To The Moon

Investors had a respite in the last 2 weeks as US stocks staged a much needed gain - S&P 500 was up 10% from the low. NASDAQ did even better with a 12% gain.

Is the worst over? If one has been sitting on cash, is this the time to go in?

This is a common question I get. But let me first explain my view about the recent rally before I answer the question.

The bull market has already ended months ago. The good times are over no matter what angles we look at.

In terms of the economy, easy money has been replaced by quantitative tightening. Interest rate has been rising with inflation and recession is looming.

In terms of fundamentals, companies are showing slowing growth rates and some management have lowered their guidance for the year.

In terms of technical analysis, the death crosses have already happened and the indices are still trading below the 200-day moving averages despite the recent rally.

Hence, this is not a rebound but more of a dead cat bounce. The bear is still in charge and the bull remained wounded. It will take a lot for the bull sentiment to come back. Not impossible, just hard.

Although predictions sound sexy, I don't bet on my directional views.

I decide to invest when good stocks are trading at reasonable prices, regardless if it is a bull or a bear market. There is no point in betting on our own predictions because the odds are not far from a coin flip.

We often have more capital to invest either because we have an income from a job or dividends from a business. And we have to make the decision to deploy the capital in good weather or bad.

There will be good stocks that trade at reasonable prices in a bull market and of course, there are even more during a bear market. My job is to find these opportunities and buy them.

If these are indeed good stocks, they will stand the test of time - the prices will come up eventually. Do your job, have faith and keep investing.