Thursday, January 10, 2013

Chinese New Year Rally

The retailer investors had not jumped into the stock market in a big way - yet. . The situation can change in the next few weeks as the three major fears begin to recede. You can feel the heat of them warming up

The first fear was the US fiscal cliff which I though it was over-hyped. The second fear was the Euroddegon but now the region is showing some signs of stabilization  The mother of Euroddegon fear Greek was turning around. The rate of Euro zone PMI has shown gradual recovery though it is still in the contraction zone of 47.2 in December. The third fear was China hard landing. It is appear that factory orders too are showing improvement and more data is supporting a soft landing.

The risk appetite is  getting stronger. People is moving money out from safe haven. The US 10 year treasury yield is inching up everyday. Whether it will march towards 52-week high of 2.38% is something to watch closely.

Some of the very unloved markets like Vietnam has breakout from its consolidation range and very possible to test 52-week high of last year March of May.

Back to our local stock market. The small cap index that has been moving sideways for the last 7 - 8 months seems ripe for at least trying a 10% rally. You can feel the heat as the overbought situation was quickly neutralized.

At this point of time, the retail investors are still very nervous. A few points dropped in the KLCI will trigger them to take profit or sell down their holdings thinking the market will collapse. It is unlikely that the market will collapse when they are thinking collapsing all the time.  If you are looking at the same small cap chart, there could be a window of sharp gain like early of last year. That window may be open for 3 - 4 weeks.

My view of this post is strictly based on sentiment analysis and for trading purpose. Meaning, I accept cut loss if I am wrong. I have been debating with myself whether I should write this piece because I worry people can lose their hard earned bonuses. But I concluded that I am not that persuasive......

Back to the bonus thing, most people think it is money drop from haven, thus easy comes easy goes. Not trying to sound preachy but just may been half-sen worth of view. Spend it the old fashion way. If you have debt, pare it down. If you have been eyeing on something nice the whole year, don't hold it back -- do yourself a favor -- reward yourself. If you still have some money left after doing these, punting on stock market conservatively is okay. The word CONSERVATIVE is the key.

Tuesday, January 1, 2013

Turtle Portfolio Update. Happy New Year

Happy New Year to you.

I hope most of you can still remember me after absent from the blogsphere and market for a while. I hope to write more gradually but it will take me another few more months to warm up my fingers. Many of you know that I am waiting for KLCI to have more meaningful corrections before deploying cash for Turtle portfolio.

I have just done some updates for Turtle portfolio. From a humble beginning of RM 3,000 and monthly saving of RM 888, this portfolio stood at RM 59,088. The performance in the last 2 years were lagging badly but the portfolio was still able to generate annual compounding return of 2.57%. The consolation, this portfolio has never suffered a single year of negative return while dabbing his fingers in stock market.

However, however, however........

Please have mercy and do not laugh at the relative performance for its lagging the fixed deposit benchmark of 3%. If one were to compare to performance of bond or REIT which typically generating 5 - 8%, the under-performance is even glaring.

The moral of the story is diversify, diversify and diversify. Another point is no matter how skeptical you are on the 30 stocks on FBM-KLCI, when it go down, you got to own some.

As of now, the fiscal cliff fear is behind us. That should convert a few more skeptics bears to join the bulls. How far the markets can continue to rally does not concern me. The markets around the world mostly in good moods. At the personal level, I have some exposure especially Chinese related stocks. Those purchases were made before the market rallied sharply. Days and nights, I have been waiting to sell those holdings. Yeah, only sellers should cheer when markets are zooming up.

For buyers? For now, it is better off spending more time with family, hobby projects, golfing, fishing..........whatever......

The stocks will be cheaper by at least 15 - 20%,  6 to 9 months down the road.

For the rest of the day, I hope to continue my reading on Dan Brown's The Lost Symbol. I was making a commitment to finish that book before the new year. Age is really catching with me, while reading on my wife's new tablet, I dozed off before I can welcome 2013.