Nov-25 We had the rebound

I hope you have enjoyed the rebound. This rebound will sustain 1-2 days more before it runs out of steam. Let's see.

By the way, this bottom should be wide. Accumulating strategy should be averaging down/up your stock using units but not amount of money. For example, you bought stock A at 20, 10, 5 dollars, each time you bought 100 shares, but not 2000 dollars each time. Buying same number of units can reduce your risk significantly. Just a tip.

Nov-23 A Rebound for Financial Sector

Sorry for not posting so long due to several project constraints in my company, plus, there is nothing worth commenting given this sick planet: everything's going down.

Today I have chance to quickly go through the market and find the financial sector is oversold without rebound again and Citibank is facing government rescue. I guess there is a quick rebound out there.

Oct-10 Time to buy

This is the only thing I want to say. Please understand, this signal is TA-based. Major indexes have completed three major wave down therefore are heading to a decent rebound with target 11000+. Also, there is a very strong Fib. resistance point at current level. Good luck.

Sept-30 Gold vs. Oil

As all you can see today, gold does NOT necessarily bound to oil.

I think Gold could hit 1000 within this year.

Sept-28 Recap commodities: Gold Coal Oil and others

People asked me whether I am still bullish on coal and other resource stocks, so I would like to recap this a little bit.

We know the market is basically a cyclic business: Once something was quite bullish in the near past, it may turn to bearish in the future. At least this turn over has higher probability. Coal stocks have amazing performance, which is NOT normal at all, so to me, it is unlikely to have another spike in the short term. The same thing holds for fertilizers. If you check the historical agriculture price, e.g., corn, there are spikes every decade, it's quite a long period due to the nature of agri-business. Big money does NOT likely to flow into one particular product in short term as short of common interest.

Let me tell you a story how the price is kicked up dramatically in short-term. Chiefs in Wall Street have lunch with each other in the steak house, talking about: Hey, you know there is some shortage of Coal in South Africa and Australia, don't you? I guess the price may go up a lot... bla bla..., the information has been exchanged all the time so that big money and smart money flow into the market. We, more precisely, tarega and I, saw this change when Coal stocks outperform markets for two weeks with huge volume, therefore we sent out the signal. Although Oil spiked a lot but we didn't cover many oil stocks, as I think coal stocks are going to outperform due to smaller caps and limited resources. The fact proved this.

However, these are past. In the foreseeable future, I personally only bullish on Gold and light metals. We all know why Gold is valuable for past thousands of years and this won't be changed. If you want to say away from stocks, you can consider an ETF GLD and an ETN DGP, the second one is a note published by Deutsche Bank which tracks 2x gold price. For light metals, I like them for long term as demands from China. In the past, China can provide sufficient light metals such as Aluminum, but this may change in the next two years. The high speed train and commercial airplane business will significantly increase the demand of light metals so China will become an importer instead of exporter of Aluminum soon. Everything needed by China is expensive, think about iron ore. Given the low price of Aluminum stocks, it is worthwhile to add them to your watch list. 

Remember, every bull market starts with low commodity price and we are close to this point. My strategy will be to accumulate quarterly in the next 12-18 months can wait bull market.

Sept-22 An account in Morgan Stanley or Goldman Sachs

You will probably have an personal banking account provided by Morgan Stanley or Goldman Sachs, so that they can use your cash as the backbone of their gambling game. Sounds funny but this gonna be the reality in the near future.

From now on, there will be NO pure investment banks on this planet. The world did experiments on investment banks for nearly a century and then this crisis proves this kind of bank cannot stand alone.

To be IBs don't not have any assets except for their office building and staff. The numbers and their holdings are barely virtual. They real money they can touch is mainly used to buy lunch. Finally, they find this may not work so from now on they want money from customers.

How this affect the stock price for GS and MS? No doubt, the US government won't let them down this time, but they won't be the next hot spot of market. For example, when you find the food price begins to surge, you may fine how smart Buffet and Coca Cola are, as they bought enough shares in the food and beverage market.

Sept-19 Buy? Sell? Hold?

People may quite anxious on the rising financial stocks and ask me whether to chase in.

I would like to ask you to pay attention to those who are heavily damped but still low on PE and high on dividend.

Check my previous posts and try to find out some stocks you like.

Buy on the opening is not a good idea, and it's not a good idea to buy today as well. I think this rally may have a big correction soon, when could be a chance.

Although it could be the time for the US government to solve the problem by entirely take the future bank loss into US national debt, the stock market won't turn to bullish immediately.

To my experience, mid-term bottom has been passed. There could be another final low in the first half next year to remove all confident investors, and then another slow bull market may show its head.

Sept-11 The forseeable future

The data show during the election year, the final two months would be positive in average. It does not mean this year will be positive but it clear shows in the history, green color has better chance to appear.

If the major indices have filled the gaps, I there is a good chance for a end-of-year rally for November of December. Therefore the strategy is very clear: Accumulating stocks in lows of September and October and hold them until 2009. In the bear market, it is always very decent rebound that may take the DOW up more than 1000 points, thus people say making money on the long side would be much easier for traders in bear market than bull market. Steady bull market only gives some space for people play with sector rotation, while the best strategy would be buy-and-hold. Bear market with high volatility is heaven of traders, just like a Chinese idiom: Hero comes from era of chaos.

Sept-04 Recap strategies

In the past year, many people walked away from stock market, and most of them lost money. Usually, here is a choice, either you cut your loss, maybe 50%, say bye to stocks and never come back, in this case, you are winner. The other choice is that you stay and wait for your stock to come back and you will be winner as well. The losers only belong to those who are buying in bull market and selling in bear market time and time again.

I mentioned the my strategy on airliners when OIL hit 120 several months ago. After that the OIL hit 140 and the bubble is broken up. Taking NWA for example, my strategy made me bought this stock 4 times, 100 shares a time at 15.x, 9.x, 7.x and 5.x respectively from Jan to July this year, the average cost on my account is 9.72 for 400 shares so it's making money. My UAUA average performance is worse than NWA but above water anyway. However, ZNH is even worse and I am losing money on it - this indicates you need to diversify your investment within individual sectors.

To have stocks, dollar averaging is better than lump sum purchase, the same thing holds now for H-shares listed in US market as ADRs. After commodity stocks such as SNP PTR ACH in trouble, the telecoms were also bashed in these days, and people said H shares are over, ADRs are over like what they said to airliners half year ago. However, I am buying and asking friend to buy Hong Kong funds, bank notes, and gradually accumulating nice blue chips such as COSCO, China Mobile, which are bashed in recent days. I also own Anshan Steel, Chalco, Mengniu Diary, Alibaba and Bank of China. Let's see what will happen 6-12 month later. 

Aug-30 High Yield Picks

PCU
DSX
PFE/LLY

I think all the stocks have good long term potential, while you can have good return on the dividend.

Aug-30 Time to catch a rebound

Now we have a possibility to head to 12100-12200 area to complete this rebound from previous low. For reasons below:

1. No major bad news ahead in short term.
2. Low forward PE for major stocks except banks.
3. Low commodity price.

After this rebound, the picture is still vague and I tend to below another test to low is possible. As the consumption of energy and gold will gradually rise in October, we should have higher commodity price and inflation. Dollar may drop again.

Aug-26 Stock may head to the previous low

I doubt if previous low could hold.

I tend to believe there will be another deep diving before the market gradually walking out of this credit trouble. Most bank will turn to profitable in 2009, this may imply the first quarter of 2009 will be still gloomy while we will have better second half of 2009. The stock market may show signs of recovery around beginning next year.

The commodity price may rebound a bit and dive again to empty the space for next slow bull market.

Gradually accumulating Asian ETFs is a good strategy - I am doing this now and will continue to buy Hong Kong and China funds until mid-2009.

As I mentioned months ago, the clean energy fund looks really nice. I hope people can hold it.

Aug-22 Time to load Gold?

Gold should have its time after September due to annual cyclic, while the recent price drop did provide sufficient space for the price to rise. As we can see easily that the US housing market is not going to stable until mid next year, therefore the economic won't be better until later next year.

There is a lot of signs that the housing market in Asia is going to correction as well. Investors in Shanghai and Singapore are selling their apartments to lock profits but they find it quite difficult to sell it high. Singapore might be better but most people think the housing price will drop in the next 1-2 years. A real estate guru here also suggested me to buy apartments after 1-2 years when the price hit the bottom.

Currently, holding Gold will be safest way to invest money to my opinion. Other commodities are also good to have.

Aug-15 Fund Investment

Just let you know that I just put some money into my long term investment account and bought an interesting fund:

• Shenton Twin City Fund

This is a Singaporean fund that invests in two cities, Singapore and Hong Hong. If you can't buy this fund, no problem. I think Hong Kong fund also works. I really like to buy low, when everything is low, when people keeping selling.

Aug-06 Recap market

Let me quickly recall my questions mentioned in one of recent emails: whether this market is going down and commodities are still rising, or the other way around.

 

For recent market, we can easily find out the answer is commodity faces a big correction. But please understand this is not a bear market for commodities. The only way to save the economic is to have lower commodity price with low rate. I see it may happen very soon.

 

The market may try several times on starting another bull market, therefore many chances will be seen in the future. Normally in bull market, commodity price will also rise, just like what we have seen from 2002-2007.

 

In September, commodity may rebound significantly, such as gold and food, as we still face global food shortage and price hike... 

 

Current strategy could be put some emerging market fund into your IRA for long term purpose. For short term, please consider stocks like NOK, NVO, CN.

 

 

July-26 Commodity

I think it is pretty much necessary to write something about commodities at this moment. It has been always a funny thing that people ask on the mailing list how they can do with their stocks under water, but no people ask me whether they should sell stocks when they are high, such as when RIO hit $45.

Stock market is always a cyclic business which means a single stocks never goes up in a mono tune without major correction. This principle also holds on the downside. Commodities have this correction led by OIL, now we have two different situations.

• The first one is, this financial crisis is completely over and the housing price is steady, Then the commodity price may go even a bit lower, then the another bull market begins.
• The second one is: we are heading more financial bail outs and more troubles on mortgate with housing price going down. Then the dollar may still go down, commodities will go up.

Please think about and look around by yourself, which one would be more likely to happen?

July-23 Is Airliners resistable?

We have seen the airliners have been boosted to rebound, then our question will be whether the rebound is a dead cat bounce, or still resistable?

 

The most important thing is still OIL price, and most people still think we are in the correction mode but not sell-off mode for OIL. I don't think it's smart to buy after one day gain of ~50% on airliner stocks.

 

However, what we can do is to bet a short-term rebound on Chinese airliners as well - we don't lost much if they don't.

July-19 Short term play - Chinese metal stocks

By inspecting Chinese metal sector, you will find they are at the level of long-term oversold and mid-term consolidation around low level, thus these stocks are heading for short-term rebound.

 

Taking 601600 for example, this stock is trading at 14.2 RMB, and this stock is heading to 17-18 RMB area in the short term.

 

Other stocks to watch, for A share market:

601600, 600497, 600489, 601899, 600362

 

for H share market:

0358, 2600, 2626, 1208

 

Please note: I am more confident on A share metal stocks.

