COVID-19 Diaries: The Stock Market, 205 Days In

125 days ago, we chatted with a self-employed person in Singapore who had relied on the stock market to make up for his losses in regular income. We asked him how the market has changed since and how he’s been doing. 

* Disclaimer: The below opinions are the interviewee’s own and should not be considered as specific investment advice. The risk of loss in trading the stock market can be substantial. Readers must consider all risk factors before trading.

Q: Hi Amateur Trader, welcome back! How’s Singapore and how have you and your family been? 

A: Not too bad, all things considered.

The last time we spoke, you said the stock market had been your main source of income? Is it still that way or have your other streams of income gone back to normal since?

It’s actually still that way. The stock market has actually been an even greater source of income, seeing how it has been behaving since the pandemic started.

Just for perspective, can you share what the state of the coronavirus outbreak in Singapore is at the moment? What is open, what is not, is full recovery anywhere in the horizon? 

It’s Phase 2 of reopening. It’s a more measured way of reopening I guess, if you compare to other countries. It’s nowhere near a full recovery. In my opinion, there will be no full recovery within this calendar year. I optimistically am thinking it would be Q1 2021 at best.

What’s happened to the stock market in the 4 months since we last spoke?

The lows were reached on March 23rd. Since then, the NYSE has regained more than 40%, and has been going green and some stocks are even hitting new highs everyday.

There are stocks that are hitting record high levels with prices that are even higher than their pre-pandemic days, especially the pandemic stocks, such as those companies that are tools for stay-at-home and work-from-home activities. So we see many stocks in companies like Zoom Video, Docusign, Paypal etc, reaching record highs.

On the other end of the spectrum, stocks that are in heavily affected industries such as cruise ships and airlines and oil, where the demand has essentially dipped significantly, have basically crashed to the floor. So. But there are still opportunities to find some profit there.

You spoke of paying attention to opportunities in a crisis previously. Did you manage to make the most of these recent opportunities? Or were they too fleeting to catch hold of?

Yes and No. Yes, I caught some. My pandemic stocks that I held are literally seeing highs. No because I was also a bit too conservative as I wanted to hold cash as dry powder going into this pandemic. Who knew the market would react in this parabolic way. Wall Street and Main Street are completely opposite.

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So now that markets seem to have been rebounding from the plunges in March, do you think the stock market is already in a state of recovery? Or are we just in a bubble that may be likely to burst again at any time? 

I have 3 simple thoughts about this.

The stock market is not the economy and vice versa, so in that sense, the stock market is always in a state of recovery from this pandemic because stocks look to the future. Today, the world may seem like a mess and the economy poor. But the stock market is looking ahead into the future when it’s a better place, and hence performs better than what’s on going on the ground.

We will no longer retest the March 23rd lows, even if the pandemic and unemployment gets worse. Simply because just think of all the information everyone has gotten in the last 3 months. The way people are going to react is simply, been there, done that already. So I don’t think there will be investors meltdown to that extent. We will not retests those lows. There will be dips, since stocks do not go up in one straight line. But it will be nothing similar to March.

Do not bet against the Fed.

Stocks that benefited from the pandemic and soared—do you think they have peaked or will they have potentially even more growth in the months ahead? 

It depends really. The first thing you need to remember is that stocks did not benefit from the pandemic. You do not buy the stock market. You buy the company. So the question perhaps is, have the stock prices in companies that benefited soared?

My simple answer is, look at the fundamentals. Yes. It’s all trending and relevant now because of the pandemic. Does it have a lifespan and relevance outside the pandemic? And look at it company specific.

So a company like Netflix is a everyday kind of stock, not just during a pandemic. Docusign is a stock that people are going to continue to use after the pandemic. In fact, people wish they used it more. Chlorox is going to get a nice run for obvious reasons… but how about a Zoom Video? How do you make sense of this after the pandemic improves and everyone goes back to work…

Any more tips for amateur traders like yourself hoping for even more tips? 

All In and All Out is a bad idea. You cannot buy low and sell high all the time. No one knows where the lows are. Buy when you are comfortable with the level. 

What advice do you have for humans of the future who find themselves hit by a pandemic like this one?

Life is Beautiful. 

Which 3 items or people are now most important to you?

My family, especially my 2 babies. 

Lastly, what else have you learned in the time since we last spoke that you didn’t know before?

I am actually not too bad at this stock market thing.

The Amateur Trader hopes to be less amateurish next year and also to “stay invested, be dedicated and continue to improve” himself. You can find out more about him and his trades by joining his trading webinars via his Facebook page or ask him about the stock market using the comment box below. 

Follow the latest in our COVID-19 Diaries series here.

If you’re in a country that has been affected by the novel coronavirus and would like to share information about the situation where you’re at, do get in touch with us here.

Other interviews with The Amateur Trader:
COVID-19 Diaries: Perspective Of A Self-Employed Person In Singapore, 74 Days In

Photographs courtesy and copyright of DiplomatTesterMan. Interviewer: Sy
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