Trials and Tribulations: Three weeks and 30%

Tuesday 17 March 2020. As I write this, it has been approximately three weeks since the market started to drop and since then my portfolio which is largely index based, has dropped roughly 30%(T＿T). Yesterday marked the biggest fall in ASX history at 9.7% and overnight the SP500 lost 12%. Trading halts and massive swings used to be rarities and are now commonplace. The volatility index has risen to 80 and panic has thoroughly set in amongst the broader population∑(￣□￣;). Self doubt has started to creep in on me but my resolve still holds firm. I decided on this course of action four months ago and I intend to see it through to the end._(:3」∠ )_

Indubitably mass hysteria has set in to the general populace, far beyond the financial markets. It is one thing to hear about panic buying of essential goods on the news and another to witness the apocalyptic sight of empty shelves in the supermarket first hand(。•ˇˍˇ•。). Thankfully my household has a heathy reserve of basic necessities. My workplace has not given a directive to work from home or self-isolate, but our organisation appears to be the last stand in a derelict skyscraper. Most of my colleagues are on edge but management refuses to consider the welfare of staff and would rather focus on the bottom line（╯‵□′）╯︵┴─┴.

In the news, I am constantly bombarded with news that large institutional companies like Qantas or UQ are on the verge of going bust as well as predictions of long standing recessions which will take up to ten years to recover from (Deloitte). People whom I respect greatly are predicting a permanent shift in society with far reaching consequences for the long term future and my learnings on holding steadfast to contrarian beliefs are being well and truly tested.( •̥́ ˍ •̀ू )

Only time will tell if I have made the right choice in sticking to my plan, otherwise it will be a very costly mistake indeed.

By 小福

Trials and Tribulations: End of the Bull Run

With my last post and the slowing down of instances of Coronavirus in China, I had thought that maybe my run of bad luck would finally take a turn and I would be able to recoup some of my (not yet crystallized) losses (－_－) zzZ. Unfortunately for me (and the rest of the world), we took a turn for the worse in the last two weeks and the eleven year bull run was finally brought to an end this with the market in free fall across America and Australia ʕ •ᴥ• ʔ.

As I write this, the S&P500 had lost $5.3tn whilst the ASX200 has lost $430bn in the last three weeks and there has been considerable hysteria online and in real life. Everyone regardless of whether or not they bought into the market has a fairly strong opinion on whether or not the virus will cause long lasting economic impacts as well as the associated impacts and flow on effects╮(︶︿︶)╭. 

For the time being, I have learned to stabilise my own emotional responses to the regular losses with a focus on long term gains as I continue to dollar cost average on a regular basis(-_-;)・・・. I thought I had gotten used to drowning out irrelevant opinions as noise, but today I was fairly shaken by the words of my long time mentor Mr L, who I consider to be the most brilliant men I have ever met. Throughout the years, he has given me priceless insights on the machinations of the world, needless to say, I hold him in extremely high regard. As someone who invests heavily in precious metals, Mr L doesn't touch property or stocks, however as I was speaking with him about other matters today, I did mention that I was buying into the dip as the downturn unfolds, to which he very sternly told me that trying to catch a falling knife is a dangerous endeavour ＼(º □ º l|l)/. Frankly, I can discount a large majority of people's opinions and continue my course of action because I consider them to be wrong, but when my most respected mentor also raised these concerns, I definitely faltered in my conviction and spent the whole afternoon pondering my choices. In the end, I've committed myself to going through with this and until I see definitive proof that the strategy doesn't work, I will see it through, but it is definitely taking a lot more determination than I had previously estimated. Hopefully in a few months, this will not matter anymore(×_×)⌒☆.

In the meantime, this is what I think of bears＼＼٩(๑`^´๑)۶／／:

By 小福

Trials and Tribulations: Coronavirus Market Correction

With the drama that I had experienced most recently with my only two hot picks in individual stocks, CLH being on its continued trading halt which has now extended until mid March and UNV being subject to a hostile takeover bid from TER, I really thought that I had seen enough drama to last a year. (ᗒᗩᗕ)

That is, until the markets this week undertook one of the biggest corrections in recent times with the index going down 9.8%, taking $210bn from the markets   ᕕʕ •ₒ• ʔ୨. As someone who doesn't buy shorts or puts, obviously I took on a fair amount of collateral damage.

