Now what?

The title was inspired by the memo "Now what" by Howard Marks around the time of GFC in '08.

VNINDEX has dropped 37.3% to 962.45 from the ATH of 1534.52. Should you buy now? Or you wait for 950?

My opinion is that predicting index is meaningless in the investing world. 

Let's say the index hit 951, should you buy? Or you wait to exactly 950? 

Let's say you buy at 951, what if index goes down 949? Or you can argue like this. If you buy at 951, so you could buy at 952, and then if you buy at 952, you can buy at 953,... and so on.

The same argument can apply for those who like to think that hedge fund manager can "know" that index would hit 950. I do give him some applaud as he can hold cash for such a long time and act almost nothing.

From 1534.52 to 962.45 is a long way, both in time and effort. There were so many events. What if the FED didn't raise the rates so aggressively? What if the war was over soon enough? What if inflation peaked? What if there was no THM incident? What if there was no VTP incident? There is absolutely impossible for a human being can predict all that, and if they can, they would be a trillionaire. Since there is not that many trillionaire in the world, prediction like that is nothing more than just a wild guess.

Investing is not about predicting the futures, or guessing the index, it is about asset allocation and stock picking. If you call yourself a hedge fund and believe it would be a downtrend, then short. Don't hold cash. Investors pay a fat fee for hedge fund not to hold cash (my 2 cents).

For me, all the events have let me feel like the situation now is quite like the GFC in '08. And that is the lucky case, because it is not like COVID-19. The GFC in '08 was a financial crisis. COVID-19 was a health crisis where you couldn't know if you can survive, like how long you could get back to the "old normal", like what if the vaccine had worked. The investors kept making prediction about the vaccine where the doctors couldn't know for sure. No amount of money supply could have helped the economy or the stock market if the vaccine didn't work.

Now, let's say we have a financial crisis in Vietnam. So to quote Warren Buffet, I believe "Vietnam 's economic train has just went off the tracks". I couldn't know how long it takes, but I believe it would come back to the right track eventually.

The index now is right about the same points as my post "When to buy". Well, I believe if you miss this train, you would be kicking yourself and telling the story about how chicken you were when the index almost hit 950.

Disclaimer: this is not a financial recommendation, just my blog