 

July-17 The bottom

It's not possible to know the bottom until quarters later, and I don't think bottom fishing is such an important thing.

If you miss the airliners today, don't worry, there will be many other opportunities ahead.

GLD retreated a bit as we expected, and I think GLD could be a good hedging option if you want to go long for mid term.

I hope you pay attention to opportunities on A share and H share tonight.

July-15 Gold will be strong

Technically, the gold chart is very bullish, and I believe this uptrend will create a new high for GLD. It's no doubt to own good Gold stocks at this moment.

I think gold price may go to 1200 USD p/o this round and sending the GLD to 117 USD.

Buy on any pull back. Also consider October options play for ABX, GG and GLD.

Other metals, as I talked about Aluminum, it's better to play options on AA rather than ACH, due to size of spread.

July Stupid Mistake on Airliners

I have to apologize once again on Airliners. This is one of my biggest mistakes in 2008. I write this email is to remind you the following facts:

1. Are all airliners going to bailout at the end? Of course not, so we need to pick up ones that will survive, as they will be probably the best gainers in the following years.
2. I think you can easily name big airliners in US. Please choose 2-3 ones that you think might have better chance to survive, track them. This world can not live without big airliners, think about this. Also, for example, count the number of air planes owned by company like UAUA and NWA, and calculate there value. You will find they probably worth more than the stock price.
   
3. I won't be that stupid to suggest you to buy airliners NOW, however, watch them.
   

Good luck.

July-11 Time to talk about Aluminum stocks

I was 100% correct on the futures price of Aluminum, which just hit the all time high at LME. However, I was wrong about the stock price of Aluminum stocks, including ACH. We know that the stock price is determined by the company performance. The major reason of the downtrend of ACH is the ER of this company - profit halved. However, we know this problem was due to the low metal price in the first half and the snow storm in China, as well as the market environment. I think it is more important to consider the strategy from now on.

We see higher Aluminum price again and we also want to benefit from that. Major institutes dumped the stocks, fine, as we can predict the metal price will go up, there is a good opportunity to collect cheap stocks - the company performance will show up in the 2nd half and then it would be too late to catch up.

Do remember, by 2010, China will be the pure importer of Aluminum. It's time to strategically long Aluminum stocks.

July 9 Daily update

Given the condition that financials waked up. The market is due for rebound very soon.

Buy good stocks to hold, now it's time. Chinese stocks are good ones to have. Do remember this country still has 10% GDP increase in the first half and most major banks doubled profits in the first half compare to 2007. I recommend ICBC HK:1398 and most other Chinese bluechips.

A share and H share are targeting decent rebound in mid-term.

ETFs for clean energy and technologies such as PZD and PBW are worthwhile to watch.

Please pay attention to the market. This area is quite likely to be the big bottom, if a decent rebound is established.

July 8 Market comment

Vietnam rebounded 20% in past weeks. I believe A share will also do this.

Crisis is always a reason to stay on the short side, while it is also the best opportunity to start long position.

Long CAF, China bluechips and ETFs such as 150001.

In US, I find chocolate producers are good ones to have.

Jun-27 Market Comments

Some people are wrong this time, including me. I thought 12000 could be the bottom and the market should go up. Given the rate steady decision, I think the market should also be able to recover a bit. But I was wrong on that.

However, I was correct on buying zone for stocks like RIO (33-34) and AAPL (155-165), I think it is time to load good stocks again. Split your position into three steps, buy at any point below current level, and 11000, and 10700, if DOW reaches that point, which is not likely.

For risky-free players, I suggest to buy maybe three to five weeks later, you need to both have commodity, tech, airline, and financial stocks this time for your long term positions. Including ACH and ZNH, they may keep silent for years but if you catch one wave, then it's enough.

For A shares and Hong Kong market, I recommend Chinese banks, ICBC is now my recommendation both on A and H. Steel makers are good ones to have as well. Finally, I think Singapore Airline is good to have as well. I plan to add it to my retirement account weeks later.

Jun-20 Comments on recent market

I am on the bullish side, as both TA and FA do not show a crash is coming around. For the evidence that agricultural stocks are due for correction, the market should be bullish in the next weeks. I would like to draw your attention with sectors and stocks below:

• Tech. Hot stocks such as AAPL, RIMM, ATVI are good ones to catch the tech wave. Buy on dips. MSFT, ADBE, CSCO, AMD are good ones for longer term investment.
• Please pay attention small-cap in A share stocks starting with 002, screen them and pick ones with volume and price increase, such as 002156. Once the market ends the downtrend, these stocks may rise.
• Emerging markets, such as Russian and Brazil are still good to have as they are rich in resouce and good for long term.

To reply stocks like LPL, if you think this stock is in good fundamental, feel free to average down now or later. Stock market is always a cyclic business, what you need to do is to diversify your portfolio with 3-5 different sectors and sell on the sudden rise of any of them.

By the way, I decided to go to Singapore, so in the future, I think I can track the morning market and give summary during the night.

Jun-16 Market updates

Given the market sentiment and recent environment. The market should turn to bullish soon.

It is possible to touch 12000 but I guess there won't be new lows. Today I would like to talk more on AAPL and its iPhone 3G.

I believe major stocks such as AAPL will still lead the sector, as I am optimistic on its 3G phone. Like iPod, the first release was not very impressive as mostly Mac fans were buying. However, with release of 3G iPhone, I think many actual users will buy it, including many young business man born after 70s. It provides GPS with Google map, therefore I think it is more powerful and informative than other GPS providers. Other functionalities of this mobile device are also more fancy and user-friendly compare its rivals. One of the most important thing: it is cheaper than previous iPhone. 200 USD will bring this mobile phone to a normal consumer electronics rather than a fancy luxury goods.

I think AAPL is a buy in the area of 155-165 with one year scope.

Jun-14 Current Opportunities

There are many opportunities out there so I think I need to write something, although I am still not fully settled yet.

 

First, if everyone sees there is a crisis in Vietnam, I see a great chance for long term investment entries. Just search Vietnam funds, than you will find many. Just look back the financial crisis during 90s in Asia and how the stock goes in the next couple of years. People always are fearful when crisis comes, while you can fine a lot of stocks that are ridiculously cheap.

 

Second, metal mining is next wave of inflation after crude oil. I personally think the oil bubble is going to explode quite soon. I strongly doubt if crude oil can go beyond 150. Just check airline stocks, do you really believe so many big airliners are going to bankrupt? I think it is good time to buy metal stocks, such as AA FCX RIO CLF and others.

 

Russian stocks are still good buy here.

 

The overall market in a second round of testing bottom, let's see if 12000 holds. If so, we should never see new lows. Another 1-2 days while candlestick can prove that.

Jun-8 Crisis is always good for bargain hunters

Sorry for leaving a week again, as I did not have regular connection in the past week. Given the sharp loss on Friday, the market gives me an impression for another round of sell-off, which indicates my prediction on recent bullish was completely wrong. I am not surprised as it can easily be a mistake once I cannot track the market from time to time. I think now I should really focus on possible opportunities in recent market and try to answer the questions on mailing list in the past week.

First, if there is big sell-off again then it is good time to buy nice stocks again, just like the previous sell-off. We have already seen the financial crisis in Vietnam and I see long-term big opportunity right there. Please remember the Southeast Asian financial crisis in 90s, when the blue chips are head cutted, they recovered in next several years. I think it is now the time to closely inspect Vietnam stock market and wait for a stablization in the low positions and buy some funds. I expect the 3rd quarter this year will be a good entry time.

Do not short financial stocks, this downturn is likely to be the last for this sector, in my opinion. Finally, if you want me to mentioned three sectors to long during sell-off, that would be Russian, Russian and Russian.

May-29 Up or Down?

I believe on FA side, the stock market should not go down significantly. GDP tells us something but not everything. But at least US is growing at 0.9%, not in a recession anyway. My theory tells me the DOW should be staying above 13000 to price in the economy without recession. On the housing price, there is a recent hot topic in Asian magazines for wealthy people, both eastern and western Asian, regarding bottom fishing the US housing market. Although I am not really sure where will be the bottom of the housing price in US, I guess it won't be too far away, maybe around late this year if it comes earlier.

I am not able to cover the market everyday in next 2 months until August or even later, as I need to settle down my personal stuff. I think I will update when I can, maybe twice a week or a bit more. I think in general, a steady long position for long term buy and hold is highly recommended. I still expect you can earn more with good picks in your long term positions compare to bonds or savings.

May-28 Back for a moment

Just got off the plane and had the dinner home, however, I will travel again with limited internet until 7th June.

Let me first breifly recap the market of previous 6 tradings days I missed. Apparently that was a major correction after break the resistent around 12950 area. My stop loss call on 12950 may shed your loss a little bit. Given most tech and commodity stocks have been flying for a while, this round of correction was not sudden, plus the continued weakness from finance sector. High oil price is an execuse for correction, as always.

For the next weeks, I believe the market will again turn to finance. Dow components AIG and BAC have been dumped greatly and I guess there would be two possibilities in the near future. One will be a decent sell-off comes and leads DOW to 12000. This is very bad situation as most people, either on main street or wall street, don't want to see this. Another possibility would be the rebounce of financial stocks bring DOW back to 13000 area to test previous high and continue a bullish trend. Of course people would like more to see this but we still need to inspect several days.

Trading strategy would be quite conservative. A combination of tech and commodity with your half position in long is OK for now. Be careful if you have short position on financial stocks. Retailers have touched the bottom as I expected months ago. I assume your hedging position on gold longs are quite profitable now.

May-19 Time for Greater China Area

With CEO and YZC are not walking to their all time high, Hong Kong index continue to be slightly more outperformed than US market. In the same time, Taiwan index soared more than 1% today to welcome new area leader who will take over Taiwan for next couple of years. Given the polican instability of Taiwan, the Taiwanese stocks are usually low on PE, I believe this will change in next couple of years. Taiwan may establish more than 6% anualized GDP growth again in the near future and most people are optimitics on the future. I have already recommend SPIL, and you can always think about EWT and TSM as Taiwan plays.

A share is in the consolidation mode and I think following the politics is quite essential to play A share stocks. Buy steels, basic materials, banks and brokers but stay away from real estates.

From tomorrow to 28th, I am not be able to update my comments. Maybe there will be 1-2 comments once I have internet, but I am skeptical about my correctness if I cannot track the market in real time. From 30th May - 7th June I'll be traveling a lot again. Fortunately, I don't see much risk out there if you follow my picks and suggestions. Good luck!

May-18 Tips on Commodity

As I have indicated to watch commodity sector for a while and now I come back on this sector as gold have found its double bottom, as well as my prediction on M head of crude oil failed. To diversify my pick list, you may find ABX AUY and NXG are always on my pick list, for this wave of Gold, I see the possibility to test previous high above 1000 if gold successfully holds above 890. If you have entered on my previous short notice around 850 and 860, then please hold tight, if you haven't steppted into Gold stocks, consider to buy around 900 with stop loss 890. You can either buy stocks or gold ETF, but please use gold price as stop loss but not the stock/ETF price.

