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Stock Market (QE vs Coronavirus) 水火不容

Posted on March 26, 2020 Written by Dr Tee (Ein55)

Over the past 1 month of global stock crisis with 30% major correction to US stock market due to fear of both Coronavirus pandemic affecting the whole world and Crude Oil price war between OPEC and non-OPEC.

By right, it is nearly a mission impossible for global stock market to recover (eg. for S&P 500 to stand above 3000 points again). Trump’s most powerful opponent is not China nor Biden. It is the tiny Coronavirus which was still an underdog a few months ago when rising from China, but now becomes a deadly challenger to Trump’s second’s term US presidency.

“Water” and “Fire” are 2 extreme elements, never get along well (水火不容). Similarly, “Greed” and “Fear” are 2 human nature which affect the stock markets, eventually the global economy.

Trump is multi-billionaire businessman, understanding the importance of greed to stock market. So, unlimited Quantitative Easing (QE = printing money) combines forces with global QE by Q20 (through various ways of economic stimulus plans, including Singapore), providing liquidity (as if “water”) to investment markets and economy to fight against spreading of wild “fire” due to fear of Coronavirus, which results in weaker economy mainly due to reduced social networking, greatly affecting all sectors, especially transportation, retail, tourism, F&B, now virtually everyone when more countries are under lockdown.

QE is literally printing money or adding liquidity, naturally results in short term market rally, even if not even 1 cent is used yet. Greed could change the market overnight, changing from 5% daily drop to 5% daily rally for global stock market.

However, current “rally” in stock market is more suitable for trading (mid term) unless entry is positioned with long term value investing (consider price below the intrinsic value), able to resist the potential downside. “Greed” and “Fear” will exchange blows to stock market, until a stronger one would survive and stand for longer time.

Let’s understand the weapons of stock market “Greed” and “Fear” now.

Greed is supported by global QE. However, when global stock markets were over speculated over the past decade to high optimism > 75% (especially for US), after the Fear has come to correct to mid optimism of about 50%, it needs more silver bullets to be strong again. In the last global financial crisis (2008-2009 subprime crisis), a few trillions of dollars were pumped in during QE 1-4 during years 2009 – 2014 to revive the US economy with excitement of global stock markets.

Due to investment market and “greed inflation”, current global stock crisis would need more than 10 trillions of dollars to resolve (similar to addiction to drug, dosage is increased each time). So, Trump has found a smart way of “Unlimited QE” through the Fed to provide “unlimited greed” to the investment market, resulting in short term stock market rally.

There are 2 keys before summer (Jun-July) to determine the fate of Trump and global stock markets: Economy vs Coronavirus conditions.

Be careful of early Apr when the first set of monthly economic data is released, likely to show higher unemployment rate or lower GDP, then investors may be back to fear again. Job market is very crucial for global economy, especially for US. Until Feb 2020, unemployment rate of 3.5% is the best performance over the past 50 years, implying the downside is tremendous. For every 100 American, about 96 have jobs which salary could be used for spending (helping other businesses with stocks to grow) and investing (helping investment markets such as stock and properties to grow).

If Mar 2020 (first monthly data after Coronavirus and global stock market crisis, to be reported in early Apr) unemployment gets worse significantly, eg to 4-5% or higher, it means a downtrend economic cycle is initiated with less spending and less investing by No 1 economy, US, which contribute to over 50% of world economy and stock market values. After the retrenchment, usually it is hard to hire back in a short term and economy is slower in response, compared to stock market which could change overnight.

So, time is key now to Trump, only maximum 3 months (Mar – May) to stabilize the global stock market fear, firstly with silver bullets of unlimited QE. However, this is only half-time match, the ending would depends on whether Coronavirus could end on time by summer and even so, will it come come again every 6 months during winter, affecting the whole whole again before vaccine is developed in about 1 year.

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Good news is Trump has a fair chance to win as Coronavirus dislikes warm temperature. Here is an update of Coronavirus condition in major countries (see my previous video on how to analyze):

1) China – 4 months Coronavirus period is confirmed, ending in Mar 2020. China people including Wuhan / Hubei have reopened the door of economy, busy making money again. This is the result after painful experience of lockdown of whole China for 2 months, with good practices continue to prevent future viruses.

