Thursday, April 30, 2009

USO : This is the second time I m posting USO waterfall-chart. Yes, on of the VERY good option in oil play when the price of crude oil jump-up again(matter of time). Trading below USD30, it is a fraction from the peak of 120!! I will highly recommend this ETF for those interested to have the so-called "safe" and ride on the rising prices of crude oil. Yes, hold for 3 yr or less, I think there will be a high chance that it will double/triple the current value!!

Morning!! DOW up almost 200 points!! I slept 10.30pm yesterday and didnt watch CNBC/Bloomberg ... but was reading a book, instead!!

As I hv pulled out of LionInd(ouch ... it went up!!), I m virtually out of KLSE, except for my small holding on AnnJoo-wb. Is the rally still on?

I m scanning on my HKSE's babe actually. Air China flew off yesterday!!

Will get back into HKSE once there is a correction?

Should be back by Sat.

7.00 pm : Dinner time ... KLCI shot up to 990!! Err ... no more swine-flu fear and we are seeing 1000-level again? Very unpredictable, right? Labour Day ... off.


Wednesday, April 29, 2009

DOW down less than 10points. Many still very anxious about the stress-test. The swine-flu compound the uncertainties. It is the best to be sideline at the moment and wait for things to be stablised before we think of going in again? We shall see ...

KLCI might be seeing 950 today? The 1000-level thoughts have been forgotten. Just last week we were talking about a possible to KLCI breaching its psychological 1000-level, but as the thing turn out to be, we are seeing more fears than positiveness. Hence, most probably we are talking about 950-level, 900-level and below .. abandoning the 4-digits optimistic figures.

Aviation vs Swine-flu

In Asia, Hong Kong's Cathay Pacific (0293.HK), which bore the brunt of the SARS crisis in 2003, closed down 0.95 percent after sharp earlier falls, and Air China (0753.HK) fell 7 percent.
Stone Lin, an airline analyst with Yuanta Securities in Taiwan, said the flu outbreak could dim hopes for summer travel.

"The summer months of July-September are typically the peak season for most airlines, with most bookings beginning right now," the analyst said.

"With sentiment so weak, and worsened by the swine flu issue, it's unlikely anyone is going to go rushing to book holidays or corporate travel, which means the second half of this year won't be pretty for most airlines," he added.

IATA, which represents 230 carriers, said airlines could lose $4.7 billion this year before any impact from swine flu.

But Michael O'Leary, the head of leading European low-cost airline Ryanair (RYA.I), sounded a contrarian note.

"Are we going to die from swine flu? No. Are we in danger of SARS? No. Foot and mouth disease? No. Will it affect people flying short-haul flights around Europe this summer? Thankfully, no," he said.


During the SARS outbreak, which began in China, airline traffic in Asia halved, and airline stocks tumbled 25 percent or more.

Most industry watchers, however, said it was still too early to say how big the
swine flu risk could be to airlines this time.

"The overall situation is weaker now ... because there are two headwinds the airline industry is facing: one is the global recession and now this outbreak of swine flu," said Daphne Roth, analyst at ABN Amro private bank.

But she added the current situation was also different from SARS, as information about the illness is coming out faster.

"There is a lot of fear out there right now and I think we've got to see if it gets much worse or the same or better over the next few weeks," said Clay Jones, chief executive of Rockwell Collins (COL.N), a U.S. supplier of parts to Boeing Co (BA.N) and EADS (EAD.PA) unit Airbus.

"If Mexico stays the center of attention, I'm not overly concerned," Jones added. "If it spreads widely in the United States, obviously that's a much different situation."

(Writing by Tim Hepher in Paris, Doug Young in Taipei and Karen Jacobs in Atlanta; additional reporting by Reuters bureaus across the world; editing by Will Waterman, Patrick Fitzgibbons and Steve Orlofsky)

8.55 am : I m still with a conviction to clear my LionInd as I 'accidentally' bought at 0.91(10k units) yesterday. I did not expect it to be done THAT low level. In fact, it went down all the way to 0.885!! I was at dental-clinic, paying money to get the drilling-pain. Ouch!

9.15 am : KLCI losing another 10points ... at 955 now. After seeing off 950, will it be back to 930 level this week? LionInd in RED, at 0.895 now. Well, queueing at 0.875 hmm ...

9.25 am : LionInd sold at 0.915 moments ago. Done with it. The net loss about RM1k playing with it. Hmm ...

12.45 pm : I m having my holida, actually. But since I hv cleared KLSE ... I want to relax. So, I will off my pc and off for holiday for few days!! Till I m back ...

happy trading.



Tuesday, April 28, 2009

DOW closed slightly lower ... Everyone will be anxious to see how DOW, the flu and Najib's 70%-news will do with KLCI ... or is KLCI reversing? It is overly bought, so was yesterday's 'correction' so-called healthy for the bull to continue running? We shall see ...

11.25 am : I am too busy ... done some of LionInd at 0.95(closed 0.96 yesterday) but cleared most at 1.00 and 1.01. Left with 10k units average at 1.05 which I don't think so I could get the price today. Need to hold on for a while before I cut it off again.

ZhaoJin back to my purchase price at 10.10 level due to profit-taking in gold-trades.

11.40 am : KLCI back in RED. The queue at 0.94 is not done, only 36k at the queue? 5k is mine. Hehe. It is diving back to 0.96 level.

2.20 pm : Rushed home to rest and do some trades before off again. I m on one-week off but this will be a busy week as I need to do some outstanding errants/paperworks. Yes, I m also applying for some bank loans since I 'gave-up' on the idea of getting some money(as capitals) from few friends. Well, it is only wise thing to do.

I m still queue-ing at 0.94 for LionInd ... averaging down, with a hope to clear ALL.

2.45 pm : Oh Boy, my phantom-stock LionInd done at 0.94 and 0.92(not 0.90 at the moment). I m back with too much of LionInd but thinking of AirChina!!

JL : Please make a decision SOON if you want to share with me the Air China. It is diving now. I will start with RM10k.

3.10 pm : Due to FEAR(holding too much), I cleared all my LionInd I bought at 0.92 & 0.94 at 0.95. Just done minutes ago. But, I m still stucked with my 10k @ 1.05. Should I cut it off as I need the funds SOON to buy Air China? I hv been in this situation many of times. Many of times it goes against me!! Hmm ...

9.15 pm : KLCI diving down for second consecutive days --- whether KLCI is going to continue to move further down, or just a mere correction ... I m out. But, my queue for LionInd at 0.91 DONE. Arrghh ... I m still stucked. Funny, when market is good, we desperately want to be in - but when market diving down, we want out? Sound familiar? That is the ups and downs of trading. You win some, you lose some. If you have hold on for one month, then it is time to take profits?

11.25 pm : Just decided with JL to BUY "Air China" but waiting for confirmation. It is still diving sharply ... bargain buying?


Monday, April 27, 2009

Gold hits 4-week highApr 27 2009 11:08

Singapore - Gold jumped to its highest in almost four weeks on Monday as fears of a global flu pandemic prompted investors to seek safer assets.

Fears of a global swine flu pandemic grew with new infections in the United States and Canada on Sunday, and millions of Mexicans hid indoors to avoid a virus that has killed 103 people.
Oil dropped more than 2% towards $50 a barrel while Asian stocks fell after the outbreak of swine flu battered shares of airlines and transport firms.

Precious metals tracked gold higher, other than platinum which is seen as an industrial metal and was hit by worries over the world economy should the flu outbreak spread and become a pandemic.

Gold hit an intraday high of $918.25 an ounce, its highest since April 2 on follow-through buying after China said last week its gold reserves had risen. The metal later slipped to $914.30, still $3.20 higher than New York's notional close.

"I am not too sure how the swine flu will play out. The problem is the potential for this to explode to pandemic proportions leaving a lot of people very wary," said Darren Heathcote of Investec Australia.

"It may well benefit gold as gold would be seen as a safe haven," he said.

Gold, which has registered four straight sessions of gains, has risen 5% over the past week and is 8% below an 11-month high above $1 000 hit in February.

"It looks like we have moved out of the 2-month downtrend and perhaps gold could head very much higher. The increase in Chinese reserves did play a part and I guess the technical traders will perhaps start coming in," said a dealer in Singapore.

China revealed on Friday it had secretly raised its gold reserves by three-quarters since 2003, confirming years of speculation it had been buying.

Dealers expected gold to face resistance around $932 - an intraday high seen in early April.
"Ultimately, we could well be targeting that mid $960s again, which is that peak in the middle of March," said Heathcote of Investec Australia.

The dollar index, a gauge of the dollar's performance against six major currencies, climbed 0.4% to 85.099. But the US currency fell to a one-month low against the yen.

The world's largest gold-backed exchange-traded fund, the SPDR Gold Trust, said holdings remained unchanged at 1 104.45 tonnes on April 26.

The speculative long position in gold slipped to 128 367 contracts during the week to April 21 from, 129 895 during the week to April 14.

- Reuters

9.10 pm : An hour or so ago, Gold price taking a dive and at 905 level. It was at 913 level just now.

10.55 pm : DOW opened lower but managed to climb back to the surface ... up 20+ points at the moment.

