Over the past few months, I’ve been through conversations either by chance/destiny/choice which have led me into “convincing” people to invest in STI. Some saw the value and some didn’t, some think other markets are way better than STI, some see that RSP) is way better off than an investment in ILP.
The considerations that you should take before buying
- Tax; capital/div gain
- Value of its worth
- Opportunity cost (deterministic cost or cost that is known)
* a point to note about opportunity cost is that we often compare a cost that is based off a hindsight value through unrealistic comparison.
This post is serve to convince you why I’d think STI could be an equivocally valuable investment as compared to S&P 500. (if you gag at any of these sentences before this, I’d suggest you gtfo. And, stop being so married to your ideas).
This price study will be an unkown amount of series as we start off with identifying “smart money” as known as “institutional money”.
Smart Money
Monthly Chart
Buybacks:
The first evidence of smart money coming in was in 1999, where price hit $800.27, a retracement of 63% from its market structure high of $2163.11.
The second evidence of smart money coming in was in 2001, where price hit $1197.85, a retracement of 53.62% from its market structure high of $2582.94.
The second evidence of smart money coming in was in 2009, where price hit $1455.47, a retracement of 62.74% from its market structure high of $3906.16.
These creates an brief understanding as to where institutional money will flow in
Why do i call the point of buy back smart money?
Because retailers can never push prices, hence only institutions can.
Historical expansions/contraction (High to High)
1996 – 2000 : 19.41%
2000 – 2007 : 51.23%
2007 – 2018 : -6.77%
Why are these numbers significant?
It reflects optimism from an institutional perspective into where the Singapore is heading.
Prior to 2007’s peak, the duration from dcc (dot com crisis) to the peak of afc (asian financial crisis) was an expansion of 19.41%.
Using the same analogy, the peak of dcc to gfc (great financial crisis) we should expect an expansion minimally between 19.41% ~ 51.23%. But we didn’t.
For one justification that can be easily seen would be the point of “buybacks” in these two crisis.
DCC buy back was way faster (in terms of price) as compared to AFC, while GFC buyback was way slower (in terms of price) as compared to DCC. For whatever reason that is not made known in theory, smart money has made it known through price
Remember, when prices are falling, institutions are buying and vice versa when they are rising. This is reflected by how fast orders can be filled based off the clean candlestick created (bull/bear).
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