Corona Crash 2020

Hello friends,

I have very mixed feelings as I'm writing this post. A lot of things has happened this past few weeks and they are nothing short of extraordinary. Three major thing happened and they all have some convoluted effects as a result. Corona virus, stock market crash and I got a new job.

March of 2020 will forever be known as the end of the 11 year bull market as many has acknowledged that we are all in the bear market now. This happened because of the black swan, Corona virus (Covid-19), event and the depressing downward surge of the world oil prices. As I'm writing this post, my head is twirling with questions about the uncertainty of the future. My hands are trembling as I think about the things that I should/could do in order to protect myself. My inner peace are constantly thinking about how to turn this whole event into a beneficial one. So I'll try to breakdown things slowly based on what goes through my head right now. At times like this, I don't even have time to think about doing some preparation on writing this post. Eventhough I've been preaching about the quality of preparedness as being an almighty trait above everything else.

So here's what's constantly on my mind. I am in my mid twenties. I want to achieve financial independence. Thus, I have a relatively long investing horizon. One of the tried and true way is through investing in the stock market. According to the greatest investor in the world, Warren Buffett, the best time to be greedy in investment is when others are fearful. Conversely, a smart investor should be fearful when others are greedy. As I reflect on his points, I made a simple conclusion that this Corona crash would be the best time for me to be greedy as I've read many times that millionaires are made in time of stock market distress. However, what's really bugging me is that I don't have any cash sitting on the sidelines to participate in this depressive market evaluation. It disturbs my conscious as I feel like I'm missing out on this huge "sale" in the market. As I try to reason with myself to not be in a stressful state of mind, I made some quick plan in order to still be able to participate in this sale. Historically, bear markets average out within 14 months in duration. The shortest bear market was about three months and the longest bear market was a little over two years. Though there's no telling of how long this 2020 crash will be, the least that I can do is to prepare to dollar cost averaging down in the market for the duration of at least 14 months. Hence, here's my plan.

1. I will allow myself to only buy 5 equities in this period. This is to conform to Warren Buffett's idea of choosing only the best company that adhere to the concept of value investing. By limiting my purchases, I won't be going around thinking that I have to buy everything just because they have low PE ratios. Instead, all of my purchases would be backed by deliberate thought process and valid reasoning.
2. In terms of monetary deployment, not only I will only deploy when the equities meet my strict requirements, I will also start the deployment in very small amount and gradually increase my purchases when the market dips deeper. I already have a few stocks on my watchlist and I'm planning to start with as little as one lot (100 units).
3. In terms of purchasing frequency, I'm planning to be fairly lenient on this because I'm willing to spend a little bit more on the transaction cost if the dips came more frequently than expected. This month alone, we have seen the market hit the circuit breaker 3 times. This occurrence is unprecedented knowing that the previous financial crisis only hit the circuit breaker once in a given month. I will start with monthly purchases but if opportunity presents itself, I might grab the lows as frequent as once a week, provided that my fund allows me to do so.

In essence, these are the guidelines that I'm telling myself. They are somewhat vague in some areas but I hope to convey a good idea whereby I stick to purchasing businesses below its fair value and not to go on a relentless spending spree without a proper conviction and justification.

The second thing that's lingering on my mind right now is in regards to the pandemic we all are facing, the Corona virus. I have to admit, I was adamant at first to the idea of going out of my way to breaking the chain of viral. My selfishness kept creeping in my head, telling me that my youth is enough to justify that I need not to worry. However, I knew things are getting serious when news about a few people in my city has succumb to the virus as well. News like these are making me paranoid especially when I see my close relatives are starting to show its symptoms like flu and coughs. Things start to get really worrisome when there are shortages of deterrent items such as hand sanitizers, disinfectants and face masks. Knowing that we are not equipped enough with the proper deterrent, it has increase some level of discomfort as I'm feeling a little too exposed and helpless. Nevertheless, I am also aware that there are plenty of ways that we all could do to combat this spread even without the proper deterrent because at the end of the day, your hygiene is the most important. So simple things like washing your hands, taking frequent showers and not touching your face are still the precautionary steps that we all could do. 

After reading through many sites and clickbaits, I'm guessing that these precautionary steps are the best ways for us to instill in our daily habit at least for another year. I often hear that vaccines could take awhile to concoct. As of right now, all that we can do is to practice proper hygiene. 

The third and final thing that's always on my mind is about my new job. Thankfully, I just managed to secure a job as a project engineer. The job scope entails me to work on building management systems (BMS). So that includes the whole spectrum of BMS systems ranging from the design, implementation & construction, and maintenance of the project. However, it's a very interesting dynamic right now because with the recent 'restriction of movement' being declared by the government, I'm currently working from home. There are definitely many challenges to working from home mainly due to distractions of entertainment and fairly easy access to bed, but it's a fun experience and I'm truly learning on how to have a better control of myself. So far, everything is very good. Friendly colleagues, good supervisor and good pay. I really hope that things progress towards the better but I always tell myself to always prepare for the worst. 

That is all my rant for you today. Hope that you are in good health physically and financially in this tough times. Just remember that dark days will pass and there's always light at the end of the tunnel. 

Stay safe!