Bear Market Survival Tips

Bear Market Survival Tips

I was hoping never to write this article because if you are here reading this, it could only means a few things.

  • We are in a bear market
  • You are in a long position with a possibility of being overleveraging
  • You don’t have a system that prepares you for this scenario

Whatever the reason you are here, I think it is quite certain that we are experience a market that is downward cha-cha.

Disclaimer: It is anybody’s guess where the market is going to be. This should not be taken as a buy/sell/hold recommendation. Please consider your own context or approach a financial advisor for advise.

Bear Market Survival Tips
Bear Market Survival Tips

Despite the fear, bear markets are nothing new. To put everyone on the same page, a bear market occurs when major stock indexes like the S&P 500 fall 20% or more from their most recent peak. They’ve occurred 12 times since 1946, which is on average once every 8 years. Most pullbacks above 20% have been associated with recessions. Hence, with the perfect long storm, politicians all over the world are most concerned about recessions.

On average, a bear market is around 9.5months. This would mean most of us will live to tell the tale assuming we are not shaken out of our position (mentally or by margin calls).

As I get more and more about how to invest in a bear market, I hope this article will be able to share with you some bear market survival tips to prepare yourself for the weeks to come.

Bear market survival tips

#1: Avoid making impulsive decisions

This makes the top of the list. Emotionally, people don’t like to be wrong (whether temporary or in the long run). Hence, when they see their portfolio in the red, many people have the temptation to “reset” their portfolio. This is detrimental to your wealth management journey and it is just a “quick fix” of escaping the mental strain.

Stay calm is the key in bear and highly volatile markets. If your time horizon is decades away, the best thing to do is to invest as if nothing has changed. Let me give you an example of a $1000 investment in the S&P 500 between 1/1/2009 and 12/31/2018 (the last market crash).

  • If you stayed invested the entire time, you’d have $2,775.
  • If you missed the 10 best-performing days during that period, your account value would be $1,722.
  • If you missed the 30 best-performing days in this 10-year period, you’d be left with $918.

I can’t emphasize how important it is to stay invested.

#2: Build your positions regularly over time

With dollar-cost-averaging (DCA), no thinking is really required. However, I recognized that it may not be easy. I saw friends who were excited about the recent bear market and have dollar cost average down the last few months.

However, they are all now NOT adding into new positions as the market is still going down. DCA is somewhat easy to say but not easy to execute consistently unless there is a system that is set up. Personally, I have averaged down on the China Market previously and it is still a bleeding position (Check out my latest SRS positions).

Time will tell. That being said, stay tune for my upcoming article: The pros and cons of dollar cost averaging.

#3: Change your strategy, diversify or play defensive

As a wealth manager, I realized risk management is something that I constantly address. If you’re still active in the markets and it is not working anymore, it might be time go passive with a lazy portfolio. If you find yourself taking too much risk, you might want to seek a more defensive portfolio.

Your current life stage might not allow you to take too much risk as compared to before. It is vital to re-assess your situation, your goals, your risk tolerance and discuss with a professional on your options.

#4: Go contrarian (Not recommended)

If you are a trader, you know better than to go against the trend. Consider taking a buy put options position to bet against a stock or ETF, this allows you to have a limited downside (as you are a buyer of the put option) and able to participate in the downward trending market.

WARNING: I have to emphasize that buying options is speculative. They may expire and be worthless if you do not have a game plan. If you are wondering what this is, do not do it. 

Final Thoughts

Stay strong. This may be the pivoting moment in your investment journey. There are so many resources you can turn to nowadays to prepare for a bear market. You can consider what Warren Buffett is doing amidst the noises.

Definitely reach out if you need help. I will be more than happy to have a conversation with you.

Otherwise, please watch out for my next article: The Pros and Cons of Dollar Cost Averaging. [Update: The article is out!]

