Winston's Investment Ideas 05 (May 19 - Jul 22)

[winston]

TOL @ Jul 17, 2022

Paint.jpg

Watching Paint Dry?

It's another week of waiting for the sky to fall but the "super-hurricane" mentioned by Jamie Dimon, CEO of JPM, is nowhere in sight.

Anyway, Jamie Dimon added the following this week:-
"Geopolitical tension, high inflation, waning consumer confidence, the uncertainty about how high rates have to go and the never-before-seen quantitative tightening and their effects on global liquidity, combined with the war in Ukraine and its harmful effect on global energy and food prices, are very likely to have negative consequences on the global economy sometime down the road".

And in "The Macro Compass", we also have the following bearish comments:-
"The picture couldn’t be any clearer":
1. Inflation (lagging indicator) showing the most acceleration on the upside;
2. The labor market (coincident/slightly lagging) holding on okay-sh for now;
3. The NFIB survey (leading indicator) flashing red.

However, "Investor Place" did have some bullish comments this week:-
"Five Reasons Michael Burry & Billionaire Investors, Aren’t Spooked by Red-Hot Inflation":-
1. Economic demand is waning
2. The Fed is hiking rates
3. Supply chains are improving
4. Inventory stockpiles are huge
5. Freight prices are dropping

As for myself, I'm forcing myself to be patient and to wait for things to play out. However, it's like watching paint dry.

You know that things are not that great but the markets are not crashing. At the same time, you are afraid to sell everything in case the markets rebound strongly.

Logically, they should not be rebounding strongly but oversold markets, short-covering, plenty of cash on the sidelines, earning surprises etc. can send prices up a lot in a very short time. An example of this would be the China Techs eg. Alibaba has rebounded around 60% despite it's poor forward guidance.

BTW, I'm reaching my 40% limit for exposure to Equities and there are still so many things that I would like to buy. Therefore, I need to remind myself that I will need to sell an existing position if I want to buy anything new.

For next week, it would be very interesting to see whether Russian Gas would be flowing again through the Nordstream 1 on July 22nd. If not, what would be happening from there? Would that lead to an escalation of the Ukraine War or would that actually lead to the end of the Ukraine war, with NATO surrendering Ukraine to the Russians, in exchange for Russian Gas to Europe by winter?


Weekly Risk Management Progress Report:-

1. To Monitor "Net Exposure" To Equities (Long Less Shorts):- Safe (40% from 36% last week from 37% two weeks ago, of Liquid Assets)
Goal: 15% exposure to Equities before the next crash; Maximum 50%;

2. To Diversify Across Countries; Goal: Maximum 20 Counters (Not Easy)
a. Singapore: 10% (3 Counters); Boring Market
b. HK: 29% (11 Counters); Trading Market
c. US: 38% (11 Counters); Large Caps & ETFs @ Time Difference
d. Malaysia: 24% (12 Counters); Special Situations
Goal: To ensure that my portfolio is not too concentrated in any country.

3. To Increase "USD/HKD/Gold/Silver" from around the current 25%
Goal: To be in the "safe havens" before next recession; (HKD may be repegged)

4. To Minimize Industry / Sector Risk / Country Risk
a. Heavy exposure to Asian Based Equities
b. Heavy exposure to Asian Based Currencies eg. HKD, MYR and SGD
Goal: To diversify across various Sectors, Countries and Currencies


Commodities: Risk-Off (Data from Commodities Live every Saturday)

1. WTI Oil - Lower. US$97 from US$105 last week from US$105 two weeks ago;
Support: US$73; US$62, US$29; Resistance: US$126;
a. What's the Demand reduction in China? 10%? 1.2m bpd / 12m bpd?
b. Saudi Instability? King Salman is 86 years old
c. When will Iranian Oil (4m bpd) be available?
d. Russia produced about 11m bpd. About 4m of Supply could be affected.
e. SPR release: 1m bpd for 6 months
e. Vested in RH Petrogas, CNOOC, XLE
viewtopic.php?f=33&t=9249&p=231235#p231235

2. Gold - Lower. US$1705 from US$1741 from US$1813;
Support: 1680; 1490; 1240; 1050; Resistance: 2015; 2070;
a. They cant print gold
b. In a crisis (cash crunch), gold will also be sold
c. Will money be flowing out of cryptos into gold?
d. Rising Interest Rates and Rising USD, would not be good for gold
e. Vested in Gold Coins, GDX; Zijin (50% Gold)
viewtopic.php?f=33&t=8845&p=231236#p231236

