2022 Recap: Events of the Year - Conflict, Inflation, and Buffett
With the highest inflation in 40 years, a looming recession, and growing geopolitical tensions, the 2021 stock market mania was suddenly shut down and the year 2022 has been quite tough for investors. After the Russo-Ukrainian war began, the market headed south, ending up with $S&P 500 Index(.SPX.US$'s worst yearly performance since 2008. (source: moomoo app, as of Dec. 15, 2022)
Investors are heading into the end of 2022 and toward 2023 amid unpredictability and uncertainty.
Event 1: Russo-Ukrainian conflict
At the beginning of this year, the Russia-Ukraine crisis sent shock waves through global stock markets. With the S&P 500 index dropping 4.95% in Q1 and 16.45% in Q2, investors started to focus on assets with lower risks, such as ETFs, bonds, and other lower-risk derivatives.
Mooers' takeaways:
The war in Ukraine has caused lots of chaos and volatility in the markets. It has also caused oil prices to skyrocket. The war may or may not end soon, but it will eventually end. In the meantime, it has been a roller coaster ride for investors.When there is Fear and Panic in the market, it is a great time to buy quality stocks like Apple and Microsoft. In the long run, they will grow exponentially and we can harvest bumper profits. View More>>
My story is my greed that got the better of me.. after Russia invasion to Ukraine, many shares started dropping, and I bought into some 'quality' shares too early coz I missed the boat earlier and thought it's too good to be missed (like covid in 2020).. but who knows the falling trend led to further drops, and the rest is history.. history lesson to be learnt = need to make friend with the trend and trade wisely. View More>>
Event 2: Highest inflation in 40 years
According to a CICC report, CPI and GDP are the two core elements to watch during the current bear market. Investors are looking to see if inflation has peaked, potentially leading the Fed to be less aggressive in rate hikes.
Mooers' takeaways:
The narratives in the markets right now are sky high and rising inflation, European recession, and de-globalization. All of the negative geopolitical tensions around the world are the supposed cause for this. Essentially only cause for actual real inflation is the expansion of the money supply. Mainstream media will not say it but all of the "money printing" during the pandemic is the main cause of the current inflation. The inflation situation as well as a very strong US dollar is exacerbating the recession situation in Europe ad well as other parts of the world like Sri Lanka. All of this is killing equity markets as the Federal Reserve is fighting inflation by raising interest rates at a rapid pace, which strengthens the dollar even more, and increases the cost of borrowing capital. This is bad for corporate profits worldwide.So when will the madness end? Nobody knows for sure. But you can follow inflationary data to see when the slowdown is happening. The Consumer Price Index (CPI) is a measure of inflation based off of the consumers perception. This makes it a lagging indicator as consumers are the last in line to feel inflation. View More>>
Event 3: The recession upon us
According to Bloomberg Economics model projections in October, a US recession is effectively certain in the next 12 months.
Mooers' takeaways:
After world pandemic crisis with covids-19 was happened, Every country tries to recover themselves by printing money which created world inflation. After world inflation one thing is coming after is recession. How can we invest in a recession? I change my plan investment to trade sideways. Buying the dip and sell sideways. I put all my stocks trade sideways. two things you need to listen are the fed meeting and the professional analysis to see when you buy the dip. Now when to sell is up to you as long as your stocks are profits. Then preparing funds to buy the dip again before the next fed meeting. that is what I do when inflation and recession come. When the economy start recovery, we can plan buying long term again by watching the bond yields. if 2 years yields lower than 5 years, 2 years and 5 years yields lower than 10 years, and all these yields lower than 20 years in consistency not fluctuate. We know the market starts recovering. View More>>
Event 4: Warren Buffett's purchase
In Q3, Warren Buffett's Berkshire Hathaway purchased a $4.1bn stake in chipmaker $Taiwan Semiconductor(TSM.US$, making it one of a few heavy bets on tech companies (besides Apple and IBM). Meanwhile, Berkshire Hathaway Energy kept selling $BYD COMPANY(01211.HK$, China's largest EV company, lowering its holdings in BYD's total issued HK shares from 20.04% to 14.95% on Dec 8.
