Monday, July 7, 2008

OSK's Rocket Science -- Quant Forecast!

Let's take emotions out of analysis because emotions are highly dangerous in a high stake poker game of stock market. Let's go high tech and let's computer do the job. We have Monte Carlo's simulation for you. To those who are mathematical inclined, we have something very logical for you: Probability. We are using a high tech tool Quantitative Analysis that those hedge fund fellas are using. So trust us. That's what OSK has done for you. If you listened to them consistently, I've only one prediction for you -- lose money big time. Why? When the market topped out in October 2007, OSK was still calling for the highest KLCI target 1,740 but for conservatism sake they picked 1,650. This is what they said, especially on the probability in the second para.

Closer at heart, we believe Malaysia offers better incentives for investors underpinned by a slew of positive catalysts and for its “insulated” nature. Apart from our fundamental target of 1,650, our technical analysis also suggests that the KLCI is poised for an upsurge in momentum with 1,585 as an initial target en route to 1,740.

From our quantitative study, the probability of the KLCI going north is higher at 26% against a 21%, otherwise. Finally, let’s not forget about the ringgit’s strength which we believe would be one of the main draws for investors.

OSK -- January 2008

I think it is fair that nobody could have predicted BN could have lost so badly on 8 March 2008. What happened to those sophisticated computer?

Meanwhile, OSK Investment Bank yesterday joined the growing rank of brokerages that had slashed their year-end target for the KLCI in view of the country's recent political changes.

The investment bank, in its market strategy report, lowered its KLCI's year-end target to 1,340 points from 1,650 previously and recommended that investors focus on large “defensive” stocks.

OSK -- March 12, 2008(The Star)

Speaking of bad luck, in a highly unprobable four-in-one-event happened in a row within one week, (i)Anwar's sodomy case (ii) Najib allegedly mastermind the murdered of the Mongolian model with PI's SD (iii) crude oil hit past US $ 145, a new world's record and (iv) in a very untimely broke down of Bursa's computer, this is what they said, first throw away the fundamental analysis.

Not just yet. While most of us are highly biased towards the fundamental approach in assessing the market, the prevailing developments may discourage such analysis for the time being. In this regard, we are making a brief diversion and attempt to look at things from the quantitative and technical perspective. Although our findings may not be etched in stone, nonetheless it at least enables us to gauge the market’s direction and the level at which the window of opportunity opens for investors to accumulate on weakness.

For those who are already nervous, most likely they will read with half empty view thinking going to 1,000 pt is very likely while the model says it has 22% chance. If a person is bullish, he will read, there is 78% chance will not happen(half full view). Chance of going to 1050 is only like 34%, inversely 64% will not happen. Very bearish thinking. These guys already infected with serious disease - mad bull to chicken bear virus.

Our model also predicts that the KLCI will fluctuate between the 1,000pt mark and our 1,250pt fundamental target for 2008 with a 72.2% probability.

Upside? Forget it, 15% chance KLCI will hit 1300. Their 1250 target? Sh**!, only 20% chance.

If many already feeling more nervous, I'm sure they will have no guts to buy now -- what happen to those preaching buy low and sell high? Guys, come on! ........ Gals, come on!

A classic case of how they torture a model to fit into what they want to see.

1 comment:

KC said...

OSK Research Report ?
It's OK to read for FUN, never take it too seriously.