What I learnt from the market over the last few years

Although STI has been moving side way for a long time but there are still many stcks that I have analysed had went higher and higher. I didnt take action and buy because I feel STI has no room to go up further and stock has reached all time high.

The few examples are Sheng Siong and SATS. I believe these 2 stocks have good fundamental and business is easy to understand. When I noticed Sheng Siong, it was $0.6 and it was it all time high. I was afraid to enter because its trading volume is not high and its initial plan to enter China stops. But what I am certain about this business is it is unlikely to go belly up. This business is cash rich and has the ability to carry on to expand. At that point, i felt there was limited room to go up, upside more than downside, I held on to my bullet. Looking back, I should start a 20% of my allocated fund in this stock. The remaining 80% shall wait for it to drop lower. As I believe it will not go belly up and give about 5% dividend while waiting, it is not a bad deal. At the point of writing, it is $1.0+. I have no guts to enter as it is too high and together with market volatility, I am not comfortable.

I think the problem with me is I have limited cash and I am afraid to loss my capital.

There is still opportunity in this uncertain time

In the year 2016, I am relative quiet in buying any stocks in Singapore. As I feel there is not much growth and upside not more downside so I have been in the cave. But I see 2 opportunities just slipped away from me. They are Super group and ARA management, they will be privatised. These 2 are in my list of stocks that I will buy in crisis. I like them because the business is easy to understand. They are considered stocks in circle of competence.

I feel I failed in some way. I have read so many books by investing guru but I failed to excute what I learnt. Example Warren Buffett said if price had dropped to its intrinsic value and business still remain the same we should simply add more. The problem with me is that I keep anticipating a crisis is coming so I am not willing to buy now and when it dropped more I have no fund to buy more. What I will miss out is all dividend I could get while waiting.

At the meantime I have to look for some other stocks to replace Super and ARA.

Macro economy in November 2016

S&P had continuous dropped for more than a week, from 2150 to 2085 prior to US election. A day before election it recovered about 80%. Every single negative news that was report on Clinton or Trump had been reflected in the stock market. As there are 2 camps of people supporting Clinton or Trump, any bad news of each one of them are simply bad news to the market. The popularity of Trump had been lower than Clinton most of the time. In the morning of 9 November during the vote counting, stocks in Singapore dropped as Trump was leading. Dow Jones futures was -700 points at one point. At the end of the day when news of Trump as president was announced, it rebound back more than 50% from the lowest point and Dow Jones instead of dropping it went up 200 points.

Although you can say market is unpredictable but from this I learnt something. Many analysts expected the market to drop no matter who is the next president as supporter of either side will reacted to the news. I think the continuous dropped in US market for more than a week prior to election was early anticipation of the result, everyone reacted early. So when news was released it will not drop any further as it had reacted. It dropped to the lowest on 4 Nov and bounded back on 7 Nov before election day. The more it dropped the higher it will bound back, similar to spring, I shall call this spring effect. At this point looking at the chart, I believe market will go up another few more days before any bad news is coming back again.