Mooers' takeaways:
TSMC exhibits a typical Buffett stock. It is a clear market leader as it accounted for 54% of the global foundry market. In terms of chip manufacturing technology, only Samsung could get close enough as it was able to mass-produce 3nm chips and head to 1nm too. But capacity-wise, Samsung is a distance behind TSMC. The rest of the foundries are nowhere near, and it will take a long time (read years) and heavy capital expenditure to catch up, if ever. Hence, there lies TSMC's competitive advantage or moat. But Buffett doesn't just buy a temporary moat. He wants a durable moat. TSMC's existing technology would not be able to sustain its competitive advantage forever. It has to keep investing in newer technology to stay ahead. View More>>
Event 5: Chinese stocks on a roller coaster
After experiencing severe selloffs in both March and October, Hong Kong's benchmark index soared 26.6% in November, the highest monthly gain since 1998. According to Goldman Sachs' China 2023 outlook, China's reopening is likely to be a major driver of asset prices in 2023, implying a strong consumption rebound, firming core inflation, and gradually normalizing cyclical policies in 2023.
Mooers' takeaways:
$Hang Seng Index(800000.HK$ correlates with sgdhkd very well. maybe because of their history together, businesses denominated in sgd because of stability and strength. the impending rate hike in nov 2 will cause sgd to weaken and hence sgdhkd to trend down. in turn, HSI will also trend down. ali and gang will be pulled down by hk tech sell-off. bear in mind that the Fed is still hawkish, whether they decide to hike 50 bps or 75 bps in dec is still hawkish. fed will most likely pause rate hikes only in 2023. Hence, do apply an automatic investment system strategy, take profit when ali and gang spike, and then you have the capital to buy the dip. Remember that the bear market is characterized by spikes in stock prices and then slowly trending down again. Bon courage View More>>
Which event is the most influential one? Feel free to leave your comments below!
This presentation is for information and educational use only and is not a recommendation or endorsement of any particular investment or investment strategy. See this link for more information.
Disclaimer: Moomoo Technologies Inc. is providing this content for information and educational use only.
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meruson : volatility in chinese stocks good for trading
RDK79 : Would not read anything from the proposed topics! TThey've been beaten to death and further push fear and devastation. How bout some positive stories: how the general economic cycle is occurring once again, how the rate hikes are working as designed, how insiders can and do manipulate the Market, how many companies have turned around since the pandemic (but reflective in their stock prices), how the Market May try to influence politics in ‘23 especially as ‘24 elections get closer are a few ideas.
Johnnie Worker meruson: Like the French said: Buy the cannon, sell the trumpet.
meruson Johnnie Worker: Very good
Johnnie Worker meruson: Good morning
RDK79 RDK79: add / edit: reveal good companies that have turned it around since the pandemic but have been driven down with the Market.
Somebody do a thesis study of all the expert analysts upgrades, downgrades, and target prices statistics in ‘22. This would help identify the good ones and weed out the ‘others’!
J-MANN : can anyone help me. I held all my shares with mmatlp. what now did I loose all of what had or with the shares become private company please help
J-MANN : can anyone help me. I held all my shares with mmatlp. what now did I loose all of what had or with the shares become private company please help
PhotoSynth RDK79: I like your ideas as far as questions go far better than theirs. Some good outrageous points to be commented on! …….Here’s another one. Did Musk do it on purpose?
Are the bandits and thieves insiders, traders or is it just the politicians? How many trades does it take for a newbie with $100,000 to go broke insisting the market was wrong? Will there ever come a time where an analyst gives an upgrade or downgrade BEFORE the major move has already occurred? What in the world is Mr Wonderful doing on CNBC during market discussion for people who are supposed to actually know something about them, and without all the accompanying self promotion? Will eating Lucky Charms for breakfast help my trading? Does Putin need to stop doing Jell-O shots of Smirnoff? 
RDK79 PhotoSynth: Love it!
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