Other precious metals should also be your target. Miners will continue to be strong but most good miners are in their all time high therefore buy on next pull back will be reasonable. For exaple, next good entry price for RIO would be around 36-38. If you have noticed, I was among the very few ones that recommend miners on BBS in the previous several months. I am 100% sure that everyone followed my suggestion on buying and holding RIO (also MTL, FCX and PCU) is quite profitable.

May-17 Preview of next weeks with new picks [VIP] and [SPIL]

I'll be away from 20-28th to Greece therefore I would like to draw your attention in following sectors.

• Asian sector, including Korean, Hong Kong and Shanghai
• Retailers, I believe the worst time for retailers has been past

The general market is still in the uptrend. The current target for Nasdaq is 2600, DOW 13200. If DOW holds above 13200, obviously 13750 will be our next target.

Another Russian play I would add to my pick list is VIP. This guy has been underperformed for a while as it spiked a lot during 2007. I think there is nothing changed for its FA given Russian has just begun to explode. To me VIP has already touched the bottom and unlike its peers such as MTL and WBD on my list with great success in past month, it has good potential to rise to new high.

I mentioned TSM and EWT weeks before but didn't put my pick list, but anyway it's still not too late to add SPIL to my pick list. I believe there will be another huge wave for Taiwanese stocks given the speculation on establishment of sweeter policies with mainland. SPIL is a good company anyway, as in these tough times for semiconductor industry, it does not directly design products but provides testing and packaging service for them, which is always required in the semi-industry. Besides, semiconductors has already bottomed out, therefore I am quite optimistic on its future performance.

May-16 Off topic: How to read the rating from institutes

We have been seeing a lot those upgrades and downgrades from institutes and many people are somehow lost as statistics indicate that 70% of the price projection from these analyzing report never meet. Today as there is nothing important to comment on the market (data and trend is still bullish, given the shake the day before yesterday's Nasdaq and the spike yesterday to establish a bullish pattern), I briefly talk about my impression on analyzing reports from different institutes:

• Reliable in long term scope: Merill Lynch, Bank of America, Deutsche Bank, S&P, Morgan Stanley
• Publish report for their own purpose (pump, dump or accumulation): Goldman Sachs, Credit Suisse, UBS, Citi, Lehman Brother
• Totally unreliable: Piper Jaffray, Bear Sterns

May-15 Recent strategy

First of all, many new people coming to this group and welcome! Glad to see people are mostly recommended by friends who are old registers in this mailing list. This implies many people think my emails are useful.

Today a friend discuss with me regarding the scope of trading. Basically, the trade-off between long term capital return, or short term swing profits. For most people, I recommend the long term scope as you may not have time to stick on the market and can not find a good entry or exit price for a certain stock. In many case, people find they can make more money if they can hold long, I believe many people here have similar experience.

Regarding the relationship between the broad market and stock on your hand, I think it is always more important to pick right sectors and stocks than predict the market direction. This has been proved to be true in the past several months when I recommend fertilizers, gold and other commodity stocks. Also, you may also find how fabulous it was to buy CF at 70 and hold until now.

What I want to say is quite simple, for my picks, I think for most people, buy and hold is a good strategy in the current market, if there is a correction but not a reversal to another new low, I would rather recommend to accumulate during the lows. Such as 12700 I said for previous correction.

Anyway, CHU CN and ZNH is still at good price to me, as well as many India stocks, Korean stocks, such as PKX and LPL are both in good shape. I like Asian plays better than anywhere else for recent market.

May-14 Shipping stocks

If you didn't catch this wave on shipping stocks in US, consider 2866 1919 0368 1138 in Hong Kong and also their A shares 601866 601919 and 600026. With BDI near new high, I think Chinese shipping stocks will catch up very soon.

May-14 Next Target

Simple and straightforward comments: if you get in around low 127xx, you are happy now. If you follow some people to play short, I am sorry about that.

Next target would be previous high near 13200, if DOW could hit 13200 and then holds above it, we see 13400 area as next strong resistance in 135xx area.

Still, you have chance in Asian markets at this moment. Forget about Tech now, you don't have much mean left when RIMM hits all time high and AAPL on its way. Normally, stocks are cyclic business and every dog has its day. Now I think it's better to check good stocks with sound FA. True, you may easily earn 30% on a stock but you may end up with 50% head cut - I have been heard similar stories innumerous times since previous downturn.

I'll try to find some good stocks to add to my pick list in next few days.

May-12 Market Update

Sorry for a bit late update today due to several personal issue.

If you followed my suggestion of buying around 12700 supporting area, your position should be profitable now. Next step is quite important: Let's see if DOW could close and hold above 13060, which determines the near term direction. A breakout will lead DOW to test 13300-13400 area, but an M head will bring DOW back to 12500 or even lower. Please track closely if you play swing.

Let's eye on the impact of the earthquake in China, while I hope it won't effect much on stocks outside Sichuan and Chongqing. I am still long on Asian sector. Regarding individual stocks, I am sorry I can't reply all of your emails, here I paste ones at least act in normal manners (NOT absolutely manupilated) with good fundamentals in my watch list. Please note, I am not taking this list into my pick list due to extreme volitality.

AOB COGO CTRP EDU GA JRJC PWRD SNDA SINA SOHU WX

With nice return, please also be prepared to lost 2/3 or even more of your investment if you buy these stocks.

May-9 Need to be careful

Several days ago I predicted the correction to 12700 area and now it's almost here due to AIG earning report. My strategy is quite simple:

• Load stocks you like from 12700-12600
• I see a strong support on 12550-12650
  
• Cut your loss when DOW dips below 12500

This strategy allows you load at downside risk of 1.5% on index and around 5% on individual stocks. If the stocks are hit hard this time, I guess government may again try to save the market.

May-8 Chinese sector is still a buy

First of all, I hope people here benefited from this rebound of gold from 850 to the current level of 882, I suggest you to closely track the gold future price and take some profits above 890. 900 will be a strong resistance and I'll simply using trailing stop on stocks and futures.

Come back to China A share, I believe this is not a simple rebound to 4000 and then game over. I would rather tend to bet on an uptrend back to 4700 area or even higher with help of Olympics and intensified infrastructure construction. I am not covering individual A-share stocks but I will reply individual question, if there is more than 10 people ask me individual A share stocks, I'll start A-share coverage.

Many people asked me about Chinese stocks trading at US, I am not going to cover them one by one, but in general, these stocks may spike once in next 3-4 months just like last year. During the next 3-4 months, I believe there will be a lot of shakes with more than -10% dump in several minutes. Please take these dumps as buying opportunities. In general, small Chinese stocks have this kind of pattern: Spike huge - pull back - spike and distribution - flat high level and distribution - dump and distribution - - rebound and distribution - dump and accumulation - flat and accumulation - shake and accumulation - spike huge and once again. It's highly risky to play with these stocks and you cannot really wait for another year when you 60% underwater. Bigger stocks like SOHU and CTRP may differ a bit: they act like a good A-share stock, higher high and higher low with high BETA - if you are not able to play swing, then just B&H.

During this uptrend of Chinese economic, I won't be surprised to see one spike per year for Chinese stocks.

May-7 Asian weakness

To me, today's Asian weakness is a correction after recent rally. If you have already sold CAF, FXI, PTR and other Asian stock following my call to reduce long position several days ago, I think it might be a good time to load some position back. Correction might last several days longer so I would recommend to load them back.

A bullish sign from US market is DOW holding above 13000. You can stay aside if DOW is trading below 13000 today. I have noticed yesterday that small Chinese stocks in NYSE and Nasdaq might go flat for months and then spike like 2007, so in next 1-2 months, any big dump of these stocks could be buying opportunities. I will mention several good ones later but in principle I don't like these highly manipulated stocks at all because of siginificant risk involved.

May-6 Daily Market View

If DOW could hold 12700 area, then this small correction will over and I would expect buying zone would be 12650-12750 with stop loss 12500. Following sectors and stocks could be your targets:

• H-Share ADRs, CAF
  
• Indian ETFs
• Brazilian resource stocks
• Tech and transportation

For candidates for short and put as hedging purpose, consider bond insurers and financial stocks. In current market, any short position will be highly risky. Volatility will be quite limited.

May-05 A correction may come

Given several technical indicators such as CCI, MACD, BBands and other indicators such as VIX and Put/Call ratio, I bet on there will be a correction on recently market. This correction won't be very decent and my target is 12600-12700 level, around 300-400 decline from current level. This reflects my reduce call on DOW falling below 13000 again. Just now DOW is 12989 so I think if during this afternoon there is no evidence showing the market strength, you may reduce your long position in general.

However, individual stocks may vary from sector to sector, for example, commodity sector may rebound to steady back from previous decline.

May-2 13200 is here

I was told that I was a moron and crazy idealist when I said this rebound will actually go to 13200 around end of January. Now it's here. What should we do now? My strategies are different based on your positions.

• If you 100% long, on every 100 advance of DOW above 13000, reduce 10% of your position until 13500. Then use 13500 as your stop win point for the rest, otherwise, 13000 is your stop point.
  
• If you 50% long, one every 100 advance of DOW above 13200, reduce 10% of your position until 13500. Then use 13500 as your stop win point for the rest, otherwise, 13000 is your stop point.
• If you are empty, buy 30% of your position on Asian stocks and ETFs when you still can, use 5% stop loss if you have good entry price during weekly lows.

Please, do not consider to win on both sides, long and short, this might be too difficult for many people. Frankly speaking, I find it difficult to both long and short stocks, rather I will trade Forex or Gold instead to hedge my stock position. This is not recommend for most beginners.

BTW, I hope you enjoy the ride on ZNH, which surged 9% last night in Hong Kong.

May-1 Sentiment still bullish

I cannot say anything until today. The sentiment is still bullish as many big guys said the worst is over. However, I still think the economy is not that good in US, so I continue to bet on emerging markets.

In the next days, we see non farm payroll data coming. As DOW topped 13000 yesterday, I think it won't be the last time we see 13000 during this period. Next try of 13000 is critical and necessary. A fail on holding above 13000 will cause major correction to 12600 area. This is my personal opinion.

Currently, I think only Asian markets are safe.

Apr-30 Brazil ALL TIME HIGH!

I apologize as I can't help myself for not BSO this time about Brazilian sector. After S&P upgraded Brazil investment rating just about an hour ago, the equity market of this country surged to all time high. I am so exciting as there are so many stocks in my pick list are Brazilian stocks and I just recommended EWZ on MSN group 2 days ago, also, there have been numerous times of recommendation on this mailing list and blog as well. Just check the great names below: ARA, CPL, PBR, RIO, SID. I hope you've bought some Brazilian stocks in your portfolio, if not, no worry, any future dips will be good opportunities and I would expect correction is coming next week. :)

Apr-30 FOMC Strategy Today

I guess many of you are expect this message, but I cannot say anything until now.

There have been 100 points spike for DOW today, so now my strategy would be keeping 1/3-1/2 of your long position, or adding hedging position to you account because of reasons below:

• After FOMC, it is VERY possible to hit 13000, even 13100, then sell-off comes, or otherwise, it holds above 13000. If 13000 holds until 3:45, huge number of buyers will step into around the last 15 minutes, you can also be one of them. Hong Kong, Indian stocks can be your targets.
• It is also very possible to hit below 12800, so buy something to wait for an immediate rebound to sell it if you can do DT. If you see indices come back later, you can also buy back H-share ADRs after 3:45, otherwise, just let it be.
• 13600 is critical support for this uptrend, reduce another 1/4 if this is broken in next days.

