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

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

Postby winston » Sun Nov 03, 2019 9:26 am

TOL @ Nov 3, 2019

nov.jpg


New Money From The New Month

It's a new month again so new money would be flowing into the markets again.

Therefore, we should see a spike in the markets next week unless the fund managers have already spent their cash in advance. (Dont forget that the Cash Levels at most US Mutual Funds are very high, at 4% to 5%).

Thereafter, the markets are hoping that:-
1. Phase One of the Trade War would be signed on Nov 17
2. US Earnings would keep the rally going and
3. If there's a plunge, QEs by the US Fed, ECB and BoJ, will save the markets

I would not be surprised if the PPT has been pumping the markets up recently as there is a need to divert public attention from the botched strategy of withdrawing from Northern Syria and the current impeachment process.

My strategy remains cautious:-
1. Selling into the rally
2. Raising Cash
3. Managing Risk
4. Monitoring Position Size
5. Monitoring Trailing Stop Loss
6. Having a Time Expiry on trades
etc.

I'm fully aware that I missed out on some small gains (especially when we may have the traditional Santa Rally) but it's a risk that I'm willing to take, in view of the following:-
1. Worsening global economy
2. Erratic US President
3. Various geopolitical issues (including any revenge by ISIS, Iran)
4. Brextit (probably a non-event as the UK economy is now only a fraction of it's past)
5. Various trade wars (China, EU, Japan-Korea etc)
6. Impeachment Of Trump
etc.

This not mean that I will not be trading any convincing story. It only means that I will be thinking a few times before I pull my next trigger. It also means that I may not think twice about pocketing any small profits.


Weekly Risk Management Progress Report:-

1. To Monitor Exposure To Equities: Neutral (22% from 37% of Liquid Assets three weeks ago)
Goal: 10% exposure to Equities before the next recession (2020-2021?); Maximum 30%;

2. To Diversify From Asian Equities: No Progress
Goal: To reduce percentage of Asian Equities to around 50%

3. To Buy Inverse ETFs and Puts - Bought 7500 (Inverse HK 2x)
Goal: To have a sizable short position going into the next recession

4. To Increase "USD/HKD/Gold" - No progress. Still at about 30%.
Goal: To be in the safe havens before next recession; (HKD may be repegged)

5. To Reduce Number Of Counters: Progress (19 from 33 three weeks ago)
Goal: To focus on about 8 to 12 counters only

6. To Minimize Industry / Sector Risk / Country Risk
a. Heavy exposure to Asian Based Equities
Goal: To diversify across various sectors and countries


Market Risk Indicators

1. Euphoria: 8 (Low: 1; High: 10) - FAANNG, ETFs; Margin Debts; SWFs; Central Banks; Fund Flows;

2. Credit Problems: 7 (Very Good: 1; Very Bad: 10) - Housing, Subprime Auto; Student Loans; Credit Cards; Junk Bonds; EM USD Loans;

3. Recession: 7 (Strong Economy: 1; Depression: 10) - GDP; Taxes; PMI; Housing; Auto; Retail; NAFTA; Trade War; 2019?;

4. Liquidity: 7 (Very Liquid: 1; Tight 10) - QE (Feds, ECB, BOJ, PBOC); Interest Rates; Rotation (Bonds); Asset Shrinkage 2018?; EM; Italy;

5. Inverted Yield: 7 (Low Inversion: 1; High Inversion: 10) - Rising Interest Rates; Slope; Inversion; US 10 Years < US 2 Years; Expecting 2019 to 2020

6. Valuation; 7 (Safe 1: PE15; Danger 10) PE S&P, Nadsaq; Revenue; USD; Tax Reform; Deregulation

7. Geopolitical Issues: 8 (Peaceful: 1; War: 10) - Iran; South China Sea; Europe; Russia; Saudi Arabia; Iran;

Total: 51 out of 70 (73%); (Safe: 60%; Danger: 85%)


Commodities: Risk-Off (Data from Commodities Live on Nov 1 @ 9.00 PM)

1. WTI Oil - Lower. US$54.75 from US$56.66 last week from US$53.72 two weeks ago;
Support: US$43; US$34; Resistance: US$75, US$105;
a. Trade Wars reducing demand for Oil; -1m bpd?
b. US: Stockpiles: Reducing?
c. US SPR: 679m barrels (33 days); To sell 190m barrels over 8 years;
d. US imports 8m bpd (Total demand of India & Japan combined);
e. US: Lighter Crude and Lower Sulphur; 2018 Production +17% yoy;
f. US Break-Even; Permian: US$35 to US$50; Shale: US$50
g. US Shale Debt: US$9b maturing in 2019; US$137b to mature between 2020-2022
h. China (4th largest producer; largest importer); Reserve Life dropped from 10 to 6 years; Ban on Petrochemical Cars in 5-10 years? Quotasj
i. China: SPR 51/90 days; 2019 imports to decrease?
j. IEA: Glut in 2020
k. Saudi: Aramco's IPO; -1.3m bpd (35% cut); Fiscal Break-Even US$85;
l. EV: -350k bpd?
m. Opec: Cut 2.3m bpd since Nov 2018; 9 months extension (April 2020)
viewtopic.php?f=33&t=7550&start=210

2. Gold - Higher. US$1510 from US$1507 from US$1493;
Support: $1240; $1150; $1050; Resistance: $1575; $1775; $1830;
a. Global 33k tons; US 8k t; China 5k t; IMF 3k t; Germany 3k t
b. Electronics, Coins, Central Banks Reserve, Jewellery etc.
c. 250 oz of paper contract for every oz of physical gold holding on Comex
d. China: PBOC has been buying gold over the past few months
e. Demand from Muslim countries as Gold is now a halal investment
g. Gold only occupies 0.03% of US investments. In 1981, it was 8%
h: India Demand: Since 2010, down each year. 2017 (700t); 2020 (900t)
i. China Demand: Since 2013, decreased 33% from 940t to 630t last year
j. China: Jewelry: +3% yoy; Industrials -10% yoy; PBOC: 2.4% forex reserves vs US 74%; Retail; Safe Haven: RMB lost 1/3 vs Gold since Jun 2007;
k. Global Demand: China +5%; India -8%;
l. Central Banks: +70% yoy; 33k tons; Poland, Turkey, Khazakhstan & India
m. U.S. government holds 260m ounces at book value of only US$42m
n. China: Reserves 185m oz; 400m oz ground; Output decreased 6% yoy; Added 100 tons since Dec 2018
o. Russia: US$109b worth of gold
viewtopic.php?f=33&t=7589&p=202084#p202084

3. Copper - Lower; US$2.64 from US$2.68 from US$2.64;
a. Higher inventories at LME
b. China - 50% of global consumption
c. China - Lower Power Grid demand
viewtopic.php?f=33&t=5598&p=215285#p215285

4. No longer monitoring Palladium, Cobalt, Uranium, Silver, Platinum and Zinc on a weekly basis


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

1. US Equities - Higher. 3067 from 3023 last week from 2986 two weeks ago;
a. Support: 2750; 2320; Resistance: 3025; 3260; PE 18
b, Sold Kraft Heinz (KHC)
viewtopic.php?f=11&t=7643&start=200

2. HK Equities - Higher. 27101 from 26667 from 26720;
a. Support: 25500, 24500, 23500; 22000;
b. Resistance: 27300; 29000; 31600;
c. Bought 7500 (2x Inverse Hang Seng)
d. Sold 1/2 MMG (1208)
htttp:/investideas.net/forum/viewtopic.php?f=10&t=7470&start=120

3. Shanghai Equities - Higher. 2958 from 2955 from 2938;
a. Support: 2450; Resistance 3300; 3600
b. No Trade
viewtopic.php?f=10&t=7190&start=210

4. Spore Equities - Higher; 3229 from 3185 from 3114;
a. Resistance 3850
b. Bought HPL
c. Sold Venture
d. Sold Jardine Strategic
viewtopic.php?f=10&t=6828&start=b110

5. Japan Equities - Higher. 22851 from 22780 from 22493;
a. Forward PE 13
b. Support 19000; Resistance 25000
c. BOJ owns > Half government bonds and 75% of ETFs
viewtopic.php?f=10&t=7138&start=200

6. Malaysian Equities; Higher; 1593 from 1570 from 1571;
a. Sold Genting Malaysia
b. Sold 1/4 Genting Berhad
c. Sold Hume Industry
d. Sold Gabungan AQRS Warrants
viewtopic.php?f=10&t=6292&start=30


Currencies - Risk-Off (Data from XE.com on Nov 01 @ 8.50 PM)

1. USD to JPY - JPY Stronger; 108.19 from 108.61 last week from 108.41 two weeks ago;
a. 52 week range is 76 to 126
b. Aging Population
c. High Debt Ratio
d. Why is it a Safe Haven ?
e. QE Infinity?
viewtopic.php?f=32&t=4205&start=180

2. SGD to MYR - SGD Weaker; 3.0666 from 3.0716 from 3.0675;
viewtopic.php?f=32&t=136&start=110

3. AUD to USD - AUD Stronger; 0.6892 from 0.6827 from 0.6855;
a. The range is 0.70 (2016) to 1.10 (2011)
b. Commodity Currency
c. To diversify my AUD into what currency?
viewtopic.php?f=32&t=5256&start=130

4. AUD to SGD - AUD Stronger; 0.9361 from 0.9305 from 0.9351;
a. The range is 0.98 (2016) to 1.36 (2012)

5. AUD to MYR - AUD Stronger; 2.8709 from 2.8577 from 2.8679;
a. The range is 2.20 (2008) to 3.41 (2017)

6. EUR to USD - EUR Stronger. 1.1131 from 1.1118 from 1.1173;
viewtopic.php?f=32&t=5523&start=100

7. USD to HKD - HKD Stronger. 7.8372 from 7.8379 from 7.8438;
a. USD Peg band: 7.75 to 7.85
b. Will they remove the peg to the USD during the next crisis?
c. Will China ask HK to depeg from the USD?
viewtopic.php?f=32&t=3529&start=40

8. USD to MYR:- MYR Stronger. 4.1653 from 4.1864 from 4.1854;
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; 1.3584 from 1.3631 from 1.3641;
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; 7.0418 from 7.0707 from 7.0821;
a. When is the right time to buy some CNY? How?
viewtopic.php?f=32&t=7720&start=90

11. GBP to USD:- GBP Stronger; 1.2941 from 1.2836 from 1.2975;
a. Brexit
viewtopic.php?f=32&t=333&start=80

12. GBP to MYR:- GBP Stronger; 5.3909 from 5.3736 from 5.4283;

13. Dollar Index - USD Weaker; 97.44 from 97.60 from 97.28;
viewtopic.php?f=32&t=7616&start=60


Others

Sentiment - Complacent?

Headwinds
a. Derivatives (US$700t);
b. Debts (US$247t, 320% GDP);
c. Corporate Debt (US$50t); US Corp Debts (US$9t)
d. Institutional Investors (US$0.5t)
e. ETFs AUM (US$3.4t)
f. Bitcoin (US$200b)
g. US Pension Short-Fall: US$385b
h. US Social Security & Medicare Short-Fall: US$100t; 2034 Bankrupt; US$3t US Treasuries
i. NPLs at European Banks: EUR$1t
j. China's Bond Market: US$12t (third largest)
k. Private Client Cash Levels as a % of Total Assets: Record Low (10.4%)
l. Japanese government’s debt highest in the world: 1.1 QUADRILLION yen (about USD $10 trillion), twice the size of its entire economy.
m. US Student Debt: US$1.7t
viewtopic.php?f=16&t=8930&start=140


Tailwinds
a. Low Interest Rates
b. Cash Sidelines (US$50t)
c. QE US$18t: US (US$4.5t), ECB (US$3.7t), Japan (US$4.4t) & China (US$5.1t)
d. Negative Yield Bonds (US$16t as of Aug 16, 2019)
e. US Foreign Funds Repatriation (US$2.5t)
f. Cash US Corporations (US$1t)
g. Cash
h. Buybacks
i. US Household Net Worth (US$90t)
j. EM Consumption
k. Private Equities US$600b Cash
l. Money Market (US$3.4t); US$3.9 @ Sub-Prime Crisis; Lowes US$2.6t;
m. ECB: Interest rates at -0.05%; QE: Eur 20b/ month starting Nov 2019;
viewtopic.php?f=16&t=8940&start=30


Warning Signs
1. Bearish Divergence - Small Caps
2. Narrow Participation - New Highs
3. Inverted Yield
4. Weak Transportation Numbers - Dow Theory
5. Strong Precious Metal Sector
6. Weak Manufacturing Numbers
7. Insiders Selling: US$26b till date; Highest US$37b in 2000

Risk Management:-
a. Global Diversification
b. Asset Class Diversification
c. Diversity of Industry & Company Exposure
d. Currency Hedging
e. Tactical Asset Allocation
f . Inverse ETFs and Put Warrants
viewtopic.php?f=16&t=7547&start=120


Properties
a. I'm no longer closely monitoring Properties in HK, China, Malaysia and Singapore.
b. I believe that the properties in these countries will not be going anywhere over the next few years.


Yield on 10 Year US Treasuries - Lower; 1.70% from 1.79% last week from 1.75% two weeks ago

Yield on 2 Year Treasuries - Lower; 1.55% from 1.62% from 1.57%;

Interest Rates:-
a. About US$13t or about 1/3 of the world’s bonds have negative yields
b. US Rate Hike: Two more 25 bps cut by end 2019?
c. 6 Developed market and 13 EM central banks to ease in 2H 2019
viewtopic.php?f=16&t=7319&p=221670#p221670


JNK (SPDR Barclays High Yield Bond ETF) - Lower: 108.19 from 108.86 from 108.47;

HYG (iShares iBoxx $ High Yid Corp Bond ETF) - Lower; 86.81 from 87.39 from 87.09;

Baltic Dry Index - Lower; 1731 from 1785 from 1855; Low 290; High 2330 (2013)


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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viewtopic.php?f=14&t=2823&start=40


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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
Billionaire Boss
 
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Joined: Wed May 07, 2008 9:28 am

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

Postby winston » Sun Nov 10, 2019 8:55 am

TOL @ Nov 10, 2019

Rip.jpg


Sell The Rip?

The markets have been grinding higher, probably on hopes that Phase One of the Trade War would be signed very soon.

However, we are now starting to hear rumors that there would not be any rolling back of the tariffs and that the Trade Truce would only be signed in December. It also does not help that Trump has been constantly chanting that "China needs a deal more than the US".

Anyway, I dont understand why someone would be buying or selling on such news. The damage is already done by the Trade War. If there's a truce, Sales would drop by about 5% to 10%. If there's a continuation of the Trade War, Sales would be dropping by 15% - 25%.

Perhaps it's the machines that are buying and selling.

Or perhaps the buying were from some fund managers who have been underperforming the markets as they do have a high Cash allocation.

Within my own circle of friends and relatives, I'm also starting to feel their "Fear Of Missing
Out".

I wont be discouraging them if they want to buy. Some people have to learn things the hard way. These people think that they are making money because of their "Skill, Research and Intellect" and does not realize that they are making money because of luck in a bull market.

In times like these, I would prefer to sell into such rallies. If the markets do continue to
grind higher, so be it. I do not have to benchmark my performance against anyone or any
index.

Next week, we will be having the impeachment hearings on Trump. I think that it's just
"Noise" and would not be affecting the markets.

