Winston's Investment Ideas 02 (Apr 10 - Jul 12)

[helios]

I have closed all my positions and would be travelling in Taipei for this week.

Erm. Should have taken the clue from Winston on the AMVIG. Argh ... W, any more hints?

[winston]

Erm. Should have taken the clue from Winston on the AMVIG. Argh ... W, any more hints?

Ha Ha ... all my positions are published on this thread every Sunday

[kennynah]

W...pick your brains...

a) do you think the Chinese will revalue RMB anytime soon (within next 30 days?)
b) do you think FOMC will announce rate hike this wed? when do you think FOMC will raise rates?
c) do you think greece will get their loan within this week or before May19?
d) do you think ECB will raise rates in their next meeting (i duno when..hahaha)?

love to hear your old bird thoughts...

thanks in advance...

[winston]

Ha Ha ... if I get any of the above correct, it's because of Luck. I dont really spend too much time on macroeconomics other than to just have the big picture ....

1) I think they may revalue the RMB within the next few months but it will be just a small percentage say 2% to 3%. They still want to protect their exporters.

2) No, I dont think the FOMC will raise rates this Wednesday. I think the FOMC will only increase interest rates when the USD becomes weak.

3) I think Greece is already a non-event. They will get their money very soon. I'm more worried about the rest of the European Contagion.

4) Yes, the ECB may be forced to increase rates because of the weak EUR

[kennynah]

thanks....glad to hear your view..

quid pro quo...i offer you my totally unqualified take on these few issues, in broad strokes...

1) I think they may revalue the RMB within the next few months but it will be just a small percentage say 2% to 3%. They still want to protect their exporters.

i too think they will eventually make RMB more expensive...when? is the question and i have absolutely no feel as to when that will happen... but i want to position myself to take advantage of this great great profit opportunity...this will be one of the best chance to make money this year

2) No, I dont think the FOMC will raise rates this Wednesday. I think the FOMC will only increase interest rates when the USD becomes weak.

i too think FOMC is not expected to increase rates but what their level of hawkishness is sufficient to move markets..

3) I think Greece is already a non-event. They will get their money very soon. I'm more worried about the rest of the European Contagion.

on the contrary, greece is not a non-event yet... it is not so much an issue of whether IMF/EU countries lends this eur45bil package, but without it will cause even more uncertainties and create greater volatility to eur currency and markets.. however, even with the immediate aid, there's will maturing ~eur265bil debenture over the next 12 months... no amount of tax hikes and govt spending cut backs can possibly raise such money in 12 months...short of printing money... this simply put means that greece's economy will stay in doldrums for many years ahead...and with it, will drag all those who continue to support its debts...

germany, besides needing parliament to ok this loan, and all other lending EU countries will have to fund their lendings thru primarily 2 means; internal tax hikes and/or reduction in govt spending; both will dampen economic growth...this is the main reason that eur is in deep trouble in the foreseeable future.. IMF cannot be a source of constant $$ assistance.

in this aspect, i agree with your outlook that the greece's financial crisis has already created some epidemic contagion to the rest of EU countries.. this is not going to pass over anytime soon...

4) Yes, the ECB may be forced to increase rates because of the weak EUR

on the contrary, i doubt ECB will raise rates in the near future... greece is a case in hand... maintaining low rates throughout EU zone and perhaps even further quantitative easing will be needed to stimulate growth...ECB cannot afford to raise rates now even when euro gets hammered...

i am very open to and welcome your critique on my take above...

i hope to hear your further thoughts and those of other forummers' as well...

[winston]

TOL as of May 02, 2010:-


Staying in the Present

As we get into May, where the weather is warmer and nicer, it's very easy to have a nice rosy outlook of the future. Therefore, it's time not to let my guard down too much and be too complacent.

