Winston's Investment Ideas 01 (Nov 08 - Apr 10)

Re: Winston's Investment Ideas 1 (Nov 08 - Mar 10)

Postby winston » Sun Mar 21, 2010 9:23 am

TOL as of March 21, 2010:-


Climbing a Wall of Worries


As we bump along nicely ( maybe due to Window Dressing activities ), I'm being reminded of the old saying above.

Anyway, a strong catalyst for a steep correction has not really materialized. Dubai was strong but not strong enough. Greece is also strong but again maybe not strong enough unless it becomes a contagion and also spreads to say Spain.

Could the "third top" be in the form of a higher USD ? Or an unexpected rate hike in the US or China? Or a collapse of Commodities due to an unwinding of speculative positions, possibly from a higher USD or new legislation ?


The week in review:-

1) Oil - US$80.60 from US$81.24 last week. The strong USD has affected the price of Oil. The cold weather is also almost over. And when would the Iraqi Oil be coming online ?

2) Gold - US$1107 from US$1102 last week. The strong USD has also affected Gold. And there's still no news on who would be buying those IMF gold ..

3) Other Commodities - Waiting for the 50% retracement.

4) Shanghai Equities - 3068 from 3014 last week. Strong Support @ 2750. Two strong headwinds ie. higher interest rates & reduced liquidity. Expecting the market to be trend-less..

5) HK Equities - 21371 from 21210 last week. Strong Support at 19500. Low volume. Position in AMVIG and added to Fosun. Bought & Sold Shineway Pharma. It's now earnings season so I need to make hay while the sun is shining :P

6) HK IPO - Applied for Huiyi. Did not apply for Flyke and Zhongsheng

7) Spore Equities - 2916 from 2881 last week. Support at 2625. Bought and Sold Capital Malls Asia this week ( my third trade on this counter ). Sold Starhill and also sold some Hotung.

8) US Equities - 1160 from 1150. Support at 1035. Stronger than expected but on low volume. Still sitting on my S&P Inverse ETF. Let's hoped that this "Position Trade" will not turn into a "Long Term Buy & Hold" :?

9) Japan Equities - 10825 from 10751 last week. Support @ 9850. Yen is going up on the repatriation of overseas profit before the end of March. Will it affect the market ?

10) Emerging Markets - Stronger than expected again.

11) Properties ( HK, China & Singapore) - Some Chinese SOEs have been told to exit the Property eg. Sino Ocean

12) Iran - When will sanctions starts ?

13) US & Japanese Interest Rates - When will the sudden spike happen ? India started raising interest rates last week. Who's next ?

14) USD - 80.76 from 79.84 last week. Unexpected strength. Maybe we will get the 50% retracement of 82 after all.

15) European Contagion - How big can it become ?

16) Mutual Fund - Cash levels are very low at < 3%. If there's a prolonged correction, there will not be anymore fire-power to support prices. And any redemption will also force prices lower...

17) Risks Out There - Please see the "Risks Out There" thread

18) Window Dressing- Was the unexpected strength in the past two weeks due to window dressing activities ?


I'll probably start worrying about the Market Direction after the Window Dressing activities. In the meantime, I'll continue to enjoy the party. I'm now positioning myself close to the doors. When the fire starts, everyone will be running to the door at the same time. Only the nimble will be able to get out ..

Some smart individuals may have already positioned themselves for the fire. They could also be the ones who will light the fire. Thereafter, they will spread it through Newsletters, Analyst Reports, Blogs, CNBC, Bloomberg, Magazines, Newspapers, Forums etc..


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


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Re: Winston's Investment Ideas 1 (Nov 08 - Mar 10)

Postby winston » Sun Mar 28, 2010 8:01 am

TOL as of March 28, 2010:-


Noise


The "perma bears" are still shaking their heads. How can the market continue it's uptrend, in the face of so many uncertainties eg. US Economy, European Contagion, High USD etc. ? Was the rise due to "Window Dressing" ? Or was the rise due to the shorts being forced to cover, probably caused by "Window Dressing" ?

There are a lot of Noise in the market nowadays. It's very difficult to separate the Facts from the Impressions. Intuitively, I think it rose because of Window Dressing so I'll be exiting some long positions next week ..


The week in review:-

1) Oil - US$80 from US$80.60 last week. The strong USD has affected the price of Oil. The cold weather is also almost over. And when would the Iraqi Oil be coming online ? Did you happened to see the big smile on the OPEC Oil Minister when he was asked whether the price of oil is at a right level ? If the Oil Men themselves thinks that the price of Oil is high, then why would you want to be buying at this price ?