 

Chengkok is a licensed Financial Services Consultant since 2012. He is an Investment and Critical Illness Specialist. Wealthdojo was created in 2019 to educate and debunk “free financial advice” that was given without context.  

Feel Free To Reach Out To Share Your Thoughts.

Contact: 94316449 (Whatsapp) chengkokoh@gmail.com (Email)
Telegram: Wealthdojo [Continuous Learning Channel]
Reviews: About Me

The views and opinions expressed in this publication are those of the author and do not reflect the official policy or position of any other agency, organisation, employer or company. Assumptions made in the analysis are not reflective of the position of any entity other than the author.

Why is it not easy to invest in the long run

Why is it not easy to invest in the long run?

In the most recent webinar that I conducted, I asked the participants what are they concerned about when it comes to investing in the long run?

I thought that most people’s answer would the lack of time or the inexperience in the market. It turns out that for most people, they are not too sure if they are doing it right.

Why is it not easy to invest in the long run
Why is it not easy to invest in the long run

If you think about it using a proxy, it is like a person driving on the roads but unsure if they driving properly. If this is not risky, I don’t know what is.

The Why

Fear Of Missing Out FOMO
Fear Of Missing Out FOMO

As we get more plugged into the internet, social news gets spread very quickly. With more people getting stuck at home during the COVID-19 period, we log in more to these social platforms to keep updated on the world around us.

One popular topic is how people are getting rich during the pandemic. Topics like Bitcoin, NFTs, Value Investing or Growth Investing gets thrown around. Because it seems that every Tom, Dick and Harry is doing it, people fear missing out and started participating into these.

Redefine Basics

Investing is the act of allocating resources (usually money) to buy an asset, in hopes of reselling it later at a higher price (Definition from Investopedia).

For most people, they get the concept that they will make money when the price goes up. I believe there is a certain form of Social Investing (a term that I just made up) going around in the recent market. Reddit has made certain stocks like Gamestop pop. Elon Musk has certainly contributed to the popularity of Bitcoin and Tesla. One thing for sure is that prices seems to be influenced by social pressures.

While it has created some millionaires, some people are unsure what they are doing anymore.

The art of investing starts from buying an asset. This concept seems to have lost its’ way in this season.

Our Mind Plays Tricks

Let’s play a game. Find a place to record your answer for Quiz A and B.

Quiz A

Choice #1: You get a 100% chance of getting $50.

Choice #2: You get a 50% chance of getting $100, 50% chance of getting $0.

Write down which one will you choose?

Quiz B

Choice #1: You get a 100% chance of losing $50.

Choice #2: You get a 50% chance of losing $100, 50% chance of losing $0.

In a 1979 experiment by Daniel Kahneman and Amos Tversky, it is discovered that most people choose Choice #1 for Quiz A and Choice #2 for Quiz B.

However, if you understand it mathematically, you should be indifferent between all the 2 choices in Quiz A or Quiz B. The expected value of both Choices in Quiz A are the same (i.e. +$50), while the expected value of both Choices in Quiz B are the same (i.e. -$50), so there should be no difference (at least mathematically) between the Choices in either Quiz. (Thank you Kok Ming for your help)

This tells us that as humans, we feel losses more keenly than gains (loss aversion). That’s probably the reason why you might have taken gains off the table early out of fear and hold onto large losing positions in the hope that they will rebound.

Our minds are not wired to maximise performance but to minimize regret.

Anyway, that’s just one problem. These are other cognitive bias we need to overcome as investors.

Cognitive Bias Investing
Cognitive Bias Investing

So What Can You Do?

Now that you understand that the society and your own mind is against you, what can you do? I would humbly like to suggest 3 steps.

#1: Get financially educated and informed of the investment process.

#2: Focus on the controllable.

#3: Consider a multi asset class portfolio to minimise drawdown.

