2015 - Top 10 Predictions

Post Merry Christmas greetings and happy new year in couple of days, this is probably my last post for 2014 and it will be a short one. I was browsing on lazy weekend and came across this article by 'Dr. Richard Coghlan', which he mentioned his Top 10 predictions for 2015. Here is the link to the article, 'http://www.chinatimes.com/realtimenews/20141105003652-260410'.

Below is the highlight of his predictions:

From the chart, what would be your strategy for 2015?

Where are the opportunity in oil price slide

In the past weeks, there have been numerous articles about oil and how the drop in oil price is going to have huge negative impact on some of the asset classes and even some of the major oil export countries. During my usual weekend browsing, I came across an interesting bloomberg video just last week on interview with Mark Mobius. His thinking about this oil 'crisis' is really different from the rest of the other professionals out there, he looks for opportunities that is going to surface from this temporary pessimism situation.
http://www.bloomberg.com/video/oil-could-return-to-90-soon-as-next-year-mobius-says-rJ2~NhAZToGZYdCyyrO~0g.html

In summary of the video;

1. Oil prices will recover to about $80-$90 next year
2. Countries such as Indonesia, India, China had made use of this low oil price situation to embark on reform measures to remove petrol subsidies.
3. Some of the middle east countries have huge oil reserve to tide over this period of low price
4. Most Asia countries to benefit from this low oil price
5. If there are no sanctions, he will be in Russia as it is really cheap. Other countries he is interested are China, Malaysia, Thailand and Indonesia.
6. Biggest concern is volatility, but it also present good opportunity to invest.

On last note, Warren Buffet bought a large stake into Exxon at the average price of $90, based on the below from Forbes. Did he know that just after 1 year, the share price now is even lower than what he paid for before. Again, it goes to show that no one can predict where the market is going, but it is the value that one should be after when opportunity arises. 

Russia Unloved

A couple of months ago, I had taken a tiny position in RSX ETF, an ETF which invest into the Russia stock market. Today, the position is down 35%, what will I be doing? Let look at the chart below.

Source: Yahoo.com

The chart does not look great, over long term it is trending down, with price remain to be below the 200d MA. On the chart, each of the high is a lower high, and each of the low is a lower low. Russia remains to be an attractive market with one of the lowest PE ratio (about 6), the closet one to this is the China market. Russia is my favourite counter, as I like to invest in things that the crowd is avoiding. 

http://www.tradingeconomics.com/russia/gdp

Russia GDP has been growing healthily post the great financial crisis. No one can predict anything with certainty, people are avoiding Russia because they are attracted and chasing rising markets. Over time, investors who invested in unloved counters will be rewarded with excellent profits. After all, we were always told to buy low and sell high, isnt it.