Reflection n Goals in New Year 2023

 Hi everyone,

I've made my first YouTube post in 2023, do check it out...

S&P500 Stocks Market bottomed!

Dear friends,

Its been awhile since my last post in May22 when I called bottom then, since then markets (S&P500) rose & peaked in mid of August 2022 before stumbling down to lower low, right at 200weeks Moving Average (MA).

& once again, another reversal has finally been confirmed at the close of this trading week.

On weekly chart (left, below), we can see a nice close above previous week's top in S&P500. This has coincided with triple bullish divergences in RSI, MACD-Histograms & MACD-signal lines which all ticked up at higher high despite a lower index low; thus indicating this bear is weaker & the upcoming upwave probably as strong as the last one May-Aug22 or possibly back to uptrend to 5k in 2023!

On the daily chart (right, above), yesterday's 2.37% rise had entered into value zone marked by 20days & 40days Exponential MA (EMAs). Some pullbacks might be expected, but for mid-long term investing (1-4months horizon or longer) it would be good to buy at any such pullbacks.

In terms of my portfolio, my realized profits year to date (YTD) is $37,369, yet to account for calls that expired yesterday, about $3114/month. However, even after accounting for the realized profit, my unrealized loss stand at -25.1% though after converting to SGD, the loss was lesser at -21.6% due to early pumping of bulk of capital into US TD Ameritrade account.

The biggest drag to my portfolio continues to be Alibaba (BABA) which had fallen new low just the past week though recovered slightly. Its funny as previously there was fear of falling ecommerce volume when China lifted its lockdowns nationwide, as people went into revenge shopping at physical stores. Now with periodic lockdowns at various cities, the market was bearish over the continuing Zero Covid policy. Nonetheless, I still maintained my holdings (800shares) at average cost of $187.50, after accounting for call premiums earned in the past 1.5year, my average cost is closer to $150 which is still doubled the prevailing price. However since its over allocated, previously at 50%, now after injecting of some capital in past year, its about 26% (see Morningstar portfolio view below). 

Although it shows I am 39% in cash, this cash portion are collateralized for the puts that I've sold. In fact, if a unlikely "armageddon"scenario if all my puts are assigned, it would cost 3.26x of cash in my account. Thus I am somewhat "stretched" in taking on new trades, however, if I do nothing to take advantage of the upwave (or possibly uptrend) ahead, I would beat myself for missing to ride this.

I am pondering between using bullish synthetic or buying bull call spread; or perhaps 1 contract of each to contrast how the profit/loss looks like. Though for a trade like this, I must remind myself a cut loss is compulsory as my portfolio could go belly up if the "armageddon" scenario do happens...

See how...

May the trend be with you...

URGENT PUBLIC SERVICE ANNOUNCEMENT: US Markets had bottomed!! Rare 5-10years chance to buy good quality stocks that will 2x-5x in next 5-10years

 Dear readers,

This is a public service announcement as the market signal of a bottom has appeared. 

The signal I'm referring is the RSI indicator on the weekly time frame. This signal, when it gets near or preferably below its 30 line indicates the stock or market is oversold. The bottom signal appears when it tick up when the stock or market make the first weekly gain that signalled a bottom has been reached.

Combined with other indicators such as long term moving averages (MAs) like (100, 150, 200) helped to establish the depth and key areas of support / resistance based on these long term MAs.

Lets take a look at the major indices like S&P500 & Nasdaq.

For S&P500 (SPX), RSI only went below or touched 30 oversold line 3 times in past 5years. The RSI tick up marked the reversal in the previous 2x, so what about this time?

For Nasdaq (NDX), similar to S&P500, 3x in past as well, what about this time?

How about companies stocks? I've selected some good quality companies with great consistent earnings & growth over many years; see & decide for yourself...

