The Best Advice From The Most Brilliant Investors In History
The Best Advice From The Most Brilliant Investors In History
Max Nisen | Jul. 26, 2012, 12:17 PM | 62,040 | 11
There's a bewildering amount of advice on how to invest. People divide into camps, schools and strategies, then proselytize on the internet, in books, and on televisions.
It's worthwhile, especially in today's volatile markets, to take a look at what's actually worked, as opposed to what people claim works.
We've collected some of the finest wisdom on markets from the most respected and successful investors, past and present.
John Templeton: This time is not different.
"The four most dangerous words in investing are 'This time it's different.'"
Source: Marketwatch
Barton Biggs: There are no relationships or equations that always work.
"Quantitatively based solutions and asset allocation equations invariably fail as they are designed to capture what would have worked in the previous cycle whereas the next one remains a riddle wrapped in an enigma."
Source: Barton Biggs via The Gartman Letter
Benjamin Graham: Beware of forecasts.
"It is absurd to think that the general public can ever make money out of market forecasts."
Source: The Intelligent Investor
Jack Bogle: Losses are a reality of the market.
"If you have trouble imaging a 20% loss in the stock market, you shouldn't be in stocks."
Source: ritholtz.com
Philip Fisher: Know the value of your investments.
Wikimedia Commons“The stock market is filled with individuals who know the price of everything, but the value of nothing.”
Source: Investopedia
Warren Buffett: Be greedy when others are fearful.
"Investors should remember that excitement and expenses are their enemies. And if they insist on trying to time their participation in equities, they should try to be fearful when others are greedy and greedy only when others are fearful."
Source: 2004 shareholder letter
Bob Farrell: Don't join the herd.
An imagining of Bob Farrell
"The public buys the most at the top and the least at the bottom"
Source: Marketwatch
Jeremy Grantham: Recognize your advantage over professionals.
"By far the biggest problem for professionals in investing is dealing with career and business risk: protecting your own job as an agent. The second curse of professional investing is over-management caused by the need to be seen to be busy, to be earning your keep. The individual is far better-positioned to wait patiently for the right pitch while paying no regard to what others are doing, which is almost impossible for professionals."
Source: GMO
Ken Fisher: Keep history in mind.
"You can’t develop a portfolio strategy around endless possibilities. You wouldn’t even get out of bed if you considered everything that could possibly happen..... you can use history as one tool for shaping reasonable probabilities. Then, you look at the world of economic, sentiment and political drivers to determine what’s most likely to happen—while always knowing you can be and will be wrong a lot."
Source: Markets Never Forget (But People Do)
Charles Ellis: Invest for the long run.
YouTube"The average long-term experience in investing is never surprising, but the short term experience is always surprising. We now know to focus not on rate of return, but on the informed management of risk"
Source: Winning The Loser's Game
Bill Miller: Think about how the market reflects information.
BusinessWeek"The market does reflect the available information, as the professors tell us. But just as the funhouse mirrors don't always accurately reflect your weight, the markets don't always accurately reflect that information. Usually they are too pessimistic when it's bad, and too optimistic when it's good."
Source: 2006 Letter to Shareholders
George Soros: Good investing is boring.
via Human Events "If investing is entertaining, if you’re having fun, you’re probably not making any money. Good investing is boring."
Source: Winning Investment Habits Of Warren Buffet And George Soros
Thomas Rowe Price Jr.: Know who's running the business, and why.
T Rowe Price“Every business is manmade. It is a result of individuals. It reflects the personalities and the business philosophy of the founders and those who have directed its affairs throughout its existence. If you want to have an understanding of any business, it is important to know the background of the people who started it and directed its past and the hopes and ambitions of those who are planning its future.”
Source: Valuewalk
Carl Icahn: The corporate governance system is not your friend.
“We have bloated bureaucracies in Corporate America. The root of the problem is the absence of real corporate democracy.”
Source: The Icahn Report
Peter Lynch: Do your homework.
"Investing without research is like playing stud poker and never looking at the cards."
Source: One Up On Wall Street
John Neff: Do what's smart, not what's popular.
Wiley
"It's not always easy to do what's not popular, but that's where you make your money. Buy stocks that look bad to less careful investors and hang on until their real value is recognized."
Source: John Neff On Investing
Henry Kravis: Be honest.
"If you don't have integrity, you have nothing. You can't buy it. You can have all the money in the world, but if you are not a moral and ethical person, you really have nothing."
Source: Academy of Achievement
Ray Dalio: Understand the system.
YouTube / MrNChoudhury"An economy is simply the sum of the transactions that make it up. A transaction is a simple thing. Because
there are a lot of them, the economy looks more complex than it really is. If instead of looking at it from the
top down, we look at it from the transaction up, it is much easier to understand."
Source: How The Economic Machine Works
Friday 27 July 2012
Sunday 22 July 2012
Why Most Investors Will Never Make Money in the Stock Market... And How NOT to be One of Them
Why Most Investors Will Never Make Money in the Stock Market... And How NOT to be One of Them
By Paul Tracy
Published 07/04/2012 - 10:00
I want to change how you think about the stock market [1]. Let me explain...
