Last trading day of 2013

I was on vacation when I saw the news of layoffs by HGST and it struck deep in me as I have also heard about friends and clients whom were layoff in the financial sector since last year. This is definitely not the most desired way to end 2013 and start 2014. I hope they have a healthy balance sheet(family) to see them through during these period and that they can find employment in 2014. This further reinforced that one should prepare himself/herself financially so that in the event such a unfortunate thing happen, it is not the end of the world.

As we moved into the last trading day of 2013, I would like to share some of the lessons learnt over the last 12 months. 

Risk and Rewards. Dr Tony Tan once said, and I quote 'when you take care of the downside, the upside will take care of itself'. How wise is the statement, and many times, it has worked for me for those shares that I have bought below their NAV and low PE. Taking care of the risk also means that one needs to cut loss if it does not turn out to be in the direction that you have set out to be. Cutting loss is important as you keep your loss to the minimum so that the profits from the other counters can help to reduce the impact to your overall portfolio.

Know Thyself. Not everyone can be both a trader and an investor. My definition of a trader is one who buys and sells share based on TA, solely TA, and that he/she does not keep shares for long period of time(more than 2 to 4 weeks). An investor is one who uses FA to select the stocks that he/she wants to buy and then uses TA to time the entry and exit from the market. I know where i belong to after having my loss when I tried trading.

Diversify. Although some people said that you dont know what you are investing if you have a diversification of portfolio. I have said this many times, I am not expert so I cant be putting all my eggs into one basket(and besides most of the experts were also wrong during the Lehman crashed) and therefore I need to learn from someone who has proven track record. Walter Schloss holds a portfolio of stocks using his own selection which he has shared and for 45 years, his fund has produced a healthy return of 15.3%. This is very impressive considering that it has beaten S&P500 which has recorded 10% for the same period of time. And besides, the penny crashed that we had in October, can you imagine if you have put all your savings into one of these counter, Blumont Group Ltd, Asiasons Capital Ltd and LionGold Corp Ltd.

Be Patient. I too made this mistake of buying too early, just like most of the investors. I have to constantly remind myself that sometime it is worthwhile just to wait for a few more days before deciding again whether to enter the market. To mitigate this, for the past few counters, I have been entering that market in batches using TA.

In less than 15hrs, we will be starting 2014, what is your investment strategy moving into the new year ...

Market Watch: STI 14 Dec 2013

It's the year end holiday season and many folks are on leaves or starting their year end break, as such, there isn't much market activities or interesting news. The only ones that is still floating around on and off is still the talk on the QE tapering. This should go on for a while, but from the look of it, it seems that the market is already absorbing some of the potential impact and is not reacting as drastically as it was initially.

Anyway, STI has started its down-trend, looking at the chart below, pivot at 3122, so we are 56 points below based on last closing. Should you be worried, I mean, if you looked at the rectangle, it just means that it's been range bound at about 200 points since June this year. 

Counter debrief: CSE Global

Instead of just showing one's portfolio like some of the other bloggers, I thought it is more useful to share the thought process of investing and divesting of one's counter. So here I will start with my first debrief for CSE Global.

1. This counter came to my radar after I used SGX mygateway to screen for stocks based on a simple criteria of ROE of 13 and having a dividend of 5%. 
2. Next I check the FA, didnt spend too much time to dig stuff, just a quick glance to make sure that revenue been growing, operating cash is healthy, Capex is low.
3. I noticed that they have more than 1/3 of business in the US, and so I became more interested as I believe their business will be able to tap on the US recovery.
4. I also used a quick litmus test using DCF from moneychimp; and realised that it's about $1.12.
5. Having done the above, I then looked at the TA. The eclipse zone is where I have bought in to the counter around August. I saw that both the 10MA and 20MA has turned up, and that the 2nd test of the support level was higher than the previous one.
6. The rectangle zone basically had reversed all the signals that was positive from my buy and by right I should have sold off but why didnt I. One of the reason is that it did not break the previous support, and also my position is small enough that I dont lose sleep over it.
7. My oversight was that I did not add on when it broke out on the right hand side, maybe I was too busy to notice. <<Lesson learnt>>.

