Thursday, December 30, 2010

Turtle's 2011 Investing Strategy

I was at first very tempted to start this review by citing all kind of fantastic charts with standard deviation, historical PE, length of bull runs and etc, etc, etc. Then I decided not include any of them because these charts are useful in stable environments. BUT they are useless in chaotic and confusing environments.

Two things will remain the same, the developed world is still undergoing deleveraging. Environments like these will force them to meddle with the markets -- i.e. either having more QE or devaluating their currencies.

In the ugly beauty contest, emerging markets appear to be prettier than their developed markets nieces. The cause and effect analysis is more QE or extended period of low interest rate in developed markets(cause) mean the higher the emerging markets/assets(effect) and volatile commodity prices(effect). Aha did I said volatile, yes, the only thing that I am very certain is this. 2011 is going to be a very more volatiles. Environments like these will be heavans for TRADERS. OMG, did I just say TRADER? Yes, you got to have gut to ride on momentum, take profit, cut losses ........ There will be time that people got scarce out of nothing. We all need to understand that LIQUIDITY can come very fast and intense but LIQUIDITY also can REVERSE very fast. At the point of they are thinking that they are going to die, SUPERMAN will come out of no where to rescue them. In other words, we will see Mr. Market a lot more active next year.

So, navigating through 2011 will be simple. I will make sure that I have three buckets: 1/3 of money in trading, 1/3 of cash to take advantage of Mr. Market 1/3 of cash in high dividend stocks. I will need to rebalance my portfolio soon.

High dividend stocks that I like are Maybank, Public Bank, LPI, BJ Toto, Amway, Alcom, BAT, PIE, PET GAS, Petronas Dagangan, UAC, DELEUM, NCB, The Star, TM, MPI, YTL Power, Mesin Niaga, Digi, Maxis and Bi Port and REITS except those with heavy office exposure.

Three of the dogs that have been unloved are Chinese(CIMBX25) and Japanese(Nikkei 225 index in Singapore Exchange) stocks and iCapital.

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