Why is it not easy to invest in the long run education
Why is it not easy to invest in the long run education

This graph records the S&P500 gains and losses over the past 60 years. The stock market can be considered like the following season (Spring and Winter). The average period for Spring (we love Spring don’t we) is 57 months and the average period for Winter (we don’t like the cold) is 12 months.

IF we are in a crisis now, it typically takes around 12 months before it is spring again. In the more recent COVID-19 crisis, the winter lasted around 6 months (Feb21 to Aug21) before roaring back into Spring again.

It is what you do during winter that determines your financial results. Getting financially educated allows you to prepare for such opportunities.

Dollar Cost Averaging VS Buying the Dips
Dollar Cost Averaging VS Buying the Dips

Let’s assume that you can predict each and every dip (technically impossible) and buy them (further assuming you have the mental resilience to buy at the lowest). Do you know that Dollar Cost Averaging (DCA) beats buying the dip in this time period? Instead of focusing on the unknowns or black swan events, why not focus on what’s controllable which is doing simple Dollar Cost Averaging?

Novel Investor Asset Class Returns TableSource: NovelInvestor.com

As you can see, different asset class performs differently every year. Because our minds are loss averse in nature, we might not be able to weather through each storms if we are only into one asset class. Consider a multi asset portfolio might make it easier for our minds to weather through each storms when it comes.

Final Thoughts

Personally, I’m invested in the long run. In investment, there will be volatility and it is something we have be comfortable with either through education, experience or both.

Do you related to the above? Let me know in the comments below.

Chengkok is a licensed Financial Services Consultant since 2012. He is an Investment and Critical Illness Specialist. Wealthdojo was created in 2019 to educate and debunk “free financial advice” that was given without context.  

Feel Free To Reach Out To Share Your Thoughts.

Contact: 94316449 (Whatsapp) chengkokoh@gmail.com (Email)
Telegram: Wealthdojo [Continuous Learning Channel]
Reviews: About Me

The views and opinions expressed in this publication are those of the author and do not reflect the official policy or position of any other agency, organisation, employer or company. Assumptions made in the analysis are not reflective of the position of any entity other than the author.

How To Identify Bullshit Investors Say

How To Identify Bullshit Investors Say

This might be an uncomfortable read for some. If you might take umbrage at what you are going to read, I suggest heading to other friendlier parts of my website such as “what’s holding us back in our wealth management journey”.

The market don’t really make sense on a day to day basis. Benjamin Graham, father of value investing famously said this. “In the short run, the market is a voting machine. In the long run, the market is a weighing machine.” Personally, I agree with this and that you should really invest in the companies you want to see grow in the long run.

Alas, in real life we have plenty of distraction coming from our friends, “Gurus“, Gamestop, Bitcoin, Elon Musk (just to name a few).

On the ground, here is a story of bullshit that I hear one investor says and here’s how to identify them.

How To Identify Bullshit Investors Say
How To Identify Bullshit Investors Say: Hulk Says BULLSHIT!

 

There are 4 stages of Bullshit that you get to hear. It follows very closely to the market cycle.

4 Stages Of Market Cycle
4 Stages Of Market Cycle

The most noise happens typically at stage 3. One recent example would be the market crash of March/April 2020. Let’s start here.

Stage 3: This time is different. Wait for confirmation.

As Sir John Templeton puts it, this time is different is the 4 most dangerous words in investing. During March/April 2020, the stock market crashed. People were pulling money out of the market because they felt that COVID19 was going to have a significant impact of the economy.

During a crash, the best thing to do is to keep calm and learn how to endure the correction. As easy as it may sound, it is not easy to do. I know of people who are pulling out or adopting the stay at the side saying “this time is different”. The crash will be longer than usual and this is the first time (not really) that a virus has made it’s way worldwide. Every sensible country is in a lockdown. The entire economy is in a standstill. This situation will drag on. It is better to keep some in cash.

Most people don’t do anything (if they have the capital) or they may take losses to protect their capital because “this time is different”. This is bullshit because this is the best time to invest in companies you always wanted to.