7. CSE Global management has announced that 28c of dividend will be given to shareholders as reported in Nextinsight. Looking at 1 - 6, I did not do what some investors will do to try and understand the management, some will say that I was lazy. To me this is beyond me, and I have neither the experience nor the time. Anyway, by doing that, will anyone knows that this was in the pipeline, dont think anyone will know unless you are involved in the decision making.


Related post: Stock scan

What can you do in today's market

Let's face it, global market is no longer as cheap as it used to be. Dow Jones and S&P500 has continued to maintain at new high, Asia markets also soared the last week after reacting positively to Yellen led Fed Reserve. Traders like this period of market volatility because this is where they make money from short term trading. However, many of us will not have the time to watch our counters every minute or second. So what do you do now as investors?

Be sensitive to global fundamental. Just a few days ago, CISCO, the US Giant networking company forecast a steep drop in revenue and weaken orders from emerging markets. There are couple of networking equipment stocks listed in SGX, is this a good time now to invest in those, given the warnings from CISCO who is the leader of the pack.

Looking at numbers. Most of the people wants to be or learn from Warren Buffett, but the fact is that there is only 1 Warren and no one can think like him. Are you able to read and assess in-depth of the management team like him, would you buy the shares like his recent purchase of IBM and Davita, which based on TA is high. We are simple man with a day job so instead of trying to analyse with so many things, maybe we should keep it simple by looking at assets such as Price-to-book ratio. Walter Schloss was a legendary investors with proven results, he kept his method simple and there is no need to talk to and try to understand management. More about this man can be found here.

Patience. If you cant find anything to buy in the current market, then dont buy. Some of us uses TA to time our entry and exit, so if there is nothing at the moment, then wait.

 

Financial tasks to do before year end

In less than 2 months, we will come to a closure for 2013. There are couple of financial tasks I thought one should try and do before the year ends.

Investment checkup. Review your stock investment and understand on those investment decisions that have not performed well or in a loss, what were the reasons. Was it due to insufficient understanding of the FA, was it due to timing, etc. Only when you understand your weakness and learn from others their strength continuously, then you can keep future losses to the minimal.

Portfolio realignment. For those who has embarked on the permanent portfolio(PP), it is probably time to rebalance your portfolio. There have been many surprises in the last 2 years where market such as Europe has gone up at least 30% despite the fact that they were having so much issues. Dow Jones have also keep hitting new highs. This also reminds us not to invest based on news but to adhere to the strict mechanics of the PP.

SRS. Isn't it cool to be a Singaporean. Apart from the America 401(k) tax saving scheme, in this region, we are probably the only country that have the similar scheme. Since the government has provided that channel, we should make full use of it. On surfing the web, I found these links which may be useful to you if you are interested.

1.  ecitizen.gov.sg - this portal has got all the information that you need for SRS, from who is eligible, what is the max amount, which are the banks, what can you do with SRS, etc.
2. ocbc.com - Just to highlight here, I am not OCBC employee, neither am I promoting anything here. I just like the SRS page which is very graphical and easy for laymen to understand. And besides, you get $30 Robinson vouchers, as part of their promotion now. I mean why not, free things is always nice :).

Charities. The fact that we are talking about the above means that we have done well in life, then shouldn't we give something back to the society especially to the less fortunate ones. With online portal, it is much easier to donate now, one can even charge to credit card.

How to tell(simplistically) if the market is expensive?

Both Dow Jones and S&P500 has hit and continue to stay at new high, questions have been asking if one is still able to invest in this market.
One of the quick way would be to look at the CAPE ration as a quick guide to determine which market one can invest. Cyclically-adjusted price-earnings(CAPE) ratio was introduced by Graham and Dodd, latter on also used by Robert Shiller. Cambria Quantitative Research's Mebane Faber extended the used of the ratio to measure global markets. Below is a chart which shows how the world markets ranks from cheapest to expensive.

Source:businessinsider.com

From the chart, it seems that most of the European countries are fairly cheap. In the middle, we have few from Asia. At the top end, to name a few, there is the US, Indonesia and Malaysia. Malaysia came as a surprise to me though ... ...

