Observations from the market.

Due to my part-time studies school assignments, I have not been posting for a while. However, I am still actively watching the market movement trying to pick up the some experience to enrich myself when the similar situation arises again.

The stock market has been very volatile for the past one month since the 26th July where US market has plunge greatly due to credit risks in the home mortages that made the bear sterns fund to collapse and investors fail to get any money back.

This crisis has spread across to the rest of the world which make investors/traders panic resulting in a massive sellout in the every market and with the exception of the ShangHai Stock Exchange. (Ironically, China should be the major threat but it seem to be in her own world rising like each every other day, and all major indexes decline it did not even not even scratch her)

Even with strong economic growth reported, Singapore was still not sparred. STI has fallen sharply from its peak @ 3685 to the possible bottom @ 2962 in three waves with some false recovery in between. It has broken some major supports that I forcasted using T.A. The situation further worsen when it manage to break 200 days moving averages (last line of defense) an indication that the bear years may be coming in.

In the correction, every counters falls as investors/traders sell in panic. Blue chips were the first to go falling sharply till is is ridiculously cheap as compared to pennies. As the market recover, these market gaints make pretty aggresive movement punching the bear deeply in its face.

As for pennies, this correction is a doomsday to those companies that has their operations funded by debt. This is most noticeable in the construction counters, where construction leader like CSC and yongnam fall greatly. Companies that are overly prices from its fair value also get their beatings. This is seen from the speculative play of serveral counters before the correction.

Another interesting observation that i have notice is, counters (courage marine) with high dividend payoffs are shown to be much more resilient in the correction. This shows that with a possible bear year emerging, traders/investors will flock to these counters to get the dividend gains.

From these observations, I notice that the risk reward is better to buy blue chips on dips instead on investing in warrants. And in times of uncertainties, we should bank on high dividend yield counters as they are more stable and the dividends will be a bonus to us even in the bears years compare to the interests paid by putting our money in the banks.

Practical World===UnRelevant to stocks trading===

There is this intersting letter that I heard while tuning to Class 95 when I was driving back home today. Below are the narrated details:

A guy by the "penname" of LY had broke off with his girlfriend 7 months ago. This was due to the fact that the girl's mother had look down on him as he is not earning highly enough.

Well this average earning John manage to move on with life and got to interact well with another girl(whom he knew for six years) developing feelings for her. He then confessed and the girl went MIA(haha no la just distant herself from him) thereafter.

He is confused and ask her if it is becuase of his confession and the girl says that her mother wants her to marry to a well to do guy(I believe should be consider rich guy ba) and she will listen to her mother cause she single-handledly raise her up.

Additional Info: This guy is earning 40K per year which should be what majority of the guys are earning from a regular job in singapore now....

Well from the above, we can see how "sway" the guy is to have 2 such encounter in a straightrow. We will pray for him and hope the third one will be exceptional!

Haha ok enough of the crap. Down to the earth, we have seen the cruelty of the society and some expectations that the guys need to live to in order to have the "license" to have a relationship that leads to a future marriage.

This is pretty sad but it's part and parcel of today life with the evergrowing inflation. With this, I urge all to look for alternatives

Recovery in progress but...

Today, counters in SGX looks pretty green indicating market recovery for serveral counters. Looking at my portfolio, there are totally no movements or only slight movements...

I am pretty depressed about it and is puzzled on the price movement on them. There have been news on reconstructing of the roads for the F1 racing event next year last friday. This means that OKP will have potential to raise. However, it only inch up an unimpressive 2 cents.. and i am still 20 cents down from my purchase price...

Next, my "Project FISH", Pac Andes, OCBC give a technical coverage expecting it to rebound. That should be a good piece of news to me but looking at the resistance they set 0.81-0.87.... taking the low price, I am 10 cents down. Seems that I hook onto a Rotten fish... Another Longcheer to be counter...

Next C & G Holdings, Its Q2 result shown an increase in profits by nearly 30%, for the 1st half od 2007 when compare with 2006. That should also sparks the counter up but there is not much buying interest today...

Lian Beng, a major worry in my portfolio, with negative cashflow, the management is planning to give dividends... Hopefully I can sell it off at a small profit before the XD date...

