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 Clearing stocks before the coming crash, what have I missed out in the analysis?

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TSplumberly
post Aug 23 2018, 10:19 AM, updated 2y ago

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Plan to clear most of my stocks in the next few months before the coming crash. Did some analysis to help in my decision making later.

Appreciate feedback on things I over looked etc in my analysis.

Assume 4-6% pa growth and 20-30% drop in price during the crash, it will take 3-4 yrs for the price to recover.

Instead of wasting the 3-4 years for the price to recover, won't it be better if I sell out before the crash, put that money in FD etc. That is, a positive net gain during the 3-4 years.

I know this is too idealistic but what have I done wrong?

Yes, I do not have a crystal ball to know when it will crash. But a crash WILL happen. Just a matter of time.

Appreciate a constructive feedback/discussion. Thanks.

P/S I think I put this in the wrong place. Should be in the discussion section. Can someone help me to transfer it? Or tell me how to? Thanks.

This post has been edited by plumberly: Aug 23 2018, 10:21 AM
MeToo
post Aug 23 2018, 10:24 AM

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I'm not sure of a crash, but I exited some time back in preparation just in case.

Timing my side was better cause I took the money and dumped it into principal repayment of my upcoming house. Ofcourse I still hold onto a much smaller portfolio... maybe about 10% in some overseas bluechips or selected stocks.

SO I kinda pare down my exposure by 90%...
TSplumberly
post Aug 23 2018, 10:29 AM

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QUOTE(MeToo @ Aug 23 2018, 10:24 AM)
I'm not sure of a crash, but I exited some time back in preparation just in case.

Timing my side was better cause I took the money and dumped it into principal repayment of my upcoming house. Ofcourse I still hold onto a much smaller portfolio... maybe about 10% in some overseas bluechips or selected stocks.

SO I kinda pare down my exposure by 90%...
*
I see. You run faster than me. Ha.

The transfer of money back into Msia was trouble and tax free?

Thanks.
CP88
post Aug 23 2018, 10:35 AM

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QUOTE(plumberly @ Aug 23 2018, 10:19 AM)

Assume 4-6% pa growth and 20-30% drop in price during the crash, it will take 3-4 yrs for the price to recover.

Instead of wasting the 3-4 years for the price to recover, won't it be better if I sell out before the crash, put that money in FD etc. That is, a positive net gain during the 3-4 years.

*
Nobody knows when the stock market will it be crashing. It was mentioned that 2018 would crash and some investor has started cashing out the early 2018. smile.gif

Minimise the expose like @MeToo said, might be a good options.
MeToo
post Aug 23 2018, 10:40 AM

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QUOTE(plumberly @ Aug 23 2018, 10:29 AM)
I see. You run faster than me. Ha.

The transfer of money back into Msia was trouble and tax free?

Thanks.
*
No issue, i dont have big amounts overseas.

Although it used to be much easier for singapore as you can easily put RM300,000 of cash into a men's wallet and walk in from SIngapore? Gotta love their 10k bill

Anyway, it also depends if you have a place to put the money when you cash out, FD might not be the best option. In a real crash, even banks might go down... tongue.gif
TSplumberly
post Aug 23 2018, 10:53 AM

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QUOTE(CP88 @ Aug 23 2018, 10:35 AM)
Nobody knows when the stock market will it be crashing. It was mentioned that 2018 would crash and some investor has started cashing out the early 2018.  smile.gif

Minimise the expose like @MeToo said, might be a good options.
*
No one can predict the exact day or even month for the crash. But bad signs are there now. If not for the QE, crash would be here much earlier.

I got out 1-2 years before the crash in 2007. Though I could have made a bit more if I didnt get out that early, no regret for my decision. biggrin.gif


TSplumberly
post Aug 23 2018, 10:54 AM

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QUOTE(MeToo @ Aug 23 2018, 10:40 AM)
No issue, i dont have big amounts overseas.

Although it used to be much easier for singapore as you can easily put RM300,000 of cash into a men's wallet and walk in from SIngapore? Gotta love their 10k bill

Anyway, it also depends if you have a place to put the money when you cash out, FD might not be the best option. In a real crash, even banks might go down...  tongue.gif
*
Noted and thanks.
CP88
post Aug 23 2018, 10:56 AM

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QUOTE(plumberly @ Aug 23 2018, 10:53 AM)
No one can predict the exact day or even month for the crash. But bad signs are there now. If not for the QE, crash would be here much earlier.

