Just my thoughts on investing: April 2015

Sunday, 26 April 2015

Investor Sentiments (26April)

Fear and Greed index from CNN money and sentiment survey from AAII.

Monday, 20 April 2015

Most of the markets have risen by more than 20%, and this has also result in most of the stock counters rised by as much, if not much more. At this point of time, it is definitely tempting to take some money of the table. Thus I have taken profit from 2 counters and the reasons for doing so below.

Suntec Reit
Most of the readers know that this is one of my favourite stock, and thus it took a while for me to decide to sell. Luckily, that 'while' did not result in more downside of the price. I am still learning to overcome the emotional element despite the fact that TA has indicated a sell in the mid-term.

The chart above shows that it has tested the 200MA few times and 50MA has turned down, indicating a trend change in mid term. On the left, noticed the 2 gap down, it has not successful in overcoming these gaps since. At 14% gain, I decided to take profit.

China
I have spoken about China ETF last year and had taken a position then. I have taken the position at the time when there were many bad news about China, remember there were news about bubble in the making, properties going to crash, trade and GDP is dwindling, etc. China also initiated the cross trading with Hong Kong, and for months, this initiative was treated lukewarm by many investors. However, in the past few months, all these changed. There have been news about multi-folds of brokerage accounts opened, everyone is talking about stock market, even China 'Da Ma' now speculates in shares, like they have done in buying Gold. It has got a good run, and at 30% profit, I decided to lock down my gains. I sold partial and left some to see where it will be heading as we should not underestimate the Chinese market. Looking back, I guess the good time to buy was when nobody was interested and in midst of many bad news.

Time to relook at Russia?? :)

Related posts:
1. Time to relook at Chinese market
2. Stock watch: Suntec Reit

Wednesday, 15 April 2015

Will AC effect result in a market correction?

Since last year, the Chinese stock market has been rising and this uptrend was also followed by Hang Seng Index in the recent months. Just few days ago, TVB decided to telecast an old film starting next Monday. For those of us who are old enough, you will remember this film 《大時代》, it's about the stock trading and speculation.

The focus here is on the actor, Adam Cheng. After this show was first telecast in 1992, it followed with a major correction on the Hong Kong stock market. This happens subsequently for the next 32 times whenever his show was telecast, is this a coincident or what. And thus this was known as the “丁蟹效应”

The chart below shows the correction that happened.

http://blogs.wsj.com/

Do you think 'Adam Cheng effect' will happen next week?

Sunday, 12 April 2015

What happened to STI when Fed raised rates?

The market was extremely volatile on past few occasions whenever the Fed meets to discuss when they should raise the interest rates. This is often followed by experts giving their opinions and some even identify the period this year when Fed will announce the rates increase. I find this amazing cause the only person who knows is none other than Yellen herself.

As there is no question about the impending rate increase in the near future, instead of trying to figure out when it will happen, I think to prepare one's portfolio, it is helpful to know what happened to STI historically when the rates were increased. I came across an article from a fellow blogger, 'A wealth of common sense', who did a study against the S&P 500. You can find his article here.

Using the same data points, let's find out how the STI had performed.

From Yahoo.com, I only managed to find STI data starting from 1988, thus the sample size is very small. Although we cant conclude anything from this chart due to the small sample size, it is interesting to note that during the 2003 to 2007, there is a 100% increase. On average, with the 4 rates hike, STI is still positive.

One last observation, I am not sure if this is coincidental, but months after the last rate increased, it was always followed by a correction as shown in the chart below.