First off, ADBE, the must have design software suite that design professionals must have. For ADBE, its actually hard for ADBE to reach 30, the previous 3x in past 5years RSI did not reach 30 but its troughs had nonetheless coincided with major bottoms as boxed. On the right edge, there's actually 2x RSI hit 30, the first time it "failed", just like all indicators, no indicator is 100% working. But when the first signal didn't work, the chance for 2nd signal, particularly this one with bullish divergence (lower price troughs, but higher indicator troughs) post a even stronger signal of the bottom, especially when it bounced up from a long term 200weeks SMA.

Some of you might challenge, hey but it failed once, how can I trust this if it fail once before. All I can say is, the signal still sort of catches a "bottom", just not the final low, even if you have got in the first signal, you hold it for 5-10years, you would still profit tremendously as you would have bought it at near to the bottom.

Lets see a few more, next ICE or Intercontinental Exchange which owns the NYSE itself, the futures & equity options exchanges and OTC energy, credit and equity markets.

This RSI signal only appeared 2x, what would you do with the current one that had just bounced above 200week MA?

Lets one last one, Nike shoes (NKE) stock.

I purposely included this which had a recent fail signal, wonder why? the signal happened when NKE only felt to 150week SMA, so not low enough like the first signal which pierced below 200week SMA before it bounced up sharply. So the current signal, is this it?

Honestly, no one can predict the future, but I go with probability & indicator served this purpose based on its structure & price action history to "indicate" potential bottom. Now that we have looked at the market (SPX, NDX) and 3 good quality companies from various industries; my personal view is that the US market has likely bottomed & this would be a good "stock market sale" that is probably ripe to enter now.

All the best to your trading & investing, may the markets be with you ( * v * )") 

Review of 2021

This will be a long post as I reflect on the following:

- CPF Interests

- 2021 Investment Results (YOY)

- 2021 Achievements Reflection

- CPF Interests

First off with the good news, our trustworthy CPF continued to deliver compounding interests along with another year of good employment. A total of $14,376.31 interests is credited, this is $1,508.46 higher than 2020's interest of $12,867.85 from government.

At age 37+, hopefully another 23-28 years employment (assuming lifelong employment at same or similar work till 65 retirement), hopefully the CPF balance could break the million dollar mark while cost of living do not rise too much when I retire then. With the combined balance of $411k, continued contributions & compounding interests, it should double within the next 18years (rule of 72 divide by 4% interests).

- 2021 Investment Results (YOY)

Next, on to the bad news, my investments (paper loss) did badly in 2H2021.

A total mark to market loss of $36,137.63 is booked, this comprised of $15k which was realized mainly from my exit of hospitality counters (Duty Free International & OUE Com Reit) early in the year, the rest of $21k loss are unrealized in US Options (based on Think or Swim's Net Liq.balance) which fluctuates wildly $10k+ each day depending on my Alibaba's price (if rise $22 from $118, I would breakeven my paper loss).

I continued to struggle with the psyche of managing options risk & its not an easy issue.

Eg. When you sold put, one's hope is that it may expire worthless.

Eventually, one would experience greed & tried selling naked weekly puts & start maximizing your available balance's leverage, the money came in fast during 1H2021 when weeks after weeks of options expired worthless, and I piled on new puts selling. Until when the price move against me (SI, TSLA, BABA etc.), even a 30-50% available balance (ie. $100k against a $200k portfolio) is insufficient as price went below your strike & deep ITM, every dollar drop is mark to market of $100 per option. If one have weekly puts sold, at some point, it would be impossible to roll down & out for a credit unless one roll more than 1 year out which would results with huge balance tied up in slow time (theta) decay.

Also, psyche wise, it mess up my past years of trading rules. If I hold stocks & it moved against me say 3-5% of cut loss rules, then I would cut loss for trading. Of course, I still mixed up with investing rules occasionally (I never really learn at times), like my OUE Com REIT & Duty Free that I cut loss too late. Anyway back to options, because of the desire to hold puts until expiry to avoid cost of buying back to close, when price pattern reverse, most traders of stocks would take profit but for options it messed up my psyche & the wishful thinking that the puts sold would expire worthless before price come down to the strike. Reality is one can identify turning points easily but one can never identify how low it might go, until it finish its falling trend. 