In the course of a month, we receive an enormous amount of emails from subscribers. And we read every single one of them.
#-ad_banner-#There is simply no better way to know how investors are feeling than by reading the emails you send in.
As you'd expect, when the market tanks and people get nervous, I get a lot more email than when the market is rising. When the market goes up, people don't worry about their stocks. They go to dinner. They go on vacation. They enjoy their lives.
But when the market falls, they believe they are about to lose all their money. People worry. They lose sleep. They just want to sell so that they don't have to worry anymore. It's been that way forever. For most people, it will always be that way.
But I want to change the way you think about the market. Sadly, based on experience, I can say confidently that most of you will not follow my advice. But I'm convinced that those who do will be better -- and wealthier -- investors because of it.
So why am I telling you this right now?
It's all because of a single email a reader sent me about my Top 10 Stocks [2] advisory just days ago.
For privacy, I won't publish this subscriber's name. But here's what he wrote me in the middle of a market sell-off where the Top 10 Stocks [2] portfolio continues to beat the S&P:
"The report should give an overview of performance, and suggested stop loss levels on the recommended securities.
"Frankly, the performance of late does not inspire."
Now, I don't personally know this subscriber. I don't know which securities he owns in his portfolio, and I don't know his investing track record. But I'd be willing to bet that more often than not, this investor loses money in the market.
How do I know that? Because he is focused too heavily on short-term swings.
The instant a stock falls, investors want to know whether they should sell. It doesn't matter if the underlying company is performing well or not -- the fear of losing money is simply too much for most small investors to stomach.
I'm convinced this is why most investors lose money in the market.
Investors driven by fear and short-term market moves are the ones who sell when the market falls... and buy when the market is rising. This is a perfect recipe to lose money and ensure that they'll never see the greatest profits.
Don't believe me? Consider this example...
Everyone knows Apple (Nasdaq: AAPL [3]). During the past decade, Apple has been one of the market's best investments. Since 2003, the stock has returned more than 7,500%. It has made many investors millionaires. But this doesn't mean the shares [4] always went up.
Take the 2008/09 bear market [5]. Apple's stock dropped more than 50% -- falling even more than the S&P:
I'm telling you this now, because volatile markets are simply something investors will have to deal with for the foreseeable future. There will be times of calm, and I believe over the long term the market will move higher. But thanks to serious debt problems in the developed world and tepid growth worldwide, the market will continue to swing, sometimes wildly.
Although I'd love to see a steadily rising market, these sell-offs are opportunities to pick up shares of great stocks at bargain prices you wouldn't see otherwise.
That's how I want you to view the market.
But if you looked back at the past century, then you'd see there hasn't been a single sell-off that didn't later turn out to be a terrific opportunity to buy stocks, assuming you bought solid companies at attractive prices and had the resolve to hold them for the long term.
This includes The Great Depression [6]... the sell-off in 1937... the sell-off between 1973-74... the 1987 crash... the "Dot-com" crash... and the most recent sell-off during the recession [7].
Action to Take -- > All of these times turned out to be wonderful opportunities to buy. I understand why many investors get nervous. But the most successful investors use these periods to generate enormous profits.
Source/Extract/Excerpts/来源/转贴/摘录: http://www.streetauthority.com/
Publish date: 04/07/12
By Paul Tracy
Published 07/04/2012 - 10:00
I want to change how you think about the stock market [1]. Let me explain...
In the course of a month, we receive an enormous amount of emails from subscribers. And we read every single one of them.
#-ad_banner-#There is simply no better way to know how investors are feeling than by reading the emails you send in.
As you'd expect, when the market tanks and people get nervous, I get a lot more email than when the market is rising. When the market goes up, people don't worry about their stocks. They go to dinner. They go on vacation. They enjoy their lives.
But when the market falls, they believe they are about to lose all their money. People worry. They lose sleep. They just want to sell so that they don't have to worry anymore. It's been that way forever. For most people, it will always be that way.
But I want to change the way you think about the market. Sadly, based on experience, I can say confidently that most of you will not follow my advice. But I'm convinced that those who do will be better -- and wealthier -- investors because of it.
So why am I telling you this right now?
It's all because of a single email a reader sent me about my Top 10 Stocks [2] advisory just days ago.
For privacy, I won't publish this subscriber's name. But here's what he wrote me in the middle of a market sell-off where the Top 10 Stocks [2] portfolio continues to beat the S&P:
"The report should give an overview of performance, and suggested stop loss levels on the recommended securities.
"Frankly, the performance of late does not inspire."
Now, I don't personally know this subscriber. I don't know which securities he owns in his portfolio, and I don't know his investing track record. But I'd be willing to bet that more often than not, this investor loses money in the market.
How do I know that? Because he is focused too heavily on short-term swings.
The instant a stock falls, investors want to know whether they should sell. It doesn't matter if the underlying company is performing well or not -- the fear of losing money is simply too much for most small investors to stomach.
I'm convinced this is why most investors lose money in the market.