It's also heartening to hear that Bloomberg may be running for President. He would be a candidate from the Democrats as I cant see Biden, Sanders or even Warren, being good Presidents.

If I'm reading the markets correctly, I think that it's getting a bit tired.

The next catalyst will be "Year End Window Dressing" which is still a few weeks away.


Weekly Risk Management Progress Report:-

1. To Monitor Exposure To Equities: Neutral (24% from 22% last week, of Liquid Assets)
Goal: 10% exposure to Equities before the next recession (2020-2021?); Maximum 35%;

2. To Diversify From Asian Based Equities: 99%; No Progress
Goal: To reduce percentage of Asian Based Equities to around 50%

3. To Buy Inverse ETFs and Puts - Bought 7500 (Inverse HK 2x) last week
Goal: To have a sizable short position going into the next recession in 2020-2021

4. To Increase "USD/HKD/Gold" - No progress. Still at about 30%.
Goal: To be in the safe havens before next recession; (HKD may be repegged)

5. To Reduce Number Of Counters: Progress (19 from 19 last week)
Goal: To focus on about 8 to 12 counters only

6. To Minimize Industry / Sector Risk / Country Risk
a. Heavy exposure to Asian Based Equities
c. Heavy exposure to Jardine Group
d. Heavy exposure to Commercial Properties
Goal: To diversify across various sectors and countries


Market Risk Indicators

1. Euphoria: 8 (Low: 1; High: 10) - FAANNG, ETFs; Margin Debts; SWFs; Central Banks;
Fund Flows;

2. Credit Problems: 7 (Very Good: 1; Very Bad: 10) - Housing, Subprime Auto; Student
Loans; Credit Cards; Junk Bonds; EM USD Loans;

3. Recession: 7 (Strong Economy: 1; Depression: 10) - GDP; Taxes; PMI; Housing; Auto; Retail; NAFTA; Trade War; 2019?;

4. Liquidity: 7 (Very Liquid: 1; Tight 10) - QE (Feds, ECB, BOJ, PBOC); Interest Rates; Rotation (Bonds); Asset Shrinkage 2018?; EM; Italy;

5. Inverted Yield: 7 (Low Inversion: 1; High Inversion: 10) - Rising Interest Rates; Slope; Inversion; US 10 Years < US 2 Years; Expecting 2019 to 2020

6. Valuation; 7 (Safe 1: PE15; Danger 10) PE S&P, Nadsaq; Revenue; USD; Tax Reform; Deregulation

7. Geopolitical Issues: 8 (Peaceful: 1; War: 10) - Iran; South China Sea; Europe; Russia; Saudi Arabia; Iran;

Total: 51 out of 70 (73%); (Safe: 60%; Danger: 85%)


Commodities: Risk-On (Data from Commodities Live on Nov 8 @ 7.45 PM)

1. WTI Oil - Higher. US$56.20 from US$54.75 last week from US$56.66 two weeks ago;
Support: US$43; US$34; Resistance: US$75, US$105;
a. Trade Wars reducing demand for Oil; -1m bpd?
b. US SPR: 679m barrels (33 days); To sell 190m barrels over 8 years;
c. US imports 8m bpd (Total demand of India & Japan combined);
d. US: Lighter Crude and Lower Sulphur; 2018 Production +17% yoy;
e. US Break-Even; Permian: US$35 to US$50; Shale: US$50
f. US Shale Debt: US$9b maturing in 2019; US$137b to mature between 2020-2022
g. China (4th producer; largest importer); Reserve Life: 10 to 6 years; Ban on
Petrochemical Cars in 5-10 years? Quotas
h. China: SPR 51/90 days; 2019 imports to decrease?
i. IEA: Glut in 2020
j. Saudi: Aramco's IPO; -1.3m bpd (35% cut); Fiscal Break-Even US$85;
k. EV: -350k bpd?
l. Opec: Cut 2.3m bpd since Nov 2018; 9 months extension (April 2020)
viewtopic.php?f=33&t=7550&start=210

2. Gold - Lower. US$1464 from US$1510 from US$1507;
Support: $1240; $1150; $1050; Resistance: $1575; $1775; $1830;
a. Global 33k tons; US 8k t; China 5k t; IMF 3k t; Germany 3k t
b. Electronics, Coins, Central Banks Reserve, Jewellery etc.
c. 250 oz of paper contract for every oz of physical gold holding on Comex
d. China: PBOC has been buying gold over the past few months
e. Demand from Muslim countries as Gold is now a halal investment
g. Gold only occupies 0.03% of US investments. In 1981, it was 8%
h: India Demand: Since 2010, down each year. 2017 (700t); 2020 (900t)
i. China Demand: Since 2013, decreased 33% from 940t to 630t last year
j. China: Jewelry: +3% yoy; Industrials -10% yoy; PBOC: 2.4% forex reserves vs US 74%;
Retail; Safe Haven: RMB lost 1/3 vs Gold since Jun 2007;
k. Global Demand: China +5%; India -8%;
l. Central Banks: +70% yoy; 33k tons; Poland, Turkey, Khazakhstan & India
m. U.S. government holds 260m ounces at book value of only US$42m
n. China: Reserves 185m oz; 400m oz ground; Output decreased 6% yoy; Added 100 tons
since Dec 2018
o. Russia: US$109b worth of gold
viewtopic.php?f=33&t=7589&p=202084#p202084

3. Copper - Higher; US$2.71 from US$2.64 from US$2.68;
a. Higher inventories at LME
b. China - 50% of global consumption
c. China - Lower Power Grid demand
viewtopic.php?f=33&t=5598&p=215285#p215285

4. No longer monitoring Palladium, Cobalt, Uranium, Silver, Platinum and Zinc on a weekly basis


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

1. US Equities - Higher. 3093 from 3067 last week from 3023 two weeks ago;
a. Support: 2750; 2320; Resistance: 3025; 3260; PE 18
b, No Trade
viewtopic.php?f=11&t=7643&start=200

2. HK Equities - Higher. 27651 from 27101 from 26667;
a. Support: 25500, 24500, 23500; 22000;
b. Resistance: 27300; 29000; 31600;
c. Bought China Mengniu (2319)
d. Sold MMG (1208)
e. Sold Fosun (0656)
htttp:/investideas.net/forum/viewtopic.php?f=10&t=7470&start=120

3. Shanghai Equities - Higher. 2964 from 2958 from 2955;
a. Support: 2450; Resistance 3300; 3600
b. No Trade
viewtopic.php?f=10&t=7190&start=210

4. Spore Equities - Higher; 3264 from 3229 from 3185;
a. Resistance 3850
b. Bought Jardine Matheson
c. Bought Mandarin Oriental
d. Bought Jardine Strategic
e. Bought Eagle Hospitality Reit
f. Bought Yangzijiang
g. Sold HK Land
h. Sold 1/4 Genting Singapore
viewtopic.php?f=10&t=6828&start=b110

5. Japan Equities - Higher. 23392 from 22851 from 22780;
a. Forward PE 13
b. Support 19000; Resistance 25000
c. BOJ owns > Half government bonds and 75% of ETFs
viewtopic.php?f=10&t=7138&start=200

6. Malaysian Equities; Higher; 1610 from 1593 from 1570;
a. Sold Tune Protect
b. Sold Genting Berhad
viewtopic.php?f=10&t=6292&start=30


Currencies - Risk-Off (Data from XE.com on Nov 09 @ 11.00 AM)

1. USD to JPY - JPY Weaker; 109.22 from 108.19 last week from 108.61 two weeks ago;
a. 52 week range is 76 to 126
b. Aging Population
c. High Debt Ratio
d. Why is it a Safe Haven ?
e. QE Infinity?
viewtopic.php?f=32&t=4205&start=180

2. SGD to MYR - SGD Weaker; 3.0364 from 3.0666 from 3.0716;
viewtopic.php?f=32&t=136&start=110

3. AUD to USD - AUD Weaker; 0.6861 from 0.6892 from 0.6827;
a. The range is 0.70 (2016) to 1.10 (2011)
b. Commodity Currency
c. To diversify my AUD into what currency?
viewtopic.php?f=32&t=5256&start=130

4. AUD to SGD - AUD Stronger; 0.9327 from 0.9361 from 0.9305;
a. The range is 0.98 (2016) to 1.36 (2012)

5. AUD to MYR - AUD Stronger; 2.8709 from 2.8577 from 2.8679;
a. The range is 2.20 (2008) to 3.41 (2017)

6. EUR to USD - EUR Weaker. 1.1019 from 1.1131 from 1.1118;
viewtopic.php?f=32&t=5523&start=100

7. USD to HKD - HKD Stronger. 7.8239 from 7.8372 from 7.8379;
a. USD Peg band: 7.75 to 7.85
b. Will they remove the peg to the USD during the next crisis?
c. Will China ask HK to depeg from the USD?
viewtopic.php?f=32&t=3529&start=40

8. USD to MYR:- MYR Stronger. 4.1270 from 4.1653 from 4.1864;
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; 1.3595 from 1.3584 from 1.3631;
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; 6.9965 from 7.0418 from 7.0707;
a. When is the right time to buy some CNY? How?
viewtopic.php?f=32&t=7720&start=90

11. GBP to USD:- GBP Weaker; 1.2776 from 1.2941 from 1.2836;
a. Brexit
viewtopic.php?f=32&t=333&start=80

12. GBP to MYR:- GBP Weaker; 5.2729 from 5.3909 from 5.3736;

13. Dollar Index - USD Stronger; 98.35 from 97.44 from 97.60;
viewtopic.php?f=32&t=7616&start=60


Others

Sentiment - Complacent?

Headwinds
a. Derivatives (US$700t);
b. Global Debt (US$247t, 320% GDP);
c. Corporate Debt (US$50t); US Corp Debts (US$9t)
d. Institutional Investors (US$0.5t)
e. ETFs AUM (US$3.4t)
f. Bitcoin (US$200b)
g. US Pension Short-Fall: US$385b
h. US Social Security & Medicare Short-Fall: US$100t; 2034 Bankrupt; US$3t US Treasuries
i. NPLs at European Banks: EUR$1t
j. China's Bond Market: US$12t (third largest)
k. Private Client Cash Levels as a % of Total Assets: Record Low (10.4%)
l. Japanese government’s debt highest in the world: 1.1 QUADRILLION yen (about USD $10 trillion), twice the size of its entire economy.
m. US Student Debt: US$1.7t
viewtopic.php?f=16&t=8930&start=140


Tailwinds
a. Low Interest Rates
b. Cash Sidelines (US$50t)
c. QE US$18t: US (US$4.5t), ECB (US$3.7t), Japan (US$4.4t) & China (US$5.1t)
d. Negative Yield Bonds (US$16t as of Aug 16, 2019)
e. US Foreign Funds Repatriation (US$2.5t)
f. Cash US Corporations (US$1t)
g. Cash
h. Buybacks
i. US Household Net Worth (US$90t)
j. EM Consumption
k. Private Equities US$600b Cash
l. Money Market (US$3.4t); US$3.9 @ Sub-Prime Crisis; Lowes US$2.6t;
m. ECB: Interest rates at -0.05%; QE: Eur 20b/ month starting Nov 2019;
viewtopic.php?f=16&t=8940&start=30


Warning Signs
1. Bearish Divergence - Small Caps
2. Narrow Participation - New Highs
3. Inverted Yield
4. Weak Transportation Numbers - Dow Theory
5. Strong Precious Metal Sector
6. Weak Manufacturing Numbers
7. Insiders Selling: US$26b till date; Highest US$37b in 2000

Risk Management:-
a. Global Diversification
b. Asset Class Diversification
c. Diversity of Industry & Company Exposure
d. Currency Hedging
e. Tactical Asset Allocation
f . Inverse ETFs and Put Warrants
viewtopic.php?f=16&t=7547&start=120


Properties
a. I'm no longer closely monitoring Properties in HK, China, Malaysia and Singapore.
b. I believe that the properties in these countries will not be going anywhere over the next few years.


Yield on 10 Year US Treasuries - Higher; 1.94% from 1.70% last week from 1.79% two weeks ago

Yield on 2 Year Treasuries - Higher; 1.67% from 1.55% from 1.62%;

Interest Rates:-
a. About US$13t or about 1/3 of the world’s bonds have negative yields
b. US Rate Hike: Two more 25 bps cut by end 2019?
c. 6 Developed market and 13 EM central banks to ease in 2H 2019
viewtopic.php?f=16&t=7319&p=221670#p221670


JNK (SPDR Barclays High Yield Bond ETF) - Flat: 108.20 from 108.19 from 108.86;

HYG (iShares iBoxx $ High Yid Corp Bond ETF) - Higher; 86.85 from 86.81 from 87.39;

Baltic Dry Index - Lower; 1428 from 1731 from 1785; Low 290; High 2330 (2013)


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:-


Support the forum button - 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.
viewtopic.php?f=14&t=2823&start=40


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viewtopic.php?f=26&t=3168


Active Topics - Do you know that there's an "Active Topics" button? It's located on the top left hand corner of the Index
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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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Re: Winston's Investment Ideas 05 (May 19 - Jul 23)

Postby winston » Sun Nov 17, 2019 8:31 am

TOL @ Nov 17, 2019

Trading Break.jpg


Trading Break

The following is from an article that I read many years ago:-

"Trading everyday begins to dull your judgement.

A successful trader commented,"When I fall to 90% mental efficiency, I begin to break-even. Anything below that, I start to lose".

This trader takes a complete break every 4 to 6 weeks.

A trading break helps you to have a detached view of the market. It also helps you to have a fresh look at yourself and the way you want to trade for the next several weeks.

Sometimes you get so close to the forest that you cant see the trees."

Over the past week, I have made some stupid mistakes;-

1. I thought I was selling a stock in Singapore. But it ended as a "short sell" as I didnt have that stock in my portfolio. That was because the buy order from the previous day, did not get filled. I didn't check things properly as I had a few trades going on. The SGX bought back that stock back at a very bad price.

2. I then checked my portfolio and noticed that there was another stock that was not supposed to be in my portfolio. I thought that I have sold that stock some time back. Again I did not check things properly. It must have been a "partial filled" instead of a "complete filled", from a trade some time ago.

3. I also bought a stock where I didn't research things properly. I based my buy decision on an Analyst report. I didnt look at the announcements on the SGX before the purchase. And if I have looked at those SGX announcements, I would have noticed that the substantial shareholders were trying to get out and that's a big warning sign.

The above mistakes happened because I had too many trades going on at the same time and I was under pressure to make decisions.

So it's time for me to take a trading break.

In addition, I'm also getting a bit uncomfortable with what is happening in the markets:-

For the US markets, the markets have been rising because all the "experts" believed that "Phase One" of the Trade War would be signed in December.

In addition, they think that the past few rates cut would be able to save the US economy from going into a recession.

And if the economy does tanked, the Central Banksters would supposedly be there to save it, by printing money again.

I'm a bit uncomfortable with the above view. I'm not too sure that China would want to sign the agreement. They have been humilated so badly.

And if Phase One does really get signed (because it's hitting China badly), wouldn't the traders be selling on the fact? Wouldn't they not want to take some profits?

In the meantime, you also have an erratic, desperate US President, who's facing impeachment, with a chaotic White House, making contradicting statements.

You may recall not too long, that the White House blatantly told a news conference, that there were two calls from the Chinese side wanting to start trade talks discussion again, when actually, there were no such calls from the Chinese side. Can you really believe what is coming out from the White House nowadays?