I got out 1-2 years before the crash in 2007. Though I could have made a bit more if I didnt get out that early, no regret for my decision.  biggrin.gif
*
Wow. Experienced investor. biggrin.gif
louzie
post Aug 23 2018, 11:05 AM

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what to do then during crash ? Buy gold ?
TSplumberly
post Aug 23 2018, 11:12 AM

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QUOTE(CP88 @ Aug 23 2018, 10:56 AM)
Wow. Experienced investor.  biggrin.gif
*
More like a scared rookie investor lah. Ha.

QUOTE(Luke Skywanker @ Aug 23 2018, 10:59 AM)
so, what crash?
in specific industries?
the entire market as a whole?
*
Global crash affecting 99% of the industries & countries.

QUOTE(louzie @ Aug 23 2018, 11:05 AM)
what to do then during crash ? Buy gold ?
*
Good question but hard to answer.


I do not mean to be rude here. Prefer to stick to what I have asked at the start of this thread. If you wish to find out more on your subject, please start another thread. No offence intended. Thanks.

This post has been edited by plumberly: Aug 23 2018, 11:25 AM
MeToo
post Aug 23 2018, 11:22 AM

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QUOTE(Luke Skywanker @ Aug 23 2018, 10:59 AM)
so, what crash?
in specific industries?
the entire market as a whole?
*
Going by the 1997/98 and 2008/09 experience... its global and when it hits there is hardly "safe haven" stocks that wont be affected..
MeToo
post Aug 23 2018, 11:23 AM

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QUOTE(plumberly @ Aug 23 2018, 11:12 AM)
More like a scared rookie investor lah. Ha.

*
its all about our individual risk appetite..

I prefer to earn less then lose money.
cherroy
post Aug 23 2018, 11:38 AM

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Time the market is impossible task to do.
If market valuation indeed expensive, just trim down the holding.

Totally clearing up is not advisable (especially one is holding on good quality stock) unless one can hit the timing exactly.

What if clearing up, the market continue to go up 10~20% before the crash?
Eg.
A stock you hold now is 10.00, expect market crash, clear up.
But A still going up to 13.00

1-2 years later, market crash, A stock drop 20%, back to 10.00 level.
You buy back at 10.00, seems gain nothing in the process of 'guessing" the crash timing.

A good stock, even experiencing crash after crash, over the long time, it is still going up and way higher than before.

Having said that, the market is indeed experiencing one of longest bull run in the history due to unprecedented massive QE pumping.



tehoice
post Aug 23 2018, 12:58 PM

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agree with cherroy.

if you think the holdings you have is undervalue, you may hold on to it.

if you think the stocks have fully valued, then by all means exit

no one can time it so perfectly i guess. but it's always good to have spare cash around.

cash is always king?
tehoice
post Aug 23 2018, 01:01 PM

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QUOTE(plumberly @ Aug 23 2018, 11:12 AM)
More like a scared rookie investor lah. Ha.
Global crash affecting 99% of the industries & countries.
Good question but hard to answer.
I do not mean to be rude here. Prefer to stick to what I have asked at the start of this thread. If you wish to find out more on your subject, please start another thread. No offence intended. Thanks.
*
what do you think of the property market?
just like the sub-prime crisis.

however, many have been talking about the property bubble burst since 2012, it's gonna burst it's gonna burst.
but fast forward 6 years now, none happened, the price psf in KL gone up from RM800 to RM2k now?
TSplumberly
post Aug 23 2018, 03:12 PM

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QUOTE(cherroy @ Aug 23 2018, 11:38 AM)
Time the market is impossible task to do.
If market valuation indeed expensive, just trim down the holding.

Totally clearing up is not advisable (especially one is holding on good quality stock) unless one can hit the timing exactly.

What if clearing up, the market continue to go up 10~20% before the crash?
Eg.
A stock you hold now is 10.00, expect market crash, clear up.
But A still going up to 13.00

1-2 years later, market crash, A stock drop 20%, back to 10.00 level.
You buy back at 10.00, seems gain nothing in the process of 'guessing" the crash timing.