2) Korea – was the second most severe country, Coronavirus would end in Apr after follow the lockdown model of China. This is the first proof outside China that Coronavirus could be controlled within about 4 months period with active intervention to minimize the death cases.

3) Italy is the most severe cases, considering the death number (actual infected cases could be more than China as mild cases were not diagnosed). Even so, after lockdown for a few weeks, last 5 days were showing downtrend in new daily cases, good chance to reach a peak by mid of Apr, ending in May.

4) Iran has been stable at high cases (growth is limited), social distancing could be a challenge, therefore infection may continue until more people to be infected before community immunity may be established to stop the spreading.

5) US/Europe is under high growth of Coronavirus, especially for US (major city like New York City with crowded population is high risk), over 13k cases each day, likely will exceed both China and Italy to have the highest number of infection. However, due to strong medical resources, US death rate is lower than China and Italy. However, US/Europe may have high growth in cases in Apr, fading in May, only then may end in Jun.

This is also true for countries like Germany and Singapore, so high infected number may not be a threat, more importantly spread over a longer period to ensure medical solution could be given.

6) Singapore and Southeast asia countries continue to follow the global trends (mainly US/Europe) with high growth. With total / partial lockdown, significant reduction would be observed in number of new daily cases as most new cases are imported cases due to return of residents infected from overseas.

7) Both Africa and India (second world largest population) may be slow in spreading of cases but Coronavirus treats everyone fairly. So, early intervention in India with strict measures would help to lower the death rate by slowing down the growth rate, similar strategy as in Singapore. Many people die in China Hubei and Italy, not due to high number of cases, but mainly due to lack of medical resources during the peak period.

In summary, there is fair chance for current on-going Coronavirus to end in summer (Jun-July). The turning point from high to slower growth rate (decline in new daily cases) is key for US as this is the first signal to see light at the end of tunnel, which would affect both stock and economy in US and whole world.

So, Trump could only help 50% with unlimited QE. The remaining 50% would need the opponent Coronavirus to fall itself. The results will be clear in summer but signals will be clearer each week from now to summer and stock market would reflect such probability of winning or losing through the stock prices.

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In general, don’t focus on daily changes in share prices. Rather, one has to establish an overall strategy: long term investing, mid term trading or short term trading. Both long or shorting is possible but need to align with own personality.

In the current uncertain market with lower optimism in Asia stock market and mid optimism for US, it is relatively safe to apply long term value investing but entries have to be in batches (eg. 10% x 10 times, 20% x 5 times, 33% x 3 times, 50% x 2 times), averaging down and up with low optimism strategies across Level 1 (individual stocks), Level 2 (sectors), Level 3 (country) and Level 4 (world) over a portfolio of 10-20 global giant stocks.

If trading is applied, S.E.T. (Stop Loss / Entry / Target Prices) trading plan must be followed strictly but a challenge for retail traders in volatile market with +/- 5% in daily stock market.

If Coronavirus may end in summer, global stock market has reasonable chance to recover with support of global QE. If not, it may fall into depression with global financial crisis, especially if the same virus may come back again every winter, every 6 months to haunt the world. By then, vaccine in about 1 year of now would be key to prevent the global financial crisis falling into the great depression as it is serious when there is little social network (eg. shopping) for more than 1 year.

Dr Tee has cancelled all investment workshops in Feb-Apr 2020 during global stock crisis to follow the government rules with less gathering. This is a regret for some students as it is the best time in 10+ years to learn and apply crisis stock investing. So, I could only share through more regular articles and video education but it has limitation compared to a more comprehensive 4 hours workshop.

The next available free 4hr investment public workshop (with meet-up) by Dr Tee will be on 21 May 2020, you may register here before it is full: www.ein55.com

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Filed Under: Macroeconomy, Stock Market Tagged: coronavirus, global financial crisis, qe, quantitative easing, stock market

When will be End of Coronavirus Pandemic & Stock Crisis?

Posted on March 16, 2020 Written by Dr Tee (Ein55)

There is a repeatable pattern in global Coronavirus life cycle, although cycle duration and magnitude of peak.