11.10 pm : DOw up 30-40 points, USD up and gold down. GM up 30% ... the winner is NVAX up 120% now. WOW. I m tired. Night.


Obscene Salaries/remunerations : I got this from my e-mail, it is being circulated.
Monday : 27th April 2009 ... It is unthinkable just 2 months ago that we will see KLCI to be at 1000-level? I was mentioning about 750 level(oopss .. my vote-box is irrelevent!! Hehe). That shows how unpredictable market could be!! Are we really seeing a V-shape recovery?

Well, perhaps the financial tsunami did not hit us here. Phew!! Tho I may be on the pessimistic side, I definitely want to ride the current waves. Surfing huge waves could be exciting but the risk is definitely there since I m still a novice. This is only the second up waves I m riding(the first was in last year nov-dec). And the current waves are much more stronger ... that we might be seeing 1000 psychological level.

Jackie Lee(a good KLSE's blogger) was mentioning about 1,030 level for this week? Probably ... YES. I do think so the feel-good sentiment might still remain in tact as Najib will use the magical-wand again for us to feel he is the best PM. At the moment, the 30% cut of bumi-holding is being seen as very positive(business-wise) but whether it could lure foreign investors to our shore will be left to be seen. I dont see it in near future, tho.

But it is in everyone's mind at the moment now if this rally could continue?

11.20 am : Oh Boy, KLCI losing 10 points now. LionInd back to 1.00 level. Done more at 0.99, 0.995, 1.00 and 1.01(0.985 and 0.98 not done yet). Enough of LionInd ... hope to clear it soon as I m holding too much on it. Arrghh ...

11.45 am : KLCI losing almost 16 points now. Hang on as we are going into a dive, and many taking profits and run. The feeling of being stuck inside is not good ...

12.33 pm : KLCI lost 16.85 in today's morning trade. LionInd back being a penny-stock!! We shall wait to see if there is any buyer coming in after lunch, or the selling pressure presist.

6.10 pm : I m very busy today(with classes then income-tax and EPF). KLCI closed at 980.12 ... suddenly we have doubts that we are in the beginning of BULL? Or is it just a short correction overdued? Talam and Ramunia hoghed the limelight. Other than that, I might need to cut of my holdings soon(ouch!!).

Najib just announced the 70% news. The 30% news made waves last week but the 70% news not interesting enough? It was from 49%, ok?

9.30 pm : The flu outbreak bringing in some "panic" in markets. Uncertainties level are at high now ... and double-check on many aviation stocks dropped significantly today. AirAsia and Mas are not spared too. Is this an opportunity in the crisis too?

Rubber-stocks : Topglove and Kossan gained much today due to the flu-crisis. Other smaller rubber-stocks moved too. Supermax, Hartalega? I did not check on them, actually.

So, my attention is channelling to HKSE which lost more than 400 points today. Air China( still my fav counter. It lost 12.7% today. Another stock to watch is Cathay Pacific(, which lost 8%.

Hence, most probably I will be releasing my KLSE's babes for HKSE's babes. Game over for KLSE? What is the outlook now AFTER today's battering? Let us watch US market now ...


Sunday, April 26, 2009

China's Stealth Abandonment of the Dollar Has Begun (Part One)

Written by Justice Litle, Editorial Director, Taipan Publishing Group

China wants to get shed of its excess dollar reserves – and to eventually see the dollar replaced as the world’s reserve currency – but in its deep ambition China must tread carefully. The great game has begun...

If you owe your bank manager a thousand pounds, you are at his mercy. If you owe him a million pounds, he is at your mercy.”– Yu Yongding, influential Chinese economist, citing John Maynard Keynes

A quick note relating to Friday’s Taipan Daily, “
The Last Western Country Where Banker isn’t a Cussword.”

TD reader from down under Roger K. writes, There is another western country where banks are also doing well, that is Australia. The banks here have similar stringent regulation and conservative management... and Australia is a western country and we speak english - well sort of...

Good on ya Roger. (An Aussie expression, for those unaware.) I should have thought to include Australia in my mental checklist of Western countries.

When I took a semester at Macquarie Uni in Sydney (back in the late 1990s), there was a lively debate taking place as to whether Australia should consider itself a part of the West or a part of Asia. Perhaps I subconsciously resolved the question in favor of the latter. As it so happens, the Australian dollar is one of the six currencies represented in the
Ultra Resource Index CD*, so all’s well that ends well.

China is well aware of its little “problem” – that is to say, the problem of what to do with $1.3 trillion worth of U.S. dollar reserves. (China’s total reserves are pegged at just under $2 trillion. Roughly two-thirds of that sits in dollar-denominated assets.)

Nor is it an easy problem to solve. In many respects the United States has China over a barrel. There is no way China can credibly threaten to dump its dollar holdings over the side en masse, as such would be an act of financial self-destruction. This “gotcha” situation gives Uncle Sam a certain degree of freedom to be as abusive as he likes when it comes to the printing press.

TEH : I have read many of such analysis regarding China "outburst" on USD. But, China is NOT sitting still and you could see China is 'up to something' big. I m still following closely the "Sun Tze" art of war applied in China at the moment ... a very interesting way of economic-war.

But hold on, that’s not quite accurate. If things get desperate enough in Beijing, the mandarins can, in fact, threaten America with a full-scale dollar blowout. They can put the gun to their own heads, so to speak, and in so doing put it to Uncle Sam’s head too. (For more along this line, see the March 20 Taipan Daily essay, “

China, the Fed and Financial MADness revisited.”)

Of course, that action is only palatable as a last-ditch resort. Playing the madman requires a certain air of desperation, a certain loss of face at home... and no doubt the mandarins would prefer avoiding that indignity if they can.

Something has to be done about the dollar situation regardless. And as we try to handicap the moves, we have to remember that China is very comfortable playing the long game. While U.S. politicians are content to play checkers, in other words, China prefers to play chess. Or, to make the analogy more apt, perhaps China prefers to play “Go” – an ancient game involving the placement of black and white stones that is, in its own way, even more subtle and complex than chess.

Change at the Periphery

The first tactical concept China seems to be embracing is “change at the periphery.” If you cannot challenge your opponent bluntly and head on, then you do so obliquely and from the side. You undertake a series of quiet, subtle maneuvers – perhaps so subtle that your opponent does not notice them at first – and slowly build strength in that fashion.

This process of change at the periphery is related to a powerful concept from the theory of evolution known as “punctuated equilibrium.” I gave a talk on this subject (as it relates to markets) in New Orleans in 2006.

A key thrust of the punctuated equilibrium idea is that, despite what many assume, the center does not actually evolve or change. Instead, the center remains relatively stable, while interesting things happen out on the fringes (the periphery). These fringe-area happenings are mostly inconsequential... little bubbles of experimentation that come and go.

But then, given enough time, something happens. One of those fringe happenings out on the edge catches on. Something new and powerful takes place at the periphery. This new model or idea or experiment or whatever it is – the precise technical term doesn’t matter – begins to catch on.

The source of peripheral change then begins to compound in force and impact, reaching a stage where it grows and expands rapidly. And then, seemingly out of nowhere, the dominance of the old center is challenged.

As mentioned before, the old center does not actually change or evolve. Instead it is challenged and eventually dominated – perhaps dominated out of existence – by a new center that quietly grew in the shadows, out on the fringes, while few were paying attention.

TEH : This is a very interesting concept, which certainly came from a scientific-brain. Nevertheless, I fully enjoyed and do believe such evolvements are possible.

One Shovel at a Time

This roadmap of “change at the periphery” is the path China must take to free itself from the heavy yoke of excess dollar reserves. The mountain is too big to be moved all at once. And so, instead, China must figure out how to move the mountain quietly and in stages... one shovelful of earth at a time.

At the same time, China is obviously thinking of power on the geopolitical stage. It is not just enough to get shed of overwhelming greenback exposure – that is only half the goal.
The other half of the goal is finding ways to accelerate the twilight of the dollar as the world’s reserve currency, in such a manner that Beijing’s power can wax as Washington’s wanes, without disturbing the existing order of things so much as to bring the current system crashing down on everyone’s head. This, too, is a delicate business.

And so China must start small, and proceed with caution. But there is a time factor here too... the longer Beijing waits to carry out a strategic plan of action, the greater the risk that large stores of Chinese wealth could evaporate through the ongoing process of dollar debasement. There is no element of leisure here. In many ways time is of the essence, and this requires certain movements to be perhaps a little less subtle and a little more blunt than the mandarins would ideally prefer.

So that’s the setup... tomorrow I will tell you about the three key “peripheral actions” China has recently undertaken, and show you how these actions could have dramatic impact on our trading and investing strategies in the years ahead.

China's Stealth Abandonment of the Dollar Has Begun (Part Two)

Written by Justice Litle, Editorial Director, Taipan Publishing Group

In part two of our "stealth abandonment of the dollar" series, Justice explains the three peripheral actions China has taken to accelerate the greenback's demise.

In part one of this two-part series we talked about China’s not-so-little “problem”: a paper mountain of U.S. dollar reserves in excess of $1.3 trillion (out of some $1.9 trillion total). We also laid out China’s two-part goal of 1) getting shed of U.S. dollar exposure and 2) hastening the end of the greenback’s reign.

