Saturday, April 6, 2013

GE 13 Fever and market

The parliament was finally dissolved this week. Our stock market has been in see-saw moods since beginning of the year is finally made up its mind. It is zipping up. Pointing out the obvious, the foreign funds have been pouring in money driving the herd to charge ahead. I am not sure they are leading the herd to a green pasture or over a cliff. I have not seen retail participation more than 20% but they finally showed up last Friday.

The FBM Small cap seems to dance out of consolidation range, though it is over-bought now.

Judging the momentum of the market, this moving train is hard to stop, leading up to polling date. Price actions will surely get people emotionally charge. Those choose to play are surely have their own reasoning. They don't expect people to agree with them. Understandably.

Judging from what I read, those choose to play in the market is betting BN to retain power. You and I know to forecast outcome is as good as flipping a coin. To forecast the stock market post-election is even more difficult. Let's be honest, if you can do so, you already made money for the last few months from the volatility.

I see the market is no longer cheap. Cheap stocks(especially small cap) that can attract institution funds, are no longer cheap after parabolic surge within 1 - 2 weeks. Cheap stocks (own by retailers) are still cheap but may remain cheap.

Foreign funds can come, they can also go. Local funds can join, they can also sell when things start to wobble. Only retailers who have been highly disciplined telling themselves to buy at the buy at the bottom of market look shaky. They are finally start thinking to buy and contra(T+3) may ended up as a long term investor - stuck with a large losing position for next 10 years.

Thinking of hit and run?

Be my guest but just remember this. "Bulls make money, bears make money, but sheep just got slaughtered."

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