Winston's Investment Ideas 05 (May 19 - Dec 24)

Re: Winston's Investment Ideas 05 (May 19 - Jul 23)

Postby winston » Sun Jun 14, 2020 12:02 pm

TOL @ June 14, 2020

Cash.jpg


Cash Is Trash?

The markets have been rising steadily since it March's low and a lot of people are starting to think that "Cash is Trash" (until the 1800 points drop on Thursday).

Their thinking is, "Why stay in Cash when the Airlines, Cruise Companies, Boeing, Hertz, Banks, Energy companies, Singapore REITS, Malaysian Rubber Gloves etc. are rising by 5% to 50% a day?".

I also have a friend who has been sending me Whatsapp messages every night for the past two weeks, telling me how great the US Market is and how it is a "Trader's Heaven". Anyway, this friend (who has never traded the US markets before), didn't send me any Whatsapp messages on Thursday night.

Somehow, people think that it's normal for a share to be rising 15% a day or even 50% in the case of Hertz.

In the case of Rubber Gloves in Malaysia, after rising 300% to 400% in 2 months, the "experts" are still coming up with higher Target Price with reasons like higher ASP, higher Margins, longer lead time, increased capacity etc.

And there seems to be no shortage of "pyjamas traders" that are chasing these type of stories.

So it's probably timely to remind myself that "bull markets do die on euphoria" and there's no shortage of evidence to warn me now, that the "animal spirits" are running very high.

It's not like we have not seen this type of euphoric behaviours before and they all have ended badly. Example:-
1. Dayang in Malaysia: It went up from $0.60 to $3.00 in a year. At $3.00, an "expert" who has written many articles touting the stock, was still saying that it could go higher. It then abruptly dropped to 0.75 and this guy supposedly lost a lot of money on it. He's now touting a Rubber Gloves company.
2. Bitcoin at US$19,000 on Dec 17, 2017; It's now 50% off at US$9400 after 2.5 years.
3. Dot.com; 80% to 90% crash
4. Nikkei at 38,950 at Jan 19, 1990; It's now still 40% off at 22,300 after 30 years.
etc.

For this round, everyone seems to believed that the amount of Liquidity created in the US economy, would be adequate to offset the decline in economic activities.

In the US, the amount of Liquidity created, is now equivalent to 25% of the GDP. However, the decline in economy activities is much less than 25%. Hence, the thinking is that the excess Liquidity will supposedly flow into the stock markets.

Anyway, I'm not an expert on MMT but I can understand the logic behind the above argument, until you get a day like Thursday, where everything falls apart and the logic no longer holds water.

By the way, we should be touching 1H Window Dressing Time very soon. Let's see whether they would be pushing the markets higher to get some nice numbers for the funds as of June 30.

Finally, IMHO, I do not think that 'Cash Is Trash". I understand that you may lose out on some returns if the market does go parabolic. But having a healthy level of Cash would provide you with more options if things do go South. In addition, being in Cash alone is also not adequate. You have to be in the right Currency, as well.


Weekly Risk Management Progress Report:-

1. To Monitor NET Exposure To Equities (Long Less Shorts):- Safe (11% from 11% last week from 15% two weeks ago, of Liquid Assets)
Goal: 5% exposure to Equities before the next crash; Maximum 20%;

2. To Diversify From Asian Equities: Progress (81% from 83% from 85%):
Goal: To reduce the percentage of Asian Equities to around 50%

3. To Buy Inverse ETFs and Puts before the next crash:-
Current Position:-
a. Sold 7500 (Hang Seng Inverse 2x)
b. TZA (Inverse Russell 3x)
c. SOXS (Inverse Semiconductor 3x)
Goal: To have a sizable short position going into the next crash / recession

4. To Increase "USD/HKD/Gold" - Progress. (28% from 26%).
Goal: To be in the safe havens before next recession; (HKD may be repegged)

5. To Reduce Number Of Counters: No Progress (12 from 12 from 15)
Goal: To focus on maximum 16 counters from 4 countries at any one time.

6. To Minimize Industry / Sector Risk / Country Risk
a. Heavy exposure to Asian Based Equities
b. Heavy exposure to Asian Currencies
Goal: To diversify across various Sectors, Countries and Currencies


Market Risk Indicators

1. Euphoria: 9 (Low: 1; High: 10) - FAANNG, ETFs; Margin Debts; SWFs; Central Banks; Fund Flows;

2. Credit Problems: 9 (Very Good: 1; Very Bad: 10) - Housing, Subprime Auto; Student Loans; Credit Cards; Junk Bonds; EM USD Loans;

3. Recession: 9 (Strong Economy: 1; Depression: 10) - GDP; Taxes; PMI; Housing; Auto; Retail; NAFTA; Trade War; 2019?;

4. Liquidity: 6 (Very Liquid: 1; Tight 10) - QE (Feds, ECB, BOJ, PBOC); Interest Rates; Rotation (Bonds); Asset Shrinkage 2018?; EM; Italy;

5. Inverted Yield: 6 (Low Inversion: 1; High Inversion: 10) - Rising Interest Rates; Slope; Inversion; US 10 Years < US 2 Years; Expecting 2019 to 2020

6. Valuation; 9 (Safe 1: Danger 10) PE S&P, Nadsaq; Revenue; USD; Tax Reform; Deregulation

7. Geopolitical Issues: 7 (Peaceful: 1; War: 10) - Iran; South China Sea; Europe; Russia; Saudi Arabia; Iran;

Total: 55 out of 70 (79%); (Safe: 60%; Danger: 85%)


Commodities: Risk-Off (Data from Commodities Live every Saturday)

1. WTI Oil - Lower. U$$36.48 from US$38.95 last week from US$35.34 two weeks ago;
Support: Resistance: US$29; US$45 (R1); US$77 (2018);
a. Demand is down about 20%?
b. Supply is up about 15%?
c. China is filling it's SPR
d. US is renting their SPR storage out, to the private companies?
viewtopic.php?f=33&t=9249&p=231235#p231235

2. Gold - Higher. US$1738 from US$1688 from US$1732;
Support: $1240; $1050; Resistance: $1775; $1830;
a. They cant print gold
b. Gold will probably rally after the current physical selling
c. In a crisis (cash crunch), gold will also be sold
d. Is Silver a better bet due to the current high Gold/Silver ratio?
viewtopic.php?f=33&t=8845&p=231236#p231236

3. Copper - Higher; US$2.62 from US$2.54 from US$2.44;
viewtopic.php?f=33&t=5598&p=231237#p231237


Equities - Risk-Off (Data as of Saturday every week)

1. US Equities - Lower; 3041 from 3194 last week from 3044 two weeks ago;
a. Support: 2820; 2740; 1930 (2016); Resistance: 3130; 3385
b. No Trade
viewtopic.php?f=11&t=7643&start=200

2. HK Equities - Lower. 24301 from 24770 from 22961;
a. Support: 22000; 21600; 19500; 16800
b. Resistance: 25400; 26800; 28000; 29000; 31600;
c. Sold 1/2 Yeahka (9923)
d. Sold 7500 (Hang Seng Inverse 2x)
htttp:/investideas.net/forum/viewtopic.php?f=10&t=7470&start=120

3. Shanghai Equities - Lower; 2920 from 2931 from 2852;
a. Support: 2450; Resistance 3300; 3600
b. No Trade
viewtopic.php?f=10&t=7190&start=210

4. Spore Equities - Lower; 2685 from 2752 from 2511;
Resistance 3850
a. No Trade
viewtopic.php?f=10&t=6828&start=b110

5. Japan Equities - Lower. 22305 from 22864 from 21878;
a. Forward PE 13
b. Support 15575 (2016); Resistance 25000
c. BOJ owns > Half government bonds and 75% of ETFs
d. Breakeven on BOJ's ETF at 19,500
e. No Trade
viewtopic.php?f=10&t=7138&start=200

6. Malaysian Equities; Lower; 1546 from 1556 from 1473;
a. No Trade
viewtopic.php?f=10&t=6292&start=30


Currencies: Risk-Off (Data from XE.com on Jun 12 @ 7.00PM)

1. USD to JPY - JPY Stronger; 107.36 from 109.35 last week from 107.80 two weeks ago;
a. 52 week range is 76 to 126
b. Aging Population
c. High Debt Ratio
d. Umlimited QE
viewtopic.php?f=32&t=4205&start=180

2. SGD to MYR - SGD Stronger; 3.0689 from 3.0618 from 3.0792;
a. Would they devalue the SGD because of the coming Recession?
viewtopic.php?f=32&t=136&start=110

3. AUD to USD - AUD Weaker; 0.6890 from 0.6976 from 0.6668;
a. The range is 0.70 (2016) to 1.10 (2011)
b. Commodity Currency
c. How will China retaliate against Australia?
d. Converted some AUD to USD
viewtopic.php?f=32&t=5256&start=130

4. AUD to SGD - AUD Weaker; 0.9577 from 0.9721 from 0.9414;
a. The range is 0.98 (2016) to 1.36 (2012)
b. Converted some AUD to SGD

5. AUD to MYR - AUD Weaker; 2.9390 from 2.9783 from 2.8987;
a. The range is 2.20 (2008) to 3.41 (2017)
b. Converted some AUD to MYR

6. EUR to USD - EUR Flat. 1.1303 from 1.1308 from 1.1106;
viewtopic.php?f=32&t=5523&start=100

7. USD to HKD - HKD Strong. 7.7501 from 7.7500 from 7.7512;
a. USD Peg band: 7.75 to 7.85
b. When will they be removing the peg to the USD?
viewtopic.php?f=32&t=3529&start=40

8. USD to MYR:- MYR Flat. 4.2670 from 4.2671 from 4.3475;
a. 52 Week Range is 3.27 to 4.54
b. Lowest: 4.885 (1998)
viewtopic.php?f=32&t=397&start=9

9. USD to SGD:- SGD Stronger; 1.3906 from 1.3922 from 1.4119;
a. High 1.70 (2004); Low 1.20 (2011)
b. Am uncomfortable holding the currency of a small country where a catatrophe can wipe them out; But Singapore has been managing it's finances well.
viewtopic.php?f=32&t=136&start=100

10. USD to CNY:- CNY Stronger; 7.0772 from 7.0981 from 7.1371;
viewtopic.php?f=32&t=7720&start=90

11. GBP to USD:- GBP Weaker; 1.2620 from 1.2669 from 1.2350;
a. Brexit
viewtopic.php?f=32&t=333&start=80

12. GBP to MYR:- GBP Weaker; 5.3848 from 5.4067 from 5.3692;

13. Dollar Index - USD Stronger; 96.76 from 96.69 from 98.34;
viewtopic.php?f=32&t=7616&start=60


Properties:-

1. China Properties:-
viewtopic.php?f=10&t=8150&start=140

2. HK Properties:-
a. How much will it drop and for how long?
viewtopic.php?f=10&t=7785&start=150

3. Singapore Properties:-
a. How long will it drop and for how long?
b. Will they be removing the property curbs?
viewtopic.php?f=10&t=7750&start=210

