Fear of the market not yet at bottom

On March 16th, 2020, our Prime Minister, Muhiyiddin Yassin announce that on March 18th, 2020, all of Malaysia is effectively under a “movement control order” or MCO until the end of the. This action is needed that hopefully able to reduce the dramatic increase in confirmed Covid-19 cases throughout the nation. What are you planning to do during the MCO period?

At the same period, Global stock markets plunged as well as the coronavirus outbreak continued to spread, stoking fears of global pandemic and an economic slowdown. In just few weeks time, the Coronavirus pandemic has shaved off nearly a third of the global market cap. Making things worse is the crude oil war between Saudi Arabia and Russia, which has injected volatility into other assets. After a crash of this magnitude, market confidence usually does not come back in the near term, it going to take a while before it recover.

Wait,wait, before 2020, some of us or a lot of people out there, are keep waiting for market to crash and only invest into it. But went it happen now, are you ready to invest in or afraid to buy good companies at cheap price. Or maybe you are wondering which companies to buy since all are crashing down.

Let’s be honest here, if before the market crash and we done our homework which are the companies we want to invest in, this is the right time now. But you may wonder ‘How much lower will the stock market go down until it hit bottom?”

I have absolutely no idea. I do not have answer if this is the lowest now. Whatever sharing in this blog here, these are just my views on what could potentially happen with this continued downturn in the stock market. The only one reason why there is chaos in the market right now is because of the Coronavirus. Businesses are shutting down, cities are being shut down and police and army forces deploy on the road to prevent the spread of this global pandemic locally and globally. In order to have the market return to the good days, first is to contain the virus spreading so that people can go back to normal life before bull return to stock market .

Now where do I think we will hit the bottom in this market?. But when panic and fear are at all time highs, that is usually when we see all time lows. When the headlines are stating the entire economy is set for financial doom then that might hint we are getting near a bottom. 

The critical thing to remember here is to take advantage of these stocks and the current priced they are at. Are we prepare for it? Other common questions are “Is it time to buy?” or “What should I buy?" Below is what I am targeting now or already initiated small position into it:

KLSE: Maybank, Public Bank, Dutch Lady, Rohas, SP Setia, Astro

SGX: OCBC

US: Disney, Starbuck, Exxon Mobil, Pepsi, VISA

To wrap up this, the MCO is necessary but hard for a lot of people to just stay at home. It better to be safe to stay at home and take this opportunity to study more companies which to invest in order to make smart decisions. 

Data as of 7 April 2020