Stage 4: Some leverage is good debt. Let’s 10X our capital.

Things are recovering right now. People are starting to enter the market. At this stage, most people would be making money from the stock market easily. If you know someone who have invested from May 2020 to Dec 2020, they will be bragging how they can be financially free in no time. They are looking into leverage instruments because they are looking to 10X their capital!!

This is the time to go long because economies are recovering. Some sectors have benefited and it is obvious (in hindsight) that they are benefiting (WFH stocks like zoom). You are a little late but there is still some time to enter. People all around somehow are making money and you don’t want to left out.

More bullshit because greed is now fueling the stock market. This is the easiest time to make money no doubt. Talk is cheap, people are showing off their results on Facebook. Almost everyone is making money here.

Stage 1: Value Investing is Dead. You got to pay more for quality.

This the most scary part of the cycle (in my opinion). The market is over-heated and valuation are rich. The narration here is “you got to pay more for quality”. As more and more people starts to pay more, the price of the stocks starts to go higher and higher. Cathie Woods starts taking central stage here in 2020 with her ARK funds outperforming all major indices. People starts to buy into the idea and invest with higher prices.

The ultimate bullshit because prices are going to the moon now. No one is concern about fundamentals. Everyone is waiting for the stock to gap up and celebrate until…

Stage 2: You need to have diamond hands. Valuation is everything.

For some reason, earning beats don’t increase the stock price anymore. Although the results are fantastic, stock prices are dropping. Stock prices drops and people start to think that there is a “sector rotation”. Here, you will need to have diamond hands as you have bought the stocks are “good prices” already.

However, stock prices continue to drop. Warren Buffett takes central stage again. Gurus are saying valuation is everything. Prices continue to go down and people gets worried. People begin to sell in companies that they have less conviction in.

Bullshit because it is too late to notice that valuation was too rich before.

 

Final Thoughts By Wealthdojo

The cycle continues on. I heard this bullshit in the last one year all from the same investor. I cannot imagine how inconsistent his/her investment strategy is and how many people have lost money because of him/her.

To put things into context, the above advice are good advices except that it is adapted conveniently to sound smart in the market. Investment is not all rosy and sunshine. It comes with rains and storms. We need to learn when is the best time to plan the seeds, when is the best time to wait and when is the best time to celebrate. A far sighted plan is needed to prepare oneself in their investment journey. Average investors learn from their own mistakes over time. The best ones learn from other people’s mistake using their time and experience. Investment is not complicated. You just need to learn from the best and apply it.

All the best to everyone enduring this correction.

 

Chengkok is a licensed Financial Services Consultant since 2012. He is an Investment and Critical Illness Specialist. Wealthdojo was created in 2019 to educate and debunk “free financial advice” that was given without context.  

Feel Free To Reach Out To Share Your Thoughts.

Contact: 94316449 (Whatsapp) chengkokoh@gmail.com (Email)
Telegram: Wealthdojo [Continuous Learning Channel]
Reviews: About Me

The views and opinions expressed in this publication are those of the author and do not reflect the official policy or position of any other agency, organisation, employer or company. Assumptions made in the analysis are not reflective of the position of any entity other than the author.

How Tesla and Bitcoin is forming the new economy Dogecoin

How Tesla and Bitcoin are forming the new economy

It is official. Tesla just invested/bought (it is hard to tell the difference today) USD$1.5B in Bitcoin and plans to accept it as payment. Just a few days ago, CEO Elon Musk tweeted positive messages around digital currency especially for Bitcoin and Dogecoin. While the intention of his Dogecoin tweet is still unclear, his tweet has send Dogecoin’s prices through the roof/moon/mars (it is hard to keep up with the terms anymore).

How Tesla and Bitcoin is forming the new economy Dogecoin
How Tesla and Bitcoin are forming the new economy Dogecoin

Disclaimer: No vested interest in Bitcoin/Dogecoin/Tesla.