Investors driven by fear and short-term market moves are the ones who sell when the market falls... and buy when the market is rising. This is a perfect recipe to lose money and ensure that they'll never see the greatest profits.
Don't believe me? Consider this example...
Everyone knows Apple (Nasdaq: AAPL [3]). During the past decade, Apple has been one of the market's best investments. Since 2003, the stock has returned more than 7,500%. It has made many investors millionaires. But this doesn't mean the shares [4] always went up.
Take the 2008/09 bear market [5]. Apple's stock dropped more than 50% -- falling even more than the S&P:
Countless investors dumped the stock... most after it had already dropped sharply. Then they refused to have anything to do with it on the way back up. So not only did they suffer a loss on the shares when they sold, but they also missed out on Apple's sensational multi-year rise:
I'm telling you this now, because volatile markets are simply something investors will have to deal with for the foreseeable future. There will be times of calm, and I believe over the long term the market will move higher. But thanks to serious debt problems in the developed world and tepid growth worldwide, the market will continue to swing, sometimes wildly.
Although I'd love to see a steadily rising market, these sell-offs are opportunities to pick up shares of great stocks at bargain prices you wouldn't see otherwise.
That's how I want you to view the market.
But if you looked back at the past century, then you'd see there hasn't been a single sell-off that didn't later turn out to be a terrific opportunity to buy stocks, assuming you bought solid companies at attractive prices and had the resolve to hold them for the long term.
This includes The Great Depression [6]... the sell-off in 1937... the sell-off between 1973-74... the 1987 crash... the "Dot-com" crash... and the most recent sell-off during the recession [7].
Action to Take -- > All of these times turned out to be wonderful opportunities to buy. I understand why many investors get nervous. But the most successful investors use these periods to generate enormous profits.
Source/Extract/Excerpts/来源/转贴/摘录: http://www.streetauthority.com/
Publish date: 04/07/12
Wednesday 18 July 2012
How Low Genting SP can go?
Posted on
Genting SP just broke the support of $1.41 and currently testing the support of $1.31 (previous resistance). If this support cannot hold, don’t be surprise to see Genting SP to drop below $1.00. 161.8% FR is at $0.89. Currently Genting SP is a clear cut down trend as all three moving averages (20D, 50D, 200D SMA) are trending down. Base on current chart, Genting SP still has not found a bottom yet. The Genting SP fairy tale story is over! Those who still “hope” to breakeven better think twice or prepare to endure the “red” portfolio for a long long time.
Fundamental Data
| CURRENT P/E RATIO (TTM) | 17.4434 |
|---|---|
| ESTIMATED P/E (12/2012) | 16.1728 |
| EARNINGS PER SHARE (SGD) (TTM) | 0.0751 |
| EST. EPS (SGD) (12/2012) | 0.0810 |
| EST. PEG RATIO | 1.2069 |
| MARKET CAP (M SGD) | 15,981.79 |
| SHARES OUTSTANDING (M) | 12,199.84 |
| ENTERPRISE VALUE (M SGD) (TTM) | 14,179.62 |
| ENTERPRISE VALUE/EBITDA (TTM) | 9.44 |
| PRICE/BOOK (MRQ) | 1.9663 |
| PRICE/SALE (TTM) | 5.1444 |
| DIVIDEND INDICATED GROSS YIELD | 0.7634 |
| NEXT EARNINGS ANNOUNCEMENT | 08/10/2012 |
Sunday 15 July 2012
Buffett Says Muni Bankruptcies Set To Climb As Stigma Lifts
Buffett Says Muni Bankruptcies Set To Climb As Stigma Lifts
By Margaret Collins - Jul 14, 2012
Warren Buffett, the billionaire chairman of Berkshire Hathaway Inc. (BRK/A), said municipal bankruptcies are set to rise as there’s less stigma attached after three California cities opted to seek protection just weeks apart.
The City Council of San Bernardino, California, a community of about 210,000 east of Los Angeles, decided July 10 to seek court protection from its creditors. The move came just weeks after Stockton, a community of 292,000 east of San Francisco, became the biggest U.S. city to enter bankruptcy. Mammoth Lakes, California, also sought the shelter this month..
“The stigma has probably been reduced when you get very sizeable cities like Stockton or San Bernardino to do it,” Buffett, 81, said in an interview today on “In the Loop with Betty Liu” on Bloomberg Television. “The very fact they do it makes it more likely.”
Cities and towns across the U.S. have been strained by rising costs for labor, including pensions and retiree health benefits, while the longest recession since the 1930s crimped sales- and property-tax revenue.
“Once people find that the city works the next day, it makes it easier for the city council next time they have a problem with pensions -- or whatever it is -- just to say, ‘well, we’ll declare bankruptcy,’” said Buffett, whose company is based in Omaha, Nebraska.
No Precipice
He said the nation isn’t on the brink of hundreds of billions of dollars in defaults, as banking analyst Meredith Whitney predicted in 2010.
“I don’t think we’re at the precipice,” Buffett said. “People will use the threat of bankruptcy to try and negotiate, particularly pension contracts, with their employees.”
