Basically, I am an optimist by nature. I see the world as half full, rather than half empty. Naturally I do not see the March bottom, revisited. Having said that we move sideways and upwards for the rest of the year, a rather bumpy ride. For a double bottom, the world will really have to be rotten. Will we ever get that awful credit squeeze, lack of liquidity that brought us to an all time low that all strategies, plans were out of the window? We will continue to see companies in trouble, however I do not think the march low is likely again. The world is determined to work on the economy in a united effort. Thus much money is pumped into the system and interest rates are at an all time low. The sick man will have to be saved so that he will die some time in the future.No effort is spared in kicking start the economy and to get it going. China is working smarter. They have send the village workers back mto the farm, not to be in industries again but to work on the farms, so that more food is provided for the cities and to avoid inflation.The Chinese may not be happy, they still have to pay the right price for our resources. They are coming off from a very low base, Japan took 40 years after the second world war,China will take a lot longer to build as they have more land and a big population. India is also starting to open up for more economic activities. Thus with the world two most populated countries, on the go, it will take something to hold them back. The old problems will rise again to remind us of the foolishness our economic masters had got us into.We will be reminded often of our problems and the share market will react to it, likewise good news will get the market going again. Yes we are on the road to recovery, problems will always come up again but not to deter our progress.In a couple of years time, we would be regretting that we did not buy enough of the shares we wanted. Many on the sidelines are waiting to get back in. Some even regretted that they have already missed the first rally and waiting to get in on each retrace. Happy days are ahead.The stock market will lead the way, whilst they will be more unemployed, well the report is a lagging indicator.
Traders should be happy with a volatile market, as they present opportunities.If they have self belief and confidence, surely by shorting a market that is likely to go down will make them the profit they seek.In actual fact, a market tends to go down faster, and the recovery slower.
Currently I am a believer in commodities, so I based my faith on the pure commodities play instead of the multi-metal producers.I select copper as the leader and aluminium as the laggard, currently.
For true believers that the market will recover, commodities will be the first to recover.
I subscribe to the view, that there is no firm cast of a good or bad share.It depends on what you paid for them. You can invest in a blue chip at the top of the market, it is not going to do much for you. On the other hand if you happened to have paid for a penny share at the bottom of the market, and it jumps on some discovery or upgrade in resources, this share is then worth its weight in gold for you, as the saying "one man's meat is another person's poison". It is also my reason for always to respect other people's selection. It is also a surprise to me the reason for being attacked for selecting a particular share. I can only think the person who attacked must have time his purchase wrong, otherwise I cannot justified such venom. To me it is a hazard of being a trader, that one do not always have it right. If one goes wrong, to accept it with grace and eat humble pie. One cannot always be right or always be wrong. Sectors do rotate, like currently because of the worsening employment situation,defensive stock comes back. As soon as there is a report the the economy is improving, growth or cyclical stocks will do well. Cyclical and resources had a good run and is not unexpected to see them retrace, before they move higher.As I believe that the economy is improving, I tend to add on during any dip, like I did in year 2003. As I have never been truly out of the market and added on when I find things are really cheap, I haven't missed out of the 30% recent rise.The question is whether to take some chips off the table or to keep on adding more on each dip. If I tend to be conservative, I would missed out on the first rally and hope and prayed that it returned to a double bottom so that I can get in again.Or if I find that I have missed the boat all together, then I have to chase the share at a later stage, which I think is more risky.It is better for me to have committed at an earlier stage than a later stage. I have elected to trade Australian shares because I understand the economy here better. To me it is a certainty that the government will inject money into infrastructure and encourage more residential building. It is not a question of whether they will do it, but when will the money comes in for it. The day it does, cyclical stocks will have their innings. Until then it is a waiting game. Impatient traders will not wait and may get out. For me I am prepare to wait, is it a matter of weeks now, or a matter of months.
------------------------------------------------- Disclaimer: Please note that comments made in this column is mainly for the interpretation of charts in technical analysis. It is not made in my professional capacity and should not be taken as advice.In my professional capacity I am only allowed to give advice on certain managed funds authorised by my license dealer.Any share discuss is for general interest and should not be relied on to make an investment decision.It is likely that I may own the shares that we discussed as a trade or as an investment. Please consult your stock broker or financial adviser in regard to your personal situation.
The views expressed here contain information derived from public available sources that has not been independently verified.No representation or warranty is made as to the accuracy, completeness or reliability of the information.Any forward looking information in this representation has been prepared on the basis of a number of assumptions which may prove to be incorrect.It should not be relied upon as a recommendation or forecast by the writer.
