AAR & TOL 01 (May 08 - Oct 08)

[winston]

Hi 802,

I'm trying to think about this one.

Money will flow from Asian Bonds to US equities, if they believe that Asian interest rate would be rising and US Equities is rising.

But if you are in Global Equities and need to apportioned things across the world, where would be the flow ? To US or from US ? Don't know. 60 billion dollar question..

Also would money be flowing into Commodities from Equities and vice versa ? Too complicated.

Take care,
Winston

[HengHeng]

Hmm personally i think some of those money has being lost in transition to losses in the the sub prime. As long as those losses remain undeclared i won't write them off.

Though US properties might be picking up but to me it is still not a good time to buy anything at the moment. This also applies to local properties at least to me .

[winston]

Thinking Out Loud:-

During the correction from Nov'07 - Feb'08, there was a lot of fear in the market. People were screaming for the end of the world and we were hearing comments like the the next great depression etc.

Why was there so much fear in the market ? IMHO, I think it is because people were not able to estimate the extend of the subprime crisis and it's effect.

The same phenomena also occurred during SARS. Who knew how big SARS was ? At that time, I did see some Analysts reports that compared SARS to the Spanish Flu where 20m people died!

Therefore, IMHO, one of the major catalyst for a deep correction is the presence of an "unquantifiable risk". If such "unquantifiable risk" does not exist, I would think that the correction would not be too deep nor long..

So, are all the problems out there quantifiable now? Can we now put a figure of, say US$2t, on the Subprime problem and it's related problem eg. foreclosures, credit card non-payments etc. ?

If that is the case, what would be the "unquantifiable risk catalyst" for the market, to have a deep correction over the next few weeks ?

If there is no "unquantifiable risk catalyst", then the market could stay range-bound for quite a while more....

[winston]

Post this here to remind me of the following rules:-

1) Once you've done your homework, make a significant bet.
2) Don't sell early... Stick with a theme as long as it's working.
3) Be quick to admit when you're wrong.

[winston]

TOL:-

1H window dressing should be coming up over the next two week and I would probably be using the opportunity to raise some more cash.

Am expecting Oil to correct and US$ to go up..

[winston]

1) 1H Window Dressing does not seem to be coming. A few more days to go..

2) If you want to get out of a short term position, don't wait until the minute to do so.

a) I have some position in HK and would like to get out today before the FOMC Meeting. However, the HK market may be close for the day due to the storm.

b) A few weeks ago, I wanted to get out of warrant by the end of the day. However, during the last few minutes before closing, the market maker disappeared.

[iam802]

Thinking Out Loud for today (25 June)

Listening to my inner voice.
- today don't feel good
- error keying in my trading accnt login details; and have to request reactivation of my accnt
- decide to close out some short term trading positions.

[winston]

Hi 802,

I think Lillian Too mentioned that if three things in your life are not working well one after another, it is a warning sign.

Shanghai is now u and I cannot trade my HK shares

Take care,
Winston

[millionairemind]

W/802,

Maybe subconsciously, you mind is telling you to stay out of long positions until the FOMC meeting is over??

You never know... since mkt is exhibiting alot of weakness..

mm

[iam802]

Reviewing my trade for the past 2 days.

I definitely see a lot of weakness in the market as MM has suggested.

Also looking at my 'Armstrong' trade yesterday, I noticed the following:
- Day 1: Speculate that things may be brewing because of high volume
- Day 2: Sell because 'inner voice' say so; things just not smooth in the morning.
- On hindsight, looking at the volume today, it suggest that it is nowhere near yesterday's volume.

So, I am adding an extra mental rule for such speculation trade.
- if Day2 volume does not seems to exceed Day 1 volume, sell.

Of course, it is hard to say whether Armstrong did rally up because of possible good news.

One never know till you look at the 'long run'. So, again...it depends on one's investment time horizon for the particular trade .

Just sharing out loud.