Badly Bruised Stocks

The following counters are badly bruised. They are trading at 30% or lower from their 200 day peak:

Security Name	CLOSE	HHV200	Ratio	HHVB	Ticker Symbol
ADVANCED SYSTEMS AUTOMATION	0.003	0.010	30.00%	139	520
CENTILLION ENV & RECYC LIMITED	0.001	0.010	10.00%	179	C49
CHINA ENERSAVE LTD	0.003	0.020	15.00%	160	5QT
CHINA ENVIRONMENTAL RES GP LTD	0.012	0.075	16.00%	195	M8J
CHINA HONGCHENG HOLDINGS LTD	0.027	0.110	24.55%	169	C0Z
CHINA TITANIUM LTD.	0.004	0.015	26.67%	153	530
COMBINE WILL INTL HLDGS LTD	0.920	3.500	26.29%	183	N0Z
DAPAI INTL HLDG CO. LTD.	0.065	0.240	27.08%	161	FP1
FRIVEN & CO. LTD.	0.030	0.165	18.18%	154	5RF
GEMS TV HOLDINGS LIMITED	0.009	0.040	22.50%	144	AM3
GLOBAL TECH (HLDGS) LIMITED	0.004	0.015	26.67%	171	G11
GOLDTRON LIMITED	0.002	0.010	20.00%	94	536
GUANGZHAO IND FOREST BIOGRPLTD	0.020	0.105	19.05%	199	G21
ITE ELECTRIC CO LTD	0.030	0.100	30.00%	163	581
JEL CORPORATION (HOLDINGS) LTD	0.007	0.040	17.50%	139	J16
JETS TECHNICS INTL HLDGS LTD	0.003	0.015	20.00%	67	J19
JOYAS INTERNATIONAL HLDGS LTD	0.012	0.042	28.57%	178	E9L
LANKOM ELECTRONICS LIMITED	0.005	0.035	14.29%	144	L22
LINDETEVES-JACOBERG LTD	0.012	0.045	26.67%	152	L15
LONGCHEER HOLDINGS LIMITED	0.117	0.760	15.39%	191	L28
LOTTVISION LIMITED	0.011	0.045	24.44%	166	M22
MATEX INTERNATIONAL LIMITED	0.039	0.145	26.90%	174	M15
NAM CHEONG LIMITED	0.135	0.750	18.00%	100	N4E
OMEGA NAVIGATION ENT,INC.	0.400	1.800	22.22%	156	O57
RENEWABLE ENERGY ASIA GRP LTD	0.063	0.260	24.23%	161	5DW
SUN EAST GROUP LIMITED	0.005	0.025	20.00%	194	Y35
TELEDATA (SINGAPORE) LTD	0.009	0.030	30.00%	147	T28
THE STYLE MERCHANTS LIMITED	0.002	0.055	3.64%	167	N37
WE HOLDINGS LTD.	0.009	0.065	13.85%	198	5RJ
YOUCAN FOODS INTERNATIONAL LTD	0.030	0.100	30.00%	173	Y06

If you are thinking of bottom fishing, these are probably counters you can start to check on. However, I had listed them without considering their fundamentals. I simply use a software to filter them out without giving much thought to them. Usually, a broken stock remains broken until some major players decided to play them up or some fundamental change to the situation. A broken stock can remain broken for 2 -3 years or even longer depending on the situation and the management.

Real Estate Investment Trust (REIT)

There is a good article about investing in REITs. There is the link:

http://www.propwise.sg/how-to-invest-in-singapore-reits/

What should you take note of when investing in REITs?
1. Composition of REIT assets - Retail Malls, Hotels, Industrial, Residential, Logistic etc.
2. Geographic diversification and currency risk- Political, Natural disasters etc.
3. Growth of Dividend Per Unit (DPU) - How well they manage 4. Spread over 10 year Government Bond yield - Risk vs Yield comparison
5. Gearing -Leverage - ability to face financial crisis

This is one way to invest for income. Depending on your risk adversity, you can make your choices.

Trade Summary August 2011

August has been roller coaster for me. Things just did quite get into rhythm for me. I found myself not inline with the market. One of the biggest reason is that I was not exactly with the market. I was involved in a project that does not allow me to access the the market information for more than 3 weeks starting from the last week of July. This is the problem. These days, I am quite hesitate to take on new projects. Year 2009 was an example.

 

It has been quite frustrating for me. My counters broke the cut loss point and I didn't get to sell them. One of the problem is also the expectations. With too many analyst promoting the idea of QE3 or its equivalent, one would expect the market to remain stable. However, I believe it was these analyst's companies that are selling away their stocks. This is conspiracy theory but it is widely held true these days. The cycle is simple: the analyst promote buying. Their companies quietly liquidate their positions to retail investors. When they want to buy, the will call for selling so the the prices are depressed.