Berkshire held municipal bonds valued at about $3 billion as of March 31, or about 9 percent of the fixed-maturity portfolio, according to a regulatory filing. That’s down from about $3.6 billion at the end of 2010. The company also had as much as $16 billion at risk in derivatives tied to such debt at the end of the first quarter, the filing shows.
The billionaire predicted a “terrible problem” for municipal bonds in coming years in testimony to the U.S. Financial Crisis Inquiry Commission in June 2010.
‘Too Early’
Forty-two municipal issuers have defaulted for the first time in 2012, down from 68 in the same period last year and 83 in 2010, according to Municipal Market Advisors.
“It’s too early to say that there’s a lack of stigma,” John Hallacy, head of municipal research at Bank of America Merrill Lynch in New York, said in a phone interview. “Municipal bankruptcy is a gut-wrenching process. There’s nothing easy about it.”
Tax-exempt mutual funds have continued to attract investors, who added about $653 million to U.S. municipal bond funds in the week through July 11, the most since mid-May, Lipper US Fund Flows data show.
Yields on 10-year benchmark munis fell to 1.77 percent as of noon in New York, the lowest since May 15, according to Bloomberg Valuation data.
Source/Extract/Excerpts/来源/转贴/摘录: http://www.bloomberg.com
Publish date:14/07/12
By Margaret Collins - Jul 14, 2012
Warren Buffett, the billionaire chairman of Berkshire Hathaway Inc. (BRK/A), said municipal bankruptcies are set to rise as there’s less stigma attached after three California cities opted to seek protection just weeks apart.
The City Council of San Bernardino, California, a community of about 210,000 east of Los Angeles, decided July 10 to seek court protection from its creditors. The move came just weeks after Stockton, a community of 292,000 east of San Francisco, became the biggest U.S. city to enter bankruptcy. Mammoth Lakes, California, also sought the shelter this month..
“The stigma has probably been reduced when you get very sizeable cities like Stockton or San Bernardino to do it,” Buffett, 81, said in an interview today on “In the Loop with Betty Liu” on Bloomberg Television. “The very fact they do it makes it more likely.”
Cities and towns across the U.S. have been strained by rising costs for labor, including pensions and retiree health benefits, while the longest recession since the 1930s crimped sales- and property-tax revenue.
“Once people find that the city works the next day, it makes it easier for the city council next time they have a problem with pensions -- or whatever it is -- just to say, ‘well, we’ll declare bankruptcy,’” said Buffett, whose company is based in Omaha, Nebraska.
No Precipice
He said the nation isn’t on the brink of hundreds of billions of dollars in defaults, as banking analyst Meredith Whitney predicted in 2010.
“I don’t think we’re at the precipice,” Buffett said. “People will use the threat of bankruptcy to try and negotiate, particularly pension contracts, with their employees.”
Berkshire held municipal bonds valued at about $3 billion as of March 31, or about 9 percent of the fixed-maturity portfolio, according to a regulatory filing. That’s down from about $3.6 billion at the end of 2010. The company also had as much as $16 billion at risk in derivatives tied to such debt at the end of the first quarter, the filing shows.
The billionaire predicted a “terrible problem” for municipal bonds in coming years in testimony to the U.S. Financial Crisis Inquiry Commission in June 2010.
‘Too Early’
Forty-two municipal issuers have defaulted for the first time in 2012, down from 68 in the same period last year and 83 in 2010, according to Municipal Market Advisors.
“It’s too early to say that there’s a lack of stigma,” John Hallacy, head of municipal research at Bank of America Merrill Lynch in New York, said in a phone interview. “Municipal bankruptcy is a gut-wrenching process. There’s nothing easy about it.”
Tax-exempt mutual funds have continued to attract investors, who added about $653 million to U.S. municipal bond funds in the week through July 11, the most since mid-May, Lipper US Fund Flows data show.
Yields on 10-year benchmark munis fell to 1.77 percent as of noon in New York, the lowest since May 15, according to Bloomberg Valuation data.
Source/Extract/Excerpts/来源/转贴/摘录: http://www.bloomberg.com
Publish date:14/07/12
How To Play The Stock Market In July?
09 JULY 2012
How To Play The Stock Market In July?
By Daniel Loh
The non-farm payroll on Friday proved to be worse than expectations and the Dow Jones Industrial Average closed 120 points down. At one point during the day, it decreased 190 points. We expect Asia to have a down day on Monday. In our last article, we warned our readers of the possibility of the jobs number missing forecast after our research.
Our article on 3 July:
http://www.sharesinv.com/articles/2012/07/03/will-we-have-a-recession-with-the-poor-ism-report/
The important thing is, what should be our next step?
In our opinion, we should follow the next three trading days from Monday to Wednesday very closely. If the market rebounds, it will indicate that Wall Street expects the Fed chairman to announce a quantitative easing (QE3) on 31 July, when there is a Federal Open Market Committee meeting. That will mean that the poor jobs number is actually a catalyst to the stock market! A good indication of bullishness would be a triple digit gain in Dow Jones in a single day or three consecutive up days! You might want to take the chance to enter some bullish position.