I'm not expecting a crash like in 2008 but a correction of 10% to 20% is not out of expectation. Prices have gone up a lot in anticipation of better times and if expectations are not met, there will be some disappointments. At the same time, we are also not completely out of the woods yet eg. Commercial Real Estate, ARM, European Contagion etc.

I still think that it's okay to continue to buy stocks with good catalysts, at a fair price. I will not be thinking too much about what happened in the Past nor will I be having all those rosy outlooks on the Future. I will try to "Stay in the Present" and watch things carefully.


The week in review:-

1) Oil - US$86.15 from US$85.12 last week. Stronger than expected. Looks like a a combination of strong USD, warmer weather, high inventories and new Iraqi oil, cannot take it down. Or were everyone thinking of those Nigerian militants, the BP Oil Spill and Iran ?

2) Gold - US$ 1180 from US$1153. How come nobody wants to buy those IMF gold ? And what's happening to those gold owned by John Paulson ?

3) Other Commodities - Long wait for the 50% retracement. Copper may be starting it's downward trend.

4) Shanghai Equities - 2871 from 2984 last week. On Friday, it was down around 1.7% at one time. Suddenly, there was some buying. How can you have a sharp correction when there was going to be an Expo party that night ? :p

5) HK Equities - 21108 from 21244 last week. Position in China Longyuan, Minmetal Land, GCL Poly and Asia Cassava. Traded ASM Pacific.

6) HK IPO - Will probably stop stagging the HK IPOs. The pricing are too high and I dont want to tie up my cash for 1.5 week.

7) Spore Equities - 2975 from 2983 last week. Initiated position on Breadtalk.

8) US Equities - 1187 from 1217 last week. Support at 1035. Weaker than expected. Still sitting on my S&P Inverse ETF.

9) Japan Equities - 11057 from 10914 last week. Support @ 9850. Stronger than expected. Up about 20% in past 4 months. PE is now around 20. And if the Yen weakens further against the USD, Japanese Equities may continue to rise ..

10) Emerging Markets - Stronger than expected

11) Properties ( HK, China & Singapore) - Chinese properties are facing a series of blows. Some experts are now expecting a 15% correction in Chinese Properties. And if you are a property momentum player in HK and Singapore, make sure that the bid/ask spread is not too wide when you are trying to get out. You would be surprised how fast sentiment can change.

12) Iran - When is sanction time ?

13) US & Japanese Interest Rates - When will the sudden spike happen ? If Greece is paying 20% on a two year bond, why should Japan and the US pay next to zero ?

14) USD - 81.99 from 81.5. When will it break-out of 83 ?

15) European Contagion - I dont think there's a high probability of such an event. I think they would be able to contain the problem. And if they cant, it will still not be the end of the world. I have no problem seeing a few banks go under.

16) Brazil - Increased interest rates to 9.75% and there has been some outflows from Brazilian Equities. However, it's still in a sweet spot eg. Commodities, Demography, Infrastructure spending for World Cup and Olympics.

17) Hedge Funds - Deadline for redemption is May 15 for June 30 redemption. It would be interesting to see whether they would be sticking with John Paulson or redeeming their money. If they are taking their money out then Gold may be hit.


The above is to help me crystallize my thinking. It's not a recommendation to Buy or Sell. Use the above comments at your own risk. Please do also feel free to provide me with your kind thoughts and comments.


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[winston]

TOL as of May 09, 2010:-


Fire !


It's so funny to watch the people run to the door at the same time. Just because someone has shouted
"fire", everyone just assumed that there was a big fire.

Has anyone really bothered to check whether there's really a fire ? Has anyone really bothered to see whether the fire is as big as everyone imagined it to be ? Has anyone really bothered to see whether the fire could be put out ?

And if you happened to be caught in such a situation, you have no one else to blame but yourself. Didnt you see that the place was crowded and it was a fire hazard? Didnt you learned from your previous experiences ?