China cases has nearly ended (Dec 2019 – Mar 2020), peak was end of Feb as projected in earlier analysis, would nearly end by Mar 2020. China is the first country to start, also the first country to end. So, experience of China (first country to start and end) is useful reference for other countries.

All the world with individual country cases are recorded here (paying attention to max new daily cases, when it is reached, would take about 1 month to reach the 95-99% peak of total cases, then another 1 month to fade away) https://www.worldometers.info/coronavirus/

Similar to stock investment and trading, if there are proven methods in the past 100 hundred years (eg. Fundamental Analysis and Technical Analysis), one could master them first, then gradually refine the strategies.

Korea epidemic is about 1 month behind China (subsiding from the peak, projected by end of Mar 2020), possible duration of Jan-Apr 2020.

This shows that if similar effort is put in (eg. active intervention by local government), the Coronavirus cycle may be about 4 months (2-3 months to reach a peak, 1-2 months to subside).

US and Europe is located further (require international flights to spread the Coronavirus), about 2 months after China pattern, active infection period could be Feb-May 2020 (reaching a peak by end of Apr 2020, fading away in May 2020). US was slow initially, now has started active intervention, possible to follow the 4 months duration. Each year, there are over 100 thousands American die of common flu but many are elderly people with weaker immune system. However, Coronavirus could also kill younger age people younger (mostly more than 40 years old), therefore many people are fearful of this unknown virus.

However, a few countries (eg. UK and Sweden) may not prepare to fight the Coronavirus actively, just let the nature takes its course, likely the peak cases will be more severe in the first 2 months (eg. Iran or Italy cases without active intervention in the first 1 month) with method of community immune system (hoping virus would end naturally or evolve into less deadly strain with many times of infection when over 60% people are infected). So, the duration of this new method of “no invention” as solution is yet to be observed, will be a useful reference for future epidemic but it comes with big price (many death) if it does not work (eg. fatality rate is much severe than common flu).

For Singapore and some countries (eg. Southeast Asia: Malaysia, Indonesia, Philippines, etc), spreading of Coronavirus is slower initially (could be due to warmer weather), but due to cross-infection by travelers of inter-countries (eg. Europe / US / Southeast Asia), start to grow in new cases. Therefore, even with active government control, duration could be longer (but lower peak), period could be 5 months (Jan – May 2020), ending in each country depends on when global pandemic may end unless the country could be totally isolated from the rest of the world (eg. Australia and New Zealand measures of isolating all international travelers for 14 days upon arrival).

Of course, if the last continent, Africa, may also be infected badly, then global pandemic could only end with Mar-June 2020, until all countries have gone through 1 cycle of 4 months infection within the country.

However, even the pandemic may end in summer (Jun-Aug 2020), it may come back as new strain of virus in the next winter (Dec 2020) in another unexpected country or city. So, vaccine development is still key. Last time SARS in 2003 ended too fast in summer, on-going vaccine development was stopped, otherwise it could be modified for Coronavirus as both belong to the same family of viruses.

Global stock markets experienced a minor correction (10% correction) during initial fear of Coronavirus, following by major correction (20% drawdown) when spreading is growing globally as pandemic. Under the worst case, if Coronavirus remains serious beyond this summer, coming back in new cycle of life in next winter, then global financial crisis would be waiting. Therefore, fighting against Coronavirus is not just for health (life), also for wealth later. Without health (life), then wealth is meaningless.

When Coronavirus pandemic and stock crisis are almost game over, it is time to master stock investment skill to improve quality of life in future, learning from free 4 hour investment course by Dr Tee here: www.ein55.com

Filed Under: Market Outlook, Personal Analysis, Stock Market, Technical Analysis Tagged: coronavirus, pandemic, stock market crisis

Airlines Stock Crisis: Delta Airlines vs Singapore Airlines

Posted on March 7, 2020 Written by Dr Tee (Ein55)

Both Delta Airlines (NYSE: DAL) and Singapore Airlines (SGX: C6L) are well known international airlines. However, choice of stock for investing is different from choosing airline as a passenger. We need to consider from investing perspective, both business performance and share prices.