It should be emphasized, again, that China is thinking longer term here. In the West we are more used to short-term thinking on the part of our leaders. This is, in part, due to a flaw in the system of representative democracy. Politicians are always thinking of the next election – never more than a few years away – and hardly if ever beyond that. This leads to a constant stream of easy promises, a tendency to put off hard choices, and an almost stubborn refusal to think clearly and soberly about the future.

From the “long game” perspective, the near-term ups and downs of the dollar don’t matter as much. To get a sense of China’s perspective, it might make sense to look at charts of the US Dollar Index from a weekly or monthly perspective, rather than a daily one.

But with that said, the game is definitely afoot. Here are the three “peripheral actions” (
see part one) China is taking to bring about the dollar’s demise, each bigger than the last.

Peripheral Action #1: Speaking to Those With Ears to Hear

China’s recent rhetoric on the dollar has been a curious mix of strength and weakness, boldness and timidity.

On the one hand, a key Chinese official, central bank governor
Zhou Xiaochuan, stated flat out in recent weeks that the dollar should be replaced as the world’s reserve currency. On the other hand, when pressed on the matter, China waved off concerns of fiat currency regime change, calling the statement simply a matter of “academic opinion” put forth in essay form for discussion.

Chinese Premier Wen Jiabao has also appeared alternately hard and soft. “We have lent a huge amount of money to the U.S.,” Mr. Wen said in March. “Of course we are concerned about the safety of our assets. To be honest, I am definitely a little worried.”

There are mixed signals here. At times China has seemed to hold the whip hand, and at other times China has played the role of anxious creditor subject to the whims of its massive debtor client.

I suspect the mix of tones is deliberate. By sounding sometimes strong and sometimes weak, China is presenting a sort of Rorschach ink blot – a muddled
message that biased listeners can resolve to their liking. Those who want to believe China is strong on the dollar question have evidence to support that idea. So, too, do those who believe the opposite.

Meanwhile, the very fact that a conversation is being held is a subtle victory. One might say a whisper campaign against the dollar has begun, and China (with a touch of help from Russia) has begun probing for ways to keep the conversation going... and perhaps even gradually turn up the volume.

This is how a delicate campaign begins, especially when the ultimate idea (replacing the dollar as world reserve currency) is so bold. You test the waters at first... get people thinking... use subtle channels to get your message to those with ears to hear, being careful not to pressure those for whom it’s still too early to hear.

As the stakes get higher, this low-level background chatter should increase. By the time there is widespread and serious talk of “what to do about the dollar,” if China’s mission is accomplished, it will feel like the subject is not new or taboo, but had already been on the table for quite some time. And those who heard China’s message early on will be prepared.

TEH : A brilliant game plan, if that is what China has in mind.

Peripheral Action #2: Quietly Circulating the Yuan

China's second course of action is more substantial. But because the details are a little too complex for the average layman to grasp, the media has all but ignored the implications.

Here is the gist from Bloomberg, as reported some three weeks ago:

China’s leaders... are making it easier for trading partners and consumers to do business in yuan.

The People’s Bank of China has agreed to provide 650 billion yuan ($95 billion) to Argentina, Belarus, Hong Kong, Indonesia, Malaysia and South Korea through so-called currency swaps. More such arrangements are being planned so importers can avoid paying for Chinese goods with dollars, the central bank said. In Hong Kong, which has pegged the currency to its U.S. counterpart since 1983, stores from Park’n Shop supermarkets to jewelers accept yuan.

The Chinese yuan is not yet what’s known as a “convertible” currency. In other words, the yuan is not yet freely tradable on the open market. Currency traders can’t buy or sell yuan in the same manner as dollars, Swiss francs or euros.

TEH : I have shared with JL recently about what I read regarding China moves to use the 'currency swaps' and making yuan 'more tradable'. This is only to point why I thinking that China is really up to something 'big'. US is aware of it but ... it is a clash of strategies now. We shall see China's next move. Also, China has been very 'quiet' in UN and such ... but recently China DARE to voice out their 'displeasure'. Time is here for China to dominate ... the crisis becoming an opportunity for China to grow ... into economy power house.

Over time, this status will change. Beijing has long placed trading restrictions on the yuan as a measure of protection for the home market. But now, through various “currency swap” agreements, China is looking to end the role of the U.S. dollar as transactionary middleman in various trading partner transactions.

Part of the role of a world reserve currency is to grease the wheels of commerce by acting as an acceptable medium between two countries. If Argentina wanted to trade with Israel, for example, there might be a currency problem – while Argentina has little need for Israeli shekels, Israel probably has even less need for Argentine pesos. Enter the dollar. If both countries agree to do their trading in U.S. dollars, the problem is solved. This is so because, in theory at least, the world’s reserve currency is universally useful and desirable.

With these new currency swaps, China is in effect saying to its major trading partners, “You know what? How about we dispense with this intermediary dollar stuff? We’ll agree in advance to do a swap – providing you a line of credit of sorts – so that you can pay for your Chinese imports in Chinese yuan. And in turn, when China imports your products – beef, grain, natural resources or what have you – we’ll pay you in your local currency too. No greenbacks necessary.”

This “stealth action” has quite a long ways to go. The amounts involved are still very small in the context of global trade, and there are a lot of kinks to be worked out.

But in a way that’s the point. Challenging the world’s reserve currency – truly challenging it in the logistical sense, not just with rhetoric – is not something you just pull off in a fortnight. This is how “change at the periphery” works... small, seemingly innocuous, below-the-radar type developments that gather momentum and force over time.

Peripheral Action #3: Embracing the Industrial Inflation Hedge

A week or so ago I wrote the following in these pages

A very important question is whether the rally in copper is real. Because “Dr. Copper” is known as the metal with a PhD in economics, a lot of people look to copper as a global barometer of economic activity. I am coming around to the view that Dr. Copper’s message may well indeed be for real... but that the good doctor is more likely predicting the imminent return of inflation as opposed to renewed economic prosperity.

In hindsight, I think that assessment has turned out to be more or less correct – but with a twist. As Ambrose Pritchard with the UK Telegraph reported last week, China has been buying copper like crazy:

Hard money enthusiasts have long watched for signs that China is switching its foreign reserves from US Treasury bonds into gold bullion. They may have been eyeing the wrong metal.

China's State Reserves Bureau (SRB) has instead been buying copper and other industrial metals over recent months on a scale that appears to go beyond the usual rebuilding of stocks for commercial reasons.

Nobu Su, head of Taiwan's TMT group, which ships commodities to China, said Beijing is trying to extricate itself from dollar dependency as fast as it can.

“China has woken up. The West is a black hole with all this money being printed. The Chinese are buying raw materials because it is a much better way to use their $1.9 trillion of reserves. They get ten times the impact, and can cover their infrastructure for 50 years."
"The next industrial revolution is going to be led by hybrid cars, and that needs copper. You can see the subtle way that China is moving into 30 or 40 countries with resources," he said.
"I wish I could just get back to where I was!"

If you've been saying this to yourself, you need these 10 FREE picks from a maverick analyst who's profited hugely from every downturn of the last decade...

This is big news. The hybrid car element is further intriguing given
Warren Buffett’s 10% investment in Chinese hybrid car maker BYD, and the fact that China’s auto sales recently surpassed U.S. auto sales for the third month in a row.

But the bigger picture aspect of China as major league buyer, storer and horder of base metals is this. When paper can’t be trusted and precious metals markets are too small, raw materials are the way to go. This “industrial inflation hedge” concept could catch on like wildfire in the coming years.

It just makes sense. Gold and silver will do very well in an environment of global currency debasement and serious inflation problems – exactly the type of world we’re headed for. But the trouble with precious metals for countries like China has always been their relative lack of size. China alone could drive the price of gold up to many thousands of dollars per ounce, simply by attempting to ratchet up its percentage of gold holdings from one percent of reserves to some large multiple of that.

Raw materials, on the other hand, are far more abundant, and ultimately more pragmatically useful too, in terms of being plugged in to the demand equation. Hard assets like copper and nickel and zinc are immune to the whims of the printing press, and China will need all those metals and more, in substantial quantities, to build out the vision of economic prosperity it holds for the coming years. And what better time to stock up than in the quiet period before a stimulus- and debt-fueled inflation tsunami returns?

TEH : If you read these, you will agree that US market has NOT bottom-out. Seriously, think of it LOGICALLY ... can US continue to exert their SUPER-power over all the global contries. China certainly rebelling at the moment. Russia has always not been on US side. US allies, UK and France are being hurt badly at the moment ... Can they save themselves? Euro still in deep-s*it and US are to be blamed. US too large to collapse?

There is still more to the story... which is wholly to be expected, as it is a very BIG story... but that’s enough for now. In the short run, just remain aware that investing and trading are two different things, and thus the time to begin accumulating hard assets from a long-term investment point of view is not necessarily the time to trade them. There could be periods in the near future where the dollar looks quite strong and hard assets again look weak – but remember, this is the short game, not the long game.

In many ways I expect the second half of 2009 to prove tricky and challenging for buyers of hard assets. But the dynamics of the long game seem clearer by the day, and China’s embrace of the industrial inflation hedge concept (along with other peripheral measures to get shed of the dollar) will play a large role.
We will be trading and investing accordingly.

