Hey Tigers,
$S&P 500(.SPX)$ down more than 20% in 2022, there are opportunities and risks for investors. Hope you guys all find the investment strategy, no matter how the market changes.
There are the top 10 pick articles, selected by the quality of their content and popularity during 2022.
Congratulations to the following Tigers for 1000 getting Tiger Coins🎉🎉🎉
@AdamKhoo, @Wayneqq, @KYHBKO, @Alvin 邹咏翰, @3Fs, @Bonta, @Keeley, @StopHunter, @AllQuant, @surfer guy
We will distribute it to you later. You can go to the Tiger Coin Center to check it out. Thanks for sharing your insights on stocks and markets with us.
1. Stocks That Beat Inflation & How To Identify Them
Tiger: @AdamKhoo
Why Stocks Fall In The Short-Term
When you've got high inflation, it suggests a higher business cost. When their costs increase, they've got lower profit margins and that's why the market freaks out. With lower profits, people would sell their stocks and the market comes down.
So is this true for all businesses?
The answer is no for businesses that are not able to raise their price easily because they're in a very competitive industry, like the auto industry and airline industry — they're very competitive and they can't raise their prices as easily. That's when their profit margin falls, and that's when these businesses will start bleeding.
That's why we should only invest in companies that have got pricing power. View More>>
2. How to determine entry price for REITs?
Tiger: @Wayneqq
Valuation methodology I use for REITs
There are many different valuation methodology used by many experts, from Price to Earnings, Price to Sales, Price to Book value, Dividends yield, Enterprise Value to Earnings, discounted cash flow etc...
For REITs, I am only interested in the dividends, so the first method I will use is the dividends payout to determine whether the REIT is over or undervalued.
Note that this method I am introducing uses past data, so they can only tell the story until present time. This is a quick method to determine if the REIT is over or undervalued now. However, past performance is no guarantee that it will perform the same in future. View More>>
3. What are the super investors buying?
Tiger:@KYHBKO
13F is an update of the purchases and sales from the various investment managers from the last quarter. It is not the most updated but it does help me with the following pertaining to the previous quarters:
- Know what the investors are buying
- Know what the investors are selling
- Establish an estimated buying or selling price by the quarter (3 months)
- Know the "capital allocation" used
- Know any portfolio diversification or concentration
Here are some of the portfolio stats from Q4/2021 for super investors...
4. Are they going to war? What do the markets say?
Tiger: @Alvin 邹咏翰
The prices of affected securities should make big moves if war is eminent. First, defence stocks. It is intuitive that defence companies are getting more revenue as ammunition get expended and damaged equipment get replaced.
Second, oil and gas. This is because Russia is a major oil exporter, about 12% of the global market share. Any conflict would result in supply problems as well as sanctions that prevent other countries from buying the oil.
Third, Ukrainian and Russian stock indices. The fear of war would spread to the markets and cause stocks to be sold down in the conflict countries. View More>>
5. Optimising Your Return With Vertical Spread Options Strategy
Tiger: @3Fs
Challenge 1: Time decay results as a decrease in option’s time value
Time decay results as a consequence of decrease in an option’s time value.
When you sell a put or call option, you are betting against the time value that the underlying stock will reach its strike price on a given time period. Since the life of an option is limited, the time value of an option decreases with each passing day as expiration looms . In return, you are rewarded with a premium which you can collect once it passes the expiration. View More>>
6. Layman’s guide part 2: Calling & Puting options
Tiger: @Bonta
When buying call options, the “risk” is the deposit that u pay for the wool.
Option buyers have the choice of buying over of the stock at a lower price from the seller, if the stock goes to the moon. Option buyers will profit the difference from the moon to agreed price. (At or above strike price) This is known as assignment.
Option buyers can also choose to sell their contract to other option buyers who will takeover the contract on their behalf.
As such, call option buyers have limited risk and unlimited profit in theory, as there is no limit to how high a stock can go.
The reward for call option seller is the premium collected (deposit for the wool).
However the risk for call option seller, is either losing the stock which is pledged (sheep) otherwise known as covered call, or will have unlimited risk as the price of the stock could go to the moon in theory. View More>>
7. $PLTR Earnings Call Q1 2022 - Time to sell?