Delta Airlines is a giant airline stock with strong business fundamental. No wonder Warren Buffett starts to collect more of this stock despite the price falls like a knife which he is not afraid to catch it as he believes the bleeding period is within his tolerance level to exchange for 1/3 discount (26% optimism, near to low optimism <25% but in downtrend direction, Ein55 members may monitor when it may recover again while optimism is still low).

Our dear Singapore Airlines is not a giant stock, fundamental is below average, optimism (28%) is approaching low (towards 25%) but long term potential is relatively weaker, more suitable for short term trading (when timing is right), not for investing.

Some smart investors select stocks as if choosing life partner, holding for long term to maximize the value of partnership, therefore won’t miss when the rare opportunity has come. However, no one would know the “perfect” moment (eg. the lowest price). For Warren Buffett, he just needs to buy with discount within his acceptable limit, buy low enough, no need to speculate the lowest price and he could hold till recovery in both business and share prices.

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Filed Under: Fundamental Analysis, Market Outlook, Stock Market Tagged: airline stocks, airlines, coronavirus, crisis stock, delta airlines, sia, singapore airlines, temasek, US Stocks

Winter Time of Global Airline Stocks

Posted on March 6, 2020 Written by Dr Tee (Ein55)

First major airline in trouble after only 2 months of Coronavirus crisis. Flybe is the largest regional airline in Europe, cannot even sustain a few months of winter time, may not able to “fly” again due to lack of funding.

At the same time, Warren Buffett is indeed different from others, holding to 4 major airline shares: Delta Airlines (NYSE: DAL), American Airlines (NASDAQ: AAL), Southwest Airlines (NYSE: LUV) and United Airlines (Nasdaq: UAL). In general, airlines sector stocks (NYSEAcra: JETS ETF) have dropped about 1/3 share price over the past 1 month from its peak. There is more downside with bearish short term stock market, both at Level 3 (US stock market under correction, even recent 0.5% interest rate cut by the Fed won’t help to recover the confidence) and Level 2 (less travelling, “doom” for airline, burning money each month).

“Be greedy when others are fearful” is correct in principle but may not be suitable for everyone as it requires more investing skills than expected. Warren Buffett could be greedy now (eg. buying more Delta Airline stock) during crisis because he has a deep pocket with strong holding power with diversification over many industries. However, it may not be wise for others to follow Warren Buffett exactly as each person has unique personality, financial condition and investing strategy. Warren Buffett’s Berkshire (NYSE: BRK) loses 50% share price during 2008-2009 subprime crisis but he could still sleep soundly each night. Others may suffer depression with 50% loss in capital.

For retail investors and investors with small capital, weak holding power and low risk tolerance level, it is relatively safer to follow trend for entry or exit. Airline stocks are usually cyclic in nature, main strategy would be buy low sell high. Currently it is only a Level 2 crisis (airline sector earning drops significantly), but if Coronavirus drags longer than 6-12 months, it could become regional crisis (some countries economy will be affected) or even evolving into the next global financial crisis.

If we don’t know Coronavirus well (how it started and when it may end), shorter term investing or holding cash as opportunity fund would be relatively safer. In the meantime, smarts investors have to start to search for global giant stocks with strong business fundamental which can last through the potential financial crisis.

Learn from Dr Tee free 4hr course on Crisis Investing Strategies (What to Buy, When to Buy/Sell), either for Coronavirus Crisis (affecting consumers related sectors such as airlines, retailers, tourism, F&B, transportation, etc) or global financial crisis (affecting all sectors and all countries in the world). Register Here: www.ein55.com

Filed Under: Macroeconomy, Market Cycle Investing, Stock Market Tagged: airline crisis, airline stocks, airlines, American Airlines, coronavirus, crisis stock, delta airlines, JETS ETF, Southwest Airlines, United Airlines, US Stocks

Perfect Storm – Global Spreading of Coronavirus

Posted on March 5, 2020 Written by Dr Tee (Ein55)

Second Wave – global spreading of Coronavirus, potential chain reactions in stock market:
-> regional fear of Coronavirus
-> global fear of health crisis
-> L4 stock from high to mid to low optimism
-> global financial crisis

Fear driven by US, No 1 economy needs special attention as it affects over 50% global stocks.

