AAR & TOL 02 (Nov 08 - Jul 09)

[financecaptain]

Just the sort of news that pp need to give reason for buying shares. Investors may be temporary discovering that they are overprising risks now, particularly the financial sector. Overall, the long-term trend should be downward although short-term trend is always volatile (consistent with the Dow Theory). The macroeconomy is not likely to recover so fast.

[winston]

Going back to the conventional way of investing ie. looking at the following in order of priority:-
1) Market Direction
2) Industry Outlook
3) Stock Picking

The next few months are for traders. It will be a Trading Market for a while.

I have no visibility for the various Industries. So I will have to wait a few more months more. In the meantime, I'm focussing on the Chinese Consumer markets ie. fast food, consumer stables etc.

[OE2008]

W,

For those with the fire power, I would think Country has a significant place in the choice of investments. It would cover currency strength and growth prospects. Jim Rogers and Peter Schiff and to certain extent Warren Buffett advocate this aspect, although the latter (WB) sings too much praise for US.

Market timing still matters. Commodities and currencies can still correct adversely even if long term prospects are good. Think, Australia, Canada.

[winston]

Hi OE2008,

Yes, the Canadian Dollar and Australia Dollar is on my radar. However, I want to keep some gun powder dry as I think this one can be longer than my expectation.

In the meantime, I still focussing on China.

thankjs and take care,
Winston

[winston]

TOL:-

Over the past few days, the markets in the US, Japn, HK and even Spore have no problem rallying 4% at a time..

It looks like there's plenty of money on the sideline that can come in very quickly, if it wants to. The rise could be due to short-covering or new money. Does not matter. What matters is that it's telling me to be very careful if I want to be shorting the market.

However, the money coming in are not really chasing stocks. They come in only after the market has dropped to a range low..

So maybe it's still in a trading range. Buy on Deep, Sell on Pop. Short on Pop, Cover on Deep..

[Cherry]

winston wrote:

It looks like there's plenty of money on the sideline that can come in very quickly, if it wants to.

However, the money coming in are not really chasing stocks. They come in only after the market has dropped to a range low..

So maybe it's still in a trading range.

Winston, do you think it could be a sign of accumulation by smart $

[winston]

Hi Cherry,

I think the smart money knows that the slowdown would last a few years. Therefore, I do not think they are really chasing stocks now unless those stocks are trading at very distressed levels.

So it may be necessary to go down to the Individual Stocks level, to see whether that stock is at a distressed level. In addition, that particular stock would also need a very good story on why somebody would want to accumulate it.

Take care,
Winston

[kennynah]

W : is C distressed enough?

[winston]

W : is C distressed enough?

Ha Ha... I think when they buy distressed assets, they are quite confident that the entity would be able to survive.

Can C survive ? I dont know. I dont follow the story that closely..

[kennynah]

you better than me.... i dont follow the story at all