There is a good possibility that is how July will be played out. For this month, the Wall Street might be betting on the likelihood of a QE3 again. Do remember that in trading, it is always good to “BUY on Expectations and SELL on Fact”. Make sure we sell our stocks before 31 July. There is still a likelihood that there would not be a QE3 afterall.
But, if the market goes slow or drops in the first three days of trading this week, it may mean that the aftereffects of the poor jobs numbers are still felt. We probably need to be a bit patient to wait for any reversal at the end of the week or next week.
Our US Market Sentiment indicator also shows that New York Stock Exchange and Nasdaq Stock Exchange stocks have both turned bullish. And this often means bullishness in the market. Previously, we had warned our readers to take note that our Market Sentiment Indicator has turned bearish in April. This indicator has served us well these two years.
Check out our daily Market Sentiment Indicator in our blog:
http://www.danielloh.com/2012/07/market-sentiment-indicator-for-4-july_06.html
In my opinion, I do not expect July to be bad at all. In fact, I am optimistic about July because of the QE3 hype and the start to the earnings season. Starting from Monday, almost all US companies will start to release their earnings reports in this coming two months and the media will start to turn their attention to companies’ earnings.
Problems in Europe have also subsided a bit because of Euro 2012 and Germany’s willingness to relent. China has cut interest rate a second time in one month. Hence, I believe that China’s stock market may be picking up soon. Commodities and energy related stocks have also reached a bottom because of China.
Source/Extract/Excerpts/来源/转贴/摘录: http://www.sharesinv.com
Publish date:09/07/12
How To Play The Stock Market In July?
By Daniel Loh
The non-farm payroll on Friday proved to be worse than expectations and the Dow Jones Industrial Average closed 120 points down. At one point during the day, it decreased 190 points. We expect Asia to have a down day on Monday. In our last article, we warned our readers of the possibility of the jobs number missing forecast after our research.
Our article on 3 July:
http://www.sharesinv.com/articles/2012/07/03/will-we-have-a-recession-with-the-poor-ism-report/
The important thing is, what should be our next step?
In our opinion, we should follow the next three trading days from Monday to Wednesday very closely. If the market rebounds, it will indicate that Wall Street expects the Fed chairman to announce a quantitative easing (QE3) on 31 July, when there is a Federal Open Market Committee meeting. That will mean that the poor jobs number is actually a catalyst to the stock market! A good indication of bullishness would be a triple digit gain in Dow Jones in a single day or three consecutive up days! You might want to take the chance to enter some bullish position.
There is a good possibility that is how July will be played out. For this month, the Wall Street might be betting on the likelihood of a QE3 again. Do remember that in trading, it is always good to “BUY on Expectations and SELL on Fact”. Make sure we sell our stocks before 31 July. There is still a likelihood that there would not be a QE3 afterall.
But, if the market goes slow or drops in the first three days of trading this week, it may mean that the aftereffects of the poor jobs numbers are still felt. We probably need to be a bit patient to wait for any reversal at the end of the week or next week.
Our US Market Sentiment indicator also shows that New York Stock Exchange and Nasdaq Stock Exchange stocks have both turned bullish. And this often means bullishness in the market. Previously, we had warned our readers to take note that our Market Sentiment Indicator has turned bearish in April. This indicator has served us well these two years.
Check out our daily Market Sentiment Indicator in our blog:
http://www.danielloh.com/2012/07/market-sentiment-indicator-for-4-july_06.html
In my opinion, I do not expect July to be bad at all. In fact, I am optimistic about July because of the QE3 hype and the start to the earnings season. Starting from Monday, almost all US companies will start to release their earnings reports in this coming two months and the media will start to turn their attention to companies’ earnings.
Problems in Europe have also subsided a bit because of Euro 2012 and Germany’s willingness to relent. China has cut interest rate a second time in one month. Hence, I believe that China’s stock market may be picking up soon. Commodities and energy related stocks have also reached a bottom because of China.
Take a look at the price of Corn trust fund, this as an indication:
To sum it up, I do not expect a poor market in July because of global market changes, earnings season and market speculation of QE3. And remember, US elections is happening in four months’ time. Do take note of opportunites to buy instead of sell.
Source/Extract/Excerpts/来源/转贴/摘录: http://www.sharesinv.com
Publish date:09/07/12
Thursday 12 July 2012
Forget Deflation, China Is Set To Rebound Strongly On Easing And Stimulus
Forget Deflation, China Is Set To Rebound Strongly On Easing And Stimulus
China’s slowdown is more dramatic than previously thought, inflation data revealed on Monday. But, despite CPI falling to a 29-month low, and economists like Nouriel Roubini expecting a hard landing in the near term, there are signs that China will rebound in the second half of the year, Nomura’s global economics team says.
“Current market sentiment on China is too bearish,” explained Nomura’s Zhiwei Zhang. While the world’s second largest economy has shown substantial signs of cooling, Zhang expects the output slowdown to bottom out in Q2, and GDP growth to accelerate into the second half of the year.