On the horizon, you have the HK District Councils election on November 24. Over the past few weeks, I have been scratching my head on what to buy in HK as it's relatively "cheap" now. However, cheap can become much cheaper, if things do really go south.

In view of the above, I think that it's time for me to take a trading break.


Weekly Risk Management Progress Report:-

1. To Monitor Exposure To Equities: Underweight (18% from 24% last week, of Liquid Assets)
Goal: 10% exposure to Equities before the next recession (2020-2021?); Maximum 30%;

2. To Diversify From Asian Equities: No Progress (Around 98% exposure to Asia)
Goal: To reduce percentage of Asian Equities to around 50%

3. To Buy Inverse ETFs and Puts - Sold 7500 (Inverse HK 2x)
Goal: To have a sizable short position going into the next recession

4. To Increase "USD/HKD/Gold" - No progress. Still at about 30%.
Goal: To be in the safe havens before next recession; (HKD may be repegged)

5. To Reduce Number Of Counters: Progress (14 from 19 last week)
Goal: To focus on about 12 to 16 counters only at heavier weightings

6. To Minimize Industry / Sector Risk / Country Risk
a. Heavy exposure to Asian Based Equities
Goal: To diversify across various sectors and countries


Market Risk Indicators

1. Euphoria: 8 (Low: 1; High: 10) - FAANNG, ETFs; Margin Debts; SWFs; Central Banks; Fund Flows;

2. Credit Problems: 7 (Very Good: 1; Very Bad: 10) - Housing, Subprime Auto; Student Loans; Credit Cards; Junk Bonds; EM USD Loans;

3. Recession: 7 (Strong Economy: 1; Depression: 10) - GDP; Taxes; PMI; Housing; Auto; Retail; NAFTA; Trade War; 2019?;

4. Liquidity: 7 (Very Liquid: 1; Tight 10) - QE (Feds, ECB, BOJ, PBOC); Interest Rates; Rotation (Bonds); Asset Shrinkage 2018?; EM; Italy;

5. Inverted Yield: 7 (Low Inversion: 1; High Inversion: 10) - Rising Interest Rates; Slope; Inversion; US 10 Years < US 2 Years; Expecting 2019 to 2020

6. Valuation; 8 (Safe 1: PE15; Danger 10) PE S&P, Nadsaq; Revenue; USD; Tax Reform; Deregulation

7. Geopolitical Issues: 8 (Peaceful: 1; War: 10) - Iran; South China Sea; Europe; Russia; Saudi Arabia; Iran;

Total: 52 out of 70 (74%); (Safe: 60%; Danger: 85%)


Commodities: Risk-Off (Data from Commodities Live on Nov 15 @ 4.45 PM)

1. WTI Oil - Higher. US$56.88 from US$56.20 last week from US$54.75 two weeks ago;
Support: US$43; US$34; Resistance: US$75, US$105;
a. Trade Wars reducing demand for Oil; -1m bpd?
b. US SPR: 679m barrels (33 days); To sell 190m barrels over 8 years;
c. US imports 8m bpd (Total demand of India & Japan combined);
d. US: Lighter Crude and Lower Sulphur; 2018 Production +17% yoy;
e. US Break-Even; Permian: US$35 to US$50; Shale: US$50
f. US Shale Debt: US$9b maturing in 2019; US$137b to mature between 2020-2022
g. China (4th producer; largest importer); Reserve Life: 10 to 6 years; Ban on Petrochemical Cars in 5-10 years? Quotas
h. China: SPR 51/90 days; 2019 imports to decrease?
i. IEA: Glut in 2020
j. Saudi: Aramco's IPO; -1.3m bpd (35% cut); Fiscal Break-Even US$85;
k. EV: -350k bpd?
l. Opec: Cut 2.3m bpd since Nov 2018; 9 months extension (April 2020)
j. Non-Opec: +2.3m bpd supply in 2020
viewtopic.php?f=33&t=7550&start=210

2. Gold - Flat. US$1467 from US$1464 from US$1510;
Support: $1240; $1150; $1050; Resistance: $1575; $1775; $1830;
a. Global 33k tons; US 8k t; China 5k t; IMF 3k t; Germany 3k t
b. Electronics, Coins, Central Banks Reserve, Jewellery etc.
c. 250 oz of paper contract for every oz of physical gold holding on Comex
d. China: PBOC has been buying gold over the past few months
e. Demand from Muslim countries as Gold is now a halal investment
g. Gold only occupies 0.03% of US investments. In 1981, it was 8%
h: India Demand: Since 2010, down each year. 2017 (700t); 2020 (900t)
i. China Demand: Since 2013, decreased 33% from 940t to 630t last year
j. China: Jewelry: +3% yoy; Industrials -10% yoy; PBOC: 2.4% forex reserves vs US 74%; Retail; Safe Haven: RMB lost 1/3 vs Gold since Jun 2007;
k. Global Demand: China +5%; India -8%;
l. Central Banks: +70% yoy; 33k tons; Poland, Turkey, Khazakhstan & India
m. U.S. government holds 260m ounces at book value of only US$42m
n. China: Reserves 185m oz; 400m oz ground; Output decreased 6% yoy; Added 100 tons since Dec 2018
o. Russia: US$109b worth of gold
viewtopic.php?f=33&t=7589&p=202084#p202084

3. Copper - Lower; US$2.63 from US$2.71 from US$2.64;
a. Higher inventories at LME
b. China - 50% of global consumption
c. China - Lower Power Grid demand
viewtopic.php?f=33&t=5598&p=215285#p215285

4. No longer monitoring Palladium, Cobalt, Uranium, Silver, Platinum and Zinc on a weekly basis


Equities - Risk-Off/b] (Data as of Saturday every week)
[
1. US Equities - Higher. 3120 from 3093 last week from 3067 two weeks ago;
a. Support: 2750; 2320; Resistance: 3025; 3260; PE 18
b, No Trade
viewtopic.php?f=11&t=7643&start=200

2. HK Equities - Lower. 26327 from 27651 from 27101;
a. Support: 25500, 24500, 23500; 22000;
b. Resistance: 27800; 29000; 31600;
c. Sold 7500 (Hang Seng Inverse 2x)
htttp:/investideas.net/forum/viewtopic.php?f=10&t=7470&start=120

3. Shanghai Equities - Lower. 2891 from 2964 from 2958;
a. Support: 2450; Resistance 3300; 3600
b. No Trade
viewtopic.php?f=10&t=7190&start=210

4. Spore Equities - Lower; 3239 from 3264 from 3229;
a. Resistance 3850
b. Sold Jardine Matheson
c. Sold Jardine Strategic
d. Sold Eagle Hospitality Reit
e. Sold Yangzijiang
viewtopic.php?f=10&t=6828&start=b110

5. Japan Equities - Lower. 23303 from 23392 from 22851;
a. Forward PE 13
b. Support 19000; Resistance 25000
c. BOJ owns > Half government bonds and 75% of ETFs
d. No Trade
viewtopic.php?f=10&t=7138&start=200

6. Malaysian Equities; Lower; 1595 from 1610 from 1593;
a. No Trade
viewtopic.php?f=10&t=6292&start=30


[b]Currencies - Risk-Off
(Data from XE.com on Nov 15 @ 9.30 PM)

1. USD to JPY - JPY Stronger; 108.71 from 109.22 last week from 108.19 two weeks ago;
a. 52 week range is 76 to 126
b. Aging Population
c. High Debt Ratio
d. Why is it a Safe Haven ?
e. QE Infinity?
viewtopic.php?f=32&t=4205&start=180

2. SGD to MYR - SGD Stronger; 3.0511 from 3.0364 from 3.0666;
viewtopic.php?f=32&t=136&start=110

3. AUD to USD - AUD Weaker; 0.6803 from 0.6861 from 0.6892;
a. The range is 0.70 (2016) to 1.10 (2011)
b. Commodity Currency
c. To diversify my AUD into what currency?
viewtopic.php?f=32&t=5256&start=130

4. AUD to SGD - AUD Weaker; 0.9259 from 0.9327 from 0.9361;
a. The range is 0.98 (2016) to 1.36 (2012)

5. AUD to MYR - AUD Weaker; 2.8251 from 2.8709 from 2.8577;
a. The range is 2.20 (2008) to 3.41 (2017)

6. EUR to USD - EUR Stronger. 1.1036 from 1.1019 from 1.1131;
viewtopic.php?f=32&t=5523&start=100

7. USD to HKD - HKD Weaker. 7.8272 from 7.8239 from 7.8372;
a. USD Peg band: 7.75 to 7.85
b. Will they remove the peg to the USD during the next crisis?
c. Will China ask HK to depeg from the USD?
viewtopic.php?f=32&t=3529&start=40

8. USD to MYR:- MYR Weaker. 4.1533 from 4.1270 from 4.1653;
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; 1.3612 from 1.3595 from 1.3584;
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; 7.0085 from 6.9965 from 7.0418;
a. When is the right time to buy some CNY? How?
viewtopic.php?f=32&t=7720&start=90

11. GBP to USD:- GBP Stronger; 1.2876 from 1.2776 from 1.2941;
a. Brexit
viewtopic.php?f=32&t=333&start=80

12. GBP to MYR:- GBP Stronger; 5.3474 from 5.2729 from 5.3909;

13. Dollar Index - USD Weaker; 98.11 from 98.35 from 97.44;
viewtopic.php?f=32&t=7616&start=60


Others

Sentiment - Complacent?

Headwinds
a. Derivatives (US$700t);
b. Global Debt (US$247t, 320% GDP);
c. Corporate Debt (US$50t); US Corp Debts (US$9t)
d. Institutional Investors (US$0.5t)
e. ETFs AUM (US$3.4t)
f. Bitcoin (US$200b)
g. US Pension Short-Fall: US$385b
h. US Social Security & Medicare Short-Fall: US$100t; 2034 Bankrupt; US$3t US Treasuries
i. NPLs at European Banks: EUR$1t
j. China's Bond Market: US$12t (third largest)
k. Private Client Cash Levels as a % of Total Assets: Record Low (10.4%)
l. Japanese government’s debt highest in the world: 1.1 QUADRILLION yen (about USD $10 trillion), twice the size of its entire economy.
m. US Student Debt: US$1.7t
viewtopic.php?f=16&t=8930&start=140


Tailwinds
a. Low Interest Rates
b. Cash Sidelines (US$50t)
c. QE US$18t: US (US$4.5t), ECB (US$3.7t), Japan (US$4.4t) & China (US$5.1t)
d. Negative Yield Bonds (US$16t as of Aug 16, 2019)
e. US Foreign Funds Repatriation (US$2.5t)
f. Cash US Corporations (US$1t)
g. Cash
h. Buybacks
i. US Household Net Worth (US$90t)
j. EM Consumption
k. Private Equities US$600b Cash
l. Money Market (US$3.4t); US$3.9 @ Sub-Prime Crisis; Lowes US$2.6t;
m. ECB: Interest rates at -0.05%; QE: Eur 20b/ month starting Nov 2019;
viewtopic.php?f=16&t=8940&start=30


Warning Signs
1. Bearish Divergence - Small Caps
2. Narrow Participation - New Highs
3. Inverted Yield
4. Weak Transportation Numbers - Dow Theory
5. Strong Precious Metal Sector
6. Weak Manufacturing Numbers
7. Insiders Selling: US$26b till date; Highest US$37b in 2000

Risk Management:-
a. Global Diversification
b. Asset Class Diversification
c. Diversity of Industry & Company Exposure
d. Currency Hedging
e. Tactical Asset Allocation
f . Inverse ETFs and Put Warrants
viewtopic.php?f=16&t=7547&start=120


Properties
a. I'm no longer closely monitoring Properties in HK, China, Malaysia and Singapore.
b. I believe that the properties in these countries will not be going anywhere over the next few years.


Yield on 10 Year US Treasuries - Lower; 1.83% from 1.94% last week from 1.70% two weeks ago

Yield on 2 Year Treasuries - Lower; 1.60% from 1.67% from 1.55%;

Interest Rates:-
a. About US$13t or about 1/3 of the world’s bonds have negative yields
b. US Rate Hike: Two more 25 bps cut by end 2019?
c. 6 Developed market and 13 EM central banks to ease in 2H 2019
viewtopic.php?f=16&t=7319&p=221670#p221670


JNK (SPDR Barclays High Yield Bond ETF) - Lower: 107.96 from 108.20 from 108.19;

HYG (iShares iBoxx $ High Yid Corp Bond ETF) - Lower; 86.68 from 86.85 from 86.81;

Baltic Dry Index - Lower; 1364 from 1428 from 1731; Low 290; High 2330 (2013)


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:-


Support the forum button - 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.
viewtopic.php?f=14&t=2823&start=40


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


Active Topics - Do you know that there's an "Active Topics" button? It's located on the top left hand corner of the Index
search.php?search_id=active_topics
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
winston
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Posts: 118530
Joined: Wed May 07, 2008 9:28 am

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

Postby winston » Sun Nov 24, 2019 9:11 am

TOL @ Nov 24, 2019

BUY_Sell_hold_BUY_Sell_hold1-770x433.jpg


Buy, Sell or Hold?

The markets have not been going anywhere for the past week. Therefore, it's timely to think about where it's heading next.

The "Optimists" are saying that the markets can head higher for the following reasons:-
1. Earnings season is about over and the companies can again buy back their shares
2. Phase One of the Trade War will be signed by early next year. (It was supposed to be at the APEC Meeting in Chile on Nov 17).
3. Interest rates are low and getting lower
4. If there's a plunge in the markets, the Central Banksters will rescue it by printing more money
5. The consumers are still spending money
6. Year End Window Dressing is coming up
7. Trump will not be impeached. And even if he's impeached, wouldn't that be good for the markets?

On the other hand, the "Pessimists" are worried of the following:-
1. Earnings season will be over soon so there's no more catalyst to push the markets higher. And if the companies are not making that much money, would they be buying back their shares. They can only borrow so much to buy back their shares.
2. Even if Phase One is signed, the damage to the global economy is already done. And why would anyone buy Equities just because Phase One is signed?
3. Interest rates are already very low and lowering them further would not have much effect on things. Japan has been stagnating for 30 years with low interest rates.
4. The Central Banksters printed about US$16t over the past 10 years, to save the global economy from the Subprime Crisis. Do they really have much firepower left for the next economic crisis, especially when the debt is so much higher this round?
5. The consumers are no longer splurging on big ticket items while Corporations are no longer spending heavily to expand.
6. What is going to happen after the "Santa Rally, Year End Window Dressing and the January Effect"? Isn't it a good time to sell in late December?
7. The politics in Washington has already damaged the global economy.

In view of the above, I think that it's still "safe" to trade the markets for the next two weeks or so, unless Trump decides to increase the tariffs on December 15.

And if "Phase One' do get signed in early 2020, it could extend this "Trading Market" for a few more weeks.

Thereafter, a coordinated QE by the Central Banksters, is needed to extend this economic "boom" beyond the November Presidential Election.

On the horizon, we have the following:-
1. Trump's Impeachment Circus
2. HK District Council Elections
3. New Money For The New Month of December

Finally, I did mentioned last week that I would like to take a "Trading Break". Instead, I went bargain hunting and increased my position from 14 counters to 20 counters this week. It's very difficult to stay disciplined in a "Trading Market" !


