Musings about Life and Investments

It has been an eventful two weeks. I’ve hinted of a “significant correction” of between 6 to 10% in the coming weeks. Refer to my email on 9 Jan 20, also on 6 Jan 2020. Lessons to learn: 1.         Nothing goes up forever and what goes up exponentially must come down fast. Take for example Bitcoin. It shot up from USD3000 to 20k. It promptly fell and gave up all the gains. All patterns repeat. 2.         Stocks rise slowly but fall very swiftly. It had to happen and this Wuhan virus is a trigger. The supports for all stock markets and stocks are at around the 150 to 200 days moving averages. They generally are on the uptrend so I presume this bull rally is intact. Most of my clients have taken some profit starting from last week till today. For China, the 2823 HK ETF is already at the 200 days MA and I don’t think we should sell now. In fact we should get ready to buy swiftly. Think of all the stocks like Alibaba, Meituan, Tencent that you never had the chance to

“A Bull Run is born from pessimism”. Some famous fund manager said that. I think it’s Peter Lynch. The bottom of the “Big Correction” was Christmas Eve, 24 th  Dec 2018. All stock markets rallied very hard in the first four months of 2019. But then the Trade War started, with Twitters threatening every other day of escalating embargoes. Asia ex Japan, MSCI Emerging Market and Japan were hit very hard, while the western world continued to rally. It was very difficult as an advisor to “push” or “persuade” clients to increase equity allocation because the news was simply very bad at every angle. There lies my repeated urgings to ignore mainstream news. One simply cannot make economic forecasts and translate that to equity returns! What matters is momentum and value! Pick the best value or cheapest stocks, sectors, funds, check the technicals if they are going to rise or fall. If they are rising, you buy. If they are falling, stay far away. Now that most of the easy money is made in 2

In his study, Ericsson could not find any violinist who performed at a genius level by practicing less than 10,000 hours. At the same time, they could not find students who worked harder than everyone else and yet did not perform exceptionally well. "I've missed more than 9000 shots in my career. I've lost almost 300 games. Twenty-six times I've been trusted to take the game winning shot and missed. Ice failed over and over and over again in my life. And that is why I succeed." - Michael Jordan