Mom, Turtle is talking about technical stuffs again!

Mom, help, idiot Turtle is talking about technical stuffs again!

Technically speaking, nothing significant to talk about. Yes, it's hanging around 100-MA. So what? There is no guarantee that it will not go nearer to 200-MA. Going nearer to 200-MA is normally associated with a bear market. So do you believe we are going into a bear market? No way many will surely scream!

Okay, then some will draw some idiot parallel lines - that would be 1440 - 1460 if we see a new low after failing to make a new high!

If foreigners are selling why Ringgit is still so strong?



So what are you saying? There are still too much optimisms out there. Small cap index has hardly corrected, has not even retraced to 50 MA. Not enough blood yet!



So what are you saying again? Technically speaking, we should not buy until 1544 is taken out or sell if 1425 is violated.

How the middle class became the underclass

http://money.cnn.com/2011/02/16/news/economy/middle_class/index.htm
Interesting read. If the income inequality continues to rise, will we have unstable society. Does that means higher taxes ahead? Does that means consumerism model will break down one of these days? Does that means .............. Just something to think about.

How big is the threat of rising commodity prices?

I was a bit surprise. Food prices have been on the rise. Gasoline price at the pump has been going up. In emerging countries, people toppled their government because they got tired of their government of unable to solve rising food prices. Egypt is the latest the example. The level of intensity coverage by media and blog, however, is far lesser compared to 2008. During that time, many accused hedge fund managers were the evil doers. Some screamed about US $ 150 per barrel oil again recently but nobody seems to pay attention. It's like a new normal or a non-event to people.

Why?

If you look at this chart, we are still way off from 2008 peak. Advanced economies CPI is only 1/3 of 2008 while emerging economies is only half. So why worry?



China, one of the largest commodity consumers, has been very concern about inflation and firing a few shorts of interest hike. But interest rate and inflation are still not as high as 2008 when both of them were at the vicinity of 7-8%.






So is inflation fear overblown? Yes based on today's data. However, investing is about looking beyond today. 12 - 18 months from today, this will be a big problem. This also tells us commodity and equity still have some more legs to run. For now.

Turtle's Portfolio Turns 3

I did not realize that I did not post anything on my Turtle Portfolio update for the month of February. When I started to update the records, I just realized that Turtle portfolio had turned 3 years old today. When I first started to blog, I had done some serious blogging strategy thinking. As a conservative person, I naturally looking at how this blog can die rather that thinking of the glory and glamor that Turtle can get. There are many ways a blog can die, I am just showing you a few here:

1. Running out of things to say. I started to look around, most of us started with fire of baptism and trying to convert every people out there to be students of WB(Warren Buffett), Ben Gram, etc......... sure we all admire these giants but after a while, you will surely running out of words.

2. Keep firing dry facts. I suspect that one cycle of economic boom and bust will also cause you to run out of things to say.

3. Self centered blog. Keep boosting how good you are will certainly pick-up a lot tail winds to blog-hell-land faster than you can wink your eye lashes.

4. Lack of credibility. Say all you want, business blogging is a materialistic subject. Failing to show people the money will cause your blog to die very fast too.

5. Curating news. People are so well read that average investors probably know more that you do.


So after knowing how I can die, I laid out a few blogging strategies to improve my longevity

1. Core subjects - (1) company analysis, (2) current market sentiment analysis (3) big pictures (4) situational analysis based on market conditions, (5) lighter side of life topics should give me enough things to talk about when this blog will draw its final curtain on 2023. You must Begin with the End in mind.

2. I love to show a lot of charts and facts. Facts will kill readers but creative explanation with good points will captivate their attentions. More importantly, show how to monetize the implication of the charts and facts.

3. I hope I did not trying to throw my weight around throughout the blogging period and stay humble and low profile.

4. I know putting up a real money portfolio will add a lot of credibility and following. It's bottom line that counts in this result oriented society. Also, when you start to measure something, it will start to change your behavior. Making it public, it will make it more likely to stick to your commitments and also reinforce your value system that you wish to build. In my case, I did not do this for behavior modification but just to demonstrate my points - (1) building and compounding wealth in a slow and steady is possible (2) In life, its very difficult to stick to one style(buy and hold), keeping churniway ng the money, TA, FA, bottom-up, etc... though I have a blend of buy and hold and do a bit of trading when I feel that I need to rotate the money and decide asset allocation.