Weekly Risk Management Progress Report:-

1. To Monitor Exposure To Equities: Went Bargain Hunting (24% from 18% last week, of Liquid Assets)
Goal: 10% exposure to Equities before the next recession (2020-2021?); Maximum 30%;

2. To Diversify From Asian Equities: No Progress (Around 98% exposure to Asia)
Goal: To reduce percentage of Asian Equities to around 50%

3. To Buy Inverse ETFs and Puts - No Trade (It's not time to short the markets yet)
Goal: To have a sizable short position going into the next recession

4. To Increase "USD/HKD/Gold" - No progress. Still at about 30%.
Goal: To be in the safe havens before next recession; (HKD may be repegged)

5. To Reduce Number Of Counters: Worse (20 from 14 last week)
Goal: To focus on about 12 to 16 counters only at heavier weightings

6. To Minimize Industry / Sector Risk / Country Risk
a. Heavy exposure to Asian Based Equities
Goal: To diversify across various sectors and countries


Market Risk Indicators

1. Euphoria: 8 (Low: 1; High: 10) - FAANNG, ETFs; Margin Debts; SWFs; Central Banks; Fund Flows;

2. Credit Problems: 7 (Very Good: 1; Very Bad: 10) - Housing, Subprime Auto; Student Loans; Credit Cards; Junk Bonds; EM USD Loans;

3. Recession: 7 (Strong Economy: 1; Depression: 10) - GDP; Taxes; PMI; Housing; Auto; Retail; NAFTA; Trade War; 2019?;

4. Liquidity: 7 (Very Liquid: 1; Tight 10) - QE (Feds, ECB, BOJ, PBOC); Interest Rates; Rotation (Bonds); Asset Shrinkage 2018?; EM; Italy;

5. Inverted Yield: 7 (Low Inversion: 1; High Inversion: 10) - Rising Interest Rates; Slope; Inversion; US 10 Years < US 2 Years; Expecting 2019 to 2020

6. Valuation; 8 (Safe 1: PE15; Danger 10) PE S&P, Nadsaq; Revenue; USD; Tax Reform; Deregulation

7. Geopolitical Issues: 8 (Peaceful: 1; War: 10) - Iran; South China Sea; Europe; Russia; Saudi Arabia; Iran;

Total: 52 out of 70 (74%); (Safe: 60%; Danger: 80%)


Commodities: Mixed (Data from Commodities Live on Nov 22 @ 8.30PM)

1. WTI Oil - Higher. US$58.38 from US$56.88 last week from US$56.20 two weeks ago;
Support: US$43; US$34; Resistance: US$75, US$105;
a. Trade Wars reducing demand for Oil; -1m bpd?
b. US SPR: 679m barrels (33 days); To sell 190m barrels over 8 years;
c. US imports 8m bpd (Total demand of India & Japan combined);
d. US: Lighter Crude and Lower Sulphur; 2018 Production +17% yoy;
e. US Break-Even; Permian: US$35 to US$50; Shale: US$50
f. US Shale Debt: US$9b maturing in 2019; US$137b to mature between 2020-2022
g. China (4th producer; largest importer); Reserve Life: 10 to 6 years; Ban on Petrochemical Cars in 5-10 years? Quotas
h. China: SPR 51/90 days; 2019 imports to decrease?
i. IEA: Glut in 2020
j. Saudi: Aramco's IPO; -1.3m bpd (35% cut); Fiscal Break-Even US$85;
k. EV: -350k bpd?
l. Opec: Cut 2.3m bpd since Nov 2018; 9 months extension (April 2020)
j. Non-Opec: +2.3m bpd supply in 2020
viewtopic.php?f=33&t=7550&start=210

2. Gold - Higher. US$1471 from US$1467 from US$1464;
Support: $1240; $1150; $1050; Resistance: $1575; $1775; $1830;
a. Global 33k tons; US 8k t; China 5k t; IMF 3k t; Germany 3k t
b. Electronics, Coins, Central Banks Reserve, Jewellery etc.
c. 250 oz of paper contract for every oz of physical gold holding on Comex
d. China: PBOC has been buying gold over the past few months
e. Demand from Muslim countries as Gold is now a halal investment
g. Gold only occupies 0.03% of US investments. In 1981, it was 8%
h: India Demand: Since 2010, down each year. 2017 (700t); 2020 (900t)
i. China Demand: Since 2013, decreased 33% from 940t to 630t last year
j. China: Jewelry: +3% yoy; Industrials -10% yoy; PBOC: 2.4% forex reserves vs US 74%; Retail; Safe Haven: RMB lost 1/3 vs Gold since Jun 2007;
k. Global Demand: China +5%; India -8%;
l. Central Banks: +70% yoy; 33k tons; Poland, Turkey, Khazakhstan & India
m. U.S. government holds 260m ounces at book value of only US$42m
n. China: Reserves 185m oz; 400m oz ground; Output decreased 6% yoy; Added 100 tons since Dec 2018
o. Russia: US$109b worth of gold
viewtopic.php?f=33&t=7589&p=202084#p202084

3. Copper - Flat; US$2.64 from US$2.63 from US$2.71;
a. Higher inventories at LME
b. China - 50% of global consumption
c. China - Lower Power Grid demand
viewtopic.php?f=33&t=5598&p=215285#p215285

4. No longer monitoring Palladium, Cobalt, Uranium, Silver, Platinum and Zinc on a weekly basis


Equities - Risk-Off/b] (Data as of Saturday every week)
[
1. US Equities - Lower. 3110 from 3120 last week from 3093 two weeks ago;
a. Support: 2750; 2320; Resistance: 3260; PE 18
b, No Trade
viewtopic.php?f=11&t=7643&start=200

2. HK Equities - Higher. 26595 from 26327 from 27651;
a. Support: 25500, 24500, 23500; 22000;
b. Resistance: 27800; 29000; 31600;
c. Bought SJM (0880)
d. Bought Cofco Meat (1610)
e. Bought MMG (1208)
htttp:/investideas.net/forum/viewtopic.php?f=10&t=7470&start=120

3. Shanghai Equities - Lower. 2885 from 2891 from 2964;
a. Support: 2450; Resistance 3300; 3600
b. No Trade
viewtopic.php?f=10&t=7190&start=210

4. Spore Equities - Lower; 3226 from 3239 from 3264;
a. Resistance 3850
b. Traded Jardine Matheson
c. Bought Jardine Strategic
c. Sold Mandarin Oriental
viewtopic.php?f=10&t=6828&start=b110

5. Japan Equities - Lower. 23113 from 23303 from 23392;
a. Forward PE 13
b. Support 19000; Resistance 25000
c. BOJ owns > Half government bonds and 75% of ETFs
d. No Trade
viewtopic.php?f=10&t=7138&start=200

6. Malaysian Equities; Higher; 1597 from 1595 from 1610;
a. Bought Gabungan AQRS
b. Bought BAT
c. Bought Pharmaniaga
d. Added to MNRB
e. Traded MYEG
viewtopic.php?f=10&t=6292&start=30


[b]Currencies - Mixed
(Data from XE.com on Nov 22 @ 8.30 PM)

1. USD to JPY - JPY Stronger; 108.53 from 108.71 last week from 109.22 two weeks ago;
a. 52 week range is 76 to 126
b. Aging Population
c. High Debt Ratio
d. Why is it a Safe Haven ?
e. QE Infinity?
viewtopic.php?f=32&t=4205&start=180

2. SGD to MYR - SGD Stronger; 3.0608 from 3.0511 from 3.0364;
viewtopic.php?f=32&t=136&start=110

3. AUD to USD - AUD Weaker; 0.6787 from 0.6803 from 0.6861;
a. The range is 0.70 (2016) to 1.10 (2011)
b. Commodity Currency
c. To diversify my AUD into what currency?
viewtopic.php?f=32&t=5256&start=130

4. AUD to SGD - AUD Weaker; 0.9251 from 0.9259 from 0.9327;
a. The range is 0.98 (2016) to 1.36 (2012)

5. AUD to MYR - AUD Stronger; 2.8317 from 2.8251 from 2.8709;
a. The range is 2.20 (2008) to 3.41 (2017)

6. EUR to USD - EUR Stronger. 1.1055 from 1.1036 from 1.1019;
viewtopic.php?f=32&t=5523&start=100

7. USD to HKD - HKD Stronger. 7.8242 from 7.8272 from 7.8239;
a. USD Peg band: 7.75 to 7.85
b. Will they remove the peg to the USD during the next crisis?
c. Will China ask HK to depeg from the USD?
viewtopic.php?f=32&t=3529&start=40

8. USD to MYR:- MYR Weaker. 4.1718 from 4.1533 from 4.1270;
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; 1.3630 from 1.3612 from 1.3595;
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; 7.0393 from 7.0085 from 6.9965;
a. When is the right time to buy some CNY? How?
viewtopic.php?f=32&t=7720&start=90

11. GBP to USD:- GBP Weaker; 1.2854 from 1.2876 from 1.2776;
a. Brexit
viewtopic.php?f=32&t=333&start=80

12. GBP to MYR:- GBP Stronger; 5.3631 from 5.3474 from 5.2729;

13. Dollar Index - USD Weaker; 98.01 from 98.11 from 98.35;
viewtopic.php?f=32&t=7616&start=60


Others

Sentiment - Fear Of Missing Out (FOMO)?

Headwinds
a. Derivatives (US$700t);
b. Global Debt (US$247t, 320% GDP);
c. Corporate Debt (US$50t); US Corp Debts (US$9t)
d. Institutional Investors (US$0.5t)
e. ETFs AUM (US$3.4t)
f. Bitcoin (US$200b)
g. US Pension Short-Fall: US$385b
h. US Social Security & Medicare Short-Fall: US$100t; 2034 Bankrupt; US$3t US Treasuries
i. NPLs at European Banks: EUR$1t
j. China's Bond Market: US$12t (third largest)
k. Private Client Cash Levels as a % of Total Assets: Record Low (10.4%)
l. Japanese government’s debt highest in the world: 1.1 QUADRILLION yen (about USD $10 trillion), twice the size of its entire economy.
m. US Student Debt: US$1.7t
viewtopic.php?f=16&t=8930&start=140


Tailwinds
a. Low Interest Rates
b. Cash Sidelines (US$50t)
c. QE US$18t: US (US$4.5t), ECB (US$3.7t), Japan (US$4.4t) & China (US$5.1t)
d. Negative Yield Bonds (US$16t as of Aug 16, 2019)
e. US Foreign Funds Repatriation (US$2.5t)
f. Cash US Corporations (US$1t)
g. Cash
h. Buybacks
i. US Household Net Worth (US$90t)
j. EM Consumption
k. Private Equities US$600b Cash
l. Money Market (US$3.4t); US$3.9 @ Sub-Prime Crisis; Lowes US$2.6t;
m. ECB: Interest rates at -0.05%; QE: Eur 20b/ month starting Nov 2019;
viewtopic.php?f=16&t=8940&start=30


Warning Signs
1. Bearish Divergence - Small Caps
2. Narrow Participation - New Highs
3. Inverted Yield
4. Weak Transportation Numbers - Dow Theory
5. Strong Precious Metal Sector
6. Weak Manufacturing Numbers
7. Insiders Selling: US$26b till date; Highest US$37b in 2000

Risk Management:-
a. Global Diversification
b. Asset Class Diversification
c. Diversity of Industry & Company Exposure
d. Currency Hedging
e. Tactical Asset Allocation
f . Inverse ETFs and Put Warrants
viewtopic.php?f=16&t=7547&start=120


Properties
a. I'm no longer closely monitoring Properties in HK, China, Malaysia and Singapore.
b. I believe that the properties in these countries will not be going anywhere over the next few years.


Yield on 10 Year US Treasuries - Lower; 1.75% from 1.83% last week from 1.94% two weeks ago

Yield on 2 Year Treasuries - Lower; 1.59% from 1.60% from 1.67%;

Interest Rates:-
a. About US$13t or about 1/3 of the world’s bonds have negative yields
b. US Rate Hike: Two more 25 bps cut by end 2019?
c. 6 Developed market and 13 EM central banks to ease in 2H 2019
viewtopic.php?f=16&t=7319&p=221670#p221670


JNK (SPDR Barclays High Yield Bond ETF) - Lower: 107.57 from 107.96 from 108.20;

HYG (iShares iBoxx $ High Yid Corp Bond ETF) - Lower; 86.36 from 86.68 from 86.85;

Baltic Dry Index - Lower; 1255 from 1364 from 1428; Low 290; High 2330 (2013)


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:-


Support the forum button - 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.
viewtopic.php?f=14&t=2823&start=40


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
winston
Billionaire Boss
 
Posts: 118530
Joined: Wed May 07, 2008 9:28 am

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

Postby winston » Sun Dec 01, 2019 9:05 am

TOL @ Dec 1, 2019

December.jpg


New Money From The New Month

It's a new month and the markets should spike up again sometime next week.

Thereafter, the "optimists" thinks that the current rally would have some legs, until at least mid-January, for the following reasons:-
1. Signing of Phased One
2. Santa Rally
3. Year End Window Dressing
4. January Effect
5. Revision Upwards Of Current Gloomy Economic Data
6. Revision Upwards Of Current Conservative Earning Estimates

At the same time, sentiment seems to be very complacent and everyone around me seems to have this "Fear Of Missing Out" (FOMO) if they dont buy now.

In times like this, it's prudent to step aside and to review the situation again.

If things were so great, why do we have the followng?
1. Crisis in the Repo market
2. Oil collapsing 5% suddenly on Friday
3. HK collapsing 550 points suddenly on Friday
4. Shanghai making "lower highs" and "lower lows" since September
etc.

Are the participants too complacent? Are they like that turkey that is being fed before being slaughtered for Thanksgiving?

In view of the above, I need to remind myself of the following:-
1. Ensure that my Cash Level is healthy
2. Cut my losses within 3 days and never leave a losing trade over the week-end
3. Have a "Trailing Stop Loss" if I want to ride a profitable trade
4. Watch my Position Size
5. Dont chase after a trade
6. Be more patient and wait for the set-up first
7. Try not to "Average Down"

Finally, there's nothing much on the horizon except for the "Impeachment" and "Phase One" circuses.


