Musings about Life and Investments

The second wave has begun. Make no mistake. Some cities are going to lock down again. https://www.youtube.com/watch?v=sV5dh1W80Zc https://www.cnbc.com/2020/06/25/countries-unlikely-to-impose-full-lockdowns-if-theres-second-wave-analysts-say.html I doubt countries wil lgo through a full lock down like the first time. But it could be serious. I mentioned in my earlier posts that infections are rising again, particularly in the Americas. But surprisingly, the "serious" cases have fallen to 1% out of 99%. Death rates have held steady and I was hoping for the virus to mutate to something less deadly. The second wave for Spanish flu was especially deadly, where most of the deaths occurred. I suspect as hospitals become overloaded with patients, a "limited" lock-down will happen in affected cities. This is to "flatten the curve" due to limited hospital capacity. Death rates should climb but I doubt it will be greater than what we saw in the fi...

Over the last 10 years, I've developed into someone more zen. I've learned to meditate, used mindfulness in the last three years. It has helped to keep me calm even in the most trying times. In the last 30 years, I've been practising visualisation for success. I learned that in my competitive sports years. It set the sails so that my ship goes in the right direction in general, without much distractions.  Lately, I've learned to respond correctly to every situation. You see, the key to happiness, success and building meaningful relationships is to respond appropriately and positively no matter what you get. It's a serve and volley game tennis game.  50% of the time, life around you sucks. Your colleagues, friends, loved ones say something, do something that lets you down. You feel disappointed.   The other half the time, things according to your plan. You are happy.  However, it also means you are happy only 50% of the time. If you are happy only half...

I’m sharing what I presented to some friends. This is what I’ve garnered in my own research. Instead of looking at news and valuation for what drives the stock markets, why don’t we look at the balance sheets. Below is a chart of the S&P500 vs assets of major central banks over the last 12 years. Pretty consistent right?   Below are the biggest money supply increases / money printers of the world. The Fed, ECB, BOJ. Surprisingly, PBOC or People’s Bank of China did not increase. That could be because China issues bonds mostly in USD, not RMB. It needs to maintain currency stability to service USD debt. Looking at the MSCI Europe, the index trend pretty much follows its balance sheets / money supply. Both rise in tandem. The MSCI Japan also increases in tandem. The Chinese index did not rise and mirrored the balance sheet / money supply. It was sideways from 2009 – 2020. While the stock markets have corrected, it is...

https://www.worldometers.info/coronavirus/ I am not a pessimist. By looking at the infection rates rising on the left graph, and the death rates falling on the right, I know that ultimately the right side will rise. The western world is opening up their economies and I don't blame down. The world cannot shut down just to save a few. Ultimately, this virus will burn through the entire world's population and by end of 2021, perhaps about one to two million people will perish, over 60 million people infected. A vaccine will probably be discovered by end of 2020. But it may take a year to reach Singapore. https://www.bbc.com/news/health-52354520 This is where globalisation breaks down. Singapore thrives on globalisation, on the belief that countries will always trade with one another. However, we have seen countries closing their borders. We could not produce our own testing kit because we didn't have the manufacturing nor raw materials to do so. https://www...

AK Fallible used to be very bearish since Feb this year. They got it right that time, but didn't catch the rebound of 30% over 40 days. https://www.youtube.com/watch?v=3DjWWpSotaE They were very sure that the stock markets will fall below 23 Mar 20's level. However, they are not as bearish now. I actually will stick to my guns to say that we may have seen the bottom on 23 March. Of course, again I'm not 100% sure, that's why I'm not 100% invested. Heck, I'm only about 50% long into equities. I'll explain that later. Here are the factors for a V shaped stock recovery. 1. Financial support from the governments. 2. Virus will get less deadly after 1 to 2 years. 3. Vaccines and cure found within 1.5 years. 4. Herd immunity where 70% of population achieve immunity and the virus doesn't spread easily. Here are the factors that point to either a W or L shaped stock market. 1. second and third waves so forth of infections worldwide. Another ...

https://www.bloomberg.com/news/articles/2020-05-12/druckenmiller-says-v-shaped-recovery-for-u-s-is-a-fantasy Stan Druckenmiller said the risk-reward calculation for equities is the worst he’s seen in his career, and that the government stimulus programs won’t be enough to overcome real world economic problems. “The consensus out there seems to be: ‘Don’t worry, the Fed has your back,’” said Druckenmiller on Tuesday during a webcast held by The Economic Club of New York. “There’s only one problem with that: our analysis says it’s not true.” “It was basically a combination of transfer payments to individuals, basically paying them more not to work than to work,” he said. “And in addition to that, it was a bunch of payments to zombie companies to keep them alive.” On a relative basis, he’s as bullish on long-short strategies as he’s been in 10 years. “That’s partly because I’m worried about everything else,” he said. Druckenmiller was also bullish on Amazon.com Inc., saying ...

I've forgotten to add the following sector: 1. Banking / Finance. with the financial aid package which allows SMEs, private individuals to delay paying their loans, banks will likely get hit the hardest. The buck literally stops with banks. Their NPLs may shoot up in the short term and bankruptcies mount. Even with government aid, many highly leveraged companies may go bankrupt.  Banking: short term -8, longer term 0. Disintermediation of banks will continue even after this pandemic.  2. Insurance. Insurance premium payments may stop temporarily but insurance companies can allow the surrender values of the policies to be impacted short term without hitting the P&L. But there may be an increase in death payouts.  Short term -2, longer term +2.  Have I missed out any sectors?