Review: The Bull Overcomed by the Bear?
Today I looked at the world market indices with fear. All the major stock exchanges showed a red. The US market last friday, KLSE, SGX, HKSE, MCI and australia all showed red. Only the Chinese market, Thai market showd me the green.
Looking at the top 30 volume on SGX showed more red than green. Thats not a good reflection of the performance this morning, where all i saw was red. Only on 1 - 5 stocks in the top 30 volume did i see green.
So what the hell is going on?
Well, the market is in intense anticipation for the upcoming US interest rates meeting. Whether the market will be a bear or bull will really be the result of what they say before the meeting, and what's changed after the meeting. Simply a simple negative remark can spark a global market correction, like the one last year, where after all the fan fare, interest rates were left unchanged after all, leaving all the professional analysts red faced.
"Those professional analysts were really the messengers of what didn't happen. They are the ones that affect whether the market is bull or bear."
But locally, we have a short term relieve. Singaporean companies can look forward to a good budget announcement this week, that may be able to offset any negative effects from the USA.
So would I recommend selling your shareholding to escape any volatility? First of all,no cause thats what you call trading, not investing. And in this season of financial year reports, you can look forward to a good financial report for FY06 (that is if your company is a good growth company), which will reinforce your shareholdings current price.
"When you trade, only your broker is happy."
Watch the market closely for the next few days. Watch the budget 2007 announcement. Watch any reckless comments by the USA officials. But do not dismay if a correction comes. Not all stocks went bear last year. Good companies like Sino Env and China Hong Xing were just 2 of the companies taht did not get affected that bad least year.
5 comments:
Pehon,
I echo your sentiments on not selling just because the bear seems to have arrived. If the business you own is fundamentally sound and has good growth prospects; then a downturn represents an aopportunity to load up more shares in that said company. This would explain why I did not buy anything in the last 4 months, cos everything isn't "cheap" anymore in terms of valuations.
I also agree that frenzied trading activity will benefit the brokers and brokerage firms the most, as they are always standing there waiting to collect your commission. Let's all be investors and not traders in order to achieve a high return on our investment over time.
Hi Pehon,
I noticed that Hengxin Technology is one of the stocks you will be reviewing. I bought Hengxin at $0.75 previously but since then the price has been steadily falling to $0.60 levels. The company seems to be doing well and has much potential tapping into China's growing telco and 3G market. Would appreciate your opinion. Does this company have good growth potential? Or should I cut loss and move on? Thanks much.
star, hengxin has been a company that i've been watching for a while. Fundamentals are good. The company IMO is classified as a growth company due to its consistant profit growth of >30% every quarter.
The stock is going thru a rough patch. The issue on whether you should cut loss should have been at -7%, about $0.695. This way you will not be sitting with such a large paper loss now.
The company is good but no interest due to its recent lawsuit by its directors. IMO, with the bear market coming up, cut loss. Move on (given it should have been earlier). Or maybe move in later. The company is good. It will eventually climb.
Pehon,
Thanks for your advise. Admire your discipline and resolve to cut your losses for China Farm. However I've decided to hold on and wait till the end of feb for several reasons. First, pending the release of 4th qtr results, which should be good (i think/hope?). Second is the impending issue of 3G licenses in China expected to boost the telco industry. Third is the fact that given the stock's last support level was at $0.54 to $0.56, I figure there isn't much further downside to the current price of my holdings anyway (I could be wrong?)
Thanks a lot for sharing such post.Gaining us information about the review of various stock exchanges and their Best SGX stock picks.Some markets showing red, while only Thai stock market showed green.
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