Weekly Risk Management Progress Report:-

1. To Monitor Exposure To Equities: Neutral (26% from 24% last week, of Liquid Assets)
Goal: 10% exposure to Equities before the next recession (2020-2021?); Maximum 30%;

2. To Diversify From Asian Equities: No Progress (Around 98% exposure to Asia)
Goal: To reduce percentage of Asian Equities to around 50%

3. To Buy Inverse ETFs and Puts - No Trade
Goal: To have a sizable short position going into the next recession

4. To Increase "USD/HKD/Gold" - No progress. Still at about 30%.
Goal: To be in the safe havens before next recession; (HKD may be repegged)

5. To Reduce Number Of Counters: Worse (23 from 20 last week)
Goal: To focus on about about 16 counters only at heavier weightings

6. To Minimize Industry / Sector Risk / Country Risk
a. Heavy exposure to Asian Based Equities
Goal: To diversify across various sectors and countries


Market Risk Indicators

1. Euphoria: 8 (Low: 1; High: 10) - FAANNG, ETFs; Margin Debts; SWFs; Central Banks; Fund Flows;

2. Credit Problems: 7 (Very Good: 1; Very Bad: 10) - Housing, Subprime Auto; Student Loans; Credit Cards; Junk Bonds; EM USD Loans;

3. Recession: 7 (Strong Economy: 1; Depression: 10) - GDP; Taxes; PMI; Housing; Auto; Retail; NAFTA; Trade War; 2019?;

4. Liquidity: 7 (Very Liquid: 1; Tight 10) - QE (Feds, ECB, BOJ, PBOC); Interest Rates; Rotation (Bonds); Asset Shrinkage 2018?; EM; Italy;

5. Inverted Yield: 7 (Low Inversion: 1; High Inversion: 10) - Rising Interest Rates; Slope; Inversion; US 10 Years < US 2 Years; Expecting 2019 to 2020

6. Valuation; 8 (Safe 1: PE15; Danger 10) PE S&P, Nadsaq; Revenue; USD; Tax Reform; Deregulation

7. Geopolitical Issues: 8 (Peaceful: 1; War: 10) - Iran; South China Sea; Europe; Russia; Saudi Arabia; Iran;

Total: 52 out of 70 (74%); (Safe: 60%; Danger: 85%)


Commodities: Mixed (Data from Commodities Live on Dec 1 @ 9.00 AM)

1. WTI Oil - Lower. US$55.42 from US$58.38 last week from US$56.88 two weeks ago;
Support: US$43; US$34; Resistance: US$75, US$105;
a. Trade Wars reducing demand for Oil; -1m bpd?
b. US SPR: 679m barrels (33 days); To sell 190m barrels over 8 years;
c. US imports 8m bpd (Total demand of India & Japan combined);
d. US: Lighter Crude and Lower Sulphur; 2018 Production +17% yoy;
e. US Break-Even; Permian: US$35 to US$50; Shale: US$50
f. US Shale Debt: US$9b maturing in 2019; US$137b to mature between 2020-2022
g. China (4th producer; largest importer); Reserve Life: 10 to 6 years; Ban on Petrochemical Cars in 5-10 years? Quotas
h. China: SPR 51/90 days; 2019 imports to decrease?
i. IEA: Glut in 2020
j. Saudi: Aramco's IPO; -1.3m bpd (35% cut); Fiscal Break-Even US$85;
k. EV: -350k bpd?
l. Opec: Cut 2.3m bpd since Nov 2018; 9 months extension (April 2020)
j. Non-Opec: +2.3m bpd supply in 2020
viewtopic.php?f=33&t=7550&start=210

2. Gold - Lower. US$1470 from US$1471 from US$1467;
Support: $1240; $1150; $1050; Resistance: $1575; $1775; $1830;
a. Global 33k tons; US 8k t; China 5k t; IMF 3k t; Germany 3k t
b. Electronics, Coins, Central Banks Reserve, Jewellery etc.
c. 250 oz of paper contract for every oz of physical gold holding on Comex
d. China: PBOC has been buying gold over the past few months
e. Demand from Muslim countries as Gold is now a halal investment
g. Gold only occupies 0.03% of US investments. In 1981, it was 8%
h: India Demand: Since 2010, down each year. 2017 (700t); 2020 (900t)
i. China Demand: Since 2013, decreased 33% from 940t to 630t last year
j. China: Jewelry: +3% yoy; Industrials -10% yoy; PBOC: 2.4% forex reserves vs US 74%; Retail; Safe Haven: RMB lost 1/3 vs Gold since Jun 2007;
k. Global Demand: China +5%; India -8%;
l. Central Banks: +70% yoy; 33k tons; Poland, Turkey, Khazakhstan & India
m. U.S. government holds 260m ounces at book value of only US$42m
n. China: Reserves 185m oz; 400m oz ground; Output decreased 6% yoy; Added 100 tons since Dec 2018
o. Russia: US$109b worth of gold
viewtopic.php?f=33&t=7589&p=202084#p202084

3. Copper - Higher; US$2.66 from US$2.64 from US$2.63;
a. Higher inventories at LME
b. China - 50% of global consumption
c. China - Lower Power Grid demand
viewtopic.php?f=33&t=5598&p=215285#p215285

4. No longer monitoring Palladium, Cobalt, Uranium, Silver, Platinum and Zinc on a weekly basis


Equities - Risk-On/b] (Data as of Saturday every week)
[
1. US Equities - Higher. 3141 from 3110 last week from 3120 two weeks ago;
a. Support: 2750; 2320; Resistance: 3260; PE 18
b, No Trade
viewtopic.php?f=11&t=7643&start=200

2. HK Equities - Lower. 26346 from 26595 from 26327;
a. Support: 25500, 24500, 23500; 22000;
b. Resistance: 27800; 29000; 31600;
c. Bought CNOOC (0883)
d. Bought CSPC Pharma (1093)
e. Sold SJM (0880)
f. Sold China Mengniu (2319)
g. Traded MMG (1208)
htttp:/investideas.net/forum/viewtopic.php?f=10&t=7470&start=120

3. Shanghai Equities - Lower. 2872 from 2885 from 2891;
a. Support: 2450; Resistance 3300; 3600
b. No Trade
viewtopic.php?f=10&t=7190&start=210

4. Spore Equities - Lower; 3194 from 3226 from 3239;
a. Resistance 3850
b. Bought Jardine Matheson
c. Traded Jardine Strategic
viewtopic.php?f=10&t=6828&start=b110

5. Japan Equities - Higher. 23294 from 23113 from 23303;
a. Forward PE 13
b. Support 19000; Resistance 25000
c. BOJ owns > Half government bonds and 75% of ETFs
d. No Trade
viewtopic.php?f=10&t=7138&start=200

6. Malaysian Equities; Lower; 1562 from 1597 from 1595;
a. Bought Pentamaster
b. Bought Hong Leong Bank
c. Bought IGB Reit
d. Sold BAT
e. Traded MNRB
viewtopic.php?f=10&t=6292&start=30


[b]Currencies - Risk-Off
(Data from XE.com on Nov 29 @ 9.00 PM)

1. USD to JPY - JPY Weaker; 109.59 from 108.53 last week from 108.71 two weeks ago;
a. 52 week range is 76 to 126
b. Aging Population
c. High Debt Ratio
d. Why is it a Safe Haven ?
e. QE Infinity?
viewtopic.php?f=32&t=4205&start=180

2. SGD to MYR - SGD Weaker; 3.0549 from 3.0608 from 3.0511;
viewtopic.php?f=32&t=136&start=110

3. AUD to USD - AUD Weaker; 0.6771 from 0.6787 from 0.6803;
a. The range is 0.70 (2016) to 1.10 (2011)
b. Commodity Currency
c. To diversify my AUD into what currency?
viewtopic.php?f=32&t=5256&start=130

4. AUD to SGD - AUD Stronger; 0.9256 from 0.9251 from 0.9259;
a. The range is 0.98 (2016) to 1.36 (2012)

5. AUD to MYR - AUD Weaker; 2.8275 from 2.8317 from 2.8251;
a. The range is 2.20 (2008) to 3.41 (2017)

6. EUR to USD - EUR Weaker. 1.0988 from 1.1055 from 1.1036;
viewtopic.php?f=32&t=5523&start=100

7. USD to HKD - HKD Weaker. 7.8262 from 7.8242 from 7.8272;
a. USD Peg band: 7.75 to 7.85
b. Will they remove the peg to the USD during the next crisis?
c. Will China ask HK to depeg from the USD?
viewtopic.php?f=32&t=3529&start=40

8. USD to MYR:- MYR Weaker. 4.1762 from 4.1718 from 4.1533;
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; 1.3671 from 1.3630 from 1.3612;
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; 7.0246 from 7.0393 from 7.0085;
a. When is the right time to buy some CNY? How?
viewtopic.php?f=32&t=7720&start=90

11. GBP to USD:- GBP Stronger; 1.2891 from 1.2854 from 1.2876;
a. Brexit
viewtopic.php?f=32&t=333&start=80

12. GBP to MYR:- GBP Stronger; 5.3838 from 5.3631 from 5.3474;

13. Dollar Index - USD Stronger; 98.43 from 98.01 from 98.11;
viewtopic.php?f=32&t=7616&start=60


Others

Sentiment - Fear Of Missing Out (FOMO)?

Headwinds
a. Derivatives (US$700t);
b. Global Debt (US$247t, 320% GDP);
c. Corporate Debt (US$50t); US Corp Debts (US$9t)
d. Institutional Investors (US$0.5t)
e. ETFs AUM (US$3.4t)
f. Bitcoin (US$200b)
g. US Pension Short-Fall: US$6t
h. US Social Security & Medicare Short-Fall: US$100t; 2034 Bankrupt; US$3t US Treasuries
i. NPLs at European Banks: EUR$1t
j. China's Bond Market: US$12t (third largest)
k. Private Client Cash Levels as a % of Total Assets: Record Low (10.4%)
l. Japanese government’s debt highest in the world: 1.1 QUADRILLION yen (about USD $10 trillion), twice the size of its entire economy.
m. US Student Debt: US$1.7t
viewtopic.php?f=16&t=8930&start=140


Tailwinds
a. Low Interest Rates
b. Cash Sidelines (US$50t)
c. QE US$18t: US (US$4.5t), ECB (US$3.7t), Japan (US$4.4t) & China (US$5.1t)
d. Negative Yield Bonds (US$16t as of Aug 16, 2019)
e. US Foreign Funds Repatriation (US$2.5t)
f. Cash US Corporations (US$1t)
g. Cash
h. Buybacks
i. US Household Net Worth (US$90t)
j. EM Consumption
k. Private Equities US$600b Cash
l. Money Market (US$3.4t); US$3.9 @ Sub-Prime Crisis; Lowes US$2.6t;
m. ECB: Interest rates at -0.05%; QE: Eur 20b/ month starting Nov 2019;
viewtopic.php?f=16&t=8940&start=30


Warning Signs
1. Bearish Divergence - Small Caps
2. Narrow Participation - New Highs
3. Inverted Yield
4. Weak Transportation Numbers - Dow Theory
5. Strong Precious Metal Sector
6. Weak Manufacturing Numbers
7. Insiders Selling: US$26b till date; Highest US$37b in 2000

Risk Management:-
a. Global Diversification
b. Asset Class Diversification
c. Diversity of Industry & Company Exposure
d. Currency Hedging
e. Tactical Asset Allocation
f . Inverse ETFs and Put Warrants
viewtopic.php?f=16&t=7547&start=120


Properties
a. I'm no longer closely monitoring Properties in HK, China, Malaysia and Singapore.
b. I believe that the properties in these countries will not be going anywhere over the next few years.


Yield on 10 Year US Treasuries - Higher; 1.77% from 1.75% last week from 1.83% two weeks ago

Yield on 2 Year Treasuries - Higher; 1.63% from 1.59% from 1.60%;

Interest Rates:-
a. About US$13t or about 1/3 of the world’s bonds have negative yields
b. US Rate Hike: Two more 25 bps cut by end 2019?
c. 6 Developed market and 13 EM central banks to ease in 2H 2019
viewtopic.php?f=16&t=7319&p=221670#p221670


JNK (SPDR Barclays High Yield Bond ETF) - Higher: 108.55 from 107.57 from 107.96;

HYG (iShares iBoxx $ High Yid Corp Bond ETF) - Higher; 87.13 from 86.36 from 86.68;

Baltic Dry Index - Higher; 1467 from 1255 from 1364; Low 290; High 2330 (2013)


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:-


Support the forum button - 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.
viewtopic.php?f=14&t=2823&start=40


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
winston
Billionaire Boss
 
Posts: 118530
Joined: Wed May 07, 2008 9:28 am

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

Postby winston » Sun Dec 08, 2019 6:41 am

TOL @ Dec 8, 2019

run.jpg


One Week To Run?


We have one more week before the Dec 15th Deadline, where a 15% levy would be applied to US$160b of Chinese Goods.

However, the consensus view is that the 15% levy would be rolled back before the December 15th deadline.

At the same time, the market seems to think that even if the 15% tariffs is applied on Dec 16th, there would be a "V" recovery after the initial sell-off. It's not the end of the world if a 15% tariff is applied to US$160b of Chinese Goods.

I do not know what will happen next week and I wont be reacting until late next week. I'm hoping that an answer would surface sometime next week and It's no point thinking about it now as the situation is very fluid.

In the meantime, I will probably be:-
1. Continuing to raise Cash whenever I can
2. Taking any windfall profits and
3. Refraining from buying anything next week unless there's a very convincing story

On the horizon, we also have the following:-
1. Dec 11: FOMC Meeting (Not expecting any rates cut)
2. Dec 11: Saudi Aramco IPO (500k bpd additional cut would help)
3. Dec 12: UK Election (Yawn Yawn)
4. Impeachment Circus (Trump should be safe for the time being)


Weekly Risk Management Progress Report:-

1. To Monitor Exposure To Equities: Neutral (27% from 26% last week, of Liquid Assets)
Goal: 10% exposure to Equities before the next recession (2020-2021?); Maximum 30%;

2. To Diversify From Asian Equities: No Progress (Around 94% exposure to Asia)
Goal: To reduce percentage of Asian Equities to around 50%

3. To Buy Inverse ETFs and Puts - No Trade
Goal: To have a sizable short position going into the next recession

4. To Increase "USD/HKD/Gold" - Bought Zhaojin (1818). Still at about 30%.
Goal: To be in the safe havens before next recession; (HKD may be repegged)

5. To Reduce Number Of Counters: Worse (24 from 23 last week)
Goal: To focus on only about 16 counters from 4 countries but with heavier weightings

6. To Minimize Industry / Sector Risk / Country Risk
a. Heavy exposure to Asian Based Equities
Goal: To diversify across various sectors and countries


Market Risk Indicators

1. Euphoria: 8 (Low: 1; High: 10) - FAANNG, ETFs; Margin Debts; SWFs; Central Banks; Fund Flows;

2. Credit Problems: 7 (Very Good: 1; Very Bad: 10) - Housing, Subprime Auto; Student Loans; Credit Cards; Junk Bonds; EM USD Loans;

3. Recession: 7 (Strong Economy: 1; Depression: 10) - GDP; Taxes; PMI; Housing; Auto; Retail; NAFTA; Trade War; 2019?;

4. Liquidity: 7 (Very Liquid: 1; Tight 10) - QE (Feds, ECB, BOJ, PBOC); Interest Rates; Rotation (Bonds); Asset Shrinkage 2018?; EM; Italy;

5. Inverted Yield: 7 (Low Inversion: 1; High Inversion: 10) - Rising Interest Rates; Slope; Inversion; US 10 Years < US 2 Years; Expecting 2019 to 2020

6. Valuation; 8 (Safe 1: PE15; Danger 10) PE S&P, Nadsaq; Revenue; USD; Tax Reform; Deregulation

7. Geopolitical Issues: 8 (Peaceful: 1; War: 10) - Iran; South China Sea; Europe; Russia; Saudi Arabia; Iran;

Total: 52 out of 70 (74%); (Safe: 60%; Danger: 85%)


Commodities: Risk-On (Data from Commodities Live on Nov 29 @ 8.45PM)