3. Silver - Flat; US$19 from US$19 from US$20;
a. Attractive "Silver to Gold" ratio
b. Industrial Demand eg. Solar
c. Vested in SLV
viewtopic.php?f=33&t=10086&start=80

4. Copper - Lower. US$3.25 from US$3.52 from US$3.61;
Support: 3.52; 3.08; 2.25; Resistance: 4.75;
a. Is the rebound in the Global Economy for real?
b. Demand: +40% over next 10 years
c. Deficit: -0.5m tonne by 2024
d. Supply: 14 years for operational new mine
e. Vested in Zijin (50% Copper)
viewtopic.php?f=33&t=5598&p=231237#p231237

5. Uranium; Flat; US$48 from US$48 from US$50;
Support: 14 (2016); Resistance: 50; 73 (2011); 140 (2007);
a. Sprott Physical Uranium Trust ( SRUUF) to purchase up to $1 billion in additional uranium in the next few months.
b. Pandemic: decrease in production and related services.
c. Kazatomprom, world's largest, to keep production flat in 2022 & 2023.
d. Not vested

6. Bitcoin: Lower. US$20937 from US$21492 last week from US$19149 two weeks ago @ 5.00 AM on Jul 16, 2022
a. Record: $69,000 Nov 2021; Support: $8300;
b. BITO - US Listed Bitcoin ETF
c. Cost of Mining Bitcoin: US$5000 to US$8500
d. US$1m Target by Cathie Woods by 2030
e. Russia-Ukraine War
f. Not vested
viewtopic.php?f=16&t=6175&start=170


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

CNN Fear & Greed Index - Worst: "Fear 27" from "Fear 30" last week from "Extreme Fear 24" two weeks ago.

1. US Equities - Lower; 3863 from 3899 last week from 3825 two weeks ago;
viewtopic.php?f=11&t=7643&start=200
a. Support: 3400; 2800; 2237 (Mar 2020); 1930 (2016); Resistance: 4750
b. S&P 500: Forward PE 16
c. S&P 500 CAPE Ratio; Current = 38; Sept 1929 = 33; Dec 1999 = 44
d. Buffett Indicator: U.S. Equity Market Cap / GDP = 215% (highest); >140 is Expensive
e. Nasdaq Forward PE 20; Equivalent Long Term Average 2021
f. Bought XLE (Energy ETF)

2. HK Equities - Lower. 20298 from 21726 from 21860;
htttp:/investideas.net/forum/viewtopic.php?f=10&t=7470&start=120
a. Support: 19900; 19500; 16800
b. Resistance: 31200; 33500
c. Added to China Merchant Bank

3. Shanghai Equities - Lower; 3228 from 3356 from 3388;
viewtopic.php?f=10&t=7190&start=210
a. Support: 2450; Resistance 4600
b. Vested 3188 (CSI 300 ETF)
c. No Trade

4. Spore Equities - Lower; 3099 from 3131 from 3096;
Resistance 3850
a. No Trade

5. Japan Equities - Higher; 26788 from 26517 from 25936;
viewtopic.php?f=10&t=7138&start=200
a. Support 15575 (2016); Resistance 30715
b. BOJ owns > Half government bonds and 75% of ETFs
c. Breakeven on BOJ's ETF at 19,500
d. Not vested

6. Malaysian Equities: Lower; 1418 from 1426 from 1450:
https//investideas.net/forum/viewtopic.php?f=10&t=6292&start=30
a. No Trade


Currencies: Risk-Off (Data from XE.com on Jul 15 @ 7.50 PM)

1. USD to JPY - JPY Weaker; 139 from 136 last week from 135 two weeks ago;
a. 52 week range is 76 to 134
b. Aging Population
c. High Debt Ratio
d. Unlimited QE
viewtopic.php?f=32&t=4205&start=180

2. SGD to MYR - SGD Stronger; 3.17 from 3.16 from 3.17;
a. Would they devalue the SGD because of the slowdown?
b. How would the reopening affect the exchange rate?
viewtopic.php?f=32&t=136&start=110

3. AUD to USD - AUD Flat; 0.68 from 0.68 from 0.69;
a. The range is 0.70 (2016) to 1.10 (2011)
b. Commodity Currency
viewtopic.php?f=32&t=5256&start=130

4. EUR to USD - EUR Weaker. 1.01 from 1.04 from 1.05;
viewtopic.php?f=32&t=5523&start=100

5. USD to HKD - HKD Weaker; 7.8503 from 7.8496 from 7.8463;
a. USD Peg band: 7.75 to 7.85
b. When will they be removing the peg to the USD?
c. No Hot IPO
viewtopic.php?f=32&t=3529&start=40