To me, I still tend to be bullish in the next 1-2 months, while we need to be prepared for all circumstances. If you are comfortable with your current long position which is not heavy, just sit back and relax. Most time, do nothing is the best strategy.

Apr-30 Recession?

OK, we have been in "recession" for about two quarters, said by many Wall Street genius, however, main street morons successfully posted two quarters with GDP in positive territory. What a joke!

Please understand that GDP is not the only criteria to measure recession or not, in fact, it does not really matter to us. What we need to do is to pick up good stocks in next few months, and it's done. Such as, let's check, CAF is trading at 48 before market, up 33% when I called on 13th March and A share still looks strong. Many people asked me whether to jump in CAF now, I guess it will still rise in next trading day but will correct in the near future, wait for that dip and jump in.

Many people also asked me about agricultural stocks, I even consider to stop my coverage as I found there are too many people want to buy stocks in this sector so I think it might be the time to stay away. Let's wait for a few days to see what's going on.

Apr-29 New Pick [ZNH] with comments on oil and airliners

I would like to start my coverage on ZNH and put this stock into my pick list with price $32.25 for reasons below:

• Different from world airliners, Chinese ones can benefit from the exchange rate and controlled oil price in China.
• The oil price looks like will have a correction in the near future and lifts the whole airline sector.
• There will be a huge explosion on routes to China brought by Olympics.
  
• China local demand is quite high and is expected to continue.
• Low PE; high growth; oversold.
  

Stop loss is quite simple, recent low on around 29 with -10% stop limit, or the USD spikes big against RMB in next 2 months.

Apr-29 Following Master

Buffet has made his selection on a food processing company, and I think following the master is a simple but smart way to do personal investments. I thought food processing would be a good investment direction so I recommended WBD months ago and this stock is now in good shape. Today I would like to introduce ADM and CZZ as my new recommendations to extend my coverage in this sector. However, I am not going to put them into my pick list now as I need more time to inspect these stocks. It does not mean ADM and CZZ will underperform WBD. I think at least they could be put into your watch list for a closer view.

Apr-28 A New Week

It looks like the bullish sentiment continues to rate cut. The day after tomorrow will be a key day for short term market. Below is my analysis:

• If today and tomorrow have significant gains, I bet big money will dump stocks whatever the rate cut the desicion will be.
• If today and tomorrow go sideways or down a bit, I think it is still bullish.

To me, I expect this wave continues to end of May or early June, but I still need more evidence. In fact, we see the company earnings are not that bad, I hope the two oil giants can report good earnings to lift DOW. It is possible to see DOW13200 with NAZ 2500 within in May.

Apr-25 Back from shopping

I just came back from shopping and I see there is little people shopping on Friday. In outlet near Stuttgart, most consumers come from outside of Germany. I see less customer compare to previous years and more discounts. For example, the wallet I bought for my father in law has another 60% discount on previous price... :( In all, I really see the EU-US economy is in recession, at least much weaker than late 2006 and early 2007.

I don't want to tell people that we are in a bull market, please assume we are in a middle term rebound. A strategy for DOW going over 13000 is quite simple: reduce 20% of your position on each gain of 100 points on DOW, and cut most of your long position if DOW dips below 13000. Now it's time to gradually accumulate gold. Buy ABX or GG every month in dips starting in May and ends in August, perhaps just a very small number of shares each time based on your account. I doubt if gold will dip below 850 - you can simply use this as stop loss.

Still, I am bullish on A and H share in next 1-2 months.

Apr-24 Struggling?

I think many of you are struggle on whether to sell CAF now as we have around 30% again now based on pre-market. For stock like CAF, you know have ER to spike, so I think it is always better to hold for a decided target and wait for another chance. Nobody knows how A share market will act tomorrow, but most people believes the rebound will be over 4000. To my personal opinion, a gap-filling is possible in next week but I hold for target 4800 for Shanghai Index. The reason is simple, the gvmt wants the stock to rise before Olympics to show the strength of Chinese economy. 3000 is confirmed bottom, for those still are out of the boat, jump in when Shanghai fills the today's gap. However, feel free to take some profit off the table if you are heavily loaded.

For Hong Kong market, I just like the way it rises little but H shares spike with A share. Indeed, H shares with quite low PE which does not look like an emerging market. Be steady, watch stocks that didn't spike yet, such as CHU, CN, CHA for the next round.

Apr-23 Chine stocks fly

Glad to see all H shares fly! I mentioned PTR and LFC around morning the day before yesterday, and you have seen the short term big swing up, as several rounds of good news.

CAF also shines. The reason I initiated my coverage of this company as I supposed CAF will not drop further because it is not an ETF, it is a US company that invests A share market. There is no surprise that Morgan Stanley is one of the first big sharks getting out of the market at peak around 6200. I also believe they have been accumulating shares since Shanghai Index dropped below 4000. That's why it did not drop much with A share market but follows US market instead, but now I think they can be influenced by this A share rebound, given many actions from gvmt to save the market.

Apr-22 Picking Stocks

Glad to see PTR is doing good in Hong Kong. Regarding my recent recommendation on TTM and PTNR, they are typically long term investment candidates. If I pick up short term ones such as PTR, it may go up in next days, but it will be volitale anyway. As I still think CEO is better than PTR in terms of long term investment potential, therefore I don't put PTR in my pick list. I usually put one stock I think might be the best in their small sector in my pick list. For example, I pick RIO, so I don't add BHP, but it does not mean BHP is bad; I pick ARA but not VCP for the same reason, and we can see ARA is better than VCP in the past months.

I have already updated my spreadsheets for a more clear view against S&P 500 in the same period. I hope you pay more attention to my picks and research on them. I would response generally better than stocks that I don't cover as I know these stocks better.

http://spreadsheets.google.com/pub?key=pBEpQGqpmvIg-8DjD4quaQw

Please also let me know individually (without going to group message) of your interested stocks for long term holding, I'll investigate and comment on them and select among them to add to my picks.

Apr-21 Earnings

BAC reports an ugly ER but price does not dip much. The overall market seeks a correction to 12650-12700 area, let's see if this level can be hold.

More interestingly, we have a lot of other earnings coming around. Let see some of them for today and tomorrow morning.

For today, TXN report might be positive. For tomorrow, MCD and DD would be positive as well. T might be somehow negative. This is quite FA based. If today closes red, the post-ER action would be somehow normal, which is, if it beats, the share will go up, otherwise, go down.

By the way, PTR is in good shape, as well as LFC.

Apr-18 Remarks for mid-term

Like C, the banks are going to post upbeat results as the estimates have been cut significantly. I have talked about this before as a point of money makers strategy on supporting the market recovery. We will see some other evidence later. Several remarks are quite important for mid-term in next months:

• It is quite important to close above 12800 either today or next week to form bullish pattern and trigger institutional buying power. If not, I need to think carefully about the market.
  
• There will be another remaining issues for this sub-prime mortgage crisis, while market will have further correction after June.
• For financial stocks, I recommend BX and V two weeks ago and they are in good shape now. Besides, C is going to test 30 in near term, BAC will follow and they will help to bring up DOW over 13000.
• Brazil is really outperform this round and will outperform for another months, I believe China and India markets will follow up later therefore I think now it is a buy-and-hold point for stocks and funds for China and India markets.

Good luck!

Apr-17 New Picks [TTM] and [PTNR]

TTM has both swing and long term holding potential. For several months swing, I would say current price around 15.5 is a buying point with target 18 and stop loss 52 week low of 14.71. Risk is quite limited. TATA group just purchased Jaguar and Land Rover from Ford, I would say for long term holding, it is also a good choice. PE 12 is somehow low for a BRIC country, I hope to see PE 15 some points this year.

PTNR is a Isareal telecommunication company. Recently mid-east countries began to realize they can not rely on oil forever, the other aspects of their economy is booming. Although PNTR is not an Abrabian company but I would say it could still benefit from booming of cities in UAE and Aman.This is a long term holding for over 1 year.

Apr-16 Short Comments

Dow tested 12270 low and now rises back to 12600 area. I predicted the correct to 12300-12400 area was not that wrong and the indices all bounce back now. Glad to see that. You may also find many stocks on my pick list, such as SID GTI RIO MOS MTL CPL ANR are now or near their all time high.

I said never stay on the short side on strong stocks for a long time - it is fine if you do several days swing if you can, but it is always risky to stay for a long time. It might be the truth that agricultural stocks are near their climax run and due for correction, but nobody knows WHEN. Please be very careful, in particular, if you play options. Stop your short position in any future correction...

I am not sure if my recent buy and hold strategy works for you, but it at least works for me.

Apr-15 Short Notice from Spain

Dow is now around 12300 as I expected for this correction. I hope all major indexes could move up and DOW could break 12800 to form a higher high pattern and maintains bullish trend.

If you have bought airline stocks as I recommend, for example NWA around 8$, you can be quite profitable now and even better today after the M&A news from Delta and Northwest. In fact, I could not predict M&A, the airline stocks are just too low to drop further. It was perhaps the worst time for airliners, and it could be the best buying opportunity for this sector in recent years. Please, please do not forget to by on weakness.

Will be back on 17th, ttyl.

Apr-9 Market Updates

I talked about the target of this correction in DOW would be 12300-12400 and still keep this forecast. However, please be prepared for a good news in the near future. As the market has been mute and little volatile in the past week so that makes me feel the market is waiting for something we don't aware of. I expect the news will be positive to the market.

The market is generally stable now, picks of my last week are generally OK. For this correction, Tech is leading the decline, I think 10-15% correction for  an individual stock would be good buying opportunities.

Tomorrow I'll go to Spain for a week, therefore I am not able to update until 17th. Maybe several words during the trip but I am not sure. So good luck.

Apr-8 Daily updates

Let me try to be short as I'll have last of my recent interviews in the Netherlands and won't be back before today's market close.

AA missed, however, the market does not act negatively, as yesterday's drop has already priced in the earnings. Let's see how big money react in today's market.

The metal stocks are mainly priced by metal futures, so I don't think we need to worry about other mining companies.

Today's data will provide two different direction for very short term: Good data may fuel the market to hold above 12700 to establish a good uptrend momentum, while bad data may bring DOW back to 12300-400 area as a recent correction.

Apr-7 Several Comments Regarding Overall Market

Today's market acts like a direction for most sectors. Although the indexes do not have huge spike, most stocks are green, also for DOW components. You may feel the sentiment of the market is really approving, given the unsatisfactory data though.

I feel the right strategy for the current market would be:

1. 80% of your account should be buy-and-hold.
2. 20% of your account could be played for speculation and options.

I know now you may have a feeling that your stocks are not rising fast enough as other stocks so you want to switch, or play with leveraged tools. Maybe some people gain a lot if they put most of their positions into options or play with margins. This is absolutely the truth and exactly drives many fresh investors into the market, giving their dreams to be a millionaire in weeks or months. However, most people will end up with ZERO in any future decent correction or surprising events. It has been proved in the past few months and will be proved in the future.

