AAR & TOL 02 (Nov 08 - Jul 09)

[winston]

Another Reminder to myself.

Wait for a strong catalyst on why the market will drop.

If there's no strong catalyst, the people on the sidelines would be buying on dips.

[winston]

TOL:-

What Asset Class, Industry or Stock is cheap & hated now ?

Everything seems to have risen. Need to continue to search for something that is hated, cheap but could go an uptrend soon.

S-Chips ? S-Reits ? Shipping Companies ? Shipyard ?

[Poles]

after april 09...every things seems relatively expensive compare to last 6months....

[winston]

TOL:-

Where are things "most expensive" now ? Where have things recovered the most ?

China Properties ? Spore Properties ? Oil ? Emerging Markets ETFs ? Singapore Banks ? Gold ? Other Commodities ? HK Properties ? HK Equities ? Chinese Equities ?

[kennynah]

TOL:-

Where are things "most expensive" now ?

McDonald's value meals are no longer that "value" anymore.... wah... a simple "upsized" meal which comprises a burger, fries and a soda = >S$7 ... which is = ~3 plates of roast chicken rice = ~ 2 bowls of authentic katong laksa = ~ 7 plates of chee cheong fan or yam cakes = 5 pieces of roti prata telor + bawang .....

[winston]

TOL:-

How would this rally end (if it can end) ?

1) Draining of the liquidity thru Rights Issues, Placements and IPOs ?
2) Redemption of Emerging Markets ETFs ?
3) Prices running ahead of Earnings / Business Fundamentals ?
4) Allocation of money in Equities into other Asset Class eg. Cash, Commodities and especially Properties ?
5) Profit Taking ?

Last Day of Window Dressing ...

Looked at my signature again:-
Bull Markets dies on Euphoria - John Templeton
Are things euphoric right now ?

[Aspellian]

will this rally ever end? now is the 2nd time the market has managed to turn things around and now back on uptrend.
VIX trending lower and lower.

Is this the mother of all rallies or is complaceny (euphoric) setting in? or is the market still at optimisim stage and not yet mature enough to move on to Optimism? if its the latter, then there's still room for further upside, but the risk gets higher (maybe).

Instead of thinking what will end the rally, how about asking "What will fuel the optimism further?"
- More and more M&As before valuation gets more expensive (the current wave is now led by the CHinese).
- More $ entering into the market (a friend in private bank says there's plenty of $ on the sideline, big clients have as much as 50% in cash waiting to invest and margin account untouched)
- more deals and contracts finalised and announced as credit market warms up
- if rally last long enough, government stimulus packages may start to be felt in real economy

so what to do now? take small positions and nibble as market gyrates higher (maybe), but when market turns, it could be pretty sharp.

somehow i feel that the points given by Winston are not compelling enough to break the market (but who am i to say otherwise).... does it mean i am slowing maturing on my optimism???

[kennynah]

it is necessary for anyone serious about making money from the markets to have an opinion....whether it is contrarian or in line with general consensus... the ones without an opinion but are easily swayed from one end to the next usually suffer negative results...

[BlackCat]

it is necessary for anyone serious about making money from the markets to have an opinion

I don't understand this.

In the short term (6-9mnths) the market can so whatever it wants. How many of saw the March rally coming?
In the long term, it reverts to fundamentals. How many of us can see more than 6-9 mnths ahead?

My opinion (feeling) is that this rally is not fundamentally justified. But the market can still do whatever it wants. So having this opinion does not help me at all.

I think trend following has a lot going for it.

[winston]

TOL:-

How would this rally end (if it can end) ?

1) Draining of the liquidity thru Rights Issues, Placements and IPOs ?
2) Redemption of Emerging Markets ETFs ?
3) Prices running ahead of Earnings / Business Fundamentals ?
4) Allocation of money in Equities into other Asset Class eg. Cash, Commodities and especially Properties ?
5) Profit Taking ?

Last Day of Window Dressing ...

Looked at my signature again:-
Bull Markets dies on Euphoria - John Templeton
Are things euphoric right now ?

One more thing to add.... High Commodity Prices will lead to lower margins unless you are investing in a Commodity Company. At this point, Equities and Commodities and Properties are all going up. Down the road, there wil be a divergence. Which will collapse ?