2) Gold - US$ 1104 from US$1107 last week. The strong USD has also affected Gold. And who will be buying those IMF gold ? And the IMF supposedly only wants to sell to Central Banks only. Why ? Some of the US newsletters are saying that the the new support for gold is US$1050 ...

3) Other Commodities - Waiting for the 50% retracement.

4) Shanghai Equities - 3060 from 3068 last week. Strong Support @ 2750. Two strong headwinds ie. higher interest rates & reduced liquidity. Expecting market to be trend-less. It's a tired market.

5) HK Equities - 21056 from 21371 last week. Strong Support at 19500. Low volume. Positions in AMVIG, China Longyuan and Li & Fung. Sold Fosun. Traded Shineway Pharma ( 2nd round ) and Sino Ocean. HK will be close from Friday, April 2nd to Tuesday, April 6th.

6) HK IPO - Jackpot on Huiyi :D. Did not apply Fook Woo

7) Spore Equities - 2906 from 2916 last week. Support at 2625. No trade for the week.

8) US Equities - 1167 from 1160 last week. Support at 1035. Stronger than expected but on low volume. May add to my S&P Inverse ETF after April 1 :?

9) Japan Equities - 10996 from 10825 last week. Support @ 9850. The Japanese market has been very stong and has gone up about 20% in past 4 months. I hesitated at 9100 and am now paying the price for that hesitation :(

10) Emerging Markets - Stronger than expected again. Am expecting some outflows.

11) Properties ( HK, China & Singapore) - Intuitively, I think that it will continue to trend upwards until 2H 2012 unless there's an external shock. The developers have plenty of cash and holding power.

12) Iran - When will sanctions starts ? The Russians are also sending out mixed messages.

13) US & Japanese Interest Rates - When will the sudden spike happen ? The largest Japanese Pension Fund, who invests 70% of their money in Japanese Bonds, have their first outflow this year. In addition, the US auctions were weaker than expected.

14) USD - 81.98 from 80.76. We finally got the 50% retracement of 82 which I was looking for. Now what ?

15) European Contagion - How big can it become ? Portugal has been downgraded. And what will happen, if Spain is downgraded next ?

16) Cash- Cash levels at Mutual Funds are very low at < 3%. If there's a prolonged correction, there may not be anymore fire-power to support prices. And any redemption will also force prices lower. However, there's still supposedly US$3t on the sidelines ..

17) Window Dressing- Will be over soon.

18) Puts - I'm cleaning up my Watch-List and may buy some puts after April 1. However, I will still need to be a bit careful as it's still earnings reporting season in HK. And thereafter, it's earnings reporting season in the US again.

19) Timing- A crash normally happens on a strong catalyst. It will first spike downwards. Then there would be a technical rebound. The best time to short is on that technical rebound. This is the typical "M" or "Triple Tops" that one see on the charts. If one is nimble enough, one can also go long when it first corrects. There are many die-hard bulls who would be buying on that first dip.


Next week would be quite interesting. Firstly, Window Dressing would be over. Secondly, HK will be closed from Friday to Tuesday. In view of these factors, I will also be winding down some of my short term long positions next week.


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


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Re: Winston's Investment Ideas 1 (Nov 08 - Apr 10)

Postby lithium » Sun Mar 28, 2010 10:22 am

Hi Winston, how you pick these stocks? What is the growth rate you are expecting on these stocks?

Company PE
AMVIG 7
China Longyuan 121
Li & Fung. 40
Fosun. 8
Shineway Pharma
Sino Ocean 20
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Re: Winston's Investment Ideas 1 (Nov 08 - Apr 10)

Postby winston » Sun Mar 28, 2010 10:55 am

lithium wrote:Hi Winston, how you pick these stocks? What is the growth rate you are expecting on these stocks?

Company PE
AMVIG 7
China Longyuan 121
Li & Fung. 40
Fosun. 8
Shineway Pharma
Sino Ocean 20



Hi Lithium, the following are my rationale:-

1) AMVIG - This is a long term play because I feel that it has dropped too much. I'm also hoping that AMCOR may take them private or at least increase their stake in the company. Most of the short term players have already sold and it's the long term players who are holding now ..

2) China Longyuan - This is a Swing Trade because they would be reporting earnings soon. If the earnings are bad, I would then hold as they are the largest Windfarm Operator and the Chinese government has already mentioned that they would buy all electricity generated from the Wind Farms.