4. Malaysian Properties:-
viewtopic.php?f=10&t=4220&start=200


Others

Market Sentiment - Complacent?
viewtopic.php?f=16&t=9099&start=90

Headwinds:-
viewtopic.php?f=16&t=8930&p=231225#p231225

Tailwinds:-
viewtopic.php?f=16&t=8940&p=231226#p231226

Warning Signs:-
viewtopic.php?f=16&t=9909&p=231227#p231227

Risk Management:-
viewtopic.php?f=16&t=7547&p=231228#p231228

Yield on 10 Year US Treasuries - Lower; 0.71% from 0.93% last week from 0.65% two weeks ago

Yield on 2 Year Treasuries - Lower; 0.20% from 0.23% from 0.16%;

Interest Rates:-
viewtopic.php?f=16&t=7319&p=221670#p221670

JNK (SPDR Barclays High Yield Bond ETF) - Lower: 101.26 from 103.54 from 102.00;

HYG (iShares iBoxx $ High Yid Corp Bond ETF) - Lower; 81.63 from 83.67 from 82.42;

Baltic Dry Index - Higher; 839 from 632 from 504; Low 290; High 2330 (2013)

Covid19 Notes:-
viewtopic.php?f=25&t=5657&start=150

US Slowdown - How Deep & How Long?
viewtopic.php?f=11&t=9039&start=50

Risks Out There:-
posting.php?mode=reply&f=16&t=8930


The above is to from help me crystallize my thinking. It's not a recommendation to Buy or Sell. Use the above comments at your own risk and please do feel free to provide me with your kind thoughts and comments


Please Note:-

Active Topics - There is an "Active Topics" button on the top right corner.
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viewtopic.php?f=26&t=3168
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Re: Winston's Investment Ideas 05 (May 19 - Jul 23)

Postby helios » Sun Jun 14, 2020 1:56 pm

Winston thinks there will be the *next* crash? If 2nd wave amdist euphoria scene was e trigger for -1,800 points crash, what will be e trigger for the 3rd? Trump elections?
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Re: Winston's Investment Ideas 05 (May 19 - Jul 23)

Postby behappyalways » Sun Jun 14, 2020 4:25 pm

If 2nd wave (in China and US) comes, then the bet on US economy rebound in 3Q will be off. Consumer behaviour and spending will change even if there is no lockdown in US.
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Re: Winston's Investment Ideas 05 (May 19 - Jul 23)

Postby winston » Sun Jun 21, 2020 2:48 pm

TOL @ June 21, 2020

Window Dressing.jpg


1H Window Dressing?

The markets were not weak over the past week and I think that it's due to 1H Window Dressing activities, which is normally being seen around this time.

After june 20th, we will also see the new money from the new month of July.

Therefore, I'm expecing the markets to be strong (or at least not weak), from here till the first few days of July.

After that, we would be touching the US Earnings season. For this round, I'm not expecting earnings to be too good but it's the projections that really matters. Anyway, expectations have already being dialled down already so beating those expectations should be quite easy.

For this week, I have not done any trading as I have not found any convincing idea at all.

I'm also a bit concerned about the current "euphoria" in the markets. When companies with poor fundamentals eg. airlines, cruise companies, banks, financials etc. can rally strongly, it's better to stand aside and let the "experts" trade amongst themselves.

Having said that, the consensus is that there's a lot of Liquidity in the system and that this Liquidity is supposedly more than adequate, to offset any decline in economic activities.

I'm also watching the Covid19 cases in Texas, Florida, California, Georgia etc. Within 2-3 weeks, we will know whether there would be a Second Wave and Rolling Lockdowns in those States that have decided to reopened prematurely.

It would also be interesting to see how many Covid19 cases would materialize from the Trump's rally in Tulsa. I think there is 19,000 people crowded together without Social Distancing and not wearing masks. (Trump did say a few days ago, that anyone wearing a mask, is against him).


Weekly Risk Management Progress Report:-

1. To Monitor NET Exposure To Equities (Long Less Shorts):- Safe (11% from 11% last week from 11% two weeks ago, of Liquid Assets)
Goal: 5% exposure to Equities before the next crash; Maximum 25%;

2. To Diversify From Asian Equities: No Progress (81% from 81% from 83%):
Goal: To reduce the percentage of Asian Equities to around 50%

3. To Buy Inverse ETFs and Puts before the next crash:-
Current Position:-
a. TZA (Inverse Russell 3x)
b. SOXS (Inverse Semiconductor 3x)
Goal: To have a sizable short position going into the next crash / recession

4. To Increase "USD/HKD/Gold" - Progress. (28% from 26%).
Goal: To be in the safe havens before next recession; (HKD may be repegged)

5. To Reduce Number Of Counters: No Progress (12 from 12 from 12)
Goal: To focus on maximum 16 counters from 4 countries at any one time.

6. To Minimize Industry / Sector Risk / Country Risk
a. Heavy exposure to Asian Based Equities
b. Heavy exposure to Asian Based Currencies
Goal: To diversify across various Sectors, Countries and Currencies


Market Risk Indicators

1. Euphoria: 9 (Low: 1; High: 10) - FAANNG, ETFs; Margin Debts; SWFs; Central Banks; Fund Flows;

2. Credit Problems: 9 (Very Good: 1; Very Bad: 10) - Housing, Subprime Auto; Student Loans; Credit Cards; Junk Bonds; EM USD Loans;

3. Recession: 9 (Strong Economy: 1; Depression: 10) - GDP; Taxes; PMI; Housing; Auto; Retail; NAFTA; Trade War; 2019?;

4. Liquidity: 6 (Very Liquid: 1; Tight 10) - QE (Feds, ECB, BOJ, PBOC); Interest Rates; Rotation (Bonds); Asset Shrinkage 2018?; EM; Italy;

5. Inverted Yield: 6 (Low Inversion: 1; High Inversion: 10) - Rising Interest Rates; Slope; Inversion; US 10 Years < US 2 Years; Expecting 2019 to 2020

6. Valuation; 9 (Safe 1: Danger 10) PE S&P, Nadsaq; Revenue; USD; Tax Reform; Deregulation

7. Geopolitical Issues: 7 (Peaceful: 1; War: 10) - Iran; South China Sea; Europe; Russia; Saudi Arabia; Iran;

Total: 55 out of 70 (79%); (Safe: 60%; Danger: 85%)


Commodities: Risk-Off (Data from Commodities Live every Saturday)

1. WTI Oil - Higher. US$39.45 from U$$36.48 last week from US$38.95 two weeks ago;
Support: Resistance: US$29; US$45 (R1); US$77 (2018);
a. Demand is down about 20%?
b. Supply is up about 15%?
c. China is filling it's SPR
d. US is renting their SPR storage out, to the private companies?
viewtopic.php?f=33&t=9249&p=231235#p231235

2. Gold - Higher. US$1757 from US$1738 from US$1688;
Support: $1240; $1050; Resistance: $1775; $1830;
a. They cant print gold
b. Gold will probably rally after the current physical selling
c. In a crisis (cash crunch), gold will also be sold
d. Is Silver a better bet due to the current high Gold/Silver ratio?
viewtopic.php?f=33&t=8845&p=231236#p231236

3. Copper - Flat; US$2.61 from US$2.62 from US$2.54;
viewtopic.php?f=33&t=5598&p=231237#p231237


Equities - Risk-On (Data as of Saturday every week)

1. US Equities - Higher; 3098 from 3041 last week from 3194 two weeks ago;
a. Support: 2820; 2740; 1930 (2016); Resistance: 3130; 3385
b. No Trade
viewtopic.php?f=11&t=7643&start=200

2. HK Equities - Higher. 24644 from 24301 from 24770;
a. Support: 22000; 21600; 19500; 16800
b. Resistance: 25400; 26800; 28000; 29000; 31600;
c. No Trade
htttp:/investideas.net/forum/viewtopic.php?f=10&t=7470&start=120

3. Shanghai Equities - Higher; 2968 from 2920 from 2931;
a. Support: 2450; Resistance 3300; 3600
b. No Trade
viewtopic.php?f=10&t=7190&start=210

4. Spore Equities - Lower; 2635 from 2685 from 2752;
Resistance 3850
a. No Trade
viewtopic.php?f=10&t=6828&start=b110

5. Japan Equities - Higher. 22479 from 22305 from 22864;
a. Forward PE 13
b. Support 15575 (2016); Resistance 25000
c. BOJ owns > Half government bonds and 75% of ETFs
d. Breakeven on BOJ's ETF at 19,500
e. No Trade
viewtopic.php?f=10&t=7138&start=200

6. Malaysian Equities; Lower; 1507 from 1546 from 1556;
a. No Trade
viewtopic.php?f=10&t=6292&start=30


Currencies: Risk-Off (Data from XE.com on Jun 20 @ 10.45 AM)

1. USD to JPY - JPY Stronger; 106.87 from 107.36 last week from 109.35 two weeks ago;
a. 52 week range is 76 to 126
b. Aging Population
c. High Debt Ratio
d. Umlimited QE
viewtopic.php?f=32&t=4205&start=180

2. SGD to MYR - SGD Weaker; 3.0552 from 3.0689 from 3.0618;
a. Would they devalue the SGD because of the coming Recession?
viewtopic.php?f=32&t=136&start=110

3. AUD to USD - AUD Weaker; 0.6834 from 0.6890 from 0.6976;
a. The range is 0.70 (2016) to 1.10 (2011)
b. Commodity Currency
c. How will China retaliate against Australia?
d. Converted some AUD to USD recently
viewtopic.php?f=32&t=5256&start=130

4. AUD to SGD - AUD Weaker; 0.9551 from 0.9577 from 0.9721;
a. The range is 0.98 (2016) to 1.36 (2012)
b. Converted some AUD to SGD recently

5. AUD to MYR - AUD Weaker; 2.9179 from 2.9390 from 2.9783;
a. The range is 2.20 (2008) to 3.41 (2017)
b. Converted some AUD to MYR recently

6. EUR to USD - EUR Weaker. 1.1179 from 1.1303 from 1.1308;
viewtopic.php?f=32&t=5523&start=100

7. USD to HKD - HKD Strong. 7.7504 from 7.7501 from 7.7500;
a. USD Peg band: 7.75 to 7.85
b. When will they be removing the peg to the USD?
viewtopic.php?f=32&t=3529&start=40

8. USD to MYR:- MYR Weaker. 4.2694 from 4.2670 from 4.2671;
a. 52 Week Range is 3.27 to 4.54
b. Lowest: 4.885 (1998)
viewtopic.php?f=32&t=397&start=9

9. USD to SGD:- SGD Weaker; 1.3975 from 1.3906 from 1.3922;
a. High 1.70 (2004); Low 1.20 (2011)
b. Am uncomfortable holding the currency of a small country where a catatrophe can wipe them out; But Singapore has been managing it's finances well.
viewtopic.php?f=32&t=136&start=100

