Thursday, July 18, 2013

Contrarian warnings



Thought you might want to take notice that iCapital assessment has been more and more cautious. iCapital is now holding almost 50% cash compared to one year earlier which was 34%. All I can say is they have been very cautious. 

It has been sometime we have not heard people quoting Marc Faber. This is what he said recently.

The only game in town in the last 12 to 18 months has been the US. So you have most markets in the world going down and the US going up. It is very likely that the US market has already peaked out at 1687 on May 22nd on the S&P and if the market makes a new high it would be only with a few stocks making new highs. The majority of stocks will not make new highs.

The similar trend is also can be observed in KLSE. Only a few stocks dominate the gains such as Tenaga and Maybank............In the small cap space, it is also seems to be dominated by a few narrow sectors like oil and gas.

I have been doing some tactical play in the recent months(earning some handsome returns) but now is really turning very cautious. In the past, before the market roll over, retail investors will usually jump in with both feet. But I am just not sure this time assuming they are a lot more wiser now.  And I don't really care because the risk of correction is very high.
 

5 comments:

dukuhead said...

the high before the chasm, i say. trade at your own risk.

Kris said...

Concur with you, turtle.

Seng Choy Lai said...

It is the probability game here. The market is almost hitting 1,800. So, what are the chances of going up and down? I believe the answer is pretty straightforward.

Melinda jon said...

Stocks Trading Tips, Superb Post.

K C said...

Is it easy to predict the market? What is the track record of Tan Teng Boo in predicting the market? Note that he has been holding 1/3 of icap assets in cash since oh 3-4 years ago. How is the performance of icap's NAV in relation to the broad market since he holds huge amount of cash a few years ago? Strange that a self-claimed value investor try timing the market. Value investing and market timers are two totally opposite investing strategy.

History has shown that it is really hard to predict the market as there are numerous economic, political, government policies and intervention etc.