Last 1 month when Coronavirus was serious in China, Singapore and Asia, the local Asian fear were insufficient to affect the US or global stock market due to small size of Asian stock market.

In summary, safer to position as short term trend-following trader or investor. A mini bear could be a correction but also could evolve into a big bear.

Sars in 2003 was regional (mostly Asia) and occured at L4 world stock market low optimism, therefore impact was limited to global stocks as potential of falling further is limited.

This time in year 2020, Coronavirus is less deadly than Sars but spreading globally (even to Africa, the only safe continent is Antarctica but no one could confirm as it is too cold there), causing global fear, having potential to be a black swan to trigger global financial crisis if the condition could not be controlled by summer (before May) as currently L4 world stock market and L3 US stock market are at high optimism.

It usually only takes 6-12 months to drop from high to low optimism, therefore Coronavirus has to be controlled globally (reaching 95-99% peak as the development in China and Singapore) within 3 months by end of May, else the more “deadly” global financial crisis may be triggered, especially if US is badly affected.

Coronavirus may not be so deadly, 1% people may die. Global financial crisis could be more deadly, both short term (see the news, even millionaire or billionaire who could not control greed may lose financially, a few ending own lives eventually) and long term (eg depression over finance condition, especially if investing in junk speculative stocks which may not recover at all after the crisis).

Back to the source, China is showing declining trend (less than 1% new daily cases), following by Singapore (stable to downtrend, about 0-3 new daily cases in last 1 week, about 1-2% new daily cases). If global countries follow similar measures as China and Singapore over the last 1 month (eg restrictive travelling, public health education, quick action on isolation for infected cases, etc), it is possible for the rest of world to take another 1-2 months (by end of Apr) to reach its 95-99% peak as well.

If the virus cannot be avoided, then the second best goal is to minimise the impact. Action is important, similar to fight against Coronavirus and also to face the global financial crisis which may be like an emerging virus, we won’t know how deadly is this black swan but early action (ok to be considered kiasi or kiasu) would help (eg, exit as a short term investor when the loss is more than the risk tolerance level). Same as Coronavirus, we need to stay alive in stock market by preserving the capital unless investing in a portfolio of global giant stocks, then one could have the option to hold through the financial crisis, similar to Warren Buffett style of buy low & hold.

Meanwhile, Malaysia is tougher, having 3 potential crisis at the same time: Coronavirus, stock market and political. Hope this is not the perfect storm. Learn to convert crisis into stock investment opportunity: www.ein55.com

Filed Under: Personal Analysis, Stock Market Tagged: coronavirus, perfect storm, stock market

Global Stock & Coronavirus Analysis (Updated 5 Mar 2020)

Posted on March 5, 2020 Written by Dr Tee (Ein55)

– World vs SG

world and Singapore Coronavirus daily update

– China vs World Outside China

Here are a few main conclusions on Coronavirus with additional analysis on world outside China (due to serious outbreak in South Korea, Iran, Italy and emerging potential in the rest of the world).

1) China

China started first in Dec 2019, also the first country to reach 99% peak (daily new cases is less than 1% of total) by end of Feb 2020, aligned with earlier Technical Analysis projection with bi-linear model.

2) Singapore

Singapore is unfortunately experiencing second wave (new clusters of infection), aligning with spreading in the rest of the world outside China (especially in South Korea, Iran, Italy and Japan). Need to monitor the second peak (new max daily cases) vs the first peak (was 9 cases for Singapore), if “higher high” is achieved, Singapore may be back to growing phase as there could be cross-infection among the countries (not limited to China or a few countries).

If Singapore follows similar pattern of China (especially non-Hubei region), there is a time lagging period of 1+ month after China, Singapore may reach 99% peak by end of Mar 2020 or in Apr 2020 (if second wave in world outside China is longer and more serious than expected).

