When to start bargain hunting stocks?

Answer: no-one knows.

Still, given the superior long-term returns* provided by 'growth' investments such as stocks, compared to having cash sitting in the bank (or under the mattress), it is a decision all investors have to make, or else they will end up never investing.

At the moment the Australian stock market is already down by about 18% compared to the highs reached only last month. It's been an amazingly fast sell-off, more similar to the crash of '87 than the GFC bear market of '17/'18. So I have to start wondering when (and how much) to start investing again in the stock market.

The 'portfolio' of investments I had purchased a few years ago (and had intended to hold for 10+ years) using my Commsec margin lending (CSML) account was sold off on 6 Feb, and, based on current prices I could already buy back that portfolio at a 18% 'discount'. But so far I've only purchase a small tranche (~$10K) of Westpac Bank shares using my CSML account a few days ago - and that purchase proved to be a bit premature (WBC is down by about 10% in just two days!).

So, I'm tempted to start buying, but unsure just how far the market might sell off before a true 'bottom' is reached - share markets could rebound from here (but that could easily be a 'dead cat bounce' and the market might then continue even lower as the global health crisis worsens -- we are likely to see total Covid-19 cases exceed 200,000 by the end of the week, and deaths to exceed 6,000 -- which could lead to *real* panic in Europe and the US, where society has become increasingly risk averse in recent decades and the population may not cope at all well with a personal existential crises - even if the risk of death is 'only' 3% (on average) when/if you catch the disease!), or the ASX200 could fall to 5,000 (another 15% decline) or even to 3,000 (another 50% decline to the post-GFC lows) before bottoming out.

So, while an 18% drop is significant, I don't see any indication that the spread of Covid-19 globally will be brought under control in the next few weeks, so I suspect that market may stagger quite a lot lower before a bottom is reached. How far? Who knows.

I'll probably (maybe) buy back some (maybe 1/4) of my previous holdings if/when the market (ASX200) drops to ~5,000, and then see how things develop.

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* based on historic performance: past returns are not a reliable indicator of future performance, yada yada. History rhymes, but doesn't repeat.

Diet 2020 Wk 10 - week ending 08.MAR.2020

Had a bit of a disaster of a week, diet-wise. I ate some extra snack foods on Tues-Wed, and then instead of being 'strict' about my diet over the weekend (as I'd planned) I ended up eating a lot of junk foods, including quite a bit of chocolate and biscuits on Sunday (I had a total of 4,395 cals on Sunday!). My weight had been hovering around 85-86 kg all week (and for the past month), but it had gone up to 87.9 kg this morning (hopefully a lot of that is just fluid retention due to the bulk of food eaten yesterday)! My average daily cals for the week was only about 200 more than 'maintenance' so as long as yesterday was only a lone 'cheat day' it shouldn't have a ruinous impact on my overall weight loss progress. The main thing is to get back on track asap. It didn't help that I had only gone to the gym twice last week, and my average daily step count was also down a bit (due to not doing much walking on the weekend) - so my caloric requirement was probably also lower than normal for the past week.

So, today I skipped breakfast and will make an extra effort to stick to my strict low-cal/keto diet plan, and I'll then stick with my low cal/keto diet plan for the rest of March and April to try to get rid of the last 6-8 excess kilos I need to shed. I'll go to the gym for some weight training on the way home from work tonight , despite the rapidly increasing risk of corona virus exposure in Sydney these days! Keeping my hands away from my face during the gym session and doing a thorough hand wash at the end might help reduce the health risks - and it helps that the gym is less busy than usual these days (the shopping center was almost deserted when I went there on Saturday afternoon).

Averages for past week were:
Calories:   2,836.2 kcals/day
Fibre:          9.9 g/day
Carbs:         36.9 % of cals
Fat:           43.1 % of cals
Protein:      126.9 g/day
Sodium:     4,280.1 mg/day
Weight:        85.1 kg
BMI:           27.8
Steps:      8,174   steps/day
Sleep:          6.1 hrs/night
Body Fat:      16.9 %
Gym sessions:   2
WT Reps:      643
WT volume: 39,625   kg
Treadmill:    37:38 mins

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Catching a falling knife - WBC

As I suspected, it was a bit early to buy bank shares - so the $10K worth of Westpac shares I bought early last week at $22.49 were already down to $21.35 by COB on Friday, and will probably be lower in Monday trading in Australia after Wall Street had another decline on Friday. It's not really a surprise, but with a trailing p/e of only 11 it is likely to 'come good' when the economy eventually improves and the fallout from the Royal Commission washes through. I keep an eye out for other 'bargains' as the market falls, and buy a tranche of this or that each month or so (essentially 'dollar cost averaging' into the market on the way down). I might defer buying an more shares for a while though, as it is probably way too early for the market to 'bottom out' yet.

The other shares I still own are a small holding of NAB bank shares - I initially got some via a final dividend payment DRP after I had previously sold out my share holding in 2018, and have received 1 or 2 shares every 6 months via the ongoing DRP (I'll have to keep my 'portfolio' records up to date with the DRP details, as the eventual CGT calculations when I sell the shares are otherwise a pain - as I found out when I sold shares in 2018 that I'd initially bought back in the 1990s...)

Anyhow, Westpac remains in a bit of a down trend while the market is heading south, so it probably has quite a bit further to fall before hitting the bottom, but you never can tell. If you believe in 'charting' there *might* be some support around $20 (if the broader market isn't in a melt-down)...

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I might buy some Westpac shares

Having already been hit by the fallout of the Royal Commission, the general December market dip, and now the effect of Covid-19 on market sentiment, it looks like Westpac shares *might* be a reasonable long-term buy:

"Westpac is down 1.9 per cent to $22.51, the lowest it has been since July 2012. However, this takes Westpac's price to earnings ratio down to 11.49 times earnings and a gross dividend yield of 11 per cent if it can maintain dividends, according to Bloomberg data. Overall the financial index is at a one-year low."

I have a tiny amount of NAB shares currently sitting in my Leveraged Equities Margin Loan account (left over due to a dividend reinvestment that got applied just after I'd sold my NAB holding), so buying some Westpac shares using some left over cash balance in my Comsec Margin Loan account might be a reasonable step at current prices.

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