This is probably history in the making. The Covid-19 has wrecked havoc all over the world and is causing an economic fallout that until now, I cannot really determine the full impact. Then we have the Saudis clashing with Russia which decimated oil prices that was already losing demand due to the virus.
In just a month, we see stocks being dumped ferociously globally for fear of recession that some “experts” say will now be worse than the GFC of 2008.
More importantly, we all took part in the start of the Great Toilet Paper Rush 2020.
Fear sure can drive strange behaviors around people.
Here’s What I’m Doing
But first things first, don’t ask me about my portfolio performance lol. Last I checked I was about 20% down.
Previously I have mentioned about the Oil Contango play which I’ve allocated a portion of by portfolio in (https://themosspiglets.com/2020/03/15/oil-contango/)
This week I have also added more to my existing counters like Powermatic Data (SGX:BCY), Straits Trading (SGX:S20), Valuetronics (SGX:BN2) and Boustead (SGX:F9D). Most of these are trading near cash levels, which means you are getting the business for free.
You can see some of my writeups here https://themosspiglets.com/case-studies/.
I am holding off adding to my construction related and F&B related stocks like Jumbo (SGX:42R), OKP Holdings (SGX:5CF), BRC Asia (SGX:BEC). F&B wise is pretty much in deep s***, especially when the government is encouraging its people not to go out and eat.
Construction industry is gonna have a hard time for the next few months. Malaysia’s lockdown meant that construction materials will not be coming in for the next few weeks. Without our basic materials such as sand, gravel and precast components, you can give me 1000 workers and I will not accomplish much at site.
Other than that, I’m keeping a close eye on the airline, tourism and oil related stocks. Anyone in these sectors could be the Bear Sterns of this crisis (If the bailout fails, could Boeing be it? https://www.usatoday.com/story/money/2020/03/20/coronavirus-bailout-boeing-suspends-dividend-ceo-dave-calhoun-pay/2889802001/)
Here’s What You Should Not Do
Whatever you do, do not take on more risk than you can stomach. Things like selling everything to buy stocks is stupid. Investing should not affect your stability of your income and non-discretionary expenses.
As for selling your stocks and accepting the losses, it it entirely up to you.
You know your own personal circumstances and your ability to accept the occasional paper losses without locking them in by panic-selling. Stay logical, stay unemotional. I know it is hard but don’t let all these violent swings break your discipline. It is also one of my biggest hurdles in my investing journey. Loss aversion is a natural instinct. We are all wired to focus more on what we stand to lose than what we stand to gain.
Did you ever look back at a chart of something in 2008 and marvel at how obviously mispriced it was, while ruing not doing anything or thinking of what you will do if you were there at the time? I think this is one of those times, dislocations are everywhere in the market and I still think it is a good time to buy.
Cheers and wash your hands