In this article, I will attempt to explain what good and what not good will happen from this move and potential series of events that might unfold. If you are new to Tesla and Bitcoin, I would encourage you to read about my previous Bitcoin article: Is it too late to invest in Bitcoin?

 

Tesla’s Current Brilliant Capital Moves

One thing for sure. Elon Musk sure knows how to raise capital or get his hands on money. Previously, Tesla raised USD$5 billion from stock offering. The question had that time was do they really need the cash? It turns out that his timing was excellent. By selling shares at an expensive price, Tesla’s existing shareholder was not affected much by dilution. Effectively, he is raising capital from the equity market and still “protecting” his existing shareholder. I feel that it was a wonderful move.

Secondly, Tesla’s income comes from selling regulatory zero emission credits to other carmakers. Tesla would have noted a net loss for 2020 if it had not relied on this USD$1.6billion sale. To help build a sustainable economy, carmakers have to manage their pollution levels and have to buy green credits or face hefty fines or have their business licenses revoked. Selling of the zero emission credits is probably a 100% profit margin (there is no COGS). I feel this is pretty smart too as Tesla is selling something that is technically “free”. This will impact them once the other carmakers are more serious about their carbon emission.

 

Tesla Next Capital Move: Bitcoin

As of 27 Jan 2021 Motley Fool’s article, Tesla ended the year with a cash war chest of USD$19.4B. This already includes the $10B raised through stocks offering in 2020. With the purchase of USD$1.5B worth of Bitcoin, around 7% of the Balance Sheet (cash and equivalent) has been converted into Bitcoin. When you are investing in Tesla, you are now “investing” in Bitcoin.

How Tesla and Bitcoin is forming the new economy
How Tesla and Bitcoin are forming the new economy

Of course, Bitcoin surge > 20% to reach a new highs of USD$44,000.

In a official filing with the Securities and Exchange Commission, the company said it bought the bitcoin for “more flexibility to further diversify and maximize returns on our cash.” With the limited use of Bitcoin at the moment, I believe Bitcoin is another investment vehicle for Tesla. In this, I feel that Tesla would be able to “sell” Bitcoin when the time is right to edge up their quarterly results. However, this could impact them if Bitcoin prices fluctuate much.

 

Tesla and Bitcoin: The New Economy

You might be wondering why I named the article “The New Economy” by now. I would like to present a thesis of what potentially can happen and the likely impacts of it.

  • An Alternative Investment / Store of Value

This is the one that I like the most. Although it is known that Warren Buffett does not invest directly into Gold, he is invested into Barrick Gold, an Gold Mining company. Gold by itself doesn’t not have any utility. Barrick Gold offers a balance sheet, income sheet etc. Most people believe that it is hedge against the USD.

Similarly, what Elon Musk might be trying to do is to hedge against the USD. Think about it, 20% of all USD are printed in 2020 during the COVID-19 crisis. The value of USD might be compromised and this is where it gets exciting.

If the crisis isn’t managed well and the value of USD continues to crumble, Bitcoin might then be a good store of value. Bitcoin will then become the new worldwide accepted currency. Hence, the new economy.

  • Increase adoption of Bitcoin

In my previous article about Bitcoin, I questioned about the “lack of adoption” of bitcoin. There seemed to be a HODL attitude on diamond hands. As Tesla cars gets traction in the world, they could really start to accept Bitcoin for their goods or service all over the world. As the velocity of Bitcoin transaction circulates more and more around the world, people will eventually have to use Bitcoin in their everyday transaction. It will give birth to a new worldwide accepted currency.

The question remains if people would actually want to use Bitcoin for transactions with the increasing Bitcoin prices.

 

Final Thoughts By Wealthdojo

Elon Musk decisions usually leave people feeling awe or just confused. Certainty, he already has raving fan base to help him push prices to wherever he wants it to be via a tweet. I can only say he is a good marketer, a great business man and definitely an excellent story teller.

