Wednesday, February 28, 2007

Review: The Global Sell Off

I was watching CNBC last night for an update on the US market. It collapsed 2% in the first hour of trade, and finally closing 3% down at the end of the day. I knew today would be a rough day.

Indeed, the STI Opened at 120+ points on the word "Go". I was shocked. Shocked to see my portfolio collapse. Yes collapse. This over "night" collapse is indeed a harder blow compared to last year's correction.

But for those who had bought Raffles Edu, China Hong, Sino Env at my purchase price, i don't think we have anything to worry about. The price should not drop anywhere close to below your purchase price.

This kind of correction may be good for long term investors like you. When was the last time you said "Hey, Sino is too expensive to buy now". Think this is the time to do it. But I don't recommend doing it now. Do it when the future is clearer. Buy closer to the "rock bottom". (Of course i don't think you can ever read the market to daily accuracy. )

But one thing is for sure (IMO), the STI is on its way back to the 2900+ level.

I've never recommended buying warrant but I've done it myself this morning.

I've purchased some insurance. I've bought STI 3000SGAePW70427, as insurance. My trade went thru at 0.19 this morning. This way, at least i've got something to cheer about when the market goes down.

6 comments:

Aragorn said...

singapore shares still very high

musicwhiz said...

Hi Pehon,

Just curious if you activated your cut-loss strategy for Swiber as it fell below yor 7-8% rule (since you bought at $1.30 then cut-loss would indicate about $1.19-$1.20). In my opinion, today's sell-down was just a correction in the markets and had nothing to do fundamentally with Swiber.

For me, I still held on to it and did not take profit. Was waiting for it to dip below my buy price so that I could add more, but it did not happen....sigh.

Good luck !

Aragorn said...

i couldn't find any bargains on my watchlist.

from what i observe the prices barely budged from 2007 levels, which are high.

i was hoping for them to fall to 2006 levels.

Star said...

Pehon,

I mirror your sentiments.
Not sure if I have done the right thing but I've immediately switched out all my mutual funds and parked them in cash funds yesterday just to be safe.

As for my hengxin, am still holding it since there was no major run up in price till the correction and price seemed to have stabilized around current levels. Will wait and see since fundamentals remain good and hopefully may see some upside with results. Then again, in this current market, good results may or may not make much of a difference.
I enjoy reading your blog. Keep it up!

Star said...

Came across this article apparently written on 2 Apr 2000, 2 days before the Dot.com bubble burst. Enlightening and stark reminder.
http://www.marketthoughts.com/perfect_crash_scenario.html

Anonymous said...

what does 3000SGAePW70427 mean?