1. WTI Oil - Lower. US$55.42 from US$58.38 last week from US$56.88 two weeks ago;
Support: US$43; US$34; Resistance: US$75, US$105;
a. Trade Wars reducing demand for Oil; -1m bpd?
b. US SPR: 679m barrels (33 days); To sell 190m barrels over 8 years;
c. US imports 8m bpd (Total demand of India & Japan combined);
d. US: Lighter Crude and Lower Sulphur; 2018 Production +17% yoy;
e. US Break-Even; Permian: US$35 to US$50; Shale: US$50
f. US Shale Debt: US$9b maturing in 2019; US$137b to mature between 2020-2022
g. China (4th producer; largest importer); Reserve Life: 10 to 6 years; Ban on Petrochemical Cars in 5-10 years? Quotas
h. China: SPR 51/90 days; 2019 imports to decrease?
i. IEA: Glut in 2020
j. Saudi: Aramco's IPO; -1.3m bpd (35% cut); Fiscal Break-Even US$85;
k. EV: -350k bpd?
l. Opec: 9 mths extension of 2.3m bpd cut until April 2020; Additional 0.5m bpd cut from Dec 7?
j. Non-Opec: +2.3m bpd supply in 2020
viewtopic.php?f=33&t=7550&start=210

2. Gold - Lower. US$1470 from US$1471 from US$1467;
Support: $1240; $1150; $1050; Resistance: $1575; $1775; $1830;
a. Global 33k tons; US 8k t; China 5k t; IMF 3k t; Germany 3k t
b. Electronics, Coins, Central Banks Reserve, Jewellery etc.
c. 250 oz of paper contract for every oz of physical gold holding on Comex
d. China: PBOC has been buying gold over the past few months
e. Demand from Muslim countries as Gold is now a halal investment
g. Gold only occupies 0.03% of US investments. In 1981, it was 8%
h: India Demand: Since 2010, down each year. 2017 (700t); 2020 (900t)
i. China Demand: Since 2013, decreased 33% from 940t to 630t last year
j. China: Jewelry: +3% yoy; Industrials -10% yoy; PBOC: 2.4% forex reserves vs US 74%; Retail; Safe Haven: RMB lost 1/3 vs Gold since Jun 2007;
k. Global Demand: China +5%; India -8%;
l. Central Banks: +70% yoy; 33k tons; Poland, Turkey, Khazakhstan & India
m. U.S. government holds 260m ounces at book value of only US$42m
n. China: Reserves 185m oz; 400m oz ground; Output decreased 6% yoy; Added 100 tons since Dec 2018
o. Russia: US$109b worth of gold
viewtopic.php?f=33&t=7589&p=202084#p202084

3. Copper - Higher; US$2.66 from US$2.64 from US$2.63;
a. Higher inventories at LME
b. China - 50% of global consumption
c. China - Lower Power Grid demand
viewtopic.php?f=33&t=5598&p=215285#p215285

4. No longer monitoring Palladium, Cobalt, Uranium, Silver, Platinum and Zinc on a weekly basis


Equities - Risk-On/b] (Data as of Saturday every week)
[
1. US Equities - Higher. 3146 from 3141 last week from 3110 two weeks ago;
a. Support: 2750; 2320; Resistance: 3260; PE 20;
b, Bought XLK (Technology ETF)
viewtopic.php?f=11&t=7643&start=200

2. HK Equities - Higher. 26498 from 26346 from 26595;
a. Support: 25500, 24500, 23500; 22000;
b. Resistance: 27800; 29000; 31600;
c. Bought Zhaojin Gold (1818)
d. Sold CSPC Pharma (1093)
e. Sold 1/2 MMG (1208)
htttp:/investideas.net/forum/viewtopic.php?f=10&t=7470&start=120

3. Shanghai Equities - Higher; 2912 from 2872 from 2885;
a. Support: 2450; Resistance 3300; 3600
b. No Trade
viewtopic.php?f=10&t=7190&start=210

4. Spore Equities - Flat; 3195 from 3194 from 3226;
a. Resistance 3850
b. Traded Jardine Matheson
c. Sold 1/2 Jardine Strategic
viewtopic.php?f=10&t=6828&start=b110

5. Japan Equities - Higher. 23354 from 23294 from 23113;
a. Forward PE 13
b. Support 19000; Resistance 25000
c. BOJ owns > Half government bonds and 75% of ETFs
d. No Trade
viewtopic.php?f=10&t=7138&start=200

6. Malaysian Equities; Higher; 1568 from 1562 from 1597;
a. Bought MYEG
b. Traded Pentamaster
c. Traded IGB
d. Sold Hong Leong Bank
viewtopic.php?f=10&t=6292&start=30


[b]Currencies - Risk-Off
(Data from XE.com on Dec 6 @ 6.45 PM)

1. USD to JPY - JPY Stronger; 108.57 from 109.59 last week from 108.53 two weeks ago;
a. 52 week range is 76 to 126
b. Aging Population
c. High Debt Ratio
d. Why is it a Safe Haven ?
e. QE Infinity?
viewtopic.php?f=32&t=4205&start=180

2. SGD to MYR - SGD Stronger; 3.0591 from 3.0549 from 3.0608;
viewtopic.php?f=32&t=136&start=110

3. AUD to USD - AUD Stronger; 0.6847 from 0.6771 from 0.6787;
a. The range is 0.70 (2016) to 1.10 (2011)
b. Commodity Currency
c. To diversify my AUD into what currency?
viewtopic.php?f=32&t=5256&start=130

4. AUD to SGD - AUD Stronger; 0.9311 from 0.9256 from 0.9251;
a. The range is 0.98 (2016) to 1.36 (2012)

5. AUD to MYR - AUD Stronger; 2.8484 from 2.8275 from 2.8317;
a. The range is 2.20 (2008) to 3.41 (2017)

6. EUR to USD - EUR Stronger. 1.1094 from 1.0988 from 1.1055;
viewtopic.php?f=32&t=5523&start=100

7. USD to HKD - HKD Weaker. 7.8292 from 7.8262 from 7.8242;
a. USD Peg band: 7.75 to 7.85
b. Will they remove the peg to the USD during the next crisis?
c. Will China ask HK to depeg from the USD?
viewtopic.php?f=32&t=3529&start=40

8. USD to MYR:- MYR Stronger. 4.1598 from 4.1762 from 4.1718;
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; 1.3598 from 1.3671 from 1.3630;
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; 7.0323 from 7.0246 from 7.0393;
a. When is the right time to buy some CNY? How?
viewtopic.php?f=32&t=7720&start=90

11. GBP to USD:- GBP Stronger; 1.3128 from 1.2891 from 1.2854;
a. Brexit
viewtopic.php?f=32&t=333&start=80

12. GBP to MYR:- GBP Stronger; 5.4609 from 5.3838 from 5.3631;

13. Dollar Index - USD Weaker; 97.46 from 98.43 from 98.01;
viewtopic.php?f=32&t=7616&start=60


Others

Sentiment - Fear Of Missing Out (FOMO)?

Headwinds
a. Derivatives (US$700t);
b. Global Debt (US$247t, 320% GDP);
c. Corporate Debt (US$50t); US Corp Debts (US$9t)
d. Institutional Investors (US$0.5t)
e. ETFs AUM (US$3.4t)
f. Bitcoin (US$200b)
g. US Pension Short-Fall: US$6t
h. US Social Security & Medicare Short-Fall: US$100t; 2034 Bankrupt; US$3t US Treasuries
i. NPLs at European Banks: EUR$1t
j. China's Bond Market: US$12t (third largest)
k. Private Client Cash Levels as a % of Total Assets: Record Low (10.4%)
l. Japanese government’s debt highest in the world: 1.1 QUADRILLION yen (about USD $10 trillion), twice the size of its entire economy.
m. US Student Debt: US$1.7t
viewtopic.php?f=16&t=8930&start=140


Tailwinds
a. Low Interest Rates
b. Cash Sidelines (US$50t)
c. QE US$18t: US (US$4.5t), ECB (US$3.7t), Japan (US$4.4t) & China (US$5.1t)
d. Negative Yield Bonds (US$16t as of Aug 16, 2019)
e. US Foreign Funds Repatriation (US$2.5t)
f. Cash US Corporations (US$1t)
g. Cash
h. Buybacks
i. US Household Net Worth (US$90t)
j. EM Consumption
k. Private Equities US$600b Cash
l. Money Market (US$3.4t); US$3.9 @ Sub-Prime Crisis; Lowes US$2.6t;
m. ECB: Interest rates at -0.05%; QE: Eur 20b/ month starting Nov 2019;
viewtopic.php?f=16&t=8940&start=30


Warning Signs
1. Bearish Divergence - Small Caps
2. Narrow Participation - New Highs
3. Inverted Yield
4. Weak Transportation Numbers - Dow Theory
5. Strong Precious Metal Sector
6. Weak Manufacturing Numbers
7. Insiders Selling: US$26b till date; Highest US$37b in 2000

Risk Management:-
a. Global Diversification
b. Asset Class Diversification
c. Diversity of Industry & Company Exposure
d. Currency Hedging
e. Tactical Asset Allocation
f . Inverse ETFs and Put Warrants
viewtopic.php?f=16&t=7547&start=120


Properties
a. I'm no longer closely monitoring Properties in HK, China, Malaysia and Singapore.
b. I believe that the properties in these countries will not be going anywhere over the next few years.


Yield on 10 Year US Treasuries - Higher; 1.79% from 1.77% last week from 1.75% two weeks ago

Yield on 2 Year Treasuries - Lower; 1.58% from 1.63% from 1.59%;

Interest Rates:-
a. About US$13t or about 1/3 of the world’s bonds have negative yields
b. US Rate Hike: Two more 25 bps cut by end 2019?
c. 6 Developed market and 13 EM central banks to ease in 2H 2019
viewtopic.php?f=16&t=7319&p=221670#p221670


JNK (SPDR Barclays High Yield Bond ETF) - Lower: 108.11 from 108.55 from 107.57;

HYG (iShares iBoxx $ High Yid Corp Bond ETF) - Lower; 86.81 from 87.13 from 86.36;

Baltic Dry Index - Higher; 1575 from 1467 from 1255; Low 290; High 2330 (2013)


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:-


Support the forum button - 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.
viewtopic.php?f=14&t=2823&start=40


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
winston
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Posts: 118530
Joined: Wed May 07, 2008 9:28 am

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

Postby winston » Sun Dec 15, 2019 7:54 am

[flash=][/flash]TOL @ Dec 15, 2019

excited.jpg


Why Are You Excited With The Phase One Deal?

Now that we have reached a "Phase One" deal in principle, were you one of the people that bought in anticipation of it?

If not, who was buying, as the markets were certainly moving:-
1. HK moved about 4.5% from Wednesday to Friday
2. Japan moved about 2.5% on Friday,
3. China moved about 2% on Friday
4. US moved about 1% on Thursday & Friday

Well, someone was certainly buying. If it were not the machines, then maybe it was due to some "Window Dressing" activities. Or maybe the PPT was trying to force the Fund Managers to buy, as the Fund Managers have been underperforming the markets.

And why would one buy just because "Phase One" is agreed in principle? It will only be signed in early January. And in a Tweeter world, with an erratic US President, that's eternity. By the way, can the deterioration in the global economy be really arrested with the signed Phase One?

Anyway, I'm still expecting a US recession only sometime after the November 2020 election, possibly in mid 2021. And if stocks do turn down about 6 months before a recession, then the time to be a bit more careful is about early 2021.

Therefore, it's probably still safe to trade the markets for the next few months. However, if the markets becomes too euphoric because of the signed Phase One, Window Dressing or Santa Rally, then I may have to take some profits, with the intention of buying again after the technical dip.

This week, I have been selling into the rip. I have reduced my exposure to Equities from 27% to 21% and the number of counters from 24 to 18. I intend to reduce my exposure further if the market continues to rise and will probably buy back on the technical dip.

On the horizon, we still have the "Impeachment Circus" as well as "Window Dressing" activities.

Finally, I'm not expecting a crash anytime soon and will continue to trade the markets if I do find any convincing story.


Weekly Risk Management Progress Report:-

1. To Monitor Exposure To Equities: Neutral (21% from 27% last week, of Liquid Assets)
Goal: 10% exposure to Equities before the next recession (2020-2021?); Maximum 30%;

2. To Diversify From Asian Equities: No Progress (Around 94% exposure to Asia)
Goal: To reduce percentage of Asian Equities to around 50%

3. To Buy Inverse ETFs and Puts - No Trade
Goal: To have a sizable short position going into the next recession

4. To Increase "USD/HKD/Gold" - No progress. Still at about 30%.
Goal: To be in the safe havens before next recession; (HKD may be repegged)

5. To Reduce Number Of Counters: Progress (18 from 24 last week)
Goal: To focus on about 16 counters fvrom 4 countries with heavier weightings

6. To Minimize Industry / Sector Risk / Country Risk
a. Heavy exposure to Asian Based Equities
Goal: To diversify across various sectors and countries


Market Risk Indicators

1. Euphoria: 8 (Low: 1; High: 10) - FAANNG, ETFs; Margin Debts; SWFs; Central Banks; Fund Flows;

2. Credit Problems: 7 (Very Good: 1; Very Bad: 10) - Housing, Subprime Auto; Student Loans; Credit Cards; Junk Bonds; EM USD Loans;

3. Recession: 7 (Strong Economy: 1; Depression: 10) - GDP; Taxes; PMI; Housing; Auto; Retail; NAFTA; Trade War; 2019?;

4. Liquidity: 7 (Very Liquid: 1; Tight 10) - QE (Feds, ECB, BOJ, PBOC); Interest Rates; Rotation (Bonds); Asset Shrinkage 2018?; EM; Italy;

5. Inverted Yield: 7 (Low Inversion: 1; High Inversion: 10) - Rising Interest Rates; Slope; Inversion; US 10 Years < US 2 Years; Expecting 2019 to 2020

6. Valuation; 8 (Safe 1: PE15; Danger 10) PE S&P, Nadsaq; Revenue; USD; Tax Reform; Deregulation

7. Geopolitical Issues: 8 (Peaceful: 1; War: 10) - Iran; South China Sea; Europe; Russia; Saudi Arabia; Iran;

Total: 52 out of 70 (74%); (Safe: 60%; Danger: 85%)


Commodities: Risk On (Data from Commodities Live on Dec 14 @ 7.00 AM)

1. WTI Oil - Higher. US$59.77 from US$55.42 last week from US$58.38 two weeks ago;
Support: US$43; US$34; Resistance: US$75, US$105;
viewtopic.php?f=33&t=9249&p=231235#p231235

2. Gold - Higher. US$1480 from US$1470 from US$1471;
Support: $1240; $1150; $1050; Resistance: $1575; $1775; $1830;
viewtopic.php?f=33&t=8845&p=231236#p231236

3. Copper - Higher; US$2.78 from US$2.66 from US$2.64;
viewtopic.php?f=33&t=5598&p=231237#p231237

4. I'm no longer monitoring Palladium, Cobalt, Uranium, Silver, Platinum and Zinc on a weekly basis


Equities - Risk-On/b] (Data as of Saturday every week)
1. US Equities - Higher. 3169 from 3146 last week from 3141 two weeks ago;
a. Support: 2750; 2320; Resistance: 3260; PE 20;
b, No trade
viewtopic.php?f=11&t=7643&start=200

2. HK Equities - Higher. 27688 from 26498 from 26346;
a. Support: 25500, 24500, 23500; 22000;
b. Resistance: 27800; 29000; 31600;
c. Sold Zhaojin Gold (1818)
d. Sold CNOOC (0883)
e. Sold Xiaomi (1810)
f. Sold MMG (1208)
g. Traded WH Group (0288)
htttp:/investideas.net/forum/viewtopic.php?f=10&t=7470&start=120