10. USD to CNY:- CNY Stronger; 7.0713 from 7.0772 from 7.0981;
viewtopic.php?f=32&t=7720&start=90

11. GBP to USD:- GBP Weaker; 1.2349 from 1.2620 from 1.2669;
a. Brexit
viewtopic.php?f=32&t=333&start=80

12. GBP to MYR:- GBP Weaker; 5.2726 from 5.3848 from 5.4067;

13. Dollar Index - USD Stronger; 97.62 from 96.76 from 96.69;
viewtopic.php?f=32&t=7616&start=60


Properties:-

1. China Properties:-
viewtopic.php?f=10&t=8150&start=140

2. HK Properties:-
a. How much will it drop and for how long?
viewtopic.php?f=10&t=7785&start=150

3. Singapore Properties:-
a. How long will it drop and for how long?
b. Will they be removing the property curbs?
viewtopic.php?f=10&t=7750&start=210

4. Malaysian Properties:-
viewtopic.php?f=10&t=4220&start=200


Others

Market Sentiment - Complacent?
viewtopic.php?f=16&t=9099&start=90

Headwinds:-
viewtopic.php?f=16&t=8930&p=231225#p231225

Tailwinds:-
viewtopic.php?f=16&t=8940&p=231226#p231226

Warning Signs:-
viewtopic.php?f=16&t=9909&p=231227#p231227

Risk Management:-
viewtopic.php?f=16&t=7547&p=231228#p231228

Yield on 10 Year US Treasuries - Lower; 0.69% from 0.71% last week from 0.93% two weeks ago

Yield on 2 Year Treasuries - Lower; 0.19% from 0.20% from 0.23%;

Interest Rates:-
viewtopic.php?f=16&t=7319&p=221670#p221670

JNK (SPDR Barclays High Yield Bond ETF) - Higher: 103.06 from 101.26 from 103.54;

HYG (iShares iBoxx $ High Yid Corp Bond ETF) - Higher; 82.88 from 81.63 from 83.67;

Baltic Dry Index - Higher; 1555 from 839 from 632; Low 290; High 2330 (2013)

Covid19 Notes:-
viewtopic.php?f=25&t=5657&start=150

US Slowdown - How Deep & How Long?
viewtopic.php?f=11&t=9039&start=50

Risks Out There:-
posting.php?mode=reply&f=16&t=8930


The above is to from help me crystallize my thinking. It's not a recommendation to Buy or Sell. Use the above comments at your own risk and please do feel free to provide me with your kind thoughts and comments


Please Note:-

Active Topics - There is an "Active Topics" button on the top right corner.
search.php?search_id=active_topics

Support The Forum - If you have benefited from the ideas in the forum but have not participated in the discussions, we would appreciate your kind support to defray the expenses of maintaining the forum. The buttom is at the top right hand corner.

Second Opinion - Please see the "Second Opinion" thread in the "Services for InvestIdeas Members" section, located just below the Miscellaneous Section.
viewtopic.php?f=26&t=3168
You do not have the required permissions to view the files attached to this post.
It's all about "how much you made when you were right" & "how little you lost when you were wrong"
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Posts: 118522
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Re: Winston's Investment Ideas 05 (May 19 - Jul 23)

Postby helios » Sun Jun 21, 2020 3:05 pm

2nd wave estimated mid-July .... Am thinking if I should also cease trading then ....
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Re: Winston's Investment Ideas 05 (May 19 - Jul 23)

Postby winston » Sun Jun 28, 2020 12:48 pm

TOL @ June 28, 2020

Window D.jpg


Window Dressing, New Money (New Month) & Second Wave

1H Window Dressing will be over next Wednesday. Thereafter, we will have the new money flowing from the new month of July.

Therefore, I'm still expecting the markets to be not weak, for the earlier part of next week, despite the weak showings on Friday.

However, when we touched US Earnings Season in July, it may be a different story altogether. And Nike's recent poor results, may be a taste of things to come.

Anyway, the US markets is now touching the support reached on June 12th. However, we are still 31% higher than the low reached on March 24th.

With the Liquidity in the market and a US President who is determined to have a strong stock market going into election season, it's very likely that the low reached on March 24th, will be the support for the time being.

It would also be interesting to see how many pyjamas traders would be wiped out this round. Suddenly, the Airlines, Cruise, Financial, Energy companies etc are no longer rising 15% a day.

Finally, it's interesting to watch the rise in Covid19 cases in the US. Trump insists that the increase in cases is due to more testing. But why would you test a healthy person if he's not showing any Covid19 symptoms unless it's for work etc.

Within 2-3 weeks, we will know whether there is a Second Wave and Rolling Lockdowns in the US.


Weekly Risk Management Progress Report:-

1. To Monitor NET Exposure To Equities (Long Less Shorts):- Safe (14% from 11% last week from 11% two weeks ago, of Liquid Assets)
Goal: 5% exposure to Equities before the next crash; Maximum 25%;

2. To Diversify From Asian Equities: Worst (85% from 81% from 81%):
Goal: To reduce the percentage of Asian Equities to around 50%

3. To Buy Inverse ETFs and Puts before the next crash:-
Current Position:-
a. TZA (Inverse Russell 3x)
b. SOXS (Inverse Semiconductor 3x)
Goal: To have a sizable short position going into the next crash / recession

4. To Increase "USD/HKD/Gold" - Worst. (25% from 28% from 26%).
Goal: To be in the safe havens before next recession; (HKD may be repegged)

5. To Reduce Number Of Counters: Worst (16 from 12 from 12)
Goal: To focus on maximum 20 counters from 4 countries at any one time.

6. To Minimize Industry / Sector Risk / Country Risk
a. Heavy exposure to Asian Based Equities
b. Heavy exposure to Asian Based Currencies
Goal: To diversify across various Sectors, Countries and Currencies


Market Risk Indicators

1. Euphoria: 9 (Low: 1; High: 10) - FAANNG, ETFs; Margin Debts; SWFs; Central Banks; Fund Flows;

2. Credit Problems: 9 (Very Good: 1; Very Bad: 10) - Housing, Subprime Auto; Student Loans; Credit Cards; Junk Bonds; EM USD Loans;

3. Recession: 9 (Strong Economy: 1; Depression: 10) - GDP; Taxes; PMI; Housing; Auto; Retail; NAFTA; Trade War; 2019?;

4. Liquidity: 6 (Very Liquid: 1; Tight 10) - QE (Feds, ECB, BOJ, PBOC); Interest Rates; Rotation (Bonds); Asset Shrinkage 2018?; EM; Italy;

5. Inverted Yield: 6 (Low Inversion: 1; High Inversion: 10) - Rising Interest Rates; Slope; Inversion; US 10 Years < US 2 Years; Expecting 2019 to 2020

6. Valuation; 9 (Safe 1: Danger 10) PE S&P, Nadsaq; Revenue; USD; Tax Reform; Deregulation

7. Geopolitical Issues: 7 (Peaceful: 1; War: 10) - Iran; South China Sea; Europe; Russia; Saudi Arabia; Iran;

Total: 55 out of 70 (79%); (Safe: 60%; Danger: 85%)


Commodities: Risk-Off (Data from Commodities Live every Saturday)

1. WTI Oil - Lower. US$38.20 from US$39.45 last week from U$$36.48 two weeks ago;
Support: Resistance: US$29; US$45 (R1); US$77 (2018);
a. Demand is down about 20%?
b. Supply is up about 15%?
c. China is filling it's SPR
d. US is renting their SPR storage out, to the private companies?
viewtopic.php?f=33&t=9249&p=231235#p231235

2. Gold - Higher. US$1785 from US$1757 from US$1738;
Support: $1240; $1050; Resistance: $1775; $1830;
a. They cant print gold
b. Gold will probably rally after the current physical selling
c. In a crisis (cash crunch), gold will also be sold
d. Is Silver a better bet due to the current high Gold/Silver ratio?
viewtopic.php?f=33&t=8845&p=231236#p231236

3. Copper - Higher; US$2.66 from US$2.61 from US$2.62;
viewtopic.php?f=33&t=5598&p=231237#p231237


Equities - Risk-On (Data as of Saturday every week)

1. US Equities - Lower; 3009 from 3098 last week from 3041 two weeks ago;
viewtopic.php?f=11&t=7643&start=200
a. Support: 2820; 2740; 1930 (2016); Resistance: 3130; 3385
b. No Trade

2. HK Equities - Lower. 24550 from 24644 from 24301;
htttp:/investideas.net/forum/viewtopic.php?f=10&t=7470&start=120
a. Support: 22000; 21600; 19500; 16800
b. Resistance: 25400; 26800; 28000; 29000; 31600;
c. Bought Cosco Shipping Energy (1138)
viewtopic.php?f=60&t=9986&start=30

3. Shanghai Equities - Higher; 2980 from 2968 from 2920;
viewtopic.php?f=10&t=7190&start=210
a. Support: 2450; Resistance 3300; 3600
b. No Trade

4. Spore Equities - Lower; 2605 from 2635 from 2685;
Resistance 3850
viewtopic.php?f=10&t=6828&start=b110
a. Bought Jardine Matheson
viewtopic.php?f=47&t=731&start=120
b. Bought Jardine Strategic
viewtopic.php?f=47&t=734&start=70

5. Japan Equities - Higher. 22512 from 22479 from 22305;
viewtopic.php?f=10&t=7138&start=200
a. Forward PE 13
b. Support 15575 (2016); Resistance 25000
c. BOJ owns > Half government bonds and 75% of ETFs
d. Breakeven on BOJ's ETF at 19,500
e. No Trade

6. Malaysian Equities; Lower; 1488 from 1507 from 1546;
viewtopic.php?f=10&t=6292&start=30
a. Short-Selling ban extended to Dec 31, 2020
b. Bought MUI Properties
viewtopic.php?f=77&t=10136


Currencies: Risk-On (Data from XE.com on Jun 26 @ 9.30PM)

1. USD to JPY - JPY Weaker; 107.04 from 106.87 last week from 107.36 two weeks ago;
a. 52 week range is 76 to 126
b. Aging Population
c. High Debt Ratio
d. Umlimited QE
viewtopic.php?f=32&t=4205&start=180

2. SGD to MYR - SGD Stronger; 3.0729 from 3.0552 from 3.0689;
a. Would they devalue the SGD because of the coming Recession?
b. Converted some SGD to MYR
viewtopic.php?f=32&t=136&start=110

3. AUD to USD - AUD Stronger; 0.6870 from 0.6834 from 0.6890;
a. The range is 0.70 (2016) to 1.10 (2011)
b. Commodity Currency
c. How will China retaliate against Australia?
viewtopic.php?f=32&t=5256&start=130