Even a fundamentally strong counter like BABA could be down for years (since 2019), as my TOS screenshot showed, my BABA shares (assigned at average of $192.50) & deep ITM puts sold took up the bulk paper loss of USD45k which literally vaporised my profits clocked 1H2021. I had to "deleverage" down & closed some BABA Puts then.

Lessons learnt: risk management is really personal emotions & character management; stick to cash secured or defined risks trade (like Diagonals, spreads) & never allow puts assignment risk to exceed 2x of cash holding. Very often, strikes that seem far at entry can come close or deep ITM... as the saying goes... the market can remains irrational longer than you can remain solvent. Having the ability to hold is an important risk pillar to support the whole investing / trading business.

- 2021 Achievements Reflection

Despite the poor investment returns, which turned my 9 years of track record to negative. I managed to achieve my financial goals set for 2021 (the first version, not the revised July 2021) where my 3 pillars (liquid assets, CPF/SRS retirement and HDB residence) each about $300+k, totalling over $1mil. Of course, in Singapore's Asset Rich Cash Poor structure, the home HDB residence is a depreciating asset as it would eventually become worthless at end of its 99years lease. However, any assets that has worth, consider good if it could generate income, but also not too bad if it could avoid expenses. Imagine if one do not have own shelter over its head, one would need to incur rental expenses each month to rent, that will definitely be a huge drag on one's financial journey to freedom.

Out of these 3 pillars, my liquid assets which include my savings, investments & retained earnings (from work & training) grew much slower than previous years (primarily due to investment realized & paper losses). My CPF & SRS retirement asset grew the most at $50k year on year which comes naturally from employment's contribution & interests. Although notably, the HDB residence also grew quite abit based on SRX appraised value though I expect it to stagnate in 2022 due to rising interests rate. 

To conclude, my focus for coming year will be on family building & trying for babies. As the "head of the household" (pardon my masculine tone to the ladies), I need to plan finances & grow them no longer for my self but for my family & future children's future education & maybe retirement (if I deposit their money to their CPF SA... Mmmm... still thinking).

Lastly, health is our greatest asset of all times, the fact that we survived the Covid-19 endemic 2nd year, we are the luckiest winners to continue to be alive and enjoy life's ups & downs.

Happy New Year 2022 & may all your goals come true, take care & stay safe!

Comparison of Integrated Shield Plans (Singapore Nov 2021)

Recently, I have entered into a sort of family planning stage where my spouse & I thought of having baby in the coming year & we thought of getting Integrated Shield Plans. Its definitely not easy to compare across all the different plans, many insurers also hyped certain wordings like "lifetime coverage" to make it as though its exclusive when its a common feature across all insurers.

I spent hours and hours reading through various sites which provided good tips but none is conclusive of which is good or detailed why its good. The insurers also avoid price competition by having different features, pricing which makes comparison really difficult across the board.

Eventually & kudos to MOH our paternal government which lists a comparison of integrated Shield Plans across the 7 insurers (link here)in a pdf format, which I converted into excel & use color formatting to help me visually see which plans have the best "features" and the average premium costs across lifespan.

You can refer to the source excel here 

The dark green color showed the top feature / benefit in that row.

Lighter green implies comparable but lesser benefit or with restrictions.

Dark red implies lack of or absence, lighter red indicates certain restrictions.

The overall idea is to have an overview visually which plan give the best or most benefits & I ranked the first or second for each table. Do note there's some bias in me, for example, I value "inpatient palliative care" highly after my late Dad's been "chased" out of his restructured hospital palliative ward as stage 4 cancer patient to hospice care which do not have any medishield coverage & the costs are easily $4-5k+/month. Fortunately (or unfortunately) his condition deteriorated in his last few days & thus no longer conducive to move out to the planned hospice thus he managed to stay on & passed away. Thus for me, this is a vital benefit that I valued should I ever face the same situation.

