Trading Book Performance - Feb 2021 - Chaotic Market

The market has been thrown into a big turbinal due to rates move (interest rate movement) on the back of reflation concern. In very layman's terms, the world's interest rate (America) is increasing on the back of the economy reopening and thus interest rate has been shooting up higher and higher every day over the past week. This raised concern that growth stocks or US equities might have overrun thus a bubble that caused the big retracement. 

Personally, I also got hit quite badly and if the equities market doesn't recover, it might just undo my Feb gains. You can look at the figures below where I am only sitting around 700USD gains. I've also taken a few fallen knives. 

However, I am still very bullish on the US equities market but I am not keen to add any more at discount due to my margin requirement. Honestly, I am very risk-averse as I've made quite a fair bit of money (more than what I expected).

I expect this hike in rates won't be sustainable and also money will flow back into equities eventually. The central banks across the globe are also putting in efforts to keep the rates low.. so this might help too. Generally, I feel that the economy is too bullish in its recovery. 

Let's see how next month will go. I'm currently heavy on options.. hopefully, the market will recover. 

How are all your portfolio doing?

Cheers to month-end. 

Alibaba News + Outlook

Alibaba has been going through ups and lows recently.. thought I will write my own view along with some of the news that I've heard. 

Background

Their first trouble was due to Jack Ma's comment on the Chinese Government.. and many of us thought that was what made the IPO of Ant Financial fail. Their share price in US $BABA plunged to as low as ~USD220.. but eventually reach a high of USD270 when Jack Ma re-surfaced in a very short video. 

The uncertainty revolving around Alibaba is definitely taking a toll on its share price. After reporting stronger-than-expected 37% increment in quarterly sales and plans for its continuous investment in cloud & AI didn't really prop up its share price. 

Progress

What trigger a jump in the share price again was mainly due to the news of Ant Financial settling on a common ground with the Chinese regulators which should allow them to go-ahead with their IPO on certain terms (but these are not revealed yet). Market took it positively! 

During Thursday, Alibaba is also pricing its 4 tranche bond deal (was initially planned earlier until Ant Financials got scrapped) which came about strong in Friday. 

Alibaba priced USD5billion deal across 4 tranches (10/20/30/40 year) with the order book as high as USD38billion (almost 8x). It ultimately priced in 30~40bps tight of the initial price guidance (IPT), showing that there's robust demand and support for the company.

The secondary market also reacted positively as the spreads tightened on the back of the news (spread tightened = more demand in layman term). 

Price Target

Nomura shifted their price lower to USD329 from USD338 (Buy Rating)

Raymond James shifted their price higher to USD350 from USD330 (Strong Buy Rating)

Citigroup shifted their price higher to USD345 from USD316 

Truist Financial price target at USD326 (Buy Rating)

Summary

Generally Alibaba business is still solid with or without Ant Financials but if Ant Financials can get going, it will bolster the balance sheet further. 

As of now, I am not holding any Alibaba positions but I did pick up some at the lows of USD221+ and taken profit. 

My view is to look at it and maybe pick up some when I got extra cash on hand and if the price comes down. I view their business resilient with the e-commerce situation. 

What's your take on Alibaba? 

Cheers and have a good weekend!

Trading Book Performance - Cup Half Full/Half Empty

Feeling sad.. ending the month with quite a severe loss.. I gave up about 1/3 gains in Jan.. (my first month). Honestly.. not losing money is a great thing and I actually reach where I would like my dividend gain to be this year without collecting any dividend yet.. 

I started to follow meme stocks.. and got a little over my head.. while I collected some decent gains.. I ended up in red for all my meme stocks. 

This actually teaches me a lesson not to be too greedy and stick to the plan.. "be cautious when you're getting greedy" is really well said. 

However, it still hurts seeing my performance dipped from ROR 59% to ~36%... but I'll trust the process.. and hopefully, maybe reach SGD12k by end of the year seems to be an achievable target.. this is my bottom line.. and hoping that with this.. I can be more satisfied with myself.. currently, I'm sitting at ~SGD3k up. 

I foresee the start of Feb to be a tough month with meme stocks still being in the focus.. I might continue to follow some of the lower-risk ones that are not overdriven yet. But this also negatively impacts my medium-term trading & investment book since meme stocks actually feel like an asset class by itself and are negatively correlated to most stocks.

What's your take on this meme stock rush.. and how has your portfolio been performing? But I also see this as a bargain sale to buy some of the more solid names as they continue to dip. 

Tiger Broker Jan 2021

I've been putting some part of my salary into Tiger Broker on a monthly basis.. As I've only recently started trading.. my trading book is really much smaller than my investment portfolio.. I plan to put all my investment funds into Tiger this year.. and diversify out of my Singapore Investment. 

I just need to make sure there's a way for me to separate my medium-term to my long-term positions.

How was your Jan if you're in the stock market? Hopefully, I can have a similar performance for Feb and bring this to a good year.

Cheers~