3) Li & Fung dropped 10% on Thursday. I suspect that the short-sellers were pushing it down so that they can cover their positions. I would exit on the technical rebound of about 5%. Or maybe I may hold, as this is a Blue Chip and people like Temasek may want to increase their stake. have not decided yet.

4) Fosun - I have already exited when it spike up on good earnings announcement. It's a slow counter and my money can be put to better use on other counters.

5) Shineway Pharma - GS is expecting a 40% growth and the PE is about 40 now. As I have made my profit, I will not wait for the earnings announcement. In addition, Sinopharm's results was below expectation :D

6) Sino Ocean - It was a Swing Trade. I bought because the short term players were selling. Cosco was not one of the 16 shortlisted company so would need to sell their stake. At the same time, China Life has been increasing their stake in the company.

As you can see from the above, PE is not my consideration when I'm Swing Trading :D :?
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Re: Winston's Investment Ideas 1 (Nov 08 - Apr 10)

Postby lithium » Sun Mar 28, 2010 10:59 am

So you pick swing trade based on coming result announcement? Or after a sharp drop? There are so many companies going to announce results. Why you pick these few?
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Re: Winston's Investment Ideas 1 (Nov 08 - Apr 10)

Postby winston » Sun Mar 28, 2010 11:20 am

Ha Ha.. it's not easy for a person with a very logical mind to understand Rojak Investing :P

I pick companies for a variety of reasons. The most important is that there has to be a strong catalyst for it to go up..

It could be an earnings announcement, a new policy etc. It could also be from a sharp drop where I think that it's over-done and whose fundamentals are improving and the short-sellers would have to cover in the not too distant future.

Sir John Templeton did say that,"The best time to buy a stock is when the short term players have finish their selling and vice-versa".
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Re: Winston's Investment Ideas 1 (Nov 08 - Apr 10)

Postby winston » Sun Apr 04, 2010 6:58 am

TOL as of April 4, 2010:-


Calm before the Storm ?


Window Dressing is over. And we now have a window of about two weeks before the US earnings season. Would they be beating expectation again this time or would there be some nasty surprises ? Intuitively, I think there could be some surprises this time.

This is because the companies are starting to take one time charges for the new Healthcare Bill and this has not been priced in by the expert Analysts. Till date, 3 companies including Boeing and Verizon, have already taken such one time charge.


The week in review:-

1) Oil - US$84.87 from US$80 last week. Stronger than expected. The strong USD, warmer weather, high inventories and Iraqi oil seems to have no effect on the price of oil this week. Is the high price of oil last week, an anticipation of sanctions on Iran, possibly within weeks ?

2) Gold - US$ 1125 from US$ 1104 last week. Why has nobody bought the IMF gold yet ?

3) Other Commodities - Waiting for the 50% retracement.

4) Shanghai Equities - 3158 from 3060 last week. Stronger than expected especially before the long week-end. Surprisingly, there were no bad news before the long weekend. Why ? Do they know something that you dont ?

5) HK Equities - 21537 from 21056 last week. Stronger than expected, especially before the 5 day break. Strong Support at 19500. Positions in AMVIG, China Longyuan, Minmetal Land and Vinda. Traded Li & Fung & Shineway Pharma ( 3nd round ). HK will be close from Friday, April 2nd to Tuesday, April 6th.

6) HK IPO - No IPO

7) Spore Equities - 2943 from 2906 last week. Support at 2625. No trade.

8) US Equities - 1178 from 1167 last week. Support at 1035. As mentioned, earning seasons will be here in 2 weeks and I'm expecting some surprises from the new Healthcare bill. Still sitting on my S&P Inverse ETF.

9) Japan Equities - 11286 from 10996 last week. Support @ 9850. Stronger than expected. The Japanese market has been very strong and has gone up about 20% in past 4 months.

10) Emerging Markets - Am expecting some outflows from the higher USD

11) Properties ( HK, China & Singapore) - The real estate agents in China are starting to make cold calls again..

12) Iran - China has probably changed their position on Iran and sanctions will probably start in a few weeks as requested by Obama. Eeryone is thinking that this is a one-way bet. What can kill those oil traders? Resumption of Iraqi oil ? Release of US Strategic Reserves ? ( Offshore drilling is too far out )

13) US & Japanese Interest Rates - When will the sudden spike happen ? The US auctions were weaker than expected.

14) USD - 81.44 from 81.98 last week. Will it break-out of 83 ?

15) European Contagion - The calm before the storm ?

16) Currency Manipulator - I dont think there would be any fall-out else President Hu would not be heading to the US. There was also probably an exchange for Iran.