I am not that far fetched or crazy after all. They are others that subscribed to the same views with proven track record.I find some similarities in the approach though.I find it comforting.I do not put myself in a class like David on share selections, but perhaps occasionally got it right as I have to put my own money in it.
Although the SP of MGX and PBG are confirmation, themselves.
Here are some abstracts from the Eureka Report.
"David Paradice, one of Australia’s best-known small-cap experts, manages about $860 million in companies outside the ASX 100. His expertise is in selecting some of the most beaten up, downtrodden and downright ugly stocks to add to his portfolio."
"Today he lists Platinum Asset Management, Mount Gibson Iron and Pacific Brands as his small-cap standouts and explains why he believes they have been priced incorrectly."
"he remains a “true believer” in discounted cash flow … as does Warren Buffett. But he has since done an about-turn on resource stocks and singled out iron ore junior Mount Gibson for special attention."
" At the start of the year about 36% of the index was resources and as things were just being carted out, we decided we would move a bit into that area.
Now Mount Gibson had fallen from $3.50 down to about 90¢-odd. But the volume of iron ore that it's selling has been locked in and the price has been locked in, so there’s not a great deal of risk because the earnings of the company are reasonably easy to forecast. So when [Mount Gibson] hit 40–50¢ we started buying it, based on what we know about the business; the stock is about 90¢ now. Based on the certainty of the production and the near certainty of the price, we think the stock looks cheap."
"Pacific Brands was one of those companies where we kind of felt that it had to raise money and we thought it was a good opportunity to buy that stock. Again, you’ve had huge P/E contractions and you’ve had big earnings contractions and you’ve got big debt numbers. The reduced earnings forecasts contribute to this meltdown in the share price, which creates a downdraft that stocks like Pacific Brands get caught up in.
They raised $253 million and we had an existing position and then we topped up again. The stock itself is worth over $1 (it’s trading at about 88¢ at the moment) and it’s a stock which, although not fantastic quality, is just too cheap. Fair value could be $1.20–1.50. It’s a another good example of the P/E contraction where you go from paying four times in a bear market to paying 10 times in a bull market. That’s a 150% increase in the price."
Compared with a $3 price before, PBG looks really cheap.
------------------------------------------------- Disclaimer: Please note that comments made in this column is mainly for the interpretation of charts in technical analysis. It is not made in my professional capacity and should not be taken as advice.In my professional capacity I am only allowed to give advice on certain managed funds authorised by my license dealer.Any share discuss is for general interest and should not be relied on to make an investment decision.It is likely that I may own the shares that we discussed as a trade or as an investment. Please consult your stock broker or financial adviser in regard to your personal situation.
The views expressed here contain information derived from public available sources that has not been independently verified.No representation or warranty is made as to the accuracy, completeness or reliability of the information.Any forward looking information in this representation has been prepared on the basis of a number of assumptions which may prove to be incorrect.It should not be relied upon as a recommendation or forecast by the writer.
The trading of the current week will change the sentiment and the direction of the stock market decisively.True to its nature, the market changes direction when it was least expected.By being out of the market by this week alone is a costly exercise for investors in general. Growth assets are back in fashion again, with resources and building materials leading the way. With the Rudd's stimulant still yet to hit where it is required most,and the infrastructure objectives to materialize, the steel manufacturers and the building materials companies are set to take off once everything is in place.The stomach for risk has improved. The fund managers who have been keeping their power dry will have to evaluate their strategy of whether by keeping the maximum cash allowed in the various reserves they hold are doing the right thing for their investors.Consumers and investors should be more optimistic from now on. Defensive stock will probably have to take a back seat today.
