Wednesday, March 12, 2008
Post Election: The Return of Sanity
Yesterday selling was as if the whole country was overtaken by a new government(as if socialist or Islamic one OK!). Many anxious about new public and economic policies. Never underestimate fear and confusion. Today's price actions tell us, many believe this country is still rule by Barisan Nasional. The sanity is coming back. There may be some projects delay here and there, some scandals exposure here and there, some resignations here and there, otherwise get use to it. Many should know my edge is not trading, therefore I will not want to write much about KLCI target, valuation of the market is OK, if we still retain the safe haven status.
This kind of rebound based on past experience is not completely unexpected, technical camp will come in for some quick trade, since they cannot short - they might as well push it up, just common sense. Many of the construction, infrastructure and possibly building materials stocks will soon falling off from everyone's radar, you will see prices to deteriorate over time. Buy and Hold buyers: Beware!, if you do not have an exit plan.
Beaten down stocks with domestic driven consumption, significant overseas operations and soft commodities driven will eventually recover. If you wish to get some names, wait till I have around $ 3,000 - you will see the next stock I plan to buy.
Question on everyone's minds, was yesterday the bottom? The 80 Billion Ringgit market capitalization loss yesterday will be answered in 100 days from yesterday. Why 100 days? If things do not shake up by oppositions within 100 days, chances of status quo is quite high, just common sense speculation - just in case my readers still need some scientific answers and predictions. The next write up will be Post Election : 100 Days. What is your wish? Shake-up or no shake up?
BTW, while we got distracted, Hang Seng is testing 23,000 again, just in case we are interested in global investing. I will be away for next few days, catch up soon.