Should you be worried about Oct 17 - US debt ceiling ?

Thanks to the media and internet, by now most of us know that US will run out of money this week if the Republicans and Democrats cannot reach an agreement to raise the borrowing limit coming 17 Oct. And if this happens or is going to happen, shouldnt there be a lot of fear in the market.

One of the indicator known as the 'fear' indicator, VIX(^VIX) is commonly used as a guide to determine the sentiment of the investors or the volatility of the market. Looking at the chart below, the indicator is below 20 now, meaning that there is not much of fear now, business as usual. The last time that it hits 40 was in Aug 2011 period where there were lots of news about US and Europe being in a prolong recession and also at the same time, Standard and Poor's downgraded the US credit rating.

In that case, we still have a long way to go from the current 16 to 40.

Source: Yahoo Finance

Financial roadmap(III)

In this post, let's look at the typical financial preparation one can adopt for the 40s. At this phase, hopefully one has become wiser financially by learning from other people's mistake and try not to make the same mistake. For some of us, we were fortunate to experience the Asia financial crisis, high interest rate, dot com bubble, 911 incident, SARs and the last financial meltdown happened from the US. 'Fortunate' because there will be very few of us(the lucky ones) who would have the GUTS to have taken advantage of those situation and attain financial freedom thereafter. One small note which I was shocked when I spoke with my colleagues, the younger ones(below 30), they thought that the low interest rates is a norm. And this is probably the reason why we have cyclic downturn as people forget.

Savings. At this phase, most of us would have reached the peak of our career, income would have also risen over the years. However, you might not be able to save more due to growing family and other commitments such as car and new property, at least still try and save 10% of your income. Continue the saving plan for the kids education, this can also be in the form of Index ETF investment.

Investment. Your index ETF portfolio should have grown to a sizeable amount at this phase, continue investing and rebalancing. This is a mechanical way of buying low and selling high. For the adventurous ones, you might have also started your stock portfolio in your late 30s.
Continue your SRS contribution to take advantage of tax savings.

Retirement planning. One should also start planning for retirement financially. For this part of the equation, it is important to watch your debts and live below your means. With the investment strategy from the above, one should be on the comfortable start to retirement planning. Watching debts is critical as most of the time it is this that slows this part down.

Unfortunate events. In life nothing is certain. In this phase, we will be vulnerable in our job as companies restructure or move out of Singapore to a cheaper location, or that we are deem too expensive and can be replace by cheaper resource. If that ever happens, and this is the reason why in part I and II, the earlier you have started savings and investing, the more prepared you will be and lesser stress when it happens. I have seen colleagues shed tears when it happened to them, cause they have a young family or have just committed to a new property/car. My grandma always tell us when we were young to always be prepared for rainy days, it will come some day.

Continuous learning. Apart from learning skills for your job, it is also important to take up new ones such as investments, blogging, expanding networking, etc. This is not so much of helping you to get promoted in your job but rather for you to exit the corporate world if needed.

Related posts:

1. financial roadmap(I)

2. financial roadmap(II)

Financial roadmap(II)

In financial roadmap(I), we looked at the typical financial situation for the 20s to 30. Here, let's look at the 30s to 40. In this phase, there are many exciting life events that will happen here, such as first job promotion, getting married, and in Singaporean mindset, this follows with the commitment to a residential property(actually, this one normally come first before marriage :)), maybe starting a family, then follow by excuse to buy car, etc.  As you can see, the life events here requires huge chunk of financial commitment as well. 

Savings. Remember in my previous post, a lot of the focus was on savings and aggressively building up the fund. Here is the reason why, because there are so much expenses at this phase. Now, if you apply, rule 72 for a 6% to 7% return, your $54,000 would have grown to close to $80k. This amount comes in handy for your wedding, honeymoon, or HDB renovation.

Continue to save, if you can't do 30%, at least 20% of your income and also continue your ETF investment as well. For those who have kids, it is also time to start planning and saving for their education as well. 

The action that we take in each of the phase, actually determines how easy or difficult financially your next phase of life going to be.