3) World Outside China

Singapore now is dependent on the World (especially Outside China), therefore good condition in China does not help Singapore much. Currently the world (outside China) is still growing, despite there is a dip yesterday in daily cases but it is insufficient to establish a clear trend (need at least 1 week of downtrend without serious new outbreak in another country). Based on population, world ex China has 5X potential than in China, therefore if it becomes pandemic, there could be 5x more cases than in China (non-Hubei which is about 50% of China cases).

US is part of “World Outside China” category, relatively still not so serious at the moment (considering the population of US). However, trend of the rest of the world is growing with Coronavirus, even if “second wave” is trending down, there could be 3rd or 4th wave in any city or country as there is time lagging effect for Coronavirus to spread from 1 country to another country (eg. from China Wuhan to Singapore in 1-2 months, then to the rest of the world in 1-3 months).

It is still a good news to see China condition improves significantly over the past 1 month (with condition that we trust the data reported) as the rest of the world including Singapore would follow similar pattern in near future, just take extra few more months to end or at least control the health crisis (reaching 99% peak with less than 1% new daily cases).

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Thinking positively, world outside China (including Singapore) could follow the footstep of China, both for Coronavirus (uptrend and then downtrend) and stock market (correction for a few days during first week of fear, then up again). G7 includes US are taking pro-active actions to stimulate economy to prolong the current bull market (started since year 2009). For example, US Federal Reserve has started to cut interest rate further by 0.5%, despite US economy is still strong.

There is no need to worry as we could only control what’s within our capacity. This is true for Coronavirus, also valid for stock investment (eg. what stocks to buy, when to buy/sell is within one control but exactly when and what crisis may come is beyond the radar). We just need to take the right actions, then depend on the probability to give us the unfair advantage (eg. low chance to be infected, high probability of winning in stocks).

While taking precautionary measures for Coronavirus, learn to take calculated risk to invest in global giant stocks at discounted prices with this rare health crisis which is only a correction in global stock market at the moment. The main focus is on the next global financial crisis which could be the best opportunity for an investor.

Learn from Dr Tee free 4hr stock investment course to convert the crisis into opportunity. Register Here: www.ein55.com

Filed Under: Macroeconomy, Personal Analysis, Stock Market Tagged: coronavirus, stock market

Singapore Budget 2020 vs Coronavirus (Updated 19 Feb 2020)

Posted on February 19, 2020 Written by Dr Tee (Ein55)

Singapore Budget 2020 is just announced, a balanced plan with both short term (eg. fighting Coronavirus crisis) and mid/long term (eg. retraining) goals. However, money is never enough, so the incentives is just a temporary relief. A country could only get stronger with higher productivity in higher value economy sectors.

Additional financial assistance is given to 5 main sectors affected by Coronavirus, eg. tourism, airline/cruise, transportation, F&B and retail, some business may have dropped more than 50% over the past 1 month.

Fear of Coronavirus is more harmful than its real risk (# death, so far 0 in Singapore) as people start to stay more at home, the sectors above would badly affected. However, this health crisis is likely to be a short term for a few months. Even it becomes an uncontrollable disease as seasonal flu, the fatality would drop significantly based on past experience of new viruses (eg. H1N1) due to build up of immune system within human with more infection. Human could “evolve” as well together with viruses, both have to co-exist in a balanced way of living.

Based on the latest daily # infected for Coronavirus, World (mainly China) is falling down below the critical 2000 “support” from Technical Analysis point of view, light at the end of tunnel to see a strong bearish signal with strong hope to reach a peak (not absolute peak but 95-99% of ultimate value) by end of Feb 2020, with conditions that data reported so is reliable and consistent without a second wave of infection (workforce back to work after lunar new year).

Singapore is still staying above the “support” of 2 daily cases, no clear signal of downtrend in # infected cases. However, the consistent downtrend in World (mainly China) cases is a strong lead to Singapore which is likely 1+ month behind China.

Even after reaching peak, Coronavirus may take a few months to end as there may be cross-infection of those waiting for recovery and long incubation period (14 days).