As someone who tried to go into this journey with a certain amount of mental preparation, I too was caught off guard as to my personal responses to this black swan event. Early on in the week, my ボーイフレンド and I spent most of it indulging ourselves in schadenfreude when we watched everyone around us and in online forums lose their minds over the daily 3% drops Σ(･ω･ﾉ)ﾉ！ . It had gotten so bad that even my colleague Mr D was finally pushed over the edge and cashed out his holdings on Thursday and dived in on inverted indexes (BBUS and BBOZ), cashing out at the lowest point, thereby crystallizing his losses before buying into the already relatively higher inverted index. I can only hope that he doesn't crash and burn too hard that he can no longer be redeemed.

As for myself, I had high hopes that with my mental preparation, I would be able to separate myself from the numbers as the fell. During the start of the week, I could definitely say that I managed to do so with relative capability. Having said that, by the end when it neared a 10% drop, I too succumbed to a slight bout of sadness when I realised that half a years' worth of my savings was gone on the papers. When you consider than in real terms of how many bleary eyed mornings I had to force myself out of bed to get onto the bus and deal with stupid people at work, it did make me fairly sad. Despite my disappointment in myself for having feelings when I expected none (◞ ‸ ◟ㆀ), I can still gladly say that I did not once have my finger on the "sell" button, which is testament at least to a level of discipline and rationality.

So to drown our sorrows for losing that much on the markets this week, at least we could still enjoy two minute noodles and tendies to commemorate our week of losses. As for what I will be doing next week? I will be increasing my DCA and putting my March funds into WGB. For those who are wondering, I couldn't convince Mr A to go buy in the dip, but at least he also stayed the course and is continuing his regular investment ʕ´•ᴥ•`ʔσ”.

An interesting note though, as an ironic silver lining to this week, the trading halt from CLH happened to cushion my fall a bit, cos 0% is still better than being negative. 

By 小福

Trials and Tribulations: CLH Trading Halt

Having only started my portfolio a mere three months ago, I had expected a fairly uneventful first few months with most of the excitement in my life attained from second hand thrills in watching what goes on in Mr D’s portfolio as well as the shenanigans on r/wallstreetbets⊙﹏⊙∥. The vast majority of what I personally hold are of course a collection of conservative and uninspiring ETFs, which of course leads to the conclusion that a minority of my holdings are comprised of individual stock picks (≧ω≦)/.

I had initially wanted to write a brief analysis post on my first ever hot pick, Collection House (ASX.CLH), but whilst I was still formulating what aspects to cover, an interesting development occurred in the meantime in the form of a Trading Halt to CLH. Σ(っ °Д °;)っ

As someone who has long been fairly risk adverse, I thought that I would be moderately stressed out by the uncertainties pertaining to the trading halt. With Mr D having mentioned to me a number of times that he believed CLH to be a textbook example of a value trap that he believes will slowly drop in price to eventual oblivion, this was largely founded upon a lack of understanding of the industry that CLH operates in as well as assumptions and speculations on management which appear to be largely unfounded based on my preliminary research (。・`ω´・).  Contrary to my apprehension though, since being notified of this last Friday, my mood has been relatively uneventful despite the unpredictability in what may happen when the Trading Halt either lifts on Tuesday or gets extended. For now, we have no information as to whether or not to expect good or bad news from the halt.

Reflecting on this, I would have to attribute my serenity to the copious amounts of time my ボーイフレンド  and I spent  delving through years of annual reports and financial reports of not only CLH but also its competitors, assessing the potential risks and threats to the business before deciding to put our hard earned money into the company(•̀へ •́ ╮ ). Having been satisfied that it was a reasonable purchase for good value with a solid history of dividend yield and potential for future growth meant that even when a Trading Halt was placed on the shares, I found little to shake my conviction in my decision making.

In short, if I am right in my reasoning of the outcome, there is little to be concerned about come the announcement tomorrow and if I happen to be wrong, it would be a most interesting albeit costly lesson to have learned. Will provide an update as the situation resolves. ٩(๑`^´๑)۶

By 小福