4. AUD to SGD - AUD Stronger; 0.9566 from 0.9551 from 0.9577;
a. The range is 0.98 (2016) to 1.36 (2012)

5. AUD to MYR - AUD Stronger; 2.9383 from 2.9179 from 2.9390;
a. The range is 2.20 (2008) to 3.41 (2017)

6. EUR to USD - EUR Stronger. 1.1221 from 1.1179 from 1.1303;
viewtopic.php?f=32&t=5523&start=100

7. USD to HKD - HKD Strong. 7.7504 from 7.7504 from 7.7501;
a. USD Peg band: 7.75 to 7.85
b. When will they be removing the peg to the USD?
viewtopic.php?f=32&t=3529&start=40

8. USD to MYR:- MYR Weaker. 4.2793 from 4.2694 from 4.2670;
a. 52 Week Range is 3.27 to 4.54
b. Lowest: 4.885 (1998)
viewtopic.php?f=32&t=397&start=9

9. USD to SGD:- SGD Stronger; 1.3921 from 1.3975 from 1.3906;
a. High 1.70 (2004); Low 1.20 (2011)
b. Am uncomfortable holding the currency of a small country where a catatrophe can wipe them out; But Singapore has been managing it's finances well.
viewtopic.php?f=32&t=136&start=100

10. USD to CNY:- CNY Weaker; 7.0775 from 7.0713 from 7.0772;
viewtopic.php?f=32&t=7720&start=90

11. GBP to USD:- GBP Stronger; 1.2371 from 1.2349 from 1.2620;
a. Brexit
viewtopic.php?f=32&t=333&start=80

12. GBP to MYR:- GBP Stronger; 5.2967 from 5.2726 from 5.3848;

13. Dollar Index - USD Weaker; 97.39 from 97.62 from 96.76;
viewtopic.php?f=32&t=7616&start=60


Properties:-

1. China Properties:-
viewtopic.php?f=10&t=8150&start=140

2. HK Properties:-
a. How much will it drop and for how long?
viewtopic.php?f=10&t=7785&start=150

3. Singapore Properties:-
a. How long will it drop and for how long?
b. Will they be removing the property curbs?
viewtopic.php?f=10&t=7750&start=210

4. Malaysian Properties:-
viewtopic.php?f=10&t=4220&start=200


Others

Market Sentiment - Complacent?
viewtopic.php?f=16&t=9099&start=90

Headwinds:-
viewtopic.php?f=16&t=8930&p=231225#p231225

Tailwinds:-
viewtopic.php?f=16&t=8940&p=231226#p231226

Warning Signs:-
viewtopic.php?f=16&t=9909&p=231227#p231227

Risk Management:-
viewtopic.php?f=16&t=7547&p=231228#p231228

Yield on 10 Year US Treasuries - Lower; 0.66% from 0.69% last week from 0.71% two weeks ago

Yield on 2 Year Treasuries - Lower; 0.18% from 0.19% from 0.20%;

Interest Rates:-
viewtopic.php?f=16&t=7319&p=221670#p221670

JNK (SPDR Barclays High Yield Bond ETF) - Lower: 101.54 from 103.06 from 101.26;

HYG (iShares iBoxx $ High Yid Corp Bond ETF) - Lower; 82.00 from 82.88 from 81.63;

Baltic Dry Index - Higher; 1738 from 1555 from 839; Low 290; High 2330 (2013)

Covid19 Notes:-
viewtopic.php?f=25&t=5657&start=150

US Slowdown - How Deep & How Long?
viewtopic.php?f=11&t=9039&start=50

Risks Out There:-
posting.php?mode=reply&f=16&t=8930


The above is to from help me crystallize my thinking. It's not a recommendation to Buy or Sell. Use the above comments at your own risk and please do feel free to provide me with your kind thoughts and comments


Please Note:-

Active Topics - There is an "Active Topics" button on the top right corner.
search.php?search_id=active_topics

Support The Forum - If you have benefited from the ideas in the forum but have not participated in the discussions, we would appreciate your kind support to defray the expenses of maintaining the forum. The buttom is at the top right hand corner.

Second Opinion - Please see the "Second Opinion" thread in the "Services for InvestIdeas Members" section, located just below the Miscellaneous Section.
viewtopic.php?f=26&t=3168
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It's all about "how much you made when you were right" & "how little you lost when you were wrong"
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Re: Winston's Investment Ideas 05 (May 19 - Jul 23)

Postby winston » Sun Jul 05, 2020 2:30 pm

TOL @ July 05, 2020

Storm.jpg


Calm Before The Storm?

As expected, the markets have not been weak over the past week, due to "Window Dressing", as well as the "New Money From The New Month".

Going forward, I need to remind myself to be not so complacent, as there are some dark clouds forming on the horizon:-
1. US: Earnings Season (>July 14); Covid 19; Rolling Lockdowns; Economic Slowdown; Placements; Rights;
2. Malaysia: Interest Rates Reduction? (Jul 07) - Banks' NIM Affected; No Confidence Vote (July 13?); Economic Slowdown; Placements; Rights;
3. Singapore: Election (Jul 10); Economic Slowdown; Placements; Rights; REITS' Dividend Cut;
4. HK: New Security Law; Economic Slowdown; Sanctions (Rusal typed); IPOs; Placements; Rights;
5. China: Rolling Lockdowns; Economic Slowdown; Banks: Sanctions (SWIFT), National Service; Sanctions - SOEs (Rusal typed); Phase 1 Trade War; Cold War;

At the same time, a lot of Liquidity was created this round. And a lot of people believed that the Liquidity is more than adequate, to reflate the various markets eg. Equities, Bonds, Commodities, Properties etc.

In addition, you also have a new group of inexperienced investors entering the markets due to the lockdowns. It's very likely that they would be slaughtered in the not too distant future. (We have already seen one suicide). But in the mean time, they could be a force to be reckon with and they could create some volatility in the markets.

By the way, it's very funny to see Trump appearing on TV on Thursday, to take credit for the 4.8m jobs created, when he was the cause of the problem in the first place.

The Dow was up +400 points when Trump appeared on TV. It subsequently dropped to < 100. So the market is stupid after all. And if you are a short term trader, it may not be a bad idea to sell whenever Trump goes on TV, to take credit for anything especially when he uses superlative words like, " The Economy Is Roaring Back!".

It's also very interesting to see Pence on TV after Trump, to emphasize that the jump in employment is solely due to Trump's "Leadership". Pence must know that Covid-19 cases are increasing and the unemployment numbers will increase again due to the rolling lockdowns.

So why is Pence giving all the credits to Trump, knowing full well that the numbers will turned bad later? Does he has ambition to become President himself? However, he doesn't looked like someone who has the IQ to play such games.

And if you are one of the Republican elders, wouldn't you be thinking of another candidate to challenge Biden, as Trump may not be able to deliver the goods for the Republicans? And who would you be choosing to replace Trump, for the Republicans?

The US Presidential election is about 4 months away and I can see Trump getting more unpredictable and imposing rolling sanctions on the Chinese SOEs, similar to what they did with Rusal.

In view of the above, I think the storm is gathering on the horizon and this is probably the calm before that storm. Therefore, it may be wise to prepare a bit for that storm while you have the chance.


Weekly Risk Management Progress Report:-

1. To Monitor NET Exposure To Equities (Long Less Shorts):- Safe (14% from 14% last week from 11% two weeks ago, of Liquid Assets)
Goal: 5% exposure to Equities before the next crash; Maximum 20%;

2. To Diversify From Asian Equities: No Progress (85% from 85% from 81%):
Goal: To reduce the percentage of Asian Equities to around 50%

3. To Buy Inverse ETFs and Puts before the next crash:-
Current Position:-
a. Bought 7500 (Hang Seng Inverse 2x)
b. TZA (Inverse Russell 3x)
c. SOXS (Inverse Semiconductor 3x)
Goal: To have a sizable short position going into the next crash / recession

4. To Increase "USD/HKD/Gold" - No Progress. (25% from 25% from 28%).
Goal: To be in the safe havens before next recession; (HKD may be repegged)

5. To Reduce Number Of Counters: Worst (17 from 16 from 12)
Goal: To focus on maximum 16 counters from 4 countries at any one time.

6. To Minimize Industry / Sector Risk / Country Risk
a. Heavy exposure to Asian Based Equities
b. Heavy exposure to Asian Based Currencies
Goal: To diversify across various Sectors, Countries and Currencies

7. To diversify from "Value" into "Momentum" stocks: 99% Value (Current)
Goal: To increase exposure to 50%


Market Risk Indicators

1. Euphoria: 9 (Low: 1; High: 10) - FAANNG, ETFs; Margin Debts; SWFs; Central Banks; Fund Flows;

2. Credit Problems: 9 (Very Good: 1; Very Bad: 10) - Housing, Subprime Auto; Student Loans; Credit Cards; Junk Bonds; EM USD Loans;

3. Recession: 9 (Strong Economy: 1; Depression: 10) - GDP; Taxes; PMI; Housing; Auto; Retail; NAFTA; Trade War; 2019?;

4. Liquidity: 6 (Very Liquid: 1; Tight 10) - QE (Feds, ECB, BOJ, PBOC); Interest Rates; Rotation (Bonds); Asset Shrinkage 2018?; EM; Italy;

5. Inverted Yield: 6 (Low Inversion: 1; High Inversion: 10) - Rising Interest Rates; Slope; Inversion; US 10 Years < US 2 Years; Expecting 2019 to 2020

6. Valuation; 9 (Safe 1: Danger 10) PE S&P, Nadsaq; Revenue; USD; Tax Reform; Deregulation

7. Geopolitical Issues: 7 (Peaceful: 1; War: 10) - Iran; South China Sea; Europe; Russia; Saudi Arabia; Iran;

Total: 55 out of 70 (79%); (Safe: 60%; Danger: 85%)


Commodities: Risk-Off (Data from Commodities Live every Saturday)

1. WTI Oil - Higher. US$40.15 from US$38.20 last week from US$39.45 two weeks ago;
Support: Resistance: US$29; US$45 (R1); US$77 (2018);
a. Demand is down about 20%?
b. Supply is up about 15%?
c. China is filling it's SPR
d. US is renting their SPR storage out, to the private companies?
viewtopic.php?f=33&t=9249&p=231235#p231235

2. Gold - Higher. US$1787 from US$1785 from US$1757;
Support: $1240; $1050; Resistance: $1775; $1830;
a. They cant print gold
b. Gold will probably rally after the current physical selling
c. In a crisis (cash crunch), gold will also be sold
d. Is Silver a better bet due to the current high Gold/Silver ratio?
viewtopic.php?f=33&t=8845&p=231236#p231236

3. Copper - Higher; US$2.72 from US$2.66 from US$2.61;
viewtopic.php?f=33&t=5598&p=231237#p231237


Equities - Risk-On (Data as of Saturday every week)

1. US Equities - Higher; 3130 from 3009 last week from 3098 two weeks ago;
viewtopic.php?f=11&t=7643&start=200
a. Support: 2820; 2740; 1930 (2016); Resistance: 3130; 3385
b. No Trade