Debts. Due to these life events, the temptation to over-commit and over spent here will be even stronger. A lot of times, our financial outlay is bigger here for weddings, honeymoon, housing renovations, car, etc. I am not saying that we shouldn't pamper ourselves with these once in a lifetime events, but do constantly remind yourself that you have a budget to follow.
Becareful with credit cards, it can be a useful tool if you use it wisely, otherwise, credit card debts will cause a major setback to you financial goals. Think about it, does it make sense to pay 24% card interest when you are only getting 7% from your investment returns.

Insurance. Most of us would have started our family here. As you are the breadwinner, do ensure that you have enough coverage in the event if the worst happens. Do remember to also include medical shield plans for your kids. As to whether, you should or should not buy life insurance for your kids, this has been a hot debate for 2 different group of people for a long time. One group feels that since they don't bring any earnings to the household, then there is no need to insure them for life. The other group will argued that since they are young and free from sickness, it is better to insure them for life and premium is typically lower. I don't have an opinion on this as long as your kids are insured for medical.

Most of us forget our aged parents, in their time, medishield was probably non-existence, so do remember to insure them. The recent medishield life is a good initiative from the government to include all Singaporeans. 

Tax. In the late 30s, for some of the folks whose income may have grown a fair bit, do consider topping up the CPF of your loved ones to enjoy up to $7000 tax relief. Another scheme, Supplementary Retirement Scheme(SRS), also allows you to save on your tax as well. For more information, do refer to CPF and IRAS website.

Emergency fund. At some point in this phase, you might also want to start an emergency fund which  can last for 9 to 12 months. One of such use is when you got layoff and not able to get employed immediately.

Charity. Don't forget about helping the less fortunate.

Related post: Financial roadmap(I)

Financial roadmap(I)

I am sure most of us when we looked back at our financial journey, we wished that when we first started there is some form of a do's and don't list to guide us. Most of us learned the hard way, either by lots of reading and attending seminars(which you are not sure if they even practice what they teach) or by trial and error through making investments mistakes. And some of these mistakes can be costly. Fortunately, there are few blogs(here and overseas) which are worth reading and thanks to the effort that they have put into the writing. Hope this one will help as a guide to the start of your financial journey as well.

For the 20s to 30 - This is where most of us would have just started working. 

Savings, savings and savings. This is the phase where one needs to save and save hard. Unfortunately, to grow money, you need to have first pot of money first. And there is no way other than saving. It is important to start early as most professionals preached, otherwise, your later part of life will be harder.

Most of the fresh graduates starts with around $3000, and if you are able to save 30% of the salary which is $900, in 5 years time, you will have accumulated $54,000. At the age of 26, you will be able to start your investment using this pot of money, part of it into ETFs and the rest as opportunity fund when the next crash(like in 2008) happens. There are other blogs which talked about the merits of investing into a permanent portfolio using ETFs, which I will not repeat here.

Debts, debts, and debts. During this phase, and in fact at every stage of life, there will be financial temptations. Is it necessary for that expensive trip to Europe or US, do we need a new mobile phone or a car, must we own an expensive condo in the city fringe. Whatever it is, keep debt low, remember leverage can go both ways.

Insurance. While you are still healthy, remember to upgrade your medical plan such as the shield plan. Keep it simple by just getting a life insurance since your parents might depend on you now. There has been alot of debates on ILP, personally, I would avoid as mine is still under water even after 12 years. And if you are investing using ETFs, then, there is no need for ILP.

In the next post, I will talk about 'for the 30s to 40'.

Stock watch: Global Investments Ltd

Technically, chart is trending up although 50MA is still below 200MA. It has also tested the support level twice(arrows), and today the candlestick closed strongly with good volume. Will there be a breakout soon?

Below is the analysis from the research report. I have extracted some of the key data from the report, low PE, low P/Book ratio and high dividend.

Market watch: STI 22/9

After the meeting last week, Fed reserve will continue its bond-buying and did not taper the QE as market has expected. The "good" news send most global markets up and Dow Jones hitting new high again. 

As for our STI, it has also reacted positively and last week it has crossed the pivot value of 3130, the falling rate has slowed down as per the monthly chart below. However, long term, it is still bearish as 50MA is still trending below 200MA.