CPI data released on Monday showed consumer prices growing only 2.2% year-over-year in June, down from 3% in May. And they will continue to slow, despite sliding to their lowest levels since June 2010, according to Nomura, which expects a print below 2% for July.
Deflation has already reared its ugly face in terms of a negative PPI reading. Producer prices fell 2.1% in June, decelerating further from a 1.4% decline in May. “Lower PPI was driven by both weak domestic demand and lower commodity prices,” explained Zhang, adding that “more disinflationary forces [remain] in the pipeline.”
China’s economic slowdown has spread beyond the domestic economy, and is taking its toll on foreign companies. Lagging demand in China has already put downward pressure on shares in Yum Brands, which derives 40% of its operating profits from China, while McDonald’s revealed contracting same-store sales in their Asia-Pacific unit. Global manufacturers like Caterpillar have acknowledged the slowdown too, while sportswear firms like Nike have suffered from compressing margins in China.
On Monday, noted economist and perma-bear Nouriel Roubini reaffirmed his call for a hard landing in China. He noted a “perfect storm scenario” was playing out, just as he had predicted, with the Eurozone in a deep crisis, the U.S. at stall speed, emerging markets under pressure (led by China, which is en route for a hard landing), and the possibility of war with Iran causing oil prices to spike. Roubini even said it’s worse than in 2008, as the power of policy bullets has been eroded; “now we are running out of rabbits to pull out of the hat” he wrote on Twitter.
Nomura’s Zhang isn’t so sure. The economist noted that slowing inflation creates space for more policy easing, while adding that Chinese policymakers have learnt from previous mistakes. Zhang explained it thus:
Nomura expects GDP to slide to around 7.8% in Q2, and then rebound in the second half of the year, to 8.6% in Q3 and 8.9% in Q4. He expects the People’s Bank of China to cut the reserve ratio twice over the second half of the year (after having delivered two rate cuts over the last two months), and lending to jump past 1 trillion renminbi ($157 billion) in June, up from 793 billion renminbi ($124 billion) in May. Further easing coupled with public investment should help boost industrial production, explained Zhang.
Markets appear to be considering China to be down and out. The iShares China ETF is down more than 18% since peaking in early February, as GDP figures for China have been cut by several economists, including the IMF. But Beijing could surprise markets, with strong intervention and a more gradual, and sustainable, approach, achieving a soft landing despite global market turmoil, at least according to Nomura.
Source/Extract/Excerpts/来源/转贴/摘录: www.forbes.com
Publish date: 10/07/12
China’s slowdown is more dramatic than previously thought, inflation data revealed on Monday. But, despite CPI falling to a 29-month low, and economists like Nouriel Roubini expecting a hard landing in the near term, there are signs that China will rebound in the second half of the year, Nomura’s global economics team says.
“Current market sentiment on China is too bearish,” explained Nomura’s Zhiwei Zhang. While the world’s second largest economy has shown substantial signs of cooling, Zhang expects the output slowdown to bottom out in Q2, and GDP growth to accelerate into the second half of the year.
CPI data released on Monday showed consumer prices growing only 2.2% year-over-year in June, down from 3% in May. And they will continue to slow, despite sliding to their lowest levels since June 2010, according to Nomura, which expects a print below 2% for July.
Deflation has already reared its ugly face in terms of a negative PPI reading. Producer prices fell 2.1% in June, decelerating further from a 1.4% decline in May. “Lower PPI was driven by both weak domestic demand and lower commodity prices,” explained Zhang, adding that “more disinflationary forces [remain] in the pipeline.”
China’s economic slowdown has spread beyond the domestic economy, and is taking its toll on foreign companies. Lagging demand in China has already put downward pressure on shares in Yum Brands, which derives 40% of its operating profits from China, while McDonald’s revealed contracting same-store sales in their Asia-Pacific unit. Global manufacturers like Caterpillar have acknowledged the slowdown too, while sportswear firms like Nike have suffered from compressing margins in China.
On Monday, noted economist and perma-bear Nouriel Roubini reaffirmed his call for a hard landing in China. He noted a “perfect storm scenario” was playing out, just as he had predicted, with the Eurozone in a deep crisis, the U.S. at stall speed, emerging markets under pressure (led by China, which is en route for a hard landing), and the possibility of war with Iran causing oil prices to spike. Roubini even said it’s worse than in 2008, as the power of policy bullets has been eroded; “now we are running out of rabbits to pull out of the hat” he wrote on Twitter.
Nomura’s Zhang isn’t so sure. The economist noted that slowing inflation creates space for more policy easing, while adding that Chinese policymakers have learnt from previous mistakes. Zhang explained it thus:
It takes time for the effects of policy easing to be fully felt, but we continue to expect growth to bottom in Q2 and pick up in Q3. After the global financial crisis in 2008 led to a sharp slowdown in China’s economy, the government loosened policies aggressively in January 2009. […]
Whether the government’s policy response was too weak and too late to avoid an economic slowdown is a question that many investors have recently asked. We believe the government learned a lesson in 2009 and will this time take an incremental approach (i.e., instead of pulling out all the stops and loosening as much as possible, it will likely take gradual action that is contingent on feedback from the economy). But this gradual pace of loosening should not be interpreted as a lack of space to ease should growth slow further.
