Thursday, February 14, 2013

Turtle portfolio certainly will buy something ......

It has been quite unusual that I have this strong urge to write. The recent developments in the markets have been very interesting. There have been a lot of talks by people like Jim Rogers, Marc Faber, Art Cashing and even investment research reports(BofA, UBS, etc) are getting uneasy with the current stock market indexes  DJI or S & P 500 registering  many all-time-highs.

Of many of materials available widely on the internet, I like this video very much that described the current condition. It was a great debate whether it's fundamental or money printing. Check this out.

I agree with Jim. It is money printing. I came to realize that it is futile to resist the Fed and other central bankers. The US, ECB and the latest was Japanese.........   The money printing pledges will keep the credit universe to expand pretty much like what Bill Gross had written his superb review: Credit Supernova ( ). Though it is more of metaphor rather than literal, the eerie feeling always make me feel uneasy.

We are kind of in the middle of a big paradox. If the Fed and central bankers will only back-off from money printing when they see stronger growth, lower unemployment, etc....... Q Eternity may be going to be around for a while, implying the bull run will continue to charge till it pops.

A well respected research house like Brinyi Associates says the bull run is entering in the final phase which is Exuberance. This phase can be very volatiles and certainly can soar violently. March Faber recalled that prior to 1987 great crash, DJI went up by 40% from January. But, he is not sure whether this can repeat in 2013.

It is very tempting to think that the central bankers can "manipulate" the markets but they may one day found out  that the markets can run out of oxygen and spark a sell-off. At that time, the markets will be greater than central bankers. 

One more chart for your perusal.

Whenever there is a reversal from extreme bull index devised by Bank of America, the average pull back is around 12% but I think it should get closer to 20% this time. Whether this scenario will materialize or not is not important to me. What is important to me is to avoid a dumb mistake like pulling out money from piggy bank and start buying now.

I will surely buying something because I see great values begin to emerge on many small caps(minimum 100 million market cap)  in our Bursa Malaysia. There is tremendous liquidity sitting on the sidelines as our local funds and retail investors started to sell a lot of stocks over last few months. This will provide some cushion post-GE.

I am getting excited as the time of buying is drawing near.

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