Conclusion, I am very disappointed with myself. It seems that my picks so far are all claypot picks... Feeling very lost now....

Summary of the week.

The heavy volatility has brought exciting times to many. Sideway trading has been going on for the whole of this week and skilled punters are happily gaining some kopi money where i only could watch from behind...The feeling of hearing people making gains where me myself is having all the sour losses is pretty sucks.

I am really tempted to do some swing trades as well but i do not have sufficient holding power to do swing trading..... haiz all i can do now is just watch the market...

Recently, central banks around the world are injecting/planning to inject money into the market to provide liquidity. This should be some good news as they are putting in effort to avoid the financial crisis. Hope my counters will recover fast.

ShowHand on Royal Flush?!?!?!

Singapore Economy has perform well during the Second Quater. With such a strong performace, serveral investors/speculator are confident in investing into our home growth companies and some other prospective overseas companies thus most of them including me go in and grab.

I have already showhand all of my capital into the market since the cards opened are the spades' royal family and the last unopened card is the Spade of Ace since the Singapore is so bullish!

Then came along two uninvited guest, Mr Bear Sterns Fund and his Ugly Friend Subprime Mortages before I get to open my last card... They seated beside me and do some wonderful tricks on my last card. Being nervous on the arrival of the unexpected guest , I look onto my card again and to my shock, my ACE is gone and now I holding onto a JOKER...

What I do now is pay protection money to Mr Bear Sterns and Subprime Mortages to delay the time so that I can rub the joker into my orginal spade of ACE....


Lesson: Never to be too confident on the bullish market. Things may not turn out to what we predict as there are external parties that may affect the market. Keep at least 30%- 50% of cash reserve instead of vesting all of them!

Itchy hand on Fujian IPO

OK... I did silly things on IPO again mounting my net losses to 3.3k.... I had repeated this mistake over and over again... This has shown that I do not have the mental edge to trade in the stock market .... Argh the failure to handle my emotions in trading has brought several downfalls onto me.

Greed and Patience
The incapabilities of human being to control the above thinking and emotions will result failure in serveral aspects of human life and partically to the me in the stock market.

Can someone please enlighten me in how they control this emotions???

Recent Actions:
Added Aztech and STI ETF.

Interesting Article!

5 Lessons for a Declining Market

1. EXPERIENCED INVESTORS USE FEAR TO THEIR ADVANTAGE. Only in markets where people are scared can you buy stocks cheap.


2. I own a private company. If I wanted to buy out my biggest competitor, I would want to pay as little as I could. Investing in stocks is the same thing. Why would I be upset if I could buy them cheaper? Shouldn't I be happy?


3. You should enjoy declining markets. Declining stock prices... nervous investors... predictions of impending doom. It's during times like these that you have to keep your head.


4. SCARED MARKETS ARE THE ONLY KIND OF MARKETS THAT CAN MAKE SAVVY INVESTORS VERY RICH.


5. The creeping anxiety most investors feel in a bad market is like a human’s internal "flight or fight" signal. But if you keep your emotions in check, it could make you a lot of money. Most people don't know how to interpret the signal correctly.

Came across this interesting article! Hehe hope you gained more knowleade after reading!

Emotions Part 3! Pharse preceding the fall!!

Today we have another correction whipping 115.95 points of STI to 3431.71. All the stocks has drop 5-10%, a lot of margin calls to reach speculators, resulting in more selldown.


I begin to feel numb from this correction when I see my portfolio falling deeper eating into my capital. Guess it part of the learning journey where I have to curb emotions and selling in frenzy realising and piling on more to my net losses.

I believe I can protect my capital by holding them through the storm.

Below are the pharses of the correction:

Pharse 1
End of June to first 2 weeks of July: Pennies stocks like jade, oculus and many others that no one notice raise vigorously where some has gone 4-5 folds from their usual prices. Speculators at work.

Pharse 2
A series of short lived rallies(e.g stocks that rises high but close back at the end of the day/stocks that rises alot and fall on the next day) went across serveral stocks. This is a good time to lock profits and get out of the market.

Pharse 3
Catastrophe strikes, all stocks jus keep falling everyday. Good entry when bottom is formed.

With this experience, I must be better prepare for the next correction!