6. USD to MYR:- MYR Weaker; 4.45 from 4.43 from 4.41;
a. 52 Week Range is 3.27 to 4.54
b. Lowest: 4.885 (1998)
viewtopic.php?f=32&t=397&start=9

7. USD to SGD:- SGD Flat; 1.40 from 1.40 from 1.40;
a. High 1.70 (2004); Low 1.20 (2011)
b. Am uncomfortable holding the currency of a small country where a catastrophe can wipe them out. But Singapore has been managing it's finances well.
viewtopic.php?f=32&t=136&start=100

8. USD to CNY:- CNY Weaker; 6.75 from 6.70 from 6.70;
viewtopic.php?f=32&t=7720&start=90

9. Dollar Index - USD Stronger; 108.29 from 107.01 from 105.14;
viewtopic.php?f=32&t=7616&start=60


Properties:-

1. China Properties:-
a. Cap of 40% for loans to Developers by banks; Low Cost Rental projects excluded;
b. Cap of 32.5% for mortgage loans by banks
c. Developers' M&A loans not limited by the "three red lines" policy
d. Disgruntled homebuyers refusing to pay mortgages
viewtopic.php?f=10&t=8150&start=140

2. HK Properties:-
a. Stronger than expected
b. Will higher interest rates affect sales?
viewtopic.php?f=10&t=7785&start=150

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

4. Malaysian Properties:-
a. How much will it drop and for how long?
viewtopic.php?f=10&t=4220&start=20


Others

Market Sentiment - "Fear" from "Extreme Fear" from "Fear"
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; 2.94% from 3.08% from 2.89%;

Yield on 2 Year US Treasuries - Higher; 3.12% from 3.11% from 2.84%;

Interest Rates:-
1. Russian Central Bank lifts key rate to 20%
2. Zimbabwe has world’s highest interest rate at 80%
3. Argentina raises key rate to 47% as inflation hits 20-year high
4. Brazil lifted the Selic to 13.25%
5. 2/10 Inverted
viewtopic.php?f=16&t=7319&p=221670#p221670

JNK (SPDR Barclays High Yield Bond ETF) - Lower: 91.66 from 92.27 from 91.04;

HYG (iShares iBoxx $ High Yid Corp Bond ETF) - Lower; 74.55 from 74.89 from 73.98;

Baltic Dry Index - Lower; 2010 from 2067 from 2214; Low 290; High 11,400 (2008)

Inflation:-
a. Peru - curfew; violent inflation protests
b. Sri Lanka - riots, protests; power cuts, food and gasoline shortages
c. Kenya - fuel shortage as government delays subsidy; long line ups
d. Turkey - 74% rise in inflation; at 20 year high
e. Argentina - 58% inflation
f. Zimbabwe, Venezuela, and Lebanon: situation worsening
viewtopic.php?f=16&t=6950&start=110

Covid19 Notes:-
viewtopic.php?f=25&t=5657&start=150

US Slowdown - How Deep & How Long?
viewtopic.php?f=11&t=9039&start=50

Risks Out There:-
posting.php?mode=reply&f=16&t=8930


Please Note:-

The above is to help me crystallize my thinking. It's not a recommendation to Buy or Sell. For illiquid counters, I may not disclose my trading activity for the week.

Please do use the above at your own risk and please do feel free to provide me with your kind comments

Active Topics - There is an "Active Topics" button on the top right corner.
search.php?search_id=active_topics

[winston]

TOL @ Jul 24, 2022

higher.jpeg

Grinding Higher?

It's another week and the markets still has not fallen. In fact, it was grinding higher this week.

Again, if you have listened to the "experts" and have sold your entire position, you must feeling quite uneasy now.

This is because things can easily gap up during earnings season and suddenly, you may have missed the boat.

And to continue frightening you, we have the following bearish comments this week:-

1. Daily Wealth: During the "Global Financial Crisis" in 2008, the S&P 500 was already reeling 19% from its high at the time. But the bottom was still a year away… And stocks went on to fall another 47% over that period.

2. Morgan Stanley: Contends the odds of a US recession in the next 12 months are at 36%. “We don’t believe this bear market is over, even if we avoid a recession”.

As for myself, I still think that the markets are "oversold" and if things do go from "bad" to "less bad", some money could be made.

However, I want to be able run quickly too if I'm wrong. Hence, I'm taking small profits and trading short term instead of "Buying & Hold".