Next benefit that I valued are the pre- and post- hospitalization treatment, which I want it to be as long as possible, as quoted by this Today article in April 2021 "complex diseases such as inflammatory bowel disease or gastroesophageal reflux disease, long-term follow up is important, as most of these conditions would not be resolved within three months of the time of diagnosis".

As I am in my late 30s, the final table which I inserted as excel formula to calculate the average across the premiums for each age groups. I also simplified the figures by taking the upper figure of the range for prudent estimate. The final results that I chose is probably GE's SupremeHealth P Plus based on the cost versus benefits (most greened benefits) though the final purchase depends on the level of exclusions as I do have a mild condition that's non-life threatening and in fact no medication needed at all with no functional impacts in any way, but have a potential to lead to cancer if the viral load somehow take a turn for the worst despite being dormant for past 25 years since its discovery. The Today's article highlighted earlier had many good tips that you should ask before purchasing any ISP; I will be asking them when I fix an appointment with my friend's agents. This will be my first time sitting down in a serious discussion with a Financial Planner / Insurance Agent. I do think its prudent from risk management perspective to divert say 5-10% of my annual income into various insurance plans (ISP, pregnancy, critical illnesses, accident, disability, children's education) etc. After all, like the options premiums that I earned, the cost is a necessary protection to my "downsides" in life & my family, provided the protections are comprehensive & trustworthy enough to rely on. Otherwise, I might as well rely on the standard government mandated ones & myself in building my rainy day funds.

Reversal of Fortunes, Investing in my Education & Community Support

Reversal of Fortunes

What a big change in the past 2months, I remembered updating my yearly resolution plans when I realized all my financial goals for 2021 were hit, setting new targets of repeating the gains which led to "performance stress" where I begun to oversell to max out the limit (ie.utilized nearly every available dollars balance in my ThinkOrSwim platform).

Initially, my portfolio started with about 10 different counters which I sold put options on, then the series of China clampdowns drove down prices so fast that the usual tactical maneuvers of rolling over results in double & double & double down, before I know it, my put options losses ballooned to 3-4x. Over the past month, I closed off other counters which results in risk concentrations over 2 specific counters, BIDU (Baidu) and BABA (Alibaba) to raise available dollars for roll overs. Until the deltas hit .90+ so much so that, towards expiry, I cannot even roll them over without taking debits as the time value (of even 3months+) are not enough to cover the ITM losses. My paper profit of almost USD70k late July reversed into losses (currently $2-3k losses YTD that hit my capital), a reversal of +USD70k to -USD3k! Ouch!! 😭

Most of the losses were taken when I closed my BIDU put options sold & reduced my exposure to BABA.

I took assignment of 200 BABA shares at strike of USD220 when the price closed at USD157.96 on 21 August 2021.

This experience forced me to research & explore other tactical maneuvers to reduce losses, other than simply taking the losses, I also sold calls at expiry price to reduce the losses (2x premiums from put sold & new call sold), hopefully as price recover, the premiums from puts roll over & call sold at or above put's strike I will be able to gradually recover my account.

This reversal of fortunes also reminded me to be humble & always remember the risk management & diversification rules as well as setting cut loss of 1% limit & avoid rolling over more than once to avoid becoming "married" to the position & suffer huge losses with a prolonged downtrend like many of the Chinese tech shares.

Investing in my Education & Community Support

Adam Khoo & his team launched a new "Beat the Market" sale, as shared in my earlier post, knowing the techniques is only at most 1/3 of the winning share, the critical part of risk management if not monitored can easily reversed the fortunes like what I did. Also, I am lacking of social support of other options traders to discuss & exchange ideas, hopefully with the investing into my own education, am purchasing bundle 5: Ultimate Profits (promo price until 1 Sept 2021 https://btm.piranhaprofits.com/sale), I know I can make the money many folds back. With the community support, hopefully I can avoid drawdowns like what I been through the past 2months.

God bless & may the trends be with you! 🙏🍀

1H 2021 Investment Results

Haven't been active in posting as I was in a sort of discovery journey on options trading, mainly selling putting options, experimenting various options strategies such as the wheel & going through hours of Adam Khoo's videos on Options Ironshell & Ironstriker...