Tiger: @Keeley
Forward guidance
Guiding for 25% next quarter YoY might be sandbagging expectations. They have already mentioned that there is a re-acceleration of overall government revenue starting Q2 2022. But why aren’t they guiding for 30% which is in line with the long-term revenue growth guidance?
The adjusted operating margin for Q2 2022 is expected to be 20%. There is a constant decrease over the past quarters. By excluding SBC and related employer taxes, we see that the company is actually spending more on operations every quarter. This could be mainly due to an increase in marketing and sales effort as they are ramping up their sales team. This is a fair trade-off if we are able to see the number of commercial customers increasing at the same or higher pace compared to the current quarter. I would also like to see net dollar retention to increase as we see a slight decrease QoQ ( 131% to 124%).
8. ICHIMOKU - The 'One Stop Shop' Trading Strategy Tool Explained!
Tiger: @StopHunter
Ichimoku, otherwise known as Ichimoku Kinko Hyu, was developed by a Japanese journalist Goichi Hosoda and published in his book in 1969. It means ‘one look’.
It is a collection of technical analytical techniques to determine:
- The trend
- Momentum
- Support and resistance
- Trading signals
- Entry and exit points
It is made up of 5 indicators:
- Tenkan Sen (Conversion Line): (9-period high + 9-period low)/2))
- Kijun Sen (Base Line): (26-period high + 26-period low)/2))
- Senkou Span A (Conversion Line + Base Line)/2))
- Senkou Span B (52-period high + 52-period low)/2))
- Chikou span (Close plotted 26 days in the past)
9. The Supreme Dollar Is Both A Gain & A Pain
Tiger: @AllQuantWhat is Driving The Dollar Strength?
Currency is the largest and most actively traded asset class globally. Persistent strong trends are almost always driven by the same few factors. And so is the case for the dollar.
1. The US interest rate is getting more attractive
The US Federal Reserve,which has consistently been behind the curve, played catch up this year. The inflation they discounted as transitory prior to 2022 soared to new highs. And being late to react, they floored the pedal andstarted hiking ratesat one of the fastestpaces in history. If all goes according to what the market expects, the Fed Funds rate will hit 4.5%-4.75% at the end of the year. To put things in perspective, we startednear zero at the beginning of the year.
Even though central banks across the globe are also pushing up interest rates to fight inflation, they still trailed behind the US. This leads to a widening differential between US interest rates and theirs. In simpler terms, it just means it is getting more attractive to hold USD relative to other currencies becausethe US now pays a higher interest rate. This results in funds flowing from other currenciestoward USD orUSD-denominated assets. And this puts upward pressure on the dollar to rise. View More>>
10. C07 – a Singapore Stock that can ‘Chiong’
Tiger: @surfer guy
While taking the same lift, my neighbour in his sixties stole a glance at me reviewing charts in Tiger App on my smartphone, and asked if I dabble in stock markets. I reply in affirmative and he invited me over to talk stocks and investment ideas over coffee. Found out he is quite an astute investor, and holdsstocks that [might] huat big big!(Singlish for growth stock). But, he asked if I could recommend to him somechiong stocks (momentum stocks) in Singapore Exchange (SGX).
Decided to take up his challenge; and as he said “My England not so powderful” (command of English is not very good), I strive to share–with sprinkling ofSinglish in italics (and English translation in bracket)–my recommendation with the next door Uncle.
I might be a tadlor sor (long-winded), so ifwhere got time… (you’re busy…), just jump to the section(s) that interest you,k(ok)?
1.Chiong (Momentum) Stocks in STI
2.Lobangs (Opportunities) based on Fundamentals
3.Huat or Jialat (Profits or Losses) based on Financials
4.Steady Pom Pi Pi (Steady) based on Technicals
5.Garang or Kiasi(Aggressive or Conservative) Entries
Congratulations to these Tigers in 2022, we will send 1000 tiger coins for each tiger as an incentive ~ Look forward to seeing more of your sharing
Comments
Thankful to be listed amongst these awesome authors. Do visit some of these great content. For me, it was understanding what the super investors were buying and selling via their 13F filings. As always, let us not forget to do our due diligence so that we know how to navigate should stock price go contrary to our findings.
Thanks @TigerStars for your kind feature. Congrats to fellow Tiger authors for your invaluable sharing. Have an awesome 2023.