And if you happened to be watching the situation from the outside, congratulations! Now is the time to clean up your watch-list. Now is the time to make arrangements to deploy those cash. Now is the time to think about taking some profits on some of those shorts. Now is the time to think about making a deposit at the bank


The week in review:-

1) Oil - US$ 75.11 from US$86.15 last week. It looks like the higher USD is finally having an effect on Oil. Let's see whether a further combination of high inventories and new Iraqi oil can take it down further. But there's also another side to the argument. The oil tankers may not be able to move because of the Oil Spill. And there's also the Nigerian militants and Iran to worry about..

2) Gold - US$ 1210 from US$ 1180. Strong move despite the high USD. And there's no news on the IMF gold nor John Paulson. And will some of the BBs be forced to sell their gold holdings to cover their margin calls ?

3) Other Commodities - Waiting for the 50% retracement. Copper is starting it's downtrend.

4) Shanghai Equities - 2688 from 2871 last week. Support at 2600 and thereafter, 2400. The drop is now about 15%. Will it go on to 25% ?

5) HK Equities - 19920 from 21108 last week. No trade for the week. Positions in China Longyuan, Minmetal Land, GCL Poly and Asia Cassava. The drop is now 10%.

6) HK IPO - Will probably stop stagging the HK IPOs. The pricing is too high and I dont want to tie up my cash for 1.5 week during periods of opportunity.

7) Spore Equities - 2817 from 2975 last week. Bought the DBX Indonesian ETF. Traded Jardine Matheson and Jardine Strategic. The drop is now down 7%.

8) US Equities - 1111 from 1187 last week. Support at 1100; 1075; 1060; 1030. Still sitting on my S&P Inverse ETF. The drop now is about 9%.

9) Japan Equities - 10365 from 11057 last week. Support @ 9850. The index is now down 8.5%. Did you noticed that the Nikkei and the Dow are always at the same numerical number nowadays ?

10) Emerging Markets - The correction has finally started. Jim Rogers mentioned that he has a short position on an Emerging Market index.

11) Properties ( HK, China & Singapore) - Some Chinese property developers have started to lower prices by 15%.

12) Iran - When is sanction time ?

13) US & Japanese Interest Rates - When will the sudden spike happen ? If Greece is paying 20% on a two year bond, why should Japan and the US pay next to zero ?

14) USD - 84.66 from 81.99. It has broken out of 83 convincingly. If it goes higher, there could be further damage to the Commodities.

15) European Contagion- The fear mongers are having the mike on CNBC nowadays. There's a need to look at the situation squarely and see whether this can lead to another financial tsunami.

16) Brazil - High interest rates plus good fundamentals eg. Commodities, Demography and infrastructure spending for World Cup and Olympics.

17) Hedge Funds - Deadline for redemption is May 15 for June 30 redemption. It would be interesting to see whether they would be sticking with John Paulson or redeeming their money. If they are taking their money out from John Paulson, gold may be hit.

18) Diversification - Are you truly diversified if you have allocations to Equities, Commodities and Properties ? Did you not noticed that they all rise and drop at the same time ?


Where do we go from here ? Will this correction be 10%, 25% or 80% ? What tools should I use to time my entry ? Do I have all the necessary information to make an informed decision? Do I trust my judgement? Do I trust my instincts? How does it feel ?

Those would be some of the questions that I have to answer this week-end as I decide on how to deploy my cash and to time my entry. Intuitively, I think there's a lot of Cash on the sidelines, waiting for a chance to get back into the market. Therefore, I will need to be slightly ahead of the crowd.

And I may have to deploy my cash faster than I would like to. But that's life. Nothing is perfect. As long as I'm correct 80% of the time on the major issues, I should be doing relatively well


The above is to help me crystallize my thinking. It's not a recommendation to Buy or Sell. Use the above comments at your own risk. Please do also feel free to provide me with your kind thoughts and comments.


Please Note:-

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Second Opinion - Please see the "Second Opinion" thread in the "Useful Reference" section, located just below the Miscellaneous Section.