3. Shanghai Equities - Higher; 2968 from 2912 from 2872;
a. Support: 2450; Resistance 3300; 3600
b. No Trade
viewtopic.php?f=10&t=7190&start=210

4. Spore Equities - Higher; 3214 from 3195 from 3194;
a. Resistance 3850
b. Sold some HPL
viewtopic.php?f=10&t=6828&start=b110

5. Japan Equities - Higher. 24023 from 23354 from 23294;
a. Forward PE 13
b. Support 19000; Resistance 25000
c. BOJ owns > Half government bonds and 75% of ETFs
d. No Trade
viewtopic.php?f=10&t=7138&start=200

6. Malaysian Equities; Higher; 1571 from 1568 from 1562;
a. Sold MYEG
b. Sold Gabungan AQRS
viewtopic.php?f=10&t=6292&start=30


Currencies - Risk-Off (Data from XE.com on Dec 13 @ 9.45 PM)

1. USD to JPY - JPY Weaker; 109.60 from 108.57 last week from 109.59 two weeks ago;
a. 52 week range is 76 to 126
b. Aging Population
c. High Debt Ratio
d. Why is it a Safe Haven ?
e. QE Infinity?
viewtopic.php?f=32&t=4205&start=180

2. SGD to MYR - SGD Weaker; 3.0582 from 3.0591 from 3.0549;
viewtopic.php?f=32&t=136&start=110

3. AUD to USD - AUD Stronger; 0.6910 from 0.6847 from 0.6771;
a. The range is 0.70 (2016) to 1.10 (2011)
b. Commodity Currency
c. To diversify my AUD into what currency?
viewtopic.php?f=32&t=5256&start=130

4. AUD to SGD - AUD Stronger; 0.9344 from 0.9311 from 0.9256;
a. The range is 0.98 (2016) to 1.36 (2012)

5. AUD to MYR - AUD Stronger; 2.8572 from 2.8484 from 2.8275;
a. The range is 2.20 (2008) to 3.41 (2017)

6. EUR to USD - EUR Stronger. 1.1171 from 1.1094 from 1.0988 from 1.1055;
viewtopic.php?f=32&t=5523&start=100

7. USD to HKD - HKD Stronger. 7.7924 from 7.8292 from 7.8262;
a. USD Peg band: 7.75 to 7.85
b. Will they remove the peg to the USD during the next crisis?
c. Will China ask HK to depeg from the USD?
viewtopic.php?f=32&t=3529&start=40

8. USD to MYR:- MYR Stronger. 4.1352 from 4.1598 from 4.1762;
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; 1.3521 from 1.3598 from 1.3671;
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; 6.9729 from 7.0323 from 7.0246;
a. When is the right time to buy some CNY? How?
viewtopic.php?f=32&t=7720&start=90

11. GBP to USD:- GBP Stronger; 1.3356 from 1.3128 from 1.2891;
a. Brexit
viewtopic.php?f=32&t=333&start=80

12. GBP to MYR:- GBP Stronger; 5.5222 from 5.4609 from 5.3838;

13. Dollar Index - USD Weaker; 96.91 from 97.46 from 98.43;
viewtopic.php?f=32&t=7616&start=60


Others

Makrket Sentiment - Fear Of Missing Out (FOMO)?
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

Properties:-
a. I'm no longer monitoring Properties in HK, China, Malaysia and Singapore, on a weekly basis

Yield on 10 Year US Treasuries - Higher; 1.88% from 1.79% last week from 1.77% two weeks ago

Yield on 2 Year Treasuries - Higher; 1.63% from 1.58% from 1.63%;

Interest Rates:-
a. About US$13t or about 1/3 of the world’s bonds have negative yields
b. US Rate Hike: Two more 25 bps cut by end 2020?
viewtopic.php?f=16&t=7319&p=221670#p221670

JNK (SPDR Barclays High Yield Bond ETF) - Higher: 109.07 from 108.11 from 108.55;

HYG (iShares iBoxx $ High Yid Corp Bond ETF) - Higher; 87.52 from 86.81 from 87.13;

Baltic Dry Index - Lower; 1388 from 1575 from 1467; Low 290; High 2330 (2013)


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:-

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.
viewtopic.php?f=14&t=2823&start=40

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
winston
Billionaire Boss
 
Posts: 118530
Joined: Wed May 07, 2008 9:28 am

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

Postby winston » Sun Dec 22, 2019 9:28 am

TOL @ Dec 22, 2019

Window Dressing.jpg


Is Window Dressing Over?

The markets have been relatively strong over the past two weeks and some "experts" are saying that part of the action, could be due to "Window Dressing" activities.

There's really no way of verifying the above claim.

For last year, the markets were very weak at this time, so "Window Dressing" is not really a sure thing.

Anyway, the closing price on Tuesday, December 31st is what matters.

However, most Fund Managers and Traders, are probably already away for their Xmas holidays, as it has been a good year.

Therefore, the turnover on the markets will probably decrease from here and the markets would probably be threading water for the rest of the year, with probably a small spike at the closing on December 31st.

There's nothing much on the horizon except for the "Impeachment Circus" which is probably a non-event unless by a miracle, the Senate decides to dismiss Trump.

Merry X'mas & Happy Holidays!


Weekly Risk Management Progress Report:-

1. To Monitor Exposure To Equities: Neutral (21% from 21% last week, of Liquid Assets)
Goal: 10% exposure to Equities before the next recession (2020-2021?); Maximum 30%;

2. To Diversify From Asian Equities: No Progress (Around 94%)
Goal: To reduce percentage of Asian Equities to around 50%

3. To Buy Inverse ETFs and Puts - No Trade
Goal: To have a sizable short position going into the next recession

4. To Increase "USD/HKD/Gold" - No progress. (Around 26%).
Goal: To be in the safe havens before next recession; (HKD may be repegged)

5. To Reduce Number Of Counters: No Progress (18 from 18 last week)
Goal: To focus on about 16 counters fvrom 4 countries with heavier weightings

6. To Minimize Industry / Sector Risk / Country Risk
a. Heavy exposure to Asian Based Equities
Goal: To diversify across various sectors and countries


Market Risk Indicators

1. Euphoria: 8 (Low: 1; High: 10) - FAANNG, ETFs; Margin Debts; SWFs; Central Banks; Fund Flows;

2. Credit Problems: 7 (Very Good: 1; Very Bad: 10) - Housing, Subprime Auto; Student Loans; Credit Cards; Junk Bonds; EM USD Loans;

3. Recession: 7 (Strong Economy: 1; Depression: 10) - GDP; Taxes; PMI; Housing; Auto; Retail; NAFTA; Trade War; 2019?;

4. Liquidity: 7 (Very Liquid: 1; Tight 10) - QE (Feds, ECB, BOJ, PBOC); Interest Rates; Rotation (Bonds); Asset Shrinkage 2018?; EM; Italy;

5. Inverted Yield: 7 (Low Inversion: 1; High Inversion: 10) - Rising Interest Rates; Slope; Inversion; US 10 Years < US 2 Years; Expecting 2019 to 2020

6. Valuation; 8 (Safe 1: PE15; Danger 10) PE S&P, Nadsaq; Revenue; USD; Tax Reform; Deregulation

7. Geopolitical Issues: 8 (Peaceful: 1; War: 10) - Iran; South China Sea; Europe; Russia; Saudi Arabia; Iran;

Total: 52 out of 70 (74%); (Safe: 60%; Danger: 85%)


Commodities: Risk On (Data from Commodities Live on Dec 14 @ 7.00 AM)

1. WTI Oil - Higher. US$59.77 from US$55.42 last week from US$58.38 two weeks ago;
Support: US$43; US$34; Resistance: US$75, US$105;
viewtopic.php?f=33&t=9249&p=231235#p231235

2. Gold - Higher. US$1480 from US$1470 from US$1471;
Support: $1240; $1150; $1050; Resistance: $1575; $1775; $1830;
viewtopic.php?f=33&t=8845&p=231236#p231236


3. Copper - Higher; US$2.78 from US$2.66 from US$2.64;
viewtopic.php?f=33&t=5598&p=231237#p231237

4. I'm no longer monitoring Palladium, Cobalt, Uranium, Silver, Platinum and Zinc on a weekly basis


Equities - Risk-On/b] (Data as of Saturday every week)
[,
1. US Equities - Higher. 3221 from 3169 last week from 3146 3141 two weeks ago;
a. Support: 2750; 2320; Resistance: 3260; PE 20;
b, Bought Unilever (UL)
c. Sold XLK (Technology ETF)
viewtopic.php?f=11&t=7643&start=200

2. HK Equities - Higher. 27871 from 27688 from 26498;
a. Support: 25500, 24500, 23500; 22000;
b. Resistance: 27800; 29000; 31600;
c. No Trade
htttp:/investideas.net/forum/viewtopic.php?f=10&t=7470&start=120

3. Shanghai Equities - Higher; 3005 from 2968 from 2912;
a. Support: 2450; Resistance 3300; 3600
b. No Trade
viewtopic.php?f=10&t=7190&start=210

4. Spore Equities - Flat; 3212 from 3214 from 3195;
a. Resistance 3850
b. Sold HPL
viewtopic.php?f=10&t=6828&start=b110

5. Japan Equities - Lower. 23817 from 24023 from 23354;
a. Forward PE 13
b. Support 19000; Resistance 25000
c. BOJ owns > Half government bonds and 75% of ETFs
d. No Trade
viewtopic.php?f=10&t=7138&start=200

6. Malaysian Equities; Higher; 1610 from 1571 from 1568;
a. Bought Hong Leong Bank
b. Bought Malayan Banking
c. Added to MNRB
d. Sold Ann Joo Resources
viewtopic.php?f=10&t=6292&start=30


[b]Currencies - Risk-Off
(Data from XE.com on Dec 20 @ 7.30PM)

1. USD to JPY - JPY Stronger; 109.38 from 109.60 last week from 108.57 two weeks ago;
a. 52 week range is 76 to 126
b. Aging Population
c. High Debt Ratio
d. Why is it a Safe Haven ?
e. QE Infinity?
viewtopic.php?f=32&t=4205&start=180

2. SGD to MYR - SGD Weaker; 3.0552 from 3.0582 from 3.0591;
viewtopic.php?f=32&t=136&start=110

3. AUD to USD - AUD Weaker; 0.6898 from 0.6910 from 0.6847;
a. The range is 0.70 (2016) to 1.10 (2011)
b. Commodity Currency
c. To diversify my AUD into what currency?
viewtopic.php?f=32&t=5256&start=130

4. AUD to SGD - AUD Stronger; 0.9358 from 0.9344 from 0.9311;
a. The range is 0.98 (2016) to 1.36 (2012)

5. AUD to MYR - AUD Weaker; 2.8558 from 2.8572 from 2.8484;
a. The range is 2.20 (2008) to 3.41 (2017)

6. EUR to USD - EUR Weaker. 1.1093 from 1.1171 from 1.1094;
viewtopic.php?f=32&t=5523&start=100

7. USD to HKD - HKD Weaker. 7.7958 from 7.7924 from 7.8292;
a. USD Peg band: 7.75 to 7.85
b. Will HK be removing the peg to the USD?
viewtopic.php?f=32&t=3529&start=40

8. USD to MYR:- MYR Weaker. 4.1408 from 4.1352 from 4.1598;
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; 1.3553 from 1.3521 from 1.3598;
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; 7.0094 from 6.9729 from 7.0323;
a. When is the right time to buy some CNY? How?
viewtopic.php?f=32&t=7720&start=90

11. GBP to USD:- GBP Weaker; 1.3033 from 1.3356 from 1.3128;
a. Brexit
viewtopic.php?f=32&t=333&start=80

12. GBP to MYR:- GBP Stronger; 5.3965 from 5.5222 from 5.4609;
a. Converted some GBP to MYR

13. Dollar Index - USD Stronger; 97.54 from 96.91 from 97.46;
viewtopic.php?f=32&t=7616&start=60


Others

Makrket Sentiment - Fear Of Missing Out (FOMO)?
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

Properties:-
I'm no longer closely monitoring Properties in HK, China, Malaysia and Singapore.

Yield on 10 Year US Treasuries - Higher; 1.94% from 1.88% last week from 1.79% two weeks ago

Yield on 2 Year Treasuries - Higher; 1.64% from 1.63% from 1.58%;

Interest Rates:-
a. About US$13t or about 1/3 of the world’s bonds have negative yields
b. US Rate Hike: Two more 25 bps cut by end 2020?
viewtopic.php?f=16&t=7319&p=221670#p221670

JNK (SPDR Barclays High Yield Bond ETF) - Higher: 109.95 from 109.07 from 108.11;

HYG (iShares iBoxx $ High Yid Corp Bond ETF) - Higher; 87.85 from 87.52 from 86.81;

Baltic Dry Index - Lower; 1151 from 1388 from 1575; Low 290; High 2330 (2013)


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.
viewtopic.php?f=14&t=2823&start=40

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
winston
Billionaire Boss
 
Posts: 118530
Joined: Wed May 07, 2008 9:28 am

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

Postby winston » Sun Dec 29, 2019 8:24 am

TOL @ Dec 29, 2019

January.jpg


New Money From The New Month

It's going to be a new month and new money would be flowing into the markets again.

That means that that there should be one spike in the markets by the end of the week, unless the Fund Managers have already spent their Cash in advance, for Window Dressing activities tomorrow and on Tuesday (last day of 2019).

In addition, the market timers are also talking about the "Santa Rally", where stocks traditionally go up during the last 5 trading days of December and the first two trading days of January.

Other market timers are also talking about the "January Effect", where small caps tend to rise in January.

As for myself, I think that it's better to be a bit more careful after the "Window Dressing" activities.

And if there's any "rip" over the next dew days, I would probably be selling into it.

BTW, I think that the US markets have become a bit "euphoric" over the past few weeks and a technical correction is due, probably by mid January.

On the horizon, we still have the "Impeachment Circus" (non-event) and the "Signing of Phase One" (probably a non-event too).

Finally, my Cash level is quite high. It's not because that I'm afraid of a crash but it's because I cant find many convincing stories to deploy those cash. My existing positions have mostly reached their "optimal" size and I'm not willing to increase my Position Size further.


