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.