Till next time!

 

Chengkok is a licensed Financial Services Consultant since 2012. He is an Investment and Critical Illness Specialist. Wealthdojo was created in 2019 to educate and debunk “free financial advice” that was given without context.  

Feel Free To Reach Out To Share Your Thoughts.

Contact: 94316449 (Whatsapp) chengkokoh@gmail.com (Email)
Telegram: Wealthdojo [Continuous Learning Channel]
Reviews: About Me

The views and opinions expressed in this publication are those of the author and do not reflect the official policy or position of any other agency, organisation, employer or company. Assumptions made in the analysis are not reflective of the position of any entity other than the author.

3 Things I Learnt About Gamestop Wall Street Bets VS Hedge Fund Short Sellers

3 Things I learnt from the Gamestop Saga

It is 29 Jan 2021. Gamestop (GME) share price is $325. It has gone up a long way since early January when price is around $17. The battle is still on. Several brokerage companies like Robinhood has started to restrict trading on GME. So much for a company that believes that everyone should have access to the financial markets. With this, I believe there might be more interest going towards Bitcoin.
If you unsure what happen, do check out the first article How Gamestop is better “investment” than Tesla, where we explain the hype on GME.
Disclaimer: I do not have any position in GME/Bitcoin. Indeed, I have “missed” out on the huge runs of those companies but time will tell. Here at Wealthdojo, we seek to understand what has happened fundamentally. Even in the insane movement in the stock market, we aim manage our wealth in a logical and systematic way.
3 Things I Learnt About Gamestop Share Price
3 Things I Learnt About Gamestop Share Price

 

The Update

Things were not pretty over the last few days.

  1. Hedge Funds had to closed their short positions taking in huge losses. Melvin Capital (the guys that have shorted GME) have not announced how much losses they suffered but Citadel and Point72 have infused close to $3 billion into Melvin Capital to shore up its finances. They have also deny going into bankruptcy but supposing have been bailed out.
  2. Several brokerage companies started to restrict trading. On 28 Jan, they only allowed people to sell their shares of selected companies. On 29 Jan, they allowed people to buy only one share of selected companies. This came as an outrage as if you restrict people to only sell. There is only one direction the company can go.
  3. Robinhood started to draw up to $600 million from their line of credit. They have also raised more than $1 billion from existing  investors. It is to pay customers who are owed money from trades and also fulfil regulations. They probably did not manage risk properly by allowing those shorter to short too much.

From this episode that is still ongoing, I hope to share 3 important lessons that we can learn as retail investors.

 

Leverage

Time and again, this word comes out to haunt the financial market. If you can remember the 2008 financial crisis, lines of credit is so easily available that even a prostitute can take a dozens of mortgage loan (Unverified information from Netflix: The Big Short).

When you leverage, you are using money that you don’t have to purchase a stock.

Leverage example:

You have $100,000. You want to invest in ABC shares (assume it is $1) because you believe the share price will double for whatever reason in the next few days. You leverage by borrowing another $100,000 to invest paying an interest (we are going to ignore interest in the calculations). You buy 200,000 shares using your $200,000.

When ABC shares doubles (now $2), you would have $400,000. You pay back $100,000 and your portfolio is now $300,000.

If you didn’t leverage and borrow, your portfolio only grows to $200,000.

Your money grows “faster” when you leverage.

However, if ABC shares drops to 0. Your original $100,000 is now 0. However, you now owe $100,000.

If you didn’t leverage and borrow, your portfolio just suffers the maximum lost of $100,000 but you do not owe people’s money.

The above is a 1:1 leverage. It is possible for you to have a 50:1 leverage in the financial market. Imagine how scary it is if the trade don’t go according to plan. That’s 50x of $100,000.