Nomura expects GDP to slide to around 7.8% in Q2, and then rebound in the second half of the year, to 8.6% in Q3 and 8.9% in Q4. He expects the People’s Bank of China to cut the reserve ratio twice over the second half of the year (after having delivered two rate cuts over the last two months), and lending to jump past 1 trillion renminbi ($157 billion) in June, up from 793 billion renminbi ($124 billion) in May. Further easing coupled with public investment should help boost industrial production, explained Zhang.
Markets appear to be considering China to be down and out. The iShares China ETF is down more than 18% since peaking in early February, as GDP figures for China have been cut by several economists, including the IMF. But Beijing could surprise markets, with strong intervention and a more gradual, and sustainable, approach, achieving a soft landing despite global market turmoil, at least according to Nomura.
Source/Extract/Excerpts/来源/转贴/摘录: www.forbes.com
Publish date: 10/07/12
Opportune time for investing in ETFs: analysts
Opportune time for investing in ETFs: analysts
by Sim Ping Khuan Updated 12:17 AM Jul 12, 2012Sim Ping Khuan
SINGAPORE - The turnover of exchange-traded funds (ETFs) fell 56 per cent on-year to S$350 million in June, according to the Singapore Exchange, taking the full-year ETF turnover for the full year ended June down 23 per cent to S$7.3 billion.
Experts say the drop in Singapore's ETF turnover in June reflects the global economic uncertainty and tracks declines in equity trading across the region, with investors holding back on riskier assets.
With valuations for equities looking attractive now, it may be an opportune time for investors to enter the ETF market, they say.
Mr Nels Friets, Head of Securities at Singapore Exchange, said: "You're seeing probably more people buying and holding, as opposed to trading, so then that's why assets under management continues to increase -- as opposed to the trading volumes. ETFs are a very important part of most investors' portfolios and should remain that way."
Globally, ETF assets have increased by 11.1 per cent to US$1.5 trillion from US$1.35 trillion in the first half of the year, according to a London-based independent ETF research and consultancy firm ETFGI.
Mr Hon Cheung, Regional Director for Asia at State Street Global Investors, said:
"The assets under management for the Singapore Exchange ETFs over the last six months grew by 29 per cent. So there's obviously significant investment interest out there. I think ETFs fulfill the role of providing very cost effective, simple, transparent access to markets."
Analysts say key factors that will drive growth in ETF trading in Singapore are the breadth of the ETF assets available, the transparency of the products, and the cost-effectiveness in gaining exposure to diversified markets.
Last month, SGX launched dual currency trading for ETFs, allowing investors to trade in seven US dollar-denominated ETFs in Singapore dollars.
The move, analysts say, will help to remove a significant psychological barrier, as some investors believe that ETF trading carries an additional risk of currency exposure.
Mr Roger Tan, CEO of SIAS Research, said: "Investors do not need to see it as a US dollar investment, they can see it as an ETF investment and focus on what the product is really about."
Selected products such as gold ETFs have remained popular among investors.
Turnover of gold ETF SPDR Gold Shares, the first commodity-based ETF listed on Singapore Exchange, has increased by 60 per cent in the past 12 months, according to State Street Global Advisors, which manages the fund.
Source/Extract/Excerpts/来源/转贴/摘录: TODAYonline
Publish date: 12/07/12
by Sim Ping Khuan Updated 12:17 AM Jul 12, 2012Sim Ping Khuan
SINGAPORE - The turnover of exchange-traded funds (ETFs) fell 56 per cent on-year to S$350 million in June, according to the Singapore Exchange, taking the full-year ETF turnover for the full year ended June down 23 per cent to S$7.3 billion.
Experts say the drop in Singapore's ETF turnover in June reflects the global economic uncertainty and tracks declines in equity trading across the region, with investors holding back on riskier assets.
With valuations for equities looking attractive now, it may be an opportune time for investors to enter the ETF market, they say.
Mr Nels Friets, Head of Securities at Singapore Exchange, said: "You're seeing probably more people buying and holding, as opposed to trading, so then that's why assets under management continues to increase -- as opposed to the trading volumes. ETFs are a very important part of most investors' portfolios and should remain that way."
Globally, ETF assets have increased by 11.1 per cent to US$1.5 trillion from US$1.35 trillion in the first half of the year, according to a London-based independent ETF research and consultancy firm ETFGI.
Mr Hon Cheung, Regional Director for Asia at State Street Global Investors, said:
"The assets under management for the Singapore Exchange ETFs over the last six months grew by 29 per cent. So there's obviously significant investment interest out there. I think ETFs fulfill the role of providing very cost effective, simple, transparent access to markets."
Analysts say key factors that will drive growth in ETF trading in Singapore are the breadth of the ETF assets available, the transparency of the products, and the cost-effectiveness in gaining exposure to diversified markets.
