There is so much crazy volatility in the equity markets this week that we see 2+% moves up and down every other day while the general trend seems to still be trending down.
The erratic moves are making it hard for traders to decide what to do as we head into the year-end period where liquidity will get worse as banks close their books before Nov/Dec. Coupled with the number of event risks we talk about in the last few weeks, this can only mean that there is more craziness ahead of us in the next 60+ days.
China is having its big meeting this week as Xi looks set to win a new 3rd term. Everyone is so negative about China now as its leadership self inflicts its economy with the bashing and crackdown of its big companies, totally destroying their old models of taking no prisoners attitude on business to win at any cost.
The zero Covid policy also does not help as the constant fear of new lockdowns is real. A thousand new positive cases could easily lock down a city of millions whereas, outside China, no one will give a shit overseas. Will this change after the meeting this week? Looking at how HK is easing up on quarantine restrictions, this could hint that the mothership may follow suit soon too.
Unless China knows something about the virus that we all don’t know, this easing up seems logical and practical. The earlier reason that a million people might die if they open up, sounds dated. This argument is moot with such a large population and the common flu already having similar annual mortality statistics. In America with a population of 300+ million, they already have a flu mortality rate of about 250,000 people per annum.
China opening up and reverting back to normal may be the silver bullet to stop the runaway inflation train which the world is facing now. As their factories restart again, they could unblock supply chain issues and take advantage of current higher prices to lock in and profit from their cheap production capabilities.
One of the other highlights of the week was the Jan 06 US hearing on Thur which is supposed to be the last session. It is timed just before the mid-term elections happening in early Nov. All fingers point to the orange one as the menace who orchestrated the whole event. It’s either that or that his ego got in the way to prevent him from ever wanting to lift a finger to use his presidential powers to stop it that day.
At the end of this latest hearing, the committee voted unanimously to subpoena the former president, to invite him to testify under oath about his role in the riot. With so many from the GOP directly incriminating him, even Houdini cannot help him escape from the multiple accusations aimed at him.
With the pending top secret documents stolen documents at Mar-A-Lago and the business tax fraud in New york plus a few other cases lined up, he is like a dead man walking. But yet his supporters continue to back him up regardless of the undeniable facts of each case against him. The amazing thing is that quite a number of GOP candidates running for the mid-term elections are still openly welcoming his backing and stating that the 2020 elections were rigged in Biden’s favour.
On the personal front, there were 3 events which occupied my time this week. The first was an online property talk I signed up for on Tues night to understand co-living investing. Pretty interesting concept for people who are very hardworking and willing to put up only a small amount into this property strategy which is scalable.
In a nutshell, one rents a private condo property for 3 years and then sublets the apartment on an individual-room basis. The living room and kitchen will become a common community space for all the room tenants to share and enjoy together. With regular cleaning services thrown in, it is an attractive and affordable option for students or working singles to just occupy a room while benefiting from a communal environment with condo facilities.
The co-living investor hopes to make a net passive income of at least SGD$1,200 or more per month after netting off the rental fee to the owner and other expenses. For example, he rents a 4-bedroom apartment for $5k/mth and in turn, seeks out individuals for long-term (> 3 mths) leases of $2k/mth. With expenses like weekly cleaning, maintenance fees and apartment rental cost, the $8k income he gets could give him a net profit.
The trainer claims that he currently has 170+ co-living units as this strategy is scalable while using OPM (Other People’s Money) to derive a positive passive income. They were also trying to sell a training package for $3k. The numbers look feasible and promising but there is a lot of hard work involved. The community they have created was an advantage they highlighted which could also provide economies of scale for services like renovation and cleaning services plus property agent referrals and standard legal document template sharing.
With a group targeting approach, the success could be higher and they normally concentrate on non-prime areas where demand is always high for such private single-room residential rentals. With Covid, WFH only requires a room to stay and work in, as we have all found out in the last 2 years.
I also attended the annual NUSS mentorship program opening dinner on Thurs. This was the first face-to-face event after 2 years of online mentor/mentee matching. This will be the 5th year for me and it was a pleasant surprise that I got to meet some old friends that evening. The potential mentees are not as hungry as they should be to seek out mentors even as we are offering our mentorship services on a pro bono basis. The Covid lockdowns probably lowered their EQ skills LOL.
Ended the week with a Friday dinner bash for Sep/Oct birthday babies. We are a group of university mates and spouses who have regularly caught up with each other over the last 30+ years. We have seen each other’s children grow to be adults now. We experienced the days of innocence fresh out of uni into the working world again.
The venue was a glammed-up living room within an old building serving Peranakan cooking (www.littlesocial.sg). We had decided to dress up in 1920s fashion and had a blast pretending to be young and carefree again. The guys posed for a new photo in the exact positions of the snapshot we took in 1988 when we were part of the NUSS Union Ball Dinner & Dance committee.
Overall a pleasant week, if not for the market turmoil that is unwinding before us into year-end…
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