AAR & TOL 01 (May 08 - Oct 08)

[tangoandrew]

Hi, i will not change my view as the investment will then be highly leveraged. I am assuming the 100K is for property purchase (to stay and not to invest) and thus it is not part of the consideration. I would rather invest with smaller capital to build it up with time. Active investment sucks alot of my time and thus i would rather spend more time investing in myself and ensure growing cashflow from my job. Maybe that is why i still need to work while other people can be Tua Towkay.

I think....majority of us still need to hold a job (except for a few towkays) but all of us are working hard towards passive income...and that's the purpose of the property investment.

Agree that active DIY investing is time-consuming....and it is not that simple to be profitable as some advertisements would like us to believe. In fact, since last Nov, I have started reading investment books, forums, etc...and my tentative conclusion is that I am not equipped to actively invest with good profitability. My conclusions are confirmed when i read many of the enlightening postings in this forum....still a lot more to learn...

[tangoandrew]

hi k, thanks for reply...and for reminding about re-mortgage risks...i'm on the same wavelength.

for discussion sake, i think if a property has got a big margin of safety in that its price has increase significantly, then re-financing risk is more manageable and tolerable...

[helios]

..but no joking..i am both gold-less and ring-less.

True..the test is in executing the ideas...but I think the margin of safety in this situation is not very attractive. Another damper is the current bearish market.

If it is a bullish market, then no hesitation...and should leverage as much as possible...

nope, see and learn from you as well.

at least you are not toothless?!

what about the execution risk?

[kennynah]

just TOL :

should i at chendol or ice kacang later ?

[winston]

TOL:-

1) The bad news will certainly persist until the end of the year. Don't have any visibility beyond that. It will not surprise me if things go from bad to worse early next year. This sort of thing needs at least two to three years to overcome.

2) Oil has corrected. Is the next big move towards $200 or $80 ? I would bet that it would probably be towards $110 rather than $160. So it may be ok for Equities in the short term, barring any war with Iran, major pipeline disruption or a destructive hurricane in the Gulf. So it may be too early to buy any Oil stocks eg. CNOOC.

3) Gold is surprisingly strong. Is the next big move towards $1200 or $700? I would bet that it would be towards $850. So it may not be the right time to buy gold stocks yet eg. Zijin.

4) The US$ has strengthened a bit. Is the next big move for it to strengthened further or for it to continue it's descend? I would bet that it may continue to strengthened in the short term. The strength may be from short-covering against the Euro, Aust $, NZ$ and now Renmimbi..

5) US Equities have rallied a bit, probably due to short-covering. If it continues to go up, the Long Fund would have no choice but to buy, for fear of underperforming the indices. However, the retail investors have been hurt badly so they could be selling into any rallies. Short-selling may slow down until the next "big bad news"..

6) HK & Shanghai should be safe until late August in view of the Olympics. No visibility beyond that. I will probably hold on to my existing shares in HK until late August. However, if there are windfall profits, I would probably be taking them also. A bit too dangerous to buy puts on the HSI at this point in time unless it is for a specific reason and for the day only ( not over-night ). Safer to buy Calls on the indices on any correction.

7) As for Spore, I think it would probably not be going anywhere until year end. If the US rallies strongly, Spore may bump up a bit. I will be keeping my yield stocks while waiting for any special catalyst plays.

8) Taiwan has corrected. Exports to the US would certainly be hurt. However, liquidity from foreign funds could be the catalyst for it to go up. Have increased my Taiwan exposure recently.

The above are my humble thoughts on a warm Saturday afternoon. It is not a buy or sell recommendation. Please do not follow me blindly. I'm writing the above to crystallize my thoughts so that I will know what to do in the next few weeks.

[kennynah]

TOL :

US Indexes....

Focus on volume....been light in the last 2 sessions... sellers diminishing from the scene....duno if they are awaiting for higher pricing to short again, or that they have been bitten into retreat with those very sharp and sudden upward swings in recent sessions...

but, lesser sellers does not mean potential higher indexes...the only way for index to make sustainable or consistent rallies is the presence of Longs...and a truckload of them...

and should the index continue it's movement up with little increase NET Long Interests...then, it will again be subjected to corrections at psychological levels...these corrections can be technical in nature...such as trendline resistances, fibo resistances, MAs, MACD, RSI, or even just century points(ie 11600, 11700, etc)...

so, i would tip toe and continue to trade the tech indicators...with an emphasis on capital risk management...

