Sunday, 1 March 2020

Year 2020: Cautiously Optimistic?

February 2020 should be a forgettable month for most stock market investors.

If you're making loss so far in year 2020, you're definitely not alone. The loss might just be temporary and you might still register positive return at the end of the year. 

For me, surely I'm heavily affected. Even without calculation of the return I already knew that year to date I'm making loss.

I have a plan in place since Jan20 to trim my portfolio which has too many stocks. I already have a list of stocks in mind to clear.

However, I decided to wait until the latest quarterly report announcement in Feb20. This has proven to be a bad decision in hindsight.

Escalating concern over Covid19 worldwide, sudden political crisis and last but not least, out of expectation's CY19Q4 financial results all sent the stock price tumbling.

Is it a temporary setback with quick rebound, or will it be the beginning of a prolonged bear market?

Of course no one knows but if you ask me, I think generally year 2020 might not be a good year for stock market.

KLCI has dropped more than 20% from peak of 1,900 in mid 2018. Currently it stands at 1,482.

I'm still not sure to what extent Covid19 will affect the economy in Malaysia & worldwide. Some companies may benefit from it and vice versa. We can only get a glimpse of it in CY20Q1 financial results to be announced in May.

A lot of experts expect the Covid19 fear to subside comes May, as the weather gradually turns hot, just like SARS in 2003.

However, Covid19 seems to be highly contagious and definitely affected more people and countries. Up to today, more than 86,000 Covid19 cases have been reported in 64 countries, and we have countries like South Korea, Iran & Italy which reported exponential rise in cases recently.

In contrast SARS has affected only 29 countries with only 8096 cases reported. Fortunately, the mortality rate of Covid19 is not as high as SARS.

Anyway, we can be 100% sure that Covid19 impact will be over one day, just the matter of when. Two months later, six months later or even one year?

Airlines and tourism industries will no doubt be negatively affected. Those companies who depend a lot on China as customers or suppliers or producers might also feel the heat.

Regarding the political turmoil in Malaysia, it seems to be settled but it might not be in reality. I'm really sick of politics and won't make any comment here.

So far I have trimmed my portfolio a bit last week but not in the way I wanted to. I keep more cash now as planned. I don't know whether I'll regret that later.

I'll remind myself, fear in stock market gives opportunity.


  1. Dear Dummy Bursa,

    New follower here and was reading thru your 2020 posts. Thanks for your detail sharing. Really hope to hear more from you especially during this opportune time. Keep it up, will be following you from now on !

    Side note: I am looking very closely on Banking Stock (PBB and Maybank) as well as Construction Stock (Ekovest and Gadang) right now. My strategy is always to buy strong fundamental company which experienced heavy sell down.

    1. You're welcomed. Get ready when the opportunity comes :)