Last month, SGX launched dual currency trading for ETFs, allowing investors to trade in seven US dollar-denominated ETFs in Singapore dollars.
The move, analysts say, will help to remove a significant psychological barrier, as some investors believe that ETF trading carries an additional risk of currency exposure.
Mr Roger Tan, CEO of SIAS Research, said: "Investors do not need to see it as a US dollar investment, they can see it as an ETF investment and focus on what the product is really about."
Selected products such as gold ETFs have remained popular among investors.
Turnover of gold ETF SPDR Gold Shares, the first commodity-based ETF listed on Singapore Exchange, has increased by 60 per cent in the past 12 months, according to State Street Global Advisors, which manages the fund.
Source/Extract/Excerpts/来源/转贴/摘录: TODAYonline
Publish date: 12/07/12
Sunday 8 July 2012
Is It Time To Buy Now? - Is this a million dollar question? Not really!
"Is It Time To Buy Now?" - Is this a million dollar question? Not really!
by ckchoy
As a retail trader/investor, where you are a person that keen on catching opportunities in stock market, I believe you might have experience people around you asking you such a question "Is it time to buy now?" For some, they may think in heart
" Hey I'm not GOD, I also want to know the answer"
or
" If I know, I will be rich"
or reluctantly and answered eg
"Hard to say, if more bad news coming, market may tank more"
"This type of market very hard to play, may win a bit and lose a lot"
"If Euro problem solved, market of course will rally, if not, will continue tank more"
"So much bad news around, I don't know how to digest, not sure what will happen to the market"
"I can see market started to rebound slowly, but will it snap back down? Is this rebound/rally sustainable? QE coming? More China's rate cut? More banks in Europe bailed-out cases pop up?"
and so on.
Instead of only focus on general global news especially on political and have no idea of what's going on next, why don't bring in some basic figures to support your view? Be it TA(Technical Analysis), FA(Fundamental Analysis) or macro-economic (eg inflation rate, interest rate, GDP etc).
Using quantitative figures not only can let you jump out of indecisive infinite loop, it may help you continue improve your experience on market view, a positive cycle to your trading/investing experience.
Below are only some samples for illustration, please do not take the numbers and comments seriously.
Sample answer 1 - TA, short term, using STI index as reference, support play
I look at the short term(few days or week) chart and it is showing uptrend. However, I notice STI has run up 9 straight days, perhaps market is a bit overbought. But since market is in uptrend, I will long the market but wait for a pull back first. From the chart, I see STI possible to make a healthy pull back to around 2920 before I enter.
Sample answer 2 - TA, mid term, using STI index as reference, breakout play
Hey, I'm more conservative, I like to take mid term(weeks to month) view. It looks like a sideway market in mid term, hence I would like to wait for STI to breakout 3000 before I consider jump into the market.
Sample answer 3 - TA, long term, using STI index as reference, conservative play
I'm super conservative, to me long term market is still in downtrend, however I have such support levels in mind, 2920, 2880, 2850, 2800, 2770, 2750, 2700, 2680. As I'm conservative, I would wait for 2680 before I enter the market.
Some may think, hey Sg market is a low volume market comparatively. I like to use HSI ( Hong Kong's Hang Seng Index ) or Dow Jones/S&P as reference.
Sample answer 4 - TA, HSI, support and resistance play, volume breakout play, Dow, S&P
Last year when the Euro crisis started, HSI down from 22000 to 16200, then rebounded sharply to 21700. And this year May the Euro crisis brought into the game again and HSI retreated back to 18100 before rebound back to current level of 19800. In between I notice the flip flops show strong support around 18200 and strong resistance around 19500. Hence I would long/short around this support and resistance. But if volume breakout and HSI were to stay above 20000, I would turn bullish.
I'm considering the Dow should be trading in the range of 12000 to 13000, and S&P 1250 - 1400.
Sample answer 5 - FA, STI
Historically, STI fair value is around 15 - 25. Current level of 13 is below fair value and considered cheap. However short term market is volatile and there are still a lot of uncertain in the markets. I'm not hurry to buy but would buy on any dips as current level do offer cheap valuation for a long term investors.
Sample answer 6 - FA, specific counter, P/E
KepCorp which is trading about 9-10 P/E which I think is undervalued. It is time for me to do accumulation.
Sample answer 7 - FA, specific counter, value investing
Capland is trading below its NAV of 3.5 which I think is worth considering even though the previous and coming quarter results were/are not that impressive. Current share prices should have already factored in 40% drop of value in future, let's say 2-3 years time.
Sample answer 8 - FA, sector, earning
I have done my research, coming quarter banks most likely will continue report better than expected results. I'm betting short term on banks for its quarter result.
Sample answer 9 - FA, macro-economy figure, longer term
Singapore inflation rate stays high around 5% per year which I think is not a healthy sign, I expect market to remain volatile. As a conservative investor, I would like to see inflation start to cooling down before I would consider enter the market. Best is when it comes down to 2-3%.
Sample answer 10 - and so on.
Have you done your homework? Let me check with you: Is it time to buy now?
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