Weekly Risk Management Progress Report:-

1. To Monitor Exposure To Equities: Neutral (20% from 21% last week, of Liquid Assets)
Goal: 10% exposure to Equities before the next recession (2020-2021?); Maximum 30%;

2. To Diversify From Asian Equities: No Progress (94%)
Goal: To reduce percentage of Asian Equities to around 50%

3. To Buy Inverse ETFs and Puts - No Trade
Goal: To have a sizable short position going into the next recession

4. To Increase "USD/HKD/Gold" - No progress. (Around 26%).
Goal: To be in the safe havens before next recession; (HKD may be repegged)

5. To Reduce Number Of Counters: Slight Progress (17 from 17 last week)
Goal: To focus on about 16 counters fvrom 4 countries with heavier weightings

6. To Minimize Industry / Sector Risk / Country Risk
a. Heavy exposure to Asian Based Equities
Goal: To diversify across various sectors and countries


Market Risk Indicators

1. Euphoria: 8 (Low: 1; High: 10) - FAANNG, ETFs; Margin Debts; SWFs; Central Banks; Fund Flows;

2. Credit Problems: 7 (Very Good: 1; Very Bad: 10) - Housing, Subprime Auto; Student Loans; Credit Cards; Junk Bonds; EM USD Loans;

3. Recession: 7 (Strong Economy: 1; Depression: 10) - GDP; Taxes; PMI; Housing; Auto; Retail; NAFTA; Trade War; 2019?;

4. Liquidity: 7 (Very Liquid: 1; Tight 10) - QE (Feds, ECB, BOJ, PBOC); Interest Rates; Rotation (Bonds); Asset Shrinkage 2018?; EM; Italy;

5. Inverted Yield: 7 (Low Inversion: 1; High Inversion: 10) - Rising Interest Rates; Slope; Inversion; US 10 Years < US 2 Years; Expecting 2019 to 2020

6. Valuation; 8 (Safe 1: PE15; Danger 10) PE S&P, Nadsaq; Revenue; USD; Tax Reform; Deregulation

7. Geopolitical Issues: 8 (Peaceful: 1; War: 10) - Iran; South China Sea; Europe; Russia; Saudi Arabia; Iran;

Total: 52 out of 70 (74%); (Safe: 60%; Danger: 85%)


Commodities: Risk On (Data from Commodities Live on Dec 14 @ 7.00 AM)

1. WTI Oil - Higher. US$59.77 from US$55.42 last week from US$58.38 two weeks ago;
Support: US$43; US$34; Resistance: US$75, US$105;
viewtopic.php?f=33&t=9249&p=231235#p231235

2. Gold - Higher. US$1480 from US$1470 from US$1471;
Support: $1240; $1150; $1050; Resistance: $1575; $1775; $1830;
viewtopic.php?f=33&t=8845&p=231236#p231236

3. Copper - Higher; US$2.78 from US$2.66 from US$2.64;
viewtopic.php?f=33&t=5598&p=231237#p231237

4. I'm no longer monitoring Palladium, Cobalt, Uranium, Silver, Platinum and Zinc on a weekly basis


Equities - Risk-On/b] (Data as of Saturday every week)
[,
1. US Equities - Higher. 3240 from 3221 last week from 3169 two weeks ago;
a. Support: 2750; 2320; Resistance: 3260; PE 20;
b. No Trade
viewtopic.php?f=11&t=7643&start=200

2. HK Equities - Higher. 28225 from 27871 from 27688;
a. Support: 25500, 24500, 23500; 22000;
b. Resistance: 29000; 31600;
c. No Trade
htttp:/investideas.net/forum/viewtopic.php?f=10&t=7470&start=120

3. Shanghai Equities - Higher; 3005 from 2968 from 2912;
a. Support: 2450; Resistance 3300; 3600
b. No Trade
viewtopic.php?f=10&t=7190&start=210

4. Spore Equities - Higher; 3227 from 3212 from 3214;
a. Resistance 3850
b. No Trade
viewtopic.php?f=10&t=6828&start=b110

5. Japan Equities - Higher. 23838 from 23817 from 24023;
a. Forward PE 13
b. Support 19000; Resistance 25000
c. BOJ owns > Half government bonds and 75% of ETFs
d. No Trade
viewtopic.php?f=10&t=7138&start=200

6. Malaysian Equities; Higher; 1611 from 1610 from 1571;
a. Added to IGB
viewtopic.php?f=10&t=6292&start=30


[b]Currencies - Risk-On
(Data from XE.com on Dec 27 @ 2.15PM)

1. USD to JPY - JPY Weaker; 109.54 from 109.38 last week from 109.60 two weeks ago;
a. 52 week range is 76 to 126
b. Aging Population
c. High Debt Ratio
d. Why is it a Safe Haven ?
e. QE Infinity?
viewtopic.php?f=32&t=4205&start=180

2. SGD to MYR - SGD Weaker; 3.0519 from 3.0552 from 3.0582;
viewtopic.php?f=32&t=136&start=110

3. AUD to USD - AUD Stronger; 0.6950 from 0.6898 from 0.6910;
a. The range is 0.70 (2016) to 1.10 (2011)
b. Commodity Currency
c. To diversify my AUD into what currency?
viewtopic.php?f=32&t=5256&start=130

4. AUD to SGD - AUD Stronger; 0.9408 from 0.9358 from 0.9344;
a. The range is 0.98 (2016) to 1.36 (2012)

5. AUD to MYR - AUD Stronger; 2.8711 from 2.8558 from 2.8572;
a. The range is 2.20 (2008) to 3.41 (2017)

6. EUR to USD - EUR Stronger. 1.1118 from 1.1093 from 1.1171;
viewtopic.php?f=32&t=5523&start=100

7. USD to HKD - HKD Stronger. 7.7864 from 7.7958 from 7.7924;
a. USD Peg band: 7.75 to 7.85
b. Will HK be removing the peg to the USD?
viewtopic.php?f=32&t=3529&start=40

8. USD to MYR:- MYR Stronger. 4.1308 from 4.1408 from 4.1352;
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; 1.3537 from 1.3553 from 1.3521;
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; 6.9968 from 7.0094 from 6.9729;
a. When is the right time to buy some CNY? How?
viewtopic.php?f=32&t=7720&start=90

11. GBP to USD:- GBP Weaker; 1.2994 from 1.3033 from 1.3356;
a. Brexit
viewtopic.php?f=32&t=333&start=80

12. GBP to MYR:- GBP Weaker; 5.3680 from 5.3965 from 5.5222;
a. Converted some GBP to MYR after the UK election

13. Dollar Index - USD Weaker; 97.44 from 97.54 from 96.91;
viewtopic.php?f=32&t=7616&start=60


Properties:-

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

2. HK Properties:-
viewtopic.php?f=10&t=7785&start=150

3. Singapore Properties:-
viewtopic.php?f=10&t=7750&start=210

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


Others

Market Sentiment - Fear Of Missing Out (FOMO)?
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; 1.90% from 1.94% last week from 1.88% two weeks ago

Yield on 2 Year Treasuries - Lower; 1.62% from 1.64% from 1.63%;

Interest Rates:-
a. About US$13t or about 1/3 of the world’s bonds have negative yields
b. US Rate Hike: Two more 25 bps cut by end 2020?
viewtopic.php?f=16&t=7319&p=221670#p221670

JNK (SPDR Barclays High Yield Bond ETF) - Lower: 109.60 from 109.95 from 109.07;

HYG (iShares iBoxx $ High Yid Corp Bond ETF) - Higher; 87.96 from 87.85 from 87.52;

Baltic Dry Index - Lower; 1090 from 1151 from 1388; Low 290; High 2330 (2013)


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
winston
Billionaire Boss
 
Posts: 118530
Joined: Wed May 07, 2008 9:28 am

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

Postby winston » Sun Jan 05, 2020 3:43 pm

TOL @ Jan 5, 2020

Accident.jpg


An Accident Waiting To Happen?

After rising for a few weeks, the Dow dropped 230 points on Friday because the US decided to assasinate one of Iran's top military commander.

So where do we go from here? And more importantly, how would Iran be retaliating?

Would Iran now be attacking some ships in the Straits of Hormuz? Or would they be attacking another US embassy or some "soft-target"? Or would they be launching a cyber-attack? And are there sleeper cells already in the US?

Is it now a game of chicken ? Is it an accident waiting to happen?

Intuitively, I think that Iran can only retaliate covertly eg. cyber-attack, as they are not strong enough for a direct confrontation.

Therefore, this could be a buying opportunity unless things do go downhill very fast (which I'm not expecting).

Anyway, I will let the short term sellers finish their selling first before I buy. And that could take a few days.

In the meantime, that would also give me some time to research any bargains that is out there.

On the horizon, we have the following:-
1. Impeachment Circus
2. Signing of Phase One
3. US 1Q Earnings


Weekly Risk Management Progress Report:-

1. To Monitor Exposure To Equities: Neutral (16% from 20% last week, of Liquid Assets)
Goal: 10% exposure to Equities before the next recession (2020-2021?); Maximum 30%;

2. To Diversify From Asian Equities: No Progress (92%)
Goal: To reduce percentage of Asian Equities to around 50%

3. To Buy Inverse ETFs and Puts - Bought 7500 (Hang Seng Inverse 2x)
Goal: To have a sizable short position going into the next recession

4. To Increase "USD/HKD/Gold" - No progress. (Around 26%).
Goal: To be in the safe havens before next recession; (HKD may be repegged)

5. To Reduce Number Of Counters: Progress (12 from 17 last week)
Goal: To focus on about 16 counters from 4 countries with heavier weightings

6. To Minimize Industry / Sector Risk / Country Risk
a. Heavy exposure to Asian Based Equities
Goal: To diversify across various sectors and countries


Market Risk Indicators

1. Euphoria: 8 (Low: 1; High: 10) - FAANNG, ETFs; Margin Debts; SWFs; Central Banks; Fund Flows;

2. Credit Problems: 7 (Very Good: 1; Very Bad: 10) - Housing, Subprime Auto; Student Loans; Credit Cards; Junk Bonds; EM USD Loans;

3. Recession: 7 (Strong Economy: 1; Depression: 10) - GDP; Taxes; PMI; Housing; Auto; Retail; NAFTA; Trade War; 2019?;

4. Liquidity: 7 (Very Liquid: 1; Tight 10) - QE (Feds, ECB, BOJ, PBOC); Interest Rates; Rotation (Bonds); Asset Shrinkage 2018?; EM; Italy;

5. Inverted Yield: 7 (Low Inversion: 1; High Inversion: 10) - Rising Interest Rates; Slope; Inversion; US 10 Years < US 2 Years; Expecting 2019 to 2020

6. Valuation; 8 (Safe 1: PE15; Danger 10) PE S&P, Nadsaq; Revenue; USD; Tax Reform; Deregulation

7. Geopolitical Issues: 8 (Peaceful: 1; War: 10) - Iran; South China Sea; Europe; Russia; Saudi Arabia; Iran;

Total: 52 out of 70 (74%); (Safe: 60%; Danger: 85%)


Commodities: Risk Off (Data from Commodities Live on Jan 04 @ 10.30 AM)

1. WTI Oil - Higher. US$63.03 from US$59.77 last week from US$55.42 two weeks ago;
Support: US$43; US$34; Resistance: US$75, US$105;
viewtopic.php?f=33&t=9249&p=231235#p231235

2. Gold - Higher. US$1555 from US$1480 from US$1470;
Support: $1240; $1150; $1050; Resistance: $1575; $1775; $1830;
viewtopic.php?f=33&t=8845&p=231236#p231236

3. Copper - Flat; US$2.78 from US$2.78 from US$2.66;
viewtopic.php?f=33&t=5598&p=231237#p231237

4. I'm no longer monitoring Palladium, Cobalt, Uranium, Silver, Platinum and Zinc on a weekly basis


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

1. US Equities - Lower. 3235 from 3240 last week from 3221 two weeks ago;
a. Support: 2750; 2320; Resistance: 3260; PE 20;
b. Sold Twitter (TWTR)
viewtopic.php?f=11&t=7643&start=200

2. HK Equities - Higher. 28452 from 28225 from 27871;
a. Support: 25500, 24500, 23500; 22000;
b. Resistance: 29000; 31600;
c. Bought 7500 (Hang Seng Inverse 2x)
htttp:/investideas.net/forum/viewtopic.php?f=10&t=7470&start=120

3. Shanghai Equities - Higher; 3084 from 3005 from 2968;
a. Support: 2450; Resistance 3300; 3600
b. No Trade
viewtopic.php?f=10&t=7190&start=210

4. Spore Equities - Higher; 3239 from 3227 from 3212;
a. Resistance 3850
b. Sold Jardine Matheson
c. Sold Jardine Strategic
viewtopic.php?f=10&t=6828&start=b110

5. Japan Equities - Lower. 23657 from 23838 from 23817;
a. Forward PE 13
b. Support 19000; Resistance 25000
c. BOJ owns > Half government bonds and 75% of ETFs
d. No Trade
viewtopic.php?f=10&t=7138&start=200

6. Malaysian Equities; Flat; 1611 from 1611 from 1610;
a. Added to IGB
b. Traded MNRB
c. Traded NAIM
d. Sold Maybank
e. Sold Hong Leong Bank
viewtopic.php?f=10&t=6292&start=30


[b]Currencies - Risk-On
(Data from XE.com on Jan 04 @ 11.00AM)

1. USD to JPY - JPY Stronger; 108.08 from 109.54 last week from 109.38 two weeks ago;
a. 52 week range is 76 to 126
b. Aging Population
c. High Debt Ratio
d. Why is it a Safe Haven ?
e. QE Infinity?
viewtopic.php?f=32&t=4205&start=180

2. SGD to MYR - SGD Weaker; 3.0383 from 3.0519 from 3.0552;
viewtopic.php?f=32&t=136&start=110

3. AUD to USD - AUD Stronger; 0.6952 from 0.6950 from 0.6898;
a. The range is 0.70 (2016) to 1.10 (2011)
b. Commodity Currency
c. To diversify my AUD into what currency?
viewtopic.php?f=32&t=5256&start=130

4. AUD to SGD - AUD Weaker; 0.9384 from 0.9408 from 0.9358;
a. The range is 0.98 (2016) to 1.36 (2012)

5. AUD to MYR - AUD Weaker; 2.8507 from 2.8711 from 2.8558;
a. The range is 2.20 (2008) to 3.41 (2017)

6. EUR to USD - EUR Stronger. 1.1159 from 1.1118 from 1.1093;
viewtopic.php?f=32&t=5523&start=100

7. USD to HKD - HKD Stronger. 7.7790 from 7.7864 from 7.7958;
a. USD Peg band: 7.75 to 7.85
b. Will HK be removing the peg to the USD?
viewtopic.php?f=32&t=3529&start=40

8. USD to MYR:- MYR Stronger. 4.1004 from 4.1308 from 4.1408;
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; 1.3498 from 1.3537 from 1.3553;
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; 6.9655 from 6.9968 from 7.0094;
a. When is the right time to buy some CNY? How?
viewtopic.php?f=32&t=7720&start=90

11. GBP to USD:- GBP Stronger; 1.3083 from 1.2994 from 1.3033;
a. Brexit
viewtopic.php?f=32&t=333&start=80

12. GBP to MYR:- GBP Weaker; 5.3650 from 5.3680 from 5.3965;
a. Converted some GBP to MYR after the UK election

13. Dollar Index - USD Weaker; 96.84 from 97.44 from 97.54;
viewtopic.php?f=32&t=7616&start=60


Properties:-

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

2. HK Properties:-
viewtopic.php?f=10&t=7785&start=150

3. Singapore Properties:-
viewtopic.php?f=10&t=7750&start=210

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


Others

Market Sentiment - Fear Of Missing Out (FOMO)?
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; 1.79% from 1.90% last week from 1.94% two weeks ago

Yield on 2 Year Treasuries - Lower; 1.52% from 1.62% from 1.64%;

Interest Rates:-
a. About US$13t or about 1/3 of the world’s bonds have negative yields
b. US Rate Hike: Two more 25 bps cut by end 2020?
viewtopic.php?f=16&t=7319&p=221670#p221670

JNK (SPDR Barclays High Yield Bond ETF) - Higher: 109.90 from 109.60 from 109.95;

HYG (iShares iBoxx $ High Yid Corp Bond ETF) - Higher; 88.22 from 87.96 from 87.85;

Baltic Dry Index - Lower; 907 from 1090 from 1151; Low 290; High 2330 (2013)


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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viewtopic.php?f=26&t=3168
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