Stock Transactions 2 Apr 2020

Bought:

  • 35 shares of Microsoft at 152.39 
  • 40 shares of Johnson & Johnson 128.3799
  • 20 shares of Nvidia of 249.27

Total about $15,000 USD.

I didn’t expect to buy today. I thought that the market will keep going down because of a historically awful jobs report. 6.6 million jobs lost, bringing the total job losses to 10 million. In just 2 weeks. It has never been so bad, and in so short a period.

But the one thing you can count on in the stock market is that it will surprise you. The market brushed the news off and kept going up. I quickly bought the shares I wanted because I didn’t want to miss out. I re-bought Nvidia at a slight discount because I didn’t want to regret selling it before. Microsoft and Johnson & Johnson were already on my watchlist for a while.

The reasons why the market might have gone up are:

  1. Another stimulus package is coming. Economy is clearly in pain, and pandemic is still going on with no end in sight. Investors are hoping again for the government to pump money in.
  2. It is good that jobs are being lost. While this sounds quite heartless, it’s good from a business perspective that people are being laid off. This reduces costs and helps to ensure long-term survival. Laid-off workers who weren’t able to do their jobs also move on to more productive areas of the economy.

But you see, I’m working backwards to rationalise why the market went up. I wouldn’t have predicted it. It’s useless to try to figure out what the market will do in the short-term.

I still have some cash waiting to deploy. I’m trying to be conservative as I have leverage of over $500,000 on bank bonds which can still go to zero. Thankfully, they have recovered somewhat.

I pledge my shares as collateral for my margin account because it helps me to preserve cash. But this is more risky because stocks are much more volatile. There is the risk of both stocks and bonds going down, quickly leading to a margin call.

So I will keep it high. Margin call is at 140%, and my margin level is currently sitting at about 177%. It shouldn’t fall below that as I have more coupons coming in and shares to pledge.

Sigh so complicated. I half wish I just kept it in CPF. 4%-6% guaranteed return looks really good now.

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