2. HK Equities - Higher. 25373 from 24550 from 24644;
htttp:/investideas.net/forum/viewtopic.php?f=10&t=7470&start=120
a. Support: 22000; 21600; 19500; 16800
b. Resistance: 25400; 26800; 28000; 29000; 31600;
c. Traded Cosco Shipping Energy (1138)
d. Sold Yeahka (9923)
e. Bought 7500 (Hang Seng Inverse 2x)

3. Shanghai Equities - Higher; 3153 from 2980 from 2968;
viewtopic.php?f=10&t=7190&start=210
a. Support: 2450; Resistance 3300; 3600
b. No Trade

4. Spore Equities - Higher; 2653 from 2605 from 2635;
Resistance 3850
viewtopic.php?f=10&t=6828&start=b110
a. Traded EW World Reit

5. Japan Equities - Higher. 22306 from 22512 from 22479;
viewtopic.php?f=10&t=7138&start=200
a. Forward PE 13
b. Support 15575 (2016); Resistance 25000
c. BOJ owns > Half government bonds and 75% of ETFs
d. Breakeven on BOJ's ETF at 19,500
e. No Trade

6. Malaysian Equities; Higher; 1553 from 1488 from 1507;
viewtopic.php?f=10&t=6292&start=30
a. Short-Selling ban extended to Dec 31, 2020
b. Bought Green Packet
viewtopic.php?f=76&t=10118&start=10
c. Added to IGB
viewtopic.php?f=76&t=6529&start=40


Currencies: Risk-On (Data from XE.com on Jul 04 @ 11.00 AM)

1. USD to JPY - JPY Weaker; 107.52 from 107.04 last week from 106.87 two weeks ago;
a. 52 week range is 76 to 126
b. Aging Population
c. High Debt Ratio
d. Umlimited QE
viewtopic.php?f=32&t=4205&start=180

2. SGD to MYR - SGD Stronger; 3.0734 from 3.0729 from 3.0552;
a. Would they devalue the SGD because of the coming Recession?
b. Converted some SGD to MYR
viewtopic.php?f=32&t=136&start=110

3. AUD to USD - AUD Stronger; 0.6950 from 0.6870 from 0.6834;
a. The range is 0.70 (2016) to 1.10 (2011)
b. Commodity Currency
c. How will China retaliate against Australia?
viewtopic.php?f=32&t=5256&start=130

4. AUD to SGD - AUD Stronger; 0.9688 from 0.9566 from 0.9551;
a. The range is 0.98 (2016) to 1.36 (2012)

5. AUD to MYR - AUD Stronger; 2.9775 from 2.9383 from 2.9179;
a. The range is 2.20 (2008) to 3.41 (2017)

6. EUR to USD - EUR Stronger. 1.1221 from 1.1179 from 1.1303;
viewtopic.php?f=32&t=5523&start=100

7. USD to HKD - HKD Strong. 7.7499 from 7.7504 from 7.7504;
a. USD Peg band: 7.75 to 7.85
b. When will they be removing the peg to the USD?
viewtopic.php?f=32&t=3529&start=40

8. USD to MYR:- MYR Weaker. 4.2875 from 4.2793 from 4.2694;
a. 52 Week Range is 3.27 to 4.54
b. Lowest: 4.885 (1998)
viewtopic.php?f=32&t=397&start=9

9. USD to SGD:- SGD Weaker; 1.3950 from 1.3921 from 1.3975;
a. High 1.70 (2004); Low 1.20 (2011)
b. Uncomfortable holding the currency of a small country where a catastrophe can wipe them out; But Singapore has been managing it's finances well.
viewtopic.php?f=32&t=136&start=100

10. USD to CNY:- CNY Stronger; 7.0666 from 7.0775 from 7.0713;
viewtopic.php?f=32&t=7720&start=90

11. GBP to USD:- GBP Stronger; 1.2483 from 1.2371 from 1.2349;
a. Brexit
viewtopic.php?f=32&t=333&start=80

12. GBP to MYR:- GBP Stronger; 5.3522 from 5.2967 from 5.2726;

13. Dollar Index - USD Weaker; 97.17 from 97.39 from 97.62;
viewtopic.php?f=32&t=7616&start=60


Properties:-

1. China Properties:-
viewtopic.php?f=10&t=8150&start=140

2. HK Properties:-
a. How much will it drop and for how long?
viewtopic.php?f=10&t=7785&start=150

3. Singapore Properties:-
a. How long will it drop and for how long?
b. Will they be removing the property curbs?
viewtopic.php?f=10&t=7750&start=210

4. Malaysian Properties:-
viewtopic.php?f=10&t=4220&start=200


Others

Market Sentiment - Complacent?
viewtopic.php?f=16&t=9099&start=90

Headwinds:-
viewtopic.php?f=16&t=8930&p=231225#p231225

Tailwinds:-
viewtopic.php?f=16&t=8940&p=231226#p231226

Warning Signs:-
viewtopic.php?f=16&t=9909&p=231227#p231227

Risk Management:-
viewtopic.php?f=16&t=7547&p=231228#p231228

Yield on 10 Year US Treasuries - Flat; 0.67% from 0.66% last week from 0.69% two weeks ago

Yield on 2 Year Treasuries - Lower; 0.16% from 0.18% from 0.19%;

Interest Rates:-
viewtopic.php?f=16&t=7319&p=221670#p221670

JNK (SPDR Barclays High Yield Bond ETF) - Higher: 101.72 from 101.54 from 103.06;

HYG (iShares iBoxx $ High Yid Corp Bond ETF) - Higher; 82.13 from 82.00 from 82.88;

Baltic Dry Index - Higher; 1894 from 1738 from 1555; Low 290; High 2330 (2013)

Covid19 Notes:-
viewtopic.php?f=25&t=5657&start=150

US Slowdown - How Deep & How Long?
viewtopic.php?f=11&t=9039&start=50

Risks Out There:-
posting.php?mode=reply&f=16&t=8930


The above is to from help me crystallize my thinking. It's not a recommendation to Buy or Sell. Use the above comments at your own risk and please do feel free to provide me with your kind thoughts and comments


Please Note:-

Active Topics - There is an "Active Topics" button on the top right corner.
search.php?search_id=active_topics

Support The Forum - If you have benefited from the ideas in the forum but have not participated in the discussions, we would appreciate your kind support to defray the expenses of maintaining the forum. The buttom is at the top right hand corner.

Second Opinion - Please see the "Second Opinion" thread in the "Services for InvestIdeas Members" section, located just below the Miscellaneous Section.
viewtopic.php?f=26&t=3168
You do not have the required permissions to view the files attached to this post.
It's all about "how much you made when you were right" & "how little you lost when you were wrong"
User avatar
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Billionaire Boss
 
Posts: 118522
Joined: Wed May 07, 2008 9:28 am

Re: Winston's Investment Ideas 05 (May 19 - Jul 23)

Postby winston » Sun Jul 12, 2020 10:52 am

TOL @ July 12, 2020

Earnings.jpg


Weak US Q2 Earnings?

It's the beginning of US Earnings season next week and the "experts" are expecting it to be quite weak this time.

For a flavor of things to come, the following are the some comments from Yahoo Finance:-

"Analysts expect a sharp drop in Q2 earnings and the margin of error is high.

The estimated (year-over-year) earnings decline for Q2 2020 is about -40%.

If -40% is the actual decline for the quarter, it will mark the largest year-over-year decline in earnings for the index since Q4 2008 (-70%).

All eleven sectors are projected to report a year-over-year decline in earnings, led by the Energy, Consumer Discretionary, Industrials, and Financials sectors."

Would Q2 Earnings be the catalyst to bring the US market down? Or has expectations being built in already as seen in the current Bullish Sentiment?

And would the inexperienced pyjama traders, be slaughtered soon, starting from next week? Or would their luck continued to be good, that actual earnings will exceed expected earnings, as in the past?

Intuitively, I think that there could be some earnings disappointment. I think that the market has fully priced in a "V" recovery and that it may not materialise. In addition, projections may also be not that rosy for the next 2 quarters.

Therefore, it may be prudent to be a bit careful during this upcoming "US Earnings Season".

Elsewhere, in Malaysia, there could be some political developments next week:-
1. Voting on the new Parliament Speaker
2. No Confidence Vote?
3. Snap Election?


Weekly Risk Management Progress Report:-

1. To Monitor NET Exposure To Equities (Long Less Shorts):- Safe (15% from 14% last week from 14% two weeks ago, of Liquid Assets)
Goal: 5% exposure to Equities before the next crash; Maximum 25%;

2. To Diversify From Asian Equities: No Progress (85% from 85% from 81%):
Goal: To reduce the percentage of Asian Equities to around 50%

3. To Buy Inverse ETFs and Puts before the next crash:-
a. Sold 7500 (Hang Seng Inverse 2x)
b. Current Position: TZA (Inverse Russell 3x)
c. Current Position: SOXS (Inverse Semiconductor 3x)
Goal: To have a sizable short position going into the next crash / recession

4. To Increase "USD/HKD/Gold" - No Progress. (25% from 25% from 25%).
Goal: To be in the safe havens before next recession; (HKD may be repegged)

5. To Reduce Number Of Counters: Progress (16 from 17 from 16)
Goal: To focus on maximum 16 counters from 4 countries at any one time.

6. To Minimize Industry / Sector Risk / Country Risk
a. Heavy exposure to Asian Based Equities
b. Heavy exposure to Asian Based Currencies
Goal: To diversify across various Sectors, Countries and Currencies

7. To diversify from "Value" into "Momentum" stocks: Progress; 85% from 99% last week
Goal: To increase exposure of "momentum stocks" to 50%


Market Risk Indicators

1. Euphoria: 9 (Low: 1; High: 10) - FAANNG, ETFs; Margin Debts; SWFs; Central Banks; Fund Flows;

2. Credit Problems: 9 (Very Good: 1; Very Bad: 10) - Housing, Subprime Auto; Student Loans; Credit Cards; Junk Bonds; EM USD Loans;

3. Recession: 9 (Strong Economy: 1; Depression: 10) - GDP; Taxes; PMI; Housing; Auto; Retail; NAFTA; Trade War; 2019?;

4. Liquidity: 6 (Very Liquid: 1; Tight 10) - QE (Feds, ECB, BOJ, PBOC); Interest Rates; Rotation (Bonds); Asset Shrinkage 2018?; EM; Italy;

5. Inverted Yield: 6 (Low Inversion: 1; High Inversion: 10) - Rising Interest Rates; Slope; Inversion; US 10 Years < US 2 Years; Expecting 2019 to 2020

6. Valuation; 9 (Safe 1: Danger 10) PE S&P, Nadsaq; Revenue; USD; Tax Reform; Deregulation

7. Geopolitical Issues: 7 (Peaceful: 1; War: 10) - Iran; South China Sea; Europe; Russia; Saudi Arabia; Iran;

Total: 55 out of 70 (79%); (Safe: 60%; Danger: 85%)


Commodities: Risk-On (Data from Commodities Live every Saturday)