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[winston]

TOL as of May 16, 2010:-


Always have a good reason when you buy or sell


When things are volatile, it is time to remind myself that I need a good reason before I buy or sell. This is because it's very easy to be a lemming and be carried along by the crowd.

The flavor of the week seems to be the weak Euro as well as the Greek default. But how is a weak Euro or Greek default, going to really affect my portfolio ? Have I thought through it before I buy or sell ? Or was I just like a lemming following the crowd, thinking that the crowd knows more than me, when in fact it's really the blind leading the blind.


The week in review:-

1) Oil - US$72.05 from US$ 75.11 last week. Same factors at play ie. high USD, high inventories, new Iraqi oil, oil tankers cant move because of the BP Oil Spill, Nigerian militants and Iran. How low can it go ? Watching CNOOC and Petrochina.

2) Gold - US$ 1227 from US$ 1210 last week. Strong move despite the high USD. And there's no news on the IMF gold nor John Paulson. Watching Zhaojin and Real Gold.

3) Other Commodities - Waiting for the 50% retracement. Copper is starting it's downtrend.

4) Shanghai Equities - 2697 from 2688 last week. Support at 2600 and 2400. The drop is still about 15%. Will it go on to 20% to 25% ?

5) HK Equities - 20146 from 19920 last week. Positions in China Longyuan, Minmetal Land, GCL Poly and Asia Cassava. Sold SJM, A50 ETF and Rexlot. Still down 9% from range high . Support at 19,900, 19700, 19500 and 19250.

6) HK IPO - I have stopped stagging the HK IPOs. I want my cash on standby for any short term trades.

7) Spore Equities - 2817 from 2975 last week. Added to Starhill Reit.

8) US Equities - 1136 from 1187 last week. Support at 1100; 1075; 1060; 1030. Still sitting on my S&P Inverse ETF. The drop now is about 6.5%.

9) Japan Equities - 10463 from 10365 last week. Support @ 9850. The index is now down 7.7% from the range high.

10) Emerging Markets - Second week of redemptions.

11) Properties ( HK, China & Singapore) - The real estate agents in China, now has time to show you apartments

12) Iran - When is sanction time ?

13) US & Japanese Interest Rates - What would be the catalyst for the sudden spike?

14) USD - 86.36 from 84.66. How high can it go ? Not good for the Commodities.

15) European Contagion- With the US$1t package, I dont think it will spiral into something bigger. But what do I know ?

16) Brazil - High interest rates plus low Commodity prices is a potent combination.

17) Hedge Funds - Deadline for redemption is May 15 for June 30 redemption. It would be interesting to see whether they would be sticking with John Paulson or redeeming their money. If they are taking their money out from John Paulson, gold may be hit.


As I have mentioned above, the lemmings are out in full force. I can see them everywhere. It's hard not to follow them. There's safety in numbers.

However, it's time to keep a cool head, to step back and to take stock. It's time to keep the big picture in mind. It's time to have always have a good reason whenever I buy or sell. Scalping and Swing Trading may again be my choice to trade this volatile market. Who cares what's gonna happen in 2 years ? I want to make my money now ..


The above is to help me crystallize my thinking. It's not a recommendation to Buy or Sell. Use the above comments at your own risk. Please do also feel free to provide me with your kind thoughts and comments.


Please Note:-

Support the forum button - We would appreciate your kind support to defray the expenses of maintaining the forum. The hosting fees alone is Sin$600 and our Ads Revenue is only about Sin$20 till date.

Second Opinion - Please see the "Second Opinion" thread in the "Useful Reference" section, located just below the Miscellaneous Section.

Private Messages ( PM ) - Please do check your Inbox for any PMs. The Inbox is located on the top left hand corner of the Index Page.

Active Topics: Do you know that there's an "Active Topics" button? It's located on the top left hand corner of the Index Page.

[winston]

TOL as of May 23, 2010:-


Do you know why you are selling, buying or shorting ?