For next week, we have the FOMC on July 26-27. I think that it's a non-event eventhough some people try to make it into a big deal.


Weekly Risk Management Progress Report:-

1. To Monitor "Net Exposure" To Equities (Long Less Shorts):- Safe (40% from 40% last week from 36% two weeks ago, of Liquid Assets)
Goal: 15% exposure to Equities before the next crash; Maximum 50%;

2. To Diversify Across Countries; Goal: Maximum 20 Counters (Not Easy)
a. Singapore: 10% (3 Counters); Boring Market

b. HK: 33% (12 Counters); Trading Market
c. US: 34% (10 Counters); Large Caps & ETFs @ Time Difference
d. Malaysia: 23% (13 Counters); Special Situations
Goal: To ensure that my portfolio is not too concentrated in any country.

3. To Increase "USD/HKD/Gold/Silver" from around the current 25%
Goal: To be in the "safe havens" before next recession; (HKD may be repegged)

4. To Minimize Industry / Sector Risk / Country Risk
a. Heavy exposure to Asian Based Equities
b. Heavy exposure to Asian Based Currencies eg. HKD, MYR and SGD
Goal: To diversify across various Sectors, Countries and Currencies


Commodities: Mixed (Data from Commodities Live every Saturday)

1. WTI Oil - Lower. US$95 from US$97 last week from US$105 two weeks ago;
Support: US$73; US$62, US$29; Resistance: US$126;
a. What's the Demand reduction in China? 10%? 1.2m bpd / 12m bpd?
b. Saudi Instability? King Salman is 86 years old
c. When will Iranian Oil (4m bpd) be available?
d. Russia produced about 11m bpd. About 4m of Supply could be affected.
e. SPR release: 1m bpd for 6 months
e. Vested in RH Petrogas, CNOOC, XLE
viewtopic.php?f=33&t=9249&p=231235#p231235

2. Gold - Higher. US$1725 from US$1705 from US$1741;
Support: 1680; 1490; 1240; 1050; Resistance: 2015; 2070;
a. They cant print gold
b. In a crisis (cash crunch), gold will also be sold
c. Will money be flowing out of cryptos into gold?
d. Rising Interest Rates and Rising USD, would not be good for gold
e. Vested in Gold Coins, GDX; Zijin (50% Gold)
viewtopic.php?f=33&t=8845&p=231236#p231236

3. Silver - Lower; US$18 from US$19 from US$19;
a. Attractive "Silver to Gold" ratio
b. Industrial Demand eg. Solar
c. Vested in SLV
viewtopic.php?f=33&t=10086&start=80

4. Copper - Higher. US$3.32 from US$3.25 from US$3.52;
Support: 3.08; 2.25; Resistance: 4.75;
a. Is the rebound in the Global Economy for real?
b. Demand: +40% over next 10 years
c. Deficit: -0.5m tonne by 2024
d. Supply: 14 years for operational new mine
e. Vested in Zijin (50% Copper)
viewtopic.php?f=33&t=5598&p=231237#p231237

5. Uranium; Lower; US$47 from US$48 from US$48;
Support: 14 (2016); Resistance: 50; 73 (2011); 140 (2007);
a. Sprott Physical Uranium Trust ( SRUUF) to purchase up to $1 billion in additional uranium in the next few months.
b. Pandemic: decrease in production and related services.
c. Kazatomprom, world's largest, to keep production flat in 2022 & 2023.
d. Not vested

6. Bitcoin: Higher. US$22755 from US$20937 last week from US$21492 two weeks ago @ 7.12 AM on Jul 23, 2022
a. Record: $69,000 Nov 2021; Support: $8300;
b. BITO - US Listed Bitcoin ETF
c. Cost of Mining Bitcoin: US$5000 to US$8500
d. US$1m Target by Cathie Woods by 2030
e. Russia-Ukraine War
f. Not vested
viewtopic.php?f=16&t=6175&start=170


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

CNN Fear & Greed Index - Better: "Fear 39" from "Fear 27" last week from "Fear 30" two weeks ago.