I still think that the best Asset Class right now is Cash while I wait for things to unfold. However, I will still "Swing Trade" on any good Catalyst or Stag on any reasonably priced IPO. I may also start buying puts on selected stocks since Window Dressing is now over and I'm anticipating some nasty surprises during the US Earnings season.

The situation now is not too different from the period after the AFC. It started with a steep decline in the markets followed by a sharp "V" rebound. Thereafter, the markets dripped downwards for close to two years before finally going up strongly on firm earnings.


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


Please Note:-

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Re: Winston's Investment Ideas 1 (Nov 08 - Apr 10)

Postby lithium » Sun Apr 04, 2010 8:22 am

hi winston. What % of your fund do you allocate for swing trade?
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Re: Winston's Investment Ideas 1 (Nov 08 - Apr 10)

Postby winston » Sun Apr 04, 2010 9:11 am

Hi Lithium,

Ideally, I like to have a 70% Strategic and 30% Tactical portfolio.

The 70% will be in allocated to Asset Classes that I'm comfortable for the present situation.

The 30% is to capitalize on any short term trading opportunity.

Take care,
Winston
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Re: Winston's Investment Ideas 1 (Nov 08 - Apr 10)

Postby winston » Sun Apr 11, 2010 10:31 am

TOL as of April 11, 2010:-


Bulls 2, Bears 0


It has been a good week for the Bulls. But who would be buying at these prices ? Is everything not being priced for perfection ? And what's the path of least resistance on some unexpected news ?

Personally, I have also been taking riskier bets over the past few weeks. These are bets that I dont normally do and I have been ignoring basic stuff like PEG and Valuation. Instead, I have been buying Momentum and selling them over for small profits.

Maybe everyone is also doing the same thing. There's confidence in the air that we would all be able to get out in time. And since it's a short term bet, we dont worry about fundamental things like PEG, European Contagion, Rising Interest Rates etc. The trend is your friend ...


The week in review:-

1) Oil - US$84.92 from US$84.87 last week. Stronger than expected. However, there are also reports that they are starting to unload those oil from tankers for a nice US$10 profit ie. US$10m per tanker.

The strong USD, warmer weather, high inventories and Iraqi oil, does not seem to have any effect on the price of oil nowadays. In addition, is the high price of oil, an anticipation of sanctions on Iran ?

2) Gold - US$1161 from US$ 1125 last week. Who will be buying those IMF gold ?

3) Other Commodities - Waiting for the 50% retracement.

4) Shanghai Equities - 3145 from 3158 last week. Still trend-less. Everyone is waiting for the Yuan revaluation. In addition, they also tried to drain some liquidity from the market by issuing some 3 year Notes.

5) HK Equities - 22210 from 21537 last week. Stronger than expected and on high volume. Positions in AMVIG, China Longyuan and Minmetal Land. Sold Vinda and some AMVIG.

6) HK IPO - No IPO

7) Spore Equities - 2972 from 2943 last week. No trading idea nowadays :(

8) US Equities - 1194 from 1178 last week. Support at 1035. Earning seasons is here and I'm expecting some surprises from the new Healthcare bill. Still sitting on my S&P Inverse ETF.

9) Japan Equities - 11204 from 11286 last week. Support @ 9850. Stronger than expected. The Japanese market has been very strong and has gone up about 20% in past 4 months. PE is now around 21.

10) Emerging Markets - Strong inflow last week

11) Properties ( HK, China & Singapore) - China implemented Property Tax in some tier one cities. In the meantime, transaction volumes are already dropping.

12) Iran - What's their plan B should there be a sanction ? Maybe it's a non-issue due to the porous region where a lot of stuff can be easily smuggled into Iran.

13) US & Japanese Interest Rates - When will the sudden spike happen ?

14) USD - 81.24 from 81.44 last week. Will it break-out of 83 ?

15) European Contagion - Subprime started as a non-event at HSBC.

16) Brazil - seems to have all the sweet spots eg. Commodities, Demography, Infrastructure spending for World Cup and Olympics. What can go wrong ?


As I review this week's data, I recall the following from Marc Faber and Jim Rogers:-

Marc Faber ( before the Sunprime Crisis ): Everything has gone up ie. Equities, Properties and Commodities.

Jim Rogers: Wait till there's money in the corner and all you have to do is just go there to pick it up.

In view of the above, my allocation is still around 14% Equities, 1% Short and 5% Gold.


Finally, stock-markets used to lead the general economy by 3 to 9 months. However, with instantaneous information nowadays, could it be leading the economy by 12 to 24 months instead ? Are we too far ahead on the curve nowadays ?


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


Please Note:-

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