My Asset Allocation At The Moment

 I entered this correction with an asset allocation of 62.5% equities, 5% precious metals, 5% short equities, 27.5% cash. I was nett long 57.5% in other words. I also had a small leverage of 50%. 

The S&P500 is down 9.5% and my portfolio has switched to 62% long, 5% precious metals, 20% short, 13% cash. I am now 42% nett long. My leverage has fallen to 39%. 

I'm quite proud of my positioning because my portfolio is down just 6.4%. I am leveraged but yet I'm faring better. I've also held a whole bunch of tech stocks that supposed fell over 10% but I'm still ok. 

I think this correction is a great opportunity to buy. I'll show you why.

I have been making use of this correction to pick up good companies that I’ve missed out on from April to now. Latest addition is HK Exchange, 388 HK. It is a booming business as many Chinese ADRs in the US may switch to HK for dual listing status. You can buy outright, do an Accumulator or Equity Linked Note on this to collect yield and sell puts while you wait to buy cheaper.

 

 

 



 

 

Do note however, that the fair value for Morningstar is only USD37.93, lower than the last close of USD48.08. This is the research based on the US ADR. My personal fair value is HKD430 so that is around 17% above current market price of HKD366.

 



Positioning of many fund managers is still OVERWEIGHT cash, although sentiments among fund manager is now NEUTRAL> we are only maximum bullish when sentiments of professionals  / retail clients are maximum BEARISH.

 

https://www.youtube.com/watch?v=VcMQhz1YYZ0

 



 

Tech, Healthcare has become a very crowded trade. I suspect there will be a rotation to Energy, Banks and Staples eventually. Meanwhile Emerging Market equities are approaching the “Green zone” of Max conviction. I will treat this as a contrarian indicator. When conviction is max, I will start to move away from the “Green Zone” towards the “red zone”.



 

 

 



 

 

Comments

  1. Anonymous9 March 2021 at 03:44

    I am also eyeing 388 HK and may enter in stages these few days. I have ICE as the second largest company by market cap. 388 HK is the largest by market cap and worth investing, especially when investors have concern in BABA and are shifting to 9988 HK. Only time will tell how it will unfold. RW

    ReplyDelete

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