5. I did not know how to blog when I first started. After banging my head here and there, I find that that I am quite a talkative person. I can start talking non-stop when I am in a mood. Always speak your mind, this is a venue to voice how strong you feel about a particular issue. However, I must learn to respect my readers --- say something when you have something worthwhile to say. Say it in a way that you it is coming from head and not ass. Say it economically, keep it short and sweet and not beating around the bush.

Just a little bit of sharing and good luck to those who are thinking of starting to blog soon.

Temptation is getting higher

Temptation is getting higher. Non fundamental stocks are going up. I would be cautions and will not compromise my principles of fundamental investing. It's better to pass up some good opportunities to make "easy" money rather than get addicted and losses everything at the end. I have seen it, making sizable return based on sound investing over a long period of time but losses it within 3 days when got sucked into the black hole.

Happy Chinese New Year

Turtle wishes all readers a Happy Chinese New Year. To those who have done well, may the "force" continue to be with them. To those who are lagging, it's certainly possible to beat the hare provided they continue to keep walking.

Don't forget to drive safely. Lastly eat and drink in moderation. Cheers.

Cheap but no one wants to make the first move

(Blommberg)Chinese stock valuations have tumbled to a record low compared with Hong Kong, a sign to investors that mainland equities are poised to rally even as the government cracks down on inflation.

The MSCI China Index’s 9.2 percent slump since November has left it trading at 11.7 times estimated profit for 2011, data compiled by Bloomberg show. The MSCI Hong Kong Index rallied 26 percent between July and December, beating China shares by the most in nine years and pushing its valuation to 17.5 times earnings, the highest ever compared with shares on the mainland.

Prudential Financial Inc. and USAA Investment Management Co. say the gap will close because economic growth may average 9.6 percent over the next two years, double the global figure in International Monetary Fund data. Premium valuations in Hong Kong, the route to China for most investors, signal that seven increases in bank reserves and two interest rate boosts by Wen Jiabao’s government since 2010 won’t derail growth, they say.

“Things will be all right even as China takes steps to tighten,” said John Praveen, the Newark, New Jersey-based chief investment strategist at Prudential International Investments Advisers, which oversees $750 billion. “Chinese growth will still be good.”

The global recovery is boosting demand for Chinese goods even as the nation takes steps to cool expansion in what likely became the world’s second-largest economy last year. China exported $283.3 billion to the U.S. in 2010, according to customs bureau figures released on Jan. 10. Gross domestic product in the U.S. grew at a 3.2 percent annual rate in the fourth quarter, up from 2.6 percent during the previous three months, the Commerce Department said Jan. 28.

Fivefold Surge

The last time Chinese stocks were this cheap relative to Hong Kong, in June 2004, the MSCI China Index was almost two months into a 3 1/2-year bull market. The measure increased fivefold and the earnings multiple climbed to 31 from 12.5, data compiled by Bloomberg show. At the time, the U.S. Federal Reserve was preparing to raise interest rates from 1 percent, a record low until policy makers cut their target for overnight loans between banks to near-zero at the end of 2008.

The MSCI China, a measure of mainland companies available to foreign investors, has retreated since Nov. 8 as regulators stepped up efforts to reduce inflation. The country’s policy makers increased the minimum down payment for second-home purchases and told local governments to set price targets on new properties, according to a Jan. 27 State Council statement.

The MSCI China fell for a third day, losing 0.2 percent to 66.43, while the index of Hong Kong shares slumped 1.2 percent to 11,412.12 for the biggest decline in more than a month.

Consumer Prices

Chinese consumer prices increased 5.1 percent in November, the fastest pace in 28 months, and 4.6 percent in December compared with the previous year, according to data from the statistics bureau.

“We have to wait and see what will happen to inflation,” said Terrace Chum, the Hong Kong-based managing director of greater China equities for Manulife Asset Management, which oversees $118 billion. “The Chinese companies look very cheap to me, but nobody wants to be the first to get in.”