1. US Equities - Higher; 3962 from 3863 last week from 3899 two weeks ago;
viewtopic.php?f=11&t=7643&start=200
a. Support: 3400; 2800; 2237 (Mar 2020); 1930 (2016); Resistance: 4750
b. S&P 500: Forward PE 16
c. S&P 500 CAPE Ratio; Current = 38; Sept 1929 = 33; Dec 1999 = 44
d. Buffett Indicator: U.S. Equity Market Cap / GDP = 215% (highest); >140 is Expensive
e. Nasdaq Forward PE 20; Equivalent Long Term Average 2021
f. Sold AMZN

2. HK Equities - Higher. 20609 from 20298 from 21726;
htttp:/investideas.net/forum/viewtopic.php?f=10&t=7470&start=120
a. Support: 19900; 19500; 16800
b. Resistance: 31200; 33500
c. Bought AIA

3. Shanghai Equities - Higher; 3270 from 3228 from 3356;
viewtopic.php?f=10&t=7190&start=210
a. Support: 2450; Resistance 4600
b. Vested 3188 (CSI 300 ETF)
c. No Trade

4. Spore Equities - Higher; 3181 from 3099 from 3131;
Resistance 3850
a. No Trade

5. Japan Equities - Higher; 27915 from 26788 from 26517;
viewtopic.php?f=10&t=7138&start=200
a. Support 15575 (2016); Resistance 30715
b. BOJ owns > Half government bonds and 75% of ETFs
c. Breakeven on BOJ's ETF at 19,500
d. Not vested

6. Malaysian Equities: Higher; 1466 from 1418 from 1426:
https//investideas.net/forum/viewtopic.php?f=10&t=6292&start=30
a. Bought BAT


Currencies: Risk-Off (Data from XE.com on Jul 22 @ 9.15 PM)

1. USD to JPY - JPY Stronger; 137 from 139 last week from 136 two weeks ago;
a. 52 week range is 76 to 134
b. Aging Population
c. High Debt Ratio
d. Unlimited QE
viewtopic.php?f=32&t=4205&start=180

2. SGD to MYR - SGD Stronger; 3.21 from 3.17 from 3.16;
a. Would they devalue the SGD because of the slowdown?
b. How would the reopening affect the exchange rate?
viewtopic.php?f=32&t=136&start=110

3. AUD to USD - AUD Stronger; 0.69 from 0.68 from 0.68;
a. The range is 0.70 (2016) to 1.10 (2011)
b. Commodity Currency
viewtopic.php?f=32&t=5256&start=130

4. EUR to USD - EUR Stronger. 1.02 from 1.01 from 1.04;
viewtopic.php?f=32&t=5523&start=100

5. USD to HKD - HKD Stronger; 7.8494 from 7.8503 from 7.8496;
a. USD Peg band: 7.75 to 7.85
b. When will they be removing the peg to the USD?
c. No Hot IPO
viewtopic.php?f=32&t=3529&start=40

6. USD to MYR:- MYR Weak; 4.45 from 4.45 from 4.43;
a. 52 Week Range is 3.27 to 4.54
b. Lowest: 4.885 (1998)
viewtopic.php?f=32&t=397&start=9

7. USD to SGD:- SGD Stronger; 1.39 from 1.40 from 1.40;
a. High 1.70 (2004); Low 1.20 (2011)
b. Am uncomfortable holding the currency of a small country where a catastrophe can wipe them out. But Singapore has been managing it's finances well.
viewtopic.php?f=32&t=136&start=100

8. USD to CNY:- CNY Weaker; 6.76 from 6.75 from 6.70;
viewtopic.php?f=32&t=7720&start=90

9. Dollar Index - USD Weaker; 106.78 from 108.29 from 107.01;
viewtopic.php?f=32&t=7616&start=60


Properties:-

1. China Properties:-
a. Cap of 40% for loans to Developers by banks; Low Cost Rental projects excluded;
b. Cap of 32.5% for mortgage loans by banks
c. Developers' M&A loans not limited by the "three red lines" policy
viewtopic.php?f=10&t=8150&start=140

2. HK Properties:-
a. Stronger than expected
b. Will higher interest rates affect sales?
viewtopic.php?f=10&t=7785&start=150

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

4. Malaysian Properties:-
a. How much will it drop and for how long?
viewtopic.php?f=10&t=4220&start=20


Others

Market Sentiment - "Fear" from "Fear" from "Extreme Fear"
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; 2.81% from 2.94% from 3.08%;

Yield on 2 Year US Treasuries - Lower; 3.02% from 3.12% from 3.11%;

Interest Rates:-
1. Russian Central Bank lifts key rate to 20%
2. Zimbabwe has world’s highest interest rate at 80%
3. Argentina raises key rate to 47% as inflation hits 20-year high
4. Brazil lifted the Selic to 13.25%
5. 2/10 Inverted
viewtopic.php?f=16&t=7319&p=221670#p221670