I will talk abit on my personal review of the 2 options courses in general as well as my 1H2021 results thus far.

Review on Adam Khoo (or rather Bang's) Options Ironshell & Ironstriker courses

Firstly, the videos I watched was shared by someone & wasn't the latest (I think its 2019 version) so there's probably some changes / updates since. However, based on Adam Khoo's free & open sharing on his youtube , the changes are minor (eg. Bull Bang / Protective Bullish Synthetic to Collar Synthetic Strategy, the only one I noticed) but the rest are largely the same. Well strategies are like principles, such as Value investing, Swing trading etc. these strategies remains the same past decades, abit of tweaks here & there, depending on individuals' style. With that set, here's my review.

The courses comprised of useful tools (excels - linking TD Think or Swim platform to color code options with rich / poor premiums, portfolio plan, tracking table etc.), power slides (for those who prefer hardcopy to read) and hundreds of hours of step by step videos with examples of trades. I personally learnt alot and find it absolutely enriching.

In terms of takeaway, which you I will attribute a good part of credits to AK, my return had breakthrough to a whole new level I never thought I can achieve. However, those strategies that I like & use to achieve these returns, are actually the most simplistic & basics which almost every options trader are well aware but different level of appreciation & mastery. My strategies thus far are mostly selling put options with occasional bull put spread or hedging on VIX, I experimented abit on diagonal (lease to rent - buy long dated call (lease), sell short dated call (rent); but my most preferred are still selling puts - simple but abit of arts (like what to sell). On this, I combined by usual trading methodologies of catching bottoms or pullbacks with a search on high Implied Volatility (IV) stocks to sell put options on. In addition, the "ah ha" moment was when I struggled to cut loss on stocks that went against me (eg. TSLA which fell from peak of $850 to low of $550 & SI which fell from $170 to $80), both caused me quite abit of drawdowns which I managed to recover from. As I read from various groups' comments, I learned more from others such as diversification over various counters, rather than selling 6-10puts with weekly expiry consecutively in upcoming 45days and so on.

In conclusion, the cost of the courses are definitely worthwhile to invest in, but it takes alot of dedication to research, learn, test & also adapt (carefully) to suit one's style. However, the materials are already out there, at least those that led me to my profits; much of the other strategies are not so comfortable to me at this stage, maybe because I still haven't master them or I dont like the number of legs needed to execute. You can actually learn almost 70% of the materials just from his videos on youtube (yes all his videos added up already cover more than 70% of his strategies taught), but the most valuable part which cannot be bought is the community (AK or Bang's Telegram group - like minded peers' money making ideas & sharing). So, even though I already have the videos, I will be keeping a lookout for AK / Bang next Black Friday sale, will take some profits & invest to learn continuously to practice & trade skillfully over time.

1H 2021 Investment Returns

My return for 1H2021 is 18.9% or USD 34k out of invested capital of USD 181k (rounded to nearest k). Adding back the 100 VRTX share assigned, the return is about USD57k or 30%.

The chart above illustrates the deposits of capital & drawdowns.

I opened my TD Account on 26 August 2020, was experimenting around & gotten my first assignment of KR which I took loss as it fell despite a positive earning report then (8 Sep 2020).

There were some drawdowns related to BABA which was affected by China government's clamp down, but gradually my appreciation of the strategy & risk management increased & I pumped in capital (marked by major blue bars for the horizontal increase in balance). At the end of 2020, I was net equal to the capital I put in then, thus instead of removing 2020 transactions I continued the entries in Excel & included it in the chart.

The slow gradient increase over time are the premiums sold which some I covered but mostly at profits, still there's some drawdowns which is only part of the investing journey. On the right edge, I was assigned 100shares of VRTX which I held & sold call option on it.

Overall, 1H2021 that is, the return in USD has been quite impressive for my standards, I hope to be able to keep up my rational & wise judgements to generate more returns consistently overtime.

Hope you enjoy this & may the trends be with you...