Think about what will happen when interest rate goes back down if high growth stock crash as interest rate rises
TLDR: How do you buy low sell high? when everyone panic sell, you buy, when everyone panic buy, you sell. So for H2 2022, I'm buying more high growth stocks which is negatively affected by high interest rate, but once the interest rate goes back down, it's party time ![]()
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Story time
For 2020 to 2021, I had been mainly buying up shares of companies hit badly by covid such as REITs and $Sembcorp Marine(S51.SG$. These companies had been hit hard with price falling dramatically. It had paid off as the price had recovered and a number of them are taken private like $SPH(T39.SG$ and $CapitaLand(C31.SG$.
For H2 2021 till H1 2022, I had been mainly buying up Chinese ADR stocks like $NIO Inc(NIO.US$, $Futu Holdings Ltd(FUTU.US$, $UP Fintech(TIGR.US$ and even $DiDi Global Inc(DIDIY.US$ as they too had been badly hit by regulation and delisting fears. People had been panic selling them like mad, thus making them super cheap compared to their US equivalent. There have been some signs of recovery and I'm hopeful it will pay off too once the regulatory overhang clears.
So sticking to the plan of buying low and selling high, in H2 2022, I'm going to mainly buy high growth stocks like $Palantir(PLTR.US$, $Grab Holdings(GRAB.US$, etc. These stocks had crashed real hard, down like 90% from their all time high. It might even go lower as interest rate goes higher. With these stocks I doubt I'll see any green this year or even next year. But with the believe that they have the balance sheet to weather this storm, and the believe that interest rate will go back down eventually, I'm sure the payout will be huge in 5 years time.
how to reduce the pain?
So I'm just going to keep adding position slowly using options strategies such as Cash Secure PUT, as well as Covered Call to help recoup some losses along the way.
For example, I have 200 shares of Palantir. Since it is a bear market, the price have fallen quite significantly.
Story time
For 2020 to 2021, I had been mainly buying up shares of companies hit badly by covid such as REITs and $Sembcorp Marine(S51.SG$. These companies had been hit hard with price falling dramatically. It had paid off as the price had recovered and a number of them are taken private like $SPH(T39.SG$ and $CapitaLand(C31.SG$.
For H2 2021 till H1 2022, I had been mainly buying up Chinese ADR stocks like $NIO Inc(NIO.US$, $Futu Holdings Ltd(FUTU.US$, $UP Fintech(TIGR.US$ and even $DiDi Global Inc(DIDIY.US$ as they too had been badly hit by regulation and delisting fears. People had been panic selling them like mad, thus making them super cheap compared to their US equivalent. There have been some signs of recovery and I'm hopeful it will pay off too once the regulatory overhang clears.
So sticking to the plan of buying low and selling high, in H2 2022, I'm going to mainly buy high growth stocks like $Palantir(PLTR.US$, $Grab Holdings(GRAB.US$, etc. These stocks had crashed real hard, down like 90% from their all time high. It might even go lower as interest rate goes higher. With these stocks I doubt I'll see any green this year or even next year. But with the believe that they have the balance sheet to weather this storm, and the believe that interest rate will go back down eventually, I'm sure the payout will be huge in 5 years time.
how to reduce the pain?
So I'm just going to keep adding position slowly using options strategies such as Cash Secure PUT, as well as Covered Call to help recoup some losses along the way.
For example, I have 200 shares of Palantir. Since it is a bear market, the price have fallen quite significantly.
Using such options contract, I can reduce the cost of owning the shares little by little. For example this is 5 PUT options sold that allows the buyer to sell me PLTR at $5 each if they want to. So if they don't force me to buy the shares, I keep the $125 which helps a little bit in reducing my losses. If they force me to buy, well that helps me to DCA into my position.
Similarly, I'm also selling 2 CALL options on the shares that I already own. This CALL options allows the buyer to buy the shares from me at $14 if they want it. Since it is a bear market, it is more likely that the option will expire worthless, so I can keep $24. That ain't much but every little bit helps ![]()
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So over time, these tiny profit from the options will help to lessen the pain, while waiting for the market to turn around.
Many investors dislike seeing red, but there is nothing to fear about red. What we should fear is the unknown and the lack of knowledge. So if you know what you are doing don't fear red, embrace them. the redder the better![]()
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Many investors dislike seeing red, but there is nothing to fear about red. What we should fear is the unknown and the lack of knowledge. So if you know what you are doing don't fear red, embrace them. the redder the better
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understanding Antelo : good read, that's what's investment about - buy low sell high
doctorpot1 OP understanding Antelo : Thanks![[undefined]](https://static.moomoo.com/nnq/emoji/static/image/default/default-black.png?imageMogr2/thumbnail/36x36 "undefined")
But it is quite scary to buy stocks that crash hahahaha ![[undefined]](https://static.moomoo.com/nnq/emoji/static/image/default/default-black.png?imageMogr2/thumbnail/36x36 "undefined")
![[undefined]](https://static.moomoo.com/nnq/emoji/static/image/default/default-black.png?imageMogr2/thumbnail/36x36 "undefined")
not many people can handle seeing red and to double down when it gets redder
bwjx : See no rush in getting into a position now. Congrats on your profit and I don't blame anyone for taking profit at resistance level.![[undefined]](https://static.moomoo.com/nnq/emoji/static/image/default/default-black.png?imageMogr2/thumbnail/36x36 "undefined")
doctorpot1 OP bwjx : still at a loss hahahaha but slowly recouping using CSP and CC. Yea I'm not rushing to enter also, entering but slowly. spreading the bullets over this year
勇士 : I feel like you're a professional. I'm new to stocks, and I don't understand anything can I pass on some experience
doctorpot1 OP 勇士 : the most important thing to remember about buying stocks is that you are buying a part of a business. imagine if you want to invest in a small shop near your house, what will you care about?
i believe you would want to make sure government wont force you to close the shop down. And most importantly the price of buying the shop must be reasonable so that you can make money out of it.
buying stocks is just like buying a shop but you are buying a part of a very big shop.
so you have to analyse the financial statement, understand the product and what customers are saying about them, check if the management is good, if they are able to make more and more money in future, and so on.
There is no hurry to buy a stock, as the stock market is always there. most importantly is to know what company is a good business. so take your time to figure them out.
If you buy into a bad business and the business goes bankrupt, all your money invested will go down the drain. if you buy into a growing or good company then you can see your investment grow as the company grows.
if you dont know anything and you buy, that is gambling. if you have done your homework before you buy, that is investing. dont gamble.
These are hard earn money you are putting at risk, it can go to zero and it can multiply. So dont be in a rush to invest, learn as much as you can so you can make the informed choice.
moomoo provides some helpful learning from here
doctorpot1 OP 勇士 : Did you see the Chinese version of my reply? If you can't see if you can translate according to the image.
勇士 : OK, I'll check. Thank you,
. I'm not familiar with the platform yet.
doctorpot1 OP 勇士 : No problem. We are all very helpful people. Feel free to ask for help![[undefined]](https://static.moomoo.com/nnq/emoji/static/image/default/default-black.png?imageMogr2/thumbnail/36x36 "undefined")
![[undefined]](https://static.moomoo.com/nnq/emoji/static/image/default/default-black.png?imageMogr2/thumbnail/36x36 "undefined")
勇士 : Thank you