I have seen many people wiped out by playing futures and options on single side, either in China or US. It does not matter how many times you win, but if once you lost on time, you will be simply wiped out.  So please, if you are not experts, do not play options and futures on single side without hedging. Also, you will find your profit is better if you trade less.

That's all I want to say if we see a mid-term uptrend swing ahead. For most people, I believe choosing the right stocks then hold for a planned period is a good strategy.

Apr-5 The Picture Looks Good

Let's first recall my comments last week:

http://iamwym-stock-analysis.blogspot.com/2008/03/mar-31-weekly-preview-and-month-end.html

"If I am correct, we will not have a negative week, however, a doji or white candle stick are all possible. For TA wise, a big while candle stick for about 300 points on weekly chart will be quite bullish for mid-term."

This week DOW close at 12609 which establishes ~400 points gain with my major picks gained nice profits in past week, including WDC, BX, LPL that are not on my pick list but mentioned in last week's posts.

Given this week's gain, the bullish bet is quite successful. However, we still need to be more careful as we have quite weak economic data, that is though priced in.

Now I have a general bullish feeling regarding big picture with cautious if DOW reaches 13000. You may ask me whether if it is time to jump in fertilizers, I may repeat coke1's strategy again: You can buy now, but be prepared to average down with any -30% correction from it's future high.

By the way, I have got the offer in Switzerland as a so called "scientist", as I (and my family) still don't want stock trading to be my job... :P I am still waiting for a preferred position in US, which might have result around late May. Let's see.

Apr-3 Market Comments

I just came back from an interview in Switzerland, so I didn't post anything before market open.

Yesterday was a consolidation and today also act in a bullish manner, however, tomorrow's job data may change the short term scheme but won't play a major role for mid-term and longer. Today's jobless claims are worse than expected but it does not indicate much.

Let's review what we had in the past 2 weeks. We may find the emerging markets, including China and Brazil, are really strong sectors, in particular, Brazil stocks that I like best, are even going to make new high soon.

For airliners, maybe I called a bit early, but still, I believe a rebound shortly as I don't see much downside risk.

A-shares, CAF has a good shape because major MMs believe the downside risk for A-shares are really low now. Small fishes in China are eagerly selling their shares, but who is buying? :)

Tomorrow I am traveling to Luxembourg for another interview and will reach home around midnight. Maybe I'll give a summary or simply write something on Saturday.

Apr-2 It's time to pace the market

Other than simple buy-and-hold, I would like to point out that pacing the tone of the market is a very important to beat the overall market.

• This is not about following the hot sectors, or picking up a single stock that outperforms
• This is about to feel the market in a sensible way

Basically, most stocks follow the market, but how can we profit from the most profitable stock or sector? This requires outstanding market sense.

For example, Hong Kong market has a cycle about a week to outperform or underperform US markets, as well as other markets like India and Russian with shorter or longer cycle, if we can catch the cycles, obviously your performance will be better than the market. For longer period, this is also the truth.

Please pay attention to Taiwan and India markets, they will be hot again in weeks. :)

Apr-1 Market Comments

The market is acting very in a very positive manner amid so called good news. As you can see, the money makers set the tone of the market. UBS and LEH can get money by issuing more stocks, then the market goes up, while Ping An and Zhao Shang did this, Shanghai market plunged. What I want to say is very simple, there is no simple rule to judge whether the market will go up or down against certain kind of news, as it is only determined by how the big sharks explain the news. If big MMs say, this is positive, then market goes up, otherwise, you will see a bloody scene. Well, don't forget the news agencies are also controlled by different forces, whose money is an very important element in the whole chain of their business. Whatever the kind of business is.

In short, hold tight and buy on dips (my "dips" mean -10% correction not -1% small waves on individual stocks) in next days and weeks. I think I don't need to say what to buy again. :)

Mar-31 Daily summary with some picks

Glad today we have a quite positive day although MRK drags down DOW for nearly 0.5%, which on the other hand, also reflects the good sentiment.

For this month and quarter end, we can see today as a window dressing day, as money institutes don't really want to see another negative month.

I was asked about stocks to watch, there are some of my picks which I think are buy now but were not mentioned last week.

WDC, NOK, MSFT, CSCO, LPL, BX, V, all with stop loss -1% below this week low.

Don't forget emerging markets stocks that I always love. :)

Mar-31 Weekly Preview and Month-end comments

If I am correct, we will not have a negative week, however, a doji or white candle stick are all possible. For TA wise, a big while candle stick for about 300 points on weekly chart will be quite bullish for mid-term.

For this March, if DOW close above 12266 today, then we will have a first positive month in five months, otherwise, this month would be the five negative month in row.

Today is month end, and also the quarter end, therefore, I am bet on the bullish side for today and at least DOW should have a doji on the monthly chart for March. Therefore, for the next 2-3 months, I am on the long side as it's somehow the time to recover from the low. My target until June would be 13300, which is 1000 points from now.

In a nutshell, I still believe we can some long position with 12000 stop loss on DOW. Please refer to my posts from last week for stocks to watch.

My wife is going home tomorrow from hospital. Things are going fine for her and it looks there is nothing to worry about. Thanks a lot for all of your best wishes. :)

Good luck.

Mar-28 What's for today?

Today I am not going to comment much as for recent two weeks I have been repeated several times about my recent market view. Today I would like to ask you to consider several points:

• How is the downside risk of previous market leaders?
• How far will be housing market fall further? Another 20%, or?
• Are many profitable emerging market stocks only worth PE around 12?
• Have most weak hands finished selling?
• Are shorters still confident enough to make big profits against the Fed and government?

Next two month will be the first profitable period in 2008 for longs, and it is also not the last one.

Mar-27 A-Share surprised me

A share PetroChina is totally a joke. I have to say the judgment on bottom around 3900 was totally wrong. But I am quite lucky on CAF due to the recent strength of US market.

I called CAF on 36.2, please use 36.2 for the stop loss position. However, given the sharp drop in recent A-share market, a decent rebound is right at the corner, the problem is when.

I feel the steel makers in China has reached the bottom, as well as coal miners.

H Shares look strong, I am happy to see I was not totally wrong on Chinese markets.

Anyway, we have better economic data readings today, and I expect the market we start to head north in recent days, which hopefully proves my suggestion on buying pull backs like yesterday was correct.

Let's see.

P.S. My wife is sick in the hospital and I need to stay with her, so I don't have time to track the intraday changes, good luck.

Mar-26 Daily Market View

This pull back has it's first target on current level around 12450. Second target is 12350. Consider the bad durable good orders, the pull back is somehow inevitable.

Small position can be initiated around 12350, stop loss on breaking down 12100, add more chips when today closes above 12400.

This call is valid for stocks I mentioned yesterday and the day before yesterday.

Mar-25 Daily Update

Good morning everyone. I still don't have internet at home so I am not able to track the market this week. In general, the market will likely to have a positive white candle stick for March, and hopefully April and May. Therefore, any pullback in this week will be buying opportunities for mid-term.

Sectors in my radar are still:

• Emerging Markets
• Commodities
• Retailers
• Airliners
  

To be more specific, yesterday I called CAF RSX and Brazil stocks, such as CPL, SID. They are still valid. Commodities can be watched, several good stocks, such as RIO, CLF, GTI, ACH. Retailers like CROX, JCG and UAUA, NWA as airliners are worthwhile to get into when they break out with volume.

Mar-24 Weekly Preview

JPM raises bidding price for BSC, another interesting week coming.

Now many people think the uptrend is going to continue before July. I see several possible entries for following stocks and sectors:

1. Recent weakness of NOK is an opportunity.
2. Recent weakness on commodities is an good opportunities. Including gold. However, do not expect they will explode soon, they will go up any time before June.
3. In general, tech is a buy here, MSFT, CSCO, AAPL, GOOG and others.
4. Financial and home builders are still risky, please try to avoid.
5. Pay attention to natural gas and coal stocks.

I guess this week will have a while candle stick.

A share is shaking on the bottom, weakness is buying opportunity, such as today. 

Mar-20 Daily Market Preview

Today is the last day of OE, therefore I expect big volatility as well. I think this week will have a positive closing and I am somehow optimistic on global stock markets for rest of the month as well as April. If there is no one going out of mind to have war, which is really unlikely to my opinion.

I called CAF several times, it's still a buy here. I entered some position on 000898 AnGang and prepare to enter some more tomorrow if there is any dip. Today, the A-share acts in a positive manner with an obvious bottom out there. Heavy buying power stepped into in afternoon session. All blue chips reached a mid-term bottom. I see 601857 PetroChina hits the bottom as well, it's a buy with target 29. Many other blue chips are also good for mid-term and above 30% return is expected to my perspective.

In US markets, airline companies could be added to long position as OIL dips back. Long UAUA NWA here. For hedging positions, perhaps LEH is a potential candidate for short, but I need more time to confirm this. Regarding commodities, we still need to wait stabilization. I expect next week this sector will have some good entry points. 

I am not going to update on this weekend but will come back on Monday, as I am going to Paris for vacation. Happy Holiday folks!

Mar-19 Market Re-cap

To briefly re-cap the market, several remarks:

1. Taiwan and Tibet issues still drag down Greater China markets, late next week may be better.
2. A-share rebounded a bit, but won't have decent rebound before Taiwan election.
3. No war anyway, to my opinion. So I think positions like Taiwan stocks, A-shares, Hong Kong ADRs could be target for today and tomorrow. Consider the risk of war, a small initial position is recommended.

When people find there is no action for Monday Asian market, big money will relief and come back to stock market gradually.

US stocks is likely to test 12250 area today or tomorrow. Good long candidates are MSFT, ORCL and ADBE for your IRA, and other active Tech  and Commodities for swing. By the way, SIMG can be added to your watch list. Financials can be shorted after they lead this market even higher, but not now.

Mar-19 Quick Correction

As H-shares ADR has priced in almost 6% price hike for tomorrow Hong Kong market, please hold your fire without entering. However, if you dare to play ZNH, it is possible to rebound again more than 3%, but it's risky.

You can still play CAF if you don't have any CAF yet. Load 50% of your planned position on CAF today or tomorrow is an option.

Otherwise, consider commodities, such as miners, and my Brazil plays, such as CPL. As I called GTI in past days, GTI is also worth buying around 15.

Good luck.

Mar-18 Daily Market Preview

First, LEH beats, GS beats, all as I expected, the market react positively as we see major investment banks are not all in trouble.

My strategy for GS call and C put should be slightly profitable. Although a more aggressive LEH call was not suggested by me yesterday. However, if you adopted this strategy, I would like to ask you monitor closely today as today's market will be highly volatile. You can just sell your GS calls on huge spike, and sell your C puts on big pull back. Then my last day's option play will be quite profitable.

As you can see now, my assumption yesterday regarding BSC may reject JPM offer has more believers as it is trading above 5$. :) I still do not recommend to touch it. We can just watch for fun.

Regarding CAF, no need to sell on such decline, I suggested you to load 1/3 of your planned position for CAF, I'll notify next 1/3 later.

