I bought my first shares. I thought it will be interesting to record how I perceived the market and look back in time to come.
Microsoft (MSFT) at 184.65USD and Singapore Exchange (SGX) at 8.41SGD.
Admittedly, purchasing Microsoft during this period of time at that price is part alarming, part anticipatory and a dash of craziness.
While I'm very new to the concept of trading in equities, I'm not entirely oblivious to the basics of trading. The mantra, buy low, sell high has been repeated enough for most adults to know the concepts. Hovering at 180USD, Microsoft stocks have bounced back to it's all time high, so why do I choose those two stocks to buy?
Singapore stocks aren't too exciting. I have started buying STI ETF since 2017. And the only thing that I'm seeing during this period of times is decreasing dividend yield and decreasing price. For 5 years, SGX has also been trading around $7 - $8, we can't even beat the inflation with this.
However, this year, SGX manages to reach an all time high of $9.85. Only to quickly dip down to around $8.40, approximately a 14% drop, most likely due to an announcmenet that SGX will be discontinuing the bulk of its MSCI equity index futures and options contracts.
$8.40 is less than what it opens with at the beginning of the year.
Price drops does not means that something is of value. I hold crypto that never amounts to anything much nowadays but was double their capital in the heydays. But it might be an entrance of opening.
SGX was once trading at 14.70SGD, that is at 2008. If nothing significant happens, this stock will probably not have any drastic adjustments.
Over the recent months and years, Temasek's Vertex has invested in cryptocurrency exchange Binance, first double listing of AMTD International, increase trading volume and upcoming Singapore single-stock futures. The trading and financial derivatives ecosystem in Singapore have became much more mature. Revenues have been increasing in SGX steadily and due to the Covid situation and share buybacks, this year might see an increase in volume.
-- The Business Times
Atop the Covid situation, there is increasing tension in Hong Kong-China, and China-USA. Due to the tension with China, Hong Kong autonomy comes under scrutiny. Prior to this, Hong Kong enjoys and is still is one of the top financial hub in Asia. In period of political uncertainty, the one country that stands out as a safe haven is Singapore. My line of thought is simple, more investor money and more companies translate to better economic activities in one or another. It also boosts up the banks in the Singapore, which are listed in SGX. This may or may not be positively influenced the valution of SGX.
Many industries are hit by the low or almost non-existent revenue during this period of international lockdown. However, the increase in tele-commuting and digitalisation efforts mean higher earnings for certain tech company.
Microsoft has maintain its position as the top operating system for a long period of time that it is almost unforeseeable to how another company could dethrone it. Most hardware and software are compatibile with window OS. Let's not forget the cloud war among the three big providers, Amazon, Google and Microsoft.
We are in a very exciting period of time, especially since Microsoft is putting in more effort in open-source and integrating with unix-based system. (I might be biased here because I have been a Windows user. Linux is great as a personal OS choice if you don't want to interface with the world, don't play games and don't care about Adobe).
But still, Microsoft is probably in it's overbought period.
So why did I still buy? I wanted to wait until Q3 to buy. Q3, in hope of another crash. But nobody knows if that is going to happen. I can say it is likely to happen but I also thought that such fast recovery is not likely to happen. We cannot assume that the market will behave in accordance to our confirmation bias. But we can take certain measure to control our risks.
With accelerated job loss, insane balance sheet, bankruptcy, it is difficult to believe that all this will not topple. To me, this feels like the insanity of the cryptocurrency rally back then. But all this is currently not showing in the market, or maybe I'm don't know enough.
What I picked up is S&P 500 has shot up. Earnings for Microsoft is healthy. There are new money and sports gamblers coming into the market due to Covid'19. There is a bullish put-call ratio to Microsoft. Will this end well for me? I don't know. But I only put in money that I can afford to lose and has placed a stop loss at 10% below my buying price.
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