying low.

However, most of the time, I am doing nothing.

It isn't that difficult to understand, really.






I said the following in a couple of blogs before:

1. If we own stocks of good businesses that are able to generate meaningful income for us

and

2. if we did not use borrowed funds or use funds which we might need for other purposes to do so,

why do we have to worry about stock prices going down?






3. If we are disturbed by our investments in the market enough to lose sleep, then, chances are we are probably over invested.

4. If we are clear as to what are our investment objectives, examine if what we are doing now gels with those objectives.

If they don't we could also lose sleep.

The tools and motivations should match.






People do die from the COVID-19 but I am willing to bet that Mr. Market is stronger than us mere mortals.

Mr. Market will recover from the COVID-19.

It is just a matter of time.

"If you worry about corrections, you shouldn't own stocks." Warren Buffett

Related posts:
1. Wuhan coronavirus is war and are we ready?
2. Wuhan coronavirus and REITs.

36 comments:

keng said...

Hi AK,

My worry is not about stock market going down. It is about not having enough warchest to take advantage of what the market is offering now. Wasn't expecting such a huge drop.

Weird thinking hor?

Siew Mun said...

Having a big safety net like CPF will allay the fears of a market downturn. Rain or shine there are stable returns, although is as boring as watching bonsai grow. But when u take step back, u can see the beautiful bonsai in it's entirety. Then set aside a certain percentage of portfolio where u can stomach the volatility and can sleep peacefully at night knowing there is a big safety net.

AK71 said...

Hi keng,

Greed isn't a bad thing.

Just don't bite off more than we can chew. ;)

AK71 said...

Hi Siew Mun,

You have absolutely cracked the secret code. ;)

Pete said...

Hi AK, I was looking at ARA US Hospitality Trust. It has fallen quite a lot till a level I thought was interesting. Can seek your views? Do feel free to talk to yourself lolol

CupcakedCrusader said...

Hi Ak,

With the decrease in prices of the 3 banks it's getting more attractive. Any thoughts on which to focus with a limited warchest.

AK71 said...

Hi Pete,

Well, I would say that given its pedigree, I would probably choose ARA US Hospitality Trust over Eagle Hospitality Trust which seems to be pretty iffy.

Mr. Market seems to agree if the collapse in Eagle Hospitality Trust's unit price is anything to go by.

There is also a nagging suspicion that smart money is exiting the US hospitality sector.

I already have exposure to the hospitality sector through Ascendas Hospitality Trust which was merged with Ascott.

I am more interested in the local banks and also ComfortDelgro and SingTel at the moment.

Of course, please don't take whatever I say as the Gospel truth.

I anyhow talking to myself only. ;p

References:
1. Smart money exiting US hospitality sector?
2. Is Eagle Hospitality Trust worth it?
3. Eagle Hospitality Trust: Financial engineering and selling...
4. Eagle Hospitality Trust: His plight and my philosophy.
5. Ascendas Hospitality Trust: A bad deal?

AK71 said...

Hi Cupcaked Crusader,

Well, I like DBS and OCBC and my portfolio shows it.

I like that they are more aggressively focused on growth.

I thought UOB to be pretty boring.

Unfortunately, COVID-19 struck.

I like to think that COVID-19 is more temporary than permanent.

That's all I am going to say. ;)

Reference:
Largest investments updated: 4Q 2019.

Your Ka-ki! said...

Hi AK

it seems we are at war time. A very big one.

tough times come back again.

YKK

AK71 said...

Hi YKK,

As long as we are prepared for war, we will have peace again one day. ;)

It is probably a good time to revisit an old blog:
When to be fully invested in the stock market?

Maybe, also these:
1. Don't think and grow rich!
2. If we want peace, be prepared for war!

WTK said...

AK,

Peace of mind is my preferred approach. I buy and hold. It is more practical to spend the well-earned time to focus on doing the things one likes. The earned time (exit from corporate world) results from the generated dividends from the investment portfolio, is priceless to me.

WTK

AK71 said...

Hi WTK,

Do what makes you happy, of course. ;)

Your Ka-ki! said...

Hi Ak

It is peace time when we stock up mask and toilet papers.

Similar to stocking up cash. Now STI has hit 2960 which is close to the level you are looking at.

Time to go shopping.

AK71 said...

Hi YKK,

I have been nibbling. ;p

Siew Mun said...

