AAR & TOL 02 (Nov 08 - Jul 09)

[winston]

Yes, I'm waiting for a One-day reversal or a "M" or better yet, a "Triple Top" ...

[winston]

1) First Stage of the Rally is to buy on the steep discounts to underlying value. ( Not too good at this as I dont know how to arrive at the Intrinsic Value).

2) Second Stage of the rally would be driven by earnings. I think we have already pass Stage One.

When would Stage Two start? And what do you do in between stages ?

After the AFC, Stage One started and went on for 1.5 years. Then it sputtered and the market lost 50% of it's rally over 3 years, until Stage Two..

Would this time be different ?

[winston]

TOL:-

To survive, one really needs to be skeptical. If you have believed those analysts that were pushing S Chips, u would been bankrupt by now.

So how does one learn to have a small healthy dose of skepticism ? Other than experience, how does one have some skepticism?

Questioning Assumptions & questioning Statistics would be the first step.

In an Analyst Report, always see whether the assumptions are reasonable or not. Growth rates of -30%, +30% and + 45% are normally not reasonable.

Someone once said that there's lies and there are statistics. If someone give u a 5 year statistics. Ask why? Also ask why only 5 years? Where's the 10 years ?

Ronald Reagan once said "Trust but Verify". Always try to verify statistics from other sources. If someone says he's going to spend 100t , verify that info from other sources. If someone says that they will be growing at a certain %, check and see whether it's reasonable. Are their peers growing at the same rate?

[Poles]

and why trust Reagan??

[winston]

I don't really trust anybody. There's always personal interest..

As for Reagan, he was once a commoner, so I would think that had the interest of the people at heart.

Too many people in power nowadays were born with a silver spoon. So they dont understand what's happening on the ground. They grew up with servants and then bodyguards. They go to Private Schools. When they graduate, a plum job is waiting for them. They don't have to really work for their car or mortgage.

This is happening in small countries and bigger ones. Do you think these Princelings know what's going on around the place ? Do they how bad crime is ? Do they know how difficult it is to get a cab ? Or to start a business or to get a loan. ?

So although I dont know Reagan personally, his humble background did score some points with me ..

[winston]

TOL:-

The people that have made money in this rally since March 2009 did the following:-
1) they were long the market
2) they were buying on dips
3) they bought early into shares that have dropped a lot

Can the above continue ? If not, why not ? Despite the skepticism, the bulls have been right for the past 10 weeks. There's also a lot of money on the sidelines. During the AFC, the "V" shapre recovery lasted for 1.5 years and we are only 10 weeks into this rally. This rally was also powered by short-covering so there may not be much profit-taking, to trigger any correction.

First Stage was the buying of "cheap" assets. Stage Two would be earnings driven. I think we are in between stages now.

At this point in time, the Bulls have the upper hand so we should respect them and not be shorting the market. Until and unless a strong catalyst emerge that would change the momentum in the market, it's safer to be in Cash, some Long Term Holdings or be a Short Term Trader on the Long side.

Not a Buy or Sell Recommendation. The above is to help me crystallize my thinking.

[winston]

TOL:-

Maybe it's a Trading Market now. Look at HK, it drops 500 yesterday and is up 300 now. No reason for the drop yesterday and no reason for the rise today.

There's no strong reason for it to go down while it has gone up alot already.

Maybe it's time to short when the market get's too excited and it's time to buy when it dips ...

[kennynah]

i dont like what i see....

so, i am out of market

[winston]

Heard this one today:-

How does one get alot of "face" ?

One way is to put in a very expensive bid for a big institution name. The world will then remember you...

Thereafter, you dont really have to go ahead with the bid. Just blame the regulators for not approving the deal...

[kennynah]

just like going to a classy ktv.... bid for a great looking girl.... pay her whatever you can afford and above market rate.... for the "face" in front of a major client.... doesnt matter that you have nothing to do with her...

this materialistic world we live in is like dat....

very mercenary....