TEH : For trading opportunities, US-market could give us huge gains. But, if we are going to invest in US-stocks, we have to listen to the direction of China's Sun Tze strategies in place ... no one will dare to dis-miss the power of China, the emerging market. I m definitely on China's mission side. Perhaps, I m a chinese?

Other Related Topics: China , Currency , Justice Litle , Macro Trader

USD Index showing that USD in the downward movements. DXM9 at 84.90 now.

The USD Index measures the performance of the US Dollar against a basket of currencies: EUR, JPY, GBP, CAD, CHF and SEK. Chart obtained from

The formula is as following: from WiKi

USDX = 50.14348112 * EURUSD^-0.576 * USDJPY^0.136 * GBPUSD^-0.119 * USDCAD^0.091 * USDSEK^0.042 * USDCHF^0.036

where ^ is math power operation.

Many stocks in KLSE registered more than 10% increase in their prices last week. So, it is very difficult to find a stock(good one?) that has yet to move ... many has almost 'doubled' the prices since this rally started in early March. So, we do expect proofit-taking soon and any bad news from the US may bring down DOW back to 7000 level(the bank stress test?) and a plunge in KLCI is inevitable.

The law is the higher you go, the harder you could fall. Well, unless you wish to insist that the worst is over and you are a long term investor, buying at the bottom now??

LL : LionInd and many more stocks are at overbought level(KLCI too) ... so, if you are REALLY interested in collecting LionInd for longer term, do not buy next week. Correction will be here and start to buy in stages when moving further down(cheaper) but you will surely need to hold for much longer as we do not know when/where the bottom is ... if you ask me, i will still maintain that this rally will NOT last and it is not the beginning of the bull. So, be glad to collect at much cheaper price, ok?

So, the first round of buying ... shall be when KLCI plunges back to 800 level? Many argued that we will not see 800-level anymore, but perhaps 850. We shall see ...

JL : For ZhaoJin, with DOW added 100+points on Friday, we expect HSI to move up tmr too. With good news about gold at the moment, ZJ may jump further up but do take profit at HKD12-13(resistance) if RSI shoots up to 70-80. Monitor gold price, USD index, CPI & inflation, Copper charts generally. Particularly, look into resistance & some technical indicators(at least you are looking into Bollinger band which I don't) for the sell signal. Sms me if you have anything urgent regarding as I wont be free tmr to monitor market tmr. Good luck.

As for tmr, I wish to clear my LionInd and AnnJoo for a small profit/loss. I will be eyeing at HSPlant or 2771.kl for plantation play. CPO moving higher above 2500 level now. And HSPlant is my love(for those following my blog since Aug 2008!!).


Saturday, April 25, 2009

Breaking our investing ideas into few parts and stay focus on them is VERY challenging. I have my 5-year investing/trading education written by myself, for myself. The creation of this blog has changed it courses too. Similarly, I m seeing myself 'diverting' into something else ... sometimes it is beneficial(as I learned something NEW and EXCITING from it) but many of times it is a waste of TIME(= money) and efforts.

So, basically I m going to re-focus on my investment GOALS. Equity markets is only ONE of the vehicles I m seeing the huge potential go achieve part of my goal --- it is a stepping stone for me to learn the tricks and trades. That explain why I m less concern if I gain/loss(as long as I still maintain my capitals!). It is the education that will benefit me in longer run. Most in markets are known to be 'short term' trading mind. I fully agreed. Sometimes I could hv forgotten that I m only temporarily playing with it for the sake of experiences(and the profits are bonuses).

What I need to do at the moment is to RE-FOCUS and RE-STRUCTURE my plans so that it remains relevent, sustainable and practical. The learning process is certainly still VERY long, but I shall continue to read(to learn) ... discipline is what needed. Patience is virtue in investing.

Investing Idea : China and Gold

I read FP( that China's gold collections has been continuously increased. Yes, the threat of 'letting go of USD' is real and speculations about China's intentions should be carefully read(and digested). Being the 'supporter' of Jim Roger, I do see USD to depreciate, Gold to strengthen(in the name of safe-haven?) and China to take over as economic-power!! Perhaps I m speaking in a view of being a Chinese myself(I m a Malaysian, actually BUT in our country, DISCRIMINATIONS is very much alive. Malaysia's GOV do not appreciate good-brains or logic. Lets not get into that!). Anyway, I will make sure that my kids will learn "Mandarin" one day as it will be increasingly important language internationally in near future.

Inflation is another issue that many countries need to address. I can't really understand of 'deflation' as we are so 'used to' inflation -- items becoming more expensive or the decrease in our purchasing power. Deflation is the total opposite of inflation? You mean things becoming cheaper and it is too cheap? Err ... as consumers, I wont mind getting cheaper oil, cheaper meals or cheaper whatever. It is unimaginable in Malaysia.

9.05 pm : Biz-China(astro 509) ... China's gold collections : 2001 = 500, 2003 = 600 and 2009 = 1054. China gold reserves is only 2.28% compared to US's of 31%. Yes, the news might give GOLD a little glitter but the current hike in the gold price could be contributed by the festival in India, the largest consumer of gold.

How about black gold? This is something I wish to be holding too. Due to my thin confidence on US-market or even the local, I prefer to look at HKSE. In mid-term(by next year or so), black gold will be in HIGH demand and the price might be shooting up above the 100 level again.

How do we actually link economic news with investing idea? Say we believe that the economic data will still remain BAD and the current rally is a BEAR-RALLY(nothing more than that ... BULL market in year of OX?), what should we INVEST in? Or should we be patiently wait for the 'right' time? It is difficult, if not impossible to time the market(bottom?) ... so, I will trade(with my limited funds and knowledge) KLSE ... while continue to read(and THINK) of what sector(and a particular listed stock) to invest in?

We followed closely the Davos meeting, the London meeting and currently the G7 meeting ... what the world leaders have to say and what is being done thus far, yet ... HOW could we actuallly related that to the STOCK that we want to invest in? Recession is a global phenomena at the moment(S.Korea recently escaped by a whisker) ... which sector do you think an INVESTOR should place their money?

Knowledge on such global economic news becoming part-n-parcel of my life for the past one year ... and I m still unclear about many things they mentioned in biz-news, especially the CNBC/Bloomberg. I dont know if it will help me in my investing but I do know I m interested to enhance my knowledge, for the sake of education ... MONEY is not the main motivator, Education is.

DOW up about 100 points.

Growing overbought condition


Investors may take profits while the CI scales nearer to the pivotal resistance level.

REVIEW: Overnight Dow Jones Industrial Average rose 5.90 points to 8,131.33 amid gains in the banking issues the previous Friday, extending the market’s rally to six weeks, as news of improving consumer spending bolstered hopes of the US economy stabilising. A higher US crude oil futures, firming 35 cents to US$50.33 a barrel also aided the energy shares.

Against the positive backdrop, many people had expected a good run in Asian bourses on Monday, but surprisingly, they were generally range-bound with a mild upward bias on bargain-hunting interest offsetting a bout of profit-taking activity. Perhaps, because of the indecisive movements in the regional markets, investors on the home front took the excuse to book profit, which witnessed Bursa Malaysia key barometer Composite Index (CI) turning negative soon after the opening bell.

Fortunately, some support in the core index-linked counters managed to keep the CI within a narrow band and later helped it reversed course to close at the plus side, up 3.20 points to 968.37.

Despite the steadier ending, the broader market was in consolidation process, with the scoreboard showing losers thumping winners by 327 to 233. Then, overnight Wall Street took a dive, plunging a huge 289.60 points, or 3.56% to 7,841.73 in the wake of fresh jitters about the health of the US economy after Bank of America reported a big jump in troubled loans. A steep pullback in crude oil prices, dropping US$4.45 to US$45.88 a barrel added to the downbeat note.

As expected, major Asian stock exchanges, such as Shanghai, Tokyo, Sydney and Hong Kong reacted accordingly, sagging between 0.85% and 3% on renewed liquidation pressure, but in an unprecedented move, trading on the local bourse was somewhat calm on follow-through bargain hunting alternated with mild selling activities.

Though the CI declined some 9.38 points in early trade, Bursa Malaysia clawed back in the afternoon on local funds support to settle marginally lower, easing a minor 1.77-point to 966.60 on Tuesday. After a short respite, the local bourse turned sideways but with an upward favouritism the following day, as a quick rebound in overseas equities gave encouragement to the local institutional players to continue seeking value buys.

Apparently, a positive remark by Treasury Secretary Timothy Geithner that most US banks have enough capital to keep lending sparked a strong recovery in global banking stocks.
On the back of an positive ambience, the CI raced to an intra-day high of 976.29 before trimming advances to close 1.98 points firmer at 968.58. Thereafter, the major index tacked on an extra 10.06 points to 978.64 and an additional 14.04 points to 992.68 yesterday, spurred by a strong performance in regional peers and optimism companies may report better-than-expected earnings in the second half respectively.

Statistics: Trading range stood at 35.11 points, with the CI posting a high of 992.68 yesterday and touching a low of 957.57 on Monday. Week-on-week, the key index climbed 27.51 points, or 2.9% to 992.68, against 965.17 the previous Friday.