The market has been going up strongly, all over the place. It is time like that, we should sit back and not let our emotion take over and start chasing returns. It is tempting to chase the market for those that already missed the first rally started in March and do not want to miss the bus. This week strong bust in the market confirmed that the stock market is hard to predict. It is quite often when things are at the breakpoint and all hopes are gone and the doom sayers chanting the doom and gloom, the stock market will always prove us wrong.By being not in the market for the week would have cost us about 8 to 10% on the indexes. For some of the growth stock like those Peter mentioned in his threads, a difference of 15 to 30%. After a strong gain, the market is very likely to take a breather, this will give those that just missed out, another opportunity to jump back on board.For some, this is not likely to happen, as they still think that the market will come back to revisit the March low. The most likely thing that will happen to this particular group is when they truly realised that they have really missed the boat, they will start chasing returns. The market always need people like that to leave some fresh money behind.The smart money will always leave a percentage of the money in the market, on what we can afford, so that we will never miss the boat when things changed. This is what the industry call "asset allocation".From now on, the trick is to sell near the top, and buy on retrace. The approach to the market in Australia, is different to that of the United States.The building industry in the States is still floundering near the bottom and the high technology is the leader that will lead the way there, follow by the financial sector because they were way oversold relative to their earning ability.A better return then expectation will give their financial a strong bust. Australia, on the other hand depend much on its resources and have the good fortune to have China in the strong growth phase which will save them from getting into a "recession" and is the best performer of all the matured nations.This will be strongly supported by the building material industry because of the government stimulant which will hit the market any time now. The temporary stimulant did help the retailers and the economy to a certain extend. The fact is, the building industry was already in recession in NSW for the past few years. The government stimulant, yet to be felt but is almost at the door step will lead NSW out of the building doldrums and the rest of the country in a strong recovery mode.Meanwhile, unemployment will become worst, before they get better. The stock market being a leading indicator will help the country by increasing the wealth of the people first and will help with consumer confidence by giving the people more buying power and a sense that everything will get better again..
The problems with some juvenile chartists, are they persist that we may see a double bottom.There is no acknowledgement that this is a bull market, as by definition it is, as we have gained over 30% in the last 5 months.Many claim that the stock market has gone too far ahead of itself and is due for a pull back. Do we tell the factories or banks, "hi, stop writing business or stop producing, we have gone too fast"? The miners and many companies are starting to turn around and probably only begin to make some real money. Copper whilst has more than double its price recently from $1.25 to about $2.60 per pound is still way below its high of $4.It may not get there in a hurry,however producers like KZL,OZL, ABY and EQN will really do well in the near future.With demand for iron ore on the increase, there will also be an increase demand for nickel.Nickel companies like MRE and MCR stands out to benefit from this increase in price.Likewise zinc producers like KZL and PEM will also benefit.I do not see much selling on the resources, when the base metal price weakens. This is an indication that holders are reluctant to sell and many do believe, once they have sold, they may not be able to get them back at the same price or a lower price in the near future.(PS:there are other base metal companies, but these are a few that came to my mine as I write and which I own).With base metal price up overnight, the shorts will have a job covering. I expect a very good day at our market tomorrow.
------------------------------------------------- Disclaimer: Please note that comments made in this column is mainly for the interpretation of charts in technical analysis. It is not made in my professional capacity and should not be taken as advice.In my professional capacity I am only allowed to give advice on certain managed funds authorised by my license dealer.Any share discuss is for general interest and should not be relied on to make an investment decision.It is likely that I may own the shares that we discussed as a trade or as an investment. Please consult your stock broker or financial adviser in regard to your personal situation.
The views expressed here contain information derived from public available sources that has not been independently verified.No representation or warranty is made as to the accuracy, completeness or reliability of the information.Any forward looking information in this representation has been prepared on the basis of a number of assumptions which may prove to be incorrect.It should not be relied upon as a recommendation or forecast by the writer.
Copper price currently US$2.92 per pound, a big difference from where it was a few months ago at $1.25.It looks like some of my stocks ABY,KZL, EQN and OZL will go for a little gallop today.At the new copper price, I would think the shares will have to be rerated, "not ahead of itself" as some traders put it. Base metals are all up strongly, so our market will no doubt do well despite a 2% gain yesterday on the XAO yesterday.We will see many new recent high on resources company, if they are not there already.
------------------------------------------------- Disclaimer: Please note that comments made in this column is mainly for the interpretation of charts in technical analysis. It is not made in my professional capacity and should not be taken as advice.In my professional capacity I am only allowed to give advice on certain managed funds authorised by my license dealer.Any share discuss is for general interest and should not be relied on to make an investment decision.It is likely that I may own the shares that we discussed as a trade or as an investment. Please consult your stock broker or financial adviser in regard to your personal situation.
The views expressed here contain information derived from public available sources that has not been independently verified.No representation or warranty is made as to the accuracy, completeness or reliability of the information.Any forward looking information in this representation has been prepared on the basis of a number of assumptions which may prove to be incorrect.It should not be relied upon as a recommendation or forecast by the writer.
