To The Moon

During the bull market, my strategy is to buy great companies at good discounts. I spend time going through their earnings, understanding their fundamentals, and identifying their moat. Once qualified, I “try” to obtain a fair value and take my position. After purchasing, I hope to hold the stocks for a long time, for decades should the earnings continue to demonstrate that their fundamentals are sound.

Will this strategy work in the coming recession? Personally, I do not think so as downward price pressures are coming.

My “current” strategy in lieu of recession

In lieu of recession, I am buying inverse ETFs. It is buying the market to go down but at a lower expense than shorting. It could take a while before the market turns bearish eventually. I am not planning to add to any of my shortlist stocks during this “bearish” season that could last months.

From these inverse ETFs, I have been taking profits and re-investing back the profits from my trades using week or month time horizons.

Some of us would agree that a recession awaits. This means that there is potential for more price declines in the coming weeks/months. I am following my macro and technical indicators for these inverse ETFs. Personally, the coming earnings season (Q1/2023) should give some indication of both earnings and market outlook. I am expecting some of Big Tech and a few sectors like defence & energy (oil & gas) to be the few doing well.

My current approach

1. I continue to review the earnings of various companies to qualify them - so that they can be shortlisted for long-term investing.

2. I have taken profits (TP) from some (with unconvincing fundamentals) and stopped losses (SL) for a few counters. It is time to cut losses.

3. I will continue to load up with inverse ETFs - using technicals to take profits and add to my positions. Typically, I will take profits in tranches and buy in tranches with the profits made in 2-3 tranches when the technical indicators have bottomed.

4. When there is blood in the street, I will cash out all remaining inverse ETFs gradually and add SL to my inverse ETF positions so that my positions close with some profits or at least break even.

5. When the earnings/macro data start to show signs of recovery, I will start to invest in my shortlisted companies in tranches.

6. I am holding on to my Chinese/HK stocks for dividends and am still adding these dividend stocks. I am reviewing my investing timeline due to China's population decline. I have started to research BRICS and have small positions in emerging markets.

7. I have taken profits from some of my Tesla stocks when it was $309 and I intend to add them later, after the coming bloodbath. The profits and losses remain on paper until we actually cash out. The biggest concern for Tesla remains geopolitical.

The overall portfolio is in red but 2023 has been good.

Considerations

John Templeton quote: For those properly prepared, the bear market is not only...

I have yet to study the market bottom but history tells us that there will be at least 2-3 fake recovery rallies (1D chart) and that is why I intend to invest in tranches. My strategy does not focus on the market bottom but I am looking out for reversals (using both macro and technicals). My technical indicators like MACD, MA50 & MA200 are mostly lagging. It is recommended to use longer time intervals of 1W during bearish times.

Food for thought: England has never recovered and returned to the pinnacle in the 1800/early 1900s. Would this happen to the US too? Thus, the US should max at 40% of my allocations but this is for now. I am looking at the macros and the fundamentals are concerning.

The next crash of the US market could be partly due to debts and in part due to congressional mismanagement.

This is for entertainment but should not be construed as financial advice. Please do your own due diligence.

@TigerStars

$S&P 500 Bear 3X ETF(SPXU)$