[millionairemind]

[quote="winston"]TOL:-

1)
2) Oil has corrected. Is the next big move towards $200 or $80 ? I would bet that it would probably be towards $110 rather than $160. So it may be ok for Equities in the short term, barring any war with Iran, major pipeline disruption or a destructive hurricane in the Gulf. So it may be too early to buy any Oil stocks eg. CNOOC.

3) Gold is surprisingly strong. Is the next big move towards $1200 or $700? I would bet that it would be towards $850. So it may not be the right time to buy gold stocks yet eg. Zijin.
[quote]

W,

Just read a piece in this week's The Edge that talked about the historical relationship between gold and oil.. a 1:10 ratio, the value of one ounce of gold was largely equal to about ten barrels of crude oil.

If gold is holding up.. that means we should see oil moving down to around $90/95 in the near future.

The article also mentioned that Soc Gen's latest analysis of CFTC data found that hedge funds are unwinding their net buying positions in oil at end-June and heading towards being neutral or net sellers.

This might gell with the US mkt indices analysis that shows that the selling has been very muted but buying in the last 2 weeks have been on above average volume.

If this historical relationship proves to be accurate, we might see a tremendous rally in the US indices in the next few weeks.

Cheers,
mm

[winston]

Hi MM,

Thanks for the kind info.

If the Hedge Funds are selling oil, then Gold could be next. Gold has been holding up stronger than expected, especially when it does not have much economic benefit, unlike oil. And the financial system is not going to collapse anytime soon despite the sensational headlines on CNBC, newspapers and magazines.

I think the buying in US equities recently was due to short-covering. I dont think the long funds and retail investors are buying yet. They are scared stiff and they will probably be on the sidelines for a while longer.

Take care,
Winston

[winston]

TOL:-

Dow dropped >220 points but Shanghai is down only 0.5% and HK is flat.

HK & SH is performing much better than my expectation. It's also a Friday and I expected much weaker markets ..

Are the Asian markets finally decoupling ?

Not likely

Is it becuz the BBs dare not short the market on a Friday and just before the Olympics ?

[winston]

TOL (Update from Aug 2)

1) The bad news will persist until year end. This sort of thing needs > two years to overcome.

2) Oil has corrected a lot. Is the next big move now towards $200 or $80 ? I would bet that it would trend downwards with some sporadic technical rebounds. So it may be ok for Equities in the short term, barring any war with Iran, major pipeline disruption, destructive hurricane in the Gulf and now, the escalation of the war in Georgia. It is still too early to buy any Oil stocks.

3) Gold is surprisingly strong. Is the next big move towards $1200 or $700? I would bet that it will also trend downwards with some sporadic technical rebounds. So it may not be the right time to buy gold stocks yet nor the Gold ETF listed in Spore.

4) The US$ has strengthened a bit. Where is it's next big move ? I would bet that it may continue to strengthened in the shorter term. This may bring down the price of commodities further.

5) US Equities have rallied a bit, probably due to short-covering. If it continues to go up, the Long Fund would have no choice but to buy, for fear of under-performing the indices. However, the retail investors that have been hurt badly, may be selling into any rallies. Some of the Funds could also be selling into the rallies.

6) HK & Shanghai should be safe until late August in view of the Olympics. No visibility beyond that. A bit too dangerous to buy puts on the HSI at this point in time unless it is for a specific reason and for the day only ( not over-night ). Safer to buy Calls on the indices on any correction.

7) As for Spore, I think it would probably not be going anywhere until year end. I will be keeping an eye on any yield plays as well as any special catalyst plays.

8) Taiwan has corrected. Exports to the US would certainly be hurt. However, liquidity from foreign funds could be the catalyst for Taiwan to go up. Taiwan was quite strong last week.

The above are to help me crystalize my thinking. Please do feel free to comment on the above. I would like to hear your kind thoughts and comments.