Not much has been discussed about the stock market clock or the stock market cycle, when we talk about the Bull and the Bear.I see in the economic clock, we are at 7am, rising stock prices.The stock market normally rises for 4 to 7 years, and we are only in our first year.A little bit of the trillions is slowly finding its way into our market, thus when ever the market dips, support comes in. Barring unforseen circumstances, this will continue. The ride will be bumpy, but we always get there.The economic clock and the economic cycle is worth thinking about. As they say, the BULL climbs a wall of worries. If we don't have this, the market will go straight up and straight down. It is food for thought.
------------------------------------------------- Disclaimer: Please note that comments made in this column is mainly for the interpretation of charts in technical analysis. It is not made in my professional capacity and should not be taken as advice.In my professional capacity I am only allowed to give advice on certain managed funds authorised by my license dealer.Any share discuss is for general interest and should not be relied on to make an investment decision.It is likely that I may own the shares that we discussed as a trade or as an investment. Please consult your stock broker or financial adviser in regard to your personal situation.
The views expressed here contain information derived from public available sources that has not been independently verified.No representation or warranty is made as to the accuracy, completeness or reliability of the information.Any forward looking information in this representation has been prepared on the basis of a number of assumptions which may prove to be incorrect.It should not be relied upon as a recommendation or forecast by the writer.
baysider, they are a few tame bears around. The others have gone back to hiberation.Winter fruit are far and few in the start of summer.It is the wrong time and season to look for bears.
------------------------------------------------- Disclaimer: Please note that comments made in this column is mainly for the interpretation of charts in technical analysis. It is not made in my professional capacity and should not be taken as advice.In my professional capacity I am only allowed to give advice on certain managed funds authorised by my license dealer.Any share discuss is for general interest and should not be relied on to make an investment decision.It is likely that I may own the shares that we discussed as a trade or as an investment. Please consult your stock broker or financial adviser in regard to your personal situation.
The views expressed here contain information derived from public available sources that has not been independently verified.No representation or warranty is made as to the accuracy, completeness or reliability of the information.Any forward looking information in this representation has been prepared on the basis of a number of assumptions which may prove to be incorrect.It should not be relied upon as a recommendation or forecast by the writer.
hershy, I attribute "as it comes to past", this recent good fortune is due to " a rising tide floats all ships". There is no Peter Loh's indicator, it is mainly on hershy's and dolphin's charts that I stuck my neck out and rode it all I could.Don't push it too far please, as my head is in the clouds, and I cannot breathe, which is not a good thing.
------------------------------------------------- Disclaimer: Please note that comments made in this column is mainly for the interpretation of charts in technical analysis. It is not made in my professional capacity and should not be taken as advice.In my professional capacity I am only allowed to give advice on certain managed funds authorised by my license dealer.Any share discuss is for general interest and should not be relied on to make an investment decision.It is likely that I may own the shares that we discussed as a trade or as an investment. Please consult your stock broker or financial adviser in regard to your personal situation.
The views expressed here contain information derived from public available sources that has not been independently verified.No representation or warranty is made as to the accuracy, completeness or reliability of the information.Any forward looking information in this representation has been prepared on the basis of a number of assumptions which may prove to be incorrect.It should not be relied upon as a recommendation or forecast by the writer.
It looks like the doom and gloom is at it again. With the market having gone up sharply, it has to take a breather. Many are hoping it will return to a level where they are comfortable enough to get back in the market and choosing to stay out of the market during this period of volatility. I have taken profit on several of the shares which I thought have gone up quite a bit like ALS,TSE and a few others. I have however bought more of the LPT when they are at a lower price as I am of the opinion they are way oversold. I am not going to wait for confirmation of when the market is going to turn. When the market or a particular share turns, it does so in a hurry and if we are not on the ball, we tend to have missed it all together. The resources stocks which I have collected in the earlier part of the year have done reasonably well. Some has retraced a bit, but overall nothing can beat a collection of shares at a rock bottom price.
------------------------------------------------- Disclaimer: Please note that comments made in this column is mainly for the interpretation of charts in technical analysis. It is not made in my professional capacity and should not be taken as advice.In my professional capacity I am only allowed to give advice on certain managed funds authorised by my license dealer.Any share discuss is for general interest and should not be relied on to make an investment decision.It is likely that I may own the shares that we discussed as a trade or as an investment. Please consult your stock broker or financial adviser in regard to your personal situation.
The views expressed here contain information derived from public available sources that has not been independently verified.No representation or warranty is made as to the accuracy, completeness or reliability of the information.Any forward looking information in this representation has been prepared on the basis of a number of assumptions which may prove to be incorrect.It should not be relied upon as a recommendation or forecast by the writer.
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