Catching Falling Knives: Unveiling My 2023 Journey in 1 Chart with 3 Tactical Lifelines!
I'm glad to be invited as a speaker in Moo Moo's Fireside Chat about 2023 Recap & 2024 Outlook, where we talked about our investment journey in 2023, our outlook for 2024, and answered burning question that fellow retail investors had.
In the chat, I mentioned that I'm using a barbell strategy, where half my portfolio is in safer tax-free income generating instruments, and the other half is riskier assets. My portfolio is made up of assets in Singapore Market, China Market and US Market, but they are heavily weighted towards Singapore and China Market, as they have been crashing and the valuation is much better. This is also why my returns (Orange line) tracks the $Hang Seng Index(800000.HK$ (Blue line) and $CSI 300 Index(000300.SH$ (Grey line) quite well in the early half of 2023.
So from the chart, $S&P 500 Index(.SPX.US$ had gained 24.73% year to date. So investors who are invested into the US market are very happy. But for the Chinese market, the $Hang Seng Index(800000.HK$ continued to drop by another 15.38%, and the Singapore market's $FTSE Singapore Straits Time Index(.STI.SG$ continued to drop by another 0.34%. Luckily, my portfolio did not followed HSI and STI down ![]()
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my portfolio went up by 9.38% instead ![]()
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During 2023, some of the 2022 investments in Chinese and US Tech company did pay off in 2023.
Let me share the 3 tactics that I've personally used to make it less painful to catch a falling knife.
Invest within my circle of competence
The first tactic involves identifying and investing in fantastic opportunities within my area of expertise. Basically, putting my money into what I know best. Given my background in the technology sector, I naturally have a good grasp of its dynamics. An interesting incident occurred in February this year when $Alphabet-A(GOOGL.US$'s AI chatbot Bard made a blunder in an advertisement, causing an 8% drop in share prices, and the crash persisted for a few days. From a geek's perspective, the market reaction is stupid, considering that other large language model chatbots, like ChatGPT, also make similar mistakes and sometimes present inaccurate information.
Armed with this asymmetric knowledge, I took a calculated risk and seized the opportunity, opting for options trading instead of directly buying the stock to play it safe. As anticipated, $Alphabet-C(GOOG.US$'s share price rebounded and continued to rise alongside other tech giants, resulting in a significant win for me and alleviating some of the challenges in 2023.
Special thanks to $Palantir(PLTR.US$ too, who had contributed significantly to reducing the pain in 2023 ![]()
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Reflecting on my past successes, it's evident that my best investment decisions stem from leveraging the knowledge within my core competency. A notable instance from 2022 was my involvement in the $Twitter (Delisted)(TWTR.US$ vs. Elon Musk case. After researching deep into the legal aspects, I was confident that Elon would have to acquire Twitter, and I profited from that saga. This underscores the importance of staying within my circle of competence when making investment decisions.
Using options for protection
The second tactic is about using the power of options that adds a layer of protection to both my new and existing positions. In 2023, I started my investment in $BABA-SW(09988.HK$, hoping for a rebound in China after the tough times in 2020. Instead of diving in and buying shares at the risk of losing a lot, I opted for a CALL option expiring a year out, putting up less capital at risk upfront. This way, if the stock price dropped to $60, $50, or to $0, my losses wouldn't be as significant. On the flip side, if there was a rally and the stock soared, I'd have the option to buy at $90 each.
Unfortunately, things didn't go as planned. When China finally opened its borders in January 2023, there was initial optimism in the market, leading to a rally. But, as luck would have it, the excitement was short-lived, and the stock price started to drop again. The stock price went on a roller coaster ride. As $Alibaba(BABA.US$'s stock price fell, I invested a bit more to lower the strike price of my options. The share price rallied afterward, and I ended up having some great paper profits, but then it took another downturn, resulting in paper losses. Did the same trick twice to reduce the strike price of my options again. The share price rallied afterwards resulting in paper profit, only to have the fall once more.
It's been quite a ride, and it is highly likely that everything invested into $Alibaba(BABA.US$ will gone when the option expires on 19 Jan 2024. However, I'm still holding on to hope. The market is unpredictable, and who knows, there might be a turnaround. Fingers crossed!
Creating supernormal return using everything within your means
And the last tactic, is to use the magic of Moo Moo vouchers to create portfolios that have supernormal returns. A Money Market fund portfolio that have more than double the returns of the usual Money Market funds ![]()
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Supernormal returns means that the returns are greater than the typical market rate of return. So for example, Singapore's Treasury bills are giving us 3.73%, but if you invest in SG tbill but you can get a return that is more than 3.73% that is supernormal return.
The YTD yield on $Fullerton SGD Cash Fund(SG9999005961.FD$ is 3.87%, and the YTD yield on $CSOP USD Money Market Fund(SGXZ96797238.FD$ is 4.88%. Similar to the yield of TBills in Singapore and US. Using Moo Moo's fund vouchers on top of these funds, I managed to get more than double the returns from the funds. As seen below, my total fund returns since inception is SGD1,647.15, and in 2023 there is another ~SGD1,900 (USD1,429.14) that I had received in Moo Moo Fund vouchers. So using Moo Moo Fund vouchers with the Money Market Funds, I had more than doubled the typical returns the funds will get.
Want to learn more on how to create such returns? I had made a more detailed post about this, in this post: Getting double returns on funds in 2023, so what's my 2024 Fund Strategy. Click on it to learn more, and join the group chats to be informed of all the fund vouchers, such as this one that is available now.
Disclaimer: Community is offered by Moomoo Technologies Inc. and is for educational purposes only.
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crawled out of poverty, working towards FIRE!! (financial independence, retired early)
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Jaydan6688 : Well done bro very nice
MooMamaLlama :
MooMamaLlama :
A massive shout out to @doctorpot1 for an awesome end of year Livestream. Love to read all your write ups and answers 
but it seemed to fly by.
I have to say it's great to go over parts of our Fireside Chat though.. sure,. we went overtime haha
MooMamaLlama MooMamaLlama: your strategies are intriguing, I'll be looking into them
doctorpot1OP Jaydan6688: thank you
doctorpot1OP MooMamaLlama: it is great that there is a replay so that we can have a nice little keepsake
creating more and more memories in moo moo 
doctorpot1OP MooMamaLlama: the cash plus fund vouchers that moo moo have is crazy good
can check if you can utilise them. their latest one is giving our 8% and 8sgd vouchers at the end of the post
https://fund-upgrowth.sg.moomoo.com/fund-y2023
toomanyscammers : the fund voucher returns are crazy , doc
doctorpot1OP toomanyscammers: ya sia, earn more from funds voucher as compared to the funds
is like getting 7.47% from Fullerton or 10.51% from CSOP sia
Always Growing : Thanks for sharing your precious experience! I didn’t manage to put funds in the fund because of the assessment. How do I invest in the fundsthen?
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