Resist the Greed, be contrarian ......another profitable trade in Jan 2020

Recent world's events had prompted me to activate my stock exit plans. SELL, SELL, SELL. I had decided to expedite the selling in view of US-Iran's war conflicts and the most recently coronavirus outbreak fear.

 I have been reducing my stock holdings for the past weeks. My cash holding had jumped from 5% to 70% within 10 days of fierce selling. SELL, SELL, SELL. The US stock indexes have been performing very well during the 2 major events, only suffered minor dips of less than 2%. It quickly rebound on the next day.

 

 

 

The ignorant of major events and excessive greed in chasing the market bull provide a great opportunity for me to unload stock without suffering much "opportunity cost". I have no intend to sell at the peaks as I'm absolutely poor in predicting the top. However, I did sold some stocks at the peak and that's were just purely LUCK.

I have done selling and comfortable with my cash holdings for now. No intentions to add any positions until the market barometer shift from extreme Greed to extreme Fear. My portfolio now showing ROI of 7% this month based on net profit after selling. This is best ROI in 1 month so far since I started tracking my trading in 2014. It took me 10 months in 2019 to achieve similar rate of return compare to only 1st month in 2020.

Being a Contrarian

I don't like to remain "risk on" when so much confidents in the bullish market. There is not enough fear to counter balance the risk of bubble. I like to stay contrarian when come to investing. That is why my blog is called fifth arrow investment, the fifth arrow always pointing at opposite directions.

 

I could be damn wrong about going against the crowds. The market could continue to climb after I sold out. But that is fine for me as I don't see the Risk-Reward Ratio is favorable to remain in the market. I like to use the quote from Warren Buffet about being contrarian, "Be fearful when others are Greedy, Be greedy when others are fearful".  

I would stand by my guts and take the plunge. I could be wrong side of the odds, but I will take my chances. I will reveal my recent trade details in my following posting. Stay tuned and thanks for reading.

-WILLIAM CHENG

      Click on the links below for more interesting articles:

Beyond Meat…… Beyond Believe

Profit taking Jan 2020...... Recalibrating risks

Investment Psychology....Investor's worst enemy

ALIBABA HK IPO..... (Investment Profit Overdrive)

Boom and Bust in 2019 revealed

KEPPEL KBS US REIT...... Take the JUMP!