If market close green, time to load a little bit FXI and Hong Kong shares to test water.

Mar-17 Daily Preview

Anybody put/short BSC on Friday, please raise your hand, you are genius.

The panic sell-off was just postponed, but not eliminated by the 400 points while candle stick.

The market will perform the way like it was in mid-November, it will be very volatile for this FOMC and OE week, and then will rebound later. I have 70% confident on this.

The market bottom is usually featured by bankruptcy of several big banks such as BSC. The question is, whether C and LEH will be next candidates? I don't know, but I can play.

LEH will report tomorrow, as a contrarian's view, I think the post-er market reaction will be positive, unless LEH report something similar to BSC, however, to my knowledge and source, LEH is not that bad. But we are not going to play on it.

A recommended option play will be call GS with put C, both near money OTM stike of this OE. Please note option play is not suitable if you are starters in stock market.

By the way, gold is now is 1023, while AUY was my only US stock recommendation in past week. Regarding CAF, just hold for another day or two to see what will happen on FOMC.

Mar-16 Weekly Preview

I would like to draw your attention on my previous post again:

http://iamwym-stock-analysis.blogspot.com/2008/03/mar-11-market-update.html

It looks more and more like that we are in the similar situation compare to mid- November -- after a one day spike, we go down gradually to test new lows.

The more the government tries to save the market, the worse the market is.

Yes, next Tuesday is rate cut announcement, give the low CPI and terrible economy, I think it's no doubt we have a more than 50 BPS cut, and most likely 75 BPS, with someone even predicted 100 BPS.

For sure next week will be volatile, however, I think how many BPS cut is not that important to mid-term market. To my opinion, the global market is set to uptrend from April to June for reasons below:

1. There have been 4 months decline in row and there might be another here. It's very nature to have 2-3 months rebound.
2. Rate cut in 2007 will show their effects somehow.
3. The government has decided to save the market in a temporal manner for whatever reason.
4. Cheap stocks are hanging around.
5. Shorts have realized the downside potential is limited.
   

That's why I called CAF and other emerging market ETFs for a mid-term swing. Stop loss position for CAF is Shanghai breaking down 3800.

Mar-14 [CAF]

Yes, again, CAF.

As I expect, you will have chance to board after yesterday. Today Shanghai index tested 2 times for 3900 area with a low of 3892 and held. I think it's time to load CAF now and hold 'till June.

This is only market comment I have for this moment.

I haven't realized other opportunity in US to build a position longer than a month.

Mar-13 New Pick Announcement [CAF]

Initiated at $36.2

Mar-12 Daily Market Preview

Based on the huge rally yesterday, we are more likely in the status of mid-November. So whether we have a while or black candle stick today and tomorrow will be an important aspect for future directions. However, in current market sentiment, near term downside will be quite limit.

More than 400 points rally is the first time in past 5 years, this kind of huge rally normally does not signal the bottom as during 2000-2002 there are many of them.

Today Chinese markets are a bit disappointing, while I think they may catch up later on if US markets still rise based on the power yesterday.

In general, I still believe we will see 2-3 month with positive gains, while the future is still gloomy. Unless we still very positive signals like housing market recovering or retailers and banks post gains, we still have to be very careful on long side.

Strategies for today is to watch the market to see if commodities, shipping and tech could be options for long. HK ADRs will decline a bit as yesterday they priced in much on upside, I see this is a buying opportunity if the US market stay positive today. 1-2 PM is my recommended time to clearify this trend.

Russian play includes MTL VIP WBD and RSX. MTL is more risky than others, while it has more upside potential.

For hedging long side, still, put bond insurers and retailers.

Mar-11 Daily Summary

If you bought followed my suggestions this morning, you can have some profits now. Anyway, if you still out of the market, I suggest you to wait.

1. This kind of decent rebound occurred during previous months, but the question will be whether it can hold or not.
2. If you really want to long some stocks, consider gold stocks, or ADRs that do not rise much today.
3. If you want to short, please keep calm and wait for another rally.

I am not sure today's H-share performance has drawn some attention on you, as I just don't understand why people like chasing H-shares and singing Chinese great economy when the stocks are high fliers, but not picking up some when they are cheap... Maybe that's the reason why most people cannot make money in this stock market unless they hold for several years.

The US government tends to hold the stock market anyway, as they know the sinking stock market is the biggest reason for shrinking retail consumption. It looks like we still have a long way to go for this tough 2008.

Mar-11 Market Update

Will the panic sell-off be somehow postponed? I think we don't need to care about this.

Let's look at the figure attached.

The first scenario is the oval area on the left: We may going a bit further lower and then bounce up.

The second scenario is the oval area in the middle: We may zigzag for 1-2 weeks and then go down again to test 2006 low.

My suggestion for short term will be:

1. Watch YZC KOL, I think the sell-off of China coal stocks is almost done
2. Watch commodities, if signs of stabilization appear (it looks like today...), go long.

Entry point is a pull back after market open with stop loss -1% lower than yesterday's low.

Mar-10 Daily Summary

As I predicated, the market is now in sell-off mode.

The target is quite clear, like SP500 and NAZ, DOW previous low is not likely to hold.

Simple strategy will be lightly loaded with long position (around 1/3) after 2 days of big sell-off and sell before FOMC. Or simply a little March OTM call spread of financial sector, if you are a option trader. It doesn't cost much but give you good return. I guess the rebound is soon, could be Thursday. All we need to do is to wait panic...

After sell-offs, the market will bounce up a bit, then zigzag for a couple of days to wait for FOMC.

For mid-term: If 12000 is not firmly established after FOMC meeting, then 2006 low is right at the corner.

I still think the global market, including US, China and others, will be better in April, if 2006 low is touch this month.

Mar-09 Weekly Preview

Today is my birthday, but it does not indicate the direction of the market next week at all. :)

By looking at the DOW daily chart, in worst case, we have to wait another 4 days before a decent rebound; while in best case scenario, the rebound comes tomorrow, according to the oversold financial sector. I successfully predicated the rebound of financial stocks yesterday, but the weak data terminated the rebound attempt. I guess another attempt will come tomorrow, let's see how it will go.

Anyway, I am not suggesting any bottom fishing tomorrow, as if the rebound fails, there will be 2-3 days of panic selling in next week, then the market will be extremely oversold. Based on current weather, any 3 panic selling will lead the market to 2006 lows, then I expect huge buying power will come and the market may reach the real bottom. Hold you fire and wait for that moment.

If the market goes up tomorrow,  I suggest you to wait for several days. Next week is very essential for mid-term chart, any decline for next week will form a bearish picture while positive while candle stick remains hope for bulls. I expect the world equity market will somehow change to a positive mode around April.

Regarding A/H shares in China, any panic selling before Taiwan election will be buying opportunities. I don't believe there will be any war in any case.

I feel all the coincidences come together, most political/economical events signal a better April for global markets.

For candidates of bottom fishing, still, commodities, shipping and home builder.

Mar-7 How will market go amid bad data?

Definitely, the job data are bad, worse than my expectation, but more importantly, how will market react?

I think today is likely to be a sell-off day at first. It looks like most people think DOW will test previous low 11634 and many think 10800 is in the cards here. Yes, this might be possible but only god knows.

What do we do?

Recalling yesterday's market, we may have another round of sell-off for financial stocks, so is it time to fish some financial stocks? I would say, no stocks now.

"If you have short positions, you may buy some calls of financial stocks to hedge"

Please note, option play is NOT suitable for beginners. If you are beginners, the strategy will be, to buy some my commodity picks on the spreadsheet in any huge market sell-off, which is more than 1000 dip from its recent high. This time is 11600. Just be prepared with cash for 10800, if it really happens, this is probably one of the best opportunities in next 5 years for you to buy stocks.

Resource第五贴: Gold

一 : 黄金的基本面

谈黄金就一定要谈到经济, 里面挺复杂, 但最关键就是要搞明白两件事 : 黄金到底是什么? 黄金到底作什么用?

Question 1: What is gold?
Answer: Gold is money!

现在人们普遍把黄金当成commodity, 但黄金本质上是钱, 是真正的钱, 是不贬值的钱, 是真正的硬通货. 任何纸币都做不到这些, 它们本质上只是纸而已, intrinsic value = 0. 但为什么人们都把纸币当钱呢? 这是因为它们有buying power. 商品交易的本质是要等值交易, 例如两头猪就一定要换一头牛. 自从人们停止物物交易后, 纸币开始扮演中间的媒介. 纸币最大的问题是它的buying power不稳定, 时高时低. 例如: 石油几年前只要三四十美元一桶, 怎么现在要一百多美元一桶? 其实这几年石油的demand&supply一直都挺稳定的, 没有发生决定性的变化, 别看中国进口油年年增长, 全球石油产量可也是年年在大幅增长. 看OPEC最近决定不增产的理由就很清楚 : 石油供应足够满足需求, 不需要增产! 但油价可是发生了决定性的变化, 所以若油本身没变的话, 那变的就是美元的buying power了. 如果你用黄金来计量油价的话, 你就会发现油价根本就没变多少 : 几年前一ounce黄金能买约10桶油, 到现在还是能买到那么多桶油. 这就是黄金的独一无二的特点了: 不贬值. 一千年前的黄金从地下挖出来还照样用, 跟新开采出来的金矿里的黄金一个价. 纸币就够呛了, 没几个人敢把一堆纸币放个几十年的.

搞明白了第一个问题, 第二个问题就简单了. 古话讲 : 物以稀为贵. 黄金是稀有金属, 全球储量不大, 这就决定了它的高价值并且不贬值; 但它的全球储量也不很少, 足够各个国家都捏一些在手里并且流通. 太少的东西就没有什么实际的价值了, 只能挂在橱窗里给人观赏. 所以以前黄金一直是作为货币的基石, 跟美元直接挂钩, 一克黄金就一定要换多少美元 (从1935~1968, 金价固定为 US$35/ounce), 世界各个国家都是储备黄金. 但自从世界经济总量越来越大后, 黄金因为它的稀少性已经不适合作为货币的基石了, 后来就跟美元脱钩了, 美元因为美国的强大和稳定变成了各个国家的储备货币和全球贸易的结算货币. 美元过去几十年的表现倒还行, 一直算稳定. 但无论如何, 美元本质上还是纸币, 对其它国家来说还是外币, 没有哪个国家会幼稚到在国库里只放着美元的, 必然要同时放些黄金来以防万一. 事实上美国自己也是这样做的, 它的国库里的黄金储量比世界其它所有国家加起来的都要多. 所以在现代社会, 黄金的一个主要用途是作为国家的储备, 保证国家经济的稳定. 但因为历史的原因黄金的第一大用途其实是珠宝业 (jewellery). 工业用途也不少. 到2006年底为止, 地面上的所有黄金在各个领域所占比例为 :

1. 珠宝业(jewellery) : 52%, 81700吨
2. 央行及IMF等组织(official sector) : 18%, 28500吨
3. 投资业(investment)如黄金的ETF等: 16%, 25800吨
4. 工业(industrial): 12%, 18700吨
5. 其它 : 2%,
总计158000吨.


下面看看黄金的demand&supply.