As there's now some panic and fear in the markets, it's timely to revisit the above quote.

The above quote has prevented me from chasing a stock, from selling into a panic and from being whip-sawed over the years.

There's now a lot of Noise and Emotions around you. If you dont have a good reason for your actions, you would be like a head-less chicken, running all over the place.



The week in review:-

1) Oil - US$70.55 from US$72.05 last week. How low can it go ? Would US$60 excite me? Or should I wait for the low of around US$50? Watching CNOOC and Petrochina.

2) Gold - US$ 1176 from US$ 1227 last week. At last, gold is behaving rationally. Would US$1000 excite me? Or should I wait for US$850? Watching Zhaojin and Real Gold.

3) Other Commodities - Waiting for the 50% retracement. Copper is starting it's downtrend.

4) Shanghai Equities - 2584 from 2697 last week. The drop is not that steep anymore. Support at 2400. The drop is now about 18%. Will it go on to 25% ? Watching A50 but I dont quite like buying an entire market unless it's very cheap.

5) HK Equities - 19546 from 20146 last week. Positions in Longyuan, Minmetal Land, GCL Poly, Asia Cassava, Rexlot and SJM. The drop is about 15%. Support at 19250, 18,000, 17500, 15500.

6) Spore Equities - 2701 from 2817 last week. Bought Breadtalk, HL Asia & Wilmar.

7) US Equities - 1088 from 1136 last week. Support at 1075; 1060 and 1030. Sold half my position on the S&P Inverse ETF. The drop now is about 11%.

8) Japan Equities - 9785 from 10463 last week. Support @ 9100. The index is now down 14%. The strong yen would hurt the exporters.

9) Emerging Markets - Is this a place that you cant emerge from, when the outflow is fast and furious ? Dont confuse outperformance with liquidity.

10) Properties ( HK, China & Singapore) - At the end of every bubble, there's always some story to tell the next generation. Is Martin Lee's purchase at the HK Peak for US$233m at US$8,746 per sq ft, one of those stories ?

11) Iran - Although there's a build-up of US troops around Iran, I dont think they will attack Iran anytime soon due to the European Contagion. Sanctions may also be delayed for a while until Oil is at a very low price.

12) US & Japanese Interest Rates - With risk aversion and money flowing back to the US and Japan now, the sudden spike may not happen in the near future.

13) USD - 85.5 from 86.36. Still not good for the Commodities.

14) European Contagion- With the US$1t package, I dont think it will spiral into something bigger.

15) Window Dressing - 1H Window Dressing would be due in a few more weeks. Maybe that could be the catalyst for a rally after the slump.


In times like this, I would like to stay short term and be like the guy in the "Way of the Warrior Trader" by Dr. Richard McCall. In the story, the Samurai gets up, go to battle, try to stay alive and then go home.

His philosophy is summarized in the "A.C.T.I.O.N." plan:-
A - Accept all possible losses before entering the battle
C - Center yourself in mind, body and spirit
T - Trust your inner-skills and warrior-intuition
I - Imagine victory clearly in your mind's-eye
O - Only exist in the present moment to conquer fear
N - Never ever stop, once you have begun


The above is to help me crystallize my thinking. It's not a recommendation to Buy or Sell. Use the above comments at your own risk. Please do also feel free to provide me with your kind thoughts and comments.


Please Note:-


Support the forum button - We would appreciate your kind support to defray the expenses of maintaining the forum. The hosting fees alone is Sin$600 and our Ads Revenue is only about Sin$20 till date.

Second Opinion - Please see the "Second Opinion" thread in the "Useful Reference" section, located just below the Miscellaneous Section.

Private Messages ( PM ) - Please do check your Inbox for any PMs. The Inbox is located on the top left hand corner of the Index Page.

Active Topics: Do you know that there's an "Active Topics" button? It's located on the top left hand corner of the Index Page.

[winston]

TOL as of May 30, 2010:-


Did you Buy or Sell on the Panic ?