Learn to take action in stock market before Coronavirus may end in near future: www.ein55.com

Filed Under: Macroeconomy, Personal Analysis, Stock Market Tagged: coronavirus, singapore budget

Technical Analysis with Level 1-4 Analysis for Coronavirus (Updated 17 Feb 2020) with Singapore Budget 2020

Posted on February 17, 2020 Written by Dr Tee (Ein55)

Similar to Technical Analysis for stock market, we may analyze the # infected cases as share prices but looking for bearish signal, eg downtrend or breaking below a critical support, eg 2000 cases for World (mainly China Hubei) or 2 cases for Singapore.

Latest Coronavirus data (16 Feb 2020) has 3 cases of # infected in Singapore, having good chance to come to “technical support” of 2 daily cases again but need to break below this number for a few days or even 1 week to establish a consistent downtrend. It is harder to analyze Singapore cases due to limited sample size (similar to a volatile penny stock, when base is a low number, up/down would create large % changes).

So, it is relatively more stable to analyze world # infected cases (still near to support of 2000 daily new cases but not yet breaking downward) which are more stable due to large sample size (so far consistently about 1000 times of # cases in Singapore). The mega trend of world could provide some leads to direction of Singapore cases in future.

For stock analysis, this is similar to Level Analysis (LA) or LOFTP strategies, Top-down analysis from World (Level 4) to Country (Level 3) to Sector (Level 2) to Individual Stock (Level 1). For Coronavirus:
Level 4 = World # infected
Level 3 = Respective Country # infected
Level 2 = Respective City # Infected (Singapore L2 = L3 due to small country = city)
Level 1 = Cluster / Group / Company of related cases (smallest unit to track # infected cases).
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Singapore Budget 2020 to be announced on 18 Feb 2020, ideally will serve multiple objectives for 3 different time frames (similar to stock investment: short term, mid term and long term):

1) Short-term (< 3 months): Coronavirus induced financial crisis, especially selected sectors.
2) Mid-term (<1 year): Stimulate Singapore economy which has been slowing down (even before Coronavirus outbreak)
3) Long-term (5-10 years): Create new opportunity for Singapore (restructuring of economy, training / investment in emerging technologies with higher economic values, etc)

Of course, politically, this would give 4th generation leaders, a chance to take the lead, making major decisions during potential crisis time. The results in short term, mid term and long term would translate into scores for voters to consider before next General Election, within 1+ year (latest by 15 Apr 2021). Balance in consideration for short term, mid term and long term would be a test on wisdom of leaders, whether to satisfy short term crisis needs or looking for long term growth or a balanced or average approach with sharing of resources to make most people satisfied but not excited.

Crisis could be an opportunity if the crisis could be resolved eventually with right decisions most of the time. It is true for all countries leaders, especially those most affected by the current Coronavirus: China, Singapore, Japan, Hong Kong, etc.
Learn the opportunity in stock market while waiting for recovery of Coronavirus Crisis: www.ein55.com

Filed Under: Macroeconomy, Personal Analysis, Stock Market, Technical Analysis Tagged: coronavirus, singapore budget, technical analysis

Dorscon Alerts with 4 Levels of Investment Opportunities

Posted on February 14, 2020 Written by Dr Tee (Ein55)

Dorscon disease outbreak alert system (4 colors: Green, Yellow, Orange, Red) was established in Singapore after SARS 2003. Some people may worry the current situation may be changed from Orange to Red Alert for Coronavirus (if so, schools have to be shutdown temporary).

There is grey area (no clear quantitative criteria) in Dorscon for 2 main criteria (# infected vs # death) to be Red Alert:

1) spread widely

– how many # infected daily is considered widely

2) Significant # death

– how to define significant?

Even for SARS in Singapore, it was later benchmark as Orange Alert, having 33 death out of 238 infected cases in Singapore. Since Dorscon absolute criteria may not be known. We may do a relative criteria based on benchmark with known case of SARS in 2003 at Orange Alert.

For Coronavirus, although actual fatality rate could be much lower than 2% (due to many cases in Hubei may not be diagnosed in earlier stage), we may assume 2% as the worst case scenario.