JNK (SPDR Barclays High Yield Bond ETF) - Higher: 95.09 from 91.66 from 92.27;

HYG (iShares iBoxx $ High Yid Corp Bond ETF) - Higher; 76.99 from 74.55 from 74.89;

Baltic Dry Index - Higher; 2118 from 2010 from 2067; Low 290; High 11,400 (2008)

Inflation:-
a. Peru - curfew; violent inflation protests
b. Sri Lanka - riots, protests; power cuts, food and gasoline shortages
c. Kenya - fuel shortage as government delays subsidy; long line ups
d. Turkey - 74% rise in inflation; at 20 year high
e. Argentina - 58% inflation
f. Zimbabwe, Venezuela, and Lebanon: situation worsening
viewtopic.php?f=16&t=6950&start=110

Covid19 Notes:-
viewtopic.php?f=25&t=5657&start=150

US Slowdown - How Deep & How Long?
viewtopic.php?f=11&t=9039&start=50

Risks Out There:-
posting.php?mode=reply&f=16&t=8930


Please Note:-

The above is to help me crystallize my thinking. It's not a recommendation to Buy or Sell. For illiquid counters, I may not disclose my trading activity for the week.

Please do use the above at your own risk and please do feel free to provide me with your kind comments

Active Topics - There is an "Active Topics" button on the top right corner.
search.php?search_id=active_topics

[winston]

TOL @ Jul 31, 2022

higher.jpeg

Higher and higher?

Liquidity: Decreasing
Earnings: Decreasing

Most markets have been moving higher and higher over the past few weeks despite the "experts" calling for the arrival of Rain, Thunderstorm, Hurricane and even Super-Hurricanes.

This week is no exception and we have "Dr Doom" Nouriel Roubini to frighten you with the following:
1. Today, we face supply shocks in a context of much higher debt levels, implying that we are heading for a combination of 1970s-style stagflation and 2008-style debt crises – that is, a stagflationary debt crisis
2. As for U.S. stocks “most likely, they will plunge lower
3. In typical plain-vanilla recessions, U.S. and global equities tend to fall by about 35%
4. But, because the next recession will be both stagflationary and accompanied by a financial crisis, the crash in equity markets could be closer to 50%

Anyway, the "experts" are now wondering why this "Bear-Market Rally" is so strong. And if they are managing money professionally, it's very likely that they are underperforming the markets. So should be trying to chase the markets now or should they be doubling down on their bearish predictions in the hope of starting a stock-market crash?

In the meantime, we have a bullish comment from Tom Lee, Head of Research at Fundstrat, (He has been quite good with his forecasts so far):-
"The volatile bear market that’s rocked stocks for the last few months is over. Recent events signal that the “bottom is in” and that stocks could hit new highs by the end of the year".

There was also a Contrarian Indicator from the latest BoA Monthly Survey of Fund Managers: "14-year low in stock allocation, a 21-year high in cash balances and all-time negativity about global growth and profits".

As for myself, my position has not really changed. This is a "Trading Market" and I will continue to buy on any Big Dips and I will also sell on any Rip. This is not a "Buy & Forget" market.

For next week, since it's a new month again, there could be a spike in the markets, from the new funds being generated by the new month, unless the Fund Managers have already spent their money in advance, over the past two days.


Weekly Risk Management Progress Report:-

1. To Monitor "Net Exposure" To Equities (Long Less Shorts):- Safe (39% from 40% last week from 40% two weeks ago, of Liquid Assets)
Goal: 15% exposure to Equities before the next crash; Maximum 50%;

2. To Diversify Across Countries; Goal: Maximum 20 Counters (Not Easy)
a. Singapore: 10% (3 Counters); Boring Market
b. HK: 38% (13 Counters); Trading Market
c. US: 29% (9 Counters); Large Caps & ETFs @ Time Difference
d. Malaysia: 24% (13 Counters); Special Situations
Goal: To ensure that my portfolio is not too concentrated in any country.

