AAR & TOL 02 (Nov 08 - Jul 09)

[winston]

TOL:-

A lot of newsletters are asking people to buy saying that this is a once in a generation opportunity. A lot of the parrots on TV are also saying the same thing. Are stocks really that cheap ? Cheap compared to what ? Cheap compared to the price a few years ago ? Has fundamentals not changed, compared to a few years ago ?

Will the economy actually turn around in 6 months ? Has redemptions stopped at the Mutual Funds and Hedge Funds ? Are the money on the sideline enough to provide some fire-power to rally the market ? The money on the sideline is only US$5t compared to US$50t that have been evaporated..

I'm gonna follow my instinct. I'm still more comfortable shorting the market after a bear market rally than to go long trying to anticipate the bear market rally. I dont think the economy will turnaround in 6 months. Also, I think a lot of people are waiting to sell into the bear market rally than to chase stocks further, so I dont see the market going very high.

My 2 cents worth to crystalize my thinking.. Not a buy or sell recommendation. Invest / Gamble / Speculate the way you think fit.

[winston]

TOL:-

I have info on about 550 stocks on my Spore List. I have no Convincing Buy idea. Is it me that is being too conservative or things would really be slow for another 1.5 years ? I cant see further than two years. In the meantime, I'm expecting business conditions to be bad for another 2 years so I need to exercise some caution in my stock-pickings. I dont want to buy two years early ..

In HK, I have info on about 375 stocks. Again, I cant really find any real Convincing Buy idea. But with the China story, it's easy to follow some ideas, hoping that there's a bigger fool to buy it off you . Also, with the China story, I'm willing to relax some of my tough criterias on the HK stocks but will apply them to my Spore stocks.

[Cherry]

winston wrote:

I have info on about 550 stocks on my Spore List. I have no Convincing Buy idea.

Winston, may I draw your attention to DBS. Its share price has risen, for the last 8 trading days, from $6.42 to $7.71 yesterday, presently $7.66. Looks like institutions were accumulating this stock.

DBS had a rights issue recently and is probably stronger than the other 2 Singapore banks to take advantage of opportunities of acquiring or expanding its overseas subsidiaries. It is a proxy for the Singapore financial sector. Therefore, institutions are likely to buy into it for their positions in the Singapore equity market.

May I borrow your statement please:
'My 2 cents worth to crystalize my thinking.. Not a buy or sell recommendation. Invest / Gamble / Speculate the way you think fit.'

[winston]

Hi Cherry,

Thanks for your kind comments.

I will reply under the DBS thread.

Take care,
Winston

[winston]

TOL:-

A friend told me that this slowdown will be a "Winner Takes All" situation.

After this slowdown, whoever that has the cash, would be able to take out their competitors in their industry.

Therefore, it's very important that we stick to the biggest and best before the turnaround. Also, it's important that we not buy too early as this could be a multi-year slowdown.

How would I know when things are turning around:-
1) Rebound in Commpdities eg. Copper, Oil ?
2) Rebound in housing, exports, imports ?
3) Rebound in Equities, Bonds?
4) Decrease in cash levels?
5) Flow of money into Emerging Marlets?
6) Drop in US$ & Yen ? Flow into riskier assets ?
7) Improvement in the employment numbers ?
8) Increase in tax collection ?

[winston]

TOL:-

Are the big elephants averaging up or selling into this rally ?

HK is only up 120 points. Shanghai is up only 1%.

And the US fuures are pointing lower now..

[winston]

TOL:-

Window Dressing for 1Q ?

[winston]

TOL:-

Where would the 9t on the sideline be going ?

1) Commodity ? Which one ? Oil, Coal, Grains ? Base Metals?

2) Real Estate ? Residential or Commercial ?

3) Corporate Bonds?

4) Emerging Marlets ?

5) Domestic Equities ? Which Industry ?

How much of these 9t will flow out of cash ? Not all will flow out. So assume that 4t will flow out . Is 4t an exciting number ?

Also, a lot of this 9t maybe happy with anything that is about 6 %, compared to the current risk free rate of
1.5%. So a lot of these money may not be going into high risk, high reward typed of situation

[winston]

TOL:-

Which industry is still growing ?

[winston]

TOL:-

It looks like the Asians are more positive on the markets today than the Americans. Dow dropped alot yet the Asians are going up.

Is it Window Dressing ?