In CNBC last week, Warren Buffet said that he is having a hard time finding things to buy, does that mean anything?

 

Stock watch: Keppel Corp

Technically, long term Keppel Corp is still bearish as the 50MA is trending below 200MA. However, for mid term, looking at the weekly chart below, the downtrend has slowed down and there is a possibility that it might turn up if it is able to stay above $10.7. Daily chart for 5/10/20 MA have all trend up.

Given that US economy is recovering, KepCorp has been mentioned in many articles to be able to benefit from it. Fundamentally(simplistically), KepCorp is trading at around 11 PE, has quite high ROE of around 20 and it's dividend yields around over 4%. For more detail analysis, click here for a report by Seeking Alpha.

Why I am not buying REITS now ...

Market has recovered last week and continue to sustain today. Most of the counters are back in the run and especially the REITS which have been beaten for a while, has made some gains. At the current price, it seems attractive to invest as passive income given that most will give about 5 to 6% dividend.

However, after thinking through, I have stopped my itchy finger from pressing the 'BUY' button. 

And here are the reasons:

1. Based on the broad index(chart below), there seem to be a reversal looking at past week candle stick but 10MA is still pointing down. Would it be a case of rebound after deep correction and then continue downtrend again?
2. How much of the QE will Fed withdraw, no one knows. Will there be a shock?
3. And when interest rate increases, how will it impact REITS, especially those who's debt is on the high side.
4. 10 yr SGS bond yield is close to 3%, is 5% from REITS attractive then?

As much as I want to collect them for passive income, I dont want to caught myself losing, due to capital loss.

Abe's 4th arrow - 2020 Olympics

Tokyo, the Japanese capital, has beaten Istanbul and Madrid, to host the 2020 Olympics. Japan's economy has been on the recovery since Abe's 3 arrows to revive it's economy. The Japanese stock market has responded strongly to these initiatives. Now by winning the 2020 Olympics, there has been market talk that this is the 4th arrow which has further boosted the Japanese confidence. In many news article today, there has been reports on the further uplift of Japan's GDP till 2020 and how the win has also raised business leaders' confidence towards the economy.

All of us know that for a stock market to be able to rally up, it has to have both Confidence and Funds, now it seems that the Japanese economy has both. How can we join the party?

There are a couple of Japanese funds that is listed in the NYSE, below is a list;

1. Japan Equity Fund(JEQ)
2. Japan Smaller Cap(JOF)
3. iShares MSCI Japan Index(EWJ)
4. WisdomTree Japan Hedge Equity(DXJ)

Click on here for a research article by Fidelity, you will find information on the annualised returns and the expense ratios for each fund.

War and the stock market

Just this week, world leaders have arrived at Saint Petersburg for the G20 summit. One of the agenda is to discuss on the Syria crisis. Global markets have corrected since the Syria crisis due to the uncertainty of whether is there going to be a war. 

While surfing aimlessly, I came across this interesting article from seeking alpha on how Mr market reacts before and after US launched the Iraqi war. One of the interesting observations in the article and also by a number of experts, market rallied when war is started. Looking at the chart below, it is quite true for the Iraqi war during 1991 and 2003.

How about our STI? Let's us look at how our STI reacts to the 2 Iraq wars, dated Jan 1991 and Mar 2003.

If you look at the first Iraq war(red oval on left), the index rallied from about 1200 to more than 2300(in 1994), more than 1000 points.

The next Iraq war, the index rallied from about 1300 to 3650(2007), more than 2300 points.

What is the similarity here?  Both started off from a low base of below 1500. Looking at where STI is today, do you think history will repeat itself? If what the experts said in theory is true and history were to repeat itself, does that mean that STI will hit at least 4000 in the next few years ???

How do you handle a recession

Last night, I was catching up on the short documentary show 'Recession Heros' which I had missed the last couple of weeks. Fortunately, thanks to technology and XINMSN, you can actually watch it online, which is cool. After watching, it sets me thinking, are we ready for one?

