AAR & TOL 01 (May 08 - Oct 08)

[la papillion]

Winston, missed one: never throw good money into bad

But in trading, one seldom looks at the fundamental aspect, so it's wise not to average down?

[winston]

TOL:- Quarterly Window Dressing

I think K discussed "Window Dressing"...

Well, the end of the quarter is coming.

For the stocks that the fund managers would like to keep, they may push up the price to make it look a bit better.

For stocks that would make the fund manager looks bad, they may want to sell, before the quarter end..

So it would be interesting to watch the action over the next 2.5 weeks

[kennynah]

earnings are about to be released for US equities... next week onwards...for about 2 weeks...

mkt may take direction from these major counters' earnings and forward guidances...

[sidney]

As far i can relate and remember, when the 1997 Asia curreny crisis happen, i was 15years old. In sec 3. Then 2000, the internet bubble in US stock market, i was in Poly enjoying the best moments of my life. In 2003 (i think), the Sars came. I was stuck incamp serving the nation. Now 2007~2008, banks, investment banks and mortage brokerage are melting. What should i do? Mainly sit oneside and observe the financial mess cos i'm still studying, saving and struggling to make my ends meet. Duhh..

Wow, in a decade, there are 4 golden opporunities. The question is always when is the bottom out? Recently all local banks issued preferred shares at 5plus yields%. Although i do not understand banking system, i feel our banking sector is relatively safe, their stock price relatively resilent, despite all the negative sentiments and recent writedowns by local banks due to CDOs exposure. In a sense, how come did our banking stocks somewhat "transformed" into defensive plays?

Carrot
Take for examples, our local banks, i "guess" they are smelling something too. Opportunties!! Bcos local banks always have their tier 1 capital ratio covered. Think: Why they issue preferred share paying us at least 5% yield if they dun need the money. (I have no idea what is tier 1 ratios, but i knew they must maintained the ratios for liquidity and to assure investors from possible capital flights.)

Stick
Credit crunch. The first financial word that is not food-related (think coco crunch). As long as the Fed is printing money, Fred & Mae is safe from collapse. State-owned entreprise (SOE) is safe for the moment. But that does mean the stock holders won't be wipe out? This simply means tat the tax payers of U.s continues to support the mortage, stock markets until... printing machine runs out of ink or out of paper. The short term effect is of calming assuarance to international capital markets. Now all the money flew to prop up U.S assets, leading to increase of US Fx against major asian currencies. Long term effect could be a perpetual dependence on the govt to be white knight everytime SOE screws up. What abt the senario of Stagflation, when too much Us money circulating during its rumoured "recession?" This will be a drag to international communities as the decoupling effect never decouples completely. Especially on export dependant countries like Singapore.

Crystal gazing
Oil, plat and copper commodities are going down, OPEC is again "regulating" supplies to reduce oil's freefall. Now is it a matter of supply surplus or demand slack? Or "FEAR" that is forcing commodities players to rethink and maintain to a more equilibrium state. Fear of the mortage meltdown is not even halfway over...

Capitalising on uncertainty
If fear is back in full force, will we see 1,000 for gold? Will fed collaspe from exhaust? ( i think not cos UsD is the "international reserve money", but it well may...) Or the chance for mutliple baggers coming.. Smell anything lately?

[kennynah]

but that's more than once in a life time

[sidney]

lol. Tat's right. Thats y i put (again). I think tat gd news for some cos this will do a wealth xfer. I'm not the recepient tat's all

[winston]

TOL:-

1) Huiyuan was trading around $4 something before it got the offer from Coca Cola for $12.12

2) Merrill was trading at $17 and it got bought out at $29

Again, if you want to play, the odds are better, if you are vested in an Industry Leader..

[winston]

TOL:-

1) In times like this, there's a need to differentiate Main Street from Wall Street

2) Although things are not that rosy on Main Street, businesses are not going bankrupt left, right & centre

3) Business on Main Street are not down 80% like some of the Financial Stocks.

4) It's not the end of the world if you can have a longer time horizon. I hope

5) So what if a few Investment Banks collapse ? Is the entire Financial System going to collapse ?

[millionairemind]

Just TOL on W's TOL

Banks are the lubricant machine for the entire system. There are counterparty risks when an investment firm goes into Chapt 11. Many firms outside of financials have debts that they need to service.

If the middlemen (banks) are not there to provide the needed liquidity to lube the system, even the best car with the best engine and best interior and exterior design might not be able to move forward.

[winston]

Maybe I should clarify my statement above...

This is not really the time to panic. If one wants to panic, it was 1 year ago. This is actually the time to go thru the watch-list, to see which baby has been thrown out with the bath..

All the Uncles and Aunties of the world already know the term "Subprime". Every analysts on CNBC and Bloomberg have been very negative on Financial Stocks and have been calling for a global slowdown for a long time..

Business goes on. Main Street goes on. Times may be tough for a few more years but it is not the end of the world..