股神 Investment 101: Outlook for 2022
Ladies and gentlemen, it is your friendly neighbourhood 股神 again.
It has been quite awhile since I last posted. Much has happened lately with the fed's tapering, upcoming interest rate hike, omicron variant, etc.
At this current juncture of market volatility and massive sell-offs, growth stocks have entered deep value territory, while large capitalization stocks have entered a bubble. In the upcoming weeks, I foresee a rotation of funds from large capitalization stocks to growth stocks amidst the upcoming progressive interest rate hike of 0.25% to 0.75% by 2022 year end. The interest rate hike should remain as projected and not be increased, to cushion the impact of the omicron variant on the economy.
Many feared the uncertainty which the omicron variant brings to the stock market, but I view it as an opportunity of a lifetime. With the current data from South Africa, Europe and the world, it is preliminarily conclusive that the omicron variant is indeed much more transmissive. In fact, it is found that the omicron variant is at least 5 times more transmissive than the delta variant. However, it appears that the omicron variant is much milder in terms of severity. With a tremendous number of people in the millions contracting the omicron variant, only a very very small percentage of people are hospitalised and slightly more than a dozen dead. I believe that this variant will be unstoppable, but humans will evolve and thrive. It will indeed be the survival of the fittest. The recovery will be very swift as herd immunity will be achieved in a very short period of time. Finally, either the omicron variant or the next will bring the virus to common cold level of severity and be truly endemic in the world.
So, what stocks do we hold in such market conditions? Well, we should hold those which are covid-proof - those which can grow and thrive in an uncertain world economy and order. To reveal, I am currently holding stocks of $ChargePoint (CHPT.US)$ $Opendoor Technologies (OPEN.US)$ $Palantir (PLTR.US)$ $Skillz (SKLZ.US)$ and $SoFi Technologies (SOFI.US)$. One does not need a massive diversification, for diversification is a protection against ignorance. Holding 5 to 15 stocks is more than diversified for the informed investor. Lastly, to balance between asset class, I am holding stocks of $Hut 8 (HUT.US)$, which have lower correlation to the general stock market.
On a side note, Chinese stocks are no longer worth holding from now to the near future with the recent turn of events - forced delisting of Chinese stocks, blacklisting of Chinese companies, heightened escalation of US-China tensions, evergrande default, etc. I have sold out my positions and took some losses in $Futu Holdings Ltd (FUTU.US)$ and $UP Fintech (TIGR.US)$. This rebalance of portfolio is vital, considering opportunity costs.
To conclude, I wish you all all the best in your investment journey. Merry Christmas and a Happy New Year. To a brighter future. Cheers!!
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chanliu1983 : TL; DR Bro, Make It Wash, Cut Right to the Point, Kutagami
doctorpot1 chanliu1983 : let me help him do that hahahahahhahah.
TLDR Bullish growth stock, scared of China stock.
TIGR FXXX : Sold my PDD with 1.5k loss but still holding on my TIGR stock with 2.7K paper loss. Is it worth to hold on?
百年难得一见的股神 OP doctorpot1 : Lol. Bullish selective growth stocks, bearish Chinese stocks as a whole.
百年难得一见的股神 OP TIGR FXXX : I strongly advise against holding Chinese stocks for the near term. I don't want to discuss politics here but if you want to hold, be prepared to hold for years, even a decade. That will incur high opportunity costs. You got to make a stand.
doctorpot1 百年难得一见的股神 OP : What's you take on this link leh? where China top official mentioned in CNA that crackdown is ending by this year. would you think that will cause the recover to start in Jan 2022?
https://www.moomoo.com/community/feed/107247140274582?data_ticket=5b3500b278c1b7aa4a176e85285988a1
百年难得一见的股神 OP doctorpot1 : In my opinion, you need to look at the multitude of events contributing to the situation as a whole. Regulatory crackdown is only one of them. Do you think that the Chinese economy will recover as soon as the crackdown ends, with the ongoing blacklisting of Chinese companies, heightened China-US tensions, evergrande default which has yet to ripple through the economy and be felt, etc??
doctorpot1 百年难得一见的股神 OP : my thinking is a bit different. because right now the price have negative factors already priced in, so by removing any of the factor would cause the price to revert. e.g. 1. China forcing ADR to delist -10% from fair value, 2. US new delisting law -10%, China property market collapse (24% of GDP) risk spiral to depression -20%, 4. China crackdown risk -5%, etc etc. so any of the factors that is removed will cause the price to readjust to account for the removal of risk.
百年难得一见的股神 OP doctorpot1 : I understand where you are coming from but unfortunately the market doesn't work that way. It is the overall sentiment that prevails. Be long enough in the market, monitor actively and you will develop a fairly accurate sense of the market. Good luck!!
doctorpot1 百年难得一见的股神 OP : I see. yea cause from my observation it seems to work that way. govt put any new news. price immediately adjust. Good news price fly, bad news price drop. Hahaha just as how market efficient theory would work (though I do not subscribe to/ believe it). need more time to analyse the market and build a better model in my head hehehehe
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