Total volume shrank to 6.424 billion shares valued at RM5.822bil compared with 7.176 billion shares worth RM6.064bil done a week ago.

Technical indicators: The daily slow-stochastic momentum index continued to flirt at the top on bullish extended-move despite triggering a short-term sell on April 16. Likewise, the 14-day relative strength index (RSI) maintained a strong posture at the bullish territory. Also, the daily moving average convergence/divergence (MACD) histogram extended the steady upward momentum, in tandem with the daily trigger line to stay positive.

Elsewhere, weekly indicators retained the bullish note, with the weekly slow-stochastic momentum index surging higher into the overbought area and the weekly MACD continuing to expand upward against the weekly signal line.

Outlook: After a short pause earlier of the week, Bursa Malaysia resumed the upward thrust on fresh buying interest, propelling the CI to a high of 992.68 yesterday, also the best since Oct 7, 2008. All in all, the key index had advanced a total of 156.17 points, or 18.7% from the recent bottom of 836.51 on March 12, carving out a near vertical style of recovery, thus catching many people by surprise. While most investors participated aggressively on optimism of an economic healing ahead, others have grown rather cynical, attributing the speed of the market’s run-up to an inflow of “short-term monies”, adding that greed has overwhelmed fear and raised doubts about the sustainability. Obviously, we do not have any proof of “hot money” snapping up stocks for immediate gains, but what is very clear is, so long the key index stays above the 14-day simple moving average (SMA) and the 21-day SMA, resting at 952 and 932 respectively and still rising, the upward momentum is intact.

Technically, the market is bullish but given the growing overbought condition of the daily and weekly slow-stochastic momentum indices, and the 14-day RSI, there is a high possibility investors may opt to take profits while the bulls trot nearer to the pivotal 1,000 points psychological level. The next upper hurdle is seen at 1021.20, followed by the 1,040-1,042 points band.

Taken from The STAR, a column I never missed for my 1 yr and 4 months adventure in trading. It is like a "must" read to give me the overall picture of how the KLSE performed for the week.


Friday, April 24, 2009

Not much of change in DOW and Crude Oil but gold seen a better trading day yesterday, and at 905 at the moment.

Nikkei and Kospi in red but down-under opened up. I wonder if KLCI will be moving further up? Holding on to KLSE's stocks do not give me a 'good' feeling tho the sentiments are still positive. Yeah, we are seeing such a strong rally that many think the bear is out. Are we?

9.25 am : KLCI at 986. LionInd done at 1.04. Bought AnnJoo-wb at 0.41.

9.55 am : Done WCT-wb at 0.30 and 0.295

10.15 am : Bought AnnJoo-wb at 0.405 but 0.40 not done.

11.30 am : AnnJoo-wb done at 0.40? Wow.

11.55 am : Yet another bull-day in KLSE. Cleared WCT-wb at 0.30(all). Holding to AnnJoo-wb(average 0.405) and LionInd(average 1.06).

5.45 pm : KLCI up 14.04 points to close higher at 992.68, and we are seeing 1000 level soon!!

Gold up again to 910 level at the moment. This BEAR-RALLY is really strong... can it last for few more weeks to come? I m riding on STEEL-stocks as news and sentiments have been bullish on steel. So, may be I might want to HOLD on to my steel-stocks for a while till it collapse? up strongly.

12.10 am : DOW up 100+ points. KLCI making a very interesting move today(yesterday) as the volume was above 2billions with turnover was one of the highest in months!! The bull is back? Look at Resorts and Genting today ... look at the heavy weights. Institutional investors are buying? So,I think we should


Thursday, April 23, 2009

DOW was down almost 100 points in a very volatile trading day in US. Uncertainty is still there ... as I m not holding to any(and no intention to buy any), nothing much to say here.

So, I will take a break from my daily BS.

9.20 am : KLCI up 3 points and Lion's counters in play.

9.35 am : I m doing some 'homework' on CNOOC, my first oil counter to close in.

CNOOC in news

Bloomberg - 19th April 2009 : (0883 HK): China’s biggest offshore energy explorer ruled out overseas takeovers during the global economic slowdown because rising protectionism was making foreign acquisitions too difficult. Cnooc will instead concentrate on joint ventures and partnerships overseas if projects are found which add value to the company, Chairman Fu Chengyu said. The stock climbed 4.8 percent to HK$9.20.

FA : 1. ROE above 25, 2. PE below 10, 3. High DY 4. Lower Debt 5. Cash +

Good fundamental counter : STALK.

3.35 pm : Time to clear LionInd if you bought in the morning. Queue-ing at 1.04. *psst* Of coz I did NOT buy LionInd.

4.00 pm : KLCI up 5.6 points to be at 974.

6.10 pm : KLCI up 10 points. We are nearing 1000 points!! Yippee .. the bull is back. Whether the bull is back or not, I simply want to be a part of it.

11.00 pm : Gold going up, above 900 now due to some(expected) bad housing data from US.


Wednesday, April 22, 2009

CNOOC : Lost 24cents. Closed at 8.40 today. RSI(14) at 58 level.

Morning ... glad to have my fans tailing my response. But, I m too tired to answer that. Cheers, anyway.

DOW up 100+ points. We shall see if KLSE and HKSE following the trend. Well, a new dealer for me with OSK, and she is recommending Gen. Int? It is at SGD0.60+ now, I think. So, too late to accumulate a few?

I m still thinking of getting a oil-stock and steel-related of China. Perhaps that tailing si-fu who gain so much from market could give me a hint? Hmm ... normally I find people generally are generous and good. But, we always could find someone to be our main 'resistance'. And we will be very surprise, one day, that the person could be your good friend!! So, I dont like making enemy(for whatever reason) but an arrogant person will never hold well in his/her lives.

Yeah ... I could keep mum about my buyings/sellings BUT this blog is meant to record(for my OWN viewing, anyway) my transactions. Bursa will send me monthly statements, OSK/CIMB sending me all my transactions done, but my letting others to know what I m BUYing/SELLing, they(much more experienced traders/investors ... tho kind hearted ones, I mean) could perhaps CORRECT my doings. Yes, I m humbled in that sense as I feel I hv so much to learn from others and have repeatedly said I m only 20% journey in my investment adventure. So, I do hope NO ONE will read my blog here to BUY/SELL. Afterall, most of my transactions are UNREAL. It is just my fantasy ... a dream that I m THAT good and earn much. I apologise if anyone REALLY buying into what I m buying(and lose money). Even JL is my fantasised doctor-friend, ok?

9.15 am : Clearing TWSCorp at 0.49 and 0.495(assuming I bought it yesterday, ya). Forgive me, I still wish to day-dream and write in my blog, can I?

9.30 am : Queue-ing lower at 0.485. Just want to get rid of this 'phantom' stock and hv nice dinner during my weekend. Yeah ... I m thinking of weekend now. So tired. BTW, is it 'lucky' that I did not manage to clear at 0.48/0.485 yesterday? I don't know ...

Yes, I m emotionally affected by Liverpool's results(not trading, of coz) ... so, I m a little down with the 4-4 and 4-4 results. Out of CL and now out of the title race? I m hardly awake at the moment as I slept for less than 2 hours.

9.55 am : Sold my TWSCorp at 0.485 and 0.490, 10k units each. Done. Phew!! Don't worry, I m just kidding. I didnt get it at 0.4675 ... and calculate it, can I earn enough for a nice dinner?

JL : I m queue-ing to clear LingBao at 3.10(ALL). We hold on to ZhaoJin and will discuss with you to see if we are going in for Oil-stocks or Steel-stocks, k?

10.15 am : KLCI at 974 ... impressive run up till 1000 level is possible now?

11.25 am : KLCI still at 974 now. I need a break. Have kit-kat.

12.30 pm : Sold LingBao at 2.95, just enough to cover broker's fees. Yes, I want out ... and cleared ALL my holdings in OSK, tranferring to CIMB for local and RHB for oversea next week. So, no trading for now till that is done. Need to re-think of my strategies and urgently need to discuss with JL how we should be invest wisely.

Regarding this blog, it is still relevent. I need to get a new face-lift for it and re-start and re-focus on my main obkectives/purposes.

Too much of distractions. Off

8.10 pm : Yes, finally I could get back into my focus and leave KLSE. Yes ... I will quit short-term trading too as that will not benefit me in longer run. I want to continue my reading on option-trading and forex-trading while back to my 'neglected' Alternative Energy research.

In the mean time, we have agreed in principle that we will focus on GOLD and O&G for a mid-term swing trades. And focus will only be in HKSE and US-market. With a longer time frame, investor certainly feel less risk and we shall see economies to recover by next year. Markets should recover by then.

That is cleared, finally. Yeah ...

10.30 pm : DOW was in red due to MS's news but the housing data giving the investors some good news and DOW back to green(slightly). I m going to sleep early now. Night.


Tuesday, April 21, 2009

DOW lost 289.60 points to close below 8000-level. Tho BAC posed a "profit", most of banking stocks plunged yesterday. Perhaps it is due to 'mild' profit taking after 6 weeks of rally, lead by financial stocks? OR perhaps it is a turning point of a bigger wave to sweep most of the stocks to new low? Whichever it is, it is certainly very volatile(15+% registered yesterday).