市面上黄金的supply主要来自三块 :
1. 金矿生产
金矿在地球上分布得还算均匀, 各大州都不少, 但一百来年来一直是南非黄金产量雄居全球第一, 但从07年起中国超过它了 (这倒并不是因为中国的金产量增加了多少多少, 而是南非的金产量因为各种因素大幅下降而掉到中国后面去了). 现在中国排第一, 南非第二 (南非还是白金, 钯金的主要生产国, 全球80%的白金, 30+%的钯金产自那, 铀矿也多得要命, 也是一个上天垂青的land), 其它如澳大利亚, 美国, 加拿大, 南美, 俄罗斯等地产量都挺大. 近年来全球金矿生产量比较稳定, 在过去5年里每年约产2550吨黄金 (约合81.6M ounces). 一个新金矿从头到尾约需10年才能进入生产, 所以别看黄金现在涨得这么凶, 新的产量supply没法很快上来的. 2002~2006年间平均每年金矿生产黄金的数量要占到全年金supply的约61% (2239吨).

2. 回收 金(recycled gold or scrap gold)
别小看这一块, 2002~2006年间平均每年回收 金的数量要占到全年金supply的约25% (926吨).

3. 各国央行和IMF的出售
世界各国央行及一些超国界组织(例如国际货币基金组织IMF)持有总共黄金总量占地面上所有黄金总量的1/5, 约31000吨, 即992M ounces. 总体上他们自89年起一直在向市场出售他们的黄金储备. 2002~2006年间平均每年各国央行和IMF出售黄金的数量要占到全年金supply的约14% (527吨). 当然, 有很多央行在卖, 也有些央行在买. 例如中国, 日本, 印度, 俄罗斯等国央行就一直在买黄金来增加储备. 各个国家的黄金储备量相差悬殊, 但平均下来也有10%, 就是说一个国家的黄金储备要占到该国金融总储备的10%. 这个数字很重要, 看中国的情况就明白了. 中国现在的外汇储备已近1.6万亿美元, 按现在黄金$1000/ounce算, 这相当于1600M ounce gold, 也就是50000吨黄金, 按这10%的平均数来算也意味着中国起码要把这笔钱的10%转换成黄金储备, 那就是5000吨. 中国现在的黄金储备我记得没错的话应该是只有500吨左右, 相差非常巨大. 所以下面几年里中国官方政府的购买需求是支持金价的重要因素. 随着中国经济的日益上升, 中国民间的购买需求肯定也是越来越大的, 毕竟中国的通货膨胀率摆在那, 大家都觉得慌. 还是那句话 : 中国缺的东西你就等着看坐地起价了.


再看看黄金的demand. 东亚, 印度和中东就占了全世界gold demand的70%. demand排前五的国家分别为 : 印度, 意大利, 土耳其, 美国, 中国, 它们合起来共占世界 demand的53%, 印度一家就占了22%. 具体到行业去, 市面上黄金的demand主要来自三块 :
1. 珠宝业 (jewellery)
2002~2006年间平均每年珠宝业要占到该年黄金总需求的69% (2548吨). 经济上升时人们会更多的购买黄金珠宝等装饰物, 经济下降时人们会购买黄金珠宝等来保值, 总之任何时候都需要.

2. 投资业 (investment)
2002~2006年间平均每年投资业要占到该年黄金总需求的19% (703吨), 平均每年增长幅度为45%, 个人和机构投资者都在蜂拥而入, 在现有全球经济前景下这个增长速率还会加快. 从世界各国历史看过去都是一样: 只要出现uncertainty and instability, 人们就会开始买黄金了.

3. 工业 (industry)
2002~2006年间平均每年工业要占到该年黄金总需求的12% (441吨). 黄金的几个优异物理化学特性: high thermal, electrical conductivity, anti-corrosion, 决定了它有广泛的工业用途. 超过一半的工业用金是用在电子工业, 其它还有: medical applications (别忘了你口里的金牙, 哈哈), biomedical applications, chemical applications, 等等.

呵呵, 庄子说: 无用之用, 方为大用. 黄金这看似无用的东西 (不能吃, 不能穿, 也不能盖房子) 是对这句话的最好注解. 希望秋月有机会看到这篇贴子后能明白黄金到底有什么用.


二: 黄金价格未来的走势

从经济的角度讲, 黄金的主要功能是跟美元对冲和抵制通货膨胀. 美元跌必然导致黄金涨, 但哪天美元不跌了或开涨了也不意味着黄金就一定开跌, 美元黄金同时涨的事过去屡见不鲜. 再谈通货膨胀的事, 世界经济从90年代初开始的这一轮扩张热潮导致各种commodity&material价格大幅上升, 这导致商品价格大幅上涨, 再导致通货膨胀, 就意味着纸钱buying power下降, 这时黄金就是避免纸钱贬值的必然选择之一. 世界各国现在都面临通货膨胀大幅上升的问题, 这个问题短期(1~3年内)不光没有缓解的迹象, 反而面临着继续加速的趋势. 这决定了黄金的大趋势必然是向上, 直到通货膨胀缓解为止.

别看欧元现在很风光的样子, 好象要取代美元的架势, 但欧洲的经济摆在那, 还是靠捧着美国大腿混饭吃. 美国经济好它也跟着喝汤, 美国经济不好它就跟着完蛋, 更别提政治上的关系了. 所以永远轮不到它来取代美元. 事实上可以说: 美国的政治, 经济, 军事, 这三样东西要同时完蛋美国才是真正完了, 美元也就完了, 到那一天的时候其他国家和货币肯定也差不多了, 这三样只要有一样没完美国和美元就完不了. 这也是为什么黄金没有真正发疯, 彪到几千美元一盎司 (什么才算发疯? 1979年下半年到1980年一月才半年时间黄金就从330美元左右彪到843美元, 呵呵, 那才叫发疯). 至于美国会不会完蛋, 天知道, 但多半不会.

看太远谁都没把握, 就说08年吧. 美国经济前景不明郎, 会不会衰退, 若衰退会有多严重及持续多久现在谁都说不清, 只能走一步看一步, 但毫无疑问美元会继续疲软,通货膨胀继续扩大, TA上看好象在一千这个关口要调整似的, 但从基本面来看要越过这个关口是轻而易举的事, 所以那些手脚不够快, 不善于short的新手最好sidelined, 别跟着别人跟黄金过不去. 正确的作法该是在它回调时择机买入而不是空它. 黄金07年上涨了32%, 08年到目前为止15%, 才两个月. 到年底的话起码再涨个20% ~ 30% 吧, 呵呵, 所以金价我先看到$1200~1300 这一线 (提醒一声: 这也意味着油价有可能会到$120~130左右. 其实过去40年的平均值一直是一ounce黄金约等于15桶油, 只是从近几年开始降到约10桶油. 原因无非下面两者之一 : 石油涨得太多或者黄金涨得不够多, 我觉得是黄金涨得不够多的可能性更大些, 所以这就意味着黄金需要价值回归, 上升空间还很大. 所以黄金若回归到等值于15桶油时, 就算油价降到$80/bbl, 黄金也会相当于$1200/ounce). 当然这不意味着黄金会一条直线上升, 回调一定会有的. 短期一个很大的压力是美国和欧洲的央行, 还有IMF, 都打算出售一部分黄金储备, 这对市场毫无疑问会有冲击. 黄金投资者应该关注这方面的新闻, 但这个销售绝改变不了黄金的总体趋势. 还有美国肯定不希望美元跌得太快, 也就意味着它不希望黄金涨得太快, 总会搞些手段的, 但这个也改变不了黄金的总体趋势. 只要美国经济没好转, 世界通货膨胀没抑制住, 黄金的趋势就变不了. 别觉得金价$1300很疯狂, 看看commodity大师Jim Rogers的预测 : $3500/ounce, 呵呵, 觉得如何?

我在resource第一贴里把黄金的投资价值按稳当性排在第五, 是因为当时还不确定美国经济的走势, 所以当时说黄金上下的可能各是50-50, 现在几个月过去了, 各种经济数据也出了不少了, 现在我的新判断是把黄金排位上升到第二, 即 :
Moly > Gold > Uranium > Base metals > Oil

金的向上向下可能性分别为 : 90% : 10%. 其它种类的维持不变. 这也算是对我以前判断的一个update吧.


三 : 金矿等级的一点常识

金矿规模分三个等级 : 大, 中, 小.
大型金矿 : 含金量 > 800吨, 约合25.6M ounces
中型金矿 : 含金量 50 ~ 800吨, 约合1.6 ~ 25.6M ounces
小型金矿 : 含金量 10 ~ 50吨, 约合0.32 ~ 1.6M ounces
再小的就没有开采价值了. 现在已经没有尚未开挖的大型金矿了. 尚未开挖的里面有个10M ounces的就是很大的矿了. 在七八十年代的挖矿热中, 绝大部分tier 1的金矿都给挖了(tier 1的矿是指那些处于附近有infrastructure的矿, 方便开采及运出来). 剩下的都是些tier 2的矿(tier 2的矿是指那些处于偏远的地方, 没人迹, 甚至没道路, 附近没有infrastructure的矿, 开采这种矿成本极大, 经常是靠直升机进出, 可想而知).

金在自然界主要存在于两种形式 : prime product 和其它矿的byproduct (主要来自于铜矿和银矿). 金矿石的grade差别很大, 来自于byproduct的金矿石显然grade很低, 来自铜矿的一般在0.x~2g/ton, 来自银矿的一般在1.5~3g/ton, 来自于prime product的金矿石grade就高多了, 一般在5~25g/ton. 看一个新挖到的金矿脉够不够significant很重要, 不是说只要在地下挖到了金矿就一定有价值. 你看看那些金矿公司报告新挖到的矿脉时一定是要报告两个数据的 : grade and length. 第二个数据是指的矿脉的延伸长度, 太短的是没用的, 没有开采价值. 有一个简单方法来判断挖到的金矿脉到底有没有价值 : grade * length >= 300. 例如 : grade=10g/ton, length=40m, 这样grade * length=400 > 300, 这个金脉就是有开采价值的, 反之如果小于300就是没开采价值的.


四 : 金矿估价的一点常识

假如有人告诉你这块地底下探明有多少多少的金子, 现在想把这块地卖给你, 你愿出多少钱呢? 或者一个上市金矿公司公布自己有多少多少的reserve, 我们怎么估算该公司的fair value呢? 估算一个金矿的价值取决于多个因素. 首先要知道的是开挖一个金矿的cost, tier 1的矿挖采的行业标准cost是$350~400/ounce, 高于这个线, 例如到了$500/ounce, 那就是cost很高了, 公司的利润很小. 低于这个线, 例如到$150~200/ounce, 那就是cost很低了, 公司的利润很大. Grade高的矿显然开矿cost低, Grade低的矿显然开矿cost高. Cost还取决于矿的地理位置, 附近有没有电网, 道路及运输条件如何, 当地的薪金水平, 税率, 有没政府补贴等等各种大大小小的因素. 如果是tier 2的矿那代价就高了, 到六七百一盎司甚至更高都正常, 储量再大都没用, 在目前的金价下就是陪钱的买卖, 只能先搁着等哪年金价涨到开挖有利可图的时候. 小公司的Cost一般低些, 大公司的Cost一般高些.