3. To Increase "USD/HKD/Gold/Silver" from around the current 25%
Goal: To be in the "safe havens" before next recession; (HKD may be repegged)

4. To Minimize Industry / Sector Risk / Country Risk
a. Heavy exposure to Asian Based Equities
b. Heavy exposure to Asian Based Currencies eg. HKD, MYR and SGD
Goal: To diversify across various Sectors, Countries and Currencies


Commodities: Mixed (Data from Commodities Live every Saturday)

1. WTI Oil - Higher. US$98 from US$95 last week from US$97 two weeks ago;
Support: US$73; US$62, US$29; Resistance: US$126;
a. What's the Demand reduction in China? 10%? 1.2m bpd / 12m bpd?
b. Saudi Instability? King Salman is 86 years old
c. When will Iranian Oil (4m bpd) be available?
d. Russia produced about 11m bpd. About 4m of Supply could be affected.
e. SPR release: 1m bpd for 6 months
f. Vested in RH Petrogas, CNOOC; Sold XLE
viewtopic.php?f=33&t=9249&p=231235#p231235

2. Gold - Higher. US$1764 from US$1725 from US$1705;
Support: 1680; 1490; 1240; 1050; Resistance: 2015; 2070;
a. They cant print gold
b. In a crisis (cash crunch), gold will also be sold
c. Will money be flowing out of cryptos into gold?
d. Rising Interest Rates and a Rising USD, would not be good for gold
e. Vested in Gold Coins, GDX; Zijin (50% Gold)
viewtopic.php?f=33&t=8845&p=231236#p231236

3. Silver - Higher; US$20 from US$18 from US$19;
a. Attractive "Silver to Gold" ratio
b. Industrial Demand eg. Solar
c. Vested in SLV
viewtopic.php?f=33&t=10086&start=80

4. Copper - Higher. US$3.59 from US$3.32 from US$3.25;
Support: 3.08; 2.25; Resistance: 4.75;
a. Is the rebound in the Global Economy for real?
b. Demand: +40% over next 10 years
c. Deficit: -0.5m tonne by 2024
d. Supply: 14 years for operational new mine
e. Vested in Zijin (50% Copper)
viewtopic.php?f=33&t=5598&p=231237#p231237

5. Uranium; Higher; US$49 from US$47 from US$48;
Support: 14 (2016); Resistance: 73 (2011); 140 (2007);
a. Sprott Physical Uranium Trust ( SRUUF) to purchase up to $1 billion in additional uranium in the next few months.
b. Pandemic: decrease in production and related services.
c. Kazatomprom, world's largest, to keep production flat in 2022 & 2023.
d. Not vested

6. Bitcoin: Higher. US$24093 from US$22755 last week from US$20937 two weeks ago @ 7.34 AM on Jul 30, 2022
a. Record: $69,000 Nov 2021; Support: $8300;
b. BITO - US Listed Bitcoin ETF
c. Cost of Mining Bitcoin: US$5000 to US$8500
d. US$1m Target by Cathie Woods by 2030
e. Russia-Ukraine War
f. Not vested
viewtopic.php?f=16&t=6175&start=170


Equities - Mixed (Data as of Saturday every week)

CNN Fear & Greed Index - Higher: "Fear 42" from "Fear 39" last week from "Fear 27" two weeks ago.

1. US Equities - Higher; 4130 from 3962 last week from 3863 two weeks ago;
viewtopic.php?f=11&t=7643&start=200
a. Support: 3800; 3400; 2800; 2237 (Mar 2020); 1930 (2016); Resistance: 4375; 4750
b. S&P 500: Forward PE 16
c. S&P 500 CAPE Ratio; Current = 38; Sept 1929 = 33; Dec 1999 = 44
d. Buffett Indicator: U.S. Equity Market Cap / GDP = 215% (highest); >140 is Expensive
e. Nasdaq Forward PE 21; Equivalent Long Term Average 2021
f. Sold XLE

2. HK Equities - Lower. 20157 from 20609 from 20298;
htttp:/investideas.net/forum/viewtopic.php?f=10&t=7470&start=120
a. Support: 19900; 19500; 16800
b. Resistance: 31200; 33500
c. Bought Alibaba

3. Shanghai Equities - Lower; 3253 from 3270 from 3228;
viewtopic.php?f=10&t=7190&start=210
a. Support: 2450; Resistance 4600
b. Vested 3188 (CSI 300 ETF)
c. No Trade

4. Spore Equities - Higher; 3212 from 3181 from 3099;
Resistance 3850
a. No Trade

5. Japan Equities - Lower; 27802 from 27915 from 26788;
viewtopic.php?f=10&t=7138&start=200
a. Support 15575 (2016); Resistance 30715
b. BOJ owns > Half government bonds and 75% of ETFs
c. Breakeven on BOJ's ETF at 19,500
d. Not vested

6. Malaysian Equities: Higher; 1492 from 1466 from 1418:
https//investideas.net/forum/viewtopic.php?f=10&t=6292&start=30
a. No Trade


Currencies: Risk-On (Data from XE.com on Jul 30 @ 10.45 PM)