Crude oil at USD45, while gold climbed to 885 level. Could gold breach 900-level this week? That is left to be seen ... every investors are looking at US-markets. US ... US ... the big brother of all markets. HSI will surely be affected by it later.

How about KLSE? Some analysts even say that we could be reaching the psychological level of 1000 points as this rally may last till JUNE? I wish I m THAT optimistic and I could "safely" buy a stock TODAY and let it run till June? How about KNM at 0.55 level? Hmm ...

10.15 am : Exit strategies need to be applied strictly. So, the blockage in my mind currently is that I will easily take profit with 10%. I was reading the "exit strategies" of Buffett again. Must learn from the master rather than hearing to the noises around.

KLCI down by 6+ points. In my HKSE's stalk list, ALL in reds except gold-mining stocks. Do you see DOW down another 300 points tonight?

Done TWSCorp at 0.47 just now and still queue-ing at 0.46, 0.465 and 0.47.

12.30 pm : I m so busy. Bought more TWSCorp at 0.465 and 0.47. I didnt watch, just placed my baits. 0.46 is NOT done ... hmm ... enough of it. Clear it after lunch later.

LingBao at 3.00 and ZhaoJin at 10.00 level. Yes, I saw Lingbao touched a low of 2.60+ yesterday and was tempted to collect more but I hv planned to only BUY more at 2.50 level. So, I m going to stick to my plans. As for ZhaoJin, it has been going through a week of selling pressure due to the retracement of gold-prices. All these fluctuations are part of trading. But, for a longer run, as INVESTOR ... we should buy into a sector we feel will benefit in longer term. I m buying into O&G and Steel ... my next targets.

I m also still eyeing ASX(long time never write about it) and AUD has appreciated to 2.60 level since then. No ... I do noot have much funds to distribute around. So, I want to keep my focus --- HKSE with commodities in play.

As for KLSE, I will only place 10% of my funds to trade ... yeah, gain/loss ... the broker wins. I just cut of Sunway-wc for a loss. And chasing TWSCorp this morning. Out of 10 trades, if you could stay in positive for 7/8 times, you should be 'glad'. It is not easy to trade in BEAR MARKET. I hv not changed my stand ... I firmly believe it is a bear-market rally. It is a matter of time investors/punters realise ... it is GAME OVER? Or is it?

Lunch time ... hmm ...

2.00 pm : Why I play with TWSCorp today? Hmm ... let me see ... because it is in-play? Well, we know what happens to DRB stocks these few days, right? Did you check out MMC or Zelan? Guess who is the big-boss behind? Why would his counters in-play? I DONT KNOW but I do know that I m following 'trends' and play by rule. It doesnt matter if he is going to privatise DRB. Many of times, stock prices movements dont make any sense anyway.

JL : Welcome back from holiday. Yes, let re-focus in our INVESTMENTS. Gold will be in-play again once market make senses, and huge correction in coming weeks. Look into USD, crude oil and volatility-index as indicators. Yes, I m the few who still stand that ecomony will NOT have a V-shape recovery as it is shown in current equity markets. It is too artificial to be true. It is like I hv to erase most of the economic concepts I hv been studying for past one year. May be I studied(or interpreted) wrongly?

Teach me "Economy", someone. Teach me "Finance", pleae. Can a gov just print money 24/7, inject into its financial system and throw away the debts? That is what they are doing!! Can ALL the so-called too hugh to collapse companies being bail-out(and they still have the guts to ask for BONUSES!!) with tax-payers monies?

Yes, all the above are happening in US at the moment. Simply illogical, but ... well it is happening! Teach me "Accounting" ... can I simply make my balance sheet 'look nice' and register a profit??! Then, most investors SHOULD have bought into Citi or BAC yesterday!! I was reading the definitions of Zombie Banks. I m confused with theories ... as it is not being applied, practically ignored!!

2.40 pm : Clearing TWSCorp(average 0.4675) at 0.48 and 0.485 for small profits -- enough for nice weekend dinner.

To my comments : Thanks.

9.30 pm : I allowed my loser-reader-cum-stalker comment to be published? Normally I dont really read his words(it is hard to go THAT low, ok?). But I need to comment on my TWSCorp ... at 2.40pm, I was queue-ing to clear (please read the word CLEAR-ING) at 0.48/0.485. I know your command of English is not THAT good(mine, either). Anyway, I do not get it and still have 20k units at 0.4675 average. No, I do not need to justify my buy/sell. YES, ALL my buy/sell are PHANTOMised. Oh yes, I m also a joker. Hehe. Thanks for recognising that. You are not THAT stupid afterall. But, why bother IF I want to write here? Hmm ... let me guess, you must be reading blogs to BUY, then you happened to BUY one of my loser stock and now you want to get even with me? Haha ... I don't know. I dont have time like you do, honestly. I hv to give tuition from 3 pm till now, 9.30pm. Then, I have to watch Bloomberg/CNBC to see what BS I could write again tmr!! Isnt it great? Hehe.

Where were you when I bought Genting-cm at 0.05 and recently sold at 0.075 and 0.08? You must be asking me to SHOW my records again right? Haha ... please understand. All these are fiction. You think I really get it at 0.05 meh? Don't get angry ... dont be stupid too la. I bought Rio Tinto at AUD35, do I need to tell you and write it here? Hmm ... no, I do not buy Rio Tinto!! I bought Chalco which buying into Rio Tinto. So, indirectly I say I buy Rio Tinto, can ar? Hehe.

Hey, do u know I asked partner to BUY AnnJoo and I bought AnnJoo-wb? Hmm ... you gained much too? I bet you surely bought PROTON at 1.60 last month, right? Mind sharing me your skills? At least I hv a blog and writing my "phantom" stocks? Hehe

No, I will not justify to ANYONE(except JL) what I buy. I will SIMPLY write what I bought at WHATEVER price I want. In fact, I can say ... emm ... I bought KNM at 0.35 and still holding 500k units on it. Hehe ... cool money, ya. Haha.

Enough of those silly words. It is fun at the stress time like now. So, thanks for entertaining. I need it, buddy. I know you will come back again ... so, I will write more 'phantom' stocks I buy for huge profits!! Haha

In more serious note .. for SP's comment.

SP, yes ... I m clearing 3330 this week. Has been riding on this one for 3rd week now. Gold at 890 level, and I will see if I could clear at 3.30 level tmr. I agreed as I m holding too much of it at the moment. But, I can't see gold to go below 700 level. We shall see. As for my 1818, my partner top-up at 10.00 today and averaging at 10.10(not cheap, honestly). That is for mid-term holding. We dont mind buying more into it at HKD9, follows by HKD8 and so on. But, all shall be seen. I need to look around.

About US market, I will go in once it in HUGE correction soon ... I m looking at around AUG or so. At the moment, I wish to stay alert(and aside) ...


Monday, April 20, 2009

7.30 am : Monday morning ... KLCI will be in green, I guess. My focus will be in my gold stocks( and in HKSE. I might jump back into Chalco while thinking of Maanshan. HSI has been jumping very high up and I m still waiting for a pullback before moving in. As for US, I will be looking into DOW below 8000 level. KLCI at 970 level is unbelivably high!! How do they actually place valuations on the sectors/stocks? Hmm ... I do wonder as I don't see KLSE's stocks to be CHEAP? But, that does'nt stop investors/traders to move in KLSE and grab some of the stocks?

As punters still playing with penny-stocks/third liners, warrants are getting more attention. For those with higher risk appetite, call-warrants in play too. I have cleared my last hold of a CW, Genting-cm with some handsome profits. It closed at 0.075 last Friday.

Perhaps I could play on heavier stocks such as AMMB, HSPlant and mommy HapSeng or whatever.

Jim Rogers the Dollar is Doomed 23 Mar 2009

9.20 am : KLCI losing 6 points now. REDS are everywhere on my screen ... gloomy and scary to look. I m not going in. Perhaps the rally is over? I m still stuck with my Sunway-wc. AnnJoo-wb at 0.36 vs 0.365 now, the corrections are overdue.

12.35 pm : KLCI closed 5.88 points lower and we shall see if KLCI will be push-up into green territory again. Yes, corrections are overdued.

HSI was in REDS too but managed to climb back and at 180 points higher now. unchanged but lost about 20cents. I will hold on to these.

Jeff Chang - 信仰 <--- We must have "FAITH" in ourselves.

2.00 pm : I noticed that Affin and Octagon moved very much lower. AnnJoo-wb too. How about Titan, Muhibah, Sapcres, Scomi,Dialog, ... hmm ... Astro, WCT, Kinstel etc etc ... and and few more I played with for past one month? I don't really know. I just want to clear my Sunway-wc and channel my focus back to HKSE, particularly my golden babes. Hmm ... I m in great stress now as I hv to finish marking by tmr and another 3 more set of papers to mark next week!!

5.40 pm : KLCI closed another 3.2 points higher, eagerly waiting for US-market tonight.

Did I miss THE bottom? In my humble opinion, NO. March rebound is very strong. We should play on rebounds but definitely we should not be confused that THE bottom is here. Well, ok ... to be fair, there is TWO diverting thoughts. IF one person BELIEVE that the current rally is the beginning of BULL RUN, as I said ... we should place ALL our MONEY to BUY ... buy any counters that you like or have confidence in.