看金矿公司的ER里经常看到它们的cost出奇的低甚至是负的, 这是因为他们把挖金矿同时挖到的byproduct (例如银或铜或其它金属) 的价值也打入了cost里, 例如挖出一吨矿石里金有多少克, byproduct有多少克, 这些byproduct所值的钱就能抵消一部分cost. 但这种byproduct高的矿石里含金量一般都比较低. 算到最后, 这个矿到底是算铜矿还是算金矿都说不清了.

第二个要知道的是一个金矿的intrinsic value. 这就是要回答开头的那两个问题. 这里也有个简单方法来计算: $150/ounce for gold reserve, $50/ounce for gold resource. 这就是说, 假如有人告诉你这块地底下探明有1M ounces的gold reserve, 那么这块地就至少值$150M. 一个上市金矿公司公布自己共有1M ounces的gold reserve 和1M ounces的gold resource, 那么该公司股票的fair value就至少是$150M+$50M=$200M. reserve 和resource差别是前者是确切探明出来的, 后者是推断出来的, 带有不确切性. 用这两个数字我们就可以简单快速地估算一个金矿公司的股票价格是undervalued 还是 overvalued. 为什么黄金现货价$1000/ounce, 但人家把这个金矿卖给你只卖$150/ounce呢? 这是因为你买下地之后还要花很多钱去把这个金子给挖出来, 前面已经讲了这个挖采的cost是多大, 按标准cost算总成本也至少是$150+$350~400=$500~550/ounce了, 况且新矿为了取得银行的贷款都是要hedge的, 就是预先签定好供货合同, 按固定价卖出开始生产后的前几年的所有产量, 这个固定价一般都远低于黄金的现货交易价, 一般能卖个$550~650/ounce就很不错了. 所以这个$150/ounce是有道理的. 当然, 随着金价的快速上涨, 这个基数值也会上升的.


五: 黄金板块的股票选择
其实正式的叫法该是稀有金属板块, 含: gold, silver, platinum group metals. 它们走势大体差不多, 同一个趋势. 最近银和白金的走势比金还强一些. 一般买黄金类股票的选择是:
1. Gold production company
2. Gold exploration company
3. Gold ETF

这三类各有千秋. 具体的ticker以前贴里早已提过, 这里就不重复了.现在提供一类新的选择 :
4. Gold royalty company

这类公司有点象投资公司, 只是个资本集团, 不进行生产. 但与一般投资公司不同的是它们投资购买的不是金矿公司的股票, 而是金矿公司的royalty. 这样金矿公司的所涉及到的风险都与它无关(例如金价大跌, 矿上出事故, cost大幅上升等等), 任何情况下金矿公司都要老老实实向它们交royalty, 标准的旱涝保收. 当然, 不利处就是它们也享受不到或只享受到很少一部分金矿公司由于金价大幅上升而带来的利润大幅上升.

这里提供几个ticker.
美股: ROY, RGLD
加股: FNV.TO, IRC.TO, RGL.TO


啰哩啰嗦写了一大堆, 写得累死了, 看的人肯定也会看得累死了, 唯希望对新手有所帮助.

Mar-06 Intraday Updates

It looks the market is really afraid of the Non-farm payroll data that will be released tomorrow. Nobody is not optimistic about this data, In the market, most people are wrong.

We have already priced in a moderately bad data tomorrow. However, by looking at the weekly jobless claim, it is possible that tomorrow the data will not be that bad.

Am I encouraging you to enter long position now? No, I am not.

I am going to provide you some strategies:

1. If you long stocks, say, Tech or commodities, I suggest you to hedge or reduce your long position.
2. If you short stocks, I suggest you keep your short position, but buy a little financial calls, such as JPM, which has several day decline and BBands lower band touch.

This is TA-wise, for short term, I believe in TA. No matter the data, if it is good, market will drop for a reason, if it is bad, market will use rate cut hope to pump. Whatever, big fish has the final word. We just need to do our own good.

Good luck!

Why am I saying it's time for strategic investment for H-shares

1. Low PE. PE should not be the only reason to invest but it should be a good reason. Once you have really cheap stocks around H-share, and you see China is booming for next 11-5 period, with many infrastructures that are going to be built, as well as many big projects, etc, you know low PE for Chinese stocks will not be a long term scheme.

2. Recent weakness. We have similar points compare to mid-2007s, while we have decent ERs ahead for major Chinese companies, I really see recent weakness is a good entry for long term investment.

3. TA-wise. We see major Chinese stocks are more or less standing above the major resistance, such as LFC, CHL, etc. The reason why market makers are not pumping them is just lacking of enough cheap chips. I am 100% sure they are accumulating now and will do in the next months, while global market is weak.

4. Many people say small factories in China now are closing their business. This is a good sign. We are now exporting electronical, machinery, communication devices, why should we still export these T-shirts? It's now for Vietnam and Thailand people to do this.

5. I am really happy to see the credit crisis. Without this crisis, I was really afraid of the over-hot Chinese stock market that may lead to a total crash, as well as the hot Chinese economy. Now we believe Chinese economy will be cooler than expected, so we begin to build rail ways, enhance infrastructure, increase local investment without worrying much about economy going crazy. At least, the market crash is postponed greatly and we won't see that in near future.

However, these assumptions are built upon peace, any war will break this. I think we don't need to worry about this too much because it is somehow out of our control and expectation.

Mar-05 Daily Strategy

We now see some strength of the market, then we can think about how to benefit from it. As I suggested, if you fished some Tech and Home Builders during AH yesterday, then now they are in good shape. We need to consider some other actions of today. I would suggest to watch several stocks for another swing.

[CEO] this baby has had correction and I think it's time for her to show some strength as OIL rises.

Chinese telecom stocks may have another swing up, such as CN CHU CHA, today is their first day up and I expect 2-3 another upward swing.

These H-share ADRs can be loaded if and only if the market is set to green today with more than 60 points gain of DOW. You can buy them around 1-2 PM when the market is steady without much weakness.

For other stocks, I suggest you to take a look at Brazil stocks on my pick list.

If you focus on some long-term investments, I have already recommended a Vietnam holding before: PINK:VTOPF, maybe you can have a look.

Mar-04 Market Summary

We have an incredible turn around today which we have not seen for a while. Still, we hold 12150 today by close, we lost 0.4% for the first two days of this week. As I said for 2 weeks, if we have a while candle stick for this week, then the middle term will be bullish. This is of course still valid.

For next days, we have two days with long shadow at the bottom, which signals a bullish sentiment for next days. Let's wait and see.

Strategies:

1. Fishing Tech, Home Builder during AH if possible.
2. Metal stocks may be cooled down a bit, but this is a correction, I think, watch tight.

Good luck!

Mar-04 Daily Market Preview

We will have a very tough week ahead, where Friday's job data is a central cocern. Highlights of today:

* Band of Canada may cut rates. The dollar may have less pressure.
* DOW 12150 held yesterday, but this is still critical for today's direction. Most long positions should be reduced and cleared accordingly.
* For minor long positions, still, gold is an option, base metal, agriculture are secondary options. My favorite gold stocks like AUY and ABX hit all time high yesterday. But please be careful, I expect 1050-1100 will be next target for big correction.
* For short positions, if you followed my suggestion to use bond insurers like fre fnm as a hedging position against longs, you should be profitable now. Still, bond insurers are first choice for shorts and puts.

To me, the best strategy here is having more cash and send money back to China to play around A shares. Yesterday, I just took my February profit around 25% (you should not be surprised by looking at my picks) and will send the money back to China, especially in this moment EUR hits all time high agaist USD.

Mar-3 Daily Preview

The new week begins with uncertainty around. We have the most important job data on this Friday, which will somehow decide the short term direction of the market.

Regarding today, we see the modest loss at the beginning as BA weights on DOW. However, commodity stocks are continue to outperform. Gold will try 1000 this week or next. Fertilizers are going to test new high if the market goes steady.

With last Friday's sharp decline, I talked about strategies of this week. I repeat, any drop below 12150 is a sell signal. It's not a good time to build short term or mid term long position, while at this stage, extra long term holding can be built with 1-2 times average down prepared. If you are not going to average down, please stay aside.

The market now has 4 declining month in row, therefore I wonder in worse case, we will have a positive month in May. In best case, we will have a positive March. A positive March could be established if we have a positive week now. This is all TA-wise. On FA, I tend to believe the Spring comes around April, when the rate cut really show something.

Good luck for this week!

Mar-01 Market Summary and Preview

As I said during last weekly summary and preview, I was not optimistic on the market at all, and I also predicted a black candle stick on the weekly chart above 12250 is possible and acceptable. Then we still have chance on the next week.

However, I am also not very optimistic on next week as well. A very obvious sign will be breaking under 12150, which is likely to happen on Monday due to the BA news, in this case, I think any long position will be dangerous. If a large sell-off occurs, it is likely to see a 1500 decline on DOW to test 10700 level on 2006 lows.

If you still have some long positions, I would strongly recommend you to reduce/clear or take some hedge position to protect your investment in the case of another decline under 12150 early next week. There is no safe place in this market. Including DBA and gold might decline as well, although they will come back.

If you have set your mind and hold blue chips tight for longer than 1 year, I think it's OK for you to ignore the current market, because normal people never dare to bottom fish and catch low price stocks and they often buy back when the price goes higher than their selling price.

In a nutshell, a bullish sign will be DOW holds 12150 for Monday and Tuesday, otherwise, it will be very bearish.

Feb-29 Intraday update

Today we have a really ugly start and my messenger is down again. What I can see now that today has a big distribution start and now it finds an temp bottom. There are several remarks:

1. We have support around previous trend line here around 12350 which is very critical, any new low today below 12300 is a very bearish signal that tells you, sell now.

2. The chance that we have a full recovery is very low. If DOW close above 12450, then it is a good sign, so you can try to buy some on this dip with stop loss around 12330.

3. As I said we can still tolerate that we have a black stick for this week and it will be still bullish if next week is white. But pleas bear in mind, the bottom line is 12300.

It's always better to go away with small/no profits than staying under water.

Feb-28 Daily comments with Gold analysis

I have seen bad economic data today, and there will be another batch of data coming tomorrow, as well as AIG report, which may not be positive.

If you have some profits in past weeks, and now it's time to take some off the table. If you are still deep underwater, I don't think short term changes make much sense on you.

As I said before, if we close this week around 12450, we still have chance to see 13000, otherwise, it will be quite gloomy again.

Some people asked me about gold, I would say, gold is a safe-haven buying now. Think about early 1990s, gold is about 130 RMB per gram, now it's about 220, which is far far below inflation. During 1990s, 130 RMB is a monthly salary of an government employee in China, but now 220 is one day salary.

I predicted gold to reach at least 1050 before next correction, now there is still no panic buying, when everyone realize gold is a safe place to put money, gold will reach 1250, or even higher.

If you believe US economy is bad, and you want some hedging position in your portfolio, think about gold stocks. However, I do not recommend to put most of your account to gold as you probably will be staying underwater for a couple of years because gold stocks sometimes do not go up with future bull market.