A good stock, even experiencing crash after crash, over the long time, it is still going up and way higher than before.

Having said that, the market is indeed experiencing one of longest bull run in the history due to unprecedented massive QE pumping.
*
Thanks.

The question on delayed crash did cross my mind before. Said to myself, willing to take that risk as long as I have considered and done a proper evaluation. Thus airing it here for comments.

Rightly or wrongly, I prefer to see a lower growth or even a flat growth than a negative growth in my investment. Thus the above get out early strategy. Ha.

The stock is in the average category, one of the oil & gas companies. My early plan was to hand on to it and use it in my retirement when the price should go even higher due to the shortage of oil and gas in 30-50 years time.

But ....

EU has now a policy to stop production of fossil vehicles by 2040, China has the same idea but no time frame yet. Even one of the 7 oil sisters has started in the EV charging business instead of just petrol stations. Growing demand for EV now. AirBus has already started work on using battery for their planes, for short distances.

Yes, even with EV, these 7 sisters will not completely go extinct as their businesses are not 100% on transportation fuel. But it will hurt their businesses.

So ...

With the coming crash and the bleaker business future for the company, there is natural tendency (flaw?) for my mind to suggest to dump the shares now, 2 birds with one stone, figuratively speaking.



QUOTE(tehoice @ Aug 23 2018, 12:58 PM)
agree with cherroy.

if you think the holdings you have is undervalue, you may hold on to it.

if you think the stocks have fully valued, then by all means exit

no one can time it so perfectly i guess. but it's always good to have spare cash around.

cash is always king?
*
Thanks.

See above.

Not trying to time it exactly. Get out when there are enough bad signs and get in when there are confirmed recovery signs. Can be a few months or years gaps.

QUOTE(tehoice @ Aug 23 2018, 01:01 PM)
what do you think of the property market?
just like the sub-prime crisis.

however, many have been talking about the property bubble burst since 2012, it's gonna burst it's gonna burst.
but fast forward 6 years now, none happened, the price psf in KL gone up from RM800 to RM2k now?
*
Saw one very good graph on how the stock-economy-property cycles interact, with stock leading then economy and then property. Cannot find it now. But the one below is similar.

I bet my bottom dollar that in the coming crash, the real estate bubble will burst, or at least leak! Ha.


Attached Image
Showtime747
post Aug 23 2018, 03:35 PM

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QUOTE(plumberly @ Aug 23 2018, 10:19 AM)

I know this is too idealistic but what have I done wrong?


*
Nothing wrong at all. This is called portfolio rebalancing, and it is totally up to an individual based on circumstances.

Trust your own sixth sense thumbup.gif

Besides FD, there are capital guaranteed bank products you can go into after you get out of stock market. Lower or zero return of course. So, you can sleep better.

Also consider spreading the tenure of your investment returns. Invest in vehicle with longer period of expected return (property, government/corporate bonds, gold for eg.). These investments may ride you through the turbulent times.

This post has been edited by Showtime747: Aug 23 2018, 03:37 PM
icemanfx
post Aug 23 2018, 04:04 PM

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QUOTE(plumberly @ Aug 23 2018, 10:19 AM)
Plan to clear most of my stocks in the next few months before the coming crash. Did some analysis to help in my decision making later.

Appreciate feedback on things I over looked etc in my analysis.

Assume 4-6% pa growth and 20-30% drop in price during the crash, it will take 3-4 yrs for the price to recover.

Instead of wasting the 3-4 years for the price to recover, won't it be better if I sell out before the crash, put that money in FD etc. That is, a positive net gain during the 3-4 years.

I know this is too idealistic but what have I done wrong?

Yes, I do not have a crystal ball to know when it will crash. But a crash WILL happen. Just a matter of time.

Appreciate a constructive feedback/discussion. Thanks.

P/S I think I put this in the wrong place. Should be in the discussion section. Can someone help me to transfer it? Or tell me how to? Thanks.
*
Bull Market Hits a Milestone: 3,453 Days. Most Americans Aren’t at the Party.

The party has been going for more than a decade. But a lot of Americans haven’t been celebrating.

Stocks crossed a major threshold on Wednesday, when the 10-year-old bull market arguably became the longest on record.