Genting is still very strong up ... if this is a beginning of bull-run, then do BUY all you can with your funds. Genting at RM4.50 level now, don't worry ... it will reach RM8-10 by year end as we are just at the beginning of ...a 3-years BULL market?

Proton is still up from RM1.50 till RM3 now, that is doubling our money in one month? But, since we are at the bottom, do BUY Proton the next day?

Funny : I m half-hearted answering the question. Did I miss the bottom? Can someone please teach me the LOGIC? What makes everyone THINK and BELIEVE we are at the bottom now?

Whether it is THE bottom or not, we SHOULD be in the play too. If it is THE bottom, GOOD. If not, pull out and wait for pullback to re-enter the market.

I will remain my point of view that we are having the bear-rally. Play hit-n-run not buy-n-hold. But, I m veiwing HKSE as bottoming and we will NOT be able to see the NOV low. That I will agree that I missed the bottom. But, if it a beginning of a bull-market ... it is never too late move in. Which sectors/counters should we place our aim at?

I do like Air China, China Telecom, Maanshan Steel, Datang Power, BOC HK and such. BUT, which ONE should I choose ... park the money there for it to recover? WHEN should I move in again?

How about US-market? Yes, I will place some(10%) of my funds into a US-stock? But which one will be in play? Oil and Energy?

10.00 pm : DOW down by 150 points now, Oil below USD50 and Copper moving down. USD rally and Gold recovering. We shall see when will be the turning point.

10.45 pm : DOW below 8000 level now, losing 220 points. Gold up to 882 level.


Sunday, April 19, 2009

World's Safest Banks : Non of banks in China or Malaysia in the list. Singapore's DBS, UOB and OCBC are there.

Warrants to stalk/RSI/V

1. BRDB-wa/52/57k
2. SPSetia-wb/67/23k
3. Suncity-wa/68/6k
4. TGOffs-wb/61/44k
5. WaSeong-wa/65/80k
6. WCT-wb/69/218k
7. YunKong-wa/55/74k

Call-warrants to stalk


Generally, we should prefer the lower RSI and higher Volume. That is logical but market is a place people DO NOT make rational-senses. It is EMOTION in play, of coz.

Whether KLCI could really breach 970-level is the least of concern at the moment as we could see more going into market for a quick-fix, I mean quick profits. Hehe.

Punters love warrants and call-warrants as they could give us huge %(up or down). So, basically I will just do some fishing for a day or two ... with NO intention of holding to any. Welcome to the largest legalised casino in Malaysia ... BURSA MALAYSIA.

A report in Reuters was saying that markets becoming a punters heaven, and not investors! The tremendous increase in the volumes giving us an indication that many moving back into markets after weeks/months of staying sideline. There are too much of cash staying idle and there is implusion to PLAY with the money. If that is true, moving into equity markets next week or so could poise greater risk?

As for me, I do prefer to stay sideline in KLSE, but moving in HKSE. I might even place 10% funds for high risk PUNTS into US-market now. Other than that, I hv no preference for any particular stock in KLSE? Proton is VERY impressive now!! Or going for plantation stock(s) since CPO reaching 25oo-level? Steel-sector counters still in play?

Too noisy ... I will focus in the warrants and will look into some CWs to play with.

Yeah, I m still concern about gold as I m placing 18% of our funds into it so far. HKSE is occupying my mind, tho KLSE is a more comfortable play-ground for me.

We shall see how markets doing as more earning-reports out.

Bloomberg's Taking Stock(Pimm Fox) : It is NOT a lie if you believe it. He was refering to GE's earnings report.

Listening to ... from David Tice(of ). He speaks LOGIC about the current rally and confirming that this is a BEAR-RALLY rather than some overly optimistic analysts pointing that the worst is over. He even said we might be seeing S&P at 325 level at end of this year!! Arrghh ... this is far more pessimistic than me!!

9.00 pm : If there is a believe that market will continue to rally, then holding on to our stocks and let it run ... this is one of my main wekaness, failure to let the one profitting to the maximum before taking profits. Hmm ...

11.00 pm : US Bank stress test results will be released on 4th MAY 2009. A very crucial and important date as it might be a turning point for equity markets.

11.55 pm : Need to BUY "Kindle" as I read a lot ... it will be a good investment.

Use wisdom of psychology to counter irrationality


COMMON sense need not be common practice. I picked up this phrase from a fellow speaker at a recent seminar and I am in total agreement. In all aspects of life, even in personal finance and investing, one may be expected to be at least reasonably rational. But in reality, it is seldom so.

If there are different opportunities to make the same amount of profit, we should expect investors to be indifferent as to which opportunity they opt for. The reverse should also hold true for potential losses.

Logical? Not quite. In fact, where money is concerned, sometimes an investor actually prefers an option that gives a slightly lower expected profit! For this seemingly ironical analysis, I tap on the wisdom of Nobel laureate Daniel Kahneman, a professor of psychology.

Let me illustrate with a game, starting with Round 1:

·Door A100% chance of winning RM800

·Door B – 80% chance of winning RM1,000

Which door would you choose? Mathematically, there should be no difference as the expected gains in both cases are identical – RM800. So if we test a large group of people, we should have roughly the same number of people choosing Door A and Door B.

Funnily, that doesn’t quite happen. When I test this in seminars, invariably about 80% or more choose Door A! Even when I up the prize of Door B by 10%, more people still choose Door A. This reflects a preference for certainty despite Door B being a superior option when the prize is increased. Rationality fails.

TEH : It is "natural" for us to prefer CERTAINTY but we sometimes forget that in INVESTING, there is no such thing as CERTAINTY. Hence, you could see that a HUGE MAJORITY of population will prefer to place their money SAFELY in FD, Bonds or UT. Even tho you may TRY to show to them about other investment vehicles, majority STILL prefer CERTAINTY. They will ask : "Are you 100% sure buying XXX at the current price will give you more than 10% increase?" I m speechless ... we are talking about probabilities, NOT CERTAINTY, ok?

Let’s reverse the game and consider losses instead, in Round 2:

·Door C – 100% chance of losing RM800

·Door D – 80% chance of losing RM1,000

Again, the mathematical results are the same behind both doors, that is, the expected loss is RM800. You probably guessed it, most people (in fact, almost 100%) choose Door D. When faced with the certainly of losing, it is in our nature to bet on a chance of not losing any money at all. People are loss-averse.

TEH : I admit that I m loss-averse. When you have lost so much before, the FEAR of losing could stop us from making irrational decisions. At times, we CUT too soon instead of waiting for confirmation or following our stop-loss plan.

In a nutshell, people are not as rational as we expected. I would not be so audacious as to call everybody irrational, but certainly we are not always rational because of our emotions. The heart can and does confuse the head!

Let’s push the boundary a bit more, in Round 3:

·Door E – 100% chance of winning RM1

·Door F – 0.1% chance of winning RM900

When the prize money is reduced to a relatively “insignificant” amount that does not matter to most people, the results are actually reversed from those of Round 1! In Round 3, more choose Door F! A rational investor should actually choose Door E as the expected returns of Door E is RM1, while the expected returns on Door F is only 90 sen. Most people preferred the “inferior” option!

This explains why even conservative investors would bet on lottery or gamble regularly, despite knowing that the odds are against them.

TEH : Yes, I could never understand since young WHY my aunties will BUY Magnum/Toto ... and my mom-in-law INVESTING RM50-RM100 per week(that is average of RM300 per month, ok?) buying lotteries tickets! You have NO CONTROL on your money and the chances of re-coup your INVESTMENT capitals are so low. That explain WHY we could bet on BJToto, MPHB, Genting&Resorts, Tanjong and it will give us good dividends. Guess what, punters will NOT stop buying lotteries tickets!!

In application, it is very tough to make rational choices because we have to fight strong emotions such as fear and greed, and love and hatred. When it comes to your hard-earned money, how can you remove all emotional factors?

TEH : It is VERY diifficult to trade/invest without emotions. It is a constant struggle NOT to get emotion-in-play. But, somehow we need to make SENSES and be logical.

I suggest fighting emotions with emotions. If you start to hate equities, I would prescribe some love. If you start to fear investing, I would recommend some greed.

Here’s my approach. How would you like to be able to play golf, go fishing and play with your kids or grandchildren every day for the next three to five years without any worries? A lot of love is generated with that imagery.

And how much would you “pay” and invest for a chance to realise this love? You must be prepared to completely forgo this pot of money. According to Kahneman, you probably would not worry if the amount is not more than 10% of your total wealth.

So what if this investment goes off tangent? There’s still the 90% or the bulk of your wealth. To him, this amount of money is not as affected by your emotions and can be more rationally invested. Without the emotions, the rational choice is more optimal.

TEH : Easier said than done, as always.

The psychology professor argues that if a person is worth (including all assets) RM1mil, then he can set aside RM100,000 (and forget about it for three to five years!).

For that RM100,000, or whatever that 10% amounts to, here is some advice on investing:

(1) Choose a high-risk market in which you have long-term confidence. It can be the Malaysian stock market, China, oil, properties or whatever. Of course, this is subject to your own risk profile, as some people are so conservative that they are not suitable for investing in any high-risk markets.