AK, I really like the piece you wrote in 2013 where STI is 2700. What has changed since 2013? I guess that you have a bigger (CPF) safety net can I not move for a while I am typing something give me a momentsince 2013. This has allow you a 'higher degree' of investment freedom. Similarly I have been painstakingly building a bigger 棺材本 that I will not invest in equities. This allows me to have a greater freedom with due care & caution.

Lastly, I guess u are nibbling on DBS and OCBC?

Refer
http://singaporeanstocksinvestor.blogspot.com/2013/06/when-to-be-fully-invested-in-stock.html?m=1

Pete said...

Thanks for talking to yourself! Learnt a lot! I have been eyeing the local banks. I love most of your mentioned other than Singtel. Not too sure about their ability to maintain the dividend though. Their financials look to be worsening

AK71 said...

Hi Siew Mun,

I am only interested in adding to my investments in the local banks, ComfortDelgro and SingTel and if Mr. Market goes into a deeper depression, I would buy more. ;p

History doesn't repeat but it rhymes:
When to be fully invested in stocks?

AK71 said...

Hi Pete,

I believe a cut in dividend is possibly a prudent thing for SingTel.

SingTel used to be one of my largest investments but no longer.

Well, I like to think that all investments are good at the right price.

If Mr. Market were to offer a much lower price for SingTel, even with a cut in dividend, SingTel could be a nice investment for income. ;)

Pete said...

Agree! all investments are good at the right price. I just prefer the local banks to Singtel. With the low interest rate, REITS should do well too. Can't wait for better entry to deploy the warchest!

AK71 said...

Hi Pete,

Oh, I would like to increase exposure to our banks too. :D

It is just that I am not writing off SingTel totally. ;p

Most S-REITs should do fine. :)

Reference:
Wuhan coronavirus and our REIT invesments.

Pete said...

Banks are on 5 % discount now... tempting!

AK71 said...

Hi Pete,

It is pretty tempting. ;)

WTK said...

Hi,

Nibble is the way to go.

WTK

Your Ka-ki! said...

Ak

All hope is loss. Depression really

AK71 said...

Hi YKK,

I just told another reader a few days ago that there was no sign of the decline stopping and that there was definitely no sign of any reversal on the horizon.

It is more of the same today, really.

Pretty bleak looking.

The technicals are pretty broken.

So, it is probably a good idea to wait for the dust to settle and not be hasty.

Unless we have a working crystal ball, it is impossible to call the bottom until it has bottomed.

"To cut losses and to sell out of fear then would have been a terribly wrong thing to do."

Reference:
Revisiting AK's simple strategy with Mr. Charlie Munger.

Bananamint said...

AK, this looks alot like 2008 already XD guess it will take a while for things to settle. Patience is difficult XD

AK71 said...

Hi Bananamint,

Well, nobody can be too sure of anything. :p

A V-shape recovery where prices sharply recovers in a sustainable manner is possible but I don't think it is very probable as the situation seems to be getting worse.

Yes, patience is sometimes the hardest thing. :)

Reference:
Sound approach to investing for income.

redponza said...

Hi AK,
I think a better plan is to separate your bets in an appropriate size and then buy the same amount for every drop of 10-15%
Thanks.

AK71 said...

Hi redponza,

As long as you feel you have a better plan, stick to it.

Ignore what others say. ;)

Sand said...

Hi AK, is there any REIT you are looking at?

Sand said...

Hi AK, is there any REIT you are looking at?

AK71 said...

Hi Sand,

See this blog for clues:
Largest investments updated (4Q 2019).

Remember, I am just talking to myself. ;)

Unknown said...

Hi AK

Reits have fallen quite a bit from their peak, looking very attractive now! AIMS APAC and IREIT are large in your portfolio, may i know if you have been buying more of these?

AIMS have 21.8m cash @31Dec2019, and has quite a bit of loans maturing this year - S$100M in Aug2020, A$65M in Nov2020). Is there a risk of the reit facing a credit crunch?

Really appreciate your thoughts and you talking to yourself!

cheers
Elaine

AK71 said...

Hi Elaine,

I already have a very large investment in AA REIT.

So, I am not looking to add more.

If I did not already have an investment in AA REIT or if it was a smaller investment, I would probably be nibbling.

As for IREIT, I have been nibbling.

IREIT is so cheap now.

Of course, Mr. Market could stay irrational longer than we can stay solvent.

Cheap could get cheaper.

Credit crunch is a possibility if the COVID-19 situation lasts much longer.

redponza said...

Hi AK,
Besides IREIT which you are nibbling, are you nibbling other REITs such as Frasers L&I? Thanks.

AK71 said...

Hi redponza,

Not telling you (or anyone else). ;)

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