US President Donald Trump did it again with threats to escalate the US-China trade row, causing stock markets around the world to tumble.
There are probably a number of ways to make money from such a volatile and uncertain situation using technical analysis and options strategies as trade negotiations continue to develop with Vice Premier of China Liu He heading over to the US, but with a shortened trip. Both sides seem to be playing hard ball at this moment.
But how about for investors practising value investing, what should we do?
Let’s look at the ramifications to the market previously when talks were not going in the right direction.
The previous two S&P all time high were brought to its knees. Towards end of 2018, the drop was 20%, characterized as a bear market. Of course, this was a period when there were aggressive rate increases too which the stock market also does not like. Uncertainty and rate hikes are not the market’s friends.
I wrote about entering Apple in November 2018 with Is Apple A Buy. I eventually entered at $147 and exited about $191 with a handsome return of 30% within a fairly short period of time. Apple’s share price is also taking a hit now and closed at $202 yesterday.
Is there an opportunity to buy Apple at a discount again? We really don’t know. And not just Apple, some stocks are reaching attractive levels again, like Sketchers, Intel, Bank of New York Melon, Wells Fargo and it will be exciting to look at Google, Skyworks Solutions etc if the drop continues. This is the time to review your shopping list and scout for opportunities.
For Apple, my guidance is simple as I have done my homework. Translated, it is the following chart with calculated fair value line of $160 drawn.
It is a long way to go specifically for Apple but for some of the other stocks mentioned, I can initiate a buy soon though I would go in progressively as cheap can become cheaper.
So, folks Be Greedy When Others Are Fearful and look out for bargains.
We are excited to announce our own Stock Investment course Cashflow Mastery Program and there is a pilot run at special price of $599 on 18-19 May. Enrollment closes coming Sunday, so please check it out. You will learn our Stock Investment Framework adapted from the gurus as illustrated below as well as beginner Technical Analysis and Options strategies to enhance your returns.
At Journey With Money, we are practitioners of Value Investing for Singapore and US stocks. We are passionate about sharing our Stock Investment knowledge and experience but the materials we present do not constitute stock recommendations and readers are urged to do their own due diligence for any investment decisions.
Do leave us comments and feedback below so we can improve on our contents.
Please also follow us on our Facebook Page.