Moving forward, with the job data from US below expectation, the market is going to continue its volatility with inclination to the down side. Is this a good time to buy in? I don't know. Maybe the situation is not that bad and it will bounce back quickly. Or are we waiting for a real sovereign default to erupt and cause the whole market to panic before we see a real rally? I think we will know soon.

The Wild Swing to Continue in the Stock Market Worldwide

With USA market leading, the wild swings in the prices and indices is expected to continue for a while. With this back drop, I am expecting at least one sovereign default to take place before extreme measures will be implemented to stabilize the market. And my guess is Greece will be the bogey boy since its impact to other nations is among the smallest of all. Spain, Italy are too large. France is even larger. USA default means world economy collapse. Essentially, USA is "Safe".

It seems that we may not avoid the double dip after all. But the dip will be short lived. There will be immerse effort to blow up the bubble. Another much bigger bubble will be sharped in place to cover the current bubble. This seems to be the direction of how the world economy is moving towards to. As individual, we can't go against it. We can only trade along it. Even a country like USA or China can't fight this trend. The whole world is addicted to credit and spending future money. The addiction is too deep to ditch. Nobody is able to take the pain of curing.

Importance of Staying Engaged in the Market

Whether you are an investor or a trader in the stock market, the most important thing you must do is to stay engaged in the market through thick and thin. Let me elaborate. What I meant to say is that you must keep monitoring the market regardless of bull or bear markets, regardless of whether you are invested or sidelined.

One of the biggest lesson I learned in 2009 was how I missed the market bull run by staying away for too long. I quit the market in 2007 and avoided the major crash. I was engaged in a few major projects where I work full time on them. I was not monitoring closely the market during the period. I came back in mid 2010. I missed the major run. What a shame! Investing and trading is actually a long term engagement. Even if you are staying at the sideline, you must at least check on the market on the weekly basis. That will give you an idea of where the market is going and provide you with some minimum alertness when opportunity comes.

I had decided not to miss any such opportunities. I am watching the market on constant basis. I believe the reward will come when the time comes. Patience is part of the game.

Trade or Invest with clear understanding of your own situtaion

Here is the head line from By MarketWatch, Aug. 25, 2011, 1:05 p.m. EDT
Buffett’s BofA investment is the new TARP
Commentary: Private-sector bailouts are better way of injecting capital

Read Full News:
http://www.marketwatch.com/story/buffetts-bofa-investment-is-the-new-tarp-2011-08-25?link=MW_story_investinginsight

I am particularly interested in what the writer said at one point:

The question for investors who don’t get the nearly guaranteed 6% dividend is whether it’s worth following Uncle Warren in. Retail investors who followed Buffett into Goldman and GE aren’t in the money, with the Connecticut industrial giant again the far-worse investment.

That is precisely what we should as ourselves when we make a decision to invest or trade. We are at different position and we are not able to have to cushion that Warren has. Whatever theory he has, we cannot have it. So, eventually, we need a different strategy.

For investors who blindly follow, they will not be getting anything. For the abovementioned case, they may not suffer great losses but, they could have gain a lot more else where.

Investing and trading in stock market involves hard work. There is no easy way out. Listening to others may work but you may ended frustrated when a things don't turn out well. You can only do that if you are prepared to lose all your money. That means the invested money is something excess for you. You will never need those money no matter what happens.

Market Trend Analysis - Double Dip A Reality?

In 2008, the housing bubble in US triggered a worldwide financial melt down. The toxic financial derivatives has cause financial institutions all over the world to lose trillions of dollars in total. Many companies went bust and some large companies went into trouble.

In 2011, what is facing us is the sovereign default. With toxic "Assets" (if they are really assets) being taken into US Fed, the US banks are now operating as normal. However, that has not generated much changes to the fundamentals. US and Europe still operates under the same mechanism. Borrow money, spend to generate demand and growth. There is no change in fundamental of operations. There is no intention to change. Again this would certainly generate another bubble. The borrow and spend first and then pay later (if there is some spare cash) strategy is going to go on. Of course everybody is hoping this would go on forever. Even if it does not, it would be the next generation's problem.

Looking at the situation in Eurozone, I am tempted to think that we must wait for at least one country to default in order to see some fundamental shift in the methods of tackling the problem. It would really take some major events to make people realise that spending future money is not sustainable in the long term. The UK is smart not to join the Eurozone. Now the Germans must be regretting. Imagine trying to convince a hard working, thrifty person to lend money to a lazy person who refuse to work but wanted to live a more luxurious life! You must be treating the hardworking person like an idiot in order to come up with that idea.

Bailing out cannot go on forever. It is not sustainable. The Greeks must have a concrete plan to bring themselves out of the debt loop. This is like drug addiction. Only drastic, fundamental changes to the economic structure can bring them away from such addiction. And for that to happen, some pain has to be inflicted or else they would never wake up. So, the default is given. It is a matter of time. And it should be soon.