Dow Jones and S&P 500 have not been able to hit new high and have been in  consolidating phase recently. It can go either way in coming months. Due to the recent correction, all regional indexes have also been down by more than 20%, and if it stays down with no signs of reversal, then the market might actually be in Bear zone. Thailand was also the first country in this region to have gone into recession since the major financial meltdown. Currencies have been behaving abnormally, most of the regional currencies(such as ringgit, baht, rupiah, rupees) have weakened alot against the USD.

With recessions, many jobs will be lost and how do you prepare for one if it comes. Actually the sad part is that most of us are not prepared for one until it hits us.

Honesty. Be honest about your layoff. Tell your closed ones, spouse, families including your children. By telling them, at least, you do not have to face the pressure of why not going to work after your layoff.

Severance package. For the lucky ones, if you have a severance package, do not spent it on an expensive vacation or buying an expensive gadget for yourself. Plan and use it carefully cause you do not know when the next job will come.

Budgeting. Discuss with your spouse on the family expense. Cut back on spending, determine what is need and what is want. The toughest part about this is telling your kids to cut back, no more eating in restaurants, visit to ice-cream cafe, buying of toys, etc.

Insurance. Ensure that your family(including your elderly parents) and yourself is covered with a comprehensive medishield plan. When one is down on luck, alot of other unfortunate things can come along. With medical covered, at least you dont have to worry about huge medical expense.

Reduce your debts. If it's so unfortunate that it is a prolong one, then look into cutting your debts, such as credit cards, property, car, etc.

Invest. Ideally, one should already have an investment portfolio before this happens. But most of us would not have one. If you manage to find the next job before finishing off your severance package, then you should make good use of the amount for investment in preparation for your next job lost. Yes, economics and jobs are very mobile now, and what you do now is to prepare you for your next job lost, sadly.

Hopefully my readers will not have to refer to this post during your work journey..

When should you cut loss

When market is on the uptrend, everyone is happy. But no stock market goes up forever, at some point it will correct, whether big or small ones. When the trend turns the other way, most of us will struggle emotionally on whether should we take profit off the table or to cut loss for the losing trades. This is why Mr Market is so interesting and everyday, every events bring different end results to Mr Market due to human emotions.

Take for e.g., this trade which I had made during October 2012(the first red arrow on left). At that time, I bought ishares silver(SLV) at about USD33. Also note that the 50MA has crossed above 200MA, so trend should have been reversed to uptrend. 

However, in Feb 2013, this had changed with 50MA below 200MA. At that point, instead of selling when TA told me to, I was holding onto hope that silver will ride up again. But it never did, and I finally cut loss at about USD27(the 2nd red arrow), sometime in April this year. 

Looking back, if I had not cut, I would have lost more(on paper), cause silver actually hit a low of USD18. And because I had cut loss in April, only then I had the capital to buy again recently. 

Related post: silver trend reverse

Is it time to short S&P 500??

One thing that investor does not like is uncertainty from events and in the recent weeks and months, this has reflected in the market. If you think that this is a good time to short the market, for e,g S&P500, one can invest in a inverse exchange-traded fund(ETFs) as a hedge against a correction.

To short S&P500, one can invest in Proshares short S&P500(SH). As this is an Inverse ETF, you buy instead of short sell. You can refer here for more information about this ETF.

The chart has crossed the 50MA, but it is still below the 200MA, so is it time to buy?

Syria tension hits Asia markets

Financial markets in the region have been hit badly by the news of QE tapering and now the tensions in Syria. Most of the regional indices have reacted negatively and has corrected since, and some people in the forum said we are in Bear market. Most of the experts define the Bear market as a major correction of 20% to 25% from the high, are we there yet?
The correction as some have said was primarily due to funds pulling money out of Asia and putting back to US where the economy seems to be recovering well. The other aspect which caused this correction to happen was also due to the tensions in Syria which we are seeing that warships are being placed out in the Gulf region. This has caused some investors to take money off the table. Lastly, market confidence was also hit slightly, with the China Minzhong sell down and trading of this counter is still halted.

With the above, I was curious as when QE was first introduced how much has the so call 'hot money' cause the index to rise and how much has is corrected due to the recent events. The numbers are not pin point accurate but it serves a good gauge.