We could do a reversed calculation to estimate when Coronavirus may be as severe as SARS based on Dorscon criteria of Orange Alert before transition to Red Alert. There are 3 possible conditions as criteria:

1) Same # infected as SARS of 238 cases. Currently Coronavirus has 58 # infected in Singapore till 13 Feb 2020. Coronavirus is about 25% level of SARS for Singapore. Since worldwide data shows Coronavirus has more potential than SARS, then this # infected may have potential to grow in Singapore.

2) Same # death as SARS of 33 cases. Currently Coronavirus has 0 death, still a long distance before in par with SARS (which is rated as Orange alert).

3) Since # death in Singapore for Coronavirus is 0, we may also apply same # death as SARS of 33, assuming 2% fatality rate (worst case) for Coronavirus, we could derive a critical # infected = 33/0.02 = 1650 # infected in Singapore before Coronavirus is comparable with SARS. Criteria 2 and 3 are related, see whichever reached first.

Conclusions:

SARS Orange alert criteria is in fact quite high. If we use the same criteria as SARS, then Coronavirus has to have either 238 or 1650 infected cases and/or 33 death in Singapore before declaring the same level of health crisis as SARS (which is still Orange Alert). Based on 3 possible conditions, the easiest criteria (assuming either wide spreading or significant number of death, not both) to meet is probably No 1 based on same # infected of 238. For Conditions No 2 & 3, will be more difficult to achieve, if applying this criteria, likely Coronavirus would remain just Orange Alert.

Assuming SARS is the upper limit of Orange Alert, then Coronavirus currently is probably the lower limit or Orange Alert. The Red Alert has to be reserved for true health crisis, otherwise there is no proper level to reflect the right action for such emergency then.

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Dorscon standard is just a reference, main objective is to show the relative risk in health, individual could then use it to make decision on how much risk to take.

Similarly, we may apply 4-color Dorscon concept in stock investment, dividing into 4 levels of investing opportunities, each level has its own risk vs opportunity based on business fundamental vs optimism level:

4 Levels of Ein55 Investment Opportunities

1) Green

– Strong business fundamental

– Low Optimism level (<25%)

2) Yellow

– Strong business fundamental

– Moderate Optimism level (25-75%)

3) Orange

– Moderate business fundamental

– Moderate Optimism level (25-75%)

4) Red

– Moderate business fundamental

– High Optimism level (>75%)

For either long term investing or short term trading, a stock requires minimum of moderate business fundamental. Buying weak fundamental stocks with bullish price trend is speculative, more suitable for very short term trader (eg. during the Coronavirus crisis time, some weak stocks start to rise).

When Optimism level is higher (from Green to Red Opportunity), positioning style is safer from investing to trading. Current global stock market is around Red Opportunity but traders may still consider short term trading in US with high optimism. For Singapore (moderate optimism level), it will be either Yellow or Orange Opportunities, depending on type of stocks.

Learn from Dr Tee free 4hr investment course on balance between risk and opportunities with comprehensive LOFTP Strategies (Level / Optimism / Fundamental / Technical / Personal Analysis). Register Here: www.ein55.com

Filed Under: Fundamental Analysis, Stock Market Tagged: coronavirus, dorscon, investment, stock market

Dr Tee Video Talk: Coronavirus Life Cycle and Stock Market

Posted on February 12, 2020 Written by Dr Tee (Ein55)

Over the past 7 years of teaching with over 700 days of lessons, Dr Tee has not taken 1 single day of MC, working nearly each day. So naturally I feel sad to cancel 12 events in Feb 2020 due to Coronavirus alert by government for wellness of students during this crucial period.

Crisis is Opportunity, I have used the 1 month homestay to learn how to make youtube video talk. After a few days of effort, here is Ein55 Talk for Ein55 Reader on Wuhan Coronavirus Life Cycle with Stock Market Analysis.

Enjoy and give your comments for improvement. You may subscribe to Ein55 youtube channel (Ein Tee) for future Ein55 video talks. You may also attend Dr Tee free investment courses and download free eBooks at www.ein55.com. Join Dr Tee Facebook Investment Forum: https://www.facebook.com/groups/ein55forum/

Here is English Version of Dr Tee Video Talk (Chinese version is available as Dr Tee is bilingual):

Filed Under: Personal Analysis, Stock Market, Technical Analysis Tagged: coronavirus, stock market

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