Tuesday, July 19, 2016

Historical high 2

Hey Folk

Part 2 of it.

Let look at Dow Jones Industrial from yahoo finance

It had already form historical high. Now is about 18,500. Probably it will pass the psychology 20,000 mark. Which is about another 10% for 3 to 6 mths.

Next look at the line that is drawn, the start of the line happen about in 2011. (This is a illustration base on me and my peers age. We graduate about 2010, working for 6mth to a year and have enough saving to invest. )
At that point of time, Dow Jones is about 11,000. Over 6 years till to date, if you invest in Dow Jones you will have a profit of 68%. Just putting your money to work. There are shorter term technique to capture good gains but that need a lot of effort. So if you think thats too much effort and  is not your cup of tea, just find something good and invest in them.

Next STI from yahoo finance




It clearly has not break the historical high of 3805 created in Oct 2007. Now it is 2928. It is clearly a lagger. If you have invested at the start of the line that I drew, it is about end of 2010 which is about 2750. For 6 years, you only had a profit of about 7%. Compare that with Dow Jones of 68%.

Even if before the Lehman Crisis you buy into Dow Jones at 13,930 VS STI at 3805 ( these are historical high price in 2007) . For Dow, one will have a profit of 32.8% while for STI one will have a lost of 23%. These scenario actually happen to a lot of older folk that buy into CPF investment or any other forms of investment during that period of time.

So
1) Invest in a good horse. Easiest to identify is to compare throughout the  breadth eg same industry and get the best.
2) Conditions will change as time. When condition change leader and trend will be changed.

There is no one regime/ruler/party that rule forever, there is no one era the same, there is no one idea that stay forever. Even for a family, you cant keep your children by your side forever. Most of the time is when the best of the best happen and these best usually become a history.
Look for the condition that will displace the current leader, when the condition occur look for another runner. Now the US market is the leader, will it change to Asia market one day?? Look for that condition.

Also lots of data are publicly available from yahoo and google. One can pluck them and do loads of research on it.

Till next time
Cheers

Monday, July 18, 2016

Historical high

Hey Folk

Quick and dirty. Market are bullish. So many things happened and is going to happen but is ok. it is a BUY as of now.

This is Nasdaq Composite from yahoo finance

The line that I drawn is the historical high created in 2015. It is about 5200+. Now Nasdaq is about 5000. I do think that it can storm pass that historical high. As Nasdaq is suppose to be the leader of the leader of all market, one can use this as an example to calculate roughly where to profit take. The horizon for now is about 3-6mths. Where exactly will it land is a billion dollar question. This can only serve as a guide.

Taking bond and stock relationship as another guide. The bond market had make new high again and again. So if stock are lagger and it follow the bond movement, it may too have these phenomenon.

Another indicator, taking the week advance stock vs decline stock,( this indicator usually is use to pick the top) are showing that it is supporting stock up move.

Another indicator, VIX have show buy on the 3rd day after Brexit which I follow till today. VIX not showing anything else as of now.

Talking about S&P500, is a weekly uptrend but most of the technical indicator are showing divergent and overbought so becarful. But this do appear in extended up run.

However the run is Pls do exercise due diligence and proper money management.

quote from  Jesse Livermore 'The market does not beat them. They beat themselves, because though they have brains they cannot sit tight'
quote from Soros 'If investing is entertaining, if you’re having fun, you’re probably not making any money. Good investing is boring'

cheers

Friday, July 1, 2016

Brexit


Hey Folk


Britain have decided to exit the EU. It is the beginning of something new. Disintegration

More countries will follow suit what Britain have done and even within Britain, Scotland wants to stay in the EU. They too can hold a referendum to be independent and join the EU.

This will surely impact Euro dollar and Sterling directly for a period of time. So I think these 2 currency towards the USD will be suppressed. Despite central bank coming to intervene the market.

However, Britain and EU will take 2 years for the ‘divorce to be sealed’. New trade deals, regulation and legislation have to be discussed and implement. New border control law and etc. For now it is more of a political catastrophe than a financial catastrophe, however I do think that there may be certain hidden ‘financial catastrophe’ factors are building up, maybe worse than the magnitude of Lehman.

If you happen to have this book titled “one man view of the world” by Mr Lee which was publish about 5 years ago, he had pointed out that EU will fail eventually unless a great leader come about. When ask about in his life time who he consider a great leader he mentioned Deng XiaoPing.

I did go through the book again and I found many similarity of things that is happening now was mentioned in his book.

So how does it relate to our pocket??? Short Euro and GBP for the long term. Europe stock market will not be good either. My pick will be US and follow by China.

I also obvious that there are not much impact on Shanghai market when Brexit happen. So maybe the next run will be there.

With this exit, I think the FED will not be able to raise rate again. Bank of England said that they are going to do some easing this summer. So rate hike maybe delay again. Which i think is good for the stock market.

Conspiracy theory, FED Yellen is a democrats she is more in favour with Hillary than Trump. And Trump said he will replace her if he is elected. Maybe she want to boost the market up for Hillary.

Cheer