Below is a table which I have tabulated; and here's how this table makes up;
1. take the lowest point in 2010 after QE was introduced
2. take the recent high
3. Calculate the gains since 2010
4. % corrected looks at how much it has corrected from the last high

	Markets	Low(Jan 2010)	High	% gain	Correction due to Syria and QE Tappering	% corrected
	Indonesia-JKSE	2500	5150	106	4026	-22
	Phillipine-PSEI	3124	7400	137	5792	-22
	Thailand-SET	730	1639	125	1275	-22
	STI	2720	3464	27	3020	-13

It seems that 'Hot Money' loves everyone except us .... ha..... Looking at the chart, not bad if you have invested in the regional markets, all more than 100% gain. STI has only about 30% gain.

If you looked at the recent correction, it gets even more interesting.
STI - almost half of the gain was wiped out with the recent correction.

All other markets - The lost is not significant if you compared to the gains that they have made since 2010. If you have made more than 100% from the market, what is a 20% correction then?

With these data, we then know whether this is a healthy correction or not, and should we worry ??

End of Quantitative Easing(QE) ...

Regional markets including STI has reacted negatively when news that FED will be tapering down or reducing the QE some time in the near future. If it really happens, how would it affect stock markets, commodities, gold, silver, property, .... etc.

After my last trip to Taiwan, I really like the place and people. Recently, I found this clip(by chance), a finance TV show(夢想街57號) by a Taiwanese TV station, and I thought this is really cool and very informative. One of the guest in the show is Hu li yang(胡立阳), who is very popular is this region. I am a fan of his, found his theory easy to understand, although at times he tends to exagerate a little :)

I wished we have this kind of show here in Singapore so that the public can be well informed about what's happening in the financial world.

QE退場四部曲

http://www.youtube.com/watch?v=wDXdV727534

STI heading south .....

11 August, I posted that STI has started the Wave C, and it is heading downtrend. Looking at the chart today(below), this is confirmed when 50MA cuts the 200MA, and this is an indication that the trend has reversed to downward. So are we at the start of the Bear market, well, according to many experts, any index has to correct about 20% to 25% before it enters the Bear zone. At the moment, STI is still quite a distance from there, at this point, it just meant that the trend has changed.

So is it a good time to enter and nimble a little now?

We should not invest against the trend, we should always go with the trend. Any rebound now might be a good chance for you to liquidate those lousy counters as low might be lower eventually. Personally, I will wait for STI to consolidate first after the downward trend slows down. I will also wait for the 10 weekly MA to trend up and lastly, STI has to stand above 3185(pivot point). Once all this is in place, it is then highly probable that STI trends up.

Related post: Sti wave C

Silver trend reverse?

Since my last post on Silver, from TA, it seems that the downward trend of Silver has slowed and it has started to reverse up. Although it has crossed the 50MA, it is still below the 200MA. As such, for medium term, the trend should be forming upwards. For long term investor, is it a good time to start buying some?

A few friends asked me given a choice and limited funds, which one to invest, Silver or Gold. Well, though Gold is also reversing the downward trend as well, I am not comfortable investing in it now since both George Soros and John Paulson had sold off most of their gold holdings. We are just small fry, we should always follow the big SHARK right :)

Related post: Time to buy gold and silver?

China Minzhong shares plunge 50%

Just when I thought that today will be just another day since DOW Jones was just consolidating last Friday, the news just broke out. California based research firm, Glaucus Research, published a report alleging irregularities in the company, China Minzhong.
Here is the report which the company has published.
https://glaucusresearch.com/wp-content/uploads/downloads/2013/08/GlaucusResearch-China_Minzhong_Food_Corp_Ltd-SGX_K2N-BBerg_MINZ_SP-Strong_Sell_August_26_2013.pdf

Now we just have to wait and see what the response will be from China Minzhong.

Early this year, the same research firm, Glaucus had also reported on another chinese based company, China metal recycling (CMR). Below is the article on what happened after.

http://www.scmp.com/business/money/markets-investing/article/1296041/glaucus-eyes-hong-kong-singapore-stocks-after-china

http://www.bloomberg.com/news/2013-08-26/china-minzhong-falls-by-most-on-record-after-short-seller-report.html

In life, I guess nothing is certain, one has to make sure that we are not overly confident and invest all our eggs into 1 basket.