It ranks among the great booms in American market history. The Standard & Poor’s 500-stock index has soared more than 320 percent since emerging from the rubble of the financial crisis in March 2009, creating more than $18 trillion in wealth.

https://www.nytimes.com/2018/08/22/business...pe=sectionfront

Stock market correction is a matter of when not if. if you don't feel comfortable with current market then sell. during bull run, most if not all herd are blinded by greed.

cherroy
post Aug 23 2018, 04:09 PM

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QUOTE(plumberly @ Aug 23 2018, 03:12 PM)

Attached Image
*
If one thinks equities is indeed heading for crash, can bank on bond.
Bond price (treasuries, sovereign bond) highly may shoot to roof if market crash.
So don't need to clear off all investment, even if market is crashing.
There are a lot of avenue to hedge on it.

Alternatively, one can still hold on good stocks, but at the same time buy some short (index) through futures market, to hedge upon market crash.

PBB price was 3.xx prior before 97 crash, it crashed to below 1.00 during the crisis.
So even one bought prior before crash at 3.xx, one still makes good return after 20 years later.

So you don't need good timing to make money in the market, but you need to pick a right stock to make money.

Yes, good timing, can make extra more, and also it is indeed wise to rebalancing/trim down and increase cash level if market is expensive, but at the same times, it is needless to get the timing exactly, or keep on guessing when the market will crash.

Don't bet when the market will down, as well as don't bet which stock will shoot up tomorrow or next month.


TSplumberly
post Aug 23 2018, 04:47 PM

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QUOTE(Showtime747 @ Aug 23 2018, 03:35 PM)
Nothing wrong at all. This is called portfolio rebalancing, and it is totally up to an individual based on circumstances.

Trust your own sixth sense  thumbup.gif

Besides FD, there are capital guaranteed bank products you can go into after you get out of stock market. Lower or zero return of course. So, you can sleep better.

Also consider spreading the tenure of your investment returns. Invest in vehicle with longer period of expected return (property, government/corporate bonds, gold for eg.). These investments may ride you through the turbulent times.
*
Noted and thanks.

QUOTE(icemanfx @ Aug 23 2018, 04:04 PM)
Bull Market Hits a Milestone: 3,453 Days. Most Americans Aren’t at the Party.

The party has been going for more than a decade. But a lot of Americans haven’t been celebrating.

Stocks crossed a major threshold on Wednesday, when the 10-year-old bull market arguably became the longest on record.

It ranks among the great booms in American market history. The Standard & Poor’s 500-stock index has soared more than 320 percent since emerging from the rubble of the financial crisis in March 2009, creating more than $18 trillion in wealth.

https://www.nytimes.com/2018/08/22/business...pe=sectionfront

Stock market correction is a matter of when not if. if you don't feel comfortable with current market then sell. during bull run, most if not all herd are blinded by greed.
*
Thanks.

Remind me of reading another article on my mobile the other day which I hope to re-read again later. But cannot find it now. About Cardiff indicator which has signaled the past recession rather well once the readings were above 200. If you know where to get that article, please drop a line here. I think most likely I did not get the name right, Cardiff.

QUOTE(cherroy @ Aug 23 2018, 04:09 PM)
If one thinks equities is indeed heading for crash, can bank on bond.
Bond price (treasuries, sovereign bond) highly may shoot to roof if market crash.
So don't need to clear off all investment, even if market is crashing.
There are a lot of avenue to hedge on it.

Alternatively, one can still hold on good stocks, but at the same time buy some short (index) through futures market, to hedge upon market crash.

PBB price was 3.xx prior before 97 crash, it crashed to below 1.00 during the crisis.
So even one bought prior before crash at 3.xx, one still makes good return after 20 years later.

So you don't need good timing to make money in the market, but you need to pick a right stock to make money.

Yes, good timing, can make extra more, and also it is indeed wise to rebalancing/trim down and increase cash level if market is expensive, but at the same times, it is needless to get the timing exactly, or keep on guessing when the market will crash.

Don't bet when the market will down, as well as don't bet which stock will shoot up tomorrow or next month.
*
Thanks.

Yes, hoping to get some PB or MB during crash. But dont think there will be many sellers then.

This post has been edited by plumberly: Aug 23 2018, 04:47 PM

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