Global investors are bracing for a financial crisis in China, with 45 percent saying they expect one within five years and another 40 percent anticipating a meltdown after 2016, according to a quarterly poll of 1,000 Bloomberg customers who are investors, traders or analysts. Only 7 percent said China will indefinitely escape turmoil, based on the survey that was conducted Jan. 21-24.

China Stocks Lagging

Hong Kong companies are beating Chinese equities again this year. The city’s shares have climbed 3.2 percent, while the MSCI China is unchanged for 2011. Speculation that Beijing policy makers will boost interest rates again drove the MSCI Hong Kong down 0.9 percent to 11,549.30 last week and the China gauge to a 1.2 percent loss to 66.59.

The MSCI All-Country World Index fell for a second week, dropping 0.2 percent to 334.54, as Egyptian protesters clashed with police. The gauge has rallied 94 percent since March 9, 2009, as the global economy recovered from the U.S. mortgage crisis that caused $1.98 trillion in bank losses and writedowns. Annual increases of 32 percent in 2009 and 10 percent last year were the biggest since gains of 32 percent and 13 percent in 2003 and 2004, data compiled by Bloomberg show.

“Global growth is fine,” said Madelynn Matlock, who helps oversee $13.8 billion at Huntington Asset Advisors in Cincinnati. “The liquidity from developed countries is helpful. The test that the Chinese policy makers face is probably a little tough. They have to find a way to keep the economy growing, without overheating. The good news is that they’ve done a good job so far.”

Less Than India

Consumer prices rose less in China than India last year, increasing 3.3 percent versus 10.8 percent, as both economies expanded at similar rates, according to data compiled by Bloomberg. GDP grew 10.3 percent last year in China and more than 8 percent in each of the first three quarters in India, according to government data. China’s GDP probably exceeded Japan’s last year, Economic and Fiscal Policy Minister Kaoru Yosano told reporters in Tokyo on Jan. 20.

PetroChina Co., the nation’s biggest energy producer, has risen 17 percent in the past six months as the Beijing-based company benefited from the 15 percent increase in crude oil prices last year. Its price-earnings ratio using 2010 income was 13.3 at the end of last week, compared with 13.9 for Irving, Texas-based Exxon Mobil Corp.

China Petroleum & Chemical Corp. of Beijing, the nation’s biggest oil refiner, advanced 33 percent since July 27. Energy stocks in the MSCI China trade at an average of 12.1 times estimated earnings, the lowest among 10 industries.

Biggest Gains

Companies that benefit from global growth are posting the biggest gains. Rising demand from emerging and developed nations led the IMF to raise its forecast for worldwide economic growth this year to 4.4 percent from 4.2 percent, according to a Jan. 25 report from the Washington-based lender.

Hutchison Whampoa Ltd., the world’s biggest container- terminal operator, has rallied 84 percent, leading industrial shares to the biggest gain among 10 groups in the MSCI Hong Kong in the past six months as rising exports helped drive expansion. The valuation for the company controlled by Li Ka-shing, Hong Kong’s richest person, has more than doubled from a two-year low of 13.7 times annual earnings in July to 26.8, according to Bloomberg data.

While the pace of China’s growth will slow in the next five years, the economy need not contract, said Aaron Gurwitz, chief investment officer at Barclays Wealth, which oversees about $244 billion. Gurwitz, who spoke in a Bloomberg Television interview, is bullish on Asian shares, including China, Korea and Taiwan.

Discounted Valuations

The MSCI China trades at 11.7 times estimated profits, below the average of 14.9, according to data compiled by Bloomberg since 2006. Among the 10 biggest global equity markets, only France, the U.K. and Germany have lower valuations. Gross domestic product in the European Union is estimated to rise 1.6 percent this year, the median estimate from 20 economists surveyed by Bloomberg. GDP in China will climb 9.6 percent this year and 9.5 percent in 2012, according to the IMF.

“The valuation disparity will probably return to normal,” said Wasif Latif, vice president of equity investments at USAA Investment Management Co., which oversees $47 billion in San Antonio. Chinese regulators “are trying to engineer a soft landing-type of situation and they will probably be able to manage that,” he said. “That would make for a decent buying opportunity.”

My very short commnents
I know that we have a lot of concerns out there, property bubble, inflation, macro-slow down, etc...... but if 10-11X PE(market as a whole) have not discounted all these bad news, what else will?