1. USD to JPY - JPY Stronger; 133 from 137 last week from 139 two weeks ago;
a. 52 week range is 76 to 134
b. Aging Population
c. High Debt Ratio
d. Unlimited QE
viewtopic.php?f=32&t=4205&start=180

2. SGD to MYR - SGD Stronger; 3.22 from 3.21 from 3.17;
a. Would they devalue the SGD because of the slowdown?
b. How would the reopening affect the exchange rate?
viewtopic.php?f=32&t=136&start=110

3. AUD to USD - AUD Stronger; 0.70 from 0.69 from 0.68;
a. The range is 0.70 (2016) to 1.10 (2011)
b. Commodity Currency
viewtopic.php?f=32&t=5256&start=130

4. EUR to USD - EUR Weak. 1.02 from 1.02 from 1.01;
viewtopic.php?f=32&t=5523&start=100

5. USD to HKD - HKD Weaker; 7.8500 from 7.8494 from 7.8503;
a. USD Peg band: 7.75 to 7.85
b. When will they be removing the peg to the USD?
c. No Hot IPO
viewtopic.php?f=32&t=3529&start=40

6. USD to MYR:- MYR Weak; 4.45 from 4.45 from 4.45;
a. 52 Week Range is 3.27 to 4.54
b. Lowest: 4.885 (1998)
viewtopic.php?f=32&t=397&start=9

7. USD to SGD:- SGD Stronger; 1.38 from 1.39 from 1.40;
a. High 1.70 (2004); Low 1.20 (2011)
b. Am uncomfortable holding the currency of a small country where a catastrophe can wipe them out. But Singapore has been managing it's finances well.
viewtopic.php?f=32&t=136&start=100

8. USD to CNY:- CNY Stronger; 6.74 from 6.76 from 6.75;
viewtopic.php?f=32&t=7720&start=90

9. Dollar Index - USD Weaker; 105.90 from 106.78 from 108.29;
viewtopic.php?f=32&t=7616&start=60


Properties:-

1. China Properties:-
a. Cap of 40% for loans to Developers by banks; Low Cost Rental projects excluded;
b. Cap of 32.5% for mortgage loans by banks
c. Developers' M&A loans not limited by the "three red lines" policy
viewtopic.php?f=10&t=8150&start=140

2. HK Properties:-
a. Stronger than expected
b. Will higher interest rates affect sales?
viewtopic.php?f=10&t=7785&start=150

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

4. Malaysian Properties:-
a. How much will it drop and for how long?
viewtopic.php?f=10&t=4220&start=20


Others

Market Sentiment - :"Fear" from "Fear" from "Fear"
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; 2.66% from 2.81% from 2.94%;

Yield on 2 Year US Treasuries - Lower; 2.89% from 3.02% from 3.12%;

Interest Rates:-
1. Russian Central Bank lifts key rate to 20%
2. Zimbabwe has world’s highest interest rate at 80%
3. Argentina raises key rate to 47% as inflation hits 20-year high
4. Brazil lifted the Selic to 13.25%
5. 2/10 Inverted
viewtopic.php?f=16&t=7319&p=221670#p221670

JNK (SPDR Barclays High Yield Bond ETF) - Higher: 96.38 from 95.09 from 91.66;

HYG (iShares iBoxx $ High Yid Corp Bond ETF) - Higher; 78.19 from 76.99 from 74.55;

Baltic Dry Index - Lower; 1895 from 2118 from 2010; Low 290; High 11,400 (2008)

Inflation:-
a. Peru - curfew; violent inflation protests
b. Sri Lanka - riots, protests; power cuts, food and gasoline shortages
c. Kenya - fuel shortage as government delays subsidy; long line ups
d. Turkey - 74% rise in inflation; at 20 year high
e. Argentina - 58% inflation
f. Zimbabwe, Venezuela, and Lebanon: situation worsening
viewtopic.php?f=16&t=6950&start=110

Covid19 Notes:-
viewtopic.php?f=25&t=5657&start=150

US Slowdown - How Deep & How Long?
viewtopic.php?f=11&t=9039&start=50

Risks Out There:-
posting.php?mode=reply&f=16&t=8930


Please Note:-

The above is to help me crystallize my thinking. It's not a recommendation to Buy or Sell. For illiquid counters, I may not disclose my trading activity for the week.

Please do use the above at your own risk and please do feel free to provide me with your kind comments

Active Topics - There is an "Active Topics" button on the top right corner.
search.php?search_id=active_topics