Posted by: donmihaihai | May 3, 2022

Market and funds

Unless you are in those techs that enjoyed one hell of a bull run, the market just shakes a little. In Singapore, STI hardly move. Individual stock is another story, anything can happen and those that you think can produce endless growth, can easily cause you endless pain. Stock picking matter and markets do shift, if the market is shifting, those techs that are at 50% down, can easily down another 50% to 70%. Why not?

A lot of those fast growing tech companies are the product of excess capital. A company need capital to grow and if one can get lot of capital at time where music and wine are flowing, there is no stopping the better one to grow fast. In fact, the faster one grow, the faster capital will be push toward them and it is not always positive. Just talk about e commerce. Yes, it is growing super fast but competition isn’t just about online. Offline matter too and the overall pie isn’t growing like crazy, overall pie is a slow grow market. Is supercharged(from excess capital) topline grow the strategy to win? I think not because they are forcing and teaching offline players how to fight, and while some offline players will be gone, most are likely to stay and each new player will know how to play the game. I don’t see them winning here and when they are not winning plus the conditions for excess capital is not longer there, these companies have to learn how to earn capital the normal way when capital is being used up. I don’t know the ending but the outcome will unlikely be the ones many are predicting and a nice movie for me to watch and I am too stupid to know who will win many years down the road. Oh yeah, it is not just e commerce, there are EV, SaaS, Paas, etc. How you name your names doesn’t excite me.

Actually I am a little excited recently because US tech, the last bull standing, is hitting the wall. Look like this bull is ending. I have never really invested in US tech except being one of the fools who walked into a bank in 2000/2001, I don’t remember the exact year. Took out all my CPF money(OA & SA) and invested in 3 funds, Tech, healthcare and a balance fund. And I lost money in all 3 when I sold them off in I believe 2002/2003. Bulk of my CPF money was invested in Tech. I told myself this was not the time to invest in tech or US equities when selling and keep telling myself the same even during 2008. That was the times I should be buying. Haha, I was looking at my losses and news headline. Luckily when I sold off my healthcare, somehow I invested some CPF in another healthcare fund few years later. Why this fund and not that fund, I don’t know but what I did next is do close to nothing. Sold off a small amount in 2015 I believe and finally sold everything during Covid. I got out close to even for the balance fund, still lose out quite because of SA interest. Overall I did badly even with the gain from healthcare which was a few hundred percent. Had I do nothing, assuming that the funds are still around(I don’t know where the tech and healthcare are anymore), with the help of this Tech bull and Covid, I would come out ahead, way better if I do nothing. Time is the friend of being on the right ship even if I paid somehow more.

I was always looking for the right ship and possible right captain. 2 of my earlier ships that I boarded were China and India. Of course I was a lot more positive on China than India. And my action reflected that. Invest more in China over the years(I sold some but not alot) but way little in India and I sold India within 2 years with a nice gain of 70% which I was really happy. It was my first real gain from investing in fund. And what happened? I did not invest anything back and currently, the price is about 5X my entry price and at time high, it was about 7X. What about China? Did decent until the recent China Tech bull run and crashing back. Oh yeah, I am holding on to quite some gain because the current price is still higher than most of my earlier purchase prices and I sold quite some along the ways, locking gain when the market was good.

Talk about luck. Tech and healthcare, China and India. I betted on the slower ship each time. I came out ok but haha. There were more of course, I betted on commodity related fund, thinking the bull has many years left. Bet on a captain but did not follow though. Those were earlier. And how can I not talk about Japan equities. During that earlier period, I invested in Japan, thinking that it was getting out of its long term secular bear market. It is true that Japan was in a long down market but I got suck in at a period of mini bull when the news headline keep popping Japan then it clash back, together with the rest during 2008 and further into early 2010s. So I keep buying, slowly till the bottom. On the reversal, I told myself good job and started to sell slowly when I was up I believe 30 to 40% on my average cost. Japan was very corporative and keep going higher but I somehow kept a 10% remaining. At the moment, it is up about 70% from my average and no one is even talking about Japan. Haha. After righting my wrong, why did I start selling? Because the future of Japan look lousy maybe. Had I not sell, I would be happy to keep them for a long time until Japan go crazy.

Despite all these, my return from investing in funds is still quite decent. High single digital percentage pa. I need to forget earlier experiences. Don’t walk into a bank and say I want to invest. Never do it anymore. Then ignore the favorites of the times. I am doing it too. Lastly, don’t try to sell early.

Talk about last 2 years, in early 2020, I bought into Europe, Singapore, Malaysia and Thailand. These were the goners. Who want them. Currently, I am starting to buy a little of Europe and China. China was cheap in early 2020 if you ignore China Tech. And after China Tech crashed for more than a year after its peaked, seeing Aberdeen China crashed like 40% from ATH, I jumped ship luckily, now I am happy to buy more, just need it to continue going down.

Still I am waiting for the last bull to be gone. And it will be painful for many peoples and their money. Lot of money will be lost and new bulls will be formed elsewhere slowly but surely.


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