``It is quite possible in the next few months to see more earnings downgrades,'' said Michael Foo, who helps manage $300 million as Singapore-based head of portfolio management in Asia at Clariden Leu AG. ``The U.S. economy has deteriorated much faster than what most of us were expecting.'' (Bloomberg, 5 February 2008)
Earning downgrades, and US lenders expectation of more delinquencies and losses this year do not make good reading, and it certainly hasn't helped global market sentiment. Thankfully in Malaysia, we have election and festive seasons to balance the negative sentiment... or is this not the case now?
We now know that if we were to have a Chinese New Year stock rally, we would have seen decent price movements by now. But we haven't. We have indeed broken a long tradition of commonly held belief that the "run up to CNY is a good time to buy".
Now, what hope do we have for an election rally?
Many internet-based market analysts (supposedly the most neutral among all types of analysts! My favourite is S Dali who writes for The Saturday StarBiz column) continue to hold bearish views on our market. Yes, there are more compelling reasons to wait than to buy now. But is our local economy and stock market that bad?
It depends on who you listen to. If you sit next to Pak Lah or Najib at their evening dinner table, you'd probably have a different opinion. And the likelihood is, you'd also probably lost a considerable sum of money punting the market judging by the performance of big cap companies in January. Unless of course they provide insider info, which I am sure they won't : ), right?
Now let's assess the market mutterings (these are more real than any analyst report), these are what you'll commonly hear in lifts/canteen/smoking area in any stockbroking firms:
"Volume is thin, how to buy?" --- (the trader's nightmare)
"HK and China now affected by US. Surely we also." --- (the decoupling theory explained and dispelled in 10 words!)
"Investors are scared. They are cashing out for CNY. Market not so liquid now." --- (even investors buying on fundamentals are not so sure now)
"Any rally these days are short. But the sell-down is extra long. How to play?" --- (the technical analysis jargon simplified)
It is really a bull, please meet bear situation, isn't it? I think the best advice comes from Samgang of www.samgang.blogspot.com. He says:
Personally, when people start to use Feng Shui or Chinese astrology to make their stock market decision, you know these are tough times indeed. Since the stock market will always be around, why not wait for better opportunities? Unless of course you know something I don't.
Earning downgrades, and US lenders expectation of more delinquencies and losses this year do not make good reading, and it certainly hasn't helped global market sentiment. Thankfully in Malaysia, we have election and festive seasons to balance the negative sentiment... or is this not the case now?
We now know that if we were to have a Chinese New Year stock rally, we would have seen decent price movements by now. But we haven't. We have indeed broken a long tradition of commonly held belief that the "run up to CNY is a good time to buy".
Now, what hope do we have for an election rally?
Many internet-based market analysts (supposedly the most neutral among all types of analysts! My favourite is S Dali who writes for The Saturday StarBiz column) continue to hold bearish views on our market. Yes, there are more compelling reasons to wait than to buy now. But is our local economy and stock market that bad?
It depends on who you listen to. If you sit next to Pak Lah or Najib at their evening dinner table, you'd probably have a different opinion. And the likelihood is, you'd also probably lost a considerable sum of money punting the market judging by the performance of big cap companies in January. Unless of course they provide insider info, which I am sure they won't : ), right?
Now let's assess the market mutterings (these are more real than any analyst report), these are what you'll commonly hear in lifts/canteen/smoking area in any stockbroking firms:
"Volume is thin, how to buy?" --- (the trader's nightmare)
"HK and China now affected by US. Surely we also." --- (the decoupling theory explained and dispelled in 10 words!)
"Investors are scared. They are cashing out for CNY. Market not so liquid now." --- (even investors buying on fundamentals are not so sure now)
"Any rally these days are short. But the sell-down is extra long. How to play?" --- (the technical analysis jargon simplified)
It is really a bull, please meet bear situation, isn't it? I think the best advice comes from Samgang of www.samgang.blogspot.com. He says:
I have changed my strategy from hold to " hit n run " ! first , I am minimising my portfolio by selling off 2/5 of my mahsing @ 1.85 for some profit taking , later on , I will sell my other stocks on strength b4 CNY , I dont think KLSE able to climb above 1,420 b4 8 of Feb !
When time to retreat , RETREAT ! no stocks can go against d gravity in bear mkt ! be it FA or Non FA stocks ! d different is if u r buying FA stock , u will be benefited in long term but u hv to lose some opportunity n holding cost !
The attached picture (there is an attached picture on his blog) is actually an ancient Chinese astrology called iching , take it as a guide for yr shares investment 4 year 2008, fyi, it did talked about "strength in metal " last year , look at how metal performed today !? believe it or not ? u decide ^V^
Personally, when people start to use Feng Shui or Chinese astrology to make their stock market decision, you know these are tough times indeed. Since the stock market will always be around, why not wait for better opportunities? Unless of course you know something I don't.
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