This week will be lack of many updates because of the cold weather.
But I might have posts like this:
We are currently on a 4-5 day “work” trip. Providend would usually have a company retreat and if we can, it will be overseas.
This year, we are having it in Taiwan.
This is where we are staying in sleepy Tamsui in New Taiwan City.
This is the view from my hotel:
Tamsui is very far from Taipei but I guess it is the sweet spot in keeping costs in check but still a pretty reasonable experience.
Taiwan at this time is cold.
This is me at the Chiang Kai-shek Memorial Hall. We ended our scavenger hunt here. I was here almost 15-16 years ago so it is a pretty nice visit.
I have been to Taiwan 3 times, all before 2007 and I cannot recall was the transit and train network this established back then, but I thought it is particular nice taking time to move around instead of taking Uber and rushing here and there.
Uber in Taipei is cheap but inter-city wise, the cost is not really that cheap.
Food in Taiwan, relative to Singapore is pretty worth it. We introduce Max, our head of expat to Chinese dishes. Many of us weren’t used to some of the food in Taiwan, particularly those stuff with bamboo shoots.
Each of these meals that we ate was about 9-10 dishes.
I sat next to our Head of People & Finance, and based on the food coming, he wondered whether he approved the budget for the food.
Food in this place costs S$45 per head.
I have got to thank our retreat committee for organizing this year’s retreat. Ray (rightmost), heads the committee, together with two of our members Alvin (leftmost) and Mike (2nd from left). This is double responsibility aside from their usual work.
Ray became a new cilent adviser at the start of the year and has the responsibility to scale up to be as strong as our senior client advisers. Alvin is part of our nascent Wealth team segment and Mike is one of our main insurance specialist at Havend. There are sales targets to meet so its not so easy for them to double hat.
In my limited time going around Taiwan, I felt that Taiwan still retains a lot of the “feel” before 2010. The buildings are old, there weren’t signs of fresh, new buildings.
The cost of food is slightly cheaper but isn’t too far from Singapore. Yet, the price of homes rivals that of Singapore HDB flats, and looks more run down. To make matters worse, the median salary in Taiwan is closer to SG$1,000 a month.
Most cannot afford a home, and have to rent or live with their family.
I guess this is the same as a lot of other places.
The Window of Weakness is Here
This morning we have the expiration of the VIX call options, which happens usually in the third week of the month.
In the last quarter of last year, we seen a very bullish move after the options expiration in October, which coincides with dovish comments by the FED.
Usually, there are constructive flows end of the year from corporate buybacks, the need to put leverage collateral back to work, and shorter trading periods means it is very conducive for the market to run up, aided by dealer flows.
All these ends on January 17th 2024 at the VIX expiration, which is this morning.
From now till 2nd of February, we have a window of weakness, which is a period that is not supported by these positive flows to support the market.
If we still have an overhang from a challenging macroeconomic situation, the market could move down very quickly due to the lack of support.
We are seeing more and more demand for fixed-strike volatility calls, further and further out, which indicates the cautious to bearish downside of market participants.
These two months till mid-March can be wobbly.
It will be a good period for long-term investors to add. For traders, it is a period to be more cautious.
Whether we take a stair-step down or a plunge depends on whether there are catalysts that are not priced into the market and whether there are supportive flows.
Personally, I think that because more and more of this information is put out, the market front runs this info to a certain extent as the market participants tries to position themselves before these periods.
This will mean that the degree of effect of these flows is very much dampened.
I have not checked my strategic systematic portfolio at all this week but given how small-cap value and non-market cap weighted indexes have been doing, I know it is not doing too well.
I will be cycling in Taiwan next week.
Let us see if I will still have the energy to write.
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