(2) Take this 10%, either through a lump sum or over a period of months, and invest in the chosen market, without any further thoughts or feelings.

(3) Don’t worry, go and play golf, until three to five years later. This also means that you do not check your statements.

A caveat though. I am not suggesting timing the market, or that three to five years is what it takes for markets to recover. However, I believe in learning from the wisdom of such an eminent scholar to prescribe practical pointers.

Our “destructive” emotions can often prevent us from choosing a superior investment option. It can inhibit us from looking beyond today to weed out short-term shocks. So we must counter such emotions with emotions to hopefully arrive at a more rational approach to investing that is superior in the long run.

·Tay is senior vice-president and senior head of UOB’s personal financial services division

TEH : I found this article from THE STAR is VERY important to point out some of our irrational decisions in our investing/trading. Once we could understand why we are acting the way we are, perhaps we could RATIONALLY think of how to counter OUR emotions.

Saturday, April 18, 2009

DOW not going anywhere tho Citi registered a profit? Yes, global equity markets are having a mini-bull run for 6 consecutive weeks now. What are we looking ahead for next week? As I mentioned, I won't trade much at all ... perhaps just to cure my itching-fingers of clicking the buy/sell platform. No huge gain/loss expected.

Next week JL will be back, and I really need to discuss with him our investment strategies. So, I m preparing my ideas and see how we could agree to place our funds. With limited funds, we certainly need to be prudent and wise.

GOLD : Gold traded lower yesterday and at 865 level now. It is in down-trend for 4 consecutive weeks. I will see how low it could go. Thinking of gold-ETF traded in US.

Comments : Thanks SP for your constructive comments, as always. Yes, I will release one of my holdings as I m going into equity(till it collapses) and will top-up in my gold stocks.

I m a supporter of Peter Schiff - I dont see HOW the current rally last. USD strengthen hurting the prices of gold too, as a safe-haven. But, I believe UD will depreciate. Once these two big factors pullback, the demand for gold as a safe-haven will increase. So, that is how I see the gold-play at the moment. Inflation will be record high(if not hyper-inflation) ... that will be another factor to monitor.

How low could gold price go? It will be very gold-investors guess. If we buy to keep for longer term, it will be OK


p/s : I didnt plan to write today but I m 'forced' to be in office. I hv to invigilate!!
Why Contrarians Make Money And Trend Chasers Lose Money

Simon Maierhofer

Friday April 17, 2009

Don't you hate being left out? Going against the grain is usually the unpopular direction to go. Nobody likes to be the oddball out. For the sake of popularity, humans tend to conform to the general trend eventually, especially if the trend continues to persist.

As it turns out, when it comes to investing, being the oddball is much more profitable. Oddballs in the investment community are considered contrarians and contrarian investors have been one of the few to actually book profits over the past year or so.

If you are willing to exchange some of your trend conforming popularity in return for profitability (don't worry, making money will once again increase your popularity score), this article is for you.

Trend chasing - a losing proposition

Most investors - novices and pros alike - rely on news and news- based forecasts to make their buy/sell decisions. News is always good at the top and bad at the bottom. Excessively bullish news will trick you into the market before it falls, excessively bad news will squeeze you out of the market before it bounces.

Here are a few examples to illustrate what I mean: Equity mutual fund cash reserves reached an all-time low of only 3.5% just before the market topped in October 2007. This means that 96.5% of mutual fund managed assets got to participate in the decline that followed.

Broad index funds such as the Dow Jones (NYSEArca: DIA - News), S&P 500 (NYSEArca: SPY - News) and Russell 1000 (NYSEArca: IWB - News) lost over 50% from top to bottom. Most actively managed mutual funds did even worse. Why? Because fund managers based their decisions on positive news.

In the fall of 2008, the Federal Pension Benefit Guaranty Corporation shifted most of its $65 billion in assets from bonds to stocks and real estate. This move came just before the bear's attack intensified.

In 2007, companies belonging to the S&P 500 index spent a record $590 billion repurchasing their own shares. On average, this buy-back decision resulted in a 50% loss. Index components like General Electric (NYSE: GE - News) and JP Morgan (NYSE: JPM - News) did much worse than the broader market.

General Properties (NYSE: GGP - News), one of the largest mall operators in the states, had to file for Chapter 11 bankruptcy protection due to its aggressive and overleveraged expansion at the height of the real estate boom.

Yes, as the example of General Properties and once highflying homebuilders (NYSEArca: XHB - News) shows, trend chasing is actually the root cause for the financial and economic meltdown. The fear of losing out on profits caused even the most prudent investors and business men to throw caution to the wind.

As Ben Stein commented in the New York Times, nearly all of us are part of creating the prevailing trend, which inevitably turns against its creators. Ben noted that 'almost all economic pundits and soothsayers - whether on television, in newspapers, or at brokerage firms - are asked to tell the future. Some of them are stunningly well paid for their efforts, even though they are wrong decade after decade. Yet, we cry out for someone to tell us the future, like children who want to hear the end of the story.'

If you are looking for a crystal ball of what the future holds - as long as it relates to equities and economics - resisting your urges and swimming against the current is your best bet.

Easier said than done

As so often, this is easier said than done. Certain people, perhaps even prior contrarians with a stellar reputation and brilliant mind, may abandon their out of the box views and conform to the general trend tempting you to do the same.

Crispin Odey, a London hedge-fund manager who gained fame and money by shorting U.K. banks, has switched teams and is now cheering for the bulls. After being short for most of 2008, Mr. Odey started to accumulate bank stocks again earlier in 2009. The SPDR KBW Bank ETF (NYSEArca: KBE - News) is the U.S. cousin to U.K. bank stocks.

On a larger scale, even Mr. Roubini, one of the few economists who predicted the real estate meltdown and Mr. Soros, the billionaire investor who came out of retirement to steer his Quantum fund to an 8% gain in 2008, believe that the worst is over. Albeit slow, they expect an economic recovery to begin over the next year or two.

Like sand on the beach

Look around and you'll see that economic forecasts are as abundant as sand on the beach, and they are worth just as much. It is tough to find a precious gem (an accurate forecast) amidst worthless sand.

To further illustrate the folly of news and news based forecasts, consider this: On March 9th, the day the market bottomed, the Wall Street Journal featured an article called 'Dow 5,000 - There's a Case For It.'

True, there might be a case for it eventually (more about that below), but as it turned out, the market decided that March 9th was not the time and place in history.

In fact, just a few days earlier, on March 2nd, the ETF Profit Strategy Newsletter sent out a Trend Change Alert recommending ETFs that benefit from a rising market. Such ETFs included traditional broad market index ETFs, dividend ETFs, sector ETFs like the Financial Select Sector SPDRs (NYSEArca: XLF - News) and leveraged ETFs such as the Ultra Dow Jones ProShares (NYSEArca: DDM - News) and Direxion Large Cap Bull (NYSEArca: BGU - News).

Back to the folly of a news-driven market; Wells Fargo's (NYSE: WFC - News) positive earnings report sent stocks soaring last week while Goldman Sachs' (NYSE: GS - News) earnings surprise this week was greeted with indifference. If news drives the market, why does the market react differently to essentially the same piece of news?

The profit prophet

The ETF Profit Strategy Newsletter has often referred to the inverse effect investor sentiment tends to have on the market's performance. On December 15th for example, it noted the following: 'Optimistic sentiment, which should be more visible above Dow 9,000, will give way to further declines. At this point, the best target for a temporary low is 6,700 for the Dow and 700 for the S&P 500. Extreme pessimistic sentiment may drive the indexes even towards Dow 6,000 and S&P 600.'

The beginning of January, right about when investors started to feel comfortable with the market's future prospects again, proved to be the time to load up on short ETFs such as the UltraShort Dow Jones ProShares (NYSEArca: DXD - News), UltraShort MidCap ProShares (NYSEArca: MZZ - News), Direxion Large Cap Bear (NYSEArca: BGZ - News) and many more.
Economists and market analysts often use projected growth and earnings numbers as foundation for their forecasts. We have found that using projected numbers does not deliver accurate results. 'Projected' implies the possibility and often probability of change. Who wants to hear after the fact, 'sorry, we had to adjust our forecast because things got worse than expected?'

The market's built-in indicators

Most people don't know this, but the stock market has several built in indicators visible to the naked eye. Just like a fever is the body's way to let you know something's wrong, the stock market's internal indicators are telling investors whether its current valuations are 'healthy or sick.'

While it does take some common sense to interpret the market's symptoms, you don't need to be a Doctor or rocket scientist to figure them out.

Dividend yields, P/E ratios and investor sentiment are the market's way of letting us know what's going on. An analysis of the above three indicators reveals that the stock market does not bottom until dividend yields, P/E ratios and investor sentiment reach certain levels, just like your body is telling you that you won't be fine until your temperature calibrates back to about 98.6 degrees.

An in-depth analysis of the above three indicators along with the Dow Jones measured in the only true currency, gold is available in the March issue of the ETF Profit Strategy Newsletter. The results show that contrarians will continue to be the ones raking in profits.

Taken from Yahoo Finance