1. WTI Oil - Higher. US$40.56 from US$40.15 last week from US$38.20 two weeks ago;
Support: Resistance: US$29; US$45 (R1); US$77 (2018);
a. Demand is down about 20%?
b. Supply is up about 15%?
c. China is filling it's SPR
d. US is renting their SPR storage out to the private companies?
viewtopic.php?f=33&t=9249&p=231235#p231235

2. Gold - Higher. US$1802 from US$1787 from US$1785;
Support: $1240; $1050; Resistance: $1775; $1830;
a. They cant print gold
b. Gold will probably rally after the current physical selling
c. In a crisis (cash crunch), gold will also be sold
d. Is Silver a better bet due to the current high Gold/Silver ratio?
viewtopic.php?f=33&t=8845&p=231236#p231236

3. Copper - Higher; US$2.91 from US$2.72 from US$2.66;
viewtopic.php?f=33&t=5598&p=231237#p231237


Equities - Risk-On (Data as of Saturday every week)

1. US Equities - Higher; 3185 from 3130 last week from 3009 two weeks ago;
viewtopic.php?f=11&t=7643&start=200
a. Support: 2820; 2740; 1930 (2016); Resistance: 3385
b. Sold Weibo (WB)

2. HK Equities - Higher. 25727 from 25373 from 24550;
htttp:/investideas.net/forum/viewtopic.php?f=10&t=7470&start=120
a. Support: 22000; 21600; 19500; 16800
b. Resistance: 25400; 26800; 28000; 29000; 31600;
c. Bought China Life (2628)
viewtopic.php?f=60&t=76&start=110
d. Bought Zhaojin Mining (1818)
viewtopic.php?f=41&t=1246&start=90
e. Sold Cosco Shipping Energy
f. Sold MMG
g. Sold 7500 (Hang Seng Inverse 2x)

3. Shanghai Equities - Higher; 3383 from 3153 from 2980;
viewtopic.php?f=10&t=7190&start=210
a. Support: 2450; Resistance 3300; 3600
b. No Trade

4. Spore Equities - Flat; 2653 from 2653 from 2605;
Resistance 3850
a. Bought Wilmar
viewtopic.php?f=48&t=7843&start=100
b. Bought Riverstone
viewtopic.php?f=30&t=456&start=70
c. Added to SGX
viewtopic.php?f=10&t=6828&start=b110
d. Sold Jardine Matheson

5. Japan Equities - Lower. 22291 from 22306 from 22512;
viewtopic.php?f=10&t=7138&start=200
a. Forward PE 13
b. Support 15575 (2016); Resistance 25000
c. BOJ owns > Half government bonds and 75% of ETFs
d. Breakeven on BOJ's ETF at 19,500
e. No Trade

6. Malaysian Equities; Higher; 1592 from 1553 from 1488;
viewtopic.php?f=10&t=6292&start=30
a. Short-Selling ban extended to Dec 31, 2020
b. Traded Green Packet
viewtopic.php?f=76&t=10118&start=10
c. Added to Berjaya Sports Toto
viewtopic.php?f=75&t=6483&start=10
d. Sold some MAA


Currencies: Risk-On (Data from XE.com on Jul 11 @ 11.00 AM)

1. USD to JPY - JPY Stronger; 106.93 from 107.52 last week from 107.04 two weeks ago;
a. 52 week range is 76 to 126
b. Aging Population
c. High Debt Ratio
d. Umlimited QE
viewtopic.php?f=32&t=4205&start=180

2. SGD to MYR - SGD Weaker; 3.0681 from 3.0734 from 3.0729;
a. Would they devalue the SGD because of the coming Recession?
b. Converted some SGD to MYR
viewtopic.php?f=32&t=136&start=110

3. AUD to USD - AUD Weaker; 0.6948 from 0.6950 from 0.6870;
a. The range is 0.70 (2016) to 1.10 (2011)
b. Commodity Currency
c. How will China retaliate against Australia?
viewtopic.php?f=32&t=5256&start=130

4. AUD to SGD - AUD Weaker; 0.9661 from 0.9688 from 0.9566;
a. The range is 0.98 (2016) to 1.36 (2012)

5. AUD to MYR - AUD Weaker; 2.9642 from 2.9775 from 2.9383;
a. The range is 2.20 (2008) to 3.41 (2017)

6. EUR to USD - EUR Stronger. 1.1300 from 1.1221 from 1.1179;
viewtopic.php?f=32&t=5523&start=100

7. USD to HKD - HKD Weaker. 7.7513 from 7.7499 from 7.7504;
a. USD Peg band: 7.75 to 7.85
b. When will they be removing the peg to the USD?
viewtopic.php?f=32&t=3529&start=40

8. USD to MYR:- MYR Stronger. 4.2665 from 4.2875 from 4.2793;
a. 52 Week Range is 3.27 to 4.54
b. Lowest: 4.885 (1998)
viewtopic.php?f=32&t=397&start=9

9. USD to SGD:- SGD Stronger; 1.3906 from 1.3950 from 1.3921;
a. High 1.70 (2004); Low 1.20 (2011)
b. Uncomfortable holding the currency of a small country where a catastrophe can wipe them out; But Singapore has been managing it's finances well.
viewtopic.php?f=32&t=136&start=100

10. USD to CNY:- CNY Stronger; 7.0001 from 7.0666 from 7.0775;
viewtopic.php?f=32&t=7720&start=90

11. GBP to USD:- GBP Stronger; 1.2628 from 1.2483 from 1.2371;
a. Brexit
viewtopic.php?f=32&t=333&start=80

12. GBP to MYR:- GBP Stronger; 5.3876 from 5.3522 from 5.2967;

13. Dollar Index - USD Weaker; 96.65 from 97.17 from 97.39;
viewtopic.php?f=32&t=7616&start=60


Properties:-

1. China Properties:-
viewtopic.php?f=10&t=8150&start=140

2. HK Properties:-
a. How much will it drop and for how long?
viewtopic.php?f=10&t=7785&start=150

3. Singapore Properties:-
a. How long will it drop and for how long?
b. Will they be removing the property curbs?
viewtopic.php?f=10&t=7750&start=210

4. Malaysian Properties:-
viewtopic.php?f=10&t=4220&start=200


Others

Market Sentiment - Complacent?
viewtopic.php?f=16&t=9099&start=90

Headwinds:-
viewtopic.php?f=16&t=8930&p=231225#p231225

Tailwinds:-
viewtopic.php?f=16&t=8940&p=231226#p231226

Warning Signs:-
viewtopic.php?f=16&t=9909&p=231227#p231227

Risk Management:-
viewtopic.php?f=16&t=7547&p=231228#p231228

Yield on 10 Year US Treasuries - Lower; 0.64% from 0.67% last week from 0.66% two weeks ago

Yield on 2 Year Treasuries - Flat; 0.16% from 0.16% from 0.18%;

Interest Rates:-
viewtopic.php?f=16&t=7319&p=221670#p221670

JNK (SPDR Barclays High Yield Bond ETF) - Higher: 102.13 from 101.72 from 101.54;

HYG (iShares iBoxx $ High Yid Corp Bond ETF) - Higher; 82.49 from 82.13 from 82.00;

Baltic Dry Index - Lower; 1810 from 1894 from 1738; Low 290; High 2330 (2013)

Covid19 Notes:-
viewtopic.php?f=25&t=5657&start=150

US Slowdown - How Deep & How Long?
viewtopic.php?f=11&t=9039&start=50

Risks Out There:-
posting.php?mode=reply&f=16&t=8930


The above is to from help me crystallize my thinking. It's not a recommendation to Buy or Sell. Use the above comments at your own risk and please do feel free to provide me with your kind thoughts and comments


Please Note:-

Active Topics - There is an "Active Topics" button on the top right corner.
search.php?search_id=active_topics

Support The Forum - If you have benefited from the ideas in the forum but have not participated in the discussions, we would appreciate your kind support to defray the expenses of maintaining the forum. The buttom is at the top right hand corner.

Second Opinion - Please see the "Second Opinion" thread in the "Services for InvestIdeas Members" section, located just below the Miscellaneous Section.
viewtopic.php?f=26&t=3168
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It's all about "how much you made when you were right" & "how little you lost when you were wrong"
User avatar
winston
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Posts: 118522
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Re: Winston's Investment Ideas 05 (May 19 - Jul 23)

Postby winston » Sun Jul 19, 2020 12:14 pm

TOL @ July 19, 2020

complacency.png


Complacent Markets?

For the week, the US & Japanese markets grinded higher, while HK & China were weaker.

The US markets rose on some "positive news" from Moderna on their potential Covid19 vaccine. It does not matter that it would probably be at least a year or more before a safe vaccine is available for the general population.

The US Investment Banks also reported better than expected trading results, while the US Traditional Banks reported not so strong results. It does not matter that the Investment Banks may not be able to repeat their sterling trading results in future quarters.

Going forward, I'm still expecting US earnings and Future Projections, to be weaker than expected, due to Covid19.

However, in the world of Unlimited QE and Pyjamas Traders, Earnings and Revenues may not matter anymore.

And if that is the case, TA would probably be more useful than FA, until the Pyjamas Traders are all slaughtered.

Therefore, I need to remind myself that if I want to trade in this market, I will need to be more of a "Momentum Player" and to treat it more of a "gamble" than a "Buy & Hold" investment.

I think that there's quite a bit of complacency in the markets but such situation can last for a long ime, until there's a bigger opposite force to counter it. That could come probably through a worsening Covid19 situation or "worst than expected earnings" in the Technology or Biotech sectors.


Weekly Risk Management Progress Report:-

1. To Monitor NET Exposure To Equities (Long Less Shorts):- Safe (13% from 14% last week from 14% two weeks ago, of Liquid Assets)
Goal: 5% exposure to Equities before the next crash; Maximum 30%;

2. To Diversify From Asian Equities: Worse (94% from 85% from 85%):
Goal: To reduce the percentage of Asian Equities to around 70%

3. To Buy Inverse ETFs and Puts before the next crash:-
Current Position:-
a. TZA (Inverse Russell 3x)
b. SOXS (Inverse Semiconductor 3x)
Goal: To have a sizable short position going into the next crash / recession

4. To Increase "USD/HKD/Gold" - No Progress. (25% from 25% from 25%).
Goal: To be in the safe havens before next recession; (HKD may be repegged)

5. To Reduce Number Of Counters: Progress (16 from 17 from 16)
Goal: To focus on maximum 20 counters from 4 countries at any one time.