 

Investing with margin or leverage is the fastest way to lose all your money. We won’t deny the fact that it is also the fastest way to make more money. Ideally, you should only invest with the money you already have. I believe we will see how this spans out in the days ahead especially if there are big hedge funds using leverage in their GME positions.

Prisoners Dilemma

I never thought I would see this happening after my university days. Readers of Wealthdojo will probably know I’m a behavioral economics fan. Seeing prisoners dilemma play out in real life is somewhat very fulfilling.

Let’s set the context first. When the brokerage stopped people from buying. All you could do was to sell the stocks. Hence, it became a situation of sell or don’t sell among the retail investors.
3 Things I Learnt About Gamestop Prisoners Dilemma
3 Things I Learnt About Gamestop Prisoners Dilemma
I have created a payout table to facilitate the discussion on the prisoners dilemma.
3 Things I Learnt About Gamestop Prisoners Dilemma Part 1
3 Things I Learnt About Gamestop Prisoners Dilemma Part 1

Shareholder #2 best response is to sell. This is because if Shareholder #1 were to sell, Shareholder #2 is better off selling than not selling (2 > 1). If you sell but other investors don’t sell, you win but other investors lose. If Shareholder #1 were to not sell, Shareholder #2 is better off selling than not selling (5 > 4).

3 Things I Learnt About Gamestop Prisoners Dilemma Part 2
3 Things I Learnt About Gamestop Prisoners Dilemma Part 2

Similarly, Shareholder #1 best response is to sell. This is because if Shareholder #2 were to sell, Shareholder #1 is better off selling than not selling (2 > 1). If Shareholder #2 were to not sell, Shareholder #1 is better off selling than not selling (5 > 4).

3 Things I Learnt About Gamestop Prisoners Dilemma Nash Equilibrium
3 Things I Learnt About Gamestop Prisoners Dilemma Nash Equilibrium
The Nash Equilibrium for this game is for both of them to sell getting a payoff of (2,2). Logically, both shareholders will sell.
Although (4,4) is the most ideal for them, it requires all the GME investors to coordinate and don’t back out on the deal. It will certainly play on the motivation on the GME investors to stick on with don’t sell.

Motivation

3 Things I Learnt About Gamestop Wall Street Bets VS Hedge Fund Short Sellers
3 Things I Learnt About Gamestop Wall Street Bets VS Hedge Fund Short Sellers

I have learnt that in investing, different people will have different motivation. I find it bizarre for people to randomly ask someone on their opinion and whether to invest in the stock market at this moment of time.

If you ask a trader, he will say yes because the S&P is upward trending.

If you ask a value investor, he will say no because valuations are crazily rich.

If you ask a growth investor, he will say yes because there is still growth.

If you ask Warren Buffett, he will just buy back his own shares.

If you ask Elon Musk, he will tweet Gamestonks!

If you ask me, I will sit at the sidelines and continue to collect excellent companies and a sensible price.

For the people at Wall Street Bets, they are there to send a message.

 

If you decide to follow any of them, make sure they have the same motivation as you. Otherwise, you might find yourself in an awkward position.

 

Final Thoughts By Wealthdojo

When you thought 2020 was an epic year, 2021 came as another surprise. This episode definitely hasn’t closed yet. Who knows this might be a trigger for another financial crisis. If it comes, the question is “are you ready?”.

 

Chengkok is a licensed Financial Services Consultant since 2012. He is an Investment and Critical Illness Specialist. Wealthdojo was created in 2019 to educate and debunk “free financial advice” that was given without context.  

Feel Free To Reach Out To Share Your Thoughts.

Contact: 94316449 (Whatsapp) chengkokoh@gmail.com (Email)
Telegram: Wealthdojo [Continuous Learning Channel]
Reviews: About Me

The views and opinions expressed in this publication are those of the author and do not reflect the official policy or position of any other agency, organisation, employer or company. Assumptions made in the analysis are not reflective of the position of any entity other than the author.