Time to buy Gold and Silver again?

By now you should have read that both gold and silver are in and still in the bear territory, since 50MA is still below 200MA. However, since July, we have seen both trending upwards. Is it a buy signal?

Looking at gold TA, there are still a number of resistances;
1. First gap down(first oval), though this has been filled by the last few days
2. 2nd gap down, which it still has some way to go
3. And it is still way below the 200MA

Above observations applies to silver as well.

At the newsfront, based on an article by Bloomberg, one of the most bullish investor in gold had cut stake by half.
http://www.bloomberg.com/news/2013-08-14/paulson-cuts-spdr-gold-stake-53-as-soros-sells-out.html

SPDR Gold

Ishares Silver

STI - Wave C?

Looking at the weekly chart of STI, are we heading to start of wave C?

Apple revived?

Since the huge correction, is it now the right time to relook at Apples shares again? It seems the 3rd quarter numbers are not bad. businessweekprofit-estimates-in-3rd-quarter

From TA perspective, it seems the 10MA weekly chart is supporting at this level. Looking at the right side of the chart, it had also breakout after testing twice it's support. Would the uptrend continue?

Apples PE ratio looks attractive as well.

Source: Bloomberg 

Technics oil&gas accumulation?

This stock came up from my weekly scan using 'mygateway' and putting in the criteria of high ROE and dividend. Upon further check, most of the Internet article shown that fundamentally it is poor. The most recent report can be gotten from here, SG-Technics_Oil__Gas_20130520.pdf

However, on looking at the chart, from TA perspective, the 10MA is trending up but there is still alot of resistance as it is still below the 200MA which is arching down. Check out the red box, it seems that since May, folks are accumulating this stock ... ...

Thoughts on Permanent Portfolio ...

Met up with couple of my friends to have beer in a Kopi shop, and I was thinking to myself how we have evolved over time. We used to drink at pubs when we were younger and now guess beer is much cheaper in Kopi shop and nicer place to have a decent conversation too. As usual, part of our conversation was about investing. My friend, whom has just finished reading a book 'Millionaire Teacher: The Nine Rules of Wealth You Should Have Learned in School', by Andrew Hallam, was wondering how best the portfolio can be created.

I shan't be talking about how one can create the composition of the portfolio as that is already mentioned in the book and serveral blogs as well. Instead, I will share how one can buy/sell mechanically for your STI ETF portfolio.

Looking at the chart above, it does show that STI is now on the high side, at most maybe another 300 to 500 points more. So is this the right time to start or even addon to your portfolio? By using mechanical method, you rule out your emotion in your investment. Here is how:


 Below 1350 BUY
1350 to 1700 Buy 3 lots
1700 to 2000 Buy 2 lots
2000 to 2350 Buy 1 lot
2350 to 2700 Sell 1 lot
2700 to 3000 Sell 3 lots
Above 3000 SELL

So now is it the time to buy? Patience is the key 

STI - has the down trend reversed?

After trending down in end of June, STI has been trending up after. Is this up trend sustainable? From the weekly chart, the 10MA is still trending down. However, today the index managed to stay above the pivot value of '3265', can this be maintain the last 2 days of the week or even next week?

Singapore stock scan 21july 2013

Singapore stock scan using mygateway;

• ROE 13
• Dividend yield 5%

Source: SGX

Stock screener Singapore

Recently, I was asked by a few friends how do I select for stocks in Singapore market. For those who has traded or invested in the market long enough, you would have known that previously one can find stock screener tool easily for global market but not the local one. However, this has changed with the launched of 'mygateway' from SGX. There are many other tools available from the portal. Using the stock screener tool from 'mygateway', one would be able to screen local stocks based on your criteria. You can select up to 4 criteria, below is the screenshot from the portal.

Source: SGX.com

This is just the first step, it just simply help you to narrow down on your search. In the next post, I will share how we can screen stocks using some of the criteria available from the portal.