If Stock Market Crashes Tomorrow

If the stock market crashes tomorrow, what stocks should I be avoiding?

Personally, I would avoid stocks that are:

(1) Trading close to its 52-week high price

(2) High beta (i.e significant correlation with the movement of the market index)

Based on the above criteria and using a stock filtering function in Shareinvestor (for Malaysian listed stocks):

beta.png

We would expect warrants and small cap companies (e.g Mexter) to possess high beta / correlation with the general market movement.

Surprisingly, CIMB appears to be on this list. It has a high beta of close to 1.60x.

DISCLAIMER: THIS IS A PERSONAL BLOG AND SHALL NOT BE RELIED IN WHATSOEVER MANNER BY ANYONE. ALL ARTICLES CONTAINED IN THIS SITE ARE FOR INFORMATION AND ILLUSTRATIVE PURPOSES ONLY AND DOES NOT PURPORT TO SHOW ACTUAL RESULTS. IT IS NOT, AND SHOULD NOT BE REGARDED AS INVESTMENT ADVICE OR AS A RECOMMENDATION REGARDING ANY PARTICULAR SECURITY OR COURSE OF ACTION. SOURCES USED IN THIS SITE HAVE NOT BEEN INDEPENDENTLY VERIFIED FOR ACCURACY, COMPLETENESS AND TIMELINESS. YOU SHOULD SEEK INDEPENDENT AND PROFESSIONAL INVESTMENT ADVICE IN REGARD TO YOUR INVESTMENT DECISIONS. THE AUTHOR MAY HOLD POSITIONS IN THE SECURITIES OR RELATED INSTRUMENTS MENTIONED ABOVE.

Author: Ken Utau

Markets Observer + Food Lover

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