Monday, December 29, 2008
Stocks are marketed to create buying and selling interest
Being a retailer, I handle large amount of different kinds of stocks. Due to my scientific education, I know some products do not work, but sells like hotcakes due to marketing. Stocks are just like that. Stocks prices of some company hardly move but report strong fundamentals year in and year out, while stocks prices of cyclical companies rises and falls like the tide, showing gains and loses multiple times its NTA value over short period of time. Why? Because, cyclical stocks frequently hog the headlines. Changes are what professional traders want, because fast changes create oppurtunities to profit fast.
Wednesday, December 17, 2008
Calling Bottom on the KLCI
Has klse bottomed? I should think so. Most people at this time still fear that worse is coming.
As one saying goes, "It will get worse before it gets worse." But I think otherwise. Here are some clues.
1) Indexes all across Asia(take a look at the Star paper) have been going sideways and now beginning to climb. The bottom was around late October 2008 when there was one day, every piece of business news was,"the sky is falling down!!". Support has since been running along that level.
2) The estimates for the best time to get into the market has been brought closer and closer by different analysts. Some say year 2010. Some then say end of 2009. Then some say after CNY. 2009 CNY? That's like about a month from now. And ppl are predicting it will crash further b4 climbing? Wat if no big scary news comes out? Then wat? It would be too late. Ppl says the stock market leads the economy by 6 months. Maybe it is not that precise...but it is to be sure "anticipatory". By the time you wait for the robins to come, spring is over.
3) I have been watching many of the top largest companies in klci. All of which charts are moving sideways or slowly ascending.
4) This round been sited a worldwide problem. But in reality it is not. It is mainly caused by the states and European countries. How badly was the west affected when the asian currency crisis hit us during 1997? For sure, due to the massive consumption capacity of the states, asian countries will be affected but we don't have the same credit problem as they do(reiterated many times by the government). In Malaysia, we have a unique system. The Chinese in general are a frugal lot with relative high savings, this character saves them from getting themselves into deep credit trouble. The Malays in general do spend more, we have a consumer base that continues to keep the economy chugging along. What a beautiful balance.
5) The recent release of employment data did not affect the Dows. Employment data is one of the key indicators that will affect the market. Dows practically ignored it. This shows the market has already factored in the expected bad news.
6) Warren Buffett, the world's greatest investor has already begun his purchase of American stocks way ahead of time.
7) Governments all over the world are quick to act this time round. From bailouts, epf cuts to fed rate cuts to also zero. Unlike previous meltdowns where the governments let the carnage run its course before deciding to act. Quicker action will result in quicker recovery.
8) Lastly, what sparked this crisis? Subprime, high credit...then came oil speculation which raised everything up causing precarious borrowers to start defaulting. Well, oil has now dropped as fast as it has risen. Logic tells u that shouldn't the borrowers be able to cope better now? Except that because of this crisis... fear has caused a chain reaction which causes everyone to pull back and spend less which in turn causes a downward spiral of demand for products of all sorts which causes manufacturers to cut back on production and to start chopping heads. But oil is low now, back to early 2004 prices. We have effectively gone back 4 years in time for an all important commodity price that influences the price of almost everything. The lower it goes, the better off everyone is. Companies should start getting better margins again.
It's a matter of logic really. And don't forget there are always invested groups, with tons of cash, that try to beat down the market to as low as possible so that they can buy up more of everything and obtain a higher profit margin when they finally decide to sell off during a bull.
Hence, bad news will continue to roll out to try and spook the weak holders. Does the market always tell the truth?
Take a look at what Tom Williams, retired syndicate trader has to say...
http://www.youtube.com/watch?v=6jwEwlZnSFY
PS : Beforehand calls
Bought 2 lots ioicorp at 3.22 yesterday
As one saying goes, "It will get worse before it gets worse." But I think otherwise. Here are some clues.
1) Indexes all across Asia(take a look at the Star paper) have been going sideways and now beginning to climb. The bottom was around late October 2008 when there was one day, every piece of business news was,"the sky is falling down!!". Support has since been running along that level.
2) The estimates for the best time to get into the market has been brought closer and closer by different analysts. Some say year 2010. Some then say end of 2009. Then some say after CNY. 2009 CNY? That's like about a month from now. And ppl are predicting it will crash further b4 climbing? Wat if no big scary news comes out? Then wat? It would be too late. Ppl says the stock market leads the economy by 6 months. Maybe it is not that precise...but it is to be sure "anticipatory". By the time you wait for the robins to come, spring is over.
3) I have been watching many of the top largest companies in klci. All of which charts are moving sideways or slowly ascending.
4) This round been sited a worldwide problem. But in reality it is not. It is mainly caused by the states and European countries. How badly was the west affected when the asian currency crisis hit us during 1997? For sure, due to the massive consumption capacity of the states, asian countries will be affected but we don't have the same credit problem as they do(reiterated many times by the government). In Malaysia, we have a unique system. The Chinese in general are a frugal lot with relative high savings, this character saves them from getting themselves into deep credit trouble. The Malays in general do spend more, we have a consumer base that continues to keep the economy chugging along. What a beautiful balance.
5) The recent release of employment data did not affect the Dows. Employment data is one of the key indicators that will affect the market. Dows practically ignored it. This shows the market has already factored in the expected bad news.
6) Warren Buffett, the world's greatest investor has already begun his purchase of American stocks way ahead of time.
7) Governments all over the world are quick to act this time round. From bailouts, epf cuts to fed rate cuts to also zero. Unlike previous meltdowns where the governments let the carnage run its course before deciding to act. Quicker action will result in quicker recovery.
8) Lastly, what sparked this crisis? Subprime, high credit...then came oil speculation which raised everything up causing precarious borrowers to start defaulting. Well, oil has now dropped as fast as it has risen. Logic tells u that shouldn't the borrowers be able to cope better now? Except that because of this crisis... fear has caused a chain reaction which causes everyone to pull back and spend less which in turn causes a downward spiral of demand for products of all sorts which causes manufacturers to cut back on production and to start chopping heads. But oil is low now, back to early 2004 prices. We have effectively gone back 4 years in time for an all important commodity price that influences the price of almost everything. The lower it goes, the better off everyone is. Companies should start getting better margins again.
http://en.wikipedia.org/wiki/Price_of_petroleum
"Oil prices have witnessed a significant fall since July 2008, and have been trading around 40$ a barrel on December 6, 2008"
It's a matter of logic really. And don't forget there are always invested groups, with tons of cash, that try to beat down the market to as low as possible so that they can buy up more of everything and obtain a higher profit margin when they finally decide to sell off during a bull.
Hence, bad news will continue to roll out to try and spook the weak holders. Does the market always tell the truth?
Take a look at what Tom Williams, retired syndicate trader has to say...
http://www.youtube.com/watch?v=6jwEwlZnSFY
PS : Beforehand calls
Bought 2 lots ioicorp at 3.22 yesterday
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