6. To Minimize Industry / Sector Risk / Country Risk
a. Heavy exposure to Asian Based Equities
b. Heavy exposure to Asian Based Currencies
Goal: To diversify across various Sectors, Countries and Currencies

7. To diversify from "Value" into "Momentum" stocks: Progress; 89% from 99% Value
Goal: To increase exposure to 50%


Market Risk Indicators

1. Euphoria: 9 (Low: 1; High: 10) - FAANNG, ETFs; Margin Debts; SWFs; Central Banks; Fund Flows;

2. Credit Problems: 9 (Very Good: 1; Very Bad: 10) - Housing, Subprime Auto; Student Loans; Credit Cards; Junk Bonds; EM USD Loans;

3. Recession: 9 (Strong Economy: 1; Depression: 10) - GDP; Taxes; PMI; Housing; Auto; Retail; NAFTA; Trade War; 2019?;

4. Liquidity: 6 (Very Liquid: 1; Tight 10) - QE (Feds, ECB, BOJ, PBOC); Interest Rates; Rotation (Bonds); Asset Shrinkage 2018?; EM; Italy;

5. Inverted Yield: 6 (Low Inversion: 1; High Inversion: 10) - Rising Interest Rates; Slope; Inversion; US 10 Years < US 2 Years; Expecting 2019 to 2020

6. Valuation; 9 (Safe 1: Danger 10) PE S&P, Nadsaq; Revenue; USD; Tax Reform; Deregulation

7. Geopolitical Issues: 7 (Peaceful: 1; War: 10) - Iran; South China Sea; Europe; Russia; Saudi Arabia; Iran;

Total: 55 out of 70 (79%); (Safe: 60%; Danger: 85%)


Commodities: Risk-On (Data from Commodities Live every Saturday)

1. WTI Oil - Flat. $40.59 from US$40.56 last week from US$40.15 two weeks ago;
Support: Resistance: US$29; US$45 (R1); US$77 (2018);
a. Demand is down about 20%?
b. Supply is up about 15%?
c. China is filling it's SPR
viewtopic.php?f=33&t=9249&p=231235#p231235

2. Gold - Higher. US$1812 from US$1802 from US$1787;
Support: $1240; $1050; Resistance: $1775; $1830;
a. They cant print gold
b. Gold will probably rally after the current physical selling
c. In a crisis (cash crunch), gold will also be sold
d. Is Silver a better bet due to the current high Gold/Silver ratio?
viewtopic.php?f=33&t=8845&p=231236#p231236

3. Copper - Flat; US$2.90 from US$2.91 from US$2.72;
viewtopic.php?f=33&t=5598&p=231237#p231237


Equities - Risk-On (Data as of Saturday every week)

1. US Equities - Higher; 3225 from 3185 last week from 3130 two weeks ago;
viewtopic.php?f=11&t=7643&start=200
a. Support: 2820; 2740; 1930 (2016); Resistance: 3385
b. No Trade

2. HK Equities - Lower. 25089 from 25727 from 25373;
htttp:/investideas.net/forum/viewtopic.php?f=10&t=7470&start=120
a. Support: 22000; 21600; 19500; 16800
b. Resistance: 25400; 26800; 28000; 29000; 31600;
c. Bought Soho China (0410)
d. Bought Cosco Shipping Energy (1138)
e. Bought Alibaba (9988)
f. Sold China Life (2628)
g. Sold Zhaojin Mining (1818)

3. Shanghai Equities - Lower; 3214 from 3383 from 3153;
viewtopic.php?f=10&t=7190&start=210
a. Support: 2450; Resistance 3300; 3600
b. No Trade

4. Spore Equities - Lower; 2618 from 2653 from 2605;
Resistance 3850
a. Sold Riverstone
b. Sold EC World Reit
c. Sold 1/2 SGX
d. Traded Jardine Matheson
e. Traded Jardine Strategic

5. Japan Equities - Higher. 22696 from 22291 from 22306;
viewtopic.php?f=10&t=7138&start=200
a. Forward PE 13
b. Support 15575 (2016); Resistance 25000
c. BOJ owns > Half government bonds and 75% of ETFs
d. Breakeven on BOJ's ETF at 19,500
e. No Trade

6. Malaysian Equities; Higher; 1596 from 1592 from 1553;
viewtopic.php?f=10&t=6292&start=30
a. Short-Selling ban extended to Dec 31, 2020
b. Sold some MAA


Currencies: Risk-On (Data from XE.com on Jul 17 @ 3.30PM)

1. USD to JPY - JPY Weaker; 107.13 from 106.93 last week from 107.52 two weeks ago;
a. 52 week range is 76 to 126
b. Aging Population
c. High Debt Ratio
d. Umlimited QE
viewtopic.php?f=32&t=4205&start=180

2. SGD to MYR - SGD Flat; 3.0682 from 3.0681 from 3.0734;
a. Would they devalue the SGD because of the coming Recession?
b. Converted some SGD to MYR
viewtopic.php?f=32&t=136&start=110

3. AUD to USD - AUD Stronger; 0.6990 from 0.6948 from 0.6950;
a. The range is 0.70 (2016) to 1.10 (2011)
b. Commodity Currency
c. How will China retaliate against Australia?
viewtopic.php?f=32&t=5256&start=130

4. AUD to SGD - AUD Stronger; 0.9726 from 0.9661 from 0.9688;
a. The range is 0.98 (2016) to 1.36 (2012)

5. AUD to MYR - AUD Stronger; 2.9843 from 2.9642 from 2.9775;
a. The range is 2.20 (2008) to 3.41 (2017)
b. Converted some AUD to MYR

6. EUR to USD - EUR Stronger. 1.1396 from 1.1300 from 1.1221;
viewtopic.php?f=32&t=5523&start=100

7. USD to HKD - HKD Weaker. 7.7536 from 7.7513 from 7.7499;
a. USD Peg band: 7.75 to 7.85
b. When will they be removing the peg to the USD?
viewtopic.php?f=32&t=3529&start=40

8. USD to MYR:- MYR Weaker. 4.2700 from 4.2665 from 4.2875;
a. 52 Week Range is 3.27 to 4.54
b. Lowest: 4.885 (1998)
viewtopic.php?f=32&t=397&start=9

9. USD to SGD:- SGD Weaker; 1.3913 from 1.3906 from 1.3950;
a. High 1.70 (2004); Low 1.20 (2011)
b. Uncomfortable holding the currency of a small country where a catastrophe can wipe them out; But Singapore has been managing it's finances well.
viewtopic.php?f=32&t=136&start=100

10. USD to CNY:- CNY Stronger; 6.9975 from 7.0001 from 7.0666;
viewtopic.php?f=32&t=7720&start=90

11. GBP to USD:- GBP Weaker; 1.2550 from 1.2628 from 1.2483;
a. Brexit
viewtopic.php?f=32&t=333&start=80

12. GBP to MYR:- GBP Weaker; 5.3568 from 5.3876 from 5.3522;

13. Dollar Index - USD Weaker; 96.24 from 96.65 from 97.17;
viewtopic.php?f=32&t=7616&start=60


Properties:-

1. China Properties:-
viewtopic.php?f=10&t=8150&start=140

2. HK Properties:-
a. How much will it drop and for how long?
viewtopic.php?f=10&t=7785&start=150

3. Singapore Properties:-
a. How long will it drop and for how long?
b. Will they be removing the property curbs?
viewtopic.php?f=10&t=7750&start=210

4. Malaysian Properties:-
viewtopic.php?f=10&t=4220&start=200


Others

Market Sentiment - Complacent?
viewtopic.php?f=16&t=9099&start=90

Headwinds:-
viewtopic.php?f=16&t=8930&p=231225#p231225

Tailwinds:-
viewtopic.php?f=16&t=8940&p=231226#p231226

Warning Signs:-
viewtopic.php?f=16&t=9909&p=231227#p231227

Risk Management:-
viewtopic.php?f=16&t=7547&p=231228#p231228

Yield on 10 Year US Treasuries - Lower; 0.60% from 0.64% last week from 0.67% two weeks ago

Yield on 2 Year Treasuries - Lower; 0.15% from 0.16% from 0.16%;

Interest Rates:-
viewtopic.php?f=16&t=7319&p=221670#p221670

JNK (SPDR Barclays High Yield Bond ETF) - Higher: 103.22 from 102.13 from 101.72;

HYG (iShares iBoxx $ High Yid Corp Bond ETF) - Higher; 83.29 from 82.49 from 82.13;

Baltic Dry Index - Lower; 1699 from 1810 from 1894; Low 290; High 2330 (2013)

Covid19 Notes:-
viewtopic.php?f=25&t=5657&start=150

US Slowdown - How Deep & How Long?
viewtopic.php?f=11&t=9039&start=50

Risks Out There:-
posting.php?mode=reply&f=16&t=8930


The above is to from help me crystallize my thinking. It's not a recommendation to Buy or Sell. Use the above comments at your own risk and please do feel free to provide me with your kind thoughts and comments


Please Note:-

Active Topics - There is an "Active Topics" button on the top right corner.
search.php?search_id=active_topics

Support The Forum - If you have benefited from the ideas in the forum but have not participated in the discussions, we would appreciate your kind support to defray the expenses of maintaining the forum. The buttom is at the top right hand corner.

Second Opinion - Please see the "Second Opinion" thread in the "Services for InvestIdeas Members" section, located just below the Miscellaneous Section.
viewtopic.php?f=26&t=3168
You do not have the required permissions to view the files attached to this post.
It's all about "how much you made when you were right" & "how little you lost when you were wrong"
User avatar
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Posts: 118522
Joined: Wed May 07, 2008 9:28 am

Re: Winston's Investment Ideas 05 (May 19 - Jul 23)

Postby winston » Sun Jul 26, 2020 3:03 pm

TOL @ July 26, 2020

Questions.jpg


Asking The Rights Questions

I discussed investments ideas with different friends everyday. Some of them think that they know everything and are not asking questions.

Therefore, it's probably time to remind myself, that asking "quality questions", is maybe more important, that repeating some "facts" that I may have read somewhere or having a fuzzy impression of a situation.

Example:-


US Markets

1. US Tech is starting to correct. So some of the questions could be:-

a. What tech counters should I be focussing on? AAPL, AMZN, MFST, NVDA, GOOG etc. ? Software seems safer than hardware, as in the case of INTC last Friday.

b. What criteria should I be using to trade Tech? The traditional PEG, Cash Flow, Yield etc obviously will not work. Is TA better better suited to trade tech eg. RSI?

c. Is there a "bigger fool" than me if I invest in US tech now ? It has run up a lot since the March low. Will the "Robinhoods" and "Mom & Pops", be buying after me?

2. Can the US stock market continue to go up with Covid19, Rolling Lockdowns, High Debt, Huge Deficits, Record Unemployment, High USD, Dysfuntional White House etc.?

3. Is Unlimited QE and the army of "Robinhoods" and "Pyjamas Traders", be strong enough to push the US market higher?


HK & China

HK & China were weak on Friday. So some of the questions could be:-

1. Is it time to buy the China Tech eg. Alibaba, Tencent, Meituan, JD?

2. What are the catalysts? Alibaba (Ant Financial IPO); Meituan (Didi Chuxing IPO?); JD.com (JD Health IPO);

3. Would China really allow their Pyjamas Traders to be slaughtered?


Currencies

USD is weak. AUD is strong. Some of the questions could be:-

1. USD: If the USD is going to weaken, what are the alternatives? Gold? Euro?

2. AUD: Why is the AUD so strong? Is it due to interest rates differential? If that is the case, wouldn't the AUD weaken, when Australia has to lower interest rates later, due to their weak economy? And when would Brazil start exporting iron ore again, as the Chinese would certainly want to buy from Brazil than Australia?


GOLD

Gold is touching 9 year highs now. Some of the questions coud be:-

a. Would there be a "bigger fool" if I buy Zhaojin, FNV, GLD, GDX and GDXJ now?

b. Nine years ago, the "experts" were talking of US$5000 gold. I didn't sell my gold as I was listening to these "experts". They are now starting to whisper that target now, using "Unlimited QE" as the excuse this time. When things crash, didn't you see gold dropping as well?


So those are some of my current questions, to the various things that have happened this week.
Hopefully, I'm asking the right questions.

On the horizon, we have the following:-
a. July 28 & 29: US Fed FOMC Meeting; How much lower can US rates go to?
b. July 30: 2Q US GDP; Can things really get better with Trump in charge of the Covid19?


Weekly Risk Management Progress Report:-

1. To Monitor NET Exposure To Equities (Long Less Shorts):- Safe (19% from 13% last week from 14% two weeks ago, of Liquid Assets)
Goal: 5% exposure to Equities before the next crash; Maximum 30%;

2. To Diversify From Asian Equities: Worse (96% from 94% from 85%):
Goal: To reduce the percentage of Asian Equities to around 70%

3. To Buy Inverse ETFs and Puts before the next crash:-
Current Position:-
a. TZA (Inverse Russell 3x)
b. SOXS (Inverse Semiconductor 3x)
Goal: To have a sizable short position going into the next crash / recession

4. To Increase "USD/HKD/Gold" - No Progress. (25% from 25% from 25%).
Goal: To be in the safe havens before next recession; (HKD may be repegged)

5. To Reduce Number Of Counters: Worse (24 from 16 from 17)
Goal: To focus on maximum 20 counters from 4 countries at any one time.

6. To Minimize Industry / Sector Risk / Country Risk
a. Heavy exposure to Asian Based Equities
b. Heavy exposure to Asian Based Currencies
Goal: To diversify across various Sectors, Countries and Currencies

7. To diversify from "Value" into "Momentum" stocks: Progress; 65% from 89% from 99% Value Stocks.
Goal: To increase exposure to 50%


Market Risk Indicators

1. Euphoria: 9 (Low: 1; High: 10) - FAANNG, ETFs; Margin Debts; SWFs; Central Banks; Fund Flows;

2. Credit Problems: 9 (Very Good: 1; Very Bad: 10) - Housing, Subprime Auto; Student Loans; Credit Cards; Junk Bonds; EM USD Loans;

3. Recession: 9 (Strong Economy: 1; Depression: 10) - GDP; Taxes; PMI; Housing; Auto; Retail; NAFTA; Trade War; 2019?;

4. Liquidity: 6 (Very Liquid: 1; Tight 10) - QE (Feds, ECB, BOJ, PBOC); Interest Rates; Rotation (Bonds); Asset Shrinkage 2018?; EM; Italy;

5. Inverted Yield: 6 (Low Inversion: 1; High Inversion: 10) - Rising Interest Rates; Slope; Inversion; US 10 Years < US 2 Years; Expecting 2019 to 2020

6. Valuation; 9 (Safe 1: Danger 10) PE S&P, Nadsaq; Revenue; USD; Tax Reform; Deregulation

7. Geopolitical Issues: 7 (Peaceful: 1; War: 10) - Iran; South China Sea; Europe; Russia; Saudi Arabia; Iran;

Total: 55 out of 70 (79%); (Safe: 60%; Danger: 85%)


Commodities: Risk-On (Data from Commodities Live every Saturday)

1. WTI Oil - Higher. $41.34 from $40.59 last week from US$40.56 two weeks ago;
Support: Resistance: US$29; US$45 (R1); US$77 (2018);
a. Demand is down about 20%?
b. Supply is up about 15%?
c. China is filling it's SPR
viewtopic.php?f=33&t=9249&p=231235#p231235

2. Gold - Higher. US$1900 from US$1812 from US$1802;
Support: $1240; $1050; Resistance: $1775; $1830;
a. They cant print gold
b. Gold will probably rally after the current physical selling
c. In a crisis (cash crunch), gold will also be sold
d. Is Silver a better bet due to the current high Gold/Silver ratio?
viewtopic.php?f=33&t=8845&p=231236#p231236

3. Copper - Flat; US$2.89 from US$2.90 from US$2.91;
viewtopic.php?f=33&t=5598&p=231237#p231237


Equities - Risk-Off (Data as of Saturday every week)

1. US Equities - Lower; 3216 from 3225 last week from 3185 two weeks ago;
viewtopic.php?f=11&t=7643&start=200
a. Support: 2820; 2740; 1930 (2016); Resistance: 3385
b. No Trade

2. HK Equities - Lower. 24705 from 25089 from 25727;
htttp:/investideas.net/forum/viewtopic.php?f=10&t=7470&start=120
a. Support: 22000; 21600; 19500; 16800
b. Resistance: 25400; 26800; 28000; 29000; 31600;
c. Bought Meituan (3690)
d. Bought Alibaba (9988)
e. Bought JD.com (9618)
f. Bought SMIC (0981)
g. Bought HKEX (0388)
h. Bought China Life (2628)
i. Bought CICC (3908)
j. Bought Sino Biopharm (1177)
k. Bought Tencent (0700)
l. Added to Cosco Shipping Energy (1138)
m. Sold Soho China (0410)

3. Shanghai Equities - Lower; 3197 from 3214 from 3383;
viewtopic.php?f=10&t=7190&start=210
a. Support: 2450; Resistance 3300; 3600
b. Bought A50 listed in HK

4. Spore Equities - Lower; 2580 from 2618 from 2653;
Resistance 3850
a. No Trade

5. Japan Equities - Higher. 22752 from 22696 from 22291;
viewtopic.php?f=10&t=7138&start=200
a. Forward PE 13
b. Support 15575 (2016); Resistance 25000
c. BOJ owns > Half government bonds and 75% of ETFs
d. Breakeven on BOJ's ETF at 19,500
e. No Trade

6. Malaysian Equities; Lower; 1590 from 1596 from 1592;
viewtopic.php?f=10&t=6292&start=30
a. Short-Selling ban extended to Dec 31, 2020
b. Added to Oriental Holdings


Currencies: Risk-On (Data from XE.com on Jul 24 @ 9.15 PM)

1. USD to JPY - JPY Stronger; 106.00 from 107.13 last week from 106.93 two weeks ago;
a. 52 week range is 76 to 126
b. Aging Population
c. High Debt Ratio
d. Umlimited QE
viewtopic.php?f=32&t=4205&start=180

2. SGD to MYR - SGD Stronger; 3.0782 from 3.0682 from 3.0681;
a. Would they devalue the SGD because of the coming Recession?
b. Converted some SGD to MYR
viewtopic.php?f=32&t=136&start=110

3. AUD to USD - AUD Stronger; 0.7088 from 0.6990 from 0.6948;
a. The range is 0.70 (2016) to 1.10 (2011)
b. Commodity Currency
c. How will China retaliate against Australia?
viewtopic.php?f=32&t=5256&start=130

4. AUD to SGD - AUD Stronger; 0.9818 from 0.9726 from 0.9661;
a. The range is 0.98 (2016) to 1.36 (2012)

5. AUD to MYR - AUD Stronger; 3.0224 from 2.9843 from 2.9642;
a. The range is 2.20 (2008) to 3.41 (2017)
b. Converted some AUD to MYR

6. EUR to USD - EUR Stronger. 1.1615 from 1.1396 from 1.1300;
viewtopic.php?f=32&t=5523&start=100

7. USD to HKD - HKD Stronger. 7.7511 from 7.7536 from 7.7513;
a. USD Peg band: 7.75 to 7.85
b. When will they be removing the peg to the USD?
viewtopic.php?f=32&t=3529&start=40

8. USD to MYR:- MYR Stronger. 4.2641 from 4.2700 from 4.2665;
a. 52 Week Range is 3.27 to 4.54
b. Lowest: 4.885 (1998)
viewtopic.php?f=32&t=397&start=9

9. USD to SGD:- SGD Stronger; 1.3853 from 1.3913 from 1.3906;
a. High 1.70 (2004); Low 1.20 (2011)
b. Uncomfortable holding the currency of a small country where a catastrophe can wipe them out; But Singapore has been managing it's finances well.
viewtopic.php?f=32&t=136&start=100

10. USD to CNY:- CNY Weaker; 7.0157 from 6.9975 from 7.0001;
viewtopic.php?f=32&t=7720&start=90

11. GBP to USD:- GBP Stronger; 1.2766 from 1.2550 from 1.2628;
a. Brexit
viewtopic.php?f=32&t=333&start=80

12. GBP to MYR:- GBP Stronger; 5.4428 from 5.3568 from 5.3876;

13. Dollar Index - USD Weaker; 94.57 from 96.24 from 96.65;
viewtopic.php?f=32&t=7616&start=60


Properties:-

1. China Properties:-
viewtopic.php?f=10&t=8150&start=140

2. HK Properties:-
a. How much will it drop and for how long?
viewtopic.php?f=10&t=7785&start=150

3. Singapore Properties:-
a. How long will it drop and for how long?
b. Will they be removing the property curbs?
viewtopic.php?f=10&t=7750&start=210

4. Malaysian Properties:-
viewtopic.php?f=10&t=4220&start=200


Others

Market Sentiment - Complacent?
viewtopic.php?f=16&t=9099&start=90

Headwinds:-
viewtopic.php?f=16&t=8930&p=231225#p231225

Tailwinds:-
viewtopic.php?f=16&t=8940&p=231226#p231226

Warning Signs:-
viewtopic.php?f=16&t=9909&p=231227#p231227

Risk Management:-
viewtopic.php?f=16&t=7547&p=231228#p231228

Yield on 10 Year US Treasuries - Lower; 0.57% from 0.60% last week from 0.64% two weeks ago

Yield on 2 Year Treasuries - Flat; 0.15% from 0.15% from 0.16%;

Interest Rates:-
viewtopic.php?f=16&t=7319&p=221670#p221670

JNK (SPDR Barclays High Yield Bond ETF) - Higher: 104.88 from 103.22 from 102.13;

HYG (iShares iBoxx $ High Yid Corp Bond ETF) - Higher; 84.52 from 83.29 from 82.49;

Baltic Dry Index - Lower; 1388 from 1699 from 1810; Low 290; High 2330 (2013)

Covid19 Notes:-
viewtopic.php?f=25&t=5657&start=150

US Slowdown - How Deep & How Long?
viewtopic.php?f=11&t=9039&start=50

Risks Out There:-
posting.php?mode=reply&f=16&t=8930


The above is to from help me crystallize my thinking. It's not a recommendation to Buy or Sell. Use the above comments at your own risk and please do feel free to provide me with your kind thoughts and comments


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