tag:blogger.com,1999:blog-37872616.post483305449764486947..comments2024-03-28T17:26:00.037+08:00Comments on BULLy the BEAR: The math of crisis investingla papillionhttp://www.blogger.com/profile/01372278083694506953noreply@blogger.comBlogger11125tag:blogger.com,1999:blog-37872616.post-79566210006070655302017-05-24T18:25:49.129+08:002017-05-24T18:25:49.129+08:00Hi LP,
Yup, critical to have foundation secured &...Hi LP,<br /><br />Yup, critical to have foundation secured & basic stability first. I had horrendous drawdowns and swings during 2008/2009 but survived & eventually thrived becoz (1) home fully paid-up, (2) no kids, and (3) I can survive on very very low maintenance. :)<br /><br />Hi Temperament,<br /><br />So far the main central banks used monetary policies (QE is unconventional monetary policy). The big govts haven't really used big scale fiscal policies yet, becoz (1) many of the big countries already have big debts, (2) govt spending can be very unproductive & self-defeating, and (3) can be very inflationary. The Donald is trying to use this approach...<br /><br />Actually S'pore is an example of a zero-interest-rate environment for a long time, since 1998 AFC. That's why govt's main tool for stimulating economy is fiscal policy i.e. govt spending. We are very dependent on all sorts or rebates & subsidies --- income tax rebate, corporate tax rebate, PIC, innovation fund, special employment credit, GST rebate, utility rebate, conservancy rebate, CHAS, Pioneer package, Workfare. And the big guns --- infrastructure spending, MRT, highways, tunnels, bridges, govt buildings, university buildings, polytechnic buildings, ports, airports, HDB, govt land sales, etc.Spurhttps://www.blogger.com/profile/11824813457786462446noreply@blogger.comtag:blogger.com,1999:blog-37872616.post-73734581412371193942017-05-24T17:14:53.648+08:002017-05-24T17:14:53.648+08:00Hi temperament,
Wah...if fiat money goes bust, re...Hi temperament,<br /><br />Wah...if fiat money goes bust, really don't know what to say. The world as we know it will cease to exist.la papillionhttps://www.blogger.com/profile/01372278083694506953noreply@blogger.comtag:blogger.com,1999:blog-37872616.post-21810399161347920062017-05-24T17:14:12.827+08:002017-05-24T17:14:12.827+08:00Hi Spur,
You're right. Makes a lot of sense t...Hi Spur,<br /><br />You're right. Makes a lot of sense too. Actually given my temperament, I doubt I'll ever use 100% of my warchest. I just can't do it mentally. And i'll just hve to live with that, I guess. As it is, I'm saving up my mortgage payment, which forms a big part of my monthly expenses, in the form of OA. In case shit happens, at least the payment part can be worked on. I should have enough work for the other variable expenses. <br /><br />As I've mentioned to other people, there must be stability in at least some areas of your life before one can take risk. Otherwise, most pple will capitulate at the wrong moment.la papillionhttps://www.blogger.com/profile/01372278083694506953noreply@blogger.comtag:blogger.com,1999:blog-37872616.post-48038522082466756402017-05-24T14:59:24.911+08:002017-05-24T14:59:24.911+08:00Many younger people (those younger than 35) only h...Many younger people (those younger than 35) only have 2008/2009 as reference point for market crash & recession. The danger is that this particular event was a "fake" recession for Singapore due to the massive QE by Fed, PBOC, BOJ, BOE and ECB. Markets started multi-year uptrend after just 6 months from Sep 2008. And job losses were rather mild. Singapore had it very very good during 2008/2009.<br /><br />A "normal" recession without artificial pump priming will take 1 year or more for stocks just to stop dropping. The bigger problem will be the much bigger job losses (like what we encountered during AFC and dot.com bust).<br /><br />Your 70% students leaving is not customer loss, but rather business turnover because your product has a relatively fixed short life. :)<br /><br />Imagine you can only get 1/3 or 1/2 of your usual annual replacement. And it lasts for 2-3 years. Use that as stress-testing for surviving the next big market crash & recession.<br /><br />With that as starting point, then work out whether & how you can implement crisis investing. E.g. you may find that instead of 100% warchest utilization, you can only afford 50% to maintain safety & sanity for family.Spurhttps://www.blogger.com/profile/11824813457786462446noreply@blogger.comtag:blogger.com,1999:blog-37872616.post-33163127173481028942017-05-24T11:13:37.916+08:002017-05-24T11:13:37.916+08:00LP,
LOL!
Ya hor? Eggs on my face :)
Again its a...LP,<br /><br />LOL!<br /><br />Ya hor? Eggs on my face :)<br /><br />Again its a good example of we perceive what we want to perceive. I definitely have a right brain bias ;)<br /><br /><br />That's a very good training for investing! Losing half your income and have to constantly start from scratch every year.<br /><br />The problem with a non-sales day time job is the complacency of a constant and regular income with little or no volatility. <br /><br />People tend extrapolate it with investing and they'll be in for a rude shock! <br /><br />Investing is not the same as saving.<br /><br /><br />Those of us living with high income volatility have no problem appreciating that we can drown while crossing a river with average water depth of 1 metre ;)<br /><br /><br /><br />Singapore Man of Leisurehttps://www.blogger.com/profile/13774067113884418001noreply@blogger.comtag:blogger.com,1999:blog-37872616.post-67849541065027474502017-05-24T09:48:37.823+08:002017-05-24T09:48:37.823+08:00Hi SMOL,
Left that out because the title is '...Hi SMOL,<br /><br />Left that out because the title is 'Math of crisis investing' HAHA! I think I've mentioned a lot of times about the psychological part of investing during crisis like this post "Wishing for rain to come" (http://bullythebear.blogspot.sg/2015/03/wishing-for-rain-to-come.html#.WSTll-t96Uk).<br /><br />Actually part of the mental strength comes from doing that what we think we know is actually feasible. At least for me. I need to satisfy both my right and left brains, otherwise no matter how strong mentally, I'll have a nagging feeling that somehow I might be delusional. The math of how it can be done will ground me, and the grounding gives me the mental strength to do it. <br /><br />Anyway, every year I experience 50% of students dropping out because they graduate. Probably more, maybe 60 to 70%, so every year I'll have to start from scratch again. It's damn good training about letting go man. la papillionhttps://www.blogger.com/profile/01372278083694506953noreply@blogger.comtag:blogger.com,1999:blog-37872616.post-89423888021693599042017-05-24T08:53:30.160+08:002017-05-24T08:53:30.160+08:00LP,
Its very doable.
On paper.
You have left o...LP,<br /><br />Its very doable.<br /><br />On paper.<br /><br /><br />You have left out the psychological part.<br /><br />The mental strength to squeese the trigger and the psychological dexterity to "let go" and take some profits off the table.<br /><br />Try doing so when 50% of your students dropped out due to one of their parents being retrenched...<br /><br />I was lucky during 2009 that the company I worked in and my day job were both doing splendidly well despite the crisis...<br /><br />If we are mentally and physically stronger than the next hunter, we may profit from his "crisis".<br /><br />That's cold. I know.<br /><br /><br /><br /><br /> <br /><br /><br /><br /><br />Singapore Man of Leisurehttps://www.blogger.com/profile/13774067113884418001noreply@blogger.comtag:blogger.com,1999:blog-37872616.post-56805858255271080692017-05-24T00:27:55.415+08:002017-05-24T00:27:55.415+08:005:45am lorr ... you don't know meh??5:45am lorr ... you don't know meh??Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-37872616.post-56283893447734730842017-05-23T23:14:07.640+08:002017-05-23T23:14:07.640+08:00Hi yeh,
That needs a certain level of technical a...Hi yeh,<br /><br />That needs a certain level of technical analysis or FA to guess. Can't tell for sure. la papillionhttps://www.blogger.com/profile/01372278083694506953noreply@blogger.comtag:blogger.com,1999:blog-37872616.post-45035557660652380912017-05-23T20:02:40.275+08:002017-05-23T20:02:40.275+08:00Dunno leh.... If mkt drops -30%, put in 33% of war...Dunno leh.... If mkt drops -30%, put in 33% of warchest? If drop further to -50% then deploy another 33% warchest. If drop > -70% then use the remaining 33% warchest. Remaining 1% take to temple to pray & go buy beer to drink.<br /><br />As J.M. Keynes said "Markets can stay irrational longer than you can stay solvent." But he still able to win the equivalent of a few million dollars in today's money through stock trading.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-37872616.post-19326597297523315952017-05-23T18:13:24.199+08:002017-05-23T18:13:24.199+08:00So how we know how Low the level can hit while dur...So how we know how Low the level can hit while during crisis ?yehhttps://www.blogger.com/profile/12571111570066245051noreply@blogger.com