It's very hard to keep a cool head when everyone around you, is shouting "fire". Everyone wants to sell first then investigate later. However, if you dont sell, others may be selling and you may end up with a lower price on your counters.

It's also at this time, that insignificant news get magnified and there's no shortage of "experts" out there that are telling you that the sky is falling.

I'm also not immuned to this situation. I sold Rexlot and SJM at the beginning of the week. At the end of the week, Rexlot has gone up 15% from the price that I sold, while SJM has gone up about 10%. This is the result not applying independent thinking, following the crowd and thinking that I'm smart enough to know where the overall market is heading ...


The week in review:-

1) Oil - US$73.97 from US$70.55 last week. It looks like the Support is around US$68. Watching CNOOC and Petrochina.

2) Gold - US$ 1212 from US$ 1176 last week. It looks like the Support is around US$1100. Watching Zhaojin and Real Gold.

3) Other Commodities - Waiting for the 50% retracement.

4) Shanghai Equities - 2656 from 2584 last week. It looks like the Support is around 2600. The drop is now about 16% compared to 18% last week. Watching A50.

5) HK Equities - 19770 from 19546 last week. Positions in Longyuan, Minmetal Land, GCL Poly and Asia Cassava. Sold Rexlot and SJM. The drop is about 11% compared to 15% last week. It looks like the Support is around 19000 then 18,000.

6) Spore Equities - 2740 from 2701 last week. No trade for the week.

7) US Equities - 1089 from 1088 last week. Support at 1060 then 1030. Still sitting on half of my S&P Inverse ETF. The drop now is still about 11%.

8) Japan Equities - 9763 from 9785 last week. Support @ 9100. The index is now down 16%. The strong yen would hurt the exporters.

9) Emerging Markets - Continued outflow except for the Chinese Funds.

10) Properties ( HK, China & Singapore) - Chinese developers are reducing prices.

11) Iran - Is there a road map towards sanctions ?

12) US & Japanese Interest Rates - With risk aversion and money flowing back to the US and Japan now, the sudden spike may not happen in the near future.

13) USD - 86.58 from 85.5. The rise is not as steep but it's still not good for the Commodities.

14) European Contagion- With the US$1t package, I dont think it will spiral into something bigger.

15) Window Dressing - 1H Window Dressing would be due in a few more weeks. Maybe that could be the catalyst for a rally after the slump.


Despite my regular monitoring of the markets, I'm not able to see where it's heading. Intuitively, I think it will head downwards, until perhaps the 50% retracement from April 2009. The move since April 2009 has been in one direction so people may be taking some money off the table. However, there could also be some trading opportunities along the way, as markets do not go in one direction only.

In view of the above, I will be continue to put my Strategic Allocation ( 70% of Portfolio ) in Cash. As for my Tactical Allocation ( 30% ), I will continue to Scalp or Swing Trade stocks that have a strong catalyst, that can maybe move against Market Direction.

I may also momentum trade on the direction of the indices during times of extreme volatility. In addition, as some of the Industry Leaders are getting cheaper, I may also start to nibble for the longer term. However, a lot of people are still in panic mode so these counters may head lower first, before it heads higher.


The above is to help me crystallize my thinking. It's not a recommendation to Buy or Sell. Use the above comments at your own risk. Please do also feel free to provide me with your kind thoughts and comments.


Please Note:-

Support the forum button - We would appreciate your kind support to defray the expenses of maintaining the forum. The hosting fees alone is Sin$600 and our Ads Revenue is only about Sin$20 till date.

Second Opinion - Please see the "Second Opinion" thread in the "Useful Reference" section, located just below the Miscellaneous Section.

Private Messages ( PM ) - Please do check your Inbox for any PMs. The Inbox is located on the top left hand corner of the Index Page.

Active Topics: